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Myriad Genetics Gains on Innovation, New Reimbursements

Zacks Equity Research

On Mar 26, we issued an updated research report on Myriad Genetics, Inc. MYGN. The stock carries a Zacks Rank #3 (Hold).

Shares of this Salt Lake City, UT-based molecular diagnostics provider have outperformed the broader industry over the past six months. The stock has rallied 19.2% compared with the industry’s 9.5% rise.

The company’s molecular-diagnostics portfolio has been gaining prominence in the MedTech space of late. We are particularly upbeat about its newly-launched product line. Myriad Genetics has been recording strong volumes of EndoPredict and GeneSight tests. In the Prolaris testing domain, volumes steadily expanded in double-digits during second-quarter fiscal 2019.

Myriad Genetics, Inc. Price

Myriad Genetics, Inc. Price | Myriad Genetics, Inc. Quote

Particularly, Myriad Genetics is focused on driving revenues by commercializing its innovative products including Vectra DA, Prolaris, myPath Melanoma, Myriad Genetics’s Companion Diagnostics, EndoPredict and myPlan Lung Cancer Test. Earlier, management expected each of the products to generate revenues of more than $50 million by fiscal 2020.

Moreover, Myriad Genetics has been consistently gaining reimbursement approvals. In the last reported quarter, the company announced the finalization of LCD (Local Coverage Determination) from Noridian for EndoPredict, thus extending the total coverage to around 90% of the U.S. market. Also, the Prolaris test is under evaluation by the revised NCCN (National Comprehensive Cancer Network) guidelines and has been covered by Medicare for the patients at intermediate risk.

Also, in order to gain reimbursement coverage on Vectra DA and GeneSight testing platforms, the company is constantly undertaking specific measures.

Meanwhile, Myriad Genetics faces stiff competition in the key BRACAnalysis market. The company expects the same to intensify due to the advancement of technology. We believe, tough headwinds might reduce the prices of expensive tests provided by the company. This might in turn, impede the stock’s margin improvement.

Moreover, as the company receives a considerable portion of its revenues as well as pays part of its expenses in foreign currencies, it is exposed to exchange rate fluctuations between foreign notes and the U.S. dollar.

Key Picks

Some better-ranked stocks in the broader medical space are Stryker Corporation SYK, Penumbra, Inc., PEN and Varian Medical Systems, Inc VAR. Notably, each currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker’s long-term earnings growth rate is expected to be 10%

Penumbra’s long-term earnings growth rate is anticipated at 20.9%.

Varian’s long-term earnings growth rate is predicted to be 8%.

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