Rayno Diagnostics and Tools Update: MYGN, SQNM Update 2 June 14

6/14  Supreme Court Ruling on Genetic Tests Takes Down Myriad Stock (MYGN $30.50)-Off Another 3% but still up 13% YTD.

The Supreme Court ruling opens up competition for Myriad’s breast cancer tests as well as other genetic disease markers.The immediate reaction to the stock was initially positive yesterday but abruptly turned negative after stock downgrades and realization of slower test growth. Still, Myriad Genetics has a strong market position for breast cancer genetic testing with an extensive data bank of clinical results. Myriad Genetics (MYGN) is not among our focus Dx and Tools stocks and we have not provided coverage.

Our diagnostic focus stocks have not yet been affected by this Supreme Court Ruling but there is weakness today in selected genetic analysis stocks but not because of specific patent issues: Genomic Health (GHDX $34.60) off 2.2% and Sequenom (SQNM) off 3%. Our top picks in the sector would be Cepheid (CPHD $33.38) and Illumina (ILMN $68.24) both off their May highs. Here is a good summary of the Ruling. A more negative contrarian view by Stephen Gottleib M.D. thinks the ruling will negatively affect investment in genetic tests.

A Bullish Tone to Diagnostics Stocks

Diagnostics and tools stocks are in the green today pretty much tracking the NASDAQ rally up close to 1%. The IBB ($177), more weighted to biopharma stocks is also up 1.5%.  Within our focus stocks we have the following winners: Abaxis (ABAX $46.27), up 1.5%, Cepheid (CPHD $33.50) up 1%, Exact Sciences (EXAS $13.12) up 0.3%, Illumina (ILMN $68.39) up 1%, Sequenom (SQNM $4.44) up 5.46%,ThermoFisher (TMO $85) up 1.24% and Vermillion (VRML $3.06) up 3.73%.

Sequenom (SQNM) was up 3.3% on volume over 4M shares on no apparent news but the Company is a leader in prenatal genetic analysis with its MaterniT21 Plus LDT (Lab Developed Test).

The uptick in SQNM could be driven by anticipated sales growth , recent licensing and distribution agreements and new lab expansion.Revenues for the Company are forecasted at the $200M level for 2013 even though the pre-natal tests are so called LDT’s for use by physicians but not approved by the FDA.

The stock may also may be also reacting to news from  Myriad Genetics (MYGN $32) down 5% despite a slightly bullish Supreme Court patent ruling that says although genes cannot be patented synthetic versions of the gene (cDNA) can be proprietary IP.

, , , ,

No comments yet.

Leave a Reply