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December 30, 2013
10:16 EDTMYGNMyriad tumbles after CMS issues statement on reimbursement cut
Shares of Myriad Genetics (MYGN) are sinking after the Centers for Medicare and Medicaid Services confirmed on Friday that it plans to cut reimbursement rates for the company's BRCA genetic tests. The tests are used to identify people who, based on their genetic makeup, have a very high likelihood of developing breast and ovarian cancer. WHAT'S NEW: CMS stated that it would extend the public comment period on its proposal to reduce the reimbursement level for Myriad's two BRCA genetic tests to $1,438, versus the previous level of $2,795. The public will now be able to comment on the proposal until January 27, 2014. Following CMS' initial disclosure of the reduced reimbursement rate on December 2, a number of analysts wrote that the reduction may have been caused by a clerical error. In the wake of the agency's latest announcement, several analysts stated that the reduction was not caused by an error. ANALYST REACTION: In a note to investors, JMP Securities analyst J.T. Haresco responded to the news by downgrading Myriad to Market Underperform from Market Perform. Haresco sees little chance that CMS will reinstate its previous $2,795 reimbursement rate for Myriad's tests. Moreover, the analyst believes that Myriad is facing increased competition and does not have near-term growth catalysts. He has a $15 price target on the stock. Taking a more positive view on Myriad's outlook was Piper Jaffray analyst William Quirk. The analyst lowered his estimates for Myriad, and predicted that private payers would gradually transition to CMS' $1,438 reimbursement level. Yet Quirk believes that CMS could raise its reimbursement rate following the public comment period, and he thinks Myriad's market share losses will be "manageable." Quirk reduced his price target on the shares to $29 from $36 but kept an Overweight rating on the stock. PRICE ACTION: In early trading, Myriad sank $3.90, or 16%, to $20.25.
News For MYGN From The Last 14 Days
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April 7, 2014
16:34 EDTMYGNMyriad Genetics submits premarket approval to FDA for BRACAnalysis
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11:09 EDTMYGNMyriad Genetics advises prior BRACAnalysis news release be disregarded
Myriad Genetics advised that readers should disregard the news release, "Myriad Genetics Submits Premarket Approval to FDA for BRACAnalysis" issued April 7 by the company over GlobeNewswire.
10:16 EDTMYGNMyriad Genetics has a conference call hosted by JPMorgan
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05:48 EDTMYGNMyriad Genetics submits premarket approval to FDA for BRACAnalysis
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