Myriad Genetics Inc. (MYGN)

[$hylo]

MYGN. Bought at $27.20 today. IMO, this will be back to $30's next week.

Here are some thoughts from analysts on the stock:

From Credit Suisse Analyst V. Divan (Neutral rating, $28 target price):

“A mixed ruling by the Supreme Court … What was surprising to us, however, was the speed with which competitors announced that they would be entering the BRCA testing market, in spite of [the Supreme Court] upholding that cDNA is patent eligible. While the near-term Myriad story is still solid, the longer-term concerns that we have had around the name are now accelerated as these competitors will likely cause MYGN to face pricing pressure and/or market share losses over time. … Myriad may challenge the legality of competing tests but we believe this will be tough to do on a case-by-case basis and the overhang will remain in place for many months (years?) … We are lowering our FY14/15 EPS estimates to $1.82/$1.98 (from $1.83/$1.99) respectively.”

Leerink Swann Analysts Dan Leonard and Julian Cochran (Market Perform, $39 target price):

“Following the Supreme Court’s mixed ruling on gene patents, we believe focus on Myriad’s stock will shift to its long-term competitive positioning in the hereditary cancer testing market, in which we think its share has nowhere to go but down, and pricing could compress over time. While we believe MYGN’s long-term positioning remains strong … [the ruling] has mixed implications …The patents at issue expired in Dec. 2015 anyway, and the larger debate on Myriad is what its business looks like long-term regarding pricing and share of hereditary cancer testing. Also, we expect the fall of the isolated DNA patents could be enough to accelerate competitive entry (BRLI, University of Washington, and Ambry Genetics have already announced plans to launch), and we would be surprised if Myriad is successful obtaining an injunction against oncoming competitors. … meaningful upside to MYGN’s intraday price … requires more aggressive assumptions on price and share maintenance long-term than we are comfortable with, and thus downgrade the stock to Market Perform.”

Mizuho Securities USA analysts Peter Lawson and Eric Criscuolo (Buy rating, $43 target price):

“The decision is positive for Myriad and removes a significant overhang for the stock, allowing greater focus onto strong earnings performance and significant new product cycle. … Myriad is converting its single gene hereditary tests (BRACAnalysis, COLARIS, Melaris, Panexia) into a single product, the myRisk panel, which will launch in the fall of 2013. Management expects to convert its entire hereditary business to the myRisk panel by Summer 2015. Myriad is also increasing its focus on pharma collaborations and companion diagnostic development. … With the patent overhang removed, we are increasing our 12-month price target from $38 to $43, based on 24x our FY14 EPS estimate of $1.80, a premium to peers due to Myriad’s growth, margin profile and product cycle.”

Cantor Fitzgerald Analyst Sung Ji Nam (Buy rating, $41 price target):

“Bio-Reference Laboratories and Quest Diagnostics plan to offer BRCA1/2 testing by year-end, which we find somewhat surprising given the risk/reward associated with potential legal proceedings. … We believe that Myriad’s intellectual property (IP) around BRACAnalysis remains strong through 2018, given four of the nine patent claims adjudicated by the Supreme Court have been essentially upheld and Myriad’s large majority of the patents and claims … remain unchallenged, and as such, we think Myriad will aggressively defend its IP going forward. Based on our adjusted estimates (competition still entering in FY:14, higher SG&A from legal expenses, slightly slower share erosion vs. our prior estimates), we reiterate our BUY rating and raise our price target to $41 from $40.”

http://blogs.barrons.com/stockstowatchtoday/2013/06/14/myriad-cancer-gene-test-survives-but-stock-sinks-13/?mod=yahoobarrons