On Monday, TD Cowen maintained a Hold rating for Myriad Genetics (NASDAQ:MYGN) shares with a steady price target of $30.00. This decision comes in the wake of UnitedHealthcare's (UNH) recent policy change regarding pharmacogenetic testing.
Specifically, UNH has updated its guidelines to exclude coverage for multi-gene tests, including Myriad Genetics' GeneSight product, which is used to guide antidepressant therapy. Following this announcement, shares of Myriad Genetics experienced an 18% decline.
The analyst from TD Cowen highlighted the immediate market reaction to UNH's update, which took place on Friday. The change in UNH's coverage policy could potentially result in a 3-8% decrease in revenue for Myriad Genetics. The extent of the financial impact will depend on whether this policy change will influence other payers and if it may signal broader industry trends.
Myriad Genetics' GeneSight is a test that analyzes how a person's genes may affect their response to medications used to treat depression, anxiety, and other psychiatric conditions. The UNH policy shift suggests a more restrictive stance on the reimbursement of such genetic tests, which could have significant implications for Myriad Genetics' business.
The analyst's comments reflect the uncertainty surrounding the long-term effects of UNH's decision on Myriad Genetics' financial performance. The market's response to the news has been notably negative, but it remains to be seen whether the current drop in Myriad Genetics' stock price is an overreaction or an accurate reflection of the company's future revenue prospects.
In summary, Myriad Genetics remains under scrutiny following UNH's policy update, with its stock taking a hit. TD Cowen has reiterated a Hold rating on the stock, maintaining the previous price target of $30.00. The industry is now watching to see how this development will shape the company's financial outlook and whether other insurers will follow UNH's lead.
In other recent news, Myriad Genetics has encountered a policy change from UnitedHealthcare, limiting coverage for its GeneSight test. Despite this, the company continues to report strong financial performance, with recent third-quarter revenues ranging between $210-212 million, surpassing analysts' expectations. Myriad Genetics also reaffirmed its 2024 revenue guidance of $835-845 million.
Analysts' views on the company vary, with Scotiabank maintaining its Sector Outperform rating, JPMorgan holding an Underweight rating, and Leerink Partners increasing their price target to $40, maintaining an Outperform rating.
Myriad Genetics has recently entered into several strategic partnerships, including collaborations with jscreen, Flatiron Health, The University of Texas MD Anderson Cancer Center, and The University of Rochester Medical Center.
These partnerships aim to expand the reach and impact of Myriad's genetic testing products. The company's collaboration with Flatiron Health marks the first time a hereditary cancer test has been integrated into a cloud-based Electronic Medical Record system.
These developments reflect the recent activities of Myriad Genetics. The company's strategic initiatives and partnerships demonstrate its commitment to growth and innovation within the field of genetic testing. Despite the discontinuation of part of its GeneSight study, Wells Fargo has listed Myriad Genetics among its high-conviction ideas for sustained growth into 2025.
InvestingPro Insights
Recent market data from InvestingPro sheds additional light on Myriad Genetics' current situation. The company's stock has taken a significant hit, with a 1-week price total return of -18.08% and a 1-month return of -32.04%, aligning with the article's mention of the 18% decline following UnitedHealthcare's policy change. This volatility is reflected in an InvestingPro Tip, which notes that "Stock price movements are quite volatile."
Despite these challenges, Myriad Genetics maintains a market capitalization of $1.63 billion and has shown revenue growth of 14.78% over the last twelve months. An InvestingPro Tip suggests that "Analysts predict the company will be profitable this year," which could provide some optimism amidst the current turbulence.
The company's price-to-book ratio stands at 2.21, indicating that the market still values the company above its book value, even after the recent stock price decline. This could suggest that investors still see potential in Myriad Genetics' assets and future prospects, despite the recent setback with UnitedHealthcare.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide further insights into Myriad Genetics' financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.