Why Myriad Genetics Shares Swooned Again

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of molecular diagnostics company Myriad Genetics (NASDAQ: MYGN  ) fell as much as 13% following yesterday's mixed U.S. Supreme Court ruling on gene patents and a flurry of analyst upgrades and downgrades in wake of that news.

So what: The more immediate implication sending Myriad lower was the Supreme Court's findings that genes already present in the human body (e.g., BRCA1, BRCA2) cannot be patented -- only synthetic genetic material may be patented. This means the patent tactics it had used to keep competitors from introducing a BRCA molecular test in competition to its BRACAnalysis test will no longer work, and it's now merely a race to bring new genetic tests to market -- likely at a big discount to Myriad's current price.

Also pressuring Myriad were mixed analyst reactions to the news. Bank of America/Merill Lynch downgraded the company to "neutral" from "buy," while JMP Securities actually upgraded the company to "outperform" from "market perform" with a $48 price target, citing the removal of the court ruling overhang.

Now what: I happen to like molecular diagnostic companies, including Myriad Genetics, but it's still too early to see how this ruling may impact Myriad's bottom line. The long run thesis of molecular diagnostics companies appears intact in that as long as the costs associated with genetic analysis continues to fall the allure of developing personalized treatment plans for patients grows. I'd suggest avoiding the analyst white noise and keeping your eyes and ears peeled to see what Myriad has to say about its forecast for the remainder of the year.

Craving more input? Start by adding Myriad Genetics to your free and personalized watchlist so you can keep up on the latest news with the company.

While you can certainly make huge gains in molecular diagnostic companies like Myriad Genetics, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2490546, ~/Articles/ArticleHandler.aspx, 9/25/2016 5:08:32 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
MYGN $21.67 Up +0.17 +0.79%
Myriad Genetics CAPS Rating: ****