What happened
Shares of Myriad Genetics (MYGN +2.83%), a molecular diagnostics company, are falling in response to a negative analyst note that suggests demand for elective testing won't return as quickly as investors want it to. The stock has fallen 17.4% as of 1:47 p.m. EDT on Thursday.
So what
During the first three months of 2020, testing revenue fell 25% compared to the previous year, and Jonathan Palmer from Bloomberg Intelligence thinks Myriad Genetics shareholders should brace for more disappointment. Myriad leans on its flagship hereditary cancer business for 52% of total revenue and Palmer estimates test volumes could drop by 70% to 75% during the present quarter.
Image source: Getty Images.
Myriad has been expanding its suite of diagnostic tools beyond testing for hereditary signs of increased cancer risk, but these services were struggling to get off the ground before the COVID-19 pandemic began pressuring demand for elective testing. During the nine months ended March 31, 2020, sales of the company's GeneSight brand antidepressant test fell 21% year over year and prenatal testing fell 25% over the same time frame.
Now what
Bargain shoppers probably don't want to try catching this falling knife. Myriad finished March with $182 million in cash and securities after its operations lost $133.7 million during the first three months of the year.
