Why Myriad Genetics Stock Rocketed 26.3% Higher in June — The … – Motley Fool

What happened

Shares of Myriad Genetics (NASDAQ:MYGN), a company focused on genetic testing, rose more than 26% in June, according to data fromS&P Global Market Intelligence.

Investors can credit the gains to a trio of positive announcements.

First, Myriad announced results from a 2,000-patient study using its myRisk Hereditary cancertest. Data from the study showed that 50% of breast cancer mutationsare missed with current testing guidelines and that 34% of these mutations were notpredicted by family history. This data helped to demonstrate the clinical advantages of the using company's test and could help to spur demand.

Image source: Getty Images.

Second, Myriad said that 17 health insurance plans have decided to cover the company's EndoPredict breast cancer test. Those 17 plans represent more than 35 million lives and bring the company's private pay coverage total up to109 million lives.

Finally, the company reported clinical results from its phase 3 OlympiAD trial with partner AstraZeneca. Data from the trial showed that Myriad's BRACAnalysis CDx companion test helped to identify patients with BRCA-mutated HER2-metastatic breast cancer. Physicians then used that identification to treat patients with either AstraZeneca's drug olaparib or standard chemotherapy. The data showed that using olaparib led to a meaningfulgain in progression-freesurvival. Myriad plans on using the data to seek FDA approval for this new test, which, if approved, could triple its addressable market.

Myriad's stock continues to climb back from the drubbing that it took last year. That beating was caused by falling profits due to pricing pressure in the company's corehereditary cancer testing business. Given the declines, it is easy to understand why the company is putting an emphasis on its other fast-growing testing products.

In spite of the advances, Wall Street doesn't have a lot of hope for this company's long-term profit growth potential. In fact, current estimates call for Myriad's profits to decline by more than 7% annually over the next five years. For that reason, I think that investors would probably be best served by looking elsewhere for investment opportunities.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Why Myriad Genetics Stock Rocketed 26.3% Higher in June -- The ... - Motley Fool