Myriad Genetics (MYGN) has decided to participate in the annual meeting of the American Society of Clinical Oncology (ASCO) from June 3 to June 7 in Chicago. The company plans to demonstrate a clinical study on prostate cancer.
The study incorporates the cell cycle progression (CCP) scores of 352 prostate cancer patients whose clinically localized disease was diagnosed by needle biopsy. It asserts that CCP score is more vital and predictive compared to the accepted traditional Gleason score or baseline PSA.
The study further concludes that Prolaris, a 46-gene CCP assay of Myriad helps the physician assess whether a man’s prostate cancer is aggressive or dormant. It also declared that Prolaris helps identify proper treatment for patients.
The limited abilities of the current markers, act as a significant growth driver for Prolaris to succeed by tapping a widely unexplored market. Myriad derives a majority of its revenues from Oncology, which increased 13.5% year over year to $73 million in the third quarter of fiscal 2011.
While Myriad markets several molecular diagnostic products, it derives a majority of its revenues from Bracanalysis, which provides a comprehensive analysis of BRCA1 and BRCA2 genes for assessing woman's risk of hereditary breast and ovarian cancers.
Bracanalysis recorded a 13.2% year-over-year growth in revenues to $90.3 million during the quarter. Moreover, revenues derived from Colaris and Colaris AP, which assess a patient's risk of developing hereditary colorectal and uterine cancers, increased 7% to $7.4 million.
We are encouraged by the company’s various initiatives to attain its growth objective such as product portfolio expansion, targeting the companion diagnostic market and expansion into Europe. Moreover, with a strong cash balance, the company is well placed to expand its product portfolio and target new territories.
However, we remain concerned about the tough competitive scenario in the biotechnology and genetics-testing field. We have a Neutral recommendation on the stock.
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