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Myriad Genetics to Grow with Study Successes, New Alliances

On Jul 6, we issued an updated research report on Salt Lake City, UT-based molecular diagnostics provider, Myriad Genetics, Inc. MYGN. The company currently carries a Zacks Rank #3 (Hold).

For the past three months, Myriad has been trading above the Zacks categorized  Medical - Biomedical and Genetics industry. The company has rallied 38.9% compared with the industry’s mere 4.9% gain in this period.

In the last-reported third quarter of fiscal 2017, Myriad has witnessed robust EndoPredict test revenues. Besides, there were favorable results on GeneSight assay and sequential growth in hereditary cancer volumes. We expect this trend to continue in the upcoming quarters banking on another set of product launches and an announcement of positive study results.

Notably, at the European League Against Rheumatism (EULAR) meeting held last month in Spain, Crescendo Bioscience, a wholly-owned subsidiary of Myriad Genetics, released new data from a meta-analysis of clinical studies. The data has demonstrated the Vectra DA test’s ability to predict a joint damage.

The same month, the company had also announced that its BRACAnalysis CDx companion diagnostic test has successfully identified those BRCA-mutated patients with HER2- metastatic breast cancer in the OlympiAD trial, who have responded to treatment with olaparib better than standard chemotherapy.

All these remain in line with the company’s strategy to diversify revenues by commercializing and upgrading its new and existing products. Per this strategy, Myriad is engaged in raising revenues by commercializing its advanced products including Vectra DA, Prolaris, myPath Melanoma, Myriad’s Companion Diagnostics, EndoPredict and myPlan Lung Cancer Test. Management expects each of these products to generate revenues of more than $50 million for the company by fiscal 2020.

Myriad’s collaborations with AstraZeneca and BeiGene for development of companion diagnostics also raise optimism. Importantly, AstraZeneca has recently formed a partnership with Myriad to use its newest companion diagnostic, myChoice HRD Plus, to help prospectively identify patients for enrollment in an upcoming exploratory study involving olaparib.

On the other hand, during the third quarter of 2017, Myriad entered into companion diagnostic development collaboration with BeiGene, a clinical-stage biopharmaceutical company developing molecularly-targeted and immuno-oncology drugs for treatment of cancer to accelerate precision medicine in oncology.

On the flip side, an unfavorable currency translation continues to be a major spoiler for the stock. Management fears that during the event of dollar’s further strengthening against foreign currencies might lead to Myriad’s deteriorating operating results which may not be overcome through increased revenues.

Intensifying competition as well as the possibility that Myriad’s new test might not generate meaningful profits to outweigh the costs associated with their developments, continue to pose threats to the stock.

Zacks Rank and Key Picks

Some better-ranked medicalstocks are Mesa Laboratories, Inc. MLAB, Inogen, Inc. INGN and Align Technology, Inc. ALGN. Notably, Mesa Laboratories and Inogen sport a Zacks Rank #1(Strong Buy), while Align Technology carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mesa Laboratories has a positive earnings surprise of 2.84% over the trailing four quarters. The stock has added roughly 10.5% over the last three months.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock has gained around 23.8% over the last three months.

Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has roughly surged 30.5% over the last three months.

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Mesa Laboratories, Inc. (MLAB): Free Stock Analysis Report
 
Inogen, Inc (INGN): Free Stock Analysis Report
 
Myriad Genetics, Inc. (MYGN): Free Stock Analysis Report
 
Align Technology, Inc. (ALGN): Free Stock Analysis Report
 
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