Zacks_Analysts' Blog : Myriad Bracanalysis Proves Cheaper - Analyst Blog

Myriad Genetics’ (MYGN) study found Bracanalysis to be cost effective. The data was recently presented at a Breast Cancer conference.

The study demonstrated the cost effectiveness of Bracanalysis in asymptomatic women in US who have a higher probability of having a BRCA1 or BRCA2 mutation based on family history. The test is cost effective if a woman has a 3.1% probability of a mutation. This would bring 7% women (11 million) in the US under the ambit thereby doubling the current market size of approximately 6 million, who fall under the current guidelines for unaffected testing.

Bracanalysis is Myriad’s flagship product, contributing 86.4% of total revenue. This test provides a comprehensive analysis of BRCA1 and BRCA2 genes for assessing a woman's risk of hereditary breast and ovarian cancers. A woman testing positive for a deleterious mutation with the Bracanalysis test has an 82% risk of developing breast cancer and a 44% risk of developing ovarian cancer during her lifetime.

Myriad has been undertaking several strategies in the past few quarters to expand the targeted patient population. Apart from increasing penetration with triple negative breast cancer patients (TNBC), the company is focusing on carcinoma in situ (CIS), a non-invasive form of breast cancer that occurs in almost 62,000 patients each year.

Viewing the huge untapped potential in the CIS market, Genomic Health (GHDX), another player in the diagnostics space, plans to launch Oncotype DX DCIS Score to physicians later this month. This will enable physicians to better assess the risk of a particular patient, facilitating the selection of the appropriate treatment option.

Myriad’s most recent quarter recorded 20% growth in total revenues to amass $110.5 million with a 13% rise in Molecular diagnostics revenue to $104 million. Revenues derived from Oncology and Woman’s Health increased 12% (to $74.2 million) and 15% (to $29.8 million), respectively. Robust growth in the Oncology segment emanated from the development of TNBC, CIS and ovarian cancer indications. Revenues from these indications grew 21% year over year and increased the addressable Oncology market by $200 million to $650 million annually.

We consider Myriad’s Bracanalysis as a valuable asset for top-line growth as it has the potential to tap a widely unexplored market. Besides, we believe the various strategies adopted by the company to improve its top line should reap benefits in the long run. Moreover, a strong cash balance enables the company to buy back shares, expand into new markets and introduce more products.