UPDATE: Morgan Stanley Initiates Coverage on Veracyte on Transforming Thyroid Cancer Diagnostics

In a report published Tuesday, Morgan Stanley analyst Daniel Brennan initiated coverage on Veracyte VCYT with an Overweight rating and $16.00 price target. In the report, Morgan Stanley noted, “We believe VCYT's Afirma solution for thyroid with its GEC is an effective assay for avoiding unnecessary surgery for cytology indeterminate thyroid patients based on a strong body of clinical validation studies, Medicare & private payer coverage, inclusion in key guidelines and interaction with key thought leaders. We expect Afirma to capture ~35+% share of its US addressable market by 2017, which when combined with expanding insurance coverage, a rising realized ASP and modest contribution from international GEC adoption, yields an attractive 60%+ revenue CAGR, a growth rate we do not believed is accurately reflected in the current stock price.” Veracyte closed on Monday at $11.36.