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Bank of America Lowers PO on Myriad Genetics Following BRACA Pricing Cut

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In a report published Tuesday, Bank of America analyst Rafael Tejada lowered the price objective on Myriad Genetics, Inc. (NASDAQ: MYGN) from $31.00 to $25.00, maintaining a Neutral rating, following the Centers for Medicare and Medicaid Services (CMS) confirming BRACA price cuts.

According to the report, on Dec. 27, CMS confirmed its final 2014 rates for many molecular diagnostic tests, including tests for BRCA1/2 gene mutations covered by MYGN's BRACA analysis.

“Pricing for the integrated version of BRCA (codes 81211, 81213, 81214) came in at $2021, down 40% from the 2013 rate of $3382 (Table 1), and in-line with rates recently published on Nov. 29th,” the report said. “The final rates will be effective for tests performed on or after January 1, 2014.”

Some highlights from the report included:

-”The bulk of the price cut stems from CMS' 49% cut to code 81211, analysis of the BRCA1/2 genes, to $1438 vs. $2795 in 2013.” -”The CMS' cuts only apply to ~10% of MYGN's net revenues.” -”Risks are intellectual property litigation, pricing and share erosion resulting from emerging new technologies and competition, lower reimbursement for the company's tests from payers, execution risks as the company transitions from single gene to multigene tests, and greater regulation of the molecular diagnostics market.”

MYGN closed Monday at $20.76.

Latest Ratings for MYGN

DateFirmActionFromTo
Nov 2014Morgan StanleyInitiates Coverage onUnderperform
Aug 2014Credit SuisseMaintainsNeutral
Jun 2014MacquarieMaintainsNeutral

View More Analyst Ratings for MYGN
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Posted-In: Bank of America Merrill Lynch Rafael TejadaAnalyst Color Price Target Analyst Ratings

 

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