Goldman Sachs Downgrades Myriad Genetics to Buy, Price Target to $18 from $29

Goldman Sachs Downgrades Myriad Genetics to Buy, Price Target to $18 from $29

Myriad Genetics (MYGD), a leading genetic testing company, recently experienced a downgrade from Neutral to Sell by Goldman Sachs. The investment bank's analyst, Isaac Ro, attributed this decision to a combination of factors, including rising competition, costly growth initiatives, and pricing pressure in the hereditary cancer market [1].

Ro's downgrade comes amidst growing concerns about Myriad's competitive position. With gene testing companies like GeneDx and Ambry Genetics offering hereditary cancer tests at lower prices, Myriad's myRisk test faces increased competition [1]. Furthermore, a shift towards panel-based tests is expected to reduce Myriad's competitive advantage in test quality [1].

The cost of new growth initiatives also presents a negative risk-to-reward ratio for Myriad. While the company's acquisitions in new products have diversified its offerings, achieving material growth over time may prove costly [1]. For instance, sales of Myriad's Vectra DA for rheumatoid arthritis have been flat for the past three quarters, and additional clinical studies will be required to demonstrate economic utility and induce payer coverage [1].

Moreover, Myriad's Prolaris prostate cancer test faces a difficult market penetration. Although the addressable market for the Cologuard colorectal cancer test remains compelling, regulatory and reimbursement catalysts are expected to play less of a role in stock performance than commercial execution [1].

Goldman Sachs lowered its six-month target price for Myriad to $25 from a prior price of $31, reflecting these concerns [1]. In afternoon trading on the Nasdaq, shares of Myriad were down about 3 percent at $35.19 [1].

References:
[1] GenomeWeb. Goldman Sachs Downgrades Myriad Genetics to Sell, Exact Sciences to Neutral. https://www.genomeweb.com/business-news/goldman-sachs-downgrades-myriad-exact-sciences-upgrades-shares-alere