Myriad Genetics slips on patent concerns
NEW YORK (AP) — Shares of Myriad Genetics Inc. fell Wednesday after a Supreme Court ruling started a new round of concerns about the company's intellectual property, which includes patents on genetic mutations related to breast cancer.
THE SPARK: On Tuesday the Supreme Court threw out patent claims belonging to Prometheus Laboratories, a subsidiary of Nestle SA. The 9-0 ruling overturned patents that were used in a blood test that helps doctors determine the dosage of a drug used to treat autoimmune diseases.
The test involved administering the drug, called thiopurine, to patients and then determining the levels of thiopurine metabolites in the patient's red blood cells. The court ruled that the patents were based on the laws of nature, which can't be patented.
Myriad has faced challenges to some of the patents supporting its BRACAnalysis test, which looks for mutations on a gene that indicates an increased risk for inherited breast cancer. In March 2010 a New York district court ruled that genes could not be patented, but a federal appeals court reversed that decision in July.
THE BIG PICTURE: The U.S. Patent and Trademark Office has been awarding patents on human genes for decades, and the federal court said the BRACAnalysis patents were valid because they concern "isolated DNA," which has a different chemical structure from DNA within the body. The case could come before the Supreme Court.
THE ANALYSIS: Analysts said Wednesday that it's not clear if the Supreme Court will accept the Myriad Genetics case or how it would rule if it did. Jefferies & Co. analyst Jon Wood said the ruling in the Prometheus Laboratories case does not contradict the federal court's findings from July. However he said that even if the Myriad Genetics patents are overturned, the BRACAnalysis test is supported by many other patents.
William Blair & Co. analyst Amanda Murphy said the decision "introduces some uncertainty related to method patents in general, particularly correlation claims in diagnostics" for Myriad Genetics and Genomic Health Inc., but she said the Prometheus Labs and the Myriad case involve different types of patents.
Genomic Health's Oncotype DX test is designed to predict the risk that a patient's breast or colon cancer will recur.
SHARE ACTION: Myriad shares lost 94 cents, or 3.9 percent, to $23.37 in afternoon trading. The stock is up 16 percent this year.
