What Happened?
Shares of genetic testing company Myriad Genetics (NASDAQ: MYGN) fell 6% in the afternoon session after the U.S. Food and Drug Administration (FDA) approved a competing blood-based test for prostate cancer from rival company Cleveland Diagnostics.
The agency gave its approval to IsoPSA, a diagnostic kit designed to help doctors decide whether a prostate biopsy is necessary for men aged 50 and older who have elevated PSA levels. The introduction of a new, FDA-approved test in the prostate cancer space signaled increased competition for Myriad Genetics. Investors reacted to the news with concern that this new product could challenge Myriad's position and capture a portion of the market for cancer diagnostics.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Myriad Genetics? Access our full analysis report here.
What Is The Market Telling Us
Myriad Genetics’s shares are not very volatile and have had no moves greater than 5% over the last year.
The previous big move we wrote about was 7 days ago when the stock gained 4.8% on the news that reports revealed the Trump administration considered extending the Affordable Care Act (ACA) subsidies. These subsidies, which are government financial aids to help people pay for health insurance, are crucial for insurers as they maintain a stable customer base. An extension would ensure continued revenue for companies with significant exposure to the ACA marketplace. The news prompted a strong positive reaction from investors, with Centene (CNC) shares jumping as much as 8%, Molina Healthcare (MOH) rising over 3%, and Oscar Health (OSCR) soaring 18%. The potential for a two-year extension reduces regulatory uncertainty for the sector, which investors view as a significant positive for the industry's outlook.
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