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Recently, favorable data from Myriad Genetics Inc.’s (MYGN - Analyst Report) PROCEDE 500 study was published in the journal Current Medical Research and Opinion. Per the findings of this data, 65% of physicians changed their original treatment plan on prostate cancer patients based on Myriad Genetic’s 46-gene molecular diagnostic testProlaris. Following this news, shares of Myriad Genetics gained 2.2% at yesterday’s market close.

As per the PROCEDE 500 study data, 65% cases were voted by physicians as requiring a change in treatment options. Among them, therapeutic burden had been reduced for 40% of the cases while the remaining experienced an increase in therapeutic burden. Further, 37% of the patients revealed a reduction in the need for interventional therapy while 23% recorded an increase in the need for the same.

Overall, there was a 50% reduction in surgical interventions and 30% fall in radiation treatment. Moreover, 96% of the patients whose treatment options were initially undecided, selected non-interventional options after receiving the Prolaris score. According to the company, all these positive data signify high clinical utility of the Prolaris test among urologists.

Myriad is currently opting for Medicare reimbursement of Prolaris and has submitted the PROCEDE 500 data as part of the Prolaris clinical dossier to the Centers for Medicare & Medicaid Services (CMS). Last month, the company had released positive data on its Prolaris testin the Journal of Urology. According to the company, the Prolaris test has been evaluated in more than 5,000 patients across 11 clinical studiesand six publications in peer-reviewed medical journals. Based on this strong data set, Myriad Genetics is highly optimistic about the reimbursement coverage by CMS which the company expects by the end of June 2014.

The Prolaris test correctly predicted those prostate cancer patients who had the risk of biochemical recurrence (BCR) or metastatic disease following a radical prostrate surgery. The predictions were made based on biopsies conducted earlier on these patients. With more than 30,000 patients who might perish on account of this fatal disease in 2014, there is urgent need for improved diagnosis. This is a clear indication of the huge market potential that Prolaris test holds in the forthcoming period.

Myriad Genetics is currently targeting expansion of its pipeline with products for diverse indications including oncology, women’s health, urology, dermatology, autoimmune and inflammatory disease and neuroscience. To achieve this objective, the company has decided to pursue internal developments, in-licensing of technologies and acquisitions to expand its business. We are sanguine about these developments as some of the pipeline candidates look promising enough to cater to a billion-dollar market size.

Myriad Genetics’ increasing focus on the companion diagnostic market should work in its favor fuelling growth. We look forward to the expansion of indications and derive comfort from the company’s plan to foray into the dermatology, autoimmune and neuroscience market in the near future, on the back of portfolio development.

Currently, the stock carries a Zacks Rank #3 (Hold). Better-placed stocks that are worth a look include Amgen Inc. (AMGN - Analyst Report), Biogen Idec Inc. (BIIB - Analyst Report) and Actelion Ltd. (ALIOF). All the three stocks carry a Zacks Rank #2 (Buy).

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