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On March 20, 2009, the American College of Obstetricians and Gynecologists (ACOG) disclosed a news release that its Practice Bulletin #103 "Hereditary Breast and Ovarian Cancer Syndrome" has been published in the April 2009 edition of Obstetrics & Gynecology. In the Bulletin, the ACOG recommended routine screening for Hereditary Breast and Ovarian Cancer. ACOG has over 52,000 members, and is the nation's leading group of professionals providing health care for women.
Following the publication of the bulletin, on March 24, Myriad Genetics (MYGN - Analyst Report) disclosed a news release applauding the recommendation of routine screening for Hereditary Breast and Ovarian Cancer. As a result of the news release, MYGN shares shot up about 8% in the morning trading session.
There is a reason for MYGN price appreciation on the news release. Keep in mind, Myriad Genetics is a biopharmaceutical company that focuses on the development of diagnostic and therapeutic products.
The company has 6 diagnostic medicine products on the market. One of them is BRACAnalysis which is a comprehensive analysis of the BRCA1 and BRCA2 genes for assessing a woman's risk for breast and ovarian cancer. It is a hereditary test designed to find mutations in the BRAC1 and BRAC2 genes. Mutations in these genes can be associated with a 10 to 15 fold increase in ovarian or breast cancer.
In the bulletin, the ACOG is recommending doctors routinely evaluate whether a patient is at risk of carrying a genetic mutation of the BRCA1 or BRCA2 gene. As carriers of the mutation generally have a markedly higher risk of developing breast or ovarian cancer, doctors may choose to take preventative measures, such as removal of the ovaries and fallopian tubes. Mutations in BRCA1 and BRCA2 account for the vast majority of families with hereditary breast and ovarian cancer syndrome. BRCA1 and BRCA2 are tumor suppressor genes that encode proteins that function in the DNA repair process.
Although individuals with hereditary breast and ovarian cancer syndrome inherit one defective allele in BRCA1 or BRCA2 from their father or mother, they have a second, functional allele. If the second allele becomes nonfunctional, cancer can develop through the accumulation of additional mutations. When evaluating a woman's family history, families with few female relatives may under-represent the family's risk of cancer, and therefore, the guidelines recommend that it may be appropriate to test women with an isolated case of breast cancer at or before the age of 50 years.
For MYGN, this is very positive news. These new guidelines will raise physician awareness of the importance of routine hereditary breast and ovarian cancer assessment. The routine screening could double or even triple the number of patients screened by MYGN's BRACAnalysis which will translate into top line growth in the coming quarters.
We have a Buy rating on MYGN shares with a six to twelve month price target of $100.