This story has been updated from a previous version to include a statement from Myriad and an updated stock quote.
NEW YORK – Shares of Myriad Genetics' stock were down around 4 percent Monday morning after tumbling about 18 percent on Friday following an announcement by UnitedHealthcare that it will no longer pay for pharmacogenetic multigene panel tests beginning Jan. 1, 2025.
In a note to investors, JP Morgan analyst Rachel Vatnsdal wrote that the payor was the largest and first one to reimburse for Myriad's GeneSight test, beginning in 2019. According to Vatnsdal, GeneSight represented approximately 18 percent of the company's total revenues in 2023.
In its new medical policy document, UnitedHealthcare now says that "the use of pharmacogenetic multigene panels (five or more genes) for the evaluation of drug-metabolizer status is unproven and not medically necessary for any indication due to insufficient evidence of efficacy."
The payor specifically cited a lack of evidence for the utility of PGx tests to guide the treatment of psychiatric and behavioral health conditions and cardiovascular disease, and it called the evidence for PGx multigene testing in general "insufficient at this time."
In the context of anthracycline chemotherapy drugs, UnitedHealthcare said that although early evidence is promising, additional prospective studies with long-term follow-up are needed to validate PGx testing in this setting.
In a statement Monday morning, Myriad said that it "strongly disagrees" with the payor's decision, and that it is currently in discussions with UnitedHealthcare regarding scientific evidence supporting the test's utility.
“We are surprised and disappointed," said Myriad President and CEO Paul Diaz, adding that the company is confident in the evidence base for GeneSight's value in personalizing care for mental health disorders.
The company also noted that it does not believe that the updated policy affects coverage of GeneSight by UnitedHealthcare under Medicare Advantage and managed Medicaid plans.
"We believe this announcement was unexpected and will likely weigh on the [long-term] trajectory of Myriad's GeneSight portfolio," especially with the company having previously projected double-digit volume growth in this market, Vatnsdal wrote. She called UnitedHealthcare's move "further proof" that Myriad faces significant hurdles in achieving widespread reimbursement for GeneSight.
TD Cowen's Dan Brennan wrote in another investor note on Friday that assuming the decision applies across all of UnitedHealthcare's commercial and exchange plans, the loss of coverage could represent a hit to Myriad's 2025 revenues of 3 percent to 8 percent.
If it turns out that the impact skews toward the lower end of that range and there is little impact on coverage by other payors, Friday's stock sell-off would look like an overreaction, Brennan wrote.
Myriad said it remains encouraged by recent favorable coverage determinations by other health plans and the progress of legislation regarding genomic biomarker testing taking place in certain states.
In mid-morning Monday trading on the Nasdaq, Myriad's shares were trading at $17.33.