Myriad Genetics Inc., used a patent-protected monopoly to become one of the most successful and controversial DNA testing companies in the world. Now, nearly two years after the Supreme Court struck down its gene patents, Myriad is fighting to sustain its business model amid growing threats from rivals.
The high court’s ruling, which held human DNA couldn’t be patented, introduced competition to Myriad’s signature product, a screening test for mutations in genes called BRCA 1 and BRCA 2 that can increase a woman’s risk of getting breast and ovarian cancer.
Thanks to a combination of brand loyalty and strong customer service, Myriad still dominates BRCA screening, which accounts for more than 80 percent of its sales. The company performs the tests at its headquarters here in the foothills of the Wasatch mountain range, where each morning at 7:30 a.m., a FedEx truck delivers hundreds of DNA samples from women around the U.S.
But threats loom. Analysts say Myriad’s BRCA position is unsustainable in the face of competition, and predict the company’s market share will gradually erode.
Myriad’s efforts to diversify, meanwhile, have hit some setbacks. In February, Myriad slashed its revenue and earnings guidance after facing delays in winning health-insurer coverage for new tests to help treat prostate cancer and rheumatoid arthritis. The company expects its profit to be about $115 million in the fiscal year ending June 30, down from $190 million last year, because of increased product-development costs and other factors.
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