'The cost will drop'

Hours after the U.S. Supreme Court invalidated Myriad Genetics' monopoly on testing for two breast cancer genes, the company's stock went tumbling as competitors announced plans to offer the same services at lower prices.

Above a photo of the Supreme Court building, the Ambry Genetics home page boldly announced “Your Genes Have Been Freed.” The company also e-mailed genetic counselors nationwide to begin offering testing for mutations in the cancer-linked genes BRCA1 and BRCA2—tests that would have been illegal until last week because of Myriad's 1996 patent on the human genes.

Similar genetic testing for the genes was announced by laboratory giant Quest Diagnostics, while GeneDx announced it would start including the genes in its broad-spectrum “panel” testing for a variety of cancer-causing genes.

“I think the cost will drop,” said Rebecca Nagy, president of the National Society of Genetic Counselors in Chicago. “For genetic counselors, the thought of patenting some type of human molecule just goes against common sense to us.”

While other genetic tests have gotten less expensive, she said, the price of Myriad's BRACAnalysis went up.

In a unanimous ruling, the Supreme Court decided that companies cannot patent human DNA because the strands of nucleotides that encode the biological instructions for life are naturally occurring phenomena.

“It is a discovery, not an invention. And discoveries are not patentable,” said Karuna Jaggar, executive director of Breast Cancer Action, a San Francisco-based advocacy group that was among numerous organizations that sued Myriad to overturn the gene patents. “The end of Myriad's monopoly means more women will have access to genetic testing.”

With genetic testing, patients can have biological samples taken by their local doctors or clinicians and then sent off to labs for analysis to see whether their genes carry mutations that may eventually cause disease. Movie star Angelina Jolie recently drew a frenzy of attention to the science when she publicized her decision to undergo a preventive double mastectomy based on a positive result from the test.

The work to detect mutations in most genes can be performed at multiple labs owned by universities and private companies around the country, but with BRCA1 and BRCA2, gene analysis could be done only by Myriad because of its patents.

That had insurance implications for patients because many limit the number of tests they will cover and because Myriad's prices did not decrease as the technology improved.

Myriad's tests can cost as much as $4,100, Nagy said. Ambry announced rates of $2,200 after last week's ruling.

Dr. Eric Topol, chief academic officer at Scripps Health and director of the Scripps Translational Science Institute in La Jolla, Calif., said that in Europe, the BRCA test can be done at more than 70 labs, and costs there are much lower.

“We won't see another monopoly again,” Topol said. “This was really the big one, and it was out there for a long time.”

Myriad, based in Salt Lake City, issued a statement to investors immediately after the ruling noting the fact that the Supreme Court did uphold its 24 patents to synthetically create strands of complementary DNA, or cDNA, which are involved in proprietary techniques of genetic testing.

“We believe the court appropriately upheld our claims on cDNA, and underscored the patent eligibility of our method claims, ensuring strong intellectual property protection for our BRACAnalysis test moving forward,” Myriad President and CEO Peter Meldrum said in the statement.

The BRACAnalysis test generated 82% of the $496 million in revenue it reported in 2012, according to the company's year-end financial filings.

Myriad stock spiked about 8% within hours of the ruling, reaching a three-year high of $37.97 on the NASDAQ exchange. But as other labs quickly rolled out plans to enter the market for BRCA testing, Myriad stock started dropping.

When the markets closed Friday, Myriad was trading at $27.59, 18% below its opening price before the ruling.

—with Jonathan Block

Follow Joe Carlson on Twitter: @MHJCarlson