Myriad weakness due to UnitedHealth coverage update, says Stephens

Stephens analyst Mason Carrico notes that Myriad Genetics (MYGN) shares are down about 20% this morning, which the firm blames on an announcement from UnitedHealth (UNH) stating that starting Jan. 1, 2025, UnitedHealthcare will no longer cover multi-panel genetic tests for behavioral health diagnoses. The announcement lists codes that will be denied as unproven and not medically necessary and 0345U for GeneSight is included in the list, notes the analyst, who is “unsure of the exact revenue impact,” but estimates the change could represent a roughly $80M, or nearly 10% headwind, in FY25. Given uncertainty around the revenue/profitability impact and likelihood that this will weigh on sentiment near-term, “we would not be buyers of the weakness today,” adds the analyst, who has an Equal Weight rating and $30 price target on Myriad shares.