Myriad Genetics (MYGN): The Stars Are Aligning for This Small Cap Cancer Diagnostic Stock (ROSG, GHDX & DGX)

On Tuesday, small cap cancer diagnostic stock Myriad Genetics, Inc (NASDAQ: MYGN) jumped 11.42% in one day, meaning its worth taking a closer look at the stock along with the performance of small cap cancer diagnostic stocks like Rosetta Genomics Ltd (NASDAQ: ROSG) and Genomic Health, Inc (NASDAQ: GHDX) plus mid cap diagnostic stock Quest Diagnostics Inc (NYSE: DGX). I should mention that we have had Myriad Genetics in our SmallCap Network Elite Opportunity (SCN EO) portfolio since February 5th and we are already up 18.50% – a nice return in just two weeks time.

What is Myriad Genetics, Inc?

Small cap is a leading molecular diagnostic company dedicated to making a difference in patient's lives through the discovery and commercialization of transformative tests to assess a person's risk of developing disease, guide treatment decisions and assess risk of disease progression and recurrence. More specifically, Myriad Genetics's hereditary cancer tests provide vital information to help people with a family history of disease understand their own risk of developing the disease while the company's prognostic tests are designed to provide information about the level of aggressiveness of a cancer to a healthcare provider and their patient so that they can make more informed treatment decisions. In addition, Myriad Genetics's personalized products provide valuable information for a healthcare provider to customize medical management plans individually for each patient.

As for diagnostic stock peers, Rosetta Genomics is a leading developer of microRNA-based diagnostic tests and therapeutic tools addressing critical unmet needs in cancer and other disease areas; Genomic Health, Inc is focused on improving the quality of cancer treatment decisions through the research, development and commercialization of genomic-based clinical laboratory services; and Quest Diagnostics is a Fortune 500 company that calls itself the world's leading provider of diagnostic information services.

What You Need to Know or Be Warned About Myriad Genetics

On Tuesday, Myriad Genetics announced it has published data in the Journal of Urology demonstrating that its Prolaris test accurately predicted, based on biopsy specimens, which men would develop biochemical recurrence (BCR) or metastatic disease following radical prostate surgery. The VP of Medical affairs at the company was quoted as saying:

"Men newly diagnosed with prostate cancer are often treated by radical prostatectomy, and about 30 percent of these patients will have metastases or progress even after surgery. The Prolaris test answers an important clinical question for all urologists concerning their surgical candidates...do my patients have an aggressive prostate cancer or not and therefore need more aggressive treatment?"

This is good news for the company because other than skin cancer, prostate cancer is the most common cancer in American men according to the American Cancer Society statistics and its the second leading cause of cancer death in American men, behind only lung cancer (about 1 man in 36 will die of prostate cancer). In fact, about 233,000 new cases of prostate cancer will be diagnosed in the USA this year and about 29,480 men will die of of it. In addition, about 1 man in 7 will be diagnosed with prostate cancer some time during his lifetime.

Earlier in the month, Myriad Genetics rallied twice. First, the stock rallied on strong earnings, a full-year guidance above Wall Street's expectations and the acquisition of a privately held competitor autoimmune diagnostics company called Crescendo Bioscience. Shares then rallied again on news about an agreement to settle a patent infringement lawsuit between it and several other groups regarding BRCA testing. The BRCA1/BRCA2 tests are how Myriad Genetics makes close to 70% of its total revenue.

However, investors should be aware that according to Yahoo! Finance data, insiders have been cashing out:

Insider Transactions Reported - Last Two Years

DateInsiderSharesTypeTransactionValue*

Feb 14, 2014	MARSH RICHARD MOfficer	20,960	Direct	Option Exercise at $7.82 per share.	163,907
Feb 14, 2014	MARSH RICHARD MOfficer	20,960	Direct	Sale at $31.50 per share.	660,240
Feb 12, 2014	HARRISON ROBERT GARDNEROfficer	13,707	Direct	Sale at $30.72 - $30.74 per share.	421,0002
Feb 12, 2014	HARRISON ROBERT GARDNEROfficer	10,506	Direct	Option Exercise at $6 - $7.82 per share.	N/A
Feb 10, 2014	CAPONE MARK CHRISTOPHEROfficer	87,500	Direct	Option Exercise at $16.53 - $18 per share.	1,511,0002
Feb 10, 2014	CAPONE MARK CHRISTOPHEROfficer	87,500	Direct	Sale at $32.07 per share.	2,806,125
Feb 7, 2014	MARSH RICHARD MOfficer	4,196	Direct	Disposition (Non Open Market) at $0 per share.	N/A
Feb 7, 2014	EVANS JAMES SOfficer	35,000	Direct	Option Exercise at $7.82 per share.	273,700
Feb 7, 2014	EVANS JAMES SOfficer	35,000	Direct	Sale at $33.04 per share.	1,156,400
Feb 5, 2014	MELDRUM PETER DOfficer	123,940	Direct	Option Exercise at $7.27 - $8.63 per share.	985,0002
Feb 5, 2014	MELDRUM PETER DOfficer	9,040	Direct	Sale at $30.78 per share.	278,251
Feb 5, 2014	MELDRUM PETER DOfficer	114,900	Direct	Automatic Sale at $30.78 - $32 per share.	3,607,0002
Nov 8, 2013	MELDRUM PETER DOfficer	31,784	Direct	Option Exercise at $5.89 - $6 per share.	189,0002
Nov 8, 2013	MELDRUM PETER DOfficer	31,784	Direct	Sale at $26.46 - $26.52 per share.	842,0002
Nov 8, 2013	EVANS JAMES SOfficer	8,072	Direct	Sale at $26.50 per share.	213,908

 

Insiders selling will tend to be a less than bullish indicator for a stock.

Share Performance: Myriad Genetics vs ROSG, GHDX & DGX

On Tuesday, small cap Myriad Genetics jumped 11.42% to $35.03 (MYGN has a 52 week trading range of $20.02 to $38.27 a share) for a market cap of $2.56 billion plus the stock is up 14% over the past year and down 19.9% over the past five years. Here is a look at the performance of Myriad Genetics verses that of diagnostic stock peers Rosetta Genomics Ltd, Genomic Health, Inc and Quest Diagnostics:

As you can see from the above chart, only Genomic Health, Inc has put in a decent performance over the long term – something investors need to consider.

Finally, here is a look at the latest technical charts for all three diagnostic stocks:

The Bottom Line. Certainly it looks like the stars are aligning for small cap cancer diagnostic stock Myriad Genetics, but investors might want to keep an eye on all of those insider transactions.

SmallCap Network Elite Opportunity (SCN EO) has an open position in MYGN. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.