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Myriad Genetics' Stock Drops After Study Shows Niraparib May Not Need CDx

NEW YORK (GenomeWeb) – Following publication of a landmark study involving Tesaro's PARP inhibitor niraparib and Myriad Genetics' myChoice HRD test, Myriad's stock tumbled around 12 percent in Monday afternoon trading.

This past weekend, researchers led by Mansoor Mirza of Copenhagen University Hospital in Denmark presented data from the NOVA trial at a European oncology conference, which compared Tesaro's PARP inhibitor niraparib against placebo in 553 patients with recurrent ovarian cancer who had responded to platinum-based chemotherapy.

The study, simultaneously published in the New England Journal of Medicine, showed that median progression-free survival was 21 months in patients with germline BRCA mutations as determined by Myriad's BRACAnalysis CDx; 9.3 months in patients without such mutations; and 12.9 months in patients with homologous repair deficiency as determined by the myChoice HRD next-generation sequencing test. Comparatively, patients receiving placebo had median progression-free survival of 5.5 months when they had germline BRCA mutations, 3.9 months when they didn't have such mutations, and 3.8 months when they were HRD positive.

However, an exploratory analysis in patients who were HRD negative by Myriad's test showed that they also derived clinically meaningful benefit from Tesaro's PARP inhibitor, Mirza reported, with median progression-free survival of 6.9 months on niraparib compared to 3.8 months on placebo. "Going back to the clinic, I will have a very hard time, because all my patients would like to have this drug," Mirza told analysts during a webcast presentation.

Mary Lynn Hedley, Tesaro's president and chief operating officer, agreed. "Dr. Mirza indicated that he would prefer that we submit the application for a broad indication given the clinical meaningfulness of the data that we had seen across the population, and we intend to do that," she said.

Wells Fargo Securities analyst Tim Evans wrote in a note that the NOVA results suggest that it might take Myriad longer to garner revenues from myChoice HRD, which along with BRACAnalysis CDx and Tumor BRACAnalysis CDx, is a key part of its companion diagnostic portfolio. Myriad has projected its companion diagnostics business will contribute between $122 million and $364 million by 2020, by which time it hopes to bolster its annual revenues to $1.5 billion.

"We still believe that myChoice HRD is likely a useful test," Evans wrote in a note to investors. "However, the current situation implies a longer timeline to revenue than we had previously hoped."

Cowen and Company analyst Doug Schenkel wrote in a note that Myriad had not factored in a revenue impact from myChoice HRD in fiscal year 2017. "While this development seemingly eliminates a potential source of revenue upside, we don't view this as a downside risk to current projections," he wrote.

Meanwhile, Piper Jaffray analyst William Quirk had a different take, writing in a note that he believes the US Food and Drug Administration will restrict niraparib's indication based on BRCA mutation or HRD status. "Our thesis: we believe FDA will weigh the drug's side effects with PFS benefit," Quirk wrote.

He noted that in HRD-negative patients the FDA will likely consider the three-month progression-free survival benefit against the fact that more than 14 percent of patients discontinued on niraparib compared to 2 percent on placebo, and there were significantly higher grade 3/4 toxicities with the PARP inhibitor. 

Myriad's stock was trading at $18.75 in late Thursday trade on the Nasdaq, down a little more than 12 percent for the day.


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