Benchmark Capital Downgrades Myriad Genetics (MYGN) from Buy

November 5, 2008 11:28 AM EST

Benchmark Capital downgrades Myriad Genetics (Nasdaq: MYGN) to Hold from Buy.

Benchmark analyst says, "The Company indicated on the call it that hopes to approach net operating margins of 50% from currently reported net operating margins of 46% for their Molecular Diagnostic business. The combined business has net operating margins of 41%. Previously, management has stated that the spinout company may create redundancies that could increase SG&A by as much as 15%. The Company is in the process adding another facility to expedite increased test volumes. In our view, It remains unclear whether the MDx spin-out can carry the Company's approximately $300m in NOLs. Nevertheless, the company seems confident accumulated NOLs will go with the MDx business rather than the therapeutics company. Admittedly, Azixa is intriguing since it can reach concentrations 14-15x greater in the brain than in the plasma (unlike Temodar which is part of the comparator arm), but any cardiovascular risk may thwart the trial."

Myriad Genetics, Inc. is a healthcare company focused on the development and marketing of molecular diagnostic and therapeutic products.

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