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What: Shares of molecular diagnostics company Myriad Genetics (NAS: MYGN) dipped 10% earlier in today's trading session following an unfavorable patent ruling for one of the company's peers.
So what: This morning, a U.S. court ruled against Prometheus Laboratories, a unit of Nestle (yes, the maker of those delicious chocolate bars), stating that it could not patent a diagnostic method to observe changes in a patient's body to determine the best drug dosage for certain diseases. Since companies like Myriad have similar diagnostic technologies, and these companies rely on patents to protect their technology, this could be a major blow to the sector.
Now what: I've long been a Myriad bull, and I'm not ready to throw in the towel on one specific ruling. But, I have to admit that today's patent rejection doesn't exactly let shareholders sleep easier at night. At 17 times forward earnings, the stock seems fairly valued. It's definitely a company I'd add to my watchlist considering the boom in diagnostic medicine expected over the next decade.
Craving more input? Start by adding Myriad Genetics to your free and personalized watchlist so you can keep up on the latest news with the company.
At the time thisarticle was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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