DNA Test for Antidepressants Raises Questions From FDA

(Bloomberg) -- A company that helped pioneer genetic tests used to diagnose and treat disease lost more than 40% of its value on Wednesday, after U.S. regulators raised questions about whether a DNA test that’s key to the firm’s growth can help personalize the prescribing of antidepressant drugs.

Myriad Genetics Inc. fell as much as 43% to $25.45 Wednesday, the stock’s worst intraday drop since 2000. In a securities filing, it said the Food and Drug Administration had asked for changes to its GeneSight test, which is used to determine how well popular antidepressants will work for patients. Several other companies sell similar tests.

It can be difficult to determine which antidepressant will work best for a patient, and the burgeoning field of pharmacogenetics seeks to offer an alternative to the often-grueling process of trial-and-error for people who have to move from drug to drug when starting or changing therapy.

GeneSight has been a key product for Myriad, selling $30 million last quarter and making up 14% of the company’s revenue. More insurers have agreed to cover the test, a key step that can mean greatly increased sales.

But some psychiatrists have pushed back as the tests have come to market, citing a lack of evidence. In a review published last year, a task a task force of the American Psychiatric Association’s research council concluded that such genetic testing is promising, but not ready for prime time.

Test Scrutiny

In late 2018, the FDA began paying closer attention to pharmacogenetic tests, raising questions about the clinical utility of the tests. In a securities filing Tuesday, Myriad said that the agency had reached out to Myriad about its tests and requested changes.

“The FDA reached out to several firms marketing such pharmacogenetic tests where the FDA believes the relationship between genetic variations and the medication’s effects has not been established,” the company said in the filing. Myriad declined to comment further.

In the filing, Myriad said that earlier this year it had provided the agency “with clinical evidence and other information” to support its GeneSight Psychotropic test. The company said that they are in ongoing conversations with the FDA about requested changes. The company said it submitted a proposal on Aug. 10 to make changes to the way it reports results to health-care providers in an attempt to address concerns.

“We suspect FDA will require Myriad to list the specific genes and potential genotype interaction for GeneSight,” said Piper Jaffray analyst William Quirk.

Read more: Street reaction to Myriad news

Sales of GeneSight declined 12% from a year prior, the company said in its fiscal fourth-quarter results. UnitedHealth Group Inc., one of the U.S.’s largest insurers, has agreed to cover the tests beginning in October.

“We cannot predict with certainty the outcome of our interactions with the FDA or its timing, and whether the ultimate form of the test offering will have an adverse effect on our revenues from the test,” Myriad said.

On a call with analysts Tuesday, Myriad touted the clinical evidence for its test. The company said it had set up a meeting to discuss evidence gaps with Blue Cross Blue Shield Association’s Evidence Street, which the company said would be easily addressed. It plans to submit a request for a review of the test.

Stephanie Caccomo, an FDA spokeswoman, said the agency “is looking into the marketing of pharmacogenetic tests with claims to predict how a person will respond to specific medications in cases where the relationship between genetic variations and the medication’s effects has not been established and is not described in the drug labeling.” She said the agency couldn’t comment on interactions with specific companies.

In April, the Inova Genomics Laboratory also received a warning letter from the FDA for illegally marketing pharmacogenetic tests that the agency said it had not reviewed. 23andMe Inc. gained FDA approval for its pharmacogenetics test last October.

--With assistance from Cristin Flanagan.

To contact the reporter on this story: Kristen V. Brown in San Francisco at kbrown340@bloomberg.net

To contact the editor responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net

©2019 Bloomberg L.P.