US Supreme Court issues mixed ruling on DNA patents

The US Supreme Court yesterday (June 13) delivered its unanimous decision regarding the Association for Molecular Pathology versus Myriad Genetics case on patent claims on isolated DNA molecules, stating that companies cannot patent specific DNA, but that synthetically produced genetic material can be patented.

Justice Thomas said: “A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated…It is undisputed that Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 genes.”

Initial reactions from investors to push Myriad’s shares as much as 10% higher, but the stock closed down 5.6% at $32.01 yesterday. Investors' initial positive feelings about having the Supreme Court ruling behind them might be fleeting, says Daniel Leonard of Leerink Swann in a note to clients quoted by USA Today. Investors will soon focus on the fact that with more competition, Myriad's "dominant" market share "has nowhere to go but down," Mr Leonard wrote. He points out that others rivals, including BRLI, University of Washington and Ambry Genetics have already stated they have plans to get into the business. Myriad's patents were due to expire in December 2015 regardless of the decision, Mr Leonard says.

Competitors come forward

Within hours of the decision, the University of Washington and Ambry Genetics said they would immediately offer expanded testing that included the BRCA1 and BRCA2 genes, which Myriad has had under patent since the late 1990s. Quest Diagnostics said it would sell testing for the genes later this year. By invalidating key parts of Myriad’s patents, the court has removed a bar that prevented labs using new technology from developing and selling broader one-time tests that search for all known cancer risks, including the BRCA genes, geneticists said. It could also mean lower prices for the screening, which can cost as much as $4,000 for Myriad’s most comprehensive version of its BRCA cancer gene test, opine analysts at Credit Suisse.