Will Angelina Jolie Boost Biotech Stocks?
While Angelina Jolie's announcement on Tuesday that she had a double mastectomy after learning she carried a genetic predisposition for breast cancer raises awareness about genetic testing, analysts are skeptical that it will boost the stock prices in the biotech industry.
"Obviously getting popular press is great, but I don't think that's the major driver," said Amanda Murphy, healthcare analyst with William Blair & Company.
Read more: Jolie's Mastectomy Not Always a Lifesaver
Shares of Myriad Genetics Inc., a company that works in human genomics based in Salt Lake City, Utah, rose to three-year highs on Tuesday, which some media reports attributed to the actress' announcement and a Supreme Court decision on Monday siding with agricultural biotech firm Monsanto against a farmer in a seed patent dispute.
Myriad Genetics developed an expensive test called BRACAnalysis that looks for the genetic mutation that Jolie referred to in her New York Times op-ed.
According to the BracAnalysis website, testing for cancer risk is covered by most insurance companies. Other reports indicate the test can cost from $300 to $3,000 depending on the type.
On April 15, the Supreme Court heard oral arguments from Myriad Genetics' attorneys who said the company should keep its patent on two genes, BRCA1 or BRCA2. Women with mutations in those genes are five times more likely to be diagnosed with breast cancer, according to the National Cancer Institute.
Murphy said Myriad's own Supreme Court case affects multiple industries.
"To the extent that you're a company invested in or patented to protect your offering, that concept is a good thing for everybody," she said.
While Murphy said she believes the Supreme Court's discussion about Monsanto - related to protecting research investments and patents - is relevant to the idea that genes can be patented. But Myriad's healthy earnings report a week ago and the bullish market are also boosting Myriad's stock price, she said. The company's stock price was trading around $33.78 mid-day on Wednesday, down about 1 percent.
Read more: Stock Market Reaches All-Time High
Doug Schenkel, analyst with Cowen and Co., said the awareness that Jolie raised in her detailed announcement is good news for Myriad.
"Even in eligible cancer patients who meet guidelines the market penetration is about half of what it could be and in asymptomatic patients who have higher hereditary risk a fraction of patients who meet the criteria for BRACAnalysis are tested," he wrote in an email to ABC News. "Her action has to broaden awareness of genetic screening benefits for this test as well as others."