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Oct 1 (Reuters) - Shares of molecular diagnostics company Myriad Genetics Inc jumped 13 percent in morning trading after the company said the proposed cut in Medicare reimbursement rates for one of its tests was the result of a clerical error.
Myriad's shares took a hit on Monday after data from the U.S. Centers for Medicare & Medicaid Services showed a proposed 48 percent pricing cut for the company's tests. The shares closed down 9 percent.
Myriad said on Tuesday the proposed low numbers were due to a clerical error and will be corrected. "It may take a week or two for this correction to be reflected by CMS," Myriad said in a regulatory filing.
The test, called BracAnalysis, is a test to confirm the presence of a BRCA1 or BRCA2 gene mutations, which are responsible for the majority of hereditary breast and ovarian cancers.
Companion diagnostics, or tests that help to find the patients who would best respond to certain drugs, is assuming increasing importance with advances in genetic screening and molecular biology.
Several drugmakers are now developing cancer treatments along with companion diagnostics to improve the drug's efficacy.
Myriad said its test will be reimbursed at about $2,795 for 2014.
Ladenburg Thalmann analyst Kevin DeGeeter said the payment rate was in line with investors' expectation.
He also upgraded the stock to "buy" from "neutral," and said the "the core of MYGN's business remains largely intact."
The CMS had cut the reimbursement payment rate for another test made by Myriad, called Colaris, but DeGeeter said the Colaris price decrease was largely priced into Myriad shares.
Colaris helps detect disease-causing genetic mutations that are responsible for the majority of hereditary colorectal cancer and uterine cancer.
Myriad shares were up 10.5 percent at $25.97 in morning trading on the Nasdaq. They touched a high of $26.57 earlier in the session. (Reporting by Esha Dey in Bangalore; Editing by Don Sebastian)