Myriad Genetics ($MYGN) faces a potential setback now that the U.S. Supreme Court has ruled unanimously that human genes are products of nature and can't be patented. But the court also came up with a compromise involving man-made gene variations that could benefit the industry.
The company's investors seemed pleased, driving Myriad's stock up more than 9.5% in midday trading to $37.22.
Myriad has argued the company had legitimate patents concerning the isolation of BRCA1 and BRCA2 genes for hereditary breast and ovarian cancers--crucial for the company's diagnostic test that gauges a woman's breast cancer risk. The test sells like gangbusters and is a major part of Myriad's revenue.
"The Supreme Court has ruled, vacating some patent claims and upholding others. But we've always said the debate was about more than patent claims," Myriad said in a statement. "It was about human health, and innovation to make sure that cancer tests are accessible and affordable to women who need them. It's time now to move on … We also want to reach out to patient advocates and the research community. The battle that really matters isn't in court; it's the one against cancer."
As The Wall Street Journal reports, Justice Clarence Thomas wrote for the court. And he noted in an 18-page decision that Myriad found "an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention" or patentable.
At the same time, the justices threw the company, the molecular diagnostics industry as a whole, and biomarker researchers a major bone. They also ruled unanimously that a synthetic version of the genes known as complementary, or cDNA, can be patented. The substance is made in a lab, CNN notes, created from a genetic template and used to clone genes. The procedure, the news agency explains, is crucial to mapping and recording the human genome.
The Supreme Court took up the case in April, and indications were strong at the time that the court would reject the patenting of human genes but also look for some sort of compromise.
Score one for cancer patients, medical groups and geneticists. As the WSJ explained, they urged such a ruling to boost patient access to genetic diagnostic testing and reduce researchers' fear of getting sued over possible patent violation.