So what does he think of this much more invasive breach of the wall that is supposed to separate the editorial and business sides of a professional journalism operation? Did he know about it? Does he think anyone ought to be disciplined for it? And what exactly is his role vis a vis Winkler, who seems to be the one who put the Bloomberg business in jeopardy.
Angelina Jolie makes a stock hot
In part, this is a story I loved seeing rather than one I’d love to see — because much of it is in this piece by David Sell of Philly.com.
“Movie star Angelina Jolie’s revelation Tuesday [May 14] of having had a double mastectomy to help avoid breast cancer had business and legal angles,” Sell begins.
The business angle, he explains, is that “Myriad Genetics, the Utah-based company at the center of a legal debate about the acceptability of gene patenting, has a monopoly on the testing Jolie had before opting for surgery. With the news of Jolie breaking in the morning, the company’s stock rose to a three-year high of $34.70 during trading on the NASDAQ market on Tuesday.”
In fact, even before Jolie’s announcement, the Salt Lake City-based gene testing company’s rise is a great story. According to its fiscal third quarter report issued in early May, Myriad’s revenues for the quarter were up 21 percent over the prior year and earnings per share were up 34 percent.
The legal angle is summarized by Sell this way in describing a pending Supreme Court case in which Myriad is the defendant: “The basic issue is whether Myriad — or any company or person — should be allowed to have a patent on a human gene. The court heard oral arguments April 15 and is likely to issue a decision before the end of the current term in June.”
The Myriad gene patent Supreme Court case, the company itself and Jolie’s announcement suggest three stories beyond what’s been reported so far.
First, because 74 percent of Myriad’s revenue comes from the kind of genetic testing Jolie used and because Myriad’s current patent gives it a monopoly on that testing that allows it to charge $3,000 for each test, this is a case that could make or break Myriad’s business model. So, how many hedge funds have hired legal experts to help them bet which way the court is going to go? We’ve been reading lately about Washington-based firms selling their intelligence-gathering skills when it comes to what the executive or judicial branches are planning. What about the judicial branch?
Second, Jolie’s announcement obviously boosted the Myriad stock, at least in the short term. So, a reporter who wants to offer a real-world lesson on the law of insider trading (complete with a photo that’s more attractive than the usual law professor head shot), ought to ask experts if Jolie or any of her friends or her doctors would have been guilty of insider trading had they bought the Myriad stock before her announcement. (My guess is that because insider trading prohibitions have to do with abusing information that one has a duty to keep secret, the doctor would be liable, because he has a fiduciary responsibility to keep Jolie’s medical information secret. But Jolie herself wouldn’t be liable, because she has no such obligation to keep her own information private.)
Third, it turns out that under Obamacare’s rules, the Myriad gene tests, at $3,000 each, must be covered 100 percent by insurance companies. How great is that if you’re a Myriad shareholder? There can be no co-pays or deductibles, because it is considered preventive care.
This means that if Myriad wins its Supreme Court case it not only has a protected monopoly on the test, but it can also charge whatever it wants without any patient caring. I’d love to see a reporter’s account of how Myriad lobbied that one — and what the party was like the night they won it.