Myriad Genetics (NASDAQ:MYGN) is down ~20% in Friday trading following reports that UnitedHealth Group (UNH) will no longer cover the company's genetic test that helps to determine which mental health medications are likely to work with an individual patient.

Notes from several investment houses indicate that the insurance giant will no longer cover genetic tests for behavioral health, which includes Myriad's GeneSight, beginning Jan. 1, 2025.

A document from the insurer reads that the coverage is ending as the tests are "unproven" and "not medically necessary."

Piper Sandler noted that GeneSight accounted for 18% of the company's revenue in 2023.

Piper analyst David Westenberg wrote the steep decline is likely the Street reacting to additional non-coverage coming.

"Though policy bulletins outline coverage, what remains unclear to us is how UNH will proceed with the contractual obligation of paying for GeneSight as part of its contract with MYGN if the test category is now not covered," Leerink analyst Puneet Souda wrote.

A Stephens note added that UnitedHealth eliminating GeneSight coverage "could represent a ~$80M or nearly 10% headwind in FY25. If GeneSight volumes from United are a higher percentage of mix, it would represent a larger impact."