NEW YORK (GenomeWeb News) – Myriad Genetics said today that it will conduct a review of its business and consider the possibility of splitting up its molecular diagnostic business and pharmaceutical business as independent operating entities.
The Salt Lake City-based firm noted the possibility of the split or other corporate restructuring in a statement announcing its fourth-quarter and fiscal-year 2008 results.
It reported fourth-quarter molecular diagnostic revenues of $64.7 million, up 53 percent from $42.3 million in the fourth quarter of fiscal 2007. Overall, revenues for the quarter were $166.9 million compared to $45.5 million in revenues for Q4 of 2007, with $100 million coming from pharmaceutical sales, due entirely to an up-front license payment from Lundbeck for European marketing rights to Flurizan.
Myriad also reported that it was profitable for both the fourth quarter and fiscal 2008. The firm’s Q4 net income was $65.5 million, or $1.40 per share, compared to a net loss of $7.8 million, or $.18 per share, in the comparable period a year ago. Its FY2008 profit was $47.8 million, or $1.02 per share, compared to a loss of $35 million, or $.85 per share, for fiscal 2007.
Myriad’s R&D expenses for the fourth quarter more than doubled to $55.2 million compared to $24.8 million for the same period in 2007. Its SG&A costs rose to $36.4 million from $30.2 million year over year.
As of June 30, Myriad had $420.1 million in cash, cash equivalents and marketable investment securities. The firm also noted that it has no debt and no convertible securities.
Myriad’s strategy up to this point has been to use its cash flow from the profitable molecular diagnostics business to invest in drug development activities. The firm said that now that it has become profitable, it will be viewed differently by Wall Street.
“The company's goal will be to develop a strategy that maximizes both the potential of our molecular diagnostic business, and the opportunity associated with our pharmaceutical research and development programs -- thereby maximizing shareholder value,” Myriad said in a statement.
It said that such a strategy could mean a split of the two businesses. Myriad noted that it has retained investment banking firm JP Morgan to assist it in a review of its business and an evaluation of its strategic alternatives. The firm expects JP Morgan and Myriad’s management to present their analysis to the board of directors in the fall.