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Myriad to Split Drug Development, Molecular Dx Businesses

NEW YORK (GenomeWeb News) - Myriad Genetics said today that it plans to spin off its drug development businesses from its molecular diagnostics business, creating two separate publicly traded firms.
The company’s core molecular diagnostics business will operate under the name Myriad Genetics, will employ around 800 staffers, and will focus on the company’s stable of molecular diagnostic tests, which include BRACAnalysis, COLARIS, COLARIS AP, MELARIS, and TheraGuide 5-FU.
The research and drug development businesses will operate under the name Myriad Pharmaceuticals, and will employ around 200 people who will focus on developing therapeutic candidates for cancer and infectious diseases. The company currently has four drug candidates in human clinical trials: Axiza, Vivecon, MPC-2130, and MPC-0920.
Myriad said it expects that Myriad Genetics’ stock will trade on the New York Stock Exchange under the ticker symbol MGX, and Myriad Pharmaceuticals will be listed on the NASDAQ Global Market under the company's current ticker symbol, MYGN.
The company has been considering such a split since at least August, when it announced that it had retained JP Morgan to conduct a strategic review of its options, including the possibility of separating its molecular diagnostic business and pharmaceutical business as independent entities.
Myriad said in a statement today that it expects the new structure to better meet “the different needs of a high-growth, profitable molecular diagnostics business and a pharmaceutical research and development business.”
The spin-off will likely be completed as a pro-rata dividend distribution to shareholders of Myriad Genetics. The company said it plans to seek an independent opinion that the dividend distribution will be tax-free to Myriad Genetics and its shareholders.
Myriad said it will provide further details on the spin-off in a Form 10 registration statement for Myriad Pharmaceuticals, which it expects to file with the Securities and Exchange Commission in the second quarter of 2009.
"By separating these unique businesses into two highly focused companies, we believe we will be able to unlock the intrinsic value of both business opportunities and create greater value than under our current structure," said Peter Meldrum, president and CEO of Myriad Genetics, in a statement.
For its fiscal year ended June 30, Myriad’s total revenues were approximately $333.6 million. Of this, 67 percent, or $222.9 million, was from its molecular diagnostics business, which represented 53 percent growth over $145.3 million in the prior year.
The company posted $100 million in pharmaceutical revenue for the fiscal year ended June 30, compared to no revenue from that business in the prior year. Pharmaceutical revenue for the year consists of an upfront fee received from H. Lundbeck under a European commercialization agreement for the company’s former Alzheimer’s disease candidate, Flurizan.
The company did not provide a timeline for when it expects the spin-off to be complete, noting that it is subject to “numerous conditions,” including the filing of the Form 10, obtaining solvency and adequate capital surplus opinions, and receiving an independent opinion that the stock distribution will be tax-free.
Myriad has retained JP Morgan as its financial advisor, Mintz Levin Cohn Ferris Glovsky and Popeo as its legal advisor, and Ernst & Young as its accounting and tax advisor for the transaction.

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