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Myriad Genetics Targets Europe for Growth

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Having successfully established itself in the US, Myriad Genetics this week said it will be tackling Europe as it embarks on a strategy to grow its presence internationally.

In the midst of reporting a 9 percent increase in its fiscal fourth-quarter revenues and an 11 percent jump in total 2010 revenues, Myriad officials outlined the company's plans to move first into Europe, and then elsewhere, to capitalize on a growing molecular diagnostic market internationally.

While Myriad has voiced its desire to increase its footprint in Europe and elsewhere in the past, the plan outlined this week is the most detailed it has provided and suggests how clearly the company sees non-US business as crucial to its future.

According to company officials, there is certainly room for growth internationally. Though some diagnostics firms derive up to half of their revenues from overseas business, Myriad's international sales to date make up less than 5 percent of its total sales.

As part of its new international strategy, Myriad disclosed this week that it has hired life science consulting firm Scientia Advisors to provide "extensive market research and to help us develop our detailed implementation strategy and tactics for establishing and building a significant presence in Europe."

But even before that announcement, the company took steps to ramp up its international business last month with the hiring of Gary King to fill the newly created position of vice president of international operations. During Myriad's conference call following the release of its earnings this week, King said that he has 25 years of sales and marketing experience in the medical devices and diagnostics space, including 20 years living and working outside the US.

"My relevant international experience includes establishing [and] operating companies throughout the major countries in Europe and developing a distribution network in Asia," he said.

That experience, he said, has given him insight into how to develop clinical acceptance of new diagnostic tests and how to navigate the regulatory and reimbursements environments "that help drive adoption" of new tests.

Myriad, he added is "strongly committed" to pushing into the European market, and will invest $2 million this year "to gather the information we need to completely develop that strategy."

The company is currently identifying the "most attractive markets" for its portfolio and pipeline of products, King said, as well as analyzing the size and growth-potential for each market and the competitive landscape. Myriad will also evaluate barriers to entry and the overall fit to the firm's core capabilities.

The company will also develop a pricing strategy with the help of a network of Europe-based experts in each target country and region.

"We will consider the full range of entry strategy options, from developing kits that can be run on existing platforms, partnering with local laboratories, acquiring local laboratories, or acquiring a major pan-European laboratory or diagnostic company, and then develop a detail action plan for implementation," King said.

Myriad's strategy includes ways to partner with pharma on its companion diagnostics, such as Myriad's BRACAnalysis for the assessment of a patient's risk of developing ovarian cancer, and Prezeon for assessing loss of PTEN function in cancer patients, King said.

Because Europe has led the US in adoption of companion diagnostics, this part of the strategy is especially intriguing, he said.

Interviews with thought leaders, regulators, and reimbursement officials in France and the UK have been completed. In the coming weeks, market surveys for Germany, Italy, the Benelux region, Spain, and Switzerland will also be completed, said King.

Though Myriad has not finished its competitive analysis of the European market, the company believes that the market is dominated by homebrew testing with "no really good competitors that we need to focus on," King said. "So in the positive case, it would be a market that's good for consolidation and good for entry of somebody who could offer full-service testing."

Myriad's BRCA1 and BRCA2 gene patents have recently been thrown into question, following a decision by a US District Court that invalidated the patents — a decision that Myriad is appealing. But CEO Peter Meldrum said this week that "most" of the company's products "have very strong intellectual property protection, not only here in the United States, but also in Europe."

"I believe we will have a strong competitive advantage in Europe similar to what we have here in the US," Meldrum said.

As Myriad's tests gain traction in the US, this is the "ideal time" to expand the firm's business internationally, King said. In addition to increased acceptance in the US, Myriad's tests are "becoming well-known internationally" through peer-reviewed publications.

Myriad currently provides testing in more than 40 countries. It is represented through distributors in Europe, Asia, and South America, "but we will not have to unwind complex, potentially blocking exclusive commercial agreements to develop our direct international presence," King said.

The MDx market in Europe is about 70 percent of that in the US, he said, with growth most rapid in oncology and pharmacogenomics. The worldwide molecular diagnostics market is currently estimated at $4 billion to $5 billion, but is growing at an annual rate of approximately 15 percent, according to various sources.

"So there is potential for international expansion to contribute significantly to future revenue and profit growth," King said. Once it has successfully penetrated the European market, Myriad will take aim at Asia-Pacific, Latin America, Eastern Europe, and the Middle East.

Meldrum added that that the goal is to establish a "significant" international presence by the end of 2012.

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