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Myriad Projects Stronger Revenue Growth in Second Half of FY2015 Driven by CDx, Prolaris

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NEW YORK (GenomeWeb) – If AstraZeneca's PARP inhibitor olaparib is granted market approval by European and US healthcare authorities in the coming months, it would enable Myriad Genetics to begin marketing BRACAnalysis as a companion test for the first time.

Such a scenario would also contribute to revenue growth for Myriad in the second half of its fiscal year, company executives told investors and analysts during a call to discuss the firm's quarterly financials this week.

During the first quarter of fiscal year 2015, Myriad reported a 17 percent decline in revenues year over year, from $202.5 million in fiscal Q1 2014 to $168.8 million in fiscal Q1 2015. The revenue drop, according to company officials was due to greater than anticipated demand for its MyRisk Hereditary NGS hereditary cancer test that Myriad wasn't able to meet, lower testing use during the summer months, negative insurer decisions from Horizon Blue Cross Blue Shield of New Jersey and Amerigroup, and market share loss due to completion.

However, the company maintained its revenue guidance of between $800 million to $820 million for the full year, hoping that revenues from its companion diagnostics business, greater adoption and reimbursement of Prolaris and the rheumatoid arthritis test Vectra DA, and improved capacity to meet MyRisk demands will make up for the revenue performance in the first part of the fiscal year.

Myriad is hoping to see greater revenues from its companion testing business during the fiscal year. The European Medicines Agency's Committee for Medicinal Products for Human Use recently recommended marketing authorization for olaparib for the maintenance treatment of adult patients with platinum-sensitive relapsed BRCA-mutated high-grade serous epithelial ovarian, fallopian tube, or primary peritoneal cancer. Meanwhile, in the US, after a challenging advisory committee hearing and additional data submissions to the US Food and Drug Administration, the agency is slated to issue a decision on AstraZeneca's marketing application on Jan. 3.

"We're working closely with AstraZeneca to prepare for a potential commercial launch in the US in early calendar year in 2015, upon simultaneous approval of olaparib and BRACAnalysis CDx," Mark Capone, president of Myriad Genetic Laboratories, said during the call. Capone noted that Myriad has submitted all four premarket approval (PMA) application modules for BRACAnalysis CDx with the FDA, and that the FDA has recently completed the pre-approval inspection of its CLIA lab where samples for companion testing will be analyzed.

If olaparib and BRACAnalysis CDx are approved in the US, Capone expects that "it will lead to a significant increase in ovarian cancer testing. He estimated that Myriad currently tests only 25 percent of the 22,000 newly diagnosed ovarian cancer patients in the US each year.

Furthermore, "Myriad will have the only companion diagnostic approved for olaparib," Capone added. In holding this distinction of BRACAnalysis being the only test that has been studied alongside the PARP inhibitor, Myriad is hoping that the agency will make an exception and mention BRACAnalysis in olaparib's label once approved. The FDA, as a policy, doesn't mention tests by their brands in drug labeling, but does mention the particular drug for which a particular companion test is indicated

"We'll see what that [olaparib] label will look like in the coming weeks," Capone said during the call. "Historically, the FDA has said that the [drug] label will not necessarily contain trade names for companion diagnostics. But I think this particular situation is quite unique, and we'll have to see if the FDA modifies that to reference specifically BRACAnalysis CDx."

Although Myriad's deal with AstraZeneca in the US is focused on using germline BRACAnalysis for companion testing, the firm has developed a new Tumor BRACAnalysis CDx that it intends to launch first in Europe with the approval of olaparib. Additionally, Myriad and drug developer AbbVie recently expanded their existing companion diagnostics collaboration and agreed to use the Tumor BRACAnalysis CDx in clinical studies.

Myriad is also planning to launch an NGS-based homologous recombination deficiency (HRD) test as a companion diagnostic for platinum-based chemotherapies. Capone noted that Myriad plans to get the HRD test to early-access customers later in the fiscal year in the neoadjuvant and triple negative breast cancer setting. In total, Myriad has CDx deals with five pharmaceutical companies using BRACAnalysis germline testing, Tumor BRACAnalysis testing, and the HRD test in 13 Phase III drug trials.

Meanwhile, during the quarter Medicare contractor Palmetto issued a draft LCD for Prolaris, stipulating coverage for the test for patients at low or very low risk of disease progression who are expected to live for a decade or longer. Additionally, the National Comprehensive Cancer Network mentioned Prolaris (as well as Genomic Health's Oncotype DX prostate cancer test) in its most recent guidelines.

Given these advancements, Myriad believes it is in a strong position to "start generating meaningful revenue from Prolaris starting from the second half of this fiscal year," Capone said, adding that Myriad has completed an expansion of its urology sales force with a total of 40 representatives.

The company estimates that approximately 50 percent of newly diagnosed prostate cancer patients fall into the low- or very low-risk category and would meet requirements for covered testing under Medicare. Of these patients, 85 percent have life expectancies of 10 years of more. "If all payors adopted these criteria, then approximately 100,000 men would be candidates for this test," Capone estimated.

However, Myriad is hopeful that it can convince Medicare to cover Prolaris testing for all prostate cancer patients, regardless of their risk of progression. The company is working on publishing two new studies on Prolaris – the third clinical utility study involving the test showing changes in patient treatment regardless of risk category and a validation study in the prostate biopsy population. These studies provide further evidence, Capone said, that Prolaris can be used to gauge prostate cancer outcomes regardless of whether patients are at high, low, or very low risk of disease progression.

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