Myriad Genetics, Rosetta Genomics, National Institutes of Health, Prostate Cancer Foundation, Health Discovery Corp, Smart Personalized Medicine, Nanogen, Elitech Group, OralDNA Labs, Interleuken Genetics
Myriad Mulls Split of Molecular Dx, Pharma Businesses
Myriad Genetics said this week 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, compared to a loss of $35 million 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.
Rosetta Genomics to Study MicroRNAs in HIV Infections for NIH
Rosetta Genomics will work with the National Institutes of Health to discover microRNAs that may be involved in the viral replication of HIV, the company said this week.
Rosetta said it will tap into its microRNA intellectual property and technologies, as well as publicly known human and viral microRNAs, to find out how microRNAs are involved in viral replication in HIV infections and the life cycle of the disease, and whether they may be used as potential novel drug targets for the disease.
The company cited a study published last year in Nature Medicine that showed that microRNAs are involved in suppressing HIV replication and keeping it latent.
Financial terms of the agreement were not released.
'Omics Scientists Reel in Prostate Cancer Foundation Funds
The Prostate Cancer Foundation this week named the winners of its Young Investigators Awards for 2008, and several of the 19 total winners will be conducting genomics and proteomics studies.
The program will provide each awardee with $75,000 for three years, for a total of $225,000, which will be matched by the recipients’ institutions. The investigators generally are under age 35, already have achieved junior faculty positions, and are “committing their lives to the field of prostate cancer.”
This year’s funding from PCF totals $4.3 million.
This year’s crop of PFC-supported young scientists using ‘omics and molecular biology tools to address the disease includes:
HDC Board Member Forms Prognostic Test Startup
Health Discovery Corp. said this week that Richard Caruso, one of the firm’s board members, has resigned his position to form a new firm that intends to develop a breast cancer prognostic test based on HDC’s support vector machine technology.
Caruso, who will become a senior advisor to HDC, said in a statement that he will negotiate a license and development agreement with HDC to apply the technology to breast cancer applications. The new firm, called Smart Personalized Medicine, also intends to collaborate with MD Anderson Cancer Center on the test.
HDC will receive and undisclosed equity position in the startup as well as royalties paid on a per-test basis.
Stephen Barnhill, chairman and CEO of HDC, said that developing a prognostic test for breast cancer “requires focused attention and potentially millions of dollars in funding to succeed.” He added that since the focus of HDC has been on launching its prostate cancer test, providing rights to the breast cancer test to Smart Personalized Medicine provides “the best opportunity to achieve success for our shareholders.”
Nanogen to Merge with French Dx Firm Elitech in Reverse Acquisition
Nanogen said last week that it has signed a merger agreement with Paris-based diagnostic firm the Elitech Group that is structured as a reverse acquisition of Nanogen by the privately held Elitech.
Under the terms of the agreement, Nanogen said that Elitech shareholders are expected to receive shares of Nanogen common stock valued at €66.5 million ($98.5 million).
Last Thursday, the day the merger was announced, Nanogen had a market capitalization of $32.8 million and its shares were trading at $.44. A Nanogen spokesman said the company will issue new shares to cover the balance of the value of the purchase agreement.
The name of the combined company has not yet been determined, but it will continue to be listed on the Nasdaq exchange, Nanogen said. The combined company will be headquartered in San Diego, where Nanogen is currently based.
The company said that the merger, expected to close in the first quarter of 2009, will combine Nanogen's experience in molecular and point-of-care diagnostics with Elitech’s global manufacturing, sales, and distribution of IVD products for the clinical chemistry and microbiology markets.
Expected first-year revenues for the combined firm will be more than $150 million.
Elitech Group has around 260 employees. For the fiscal year ended March 31, 2008, it posted revenue of €47.5 million ($70.4 million).
Nanogen reported revenues of $38.2 million for its 2007 fiscal year and has forecast full-year 2008 revenues of approximately $48 million.
The merged company is expected to benefit from “significant operational synergies,” Nanogen said, including cost reductions in sales, marketing, manufacturing, and development.
As part of the agreement, Nanogen has also entered into an interim funding agreement with Elitech and “certain existing Nanogen investors” under which they will loan Nanogen $8 million to fund operations prior to the close of the acquisition.
In exchange, Nanogen will issue senior secured convertible promissory notes that are convertible into shares of Nanogen stock at the closing bid price immediately preceding the signing of the interim funding agreement.
Nanogen said that the boards of directors of both companies unanimously approved the merger agreement.
Pierre Debiais, president of Elitech, will serve as CEO. Howard Birndorf, Nanogen's chairman and CEO, is “expected” to serve as chairman of the combined entity.
Michael Saunders, group vice president of marketing and business development for Elitech, will become COO, with a focus on European business and global commercial operations. David Ludvigson, president and COO for Nanogen, will also serve as COO, with a focus on the US business and global business and finance.
Nick Venuto, currently vice president and CFO of Nanogen, will serve in the same capacity for the combined entity.
OralDNA to Distribute Interleukin's Periodontal Disease Genetic Test in US
OralDNA Labs has licensed the rights to sell an Interleukin Genetics test that assesses the risk for periodontal disease, Interleukin said last week.
Under the agreement, the oral diagnostics company has acquired a non-exclusive license allowing it to market, sell, and distribute Interleukin Genetics’ PST Genetic Test to dental practices in the US.
The PST Genetic Test analyzes interleukin 1 genes for variations that identify an individual's predisposition for inflammation and risk for more severe periodontal disease, the company said.
Brentwood, Tenn.-based OralDNA has agreed to pay Interleukin Genetics a set fee per test for all of the tests it sells, and it is responsible for all of the associated marketing costs.
Interleukin also said that patients will be asked through informed consent if they would like to receive additional genetic tests from Interleukin Genetics besides the PST.
Interleukin’s CEO, Lewis Bender, said the agreement should help to “build a customer base to provide additional test services.”
OralDNA CEO Brian Carr said in a statement that the company plans to market the PST test along with its MyPerioPath test, which identifies specific bacteria that cause infections in the structure of the gums.