Myriad Genetics sees three drugs advancing, two new clinical trials in 2006

By Rebecca Melvin

Princeton, N.J., Feb. 7 - Myriad Genetics Inc. is aggressively advancing three drug candidates through the regulatory process in 2006 and expects to begin two new drug trials during the year as well, company officials said.

The Salt Lake City-based biotechnology company is designing trials for testing MPC-6827 for treatment of a single primary tumor type with brain involvement.

Those trials are seen starting in the second half of the year, Adrian Hobden, president of Myriad's pharmaceuticals segment, said during a conference call.

Such trials will involve cancers such as breast cancer with brain metastases or lung cancer with brain metastases, Hobden said. Currently there are no Food and Drug Administration-approved drugs to treat cancers that have spread to the brain, he said, adding that brain metastases affect 170,000 Americans per year.

"MPC-6827 has the remarkable ability to enter the brain at 1400% of plasma levels, compared to 30% of the best drug currently available," Hobden said. "The objectives of the trials will be to determine the safety [of MPC-6827] and identify maximum tolerated dose in two phase 1 trials."

To date, the drug is well tolerated, but no conclusions about the potential beneficial affects can be drawn at this time, he said.

Other Myriad clinical trials include a phase 3 study of Flurizan, or MPC-7869, in Alzheimer's disease, a 12-month follow-on study to the phase 2 Alzheimer's disease trial, a phase 2b trial of MPC-7869 in prostate cancer and a phase 1 study of MPC-2130 in blood cancers and advanced metastatic tumors.

Results of the phase 2b prostate cancer trial, which has been ongoing in trials for several years, are expected to be ready toward the end of the current calendar year, Hobden said in response to an analyst's inquiry.

Flurizan a focus

But the company emphasized its promising investigational drug Flurizan to treat and slow the progress of mild Alzheimer's disease. It is a selective amyloid lowering agent (SALA) that reduces levels of the toxic peptide amyloid beta 42 in cultured human cells and in animal models.

"There are no drugs on the market that can slow the progression of Alzheimer's disease. Currently available treatments provide only temporary and symptomatic relief," said Peter Meldrum, Myriad's president and chief executive.

"Phase 2 studies of Flurizan show it can slow the disease in mild patients, with a 34% to 45% improvement compared to [a] placebo in the first 12 months. The ongoing study has shown considerable improvement in these cases, and it is currently in phase 3 study," Meldrum said.

Research expense rises

Due to costs associated with the trials underway, Myriad's research and development expenses for the fiscal second quarter ended Dec. 31 rose 31% to $19 million from $14.5 million in the same quarter of the prior year and were 3% higher than the previous quarter, said chief financial officer Jay Moyes.

"With two additional drug candidates going to clinic this year, R&D expenses will continue to grow in the next several quarters," Moyes said. But the increase is expected to be gradual, not dramatic, company officials added later.

For the second quarter, Myriad's net loss was $8 million, or 22 cents per share, which was down compared with $10 million, or 33 cents a share, in the same quarter of the prior year.

The reduced loss, which bettered First Call consensus estimates, was due in large part to the earnings contribution of Myriad's predictive medicine business, which was $7.7 million before taxes, depreciation and amortization, Moyes said.

Predictive business revenue in the quarter was a record $23.4 million and it is expected to grow in the third quarter. Research revenues increased 87% to $3.9 million, from $2.1 million for the second quarter of fiscal 2005, putting total revenue at $27.3 million for the fiscal second quarter.

Pressuring the bottom line for the rest of its fiscal year however will be the expanded phase 3 Alzheimer's disease trial, which was increased to 1,600 patients from 750 patients, and stock options expense expected to increase, Moyes said. But the losses for the next two quarters are expected to be in line with current estimates.

Operating margin improves

In the most recent quarter, operating margin improved to 31%, up from 23% in the same quarter a year earlier. Cash, cash equivalents, and marketable securities totaled $235.1 million as of Dec. 31, compared to $124.7 million for the same period in the prior year.

The improvement was due to Myriad's follow-on offering last year, Moyes said, adding that the company has no straight or convertible debt.

Meldrum said Myriad's pipeline of future products is strong and that its growing predictive medicine business is promising.

Its predictive business consists of various tests for determining patient risk for developing hereditary cancers, such as ovarian, breast, uterine, colon and skin cancers.

Having faced criticism in the past for the efficacy of such tests, company officials said that actions that can be taken before cancer presents in patients make the tests valuable. Those actions include more careful surveillance and monitoring activities, various medications that can lower the risk of getting ovarian and uterine cancers, and surgeries including removal of ovaries for patients that are at high risk of developing ovarian cancer.

"Greater product acceptance has increased market penetration across all four product lines," Meldrum said.

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