By Matthew Willett
Myriad Genetics Inc. raised $41 million in a private equity placement of 400,000 shares with Acqua Wellington North American Equities Fund Ltd., making the fund a 2.5 percent shareholder in Myriad.
The placement is the second such investment by the New York-based investor in Myriad, of Salt Lake City. Acqua Wellington bought 175,000 shares of Myriad in August for $22 million. (See BioWorld Today, Aug. 31, 2000.)
William Hockett, Myriad director of corporate communications, said the financing will fund drug development.
"They approached us with the idea of making an investment in August, and we did a deal with them and raised $22 million," Hockett told BioWorld Today. "Just recently we were at a meeting in New York and Acqua Wellington came to us and said they were happy with their investment and would like to own more Myriad."
Myriad's stock (NASDAQ:MYGN) rose $16 Tuesday, or 15 percent, closing at $120. Hockett said the rise in the company's valuation came partially due to the financing and partially due to analysts' comments. Bear Stearns & Co. Inc. initiated coverage with a "buy" rating Tuesday, and CIBC World Markets Corp. upgraded the company to "strong buy."
"We are upgrading Myriad Genetics to Strong Buy and raising our price target to $141, based on comparables," Matt Geller, of CIBC World Markets, said in a research note. "We believe that this genomics, proteomics, molecular diagnostics and drug discovery leader is undervalued, given the company's recent progress in all these areas."
Hockett said the funding should be enough to take at least two of Myriad's candidates into the clinic.
"We've have about $145 million in the bank, and it will really help us finance our drug development efforts with our colon cancer compound and other development programs," Hockett said. "It's primarily earmarked for further development in the colon cancer program."
The program for colorectal therapeutic MPYS-847 is approaching the clinic, Hockett said. "It's proceeding very well in animal testing," he added. "The compound is one we found using proteomics technology and we're proceeding well, and hope to have it in human trials within 12 months."
Myriad has made its business in genetic testing and therapeutics development, marketing its BRACAnalysis and CardiaRisk diagnostics tests for predisposition to breast cancer and cardiovascular disease, respectively.
The company licensed 10 of its 19 drug development targets to pharma or biotech companies, including Novartis AG, of Basel, Switzerland; Pharmacia Corp., of Peapack, N.J.; Bayer AG, of Leverkusen, Germany; Eli Lilly and Co., of Indianapolis; Hoffmann-La Roche Inc., of Nutley, N.J.; Schering AG, of Frankfurt, Germany; and Schering-Plough Corp., of Madison, N.J.
The company also has a broad pipeline of development candidates, Hockett said.
"We're working with human viral diseases. One of our most recent targets is the hepatitis B virus, and that's proceeding nicely through high-throughput screening. We have a novel HIV target that we're working with as well that's gone through high-throughput screening, and that's very promising."
Competitively, he said, Myriad strives to take advantage of flexibility and choice.
"Myriad has the luxury of lots of targets," Hockett said. "Rather than exhaust our targets looking for compounds that inhibit or bind, we can go through rapidly and find the best targets and be selective. We can move quickly to the best one competitively and can be quick and decisive and get the best of the targets into development quickly."