By Mary Welch
Myriad Genetics Inc. received a $24 million equity investment from an undisclosed European pharmaceutical company, with the proceeds being used to accelerate the development of colon cancer therapeutic compounds as well as advance its second-generation proteomics technologies.
"The deal was brought to us because this company was interested in making an investment with us," said William Hockett, Myriad's director of corporate communications. "While this company is a new investor, it is a collaborator of ours. So they have had a chance to see Myriad's operations, the programs we have in place and our technology. Obviously they wanted to be a part of it."
Myriad has American-based partners including Schering-Plough Corp., of Madison, N.J., and Eli Lilly and Co., of Indianapolis, and has four European pharmaceutical partners: Schering AG, of Berlin; F. Hoffmann-La Roche Ltd., of Basel, Switzerland; Bayer AG, of Leverkusen, Germany; and Novartis AG, of Basel.
The European investor received 300,000 shares of newly issued common stock at a 7.5 percent discount to the 15-day trailing average stock price.
"The deal was done two weeks ago when the stock was in the $80s," Hockett said. "Since then the stock has had a nice run so they must be very happy."
Myriad's stock (NASDAQ:MYGN) closed Thursday at $146.125, up $4.25.
The company has 10.7 million shares outstanding. Its 2000 fiscal year ends today, and the company will close the year with $85 million in cash.
Friedli Corporate Finance and Swissfirst Bank AG, both of Zurich, Switzerland, arranged the transaction.
Salt Lake City-based Myriad will use the proceeds to fund and accelerate the development of MPI-42511, or a closely related analogue, for the treatment of colon cancer. The compound has been shown to selectively kill human colon cancer in vitro. Testing in animals is slated to start within the next several weeks. MPI-42511 inhibits a key regulator protein in an important colon cancer pathway that is common to about 95 percent of all colon cancer cases, the company said.
"I would say it is our lead compound, and we're very excited about it and continue to be more interested and excited about it," Hockett said. "It is also a compound that we may take to the clinic ourselves. We can do a cancer trial program in a shorter and less expensive way than, say, an HIV trial."
Hockett said it was "a little bit early" to predict when an investigational new drug application might be filed.
The company's ability to raise the $24 million is a bit of a comfort after it was forced to withdraw its ambitious $327 million public offering. The company proposed selling 2 million shares at a time when the shares were worth $165.50 each. At the time of the withdrawal, the stock price was at $51.625. (See BioWorld Today, April 13, 2000, p. 1; and March 7, 2000, p. 1.)
"If the time is right at a later time, we might reconsider and try another offering," Hockett said.