By Mary Welch
The capricious stock market caused another biotechnology firm, Myriad Genetics Inc., to withdraw its ambitious $327 million public offering.
The company, based in Salt Lake City, proposed selling 2 million shares, with the underwriters getting another 300,000 shares to cover any overallotments. At the time Myriad filed with the SEC, its stock was selling at $165.50, which would have resulted in a financial windfall of $327 million ¿ or about $370.6 million had the overallotment been exercised. (See BioWorld Today, March 7, 2000, p. 1.)
¿The timing just wasn¿t in our favor,¿ said William Hockett, Myriad¿s director of corporate communications. ¿Clearly this is a matter of market forces, and we believe our stock is undervalued. The market has wielded some pretty wild gyrations. I don¿t attribute our withdrawal to anything except the market and this segment.¿
Myriad¿s stock (NASDAQ:MYGN) closed Wednesday at $51.625, down $3.125. Had the offering taken place Wednesday, the 2 million shares would have been worth $103 million.
Morgan Stanley Dean Witter and CIBC World Markets, both of New York, were the managing underwriters. Dain Rauscher Wessels, of Minneapolis, and Tucker Anthony Cleary Gull, of Chicago, also were underwriters.
The company¿s latest financial statement covered its second-quarter 2000 figures, which ended Dec. 31. For that quarter, the company had revenues of $8.2 million and a net loss of $1.8 million, or 19 cents per share. The company has 10.1 million shares outstanding.
¿We are fortunate to have about $60 million in cash in the bank,¿ Hockett said. ¿This offering was going to fund research and development and accelerate our drug discovery efforts. We can still do that, but the financing would have provided a cushion for us to develop a drug and take it through the clinic ourselves. Perhaps we will still do that at a future date, but it will depend on the market.¿
Myriad uses gene-based medicine to develop therapeutic and diagnostic products. To date, it has identified 19 drug targets and delivered 10 of those targets to various strategic partners based on its discovery of genes involved in breast, ovarian, brain and prostate cancers, as well as heart disease and dementia. The company has received more than $100 million from its seven partners.
Current partners include Bayer Corp., of Pittsburgh; Eli Lilly and Co., of Indianapolis; Monsanto Co., of St. Louis; Schering-Plough Corp., of Madison, N.J.; and Schering AG, of Berlin.
In addition, Myriad has nine new drug targets it has retained for its own small-molecule drug development program. The company anticipates entering into future partnerships for clinical development of some of the targets. However, it may internally commercialize some of these drug targets, particularly in the area of cancer, it said in its filing.
One of Myriad4s products is ProNet, a proprietary proteomic database, which is used to discover disease pathways, understand protein function and identify high-quality drug targets. Using ProNet, researchers can discover and evaluate the potential modifying or disrupting of these protein pathways in order to upset the disease process.