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Playing by the Rules
SALT LAKE CITY, Utah—Molecular diagnostic company Myriad Genetics Inc. and privately held Rules-Based Medicine (RBM) recently announced that the two companies have entered into a definitive merger agreement by which Myriad will acquire RBM for $80 million in cash.
Per the agreement, Myriad will acquire RBM on a cash- and debt-free basis, financing the purchase price with cash on hand. The expected closing date for the transaction is on or before May 31, with the acquisition subject to customary closing conditions.
"We believe the acquisition of RBM will enhance Myriad's capacity to deliver transformative molecular and companion diagnostic products to patients suffering from major, common diseases," says Peter Meldrum, president and CEO of Myriad Genetics.
In Myriad's May 3 earnings call, Meldrum called the acquisition "an attractive opportunity" for three main reasons, the first of which he said was RBM's pipeline, which includes diagnostic tests in neuroscience disorders, infectious diseases, oncology and inflammatory diseases. RBM's past and current collaborations have provided RBM with a variety of biomarker information, Meldrum added. He also noted that RBM's "proprietary multiplex immunoassay technology and access to patient samples enhances Myriad's already-strong capabilities in nucleic acid biomarker discovery." Meldrum told investors that Myriad believes the acquisition "represents a very attractive return on investment, and [we] expect the deal to be accretive within two years."
While Myriad identifies its expertise as being related to nucleic acids biomarker discovery, RBM's expertise lies in protein biomarkers. In addition, RBM's quantitative proteomics platform and immunoassays make them a leader in novel biomarker discovery.
"RBM has succeeded in developing over 550 immunoassays and a proprietary multiplex immunoassay technology for the discovery of novel protein biomarkers," says Craig Benson, president and CEO of RBM. "With its heritage as an innovator in the molecular diagnostics field, Myriad is perfectly suited to take RBM to the next stage and commercialize our products that can improve the quality of one's life."
The acquisition provides Myriad with eight new molecular diagnostic product candidates to add to its pipeline, including RBM's diagnostic test VeriPsych. The test was launched last year, and Meldrum told investors "the United States military has already shown a strong interest in using this test."
Sam LaBrie, vice president of corporate development at RBM, identifies VeriPsych as "an aid to the diagnosis of recent-onset schizophrenia," adding that "we've been actively working on developing additional tests in the area of mental illness, neurodegenerative disease, infectious disease, oncology and kidney damage."
The companies' platforms, LaBrie says, are "quite distinct and complementary," a sentiment echoed by Meldrum as he told investors that the company expects the combination of RBM's technology platform and Myriad's experience in DNA/RNA biomarker discovery to accelerate the discovery and development of new diagnostics. Meldrum asserted that "Myriad now has the complete complement of molecular biomarker technologies needed to lead the paradigm shift towards individualized medicine, whether it is assessing risk of disease or selecting the most appropriate therapy for a given patient."
RBM will continue to operate at its headquarters in Austin, Texas, as a wholly owned subsidiary under the name Myriad RBM Inc., and Meldrum told investors that Myriad is "excited to welcome the over 160 talented and dedicated RBM employees to the Myriad team." RBM's commercial diagnostic operations will be placed under Myriad's molecular diagnostic laboratory in Salt Lake City, Utah. In a video report regarding the merger, Dr. Ralph L. McDade, senior vice president and strategic development officer at RBM, said that "the day-to-day operation of our lab, sample-handling, testing and reporting will continue," adding that "we intend for this transition to be seamless."
"As medical sciences moves toward the era of personalized medicine, we believe that a combination of genomics and proteomics will make both companion diagnostics, as well as more effective treatments, a reality," said McDade.
"There should be no immediate impact," LaBrie says of the merger. "Myriad has said that they will continue to have the RBM business run here at our Austin, Texas headquarters and maintain our current employees and keep growing and developing the business as we have been."
RBM's revenues were approximately $25 million in 2010, with its operations approaching breakeven after adjusting for non-recurring activities.
Myriad Genetics licenses cancer detection technology from Chronix Biomedical
SALT LAKE CITY, Utah—Last month, Myriad Genetics Inc. also signed an agreement to license proprietary technology for the early detection of cancer from Chronix Biomedical of San Jose, Calif.
Under the agreement, Myriad has rights in North America, South America and Europe to commercialize tests derived from the technology for the early detection of breast cancer, colon cancer and prostate cancer in exchange for upfront fees, milestone payments and royalty payments based upon the technical and commercial success of the products.
In a study of 575 individuals presented at the June 2010 ASCO meeting, Chronix's technology detected and identified DNA fingerprints in blood samples from patients that indicated the presence of prostate or breast cancer with 92 percent sensitivity and 100 percent specificity. Myriad will expand on this initial research with the goal of developing molecular diagnostic products that are less invasive and significantly outperform the accuracy of current early detection methods.
"The technology we have licensed from Chronix Biomedical has the potential to revolutionize the early detection of cancer through the analysis of unique DNA sequences in blood samples," said Mark Capone, president of Myriad Genetic Laboratories Inc., in a statement. "This acquisition is consistent with our strategy to broaden our preventive care portfolio beyond predictive medicine products for women's health, and supply healthcare providers with enhanced tools to catch disease early, when it is most treatable."
"We are pleased with the partnership of our technology with Myriad Genetics given their expertise in developing and commercializing molecular diagnostic products," added Dr. Howard Urnovitz, CEO of Chronix. "Chronix's molecular diagnostic technology is transformative; as it is based on the ability to detect, analyze and identify alterations in specific regions of the human chromosome discharged by damaged or dying cancer cells. The ability to differentiate cancerous versus normal cells in blood will provide an incredibly sensitive screening and monitoring tool."