Playing by the Rules
Myriad acquires Austin-based Rules- Based Medicine for $80 million, boosting capabilities in biomarker discovery
SALT LAKE CITY, Utah—Molecular diagnostic company MyriadGenetics Inc. and privately held Rules-Based Medicine (RBM) recently announcedthat the two companies have entered into a definitive merger agreement by whichMyriad will acquire RBM for $80 million in cash.
Per the agreement, Myriad will acquire RBM on a cash- anddebt-free basis, financing the purchase price with cash on hand. The expectedclosing date for the transaction is on or before May 31, with the acquisitionsubject to customary closing conditions.
"We believe the acquisition of RBM will enhance Myriad'scapacity to deliver transformative molecular and companion diagnostic productsto patients suffering from major, common diseases," says Peter Meldrum,president and CEO of Myriad Genetics.
In Myriad's May 3 earnings call, Meldrum called theacquisition "an attractive opportunity" for three main reasons, the first ofwhich he said was RBM's pipeline, which includes diagnostic tests inneuroscience disorders, infectious diseases, oncology and inflammatorydiseases. RBM's past and current collaborations have provided RBM with avariety of biomarker information, Meldrum added. He also noted that RBM's"proprietary multiplex immunoassay technology and access to patient samplesenhances Myriad's already-strong capabilities in nucleic acid biomarkerdiscovery." Meldrum told investors that Myriad believes the acquisition "represents a very attractivereturn on investment, and [we] expect the deal to be accretive within twoyears."
While Myriad identifies its expertise as being related tonucleic acids biomarker discovery, RBM's expertise lies in protein biomarkers.In addition, RBM's quantitative proteomics platform and immunoassays make thema leader in novel biomarker discovery.
"RBM has succeeded in developing over 550 immunoassays and aproprietary multiplex immunoassay technology for the discovery of novel proteinbiomarkers," says Craig Benson, president and CEO of RBM. "With its heritage asan innovator in the molecular diagnostics field, Myriad is perfectly suited totake RBM to the next stage and commercialize our products that can improve thequality of one's life."
The acquisition provides Myriad with eight new moleculardiagnostic product candidates to add to its pipeline, including RBM's diagnostictest VeriPsych. The test was launched last year, and Meldrum told investors "the United States militaryhas 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-onsetschizophrenia," adding that "we've been actively working on developingadditional 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 byMeldrum as he told investors that the company expects the combination of RBM'stechnology platform and Myriad's experience in DNA/RNA biomarker discovery toaccelerate the discovery and development of new diagnostics. Meldrum assertedthat "Myriad now hasthe completecomplement of molecular biomarker technologies needed to lead the paradigmshift towards individualized medicine, whether it is assessing risk of diseaseor 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 Meldrumtold investors that Myriad is "excitedto welcome the over 160 talented and dedicated RBM employees to the Myriadteam." RBM's commercial diagnostic operations will be placed underMyriad's molecular diagnostic laboratory in Salt Lake City, Utah. In a videoreport regarding the merger, Dr. Ralph L. McDade, senior vice president andstrategic development officer at RBM, said that "the day-to-day operation ofour lab, sample-handling, testing and reporting will continue," adding that "weintend for this transition to be seamless."
"As medical sciences moves toward the era of personalizedmedicine, we believe that a combination of genomics and proteomics will makeboth companion diagnostics, as well as more effective treatments, a reality,"said McDade.
"There should be no immediate impact," LaBrie says of themerger. "Myriad has said that they will continue to have the RBM business runhere at our Austin, Texas headquarters and maintain our current employees andkeep growing and developing the business as we have been."
RBM's revenues were approximately $25 million in 2010, withits operations approaching breakeven after adjusting for non-recurringactivities.
Myriad Geneticslicenses cancer detection technology from Chronix Biomedical
SALT LAKE CITY, Utah—Last month, Myriad Genetics Inc. alsosigned an agreement to license proprietary technology for the early detectionof 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 forthe early detection of breast cancer, colon cancer and prostate cancer inexchange for upfront fees, milestone payments and royalty payments based uponthe technical and commercial success of the products.
In a study of 575 individuals presented at the June 2010ASCO meeting, Chronix's technology detected and identified DNA fingerprints inblood samples from patients that indicated the presence of prostate or breastcancer with 92 percent sensitivity and 100 percent specificity. Myriad willexpand on this initial research with the goal of developing moleculardiagnostic products that are less invasive and significantly outperform theaccuracy of current early detection methods.
"The technology we have licensed from Chronix Biomedical hasthe potential to revolutionize the early detection of cancer through theanalysis of unique DNA sequences in blood samples," said Mark Capone, presidentof Myriad Genetic Laboratories Inc., in a statement. "This acquisition isconsistent with our strategy to broaden our preventive care portfolio beyondpredictive medicine products for women's health, and supply healthcareproviders with enhanced tools to catch disease early, when it is mosttreatable."
"We are pleased with the partnership of our technology withMyriad Genetics given their expertise in developing and commercializingmolecular diagnostic products," added Dr. Howard Urnovitz, CEO of Chronix."Chronix's molecular diagnostic technology is transformative; as it is based onthe ability to detect, analyze and identify alterations in specific regions ofthe human chromosome discharged by damaged or dying cancer cells. The abilityto differentiate cancerous versus normal cells in blood will provide anincredibly sensitive screening and monitoring tool."