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Myriad Genetics, Inc. (MYGN)
Analyst Day Call
May 9, 2013 9:00 AM ET
Pete Meldrum – President and CEO
Mark Capone – President, Myriad Genetics Laboratories, Inc.
Jerry Lanchbury – Chief Scientific Officer
Lloyd Sanders – Head, Oncology Division
Alec Ford – Head, Preventive Care Business Unit
Scott Gleason – IR
Bill Rusconi – Head, Urology Division
Gary King – EVP, International Operations
Jim Evans – CFO
Isaac Ro – Goldman
Peter Lawson – Mizuho Securities
Doug Schenkel – Cowen & Company
Vamil Divan – Credit Suisse
Tycho Peterson – JP Morgan
Chip Skinner – Royce Funds
Derik De Bruin – Bank of America
Michael Yee – RBC Capital Markets
Sung Ji Nam – Cantor Fitzgerald
Previous Statements by MYGN
» Myriad Genetics Management Discusses Q3 2013 Results - Earnings Call Transcript
» Myriad Genetics' CEO Discusses F2Q13 Results - Earnings Call Transcript
» Myriad Genetics' CEO Discusses F1Q13 Results - Earnings Call Transcript
Before we get started, we need to go through our forward-looking statements. We will be making some forward-looking statements commentary today. Please note that some of the information presented here today may contain projections or other forward-looking statements regarding future events or the future financial performance of the company. These statements are based on management’s current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons.
We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company’s Annual Report on Form 10-K, its quarterly report on Form 10-Q, and its current reports on form 8K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.
With that, I’m very pleased to present Pete Meldrum, our Chief Executive Officer. Thank you.
Thank you, Scott. And it’s my pleasure to welcome you to Myriad Genetics Analyst and Investor Day. And we’re excited to share with you the company vision and talk a little bit about some of the products that are coming out through our pipeline.
Myriad Genetics is dedicated to saving lives and improving the quality of life of patients through the discovery and development and commercialization of novel transformative molecular diagnostic products across major disease indications. We’re really focused on every aspect of the continuum of patient care. To getting with the assessment of risk of disease, so that the physician and patient know how aggressively to treat the disease if a patient has and take preventive action if a patient has an increase risk over the general population for that disease.
We’re also very much focused on ensuring the patients get the most accurate and rapid diagnosis and predicting disease recurrence and disease progression and finally ensuring that the patient gets the most appropriate therapy using companion diagnostics to ensure that the patient gets the right drug at the right time. And this really represents the complete continuum of patient care that Myriad is focused on.
We have three major strategic growth initiatives as the companies involved in, the first is to grow our core business and expand our current market. And I think from our last earnings call, you can see the company has been implementing this, the strategy effectively. We now have achieved our seventh consecutive top line growth of over 20%. We also are very much focused on expanding our markets globally. We now have a marketing presence in over 80 different countries and are in full operations with our laboratory in Munich, Germany.
And finally, we’re going to be launching new products and that’s really what we’re going to be talking a lot about today, as we talk about our hereditary cancer panel and our HRD product as ways of growing the company and the future. All of these areas then will fuel the top line revenue growth of the company continues to expand.
We’re also focused on a variety of disease states, currently we have sales and marketing presence in Oncology, preventive care and urology. But we’re also expanding into dermatology and we’ll be launching our first dermatology product Melapath later this calendar year. We’re going to expand into auto immune diseases and we have entered into an auction to acquire a company called Crescendo Biosciences which has a very exciting Rheumatoid Arthritis product.
And we’re also going to be moving into the neuron science arena with the Acquisition of Rules-Based Medicine focusing on depression, major bipolar disease and schizophrenia. So the company is really going to be focusing across multiple disease indications to apply our technologies and launch products that improve patient care and stabilize.
Myriad’s vision is to become a trusted advisor for the physician to answer the patient’s most pressing concerns. And that really represents the complete continuum of patient care. Beginning at the top with risk assessment, answering the patient’s concern, what is myRisk of getting disease later in life, moving on to the concern of do I have disease, and then how aggressive is my disease, how aggressively should it be treated. What is the risk that my disease my progress?
And finally, what do you do with treating my disease, what is the best therapy. We really view Myriad as a trusted advisor and as the single source for answering all of the physicians questions about these important areas.
Let me talk about each one separately now. And the first patient concern is what is myRisk of getting disease later in life. Well, Myriad has been a pioneer in risk assessment or hereditary cancers. And all of these cancers we have test on the market today that are very important in terms of saving lives by identifying those patients who have a heightened risk or disease.
If we take for example, Colorectal cancer, the general population risk is about 5%, an individual has a 5% probability of developing colorectal cancer later in life. However, if you’d inherited a gene from your parents that predisposes to colorectal cancer, your risk can be as high as 82%. However, on to that information, you can take preventive action to prevent or delay the onset of the disease. And using preventive measures can actually lower your risk down to the general population or sometimes even below the general population risk.
While, this is a very exciting panel of products, we really see the future of predictive medicine moving from single cancer test to a pan-cancer disease panel. And this is Myriad’s very exciting product myRisk Hereditary Cancer. And you’ll hear more about myRisk Hereditary Cancer from Mark Capone, but I am pleased to say that we will be launching this product this year.
Myriad, as I mentioned is a pioneer in predictive medicine. We discovered the first gene for a major common disease, that being breast cancer and launch the first test that was a full DNA sequence based test, identifying all of the mutations in a particular population group.
This was a great improvement from the state of predictive medicine only a few years before our discovery of the breast cancer gene, whereas individuals really looked at linkage analysis or looked at a handful of common mutations and focused primarily on the rare genetic disorders.
So this really moved into common disease with Myriad’s discovery. But as I mentioned we see the future of predictive medicine, moving away from single cancer test to Pan disease cancer panels and applying it not only in cancer but across many different types of disease. And the launch of myRisk Hereditary Cancer will be the first comprehensive pan-cancer panel.
The second patient concern is do I have a disease? Cancer diagnosis today is very subjective and involves considerable judgment on the part of the physician. We believe the future of cancer diagnoses will be moving from this more subjective vision assessment to applying molecular diagnostic techniques to really provide a more accurate and objective measure.
14% of all skin biopsies are classified as indeterminate. This affects over 275,000 patients annually. The physician really can’t looking at the cells under a microscope determine whether or not the patient has a malignancy. Melapath is a very exciting product that we will launch this calendar year that will be able to assist the physician in determining whether or not the skin biopsy represents a benign nevi or a malignant melanoma, really improving the diagnoses and saving lives.
The third patient concern is how aggressive is my disease? Today physicians have a difficult time accurately determining how aggressive a disease is going to be and how that disease is going to progress. As a result of that physicians have a hard time knowing how aggressively to treat a patient. And frequently they air on the side of caution by over-treating patients. And prostate cancer I think is a perfect example.
85% of the man diagnosed with prostate cancer today will have aggressive therapy either removal of the prostate or radiation treatment. And yet, only 20% to 30% of those man need that aggressive therapy. But this is no good way today of assessing how aggressive a man’s prostate cancer is until Myriad’s launch of PROLARIS. The first test that actually predicts a man’s probability of surviving his prostate cancer, if that cancer is left alone and the man undergoes active surveillance or watchful waiting.
As shown in this clinical study, 90% of the man, with a low PROLARIS score survived their cancer for 10 years without any treatment. However, if a man had a high PROLARIS score and there you need aggressive therapy because only 22% of those men survived.
Myriad is an innovator in prognostic medicine with the launch of the first prognostic prostate cancer test. We’re very excited about this and we think this will gravely improve the healthcare of man because for 50 years physicians have had to rely on clinical parameters like Gleeson Score. And these adverse pathology indications are really willfully and adequate in terms of predicting how aggressively a man’s prostate cancer is going to be and therefore how aggressively to treat it.
A good example of how poor of an indicator these clinical parameters are is the United States Preventive Services Taskforce recently came out with a recommendation of doing away with PSA screening. They said it basically did more harm by over-treating the vast majority of patients and the good by treating those patients who actually needed aggressive therapy.
And even more recently, the American Urological Association came out with new guidelines, changing the PSA screening from any man over the age of 40 to only men between the ages of 55 and 69. So, again a test like PROLARIS is very much needed so that we can improve healthcare through man and treat only those man who need aggressive forms of treatment for their cancer.
We will launch a lung cancer prognostic test next fiscal year to compliment our prognostic medicine platforms and we will move this into other disease indications in the future as well. The first patient concern is what therapy is best, how do you treat my disease? Many medicines today are really prescribed on a trial and error basis. Only about 30% of the cancer patients will actually benefit from the chemotherapy that’s given to them.
And we view the future of drug development and medicine focusing on from hanging diagnostics that can identify those individuals who respond versus those who will not respond to a particular therapy. And our HRD test is very exciting, this was data presented recently at the San Antonio Breast Cancer Symposium in patients with triple negative breast cancer who are given carboplatin therapy. And one might expect about 30% response rate.
If those individuals with a high HRD score which is indicative of positive response, so 70% of those patients have their tumors shrink to the point where a cancer was not detectable. Yet a low PROLARIS score which was indicative of not responding well to carboplatin and DNA damaging based agents only 12% responded.
So, we’re very excited about being able to guide patient-care, identify individuals who respond effectively to the new classes of drugs that are coming on to the market. And Myriad has done a trailblazer in personalized medicine. Personalized medicine began by focusing mostly on how we metabolize drugs, recognizing that we all have a different genetic make-up and we all metabolized drugs slightly differently.
And then we moved on to a single gene or protein based test like the HER2/neu gene, or breast cancer testing. But at Myriad, we see the future of companion diagnostics not focusing on one or two genes that might be predictive as response but looking at an complete pathway, looking not at the powers but at the end result, the ability of the tumor to not prepare effectively DNA damage, and that’s exactly what the HRD test is.
And when we launched this test in calendar 2015, it will it’s first half way based companion diagnostic test. Myriad does have collaborations with 20 major pharmaceutical companies. These collaborations are exciting and represent $1 billion mark at opportunities for diagnostic, companion diagnostic products. But I’d like to point out that a lot of these products are very late stage. We have eight collaborations on drugs in phase 2 clinical trials, three of the drugs are in phase 3 and three additional studies which are very near term for phase 4 or post marketing studies.
So, Myriad’s strategic direction is to focus on answering the four major questions a patient has, what is myRisk of disease, do I have disease, how aggressive is that disease going to progress and how do you treat that disease. And doing that across multiple disease indications from oncology to preventive care, urology, dermatology other immune diseases and the neuroscience area.
And as you can see by this chart, we have a number of products already on the market addressing these critical concerns and a very strong product pipeline that is also filling out this matrix.
Myriad as I mentioned I think is a pioneer in genetic testing for common diseases. And we have products on the market for breast cancer, colon cancer, ovarian endometrial cancer as well as melanoma and pancreatic cancer. We’re also trailblazing the future of molecular diagnostics, with the development of pan-cancer panels and then moving beyond cancer to pan disease panels and other medical specialties.
We’re also an innovator in companion diagnostic and are an advisor to assist physicians and ensuring that the patients get the right drug at the right time. And we have the complete technology package for this. If you look at the development of biomarkers, there is three main technologies employed, DNA sequencing, RNA expression and protein analysis.
And Myriad has excellent expertise and capabilities in all three of these areas, so that we can uncover the cause and understand the cause of the genetics of human disease.
Myriad is also the only diagnostic company focused on this vision of complete patient care, becoming a single source provider to the physician to answer all of the physician and patient’s question about their disease. So a physician doesn’t need to send a sample to three or four different laboratories like and use Myriad as a single trusted advisor to answer these questions of predicting disease risk, ensuring the most accurate diagnosis, guiding optimal treatment and assessing how aggressive a disease is likely to be and the probability of recurrence.