Myriad Genetics, Inc.
MYRIAD GENETICS INC (Form: 10-Q, Received: 05/04/2005 11:38:11)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)  

ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                             to                              

Commission file number: 0-26642

MYRIAD GENETICS, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation or organization)
87-0494517
(I.R.S. Employer Identification No.)

320 Wakara Way, Salt Lake City, UT
(Address of principal executive offices)

84108
(Zip Code)

Registrant's telephone number, including area code: (801) 584-3600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý     No  o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  ý     No o

As of May 1, 2005 the registrant had 30,770,415 shares of $0.01 par value common stock outstanding.




MYRIAD GENETICS, INC.

INDEX TO FORM 10-Q

        

 
   
PART I—Financial Information

Item 1.

 

Financial Statements:

 

 

Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2005 and June 30, 2004

 

 

Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended March 31, 2005 and 2004

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended March 31, 2005 and 2004

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

 

Controls and Procedures

PART II—Other Information

Item 1.

 

Legal Proceedings

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

 

Defaults Upon Senior Securities

Item 4.

 

Submission of Matters to a Vote of Security Holders

Item 5.

 

Other Information

Item 6.

 

Exhibits

Signatures


MYRIAD GENETICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except per share amounts)

  Mar. 31, 2005
  June 30, 2004
 
Assets              
Current assets:              
  Cash and cash equivalents   $ 48,393   $ 83,983  
  Marketable investment securities     29,701     31,383  
  Prepaid expenses     5,388     7,279  
  Trade accounts receivable, less allowance for doubtful accounts of $1,395 at Mar. 31, 2005 and $1,205 at June 30, 2004     16,173     13,994  
  Other receivables     1,116     554  
   
 
 
    Total current assets     100,771     137,193  
   
 
 
Equipment and leasehold improvements:              
  Equipment     36,068     34,212  
  Leasehold improvements     7,812     7,692  
   
 
 
      43,880     41,904  
  Less accumulated depreciation and amortization     28,298     24,565  
   
 
 
      Net equipment and leasehold improvements     15,582     17,339  
Long-term marketable investment securities     37,189     26,473  
Other assets     7,038     7,351  
   
 
 
    $ 160,580   $ 188,356  
   
 
 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 
Current liabilities:              
  Accounts payable   $ 7,899   $ 7,938  
  Accrued liabilities     7,305     5,933  
  Deferred revenue     1,335     1,209  
   
 
 
    Total current liabilities     16,539     15,080  

Stockholders' equity:

 

 

 

 

 

 

 
  Preferred stock, $0.01 par value, 5,000 shares authorized, no shares issued and outstanding          
  Common stock, $0.01 par value, 60,000 shares authorized; issued and outstanding 30,760 at Mar. 31, 2005 and 30,623 at June 30, 2004     308     306  
  Additional paid-in capital     313,814     312,453  
  Accumulated other comprehensive loss     (784 )   (212 )
  Accumulated deficit     (169,297 )   (139,271 )
   
 
 
    Total stockholders' equity     144,041     173,276  
   
 
 
    $ 160,580   $ 188,356  
   
 
 

See accompanying notes to condensed consolidated financial statements (Unaudited).

3



MYRIAD GENETICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 
  Three Months Ended
  Nine Months Ended
 
(in thousands, except per share amounts)

  Mar. 31, 2005
  Mar. 31, 2004
  Mar. 31, 2005
  Mar. 31, 2004
 
Revenues:                          
  Predictive medicine revenue   $ 18,386   $ 11,699   $ 50,350   $ 30,209  
  Research revenue     1,575     1,909     5,960     9,761  
  Related party research revenue         148         1,606  
   
 
 
 
 
    Total research revenue     1,575     2,057     5,960     11,367  
   
 
 
 
 
      Total revenues     19,961     13,756     56,310     41,576  

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 
  Predictive medicine cost of revenue     5,297     3,709     14,667     9,916  
  Research and development expense     15,540     12,390     43,218     38,693  
  Selling, general and administrative expense     9,834     8,821     30,429     24,680  
   
 
 
 
 
      Total costs and expenses     30,671     24,920     88,314     73,289  
   
 
 
 
 
      Operating loss     (10,710 )   (11,164 )   (32,004 )   (31,713 )

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 
  Interest income     724     473     2,044     1,569  
  Other         (5 )   (66 )   (15 )
   
 
 
 
 
      724     468     1,978     1,554  
   
 
 
 
 
      Net loss   $ (9,986 ) $ (10,696 ) $ (30,026 ) $ (30,159 )
   
 
 
 
 
Basic and diluted loss per share   $ (0.32 ) $ (0.39 ) $ (0.98 ) $ (1.11 )
   
 
 
 
 
Basic and diluted weighted average shares outstanding     30,749     27,148     30,693     27,114  

See accompanying notes to condensed consolidated financial statements (Unaudited).

4



MYRIAD GENETICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 
  Nine Months Ended
 
(In thousands)

  Mar. 31, 2005
  Mar. 31, 2004
 
Cash flows from operating activities:              
  Net loss   $ (30,026 ) $ (30,159 )
  Adjustments to reconcile net loss to net cash used in operating activities:              
    Depreciation and amortization     4,546     4,307  
    Loss on disposition of assets     66     15  
    Bad debt expense     1,413     906  
    Changes in operating assets:              
      Trade accounts receivable     (3,592 )   (2,805 )
      Other receivables     (562 )   8,309  
      Related party receivables         150  
      Prepaid expenses     1,891     (621 )
      Accounts payable     (39 )   (2,527 )
      Accrued liabilities     1,372     (701 )
      Deferred revenue     126     (1,269 )
   
 
 
        Net cash used in operating activities     (24,805 )   (24,395 )
   
 
 

Cash flows from investing activities:

 

 

 

 

 

 

 
  Capital expenditures     (2,442 )   (2,876 )
  Purchase of other assets     (100 )   (100 )
  Purchases of marketable investment securities     (42,904 )   (33,738 )
  Proceeds from sales and maturities of marketable investment securities     33,298     45,810  
   
 
 
        Net cash (used in) provided by investing activities     (12,148 )   9,096  
   
 
 

Cash flows from financing activities:

 

 

 

 

 

 

 
  Net proceeds from issuance of common stock     1,363     608  
   
 
 
        Net cash provided by financing activities     1,363     608  
   
 
 

Net decrease in cash and cash equivalents

 

 

(35,590

)

 

(14,691

)
Cash and cash equivalents at beginning of period     83,983     61,603  
   
 
 
Cash and cash equivalents at end of period   $ 48,393   $ 46,912  
   
 
 

See accompanying notes to condensed consolidated financial statements (Unaudited).

5



MYRIAD GENETICS, INC. AND SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) Basis of Presentation

        The accompanying condensed consolidated financial statements have been prepared by Myriad Genetics, Inc. (the "Company") in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly all financial statements in accordance with accounting principles generally accepted in the United States. The unaudited condensed consolidated financial statements herein should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2004, included in the Company's Annual Report on Form 10-K for the year ended June 30, 2004. Operating results for the three and nine month periods ended March 31, 2005 may not necessarily be indicative of results to be expected for any other interim period or for the full year.

        The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(2) Stock-Based Compensation

        In 2003 the Company adopted the 2003 Employee, Director and Consultant Stock Option Plan, which, together with our earlier stock option plan, is accounted for under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees , and related Interpretations. No stock-based employee compensation cost is reflected in net loss, as all options granted under these plans have an exercise price equal to the market value of the underlying common stock on the date of grant and as of March 31, 2005 no modifications had been made to any of the awards. The following table illustrates the effect on net loss and loss per share if the Company had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation , to stock-based employee compensation.

 
  Three Months Ended Mar. 31,
  Nine Months Ended Mar. 31,
 
(in thousands, except per share amounts)

 
  2005
  2004
  2005
  2004
 
Net loss, as reported   $ (9,986 ) $ (10,696 ) $ (30,026 ) $ (30,159 )

Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax related effects

 

 

(6,198

)

 

(5,961

)

 

(19,090

)

 

(18,721

)
   
 
 
 
 
Pro forma net loss   $ (16,184 ) $ (16,657 ) $ (49,116 ) $ (48,880 )
   
 
 
 
 

Loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 
Basic and diluted—as reported   $ (0.32 ) $ (0.39 ) $ (0.98 ) $ (1.11 )
   
 
 
 
 
Basic and diluted—pro forma   $ (0.53 ) $ (0.61 ) $ (1.60 ) $ (1.80 )
   
 
 
 
 

6


        In December 2004, the Financial Accounting Standards Board (FASB) issued Statement No. 123R, Share-Based Payment . Statement 123R sets accounting requirements for "share-based" compensation to employees, including employee stock purchase plans, and requires companies to recognize in the income statement the grant-date fair value of stock options and other equity-based compensation. Statement 123R will become effective for the Company beginning July 1, 2005. On April 14, 2005 the Company accelerated the vesting of unvested stock options previously awarded to employees and non-employee members of the board of directors under the Company's 2002 and 2003 stock option plans in order to avoid estimated charges of approximately $25 million to future periods under the requirements of Statement 123R, as the options would have vested under their unmodified terms. Approximately 3.5 million options were accelerated, of which 1.7 million belong to executive officers and non-employee members of the board of directors. As a result of the acceleration of the vesting of the unvested options, the Company recognized an expense of approximately $231,000 on the date of acceleration.

(3) Comprehensive Loss

        The components of the Company's comprehensive loss are as follows (in thousands):

 
  Three Months Ended Mar. 31,
  Nine Months Ended Mar. 31,
 
 
  2005
  2004
  2005
  2004
 
Net loss   $ (9,986 ) $ (10,696 ) $ (30,026 ) $ (30,159 )
Unrealized loss on available-for-sale securities     (381 )   (46 )   (572 )   (446 )
   
 
 
 
 
Comprehensive loss   $ (10,367 ) $ (10,742 ) $ (30,598 ) $ (30,605 )
   
 
 
 
 

(4) Net Loss Per Common Share

        Loss per common share is computed based on the weighted-average number of common shares and, as appropriate, dilutive potential common shares outstanding during the period. Stock options and warrants are considered to be potential common shares.

        Basic loss per common share is the amount of loss for the period available to each share of common stock outstanding during the reporting period. Diluted loss per share is the amount of loss for the period available to each share of common stock outstanding during the reporting period and to each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the period.

        In calculating loss per common share the net loss and the weighted average common shares outstanding were the same for both the basic and diluted calculation.

        As of March 31, 2005 and 2004, there were antidilutive potential common shares of 7,455,375 and 5,961,633, respectively. Accordingly, these potential common shares were not included in the computation of diluted loss per share for the periods presented, but may be dilutive to future basic and diluted earnings per share.

(5) Segment and Related Information

        The Company's business units have been aggregated into three reportable segments: (i) research, (ii) predictive medicine, and (iii) drug development. The research segment is focused on the discovery of genes and protein pathways related to major common diseases. The predictive medicine segment provides testing to determine predisposition to common diseases. The drug development segment is focused on the development of therapeutic products for the treatment and prevention of major diseases.

7



        The accounting policies of the segments are the same as those described in the basis of presentation (note 1). The Company evaluates segment performance based on results from operations before interest income and expense and other income and expense.

(in thousands)

  Research
  Predictive
medicine

  Drug
development

  Total
 
Three months ended Mar. 31, 2005:                          
  Revenues   $ 1,575   $ 18,386   $   $ 19,961  
  Depreciation and amortization     516     520     487     1,523  
  Segment operating gain (loss)     (4,403 )   4,603     (10,910 )   (10,710 )

Three months ended Mar. 31, 2004:

 

 

 

 

 

 

 

 

 

 

 

 

 
  Revenues     2,057     11,699         13,756  
  Depreciation and amortization     570     445     437     1,452  
  Segment operating gain (loss)     (5,545 )   1,828     (7,447 )   (11,164 )

Nine months ended Mar. 31, 2005:

 

 

 

 

 

 

 

 

 

 

 

 

 
  Revenues     5,960     50,350         56,310  
  Depreciation and amortization     1,620     1,510     1,416     4,546  
  Segment operating gain (loss)     (11,454 )   10,550     (31,100 )   (32,004 )

Nine months ended Mar. 31, 2004:

 

 

 

 

 

 

 

 

 

 

 

 

 
  Revenues     11,367     30,209         41,576  
  Depreciation and amortization     1,718     1,308     1,281     4,307  
  Segment operating gain (loss)     (12,944 )   1,818     (20,587 )   (31,713 )
 
  Three Months Ended Mar. 31,
  Nine Months Ended Mar. 31,
 
(in thousands)

 
  2005
  2004
  2005
  2004
 
Total operating loss for reportable segments   $ (10,710 ) $ (11,164 ) $ (32,004 ) $ (31,713 )
Interest income     724     473     2,044     1,569  
Other         (5 )   (66 )   (15 )
   
 
 
 
 
Net loss   $ (9,986 ) $ (10,696 ) $ (30,026 ) $ (30,159 )
   
 
 
 
 

8



Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

        We are a leading biopharmaceutical company focused on the development and marketing of novel therapeutic and molecular diagnostic products. We employ a number of proprietary technologies that permit us to understand the genetic basis of human disease and the role that genes and their related proteins play in the onset and progression of disease. We use this information to guide the development of new healthcare products that treat major diseases and assess a person's risk of disease later in life.

        We believe that the future of medicine lies in the creation of new classes of drugs that treat the underlying cause, not just the symptoms, of disease and that may be useful in disease prevention. By understanding the genetic basis of disease, we believe we will be able to develop drugs that are safer and more efficacious. In addition, we believe that advances in the emerging field of predictive medicine will improve our ability to determine which patients are subject to a greater risk of developing these diseases and who therefore would benefit from these new preventive therapies.

        Myriad researchers have made important discoveries in the fields of Alzheimer's disease, cancer, and infectious diseases such as AIDS. We intend to independently develop and, subject to regulatory approval, market our therapeutic products in these areas. These discoveries point to novel disease pathways that may pave the way for the development of new classes of drugs.

        On May 2, 2005, we announced the preliminary results of our phase 2 human clinical study of Flurizan™ in patients with mild to moderate Alzheimer's disease which was conducted in the United Kingdom and Canada. Based on our preliminary analysis of the results of the phase 2 trial, Flurizan™ did not achieve statistical significance in patients with mild to moderate Alzheimer's disease; however, a positive trend was observed on all three primary endpoints in patients with mild Alzheimer's disease on the 800 mg twice-daily dose. Additional information on the phase 2 results will be presented at the Alzheimer's Association International Conference on Prevention of Dementia in Washington D.C. in June 2005.

        Flurizan™ is also the subject of a phase 3 human clinical study to determine its ability to alter the course of cognitive decline and behavioral change in patients with Alzheimer's disease. When fully enrolled the trial will be conducted in approximately 750 patients with mild to moderate Alzheimer's disease at approximately 100 centers in the United States. Based on our continued analysis of the phase 2 results, modifications may be made to the phase 3 clinical trial of Flurizan™, but no determinations have been made in that regard as of the current date. Flurizan™ is also the subject of a large, multi-center phase 2/3 human clinical trial in the U.S. for the treatment of patients with pre-metastatic prostate cancer.

        Our cancer drug candidate, MPC-6827, is currently the subject of a phase 1 clinical study designed to evaluate its safety and pharmacokinetic profile in patients with advanced solid tumors, in an escalating dose regimen. In preclinical testing MPC-6827 has demonstrated the ability to inhibit tumor growth in animal models of human melanoma and cancers of the ovary, breast, prostate, colon, and pancreas. In preclinical testing MPC-6827 has also been demonstrated to be effective against cancers that have developed multiple drug resistance.

        Because of its demonstrated ability to cross the blood-brain barrier, on March 1, 2005 we announced the initiation of an additional phase 1 clinical study designed to evaluate the safety and pharmacokinetic profile of MPC-6827 in patients with metastatic brain cancer.

        Our cancer drug candidate MPC-2130, a broad-acting inducer of programmed cell death, or apoptosis is currently the subject of a phase 1 clinical study. The study is designed to evaluate its safety and pharmacokinetic profile in patients with advanced metastatic tumors or blood cancers as well as refractory cancer that has progressed despite previous chemotherapy. In preclinical studies MPC-2130

9



has demonstrated cancer cell killing activity in ovarian cancer, prostate cancer and two lymphoma cell lines, Burkitt's lymphoma and T-cell lymphoma. MPC-2130 was also shown to be effective against cancers that have developed multiple drug resistance.

        We also have developed and commercialized a number of innovative predictive medicine products, including BRACAnalysis®, which assesses a woman's risk of developing breast and ovarian cancer, COLARIS® and COLARIS AP®, which determine a person's risk of developing colon cancer, and MELARIS®, which assesses a person's risk of developing malignant melanoma, a deadly form of skin cancer. In the United States we market these products using our own 100 person sales force. Predictive medicine revenues were $18.4 million and $50.4 million for the three and nine months ended March 31, 2005, respectively.

        We have devoted substantially all of our resources to undertaking our drug discovery and development programs, operating our predictive medicine business, and continuing our research and development efforts. Our revenues have consisted primarily of sales of predictive medicine products and research payments. We have yet to attain profitability and, for the three and nine months ended March 31, 2005, we had net losses of $10.0 million and $30.0 million, respectively. As of March 31, 2005 we had an accumulated deficit of $169.3 million.

        We expect to incur losses for at least the next several years, primarily due to the expansion of our drug discovery and development efforts, the initiation and continuing conduct of human clinical trials, the launch of new predictive medicine products, the continuation of our internal research and development programs, and expansion of our facilities. Additionally, we expect to incur substantial sales, marketing and other expenses in connection with building our pharmaceutical and predictive medicine businesses. We expect that losses will fluctuate from quarter to quarter and that such fluctuations may be substantial.

Critical Accounting Policies

        Critical accounting policies are those policies which are both important to the portrayal of a company's financial condition and results and require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are as follows:

    revenue recognition;

    allowance for doubtful accounts; and

    investments in privately-held companies.

        Revenue Recognition.     Research revenues include revenues from research agreements, milestone payments, and technology licensing agreements. In applying the principles of SAB 104 to research and technology license agreements we consider the terms and conditions of each agreement separately to arrive at a proportional performance methodology of recognizing revenue. Such methodologies involve recognizing revenue on a straight-line basis over the term of the agreement and based on costs incurred relative to the total estimated contract costs (cost-to-cost method). We make adjustments, if necessary, to the estimates used in our cost-to-cost calculations as work progresses and we gain experience.    The principal costs under these agreements are for personnel expenses to conduct research and development but also include costs for materials and other direct and indirect items necessary to complete the research under these agreements. Actual results may vary from our estimates. Payments received on uncompleted long-term contracts may be greater than or less than incurred costs and estimated earnings and have been recorded as other receivables or deferred revenues in the accompanying consolidated balance sheets. We recognize revenue from milestone payments as agreed-upon events representing the achievement of substantive steps in the development process are achieved and where the amount of the milestone payments approximates the value of achieving the

10


milestone. We recognize revenue from up-front nonrefundable license fees on a straight-line basis over the period of our continued involvement in the research and development project.

        Predictive medicine revenues include revenues from the sale of predictive medicine products, related marketing agreements, and forensic DNA analysis fees. Predictive medicine revenue is recognized upon completion of the test or analysis and communication of results. Up-front payments related to marketing agreements are recognized ratably over the life of the agreement.

        Allowance for Doubtful Accounts.     The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amount of assets at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Trade accounts receivable are comprised of amounts due from sales of our predictive medicine products. We analyze trade accounts receivable and consider historic experience, customer creditworthiness, facts and circumstances specific to outstanding balances, and payment term changes when evaluating the adequacy of the allowance for doubtful accounts. Changes in these factors could result in material adjustments to the expense recognized for bad debt.

        Investments in Privately-Held Companies.     We review the valuation of our investments in privately-held biotechnology and pharmaceutical companies for possible impairment as changes in facts and circumstances indicate that impairment should be assessed. The amount of impairment, if any, and valuation of these investments are based on our estimates and, in certain circumstances, the completion of independent, third-party appraisals of the investments. Inherent in these estimates and appraisals are assumptions such as the comparability of the investee to similar publicly traded companies, the value of the investee's underlying research and development efforts, the likelihood that the investee's current research projects will result in a marketable product, and the investee's expected future cash flows. Accordingly, the amount recognized by us upon ultimate liquidation of these investments may vary significantly from the estimated fair values at March 31, 2005.

Recent Accounting Pronouncements

        In December 2004, the Financial Accounting Standards Board (FASB) issued Statement No. 123R, Share-Based Payment . Statement 123R sets accounting requirements for "share-based" compensation to employees, including employee stock purchase plans, and requires companies to recognize in the income statement the grant-date fair value of stock options and other equity-based compensation. We currently account for our stock-based compensation using the intrinsic method as defined in Accounting Principles Board (APB) Opinion No. 25 and accordingly, we have not recognized any expense for our stock option plans or employee stock purchase plan in our consolidated financial statements as of March 31, 2005. Statement 123R will become effective for our fiscal year beginning July 1, 2005. In anticipation of adopting Statement 123R, on April 14, 2005 we announced that we had accelerated the vesting of unvested stock options previously awarded to employees and non-employee members of the board of directors under the Company's 2002 and 2003 stock option plans. As a result of the acceleration of vesting for unvested options we do not anticipate that Statement 123R will have a material impact on our financial statements at the time of adoption.

Results of Operations for the Three Months Ended March 31, 2005 and 2004

        Predictive medicine revenues for the three months ended March 31, 2005 were $18.4 million compared to $11.7 million for the same three months in 2004, an increase of 57%. Predictive medicine revenue is comprised primarily of sales of predictive medicine products, and also includes some marketing fees and forensic DNA analysis fees. Increased sales, marketing, and education efforts, coupled with recent publications concerning the clinical utility of our products have resulted in wider acceptance of our products by the medical community and increased revenues for the three months ended March 31, 2005. There can be no assurance that predictive medicine revenues will continue to increase at historical rates.

11



        Research revenues for the three months ended March 31, 2005 were $1.6 million compared to $2.1 million for the same three months in 2004. This 23% decrease in research revenue is primarily attributable to the successful completion of one of our research collaborations with a corporate partner. Current levels of research revenues reflect our continued focus on internal drug development programs and de-emphasis of external research collaborations. Research revenue from our research collaboration agreements is recognized using a proportional performance methodology. Consequently, as these programs progress and costs increase or decrease, revenues may increase or decrease proportionately.

        Predictive medicine cost of revenue for the three months ended March 31, 2005 was $5.3 million compared to $3.7 million for the same three months in 2004. This increase of 43% in predictive medicine cost of revenue is primarily due to the 57% increase in predictive medicine revenues for the three months ended March 31, 2005 compared to the same three months in 2004. This increase was partially offset by technology improvements and efficiency gains in the operation of our predictive medicine business. Our technology and efficiency improvements also contributed to an increase in our gross profit margin, which was 71% for the three months ended March 31, 2005 compared to 68% for the same three months in 2004. There can be no assurance that predictive medicine gross profit margins will continue to increase at historical rates.

        Research and development expenses for the three months ended March 31, 2005 were $15.5 million compared to $12.4 million for the same three months in 2004. This increase of 25% was primarily due to increased costs associated with our ongoing clinical trials and increases in our drug discovery and drug development programs. We expect our research and development expenses to continue to fluctuate based on changes in our research programs and the progression of our drug development programs.

        Selling, general and administrative expenses for the three months ended March 31, 2005 were $9.8 million compared to $8.8 million for the same three months in 2004. Selling, general and administrative expenses consist primarily of salaries, commissions and related personnel costs for sales, marketing, executive, legal, finance, accounting, human resources, business development, allocated facilities expenses and other corporate expenses. This increase of 11% was primarily attributable to increased sales and marketing commissions and expenses incurred to support the 57% increase in our predictive medicine business. We expect our selling, general and administrative expenses will continue to fluctuate depending on the number and scope of new product launches and our drug discovery and drug development efforts.

Results of Operations for the Nine months Ended March 31, 2005 and 2004

        Predictive medicine revenues for the nine months ended March 31, 2005 were $50.4 million compared to $30.2 million for the same nine months in 2004, an increase of 67%. Increased sales, marketing, and education efforts, coupled with recent publications concerning the clinical utility of our products have resulted in wider acceptance of our products by the medical community and increased revenues for the nine months ended March 31, 2005. There can be no assurance that predictive medicine revenues will continue to increase at historical rates.

        Research revenues for the nine months ended March 31, 2005 were $6.0 million compared to $11.4 million for the same nine months in 2004. Related party research revenues included in total research revenues for the nine months ended March 31, 2005 and 2004 were $0 and $1.6 million, respectively. Related party research revenue is comprised of certain research services performed for Prolexys Pharmaceuticals, Inc., which is 49% owned by us. The agreement to provide these research services was terminated effective January 26, 2004. The 48% decrease in total research revenue is primarily attributable to the successful completion of two of our research collaborations with corporate partners. Research revenue from our research collaboration agreements is recognized using a proportional performance methodology. Consequently, as these programs progress and costs increase or decrease, revenues may increase or decrease proportionately.

12


        Predictive medicine cost of revenue for the nine months ended March 31, 2005 was $14.7 million compared to $9.9 million for the same nine months in 2004. This increase of 48% in predictive medicine cost of revenue is primarily due to the 67% increase in predictive medicine revenues for the nine months ended March 31, 2005 compared to the same nine months in 2004. This increase was partially offset by technology improvements and efficiency gains in the operation of our predictive medicine business. Our technology and efficiency improvements also contributed to an increase in our gross profit margin, which was 71% for the nine months ended March 31, 2005 compared to 67% for the same nine months in 2004. There can be no assurance that predictive medicine gross profit margins will continue to increase at historical rates.

        Research and development expenses for the nine months ended March 31, 2005 were $43.2 million compared to $38.7 million for the same nine months in 2004. This increase of 12% was primarily due to increased costs associated with our ongoing clinical trials and increases in our drug discovery and drug development programs. These increases added approximately $10.5 million to our research and development expenses for the nine months ended March 31, 2005 compared to the same nine months in 2004. These increases were partially offset by the completion of two of our research collaborations which resulted in decreased research and development expenses of approximately $6.0 million for the nine months ended March 31, 2005 compared to the same nine months in 2004. We expect our research and development expenses to continue to fluctuate based on changes in our research programs and the progression of our drug development programs.

        Selling, general and administrative expenses for the nine months ended March 31, 2005 were $30.4 million compared to $24.7 million for the same nine months in 2004. This increase of 23% was primarily attributable to increased sales and marketing commissions and expenses incurred to support the 67% growth in our predictive medicine business, which resulted in an increase of approximately $4.0 million to our selling, general, and administrative expense for the nine months ended March 31, 2005 compared to the same nine months in 2004. In addition, general corporate expenses in support of our predictive medicine business and therapeutic product development efforts resulted in an increase of approximately $1.7 million to our selling, general, and administrative expense for the nine months ended March 31, 2005 compared to the same nine months in 2004. We expect our selling, general and administrative expenses will continue to fluctuate depending on the number and scope of new product launches and our drug discovery and drug development efforts.

Liquidity and Capital Resources

        Cash, cash equivalents, and marketable investment securities decreased $26.6 million or 19% from $141.8 million at June 30, 2004 to $115.3 million at March 31, 2005. This decrease in cash, cash equivalents, and marketable investment securities is primarily attributable to increased expenditures for our ongoing clinical trials, internal research and drug development programs and other expenditures incurred in the ordinary course of business. As a result of changes in interest rates and cash, cash equivalents, and marketable investment securities, interest income for the three and nine months ended March 31, 2005 was $0.7 million and $2.0 million, compared to $0.5 million and $1.6 million for the same three and nine months in 2004, an increase of 53% and 30%, respectively.

        Net cash used in operating activities was $24.8 million during the nine months ended March 31, 2005 compared to $24.4 million used in operating activities during the same nine months in 2004. Trade accounts receivable increased $3.6 million between June 30, 2004 and March 31, 2005, primarily due to increases in predictive medicine sales during the same period. Prepaid expenses decreased by $1.9 million between June 30, 2004 and March 31, 2005, primarily due to the usage of lab supplies previously purchased at a discount. Accrued liabilities increased by $1.4 million between June 30, 2004 and March 31, 2005, primarily as a result of activities related to our clinical trials and drug development programs.

13



        Our investing activities used cash of $12.1 million during the nine months ended March 31, 2005 and provided cash of $9.1 million during the same nine months in 2004. Investing activities were comprised primarily of purchases and maturities of marketable investment securities and capital expenditures for research equipment.

        We believe that with our existing capital resources, we will have adequate funds to maintain our current and planned operations for at least the next two years, although no assurance can be given that changes will not occur that would consume available capital resources before such time. Our future capital requirements, cash flows, and results of operations could be affected by and will depend on many factors, including:

    the progress of our preclinical and clinical activities;

    the progress of our research and development programs;

    the progress of our drug discovery and drug development programs;

    the cost of developing and launching additional predictive medicine products;

    the costs of filing, prosecuting and enforcing patent claims;

    the costs associated with competing technological and market developments;

    the costs associated with potential litigation;

    the payments received under collaborative agreements and changes in collaborative research relationships;

    the costs associated with potential commercialization of our discoveries, if any, including the development of manufacturing, marketing and sales capabilities; and

    the cost and availability of third-party financing for capital expenditures and administrative and legal expenses.

        On April 7, 2005, we filed a shelf registration statement on Form S-3 (Registration No. 333-123914) with the Securities and Exchange Commission for the sale of up to $300 million of various types of securities upon filing of a prospectus supplement with the SEC. The filing was declared effective by the SEC on April 20, 2005. This filing includes the securities that had been available for sale under our shelf registration statement on Form S-3 (Registration No. 333-73124) filed previously on November 9, 2001. Because of our significant long-term capital requirements, we intend to raise funds when conditions are favorable, even if we do not have an immediate need for additional capital at such time.

Effects of Inflation

        We do not believe that inflation has had a material impact on our business, sales, or operating results during the periods presented.

Certain Factors That May Affect Future Results of Operations

        The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. This Quarterly Report contains such "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.

        Words such as "may," "anticipate," "estimate," "expects," "projects," "intends," "plans," "believes" and words and terms of similar substance used in connection with any discussion of future operating or financial performance, identify forward-looking statements. These forward-looking

14



statements are based on management's current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth or implied by the forward-looking statements. These include, but are not limited to: our inability to further identify, develop and achieve commercial success for new products and technologies; our ability to discover drugs that are safer and more efficacious than our competitors; our ability to develop predictive medicine products that help determine which patients are subject to greater risk of developing diseases and who would therefore benefit from new preventive therapies; the possibility of delays in the research and development necessary to select drug development candidates and delays in clinical trials; the risk that clinical trials may not result in marketable products; the risk that we may be unable to successfully finance and secure regulatory approval of and market our drug candidates, or that clinical trials will be completed on the timelines we have estimated; uncertainties about our ability to obtain new corporate collaborations and acquire new technologies on satisfactory terms, if at all; the development of competing products and services; our ability to protect our proprietary technologies; patent-infringement claims; risks of new, changing and competitive technologies and regulations in the United States and internationally; and other factors discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended June 30, 2004, which has been filed with the Securities and Exchange Commission.

        In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this Quarterly Report or in any document incorporated by reference might not occur. Stockholders are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable to the Company or to any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

        We maintain an investment portfolio in accordance with our Investment Policy. The primary objectives of our Investment Policy are to preserve principal, maintain proper liquidity to meet operating needs and maximize yields. Our Investment Policy specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer or type of investment.

        Our investments consist of securities of various types and maturities of three years or less, with a maximum average maturity of 12 months. These securities are classified as available-for-sale, which are recorded on the balance sheet at fair market value with unrealized gains or losses reported as part of accumulated other comprehensive income. Gains and losses on investment security transactions are reported on the specific-identification method. Dividend and interest income are recognized when earned. A decline in the market value of any marketable investment security below cost that is deemed other than temporary results in a charge to earnings and establishes a new cost basis for the security.

        The securities held in our investment portfolio are subject to interest rate risk. Changes in interest rates affect the fair market value of the marketable investment securities. After a review of our marketable securities as of March 31, 2005, we have determined that in the event of a hypothetical ten percent increase in interest rates, the resulting decrease in fair market value of our marketable investment securities would be insignificant to the consolidated financial statements as a whole.


Item 4. Controls and Procedures

(a)
Evaluation of Disclosure Controls and Procedures . Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of period covered by this

15


    Quarterly Report on Form 10-Q, have concluded that, based on such evaluation, our disclosure controls and procedures were adequate and effective to ensure that material information relating to us, including our consolidated subsidiaries, was made known to them by others within those entities, particularly during the period in which this Quarterly Report on Form 10-Q was being prepared.

        In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

(b)
Changes in Internal Controls . There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during our last fiscal quarter, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

16



PART II—Other Information

Item 1. Legal Proceedings.

        Neither the Company nor any of its subsidiaries is a party to any material legal proceedings.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

        None.


Item 3. Defaults Upon Senior Securities.

        None.


Item 4. Submission of Matters to a Vote of Security Holders.

        None.


Item 5. Other Information.

        None.


Item 6. Exhibits.

(a)
Exhibits

10.1
Form of 2005 Executive Retention Agreements.

31.1
Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

31.2
Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

32.1
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

17



SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

    MYRIAD GENETICS, INC.

Date: May 3, 2005

 

By:

/s/  
PETER D. MELDRUM       
Peter D. Meldrum
President and Chief Executive Officer
(Principal executive officer)

 

 

Date: May 3, 2005

 

By:

/s/  
JAY M. MOYES       
Jay M. Moyes
Vice President of Finance and Chief Financial Officer
(Principal financial and chief accounting officer)

 

 
           

18




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Exhibit 10.1

MYRIAD GENETICS, INC.

Form of Executive Retention Agreement

        THIS EXECUTIVE RETENTION AGREEMENT (this "Agreement"), by and between Myriad Genetics, Inc., a Delaware corporation (the "Company"), and                         (the "Executive"), is made as of February 17, 2005 (the "Effective Date").

        WHEREAS, the Company recognizes that, as is the case with many publicly-held corporations, the possibility of a change in control of the Company exists and that such possibility, and the uncertainty and questions which it may raise among key personnel, may result in the departure or distraction of key personnel to the detriment of the Company and its stockholders, and

        WHEREAS, the Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued employment and dedication of the Company's key personnel without distraction from the possibility of a change in control of the Company and related events and circumstances.

        NOW, THEREFORE, as an inducement for and in consideration of the Executive remaining in its employ, the Company agrees that the Executive shall receive the benefits set forth in this Agreement, including without limitation, those benefits in the event the Executive's employment with the Company is terminated under the circumstances described below subsequent to a Change in Control (as defined in Section 1.1).

        1.      Key Definitions.

        As used herein, the following terms shall have the following respective meanings:

1


        For purposes of this Section 1.3, no act or failure to act by the Executive shall be considered "willful" unless it is done, or omitted to be done, in bad faith and without reasonable belief that the Executive's action or omission was in the best interests of the Company.

2


In addition, in an effort to foster and retain the employment of the Executive following a Change in Control, the termination of employment by the Executive for any reason (except for those set forth in section 1.4(a)-(f)), or no reason, during the 90-day period beginning on the first anniversary of the Change in Control Date shall be deemed to be termination for Good Reason for all purposes under this Agreement; however, in the case of a termination of employment by the Executive pursuant to this paragraph, those benefits payable to the Executive under section 4.1(a)(i)(2) shall be reduced by one-half.

        The Executive's right to terminate his or her employment for Good Reason shall not be affected by his or her incapacity due to physical or mental illness.

3


        2.      Term of Agreement . This Agreement, and all rights and obligations of the parties hereunder, shall take effect upon the Effective Date and shall expire upon the first to occur of (a) the expiration of the Term (as defined below) if a Change in Control has not occurred during the Term, (b) the date 24 months after the Change in Control Date, if the Executive is still employed by the Company as of such later date, or (c) the fulfillment by the Company of all of its obligations under this Agreement if the Executive's employment with the Company terminates within 24 months following the Change in Control Date. "Term" shall mean the period commencing as of the Effective Date and continuing in effect through December 31, 2015; provided , however, that commencing on January 1, 2016 and each January 1 thereafter, the Term shall be automatically extended for one additional year unless, not later than 90 days prior to the scheduled expiration of the Term (or any extension thereof), the Company shall have given the Executive written notice that the Term will not be extended.

        3.      Employment Status; Termination Following Change in Control .

4


        4.      Benefits to Executive .

5


        5.      Certain Additional Payments By Company .

6


7


        6.      Disputes .

8


        7.      Successors .

9


        8.      Notice . All notices, instructions and other communications given hereunder or in connection herewith shall be in writing. Any such notice, instruction or communication shall be sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable nationwide overnight courier service, in each case addressed to the Company, at 320 Wakara Way, Salt Lake City, Utah 84108, Attn: General Counsel, and to the Executive at the address for notices indicated below (or to such other address as either the Company or the Executive may have furnished to the other in writing in accordance herewith). Any such notice, instruction or communication shall be deemed to have been delivered five business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent via a reputable nationwide overnight courier service. Either party may give any notice, instruction or other communication hereunder using any other means, but no such notice, instruction or other communication shall be deemed to have been duly delivered unless and until it actually is received by the party for whom it is intended.

        9.      Miscellaneous .

10


        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above.

MYRIAD GENETICS, INC.   EXECUTIVE
         

    


    


 

 

 

By:

    


 

Name:

    


Title:

    


 

Address:

    

    
         

11


EXHIBIT A

GENERAL RELEASE

        1.      General Release . In consideration of the payments and benefits to be made under that certain Executive Retention Agreement, dated February    , 2005, (the "Agreement"),                        (the "Executive"), with the intention of binding the Executive and the Executive's heirs, executors, administrators and assigns, does hereby release, remise, acquit and forever discharge Myriad Genetics, Inc. (the "Company") and each of its subsidiaries and affiliates (the "Company Affiliated Group"), their present and former officers, directors, executives, agents, attorneys, employees and employee benefits plans (and the fiduciaries thereof), and the successors, predecessors and assigns of each of the foregoing (collectively, the "Company Released Parties"), of and from any and all claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of money, accounts, financial obligations, suits, expenses, attorneys' fees and liabilities of whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or otherwise and whether now known or unknown, suspected or unsuspected which the Executive, individually or as a member of a class, now has, owns or holds, or has at any time heretofore had, owned or held, against any Company Released Party in any capacity, including, without limitation, any and all claims (i) arising out of or in any way connected with the Executive's service to any member of the Company Affiliated Group (or the predecessors thereof) in any capacity, or the termination of such service in any such capacity, (ii) for severance or vacation benefits, unpaid wages, salary or incentive payments, (iii) for breach of contract, wrongful discharge, impairment of economic opportunity, defamation, intentional infliction of emotional harm or other tort and (iv) for any violation of applicable state and local labor and employment laws (including, without limitation, all laws concerning unlawful and unfair labor and employment practices), any and all claims based on the Executive Retirement Income Security Act of 1974 ("ERISA"), any and all claims arising under the civil rights laws of any federal, state or local jurisdiction, including, without limitation, Title VII of the Civil Rights Act of 1964 ("Title VII"), the Americans with Disabilities Act ("ADA"), Sections 503 and 504 of the Rehabilitation Act, the Family and Medical Leave Act, and any and all claims under any whistleblower laws or whistleblower provisions of other laws, excepting only:

        2.      No Admissions . The Executive acknowledges and agrees that this General Release is not to be construed in any way as an admission of any liability whatsoever by any Company Released Party, any such liability being expressly denied.

12


        3.      Application to all Forms of Relief . This General Release applies to any relief no matter how called, including, without limitation, wages, back pay, front pay, compensatory damages, liquidated damages, punitive damages for pain or suffering, costs and attorney's fees and expenses.

        4.      Specific Waiver . The Executive specifically acknowledges that his or her acceptance of the terms of this General Release is, among other things, a specific waiver of his or her rights, claims and causes of action under Title VII, ADEA, ADA and any state or local law or regulation in respect of discrimination of any kind; provided, however, that nothing herein shall be deemed, nor does anything herein purport, to be a waiver of any right or claim or cause of action which by law the Executive is not permitted to waive.

        5.      No Complaints or Other Claims . The Executive acknowledges and agrees that he or she has not, with respect to any transaction or state of facts existing prior to the date hereof, filed any complaints, charges or lawsuits against any Company Released Party with any governmental agency, court or tribunal.

        6.      Conditions of General Release .

13


        7.      Voluntariness . The Executive agrees that he or she is relying solely upon his or her own judgment; that the Executive is over eighteen years of age and is legally competent to sign this General Release; that the Executive is signing this General Release of his or her own free will; that the Executive has read and understood the General Release before signing it; and that the Executive is signing this General Release in exchange for consideration that he or she believes is satisfactory and adequate.

        8.      Legal Counsel . The Executive acknowledges that he or she has been informed of the right to consult with legal counsel and has been encouraged to do so.

        9.      Complete Agreement/Severability . This General Release constitutes the complete and final agreement between the parties and supersedes and replaces all prior or contemporaneous agreements, negotiations, or discussions relating to the subject matter of this General Release. All provisions and portions of this General Release are severable. If any provision or portion of this General Release or the application of any provision or portion of the General Release shall be determined to be invalid or unenforceable to any extent or for any reason, all other provisions and portions of this General Release shall remain in full force and shall continue to be enforceable to the fullest and greatest extent permitted by law.

        10.    Acceptance . The Executive acknowledges that he or she has been given a period of twenty-one (21) days within which to consider this General Release, unless applicable law requires a longer period, in which case the Executive shall be advised of such longer period and such longer period shall apply. The Executive may accept this General Release at any time within this period of time by signing the General Release and returning it to the Company.

        11.    Revocability . This General Release shall not become effective or enforceable until seven (7) calendar days after the Executive signs it. The Executive may revoke his or her acceptance of this General Release at any time within that seven (7) calendar day period by sending written notice to the

14



Company. Such notice must be received by the Company within the seven (7) calendar day period in order to be effective and, if so received, would void this General Release for all purposes.

        13.    Governing Law . Except for issues or matters as to which federal law is applicable, this General Release shall be governed by and construed and enforced in accordance with the laws of the State of Utah without giving effect to the conflicts of law principles thereof.

15


        IN WITNESS WHEREOF, the Executive has executed this General Release as of the date last set forth below.

EXECUTIVE      
         

    


 

Date:

    


Name:

    


 

 

 
         

16


Attachment

        On February 17, 2005 the Company entered into an Executive Retention Agreement for each of following executive officers utilizing the form included in this Exhibit 10.1:

17




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Exhibit 31.1

SARBANES-OXLEY SECTION 302(a) CERTIFICATION

Chief Executive Officer

I, Peter D. Meldrum, certify that:

1.
I have reviewed this quarterly report of Myriad Genetics, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 3, 2005   By: /s/   PETER D. MELDRUM       
   
      Peter D. Meldrum
President and Chief Executive Officer
(Principal executive officer)
           



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Exhibit 31.2

SARBANES-OXLEY SECTION 302(a) CERTIFICATION

Chief Financial Officer

I, Jay M. Moyes, certify that:

1.
I have reviewed this quarterly report of Myriad Genetics, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 3, 2005   By: /s/   JAY M. MOYES       
   
      Jay M. Moyes
Vice President of Finance and Chief Financial Officer
(Principal financial and chief accounting officer)
           



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Exhibit 32.1

Certifications of Chief Executive Officer and Chief Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

        Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Myriad Genetics, Inc. a Delaware corporation (the "Company"), does hereby certify, to such officer's knowledge, that:

        The Quarterly Report on Form 10-Q for the three and nine months ended March 31, 2005 (the "Form 10-Q") of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 3, 2005
/s/   PETER D. MELDRUM       
Peter D. Meldrum
President and Chief Executive Officer
 
   

Dated: May 3, 2005

 
/s/   JAY M. MOYES       
Jay M. Moyes
Vice President of Finance and Chief Financial Officer
 
   

        A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.




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