UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
------------------
OR
[ ] 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
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MYRIAD GENETICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 87-0494517
-------- ----------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
320 Wakara Way, Salt Lake City, UT 84108
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(Address of principal executive offices) (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 [ X ] No [ ]
As of November 9, 2001 the registrant had 23,544,268 shares of $0.01 par value
common stock outstanding.
MYRIAD GENETICS, INC.
INDEX TO FORM 10-Q
Page
----
PART I - Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of September 30, 2001
(unaudited) and June 30, 2001 3
Condensed Consolidated Statements of Operations for the three months
ended September 30, 2001 and 2000 (unaudited) 4
Condensed Consolidated Statements of Cash Flows for the three months
ended September 30, 2001 and 2000 (unaudited) 5
Notes to Condensed Unaudited Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
PART II - Other Information
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURE(S) 15
2
MYRIAD GENETICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Sept. 30, 2001 June 30, 2001
-------------- -------------
Assets
------
Current assets:
Cash and cash equivalents $ 47,358,334 $ 35,936,817
Marketable investment securities 49,170,905 91,282,481
Prepaid expenses 3,662,781 4,219,037
Trade accounts receivable, less allowance for
doubtful accounts of $265,000 at Sept. 30, 2001
and $255,000 at June 30, 2001 3,683,360 3,634,370
Other receivables 380,434 314,571
Related party receivables 1,371,063 1,811,517
-------------- -------------
Total current assets 105,626,877 137,198,793
-------------- -------------
Equipment and leasehold improvements:
Equipment 21,966,341 21,425,910
Leasehold improvements 3,828,393 3,721,345
-------------- -------------
25,794,734 25,147,255
Less accumulated depreciation and amortization 13,354,717 12,416,209
-------------- -------------
Net equipment and leasehold improvements 12,440,017 12,731,046
Long-term marketable investment securities 39,724,689 18,735,670
Other assets 3,452,310 3,479,846
-------------- -------------
$ 161,243,893 $ 172,145,355
============== =============
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable $5,703,250 $9,657,385
Accrued liabilities 3,399,500 3,082,799
Deferred revenue 12,868,716 19,843,373
-------------- -------------
Total current liabilities 21,971,466 32,583,557
Stockholders' equity:
Common stock, $0.01 par value, 60,000,000 shares
authorized; issued and outstanding 23,539,801 at
Sept. 30, 2001 and 23,441,659 at June 30, 2001 235,398 234,417
Additional paid-in capital 199,240,484 198,800,273
Accumulated other comprehensive gain 818,138 363,583
Accumulated deficit (61,021,593) (59,836,475)
-------------- -------------
Total stockholders' equity 139,272,427 139,561,798
-------------- -------------
$ 161,243,893 $ 172,145,355
============== =============
See accompanying notes to condensed consolidated financial statements.
3
MYRIAD GENETICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
------------------
(Unaudited) (Unaudited)
Sept. 30, 2001 Sept. 30, 2000
-------------- --------------
Revenues:
Research revenue $ 7,672,691 $ 7,769,251
Predictive medicine revenue 5,517,596 3,050,009
-------------- --------------
Total revenues 13,190,287 10,819,260
Costs and expenses:
Predictive medicine cost of revenue 2,271,689 1,305,362
Research and development expense 8,261,360 8,790,797
Selling, general and administrative
expense 5,624,462 3,943,390
-------------- --------------
Total costs and expenses 16,157,511 14,039,549
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Operating loss (2,967,224) (3,220,289)
Other income (expense):
Interest income 1,931,156 1,398,293
Other (24,050) (248,465)
-------------- --------------
Net loss before taxes (1,060,118) (2,070,461)
-------------- --------------
Income taxes 125,000 --
Net loss ($1,185,118) ($2,070,461)
============== ==============
Basic and diluted loss per share ($0.05) ($0.09)
============== ==============
Basic and diluted weighted average
shares outstanding 23,482,735 22,032,596
See accompanying notes to condensed consolidated financial statements.
4
MYRIAD GENETICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
------------------
(Unaudited) (Unaudited)
Sept. 30, 2001 Sept. 30, 2000
-------------- --------------
Cash flows from operating activities:
Net loss ($1,185,118) ($2,070,461)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,041,831 878,142
Loss on disposition of assets 24,050 248,465
Bad debt expense 10,000 35,000
Changes in operating assets:
Trade receivables (58,990) (450,940)
Other receivables (65,863) (96,406)
Related party receivables 440,454 -
Prepaid expenses 556,256 806,863
Other assets 27,536 -
Accounts payable and accrued expenses (3,637,434) (806,522)
Deferred revenue (6,974,657) (3,832,801)
-------------- --------------
Net cash used in operating activities (9,821,935) (5,288,660)
-------------- --------------
Cash flows from investing activities:
Capital expenditures (774,852) (1,381,150)
Net change in marketable investment securities 21,577,112 (13,452,864)
-------------- --------------
Net cash provided by (used in) investing
activities 20,802,260 (14,834,014)
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Cash flows from financing activities:
Net proceeds from issuance of common stock 441,192 22,539,489
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Net cash provided by financing activities 441,192 22,539,489
-------------- --------------
Net increase in cash and cash equivalents 11,421,517 2,416,815
Cash and cash equivalents at beginning of period 35,936,817 56,214,736
-------------- --------------
Cash and cash equivalents at end of period $ 47,358,334 $ 58,631,551
============== ==============
See accompanying notes to condensed consolidated financial statements.
5
MYRIAD GENETICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
---------------------
The accompanying condensed consolidated financial statements have been
prepared by Myriad Genetics, Inc. (the "Company") in accordance with
generally accepted accounting principles 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. The 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, 2001,
included in the Company's Annual Report on Form 10-K for the year ended
June 30, 2001. Operating results for the three month period ended
September 30, 2001 may not necessarily be indicative of the 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) Comprehensive Loss
------------------
The components of the Company's comprehensive loss are as follows:
Three Months Ended
------------------
(Unaudited) (Unaudited)
Sept. 30, 2001 Sept. 30, 2000
-------------- --------------
Net loss ($1,185,118) ($2,070,461)
Unrealized gain on available-for-sale
marketable investment securities 454,555 22,953
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Comprehensive loss ($730,563) ($2,047,508)
============== ==============
(3) 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 earnings 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.
6
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 September 30, 2001 and 2000, there were antidilutive potential
common shares of 3,992,950 and 3,996,802, 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.
(4) Segment and Related Information
-------------------------------
The Company's business units have been aggregated into two reportable
segments: (i) research and (ii) predictive medicine. The research
segment is focused on the discovery and sequencing of genes related to
major common diseases, marketing of subscriptions to proprietary
database information, and the development of therapeutic products for
the treatment and prevention of major diseases. The predictive medicine
segment provides testing to determine predisposition to common
diseases.
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. The Company's assets are not
identifiable by segment.
Predictive
Research medicine Total
-------- -------- -----
Three months ended Sept. 30, 2001:
Revenues $7,672,691 5,517,596 13,190,287
Depreciation and amortization 715,702 326,129 1,041,831
Segment operating loss 1,557,355 1,409,869 2,967,224
Three months ended Sept. 30, 2000:
Revenues $7,769,251 3,050,009 10,819,260
Depreciation and amortization 635,977 242,165 878,142
Segment operating loss 1,357,734 1,862,555 3,220,289
Three Months Ended
(Unaudited) (Unaudited)
Sept. 30, 2001 Sept. 30, 2000
-------------- --------------
Total operating loss for
reportable segments ($2,967,224) ($3,220,289)
Interest income 1,931,156 1,398,293
Other (24,050) (248,465)
Income taxes (125,000) --
-------------- --------------
Net loss ($1,185,118) ($2,070,461)
============== ==============
7
(5) Recent Accounting Pronouncements
--------------------------------
In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 141, Accounting for Business
Combinations and No. 142, Accounting for Goodwill and Other Intangible
Assets (SFAS 141 and SFAS 142). SFAS 141 is effective for the Company
beginning July 1, 2001 and establishes accounting and reporting
standards for business combinations and prohibits the use of the
pooling-of-interests method of accounting for those transactions after
June 30, 2001. SFAS 142 is effective for the Company beginning July 1,
2002 (though early adoption is permitted) and establishes accounting
and reporting standards for goodwill and intangible assets whereby
entities will no longer amortize goodwill and certain intangibles, but
will test for impairment at least annually. The impact of adopting SFAS
141 and SFAS 142 is not expected to be material to the financial
statements.
Statement of Financial Accounting Standards No. 143, Accounting for
Asset Retirement Obligations (SFAS 143) was issued in June 2001 and is
effective for the Company beginning July 1, 2002. SFAS 143 addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset
retirement costs. The impact of adopting SFAS 143 is not expected to be
material to the financial statements.
Statement of Financial Accounting Standards No. 144, Accounting for the
Impairment of Long-Lived Assets (SFAS 144) was issued in August 2001
and is effective for the Company beginning July 1, 2002. SFAS 144
establishes new standards related to the accounting and reporting for
the impairment or disposal of long-lived assets. The impact of adopting
SFAS 144 is not expected to be material to the financial statements.
(6) Subsequent Events
-----------------
On November 9, 2001, the Company filed a Form S-3 shelf registration
statement with the Securities and Exchange Commission for the sale of
up to $250 million of various types of securities.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a leading biopharmaceutical company focused on the development and
marketing of novel therapeutic and predictive medicine products. We have
developed a number of proprietary proteomic technologies that permit us to
identify genes, their related proteins and the biological pathways they form. We
use this information to better understand the role proteins play in the onset
and progression of human disease. We operate two wholly owned subsidiaries,
Myriad Pharmaceuticals, Inc. and Myriad Genetic Laboratories, Inc., to
commercialize our therapeutic and predictive medicine discoveries. Myriad
Pharmaceuticals, Inc. develops and intends to market novel therapeutic products.
Myriad Genetic Laboratories, Inc. focuses on the development and marketing of
predictive medicine products that assess an individual's risk of developing a
specific disease.
Myriad researchers have made important discoveries in the fields of cancer,
viral diseases such as AIDS, and acute thrombosis. These discoveries point to
novel disease pathways and have paved the way for the development of new drugs.
Additionally, our pipeline of drug targets offers therapeutic opportunities for
the treatment of diseases such as heart disease, rheumatoid arthritis,
Alzheimer's Disease and other central nervous system disorders. We have
identified 141 drug targets to date. We have also established a portfolio of 12
drug candidates that are under development at Myriad. Four of these drug
candidates are in pre-clinical testing, while our lead therapeutic product for
the treatment of prostate cancer recently completed a phase II human clinical
trial. We intend to independently develop and, subject to regulatory approval,
market our therapeutic products, particularly in the area of cancer and
infectious diseases.
We also have developed and commercialized four innovative predictive medicine
products: BRACAnalysis(R), which is used to assess a woman's risk of developing
breast and ovarian cancer; COLARIS(TM), which is used to determine a person's
risk of developing colon cancer; and CardiaRisk(R), which is used for
therapeutic management of hypertensive patients. In September 2001 we announced
the introduction of a new predictive medicine product, MELARIS(TM), which is
used to assess a person's risk of developing melanoma, a deadly form of skin
cancer. We market these products using our own internal 75 person sales force in
the United States and we have entered into marketing collaborations with other
organizations in Austria, Canada, Germany, Japan, and Switzerland. Revenues from
these proprietary products were $5,717,596 for the three months ended September
30, 2001, an 81% percent increase over revenues of $3,050,009 for the three
months ended September 30, 2000.
We believe that the future of medicine lies in the creation of new classes of
drugs that prevent disease from occurring or progressing and that treat the
cause, not just the symptoms, of disease. 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 should receive these new preventive medicines.
We have devoted substantially all of our resources to maintaining our research
and development programs, undertaking drug discovery and development, and
operating our predictive medicine business. Our revenues have consisted
primarily of research payments received pursuant to collaborative agreements,
upfront fees, milestone payments, and sales of predictive medicine products. We
have yet to attain profitability and, for the three months ended September 30,
2001, we had a net loss of $1,185,118. As of September 30, 2001 we had an
accumulated deficit of $61,021,593.
We have formed strategic alliances with 10 major pharmaceutical or multinational
companies including Bayer Corporation, Eli Lilly and Company, Novartis
Corporation, Hoffmann-LaRoche Inc., Pharmacia Corporation, Schering-Plough
Corporation, Schering AG, Hitachi Ltd., Oracle Corporation, and Torrey Mesa
Research Institute, formerly known as Novartis Agricultural Discovery Institute.
We intend to enter
9
into additional collaborative relationships to discover genes, proteins, and
protein networks associated with common diseases as well as to continue to fund
internal research projects. However, we may be unable to enter into additional
collaborative relationships on terms acceptable to us.
In April 2001, we announced the formation of Myriad Proteomics, Inc., a new
venture with Hitachi, Ltd. and Oracle Corporation to map the human proteome.
Myriad Proteomics, which is 50 percent owned by the Company, intends to market a
proprietary map of the human proteome to pharmaceutical and biotechnology
companies for therapeutic and diagnostic product development. We have a
perpetual, subscription free right to study all of the data generated by Myriad
Proteomics for our own internal drug development and predictive medicine
programs.
We expect to incur losses for at least the next several years, primarily due to
expansion of our research and development programs, expansion of our drug
discovery and development efforts, launch of new predictive medicine products,
and expansion of our facilities. Additionally, we expect to incur substantial
sales, marketing and other expenses in connection with building our predictive
medicine business. We expect that losses will fluctuate from quarter to quarter
and that such fluctuations may be substantial.
Results of Operations for the Three Months Ended September 30, 2001 and 2000
Predictive medicine revenues for the quarter ended September 30, 2001 were
$5,517,596, an increase of 81% or $2,467,587 over the same quarter of 2000.
Predictive medicine revenue is comprised primarily of sales of predictive
medicine products resulting from our discovery of important disease genes. The
successful launch of COLARIS(TM), increased sales and marketing efforts, and
wider acceptance of our products by the medical community have resulted in
increased revenues for the quarter ended September 30, 2001. However, there can
be no assurance that predictive medicine revenues will continue to increase at
historical rates.
Research revenues for the quarter ended September 30, 2001 were $7,672,691
compared to $7,769,251 for the same quarter of 2000. This decrease in research
revenue is primarily attributable to greater emphasis on our internal research
and drug development programs, performing research for Myriad Proteomics, Inc.
(a 50% owned affiliate), and reduced collaboration expenses. Research revenue
from our research collaboration agreements is generally recognized as related
costs are incurred. Consequently, as these programs progress and costs increase
or decrease, revenues increase or decrease proportionately.
Research and development expenses for the quarter ended September 30, 2001 were
$8,261,360 compared to $8,790,797 for the same quarter in 2000. This decrease
was primarily due to reimbursement for research we performed for Myriad
Proteomics, Inc. as part of a scientific outsourcing agreement. For the quarter
ended September 30, 2001 research and development expenses were reduced by
$1,974,717 as a result of these scientific outsourcing services.
Selling, general and administrative expenses for the quarter ended September 30,
2001 were $5,624,462 compared to $3,943,390 for the same quarter in 2000. The
increase of 43% was primarily attributable to costs associated with the ongoing
promotion of our predictive medicine business, including the launch of
MELARIS(TM) announced in September 2001. We have also increased our sales force
to 75 full-time employees as of September 30, 2001, compared to 41 full-time
employees for the same period in the previous year. This increase will allow us
to increase awareness of our predictive medicine business through direct contact
with health care professionals. We expect our selling, general and
administrative expenses will continue to fluctuate as needed in support of our
predictive medicine business and our drug discovery and development efforts.
10
Cash, cash equivalents, and marketable investment securities increased
$31,705,452 or 30% from $104,548,476 at September 30, 2000 to $136,253,928 at
September 30, 2001. This increase in cash, cash equivalents, and marketable
investment securities is primarily attributable to the sale of approximately $41
million of the Company's Common Stock in a private placement in October 2000, as
well as the receipt of license and milestone payments from the Company's
collaborators. These cash receipts were offset by expenditures incurred in the
ordinary course of business. As a result of the Company's increased cash
position, interest income for the quarter ended September 30, 2001 was
$1,931,156 compared to $1,398,293 for the same quarter in 2000, an increase of
38%.
Liquidity and Capital Resources
Net cash used in operating activities was $9,821,935 during the three months
ended September 30, 2001 compared to $5,288,660 used in operating activities
during the same period of the prior fiscal year. Related party receivables
decreased $440,454 for the three months ended September 30, 2001, due to
reimbursement for services provided to Myriad Proteomics, Inc. Prepaid expenses
decreased by $556,256 during the three months ended September 30, 2001 primarily
due to the use of lab supplies previously purchased. Accounts payable and
accrued expenses decreased by $3,637,434, primarily as a result of payments for
equipment and lab supplies that were purchased in the prior quarter. Deferred
revenue, representing the difference in collaborative payments received and
research revenue recognized, decreased by $6,974,657 during the three months
ended September 30, 2001.
The Company's investing activities provided cash of $20,802,260 in the three
months ended September 30, 2001 and used cash of $14,834,014 in the three months
ended September 30, 2000. Investing activities were comprised primarily of
capital expenditures for research equipment and changes to marketable investment
securities. During the three months ended September 30, 2001, the Company
shifted a portion of its investment from marketable investment securities to
cash and cash equivalents due to changes in interest rates.
Financing activities provided $441,192 during the three months ended September
30, 2001, due to the exercise of stock options.
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 will be substantial and will depend on many factors, including:
. 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 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
11
. the cost and availability of third-party financing for capital
expenditures and administrative and legal expenses.
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.
Subsequent Event
On November 9, 2001, the Company filed a Form S-3 shelf registration statement
with the Securities and Exchange Commission for the sale of up to $250 million
of various types of securities. This Form S-3 registration statement has not yet
become effective. These securities may not be sold nor may offers to buy be
accepted prior to the time that the registration statement becomes effective.
This disclosure does not constitute an offer to sell or the solicitation of an
offer to buy the securities, nor shall there be any sale of the securities in
any state in which such offer, solicitation or sale would be unlawful prior to
registration or qualification of the securities under the securities laws of
that state.
Quantitative and Qualitative Disclosures About Market Risk
The Company maintains an investment portfolio in accordance with its Investment
Policy. The primary objectives of the Company's Investment Policy are to
preserve principal, maintain proper liquidity to meet operating needs and
maximize yields. The Company's Investment Policy specifies credit quality
standards for the Company's investments and limits the amount of credit exposure
to any single issue, issuer or type of investment.
The Company's 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 either as available-for-sale or held-to-maturity.
Available-for-sale securities are recorded on the balance sheet at fair market
value with unrealized gains or losses reported as part of accumulated other
comprehensive loss. Held-to-maturity securities are recorded at amortized cost,
adjusted for the amortization or accretion of premiums or discounts. 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 available-for-sale or
held-to-maturity security below cost that is deemed other than temporary results
in a charge to earnings and establishes a new cost basis for the security.
Premiums and discounts are amortized or accreted over the life of the related
held-to-maturity security as an adjustment to yield using the effective-interest
method.
The securities held in the Company's investment portfolio are subject to
interest rate risk. Changes in interest rates affect the fair market value of
the available-for-sale securities. After a review of the Company's marketable
securities as of September 30, 2001, the Company has determined that in the
event of a hypothetical ten percent increase in interest rates, the resulting
decrease in fair market value of the Company's marketable investment securities
would be insignificant to the consolidated financial statements as a whole.
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. These statements may be made directly
in this Quarterly Report, and they may also be made a part of this Quarterly
Report by reference to other documents filed with the Securities and Exchange
Commission, which is known as "incorporation by reference."
12
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. All forward-looking statements are management's
present expectations of future events and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. These risks and uncertainties
include, among other things: our inability to further identify, develop and
achieve commercial success for new products and technologies; 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; our
dependence upon pharmaceutical and biotechnology collaborations; the levels and
timing of payments under our collaborative agreements; uncertainties about our
ability to obtain new corporate collaborations and acquire new technologies on
satisfactory terms, if at all; the development of competing systems; our ability
to protect our proprietary technologies; patent-infringement claims; and risks
of new, changing and competitive technologies and regulations in the United
States and internationally.
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 of the date of this Quarterly Report or the date of the document
incorporated by reference in 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.
13
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. Changes in Securities and Use of Proceeds.
On July 16, 2001, the Company's Board of Directors adopted a stockholder rights
plan (the "Plan"). The Plan was implemented by declaring a dividend distribution
to stockholders of record as of July 17, 2001 of one preferred share purchase
right (a "Right") for each outstanding share of the Company's Common Stock, par
value $0.01 per share. Each Right will entitle registered holders of the
Company's Common Stock to purchase a unit consisting of one one-hundredth
(1/100) of a share (a "Unit") of a new series of junior participating preferred
stock, designated as Series A Junior Participating Preferred, $0.01 par value
per share, at a purchase price of $300.00 per Unit. The Rights will expire on
July 17, 2011 unless redeemed prior to that date. For further details of the
Plan, please see the Company's Current Report on Form 8-K filed on July 18,
2001, which is incorporated herein by reference.
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 and Reports on Form 8-K.
(a) 4.1 Rights Agreement, dated as of July 17, 2001, between the
Company and Mellon Investor Services LLC (previously filed as
Exhibit 4.1 to the Company's Current Report on Form 8-K filed
on July 18, 2001 and incorporated herein by reference).
(b) Reports on Form 8-K
-------------------
We filed a Current Report on Form 8-K, on July 18, 2001, describing the adoption
of a stockholder rights plan.
14
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: November 14, 2001 By: /s/ Peter D. Meldrum
----------------- -------------------------------------
Peter D. Meldrum
President and Chief Executive Officer
Date: November 14, 2001 By: /s/ Jay M. Moyes
----------------- -------------------------------------
Jay M. Moyes
Vice President of Finance
Principal financial and chief accounting officer