Myriad Genetics' shares rise on takeover talk

Shares of Salt Lake City-based Myriad Genetics shot up seven percent Wednesday this week after an analyst with the Royal Bank of Canada Capital Markets said the company would be taken over.

Myriad's goal is to understand the role of genes in disease and use that information to develop products that assess a person's risk of developing a condition later in life. Its products include, among others, BRACAnalysis for breast or ovarian cancer, Colaris for colorectal and uterine cancer, and Melaris for melanoma.

Myriad could be attractive to companies because its ongoing patent litigation is likely to be resolved next year, as well as due its low valuation and very high margins, RBC's Michael Yee says in a note, as quoted by Reuters. Earlier this year, a federal judge concluded that the patents on the BRCA1 and BRCA2 genes--held by Myriad and the University of Utah Research Foundation--were not valid, saying that the gene patents simply circumvented a prohibition against patenting human DNA. Myriad is appealing.

Yee says Myriad's suitors could include Roche, Sanofi-Aventis and AstraZeneca. In addition, diagnostic test makers or Big Pharma firms interested in a new class of cancer drugs will also be interested in taking over Myriad, Minyanville notes. "I think the shares have been beaten down, but sentiment is improving, and there are opportunities in the next six to 12 months that the street is underappreciating," Yee said in a telephone interview, as quoted by Bloomberg. "Plus the stock is cheap." Myriad shares have fallen 22 percent in the past 12 months.

According to the Salt Lake Tribune, Peter Meldrum, Myriad's president and CEO, says the company doesn't generally comment on speculation, but he added that he wants it to remain independent. "Myriad is a pioneer and introduced the first genetic test for a common disease--breast cancer," he explains. "Our goal is to become a multibillion-dollar company and a global leader in the field of molecular diagnostics. And we would like to do that while based in Salt Lake City and as an independent company."

- get more from Minyanville
- see the Salt Lake Tribune's coverage
- read Bloomberg's report
- get the Reuters story

ALSO: The company announced this week that a study of its new Prolaris diagnostic test shows it can accurately predict survival rates of men with prostate cancer--a development that should help patients and their doctors decide whether to aggressively treat the disease or take a wait-and-see approach. News

AND: Check out what's going on in Australia with regards to the disputed Myriad patents. Report