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Biotech / Medical : Myriad Genetics, Inc. (MYGN) -- Ignore unavailable to you. Want to Upgrade?

To: mopgcw who wrote (490)	12/7/2004 2:57:27 AM
From: mopgcw	Read Replies (1) \| Respond to of 2355

Piper: MYGN :Upgrading Myriad To Outperform Ahead Of Alzheimer's Data December 6, 2004 Edward A. Tenthoff, Sr Research Myriad Genetics (MYGN - $20.06) Outperform Volatility: Medium Price Tgt $30.00 Price: $20.06 52 Week High: $20.33 52 Week Low: $11.69 Shares Out (mil): 30.6 Market Cap. (mil): $613.8 Avg Daily Vol (000): 317 Book Value/Share: $5.34 Cash Per Share: $4.23 KEY POINTS: * We are upgrading our investment rating on Myriad Genetics to an Outperform ahead of what we believe will be a break-out 2005. * The primary driver will be Phase II data on Flurizan for the treatment of Alzheimer's disease due out in 2Q:05. The Phase II trial has enrolled 201 elderly patients in the U.K. and Canada. The trial is designed to compare memantine alone vs. memantine plus either 400mg or 800mg of Flurizan and is 90% powered to show a 60% improvement in ADAS-Cog score. * In addition, we look for Myriad to file as many as three INDs over the next several months, some of which may still occur this year. The most likely candidates are MPI-176716 and MPC-6827 for cancer, MPI-49839 for HIV, and MPI-4505 for chemotherapy induced nausea and vomiting. * Importantly, Myriad Genetic Laboratories continues to post strong growth with forecasted Predictive Medicine revenues of $60 million in FY:05. This business is profitable and off-sets proprietary drug development burn. * Myriad retains a strong cash position of $130 million. INVESTMENT RECOMMENDATION: We are upgrading Myriad to an Outperform with an increased price target of $30 per share. This price target is based on a change in valuation methodology with a projected enterprise value of $900 million. We expect Myriad should have 2 Phase III trials valued at $300M each and 3 Phase I trials valued at $100 million each. To this we add back year-end cash position of $80 million arriving at a market cap of $980 million. RISKS TO ACHIEVEMENT OF TARGET PRICE: Among the risks associated with Myriad Genetics are those common to all drug discovery companies, including developmental, clinical, regulatory, and marketing risks. Myriad has limited capital resources compared to many of its competitors. Further, Myriad may not develop the market opportunity for its predictive medicine tests and could face pricing pressure on such products.<snip>