Staff Writer

Shares of Myriad Genetics Inc. fell 5 percent in Monday trading on news that the company's Act-Earli-AD trial, a pivotal 18-month Phase III study of Flurizan (tarenflurbil) in patients with mild Alzheimer's disease (AD), did not achieve statistical significance on either of its primary endpoints - cognition and activities of daily living.

As a result, Myriad said it will discontinue development of the compound. President and CEO Peter Meldrum said in a statement that the company is "disappointed that Flurizan failed to achieve significance in this study, and we will now discontinue development of this compound."

The trial enrolled 1,684 patients in the U.S., and subjects received either an 800-mg dose of Flurizan or placebo. Results from a global trial are expected in the fourth quarter of this year.

However, even if the global study data are positive, it is unlikely that the company will file for approval, said Hung Li, an analyst with Stanford Group Co. In a research note, he called the decision to cease development of Flurizan "prudent."

That marked the end of Myriad's turbulent history with the drug since it licensed Flurizan from Riverside, Calif.-based Encore Pharmaceuticals Inc. in 2000.

The first indication of Flurizan's potential failure came in May 2005, when the company announced that the drug did not achieve statistical significance in Phase II trials. However, those studies pointed to positive trends among some patients on Flurizan. (See BioWorld Today, May 23, 2008.)

Most notably, those data showed encouraging tendencies on all three primary endpoints in mild AD patients who received 800-mg, twice-daily doses of Flurizan. In addition, mild patients who achieved high plasma concentrations of the drug demonstrated a statistically significant effect in two of the three primary endpoints.

But the Phase II trials had a broader reach, targeting both mild and moderate AD patients. Striving for that breadth revealed gaps in the drug's ability to treat moderate AD subjects, who did not respond as well to treatment. (See BioWorld Today, May 3, 2005.)

In March 2006, Salt Lake City-based Myriad presented additional data from a Phase II follow-on study of Flurizan in patients with mild AD. Those data found that overall, 42 percent of patients on Flurizan showed improvement or no decline in one or more of the three primary endpoints of cognition, global function and activities of daily living, compared to 10 percent for the placebo group. That gave investors and physicians alike hope that the drug had the potential to not only slow disease progression but also to halt progression or improve symptoms.

That optimism carried the drug into Phase III development, and in May, the company inked a potential $250 million European commercialization deal with Copenhagen, Denmark-based J. Lundbeck AS. (See BioWorld Today, May 23, 2008.)

As part of that agreement, Myriad netted $100 million in up-front payments. But the deal also triggered a sublicense royalty payment to Encore that increased the company's research expenses and net losses in 2008.

In 2008 alone, Myriad spent approximately $60 million on development of Flurizan. The remaining expenses to wrap up the Flurizan program are projected to be approximately $8 million, spread primarily over the next two fiscal quarters. "The discontinuation of Flurizan will reduce our pharmaceutical development spend substantially and should enable Myriad to achieve profitability next year, ending June 30, 2009," Meldrum stated.

Li concurred with the company's predictions, noting that "the up-front payment from the recent deal with Lundbeck is more than enough to recoup the cost of Flurizan development in FY08."

On March 31, Myriad reported cash, cash equivalents and marketable securities of $310 million.

In addition, Li wrote that the company should remain financially sound due to its diagnostics coverage and issued a hold rating for the stock. Li valued Myriad's diagnostic portfolio at $32 per share, or $1.5 billion.

Myriad's stock (NASDAQ:MYGN) fell $2.41 in Monday trading to close at $45.52.