On the heels of reporting its strongest-ever financial results, Myriad Genetics Inc. is raising $105 million through the sale of 3 million shares of common stock. If the underwriters exercise their option to purchase another 450,000 shares to cover overallotments, Myriad's net could increase to $120 million.

The Salt Lake City-based company will have about 42.7 million shares outstanding after the offering, which is expected to close Feb. 13, 2007. J.P. Morgan Securities Inc. served as the sole underwriter.

Myriad's shares (NASDAQ:MYGN) traded down 96 cents on Thursday to close at $36.16, slightly offsetting previous gains tied to its financial results. On Tuesday, the company reported a net loss for the second quarter (based on a June 30 fiscal year-end) of $8.8 million or 22 cents per share, beating analyst expectations of $12.6 million in losses or 31 cents per share, and causing several analysts to up their price targets.

Much of Myriad's robust earnings can be attributed to better than expected revenues from its molecular diagnostics business. The company sells four tests to determine a patient's hereditary risk for various cancers, and together they generated $34.2 million during the quarter. That represents an 11 percent increase over the previous quarter and a 46 percent increase over the same quarter in 2006. Analysts had expected $32.8 million for the second quarter.

In a conference call with investors, Myriad President and CEO Peter Meldrum said the company plans to launch two additional molecular diagnostics products this year and will begin a direct-to-consumer advertising campaign.

Yet most of the proceeds from the financing are earmarked for the therapeutics side of Myriad's business. William Hockett, Myriad's executive vice president of communications, said the funds will be used to conduct two ongoing Phase III trials of the Alzheimer's disease drug Flurizan (tarenflurbil), prepare for commercialization of Flurizan, start two Phase II trials with the brain cancer drug Azixa, and potentially conduct licensing activity of quality opportunities in both the diagnostic and treatment fields.

Flurizan, a selective amyloid beta-lowering agent (SALA), has the potential to become the "first disease-modifying therapy" in Alzheimer's, Meldrum said. The current standard of care includes cholinesterase inhibitors such as the blockbuster Aricept (donepezil, Eisai Co. Ltd. and Pfizer Inc.), but such drugs provide only a temporary cognitive boost and cannot stop the disease's progression.

Another company working on a disease-modifying Alzheimer's treatment is Neurochem Inc., which last week reported the completion of a Phase III trial of Alzhemed (tramiprosate). Myriad is conducting two Flurizan trials: a global Phase III trial, which the company expects will complete enrollment in the first half of the year, and a U.S. Phase III trial, which is fully enrolled with 1,687 patients and should generate top-line data before the end of the year.

Following a recent meeting with the FDA, Myriad decided to skip a planned interim analysis after 12 months of treatment in the U.S. trial, instead continuing to the full 18-month term of the trial. That decision may give the company a better shot at getting disease modification into the label and may decrease the likelihood that another Phase III trial would be needed for approval, Hockett said.

Skipping the interim analysis of 12-month data also may increase the trial's likelihood of success, considering that data from a Phase II trial looked much better at 18 months than at 12 months.

Myriad also had been conducting a Phase II trial of Flurizan in prostate cancer, but last month the company announced the trial missed its endpoints and ended the program. That leaves Azixa as the No. 2 compound, and Myriad is preparing to initiate two Phase II trials in the first half of the year. Other milestones expected this year include Phase I data with the cancer drug MPC-2130 in the first half of the year, Phase I data with the thrombosis drug MPC-0920 around the third quarter and an IND filing with the HIV drug MPC-49839 before the end of the year.

In other financing news:

• Immtech Pharmaceuticals Inc., of New York, is selling 1 million shares of common stock at $6.75 per share to select institutional investors in a registered direct offering. Ferris, Baker Watts Inc. acted as the exclusive placement agent in the offering, which is expected to close Feb. 13 and generate $6.1 million in net proceeds. Last week, Immtech completed enrollment in a Phase III pivotal trial of pafuramidine maleate in patients with first-stage African trypanosomiasis.

• ChemGenex Pharmaceuticals Ltd., of Melbourne, Australia, is raising $8.2 million through an institutional share and option placement. The 17 million new shares will be priced at 48 cents per share, and the 5.7 million options, on a 1:3 basis, will have a five year term and an exercise price of 58 cents. Investors include Alta Partners, GBS Venture Partners, and others. Additionally, the company plans to raise another $8.2 million through a 1:10 rights issue for shares and options at the same terms.