Myriad Genetics Inc (MYGN) 2004 Q3 法說會逐字稿

(OPERATOR INSTRUCTIONS). At this time I would like to turn the program over to Mr. Peter Meldrum. Go ahead, sir.

Thank you. Good morning and welcome to the Myriad Genetics earnings conference call for our third fiscal quarter, which ended March 31, 2004. My name is Peter Meldrum, and I'm the President and Chief Executive Officer. I'm joined today by Greg Critchfield, President of Myriad Genetic Laboratories; Adrian Hobden, President of Myriad Pharmaceuticals; and Jay Moyes, our Chief Financial Officer.

I will begin the discussion this morning with a brief review of the past quarter and will be followed by Mr. Moyes who will discuss our financial results for the third quarter of fiscal 2004. Dr. Critchfield will then review the Company's predictive medicine business. Then Dr. Adrian Hobden will discuss the status of our clinical trials and our newest drug candidate, MPC-4505, for the treatment of chemotherapy-induced emesis. At the end of this presentation I will turn it back to the operator for the question-and-answer portion of the conference call.

Please note that some of the information presented here today may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. These statements are based on management's current expectations, and actual events may differ materially from these expectations.

We refer you to the documents the Company files from time to time with the Securities and Exchange Commission, specifically the Company's annual report on Form 10-K and its quarterly reports on Form 10-Q. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.

This was an exceptionally strong quarter for the Company, which saw record product revenues, record gross profit margins, and significant progress on the drug development front. Let me start first with the predictive medicine revenues. As a result of our increased sales and marketing efforts and recent publications concerning the clinical utility of our products, we experienced strong customer demand for our predictive medicine tests, which achieved a record 11.7 million in our first -- sorry -- third fiscal quarter.

I'm also pleased to announce that we have seen continued growth in the predictive medicine sample flow during this past month of April. We also enjoyed excellent gross profit margins of 68 percent for the third fiscal quarter, as compared to 64 percent for the third fiscal quarter last year. Historically our gross profit margins have improved by 1 percent each quarter. We believe that these are exceptional gross profit margins for the molecular diagnostic industry and have the potential to continue increasing into the mid 70 percent range, resulting in margins comparable to those of the pharmaceutical industry.

Myriad is continually improving its current line of products and developing new predictive medicine products. As Greg will discuss later on the conference call, Myriad recently strengthened its colon cancer product line with the acquisition of the exclusive U.S. right to detect mutations in the MYH colon cancer gene. We expect to introduce the MYH gene into the COLARIS product line later this summer.

Myriad continues to make excellent progress on its lead drug candidate, Flurizan, for the treatment of Alzheimer's disease. We anticipate completing the Phase I study of Flurizan this quarter and reporting results at an upcoming Alzheimer's disease meeting. We will complete the Phase II study in over 200 patients with mild to moderate Alzheimer's disease in less than a year from now during the first calendar quarter of 2005.

Finally, we're investigating Flurizan for the treatment of prostate cancer as well. In the prostate cancer animal models Flurizan reduced the incidence of metastasis, which is our primary clinical endpoint, in the Phase II/III study by over 85 percent as compared to control animals. I'm pleased to report that the Phase II/III study in prostate cancer will be concluded in the second calendar quarter of 2006.

As we recently announced, Myriad has advanced another drug candidate into late preclinical studies, and is positioning it for an IND filing in 2005. As Adrian will discuss later on in the conference call, MPC-4505 has shown promise for the treatment of chemotherapy-induced nausea and vomiting, a multibillion dollar market opportunity.

Myriad's therapeutic product pipeline continues to expand as we focus our research on understanding the cause of human disease at the molecular level. We are on track for two new IND filings during this calendar year, and have as our goal the filing of one to two new INDs each year as we move forward toward becoming a leading biopharmaceutical company. It is my pleasure now to turn the conference call over to our CFO, Jay Moyes.

Thank you, Pete. It certainly is a pleasure to be able to discuss Myriad's financial results for our third fiscal quarter ending March 31st, 2004. As Pete mentioned earlier, predictive medicine revenues this quarter are at an all-time high of $11.7 million. This represents a 26 percent increase over the same quarter in the prior year and a 12 percent increase over the prior quarter of this year.

The $11.7 million in predictive medicine revenues exceeded the research analyst's consensus forecast for this quarter by $400,000 or 4 percent. The predictive medicine revenues for the nine months ended March 31, 2004 are up 19 percent over the same nine months of the prior year, even though our first fiscal quarter was unusually weak. We continue to see good sample flows in the month of April and expect predictive medicine revenues to perform well again in the fourth fiscal quarter.

Once again gross profit margins have continued their consistent growth rate. Our gross profit margins on predictive medicine revenues grew to 68 percent for the quarter ended March 31, 2004, which is up from 64 percent in the same quarter of the prior year, and 67 percent in the prior quarter ended December 31, 2004 -- or 2003.

I want to emphasize that our gross profit margins are already the same as many pharmaceutical companies, and more than 150 percent better than the margins of traditional reference laboratory companies like LabCorp and Qwest. We believe that our gross profit margins will continue to improve into the mid 70 percent range within the next 18 months.

Even though the insurance companies and HMOs have reimbursed the majority of our sales, have remained aggressive in prolonging payments to other vendors, including Myriad, our accounts receivable have not deteriorated. Despite the fact that the Company had record predictive medicine revenues this quarter, the number of days sales outstanding based on average daily sales for the quarter remained constant at 114 days. Further, year to date bad debt expense is a very reasonable 3 percent of predictive medicine revenues. The quality of our accounts receivable remain excellent.

As we had anticipated over the past few conference calls, research revenues have declined. Total research revenues for the third fiscal quarter ended March 31, 2004 were $2.1 million, compared to $6.8 million for the same quarter in the prior year. This change reflects the successful completion of our collaborations with Hitachi and DuPont, as well as the overall decrease in the emphasis placed on external collaborations in favor of internal drug development programs. Nevertheless, we do not expect research revenues to decline substantially beyond the current levels in the near future.

Research and development expenses for the quarter ending March 31, 2004 were $12.4 million, which is an increase of 7 percent over the same quarter in the prior year. Research and development expenses include costs associated with our three ongoing human clinical trials in prostate cancer and Alzheimer's disease, as well as the late stage preclinical development of our cancer, HIV and emesis drug candidates.

Selling, general and administrative expenses for the quarter ending March 31, 2004 were $8.8 million compared to $7.9 million for the same quarter in the prior year. The increase in selling, general and administrative expenses from the previous year primarily reflects increased legal costs associated with protecting our intellectual property estate, as well as costs associated with documenting our internal controls for timely compliance with the Section 404 of the Sarbanes-Oxley Act.

Selling, general and administrative expenses for the nine months ending March 31, 2004 were $24.7 million compared to $24.8 million for the same nine month period in the prior year. Selling, general and administrative expenses include salaries, commissions and related personnel costs for sales, marketing, executive, legal, finance, accounting, human resources, and business development personnel, allocated facilities expenses and other corporate expenses. We expect our selling, general and administrative expenses will continue to fluctuate depending on a variety of factors, including the number and scope of new product launches in our drug discovery and drug development efforts.

Our net loss for the quarter was $10.7 million, or 39 cents per share, compared with $5.5 million, or 20 cents per share, for the quarter ending March 31, 2003. We were pleased that this result beat the research analyst consensus loss of $11 million, or 40 cents per share.

The increased loss is primarily the result of our increased expenditures in, and commitment to, the area of research and drug development. We expect our loss to continue to be among the lowest of the product focused biotech companies.

Cash, cash equivalents and marketable investment securities were $99.1 million as of March 31, 2004, a decrease of $4.2 million or 4 percent from $103.3 million at December 31, 2003. This decrease in cash, cash equivalents and marketable investment securities is primarily attributable to the net loss from the ongoing operations of the Company. We again point out that Myriad has no debt and no convertible securities, and that the total number of shares outstanding at March 31, 2004 is a very modest 27.2 million shares.

Thank you for your attention. I will now turn the time over to Dr. Greg Critchfield.

Thank you, Jay, and good morning everyone. It is a pleasure to speak to you about the growth of our predictive medicine business. During the third quarter of this fiscal year we saw strong growth in sample flows during the entire quarter. The total revenues for our predictive medicine business was $11.7 million, an increase in quarterly revenue of 12 percent over our previous record quarter for this business. Our growth continues with $30.2 million in revenues for the past nine months, and more than $125 million in cumulative revenues since the founding of our predictive medicine subsidiary.

We continue to operate our laboratories in a highly efficient manner. While revenues grew, our gross margins improved to 68 percent. We are seeing the benefits of the technical improvements we mentioned during our last conference call. These include the application of more automation, the improvements in chemistries, and institution of improved ways to run instrumentation. With these efficiencies we are able to spread our cost of operations over a greater number of tests as our volumes continue to grow.

Finally, a price increase was announced for our customers beginning in February. For example, the new BRACAnalysis price is $2,975 compared to previous price of $2,760. Because our insurance contracts have anniversary dates throughout the year, it will take time before the full benefit of a price increase is realized. These items all work together to improve our gross margins.

Additionally, the PCR patents that we have licensed for use in our laboratories, expire in March of 2005. And we expect our margins to improve further as we anticipate reduced royalty obligations.

We are seeing greater physician and patient awareness of our predictive medicine product. Several papers have been published discussing important clinical findings, such as the value of interventions in BRCA mutation carriers, the roles of physicians in long-term follow-up of patients testing positive, the high risks of cancer in individuals carrying mutations, and the BRC status as a possible predictor of chemotherapeutic response.

These are all evidence that our understanding of the role of these genes and the application of that understanding in clinical medicine is maturing. We believe that the clinical utility of these tests continues to increase as more supporting scientific data are published, and as physicians and patients decide to use testing as a key element in decreasing the risks of cancer.

We continue to work with insurers to streamline reimbursement for our services and to make it easier for patients to have testing performed. Changes in insurance coverage guidelines have expanded the number of individuals who are now considered candidates for testing. We believe that expanded coverage to more individuals will lead to increased numbers of tests.

Colorectal cancer is expected to occur in more than 145,000 individuals in the United States in 2004. It is one of the leading causes of cancer death. The single most important message regarding colon cancer is that its largely preventable. Knowing who is at particularly high risk for colon cancer allows the physician and patient to take steps to prevent or reduce the risk of cancer. Myriad's COLARIS products gives the physician and patient the kind of information that may help them to prevent this disease.

Recently, we announced that Myriad exclusively licensed the right to detect mutations in the MYH gene in the United States. In the area of colorectal cancer, one of the major hereditary cancer syndromes is characterized by the formation of many polyps, some of which can become cancerous. The MYH gene appears to be involved in polyp formation. The MYH gene normally functions in a process called base excision repair. For certain kinds of DNA damage this gene corrects errors that occur in the DNA. If MYH is not working properly, the DNA damage is not repaired and the errors can lead to damage of important -- of other important genes in cancer pathways. Polyps in colon cancer can therefore occur as a consequence of these damages.

Both in cases where there is a clear family history of colon cancer and in cases without any sign of a hereditary cause, the MYH gene has been found to be significantly involved in colon cancer. This finding was recently demonstrated in a study of 111 British subjects published in the Journal Lancet.

The study participants each had more than 10 polyps, no family history of colon cancer in their parents or children, and were negative for mutations in the APC colon cancer gene, the gene that we analyze in the COLARIS AP tests. The study found that a surprisingly high total of 25 such individuals, 23 percent of them, were positive for mutations in the MYH gene.

Another insightful study was published recently in the New England Journal of Medicine by a group at the London Research Institute. The authors evaluated patients who had no known gene abnormality, but had multiple colorectal polyps. The study found that approximately one-third of the people who had between 15 and 100 polyps had two mutated copies of the MYH gene. Of the people with more than 100 polyps, 7.5 percent had two mutated copies of the MYH gene. The authors concluded that, "molecular methods should be used to classify disease in patients with multiple adenomas". Some researchers have suggested that only one mutation may increase the risk of colon cancer in such individuals as well.

Further work is ongoing to fully elucidate the implications for those persons who carry mutations in the MYH gene. We plan on implementing MYH testing during the next fiscal quarter as an expansion of our COLARIS line of predictive colorectal cancer products. This strategy is consistent with Myriad's goal to be a leading provider of predictive medicine products for hereditary cancers.

We look forward to continuing the growth of our business during the current fiscal quarter as more patients and families take advantage of the lifesaving benefits of these predictive medicine products. I'll now turn the microphone back to Pete.

And I would like Adrian Hobden now to continue the conference call.

Thanks, Pete, and good morning. We have been very busy during the last three months. We recently announced that MPC-4505, an NK-1 receptor antagonist for the treatment of chemotherapy-induced nausea and vomiting had entered pre-IND development and joins three other compounds at that state of development. To remind you, those compounds are MPI-49839 for the treatment of HIV, MPI-176716 for ovarian cancer, and MPC-6827 for a variety of cancers including breast and pancreas.

In addition, we will complete our Alzheimer's Phase II trial of Flurizan in the first quarter of 2005. And we will shortly finish the Phase I safety trial for Flurizan in healthy older volunteers.

I'll first spent some time describing the characteristics of MPC-4505 and the rationale for developing a product of this type. Myriad has set itself the objective of developing a franchise in cancer products. We believe that we can leverage Myriad's existing oncology sales force, which currently calls on all U.S. oncologists, to sell therapeutic products. Indeed, many of the sales force came originally from pharmaceutical companies.

Over the last few years standard of care treatment of cancer patients has included a number of drugs that have no direct activity on the cancers themselves. For example, antiemetics are used to reduce the immediate side effects of chemotherapy. And erythropoietin is used to combat the anemia which often develops shortly after chemotherapy. These new classes of medications have improved the effectiveness of cancer drugs by allowing oncologists to adopt more aggressive chemotherapy regimes and enhancing patient compliance. Thus the drug for the prevention of chemotherapy-induced nausea and vomiting fits well in our portfolio.

There are currently a number of 5-HT 3 antagonists, such as sulfan and Kytro (ph) available for chemotherapy induced nausea and vomiting. However, despite providing relief to some patients they do not provide complete coverage. Without treatment a patient typically experiences rapid onset nausea followed by a period of relative freedom from symptoms, and then a later period of nausea. 5-HT 3 antagonists work best for the early period, but less well for late stage nausea.

Indeed, an editorial in a recent edition of the Journal of Clinical Oncology argued that as many as 40 percent of patients receiving 5-HT 3 antagonists vomited more than 24 hours after receiving treatment.

Unlike 5-HT 3 antagonists, which work in the periphery, NK-1 receptor antagonists, such as MPC-4505, work centrally and modulate both early and late stage -- late onset nausea, and have the potential to be a single agent drug for this distressing condition.

Clearly a basic requirement of the drug we have to work centrally is that it gets into the central nervous system; MPC-4505 does that. In fact, it has very good CNS penetration and a long half-life in the brain. It is also important that the drug can be given orally so that patients can take the drug home with them and control delayed emesis. MPC-4505 has good oral bioavailability; about 30 percent in monkeys.

Finally, for early onset emesis it is important to have a formulation of the drug that can be delivered by intravenous drip along with, or just before, the chemotherapy drugs. The solubility profile of MPC-4505 is acceptable for an IV formulation. We are excited about the potential of this drug to be competitive with other agents in this billion dollar indication.

Turning now to Flurizan, our drug candidate for the treatment of Alzheimer's disease, we're pleased with the progress of the Alzheimer's Phase II trial, which will be completed in the early 2005. And are excited about its potential due to the strong safety profile of Flurizan and the urgent clinical need for new and improved medicines for this terrible disease.

Recently the Data Monitoring Committee for the Alzheimer's trial reported that they have not identified any safety issues, and have recommended the trial continue. The inclusion criteria for the Alzheimer's trial were, firstly, the patients have mild to moderate Alzheimer's as defined by a score on the Mini Mental State Exam, which is also known as the MMSE, of 15 to 26. This is a scale in which 30 is normal and a decline in score mirrors disease progression. Myriad powered the study on the assumption that the average MMSE would be 21, and indeed it turned out that the average MMSE was almost exactly 21.

Secondly, the age of the patients would be over 55. The average age of our patients is 75, with the oldest being a remarkable 93. Thirdly, we required patients to be on stable dose of Cholinesterase inhibitor, or if not, to be unable to tolerate that class of drug. Ninety-four percent of our patients are on Cholinesterase inhibitor.

Finally we did not specify the sex of the patients, but expected given the age of the individuals to see more women than men enrolled. In fact, there are almost exactly equal numbers of men and women enrolled.

Myriad has also been conducting a U.S. Phase I study of Flurizan in healthy older volunteers. The study has involved volunteers between the ages of 55 and 80. It is an escalating multidose study in which volunteers are monitored to determine the safety, pharmacokinetics, and CNS penetration of the drug. I am pleased to announce that we expect the results to be available around the middle of this year.

Additionally, Myriad is proceeding well with its Phase II/III trial of Flurizan in prostate cancer. Many patients have been taking the highest dose of the drug on a daily basis for over two years. And thus far the independent Data Monitoring Committee has not identified any safety issues. Myriad will continue to monitor the safety profile on Flurizan in the ongoing prostrate trial. And we look forward to the completion of the study in the middle of 2006.

Finally, I would like to update you on the progress with our other programs. Myriad continues with the development of our HIV compound and our two cancer compounds. We're on course to file two INDs this year, and expect to file two new INDs next year. At the same time as completing the IND packages, we have been further examining the biological profiles of our compounds. We have found that MPI-49839, our anti-HIV drug, works well against strains of virus resistant to protease and reversed transcriptase inhibitors. Furthermore, it has additive activity with either protease inhibitors or reversed transcriptase inhibitors against sensitive strains. MPI-176716, our anticancer drug targeted for the treatment of ovarian cancer, has synergistic activity with carboplatin for that disease. It is also showing intriguing activity with Paxitia (ph) for melanoma.

MPC-6827, our other anticancer drug, continues to impress us both -- with both its potency and broad spectrum. Recently we observed that it is not a substrate for multidrug resistance, also known as MDR pumps.

As you may now, tumors become resistant to anticancer drugs by a number of different mechanisms. However, the most common, and for the patient disastrous route, is by upregulating MDR pumps. The tumor immediately becomes resistant both to the patient's current drug and a large number of potential alternative chemotherapy drugs.

It is highly desirable to have cancer drugs that are not substrates for the MDR pumps. MPC-6827 has equal potency regardless of the MDR states status of the cancer cell. In contrast, drugs that are substrates are 100 to 1,000 times less potent against cancer cells expressing the pumps.

As you can hear, Myriad has been very busy and productive over the past quarter. In future conference calls I hope to be able to tell you about progress in some of our earlier drug discovery programs.

Thank you for your attention, and I will now hand the meeting back to Pete.

Thank you, Adrian. And I will hand it back to the operator for the question-and-answer portion of the conference call.

(OPERATOR INSTRUCTIONS) Charles Duncan, JMP Securities.

First of all, congratulations on a good quarter. Also, I would like to ask you a couple of questions; first of all about the predictive medicine business, and then secondly about drug development.

My first question on predictive medicine, I wanted to explore with you the growth sector for that revenue. First of all, you had 26 percent year-on-year growth, but only 12 percent on a quarter-on-quarter. Could you give us a little bit more color on your comment, Pete, that you made with regard to sample flow last quarter and then going into this quarter?

Thank you, Charles. Yes, as you pointed out we have seen excellent growth both year-on-year, 26 percent, and quarter-to-quarter growth. The quarter-to-quarter growth is actually more impressive than the year-to-year growth, and represents the second quarter in a row that we have had double-digit quarter-to-quarter growth.

As I mentioned, we have seen kind of a change in the dynamics of the predictive medicine business, based in part upon recent publications demonstrating the clinical utility of our products, and in part upon our own internal marketing and sales efforts. And we continue to see very strong sample flow that began at the end of the summer of 2003. So like the last two quarters, which experienced double-digit quarter-to-quarter growth, we continue in April to see very strong sample flow. And as Jay mentioned, we're looking forward to a good fourth quarter.

Can you point to any specific new marketing initiatives that we can keep track of to gauge progress?

No, there are not any specific major initiatives. The Company is continuing to discuss with primary care physicians and oncologists the utility of our tests. We continue to receive excellent insurance reimbursement. We have about 200 million lives now with insurance coverage with organizations that reimburse BRACAnalysis. But it is I think just continued education and acceptance in the medical community as our tests become standard of care in the treatment of hereditary cancer.

And moving on to therapeutic product development, a quick question on Flurizan, or 7869, in Alzheimer's. Adrian, you mentioned that -- you characterized the patient population in your Phase I, it seems like it is a pretty tough or later stage patient population. If you could comment on that with regard to the efficacy of some of the other drugs that are being sold with different mechanisms?

And then secondarily you mentioned having data midyear. Is that going to be presented at the July Alzheimer's meeting, and give us some insight as to the presentation format?

Yes, Charles. I think that, as you're aware, the demographics of Alzheimer's disease is primarily in populations over the age of 60, 65. There is remarkably -- a remarkable number of patients unfortunately that are diagnosed with the disease at an earlier stage, including of course, familial Alzheimer's disease, where the patients may be in their early 40s.

We were surprised that we hac as many patients in the 55 age group, 55 to 60, as we in fact do. But the majority, as you would expect, are in the 70, 75 age group. That is the group that you see major prescriptions for the existing Colenestrate inhibitors, and for Memantine, the new drug from Forrest Laboratories, which has a slightly different mechanism of action.

The rationale for our design of the study was that the Cholinesterase inhibitors are the major prescribed drugs for this indication, and we expect that to be the case going into the future. Therefore, we expect that our drug will be prescribed in combination with those drugs.

We did not include Memantine in the study simply because it is not a widely prescribed drug in the UK and Canada. And we were not clear -- since it is not currently indicated for mild to moderate Alzheimer's disease what the effect would be on the patient population, so that drug was excluded from the trial. But in anticipation we would not see any reason why our drug wouldn't work in combination with Memantine as well as Cholinesterase inhibitors. I hope that answers your question.

In terms of the presentation of the Phase I data, we hope to have a presentation probably as a poster at the Alzheimer's -- International Alzheimer's Conference in Philadelphia in the middle of July. The reason we don't have that poster in there right now is because we were unsure when this trial would be completed. We do have the last volunteer on drug at the moment, and therefore we know when the final results will be available, and therefore, we know the results will be available prior to that meeting.

The study is being done in collaboration with Eddie Koo and Doug (indiscernible) in San Diego, and Neil Grafrafred (ph) in the Mayo Clinic in Jacksonville. And we are somewhat beholden to them to get the data analyzed in time for that conference. Although their intent at this stage is to make a presentation, or at least a poster at that meeting.

And final question on your NK-1 inhibitor, could you compare it to what you know about (indiscernible) and then with regard to you mentioned interestingly that it could be amenable to an IV formulation. And then if you would give us some insight as to where you think your competitive advantage is with that molecule relative to events?

Emend (indiscernible) this is a very interesting molecule in as much as when Merck was developing that compound their primary interest appeared to be in depression, an indication which you'll be aware the drug did not show efficacy in a recent Phase III trial. And so this, of course, is only our speculation, but it seems like their measure of retention was to develop a formulation that was suitable for that particular disease, with chemotherapy-induced nausea and vomiting being a secondary objective.

The potential that we see in NK-1 receptor antagonist is not as just purely a supplement to 5-HT 3 antagonist to add on to deal with the late stage, late onset emesis, but in fact as a drug that can control both early and late stage emesis, and so could be a single drug rather than the combination of drugs that are currently given for this indication.

In that potential scenario we believe that you need to give the drug at the time of chemotherapy, or just before it with immediate onset, which really means to give it by IV formulation, and then to send the patients home with the drug as an oral formulation. Currently, as you probably are aware, there is no IV formulation of Emend available. And obviously we don't know the reason for that. What we do know, however, is that the drug is highly insoluble. And therefore, I project it is very, very hard to formulate for IV. And that may be the reason that they have not done that.

I am sure that they will be interested to do it in the future, but I think it is going to be very challenging for them. So the big advantages we see in our drug are, one, that it is a relatively soluble, and therefore relatively straightforward. We expect to develop an IV formulation. And then secondly as I think I said it does have a very long half-life in the CNS, which we think would leave us to the potential for maybe taking the drug. And we may even be able to develop it such that you don't have to take the drug on a daily basis. You may be able to take the drug one tablet, and it may hold for 48 hours or something of that sort.

And that is, again, a significant advantage I think in this indication. It is particularly hard for patients to swallow tablets when they are feeling nauseous, and so to be able to avoid that is a big advantage.

I imagine it is. However, mechanistically do you think that a NK-1 inhibitor would prevent the first phase of emesis?

Well, the emesis is centrally mediated, but based on signals from the periphery. And the signal from the periphery to the brain is driven by serotonin, hence the 5-HT 3 antagonist. But the emesis response is driven by a centrally mediated factor (ph) called NT1, which is why we think it'll work for early as well as late stage.

Annabel Samimy from UBS.

It is Annabel Samimy calling for Delta Burn (ph). I had several questions actually. Can you talk a little bit about the different growth rates of the various predictive medicine products which you saw as stronger, was it COLARIS or in breast cancer?

Yes, thank you. We have seen good growth rates across the board with all of our predictive medicine products. Our lead product, of course, is BRACAnalysis and it demonstrated excellent growth rates the last several quarters. Probably the fastest-growing product in our product line is COLARIS. So the colon cancer products have grown well. And MELARIS is doing exceptionally well for melanoma. So we're really seeing across the board excellent growth among our predictive medicine products.

Has there been -- we hear a lot about COLARIS and the BRACAnalysis. Has there been any literature recently on the melanoma product?

There have been some publications looking at the risk of melanoma in individual carrying mutations. And there are clinical studies that are underway to establish its use in the expanded populations.

Also in terms of the price increase, that was for all of the tests, or which one in particular?

We had a price increase for a number of the tests, but not all the tests. All of the BRACAnalysis products experienced price increases, and then several of the others did as well.

And can you just tell me what that was again? It was -- what are those prices again?

Yes. For a comprehensive BRACAnalysis the new price is 2,975 compared to an old price of 2,760.

Okay, great. And one last question. You are talking about QINDs in 2005 and two next year. Is that calendar or fiscal?

That would be calendar year. Two new IND filings between now and December 31, and then two next year, one to two each year thereafter.

Right. Are there there -- is there anything that you're particularly favoring for IND this year?

As Adrian mentioned, we have three products that are very close to an IND filing. The first is our AIDS drug, 49839, the ovarian cancer drug candidate, 176716, and our general cancer drug candidate, 6827.

(OPERATOR INSTRUCTIONS). Mark Augustine, CS First.

Can you gentlemen remind me what the final enrollment number was and site number in the Phase II Alzheimer's disease study? Thank you.

Yes, Mark. The final enrollment number in the Alzheimer's trial was 210 patients. And there were 31 centers throughout the UK and Canada.

And then tell me if you would on what association exists if any between AB 42 levels assayed in the blood, changes in those levels and clinical improvements? Do we have any information on that?

We do not have any information on that. There is a lot of epidemiology associated with raised Abeta 42 and plasma role in CNS and onset and progression of Alzheimer's disease. But I think that that is the big question that everyone is looking at right now.

(OPERATOR INSTRUCTIONS). At this time it appears we have no further questions. Once again, we have no further questions.

Thank you, operator. At this time I would like to conclude the Myriad Genetics earnings conference call for our third fiscal quarter, and thank all of those who attended. Thank you very much.

Thank you, and this does conclude today's program. You may disconnect at any time, and have a great day.