Myriad Genetics Gets A Boost From Direct-To-Consumer Ad Campaign
This article was originally published in The Pink Sheet Daily
Executive Summary
Myriad expects to spend more than $6 million this year on the ad campaigns, which include TV and print ads, direct mailings and a Web site directed at women with a family history of breast or ovarian cancers and at their health care providers.
Molecular diagnostics firm Myriad Genetics is seeing an uptick in testing volumes following the launch of an aggressive direct-to-consumer marketing campaign that will run through next March. The DTC campaigns, targeted at Midwest and Southern states initially, were among several initiatives the company launched this fall in an effort to boost sales, particularly in its Women's Health business. The obstetrics/gynecology market represents 30 percent of the company's sales, including Myriad's flagship BRACAnalysis breast and ovarian cancer screening test, and is its fastest growing market segment. The remaining 70 percent of Myriad's sales are derived from other oncology testing. Myriad expects to spend more than $6 million this year on the ad campaigns, which include TV and print ads, direct mailings and a Web site directed at women with a family history of breast or ovarian cancers and at their health care providers. "We have definitely begun to see positive signs" from the ad campaigns, CEO Peter Meldrum reported during a Dec. 1 presentation at the Piper Jaffray Health Care Conference in New York. "We definitely saw hits to the Web site; we definitely saw physicians ordering kits from the company in anticipation of that demand." Following the August launch of the campaigns, Myriad saw a "marked increase" in weekly testing volume in the last half of September and continuing through October, Meldrum noted. However, the firm expects to see the largest impact on sales in the second half of its 2010 fiscal year (which ends June 30). The firm estimates that the market for its current products is about $2.3 billion. On Nov. 3, Myriad reported sales growth of 22 percent for its first fiscal quarter (ended Sept. 30) versus the same quarter a year ago, coming in at $85.1 million compared to $70 million last year. However, the total represents a 1 percent sequential decrease from the quarter ended June 30. For the year ended June 30, Myriad's sales from continuing operations grew 47 percnet to $326.5 million. Growth Push Adds 50 New Ob/Gyn Reps This Fall Myriad also hired and trained 50 new sales reps in its Ob/Gyn unit this fall, bringing the total number of in-house Ob/Gyn reps to 150 and its overall sales force - including Ob/Gyn and oncology- to 300. Though the new reps are already in the field, the impact of the expansion, like the boost from the DTC ad campaigns, likely will not be fully felt until the March and June quarters, Meldrum said at the Piper Jaffray conference. Myriad expects it will need to build the women's health sales force by another 100 reps, to a total of 250, over the next few years to fully penetrate the U.S. Ob/Gyn market. "I think you will see additional sales force expansion ... as we continue to penetrate and grow the Ob/Gyn market," Meldrum predicted. A larger presence in the women's health market is "vitally important" to Myriad's long-term success, the CEO noted during the earnings call. Meanwhile, the firm is defending itself against a lawsuit that seeks to overturn seven of Myriad's 23 patents covering the BRCA1 and BRCA2 breast cancer genes, which are the foundation of the BRACAnalysis test. A federal court last month denied Myriad's request to dismiss the case, filed by the American Civil Liberties Union on behalf of scientific organizations and breast and women's health groups. The court has yet to rule on the merits of the case, and a hearing was scheduled for Dec. 11 (Also see "Patently Unconstitutional? Lawsuit Proceeds Over BRCA Gene Patents" - Medtech Insight, 9 Nov, 2009.). "We are optimistic the court will uphold these patents," Meldrum said during the recent earnings call. "We will now proceed forward with defending the substantive issues in this case." Two Product Launches On Deck For 2010 Myriad, which completed a spin-off of its pharmaceutical and research businesses into a separate company in June, is looking to grow its presence in the molecular diagnostics market with at least one new product launch each year (Also see "Newly Independent Myriad Diagnostics Firm Will Pursue Product Acquisitions" - Medtech Insight, 27 Oct, 2008.). Meldrum said he expects his firm to grow to be the global leader in molecular diagnostics. Myriad currently has seven molecular diagnostic products on the market, including the BRACAnalysis test, Colaris colorectal cancer screening test and Melaris melanoma susceptibility test. In the past two years, the firm has launched three additional products: the TheraGuide 5-FU chemotherapy toxicity test, Prezeon genetic test for cancer progression and cancer drug response, and OnDose , a blood test to help oncologists determine chemotherapy drug dosing based on genetic data rather than simple body surface area. Myriad says it will launch a new oncology diagnostic within the next few months, as well as a new genetic disposition test for pancreatic cancer later in 2010. The pancreatic cancer test will incorporate Myriad's existing BRCA2 and P16 genes, plus a new pancreatic cancer gene, PALB2, that the firm recently acquired from Johns Hopkins University. Meldrum said at the Piper Jaffray conference that the company also is pursuing additional clinical studies to demonstrate the utility of OnDose in treating patients with colorectal and potentially other cancers. In addition, the firm is planning additional studies for the Prezeon test. "Prezeon has the largest market potential of any of Myriad's products, greater than that of BRACAnalysis," the CEO noted. While the current data on the test is broad, covering a wide range of cancers, it is too shallow, he said. "For Prezeon to really grow rapidly, we'll need to do additional clinical studies, and we're working on that." -Jessica Bylander ([email protected]) [Editor's note: This story appears courtesy of the editorial staff of 'The Gray Sheet,' your source for coverage of devices and diagnostics. For a sample copy, call customer service at 800-332-2181.] |