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Myriad Pharmaceuticals Inc. Reports Operating Results (10-Q)

February 08, 2013 | About:

Myriad Pharmaceuticals Inc. (MYRX) filed Quarterly Report for the period ended 2012-12-31.

Myrexis, Inc. has a market cap of $79.6474 million; its shares were traded at around $2.97 with and P/S ratio of 429.

Highlight of Business Operations:

We assess the impairment of long-lived assets when events or changes in circumstances indicate that the carrying value of the assets or the asset grouping may not be recoverable. Factors that we consider in deciding when to perform an impairment review include significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. We measure the recoverability of assets that will continue to be used in our operations by comparing the carrying value of the asset grouping to our estimate of the related total future undiscounted net cash flows. If an asset groupings carrying value is not recoverable through the related undiscounted cash flows, the asset grouping is considered to be impaired. The impairment is measured by comparing the difference between the asset groupings carrying value and its fair value. Fair value is the price that would be received from selling an asset in an orderly transaction between market participants at the measurement date. Long-lived assets such as intangible assets and property, plant and equipment are considered non-financial assets, and are recorded at fair value only when an impairment charge is recognized. We recorded impairment charges for the three and six months ended December 31, 2012 of $0 and $20,000, respectively. There were no impairment charges in the same periods for 2011. These charges are reflected in the statement of operations and comprehensive loss in general and administrative expenses.

Research and development expenses are comprised primarily of salaries and related personnel costs, laboratory supplies, equipments costs, facilities expense, and costs associated with our clinical trials. Research and development expenses for the three and six months ended December 31, 2012 were $0.1 million and $0.4 million compared to $3.8 million and $8.1 million in the same periods last year. This 97% and 95%, respectively, decrease was primarily due to:

General and administrative expenses consist primarily of salaries and related personnel costs for business development, executive, legal, finance and accounting, information technology, human resources, and facilities expenses. General and administrative expenses for the three and six months ended December 31, 2012 were $4.7 million and $8.2 million compared to $3.8 million and $8.2 million for the same period in 2011. This 24% increase in general and administrative expenses during the three months ended December 30, 2012, was due primarily to the $1.5 million settlement associated with the settlement agreement entered into on December 21, 2012 with AIA, partially offset by a reduction in headcount as a result of our decision to suspend development activities for all clinical and preclinical programs. We expect to see reduced general and administrative expenses as a result of the decision to suspend further development activities for all preclinical and clinical programs and other related wind down activities.

Other income of $41,000 and $396,000 for the three and six months ended December 31, 2012, compared to $100,000 and $199,000 for the same period in 2011, respectively, reflects interest income earned on our marketable investment securities of $32,000 and $67,000 for the three and six months ended December 31, 2012, and $78,000 and $166,000 for the same periods in 2011, respectively. The decrease in interest income of 59% and 60%, respectively, is a result of the reduction in our invested balance in marketable securities for the three and six months ended December 31, 2012, as compared to 2011. In addition, other income includes a net gain on the sale of assets of $8,000 and $326,000 for the three and six months ended December 31, 2012, and $0 for the same periods in 2011. The increase in gain on disposal of assets is a result of our decision to sell our laboratory equipment after our decision to suspend development activity on all our clinical and preclinical activities. The majority of the gain recorded results from the sale of assets that were fully depreciated or written off as a result of previous reorganizations in the Company.

As of December 31, 2012, we had $81.3 million in cash, cash equivalents and marketable securities. As discussed above, on January 22, 2013, our Board of Directors unanimously determined to cancel the special meeting of our shareholders scheduled for January 23, 2013, and instead, the Board of Directors declared a special cash distribution to shareholders in the amount of $2.86 per share to shareholders of record at the close of business on Monday, February 4, 2013. The Board of Directors also appointed Jonathan M. Couchman as a Class II director and as our President and Chief Executive Officer. Subsequent to Mr. Couchmans appointment to the Board of Directors, the remaining members of the Board of Directors, Gerald P. Belle, Jason M. Aryeh, Robert Forrester, Timothy R. Franson, M.D., John T. Henderson, M.D., and Dennis H. Langer, M.D., J.D., resigned. Under the leadership of Mr. Couchman, Myrexis will continue its evaluation of strategic alternatives. Upon the completion of the special cash distribution approved by the Board, we expect to have approximately $3.3 million in cash, cash equivalents and marketable securities, of which all but approximately $800,000 is anticipated to be spent prior to March 31, 2013 to satisfy existing or anticipated obligations as of February 4, 2013, in connection with the operation of the Company. The approximately $800,000 remaining cash in the Company, subsequent to March 31, 2013, is anticipated to be sufficient to fund ongoing public company and other related operational costs for at least 12 months. Our future capital requirements, cash flows, and results of operations will be affected by and depend on many factors that are currently unknown to us, including:

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