`
`2013
`
`ANNUAL REPORT
`
`_ _. __ _ _fi4
`.
`a...
`'1 GeneDX1013, pg. 1
`x
`
`GeneDX 1013, pg. 1
`
`

`

`Fiscal Year 2014 Product Launches
`
`myRisk™ Hereditary Cancer is
`our next generation hereditary
`cancer panel. myRisk Hereditary
`Cancer will provide the most
`comprehensive assessment of
`inherited cancer in any product
`available by analyzing 25 genes
`associated with breast, ovarian,
`colon, endometrial, pancreatic,
`lung, prostate cancer, and
`melanoma. Launched in
`September 2013, this test will
`dramatically improve patient
`care by detecting more patients
`at high risk for hereditary cancer
`and allowing them to take
`appropriate steps to
`reduce their overall
`cancer risk.
`
`myPath™ Melanoma is a
`groundbreaking new test
`filling a significant unmet
`medical need in dermatology.
`With a planned launch in
`2014, this test will aid
`dermatopathologists in
`correctly classifying the more
`than 275,000 skin biopsy
`lesions which are classified
`as indeterminate each year.
`Today these indeterminate
`results lead to missed cancers
`or unnecessary treatment,
`adding a substantial
`cost burden to the
`healthcare system.
`
`myPlan™ Lung Cancer is our
`exciting lung cancer prognostic
`test. With a planned launch in
`2014, this test will provide a
`detailed assessment of a patient’s
`risk for lung cancer related death
`and recurrence in early stage
`lung cancer patients. This
`information can be utilized
`by the physician and patient
`to more appropriately select
`whether or not to undergo
`chemotherapy following
`the initial surgery.
`
`GeneDX 1013, pg. 2
`
`

`

`Dear Fellow Shareholders
`
`Myriad is a pioneer in the field of molecular
`diagnostics as we seek to improve the quality of
`patients’ lives through innovative products. Patients
`and physicians look to our company as a trusted
`advisor to guide critical healthcare decisions and
`improve the healthcare management of patients.
`We will continue our tradition of innovation and
`focus on the patient with the launch of three new
`diagnostic tests in fiscal 2014.
`
`This fall we introduced our next generation
`pan-cancer panel – myRisk™ Hereditary Cancer.
`We believe myRisk Hereditary Cancer will
`transform the quality of patient care by providing
`an unparalleled level of information concerning a
`patient’s inherited cancer predisposition risk. myRisk
`enables patients to take preventive action to reduce
`their cancer risks or catch their cancer at an earlier
`stage when prognosis is more favorable.
`
`The launch of myRisk will be followed by our first
`dermatology product – myPath™ Melanoma. We
`believe myPath Melanoma will become an invaluable
`tool for pathologists in assessing whether a skin
`biopsy is benign or malignant. This more accurate
`diagnosis will not only save lives, but will help reduce
`overall healthcare costs.
`
`Myriad also will launch its first lung cancer prognostic
`product – myPlan™ Lung Cancer. myPlan Lung Cancer
`is designed to aid physicians in determining whether
`or not an early-stage lung cancer patient would benefit
`from chemotherapy following the initial surgery to
`remove the tumor. These three breakthrough tests
`are the result of years of product development
`and innovation by the Myriad team, and we look
`forward to embarking on the next leg of our journey.
`
`Furthermore, Myriad continues to expand its
`leadership role in companion diagnostics with
`more than 20 major pharmaceutical collaborations
`underway. This year, we saw exciting progress with
`PARP inhibitors, novel cancer drug candidates, with
`many of our pharmaceutical partners announcing the
`initiation of Phase III trials with the FDA. These drugs
`have the promise of dramatically expanding the
`indications for our core BRACAnalysis franchise.
`
`Diversifying our business is a key strategic initiative
`of the Company as we pursue new opportunities in
`oncology, women’s health, urology, dermatology,
`autoimmune disorders, and neuropsychiatric
`disorders. Also, geographical diversification is
`equally important to Myriad, and we now have
`distribution in over 80 countries for our laboratory
`in Munich, Germany. International sales are growing
`rapidly and contributed to our past year’s success.
`Myriad is transitioning into a Company with a true
`global reach and the ability to transform patients’
`lives across the world.
`
`Our innovation and dedication to providing quality
`care for patients is reflected in the strong customer
`demand for our tests and the resulting financial
`performance of the Company. Fiscal 2013 was
`another year of record revenue and earnings per
`share for the Company. Revenue increased 24 percent
`to $613.2 million dollars compared to $496.0 million
`dollars in fiscal 2012. Our earnings per share
`increased 36 percent to $1.77 compared to $1.30
`in fiscal 2012. Importantly, we were again able to
`garner financial leverage even as the Company
`increased investments in research and development
`to expand our product pipeline.
`
`Our achievements in fiscal year 2013 were
`remarkable, and we are very proud of our
`accomplishments, however our focus remains
`on the future and the advancement of personalized
`medicine. Our patients depend on Myriad to be an
`innovator and pioneer in improving the quality of
`their healthcare through innovative diagnostics.
`
`Sincerely,
`
`John T. Henderson, M.D.
`Chairman
`
`Peter D. Meldrum
`President and CEO
`
`GeneDX 1013, pg. 3
`
`

`

`REVENUE ($ millions)
`
`OPERATING PROFIT ($ millions)
`
`$613
`
`$496
`
`$402
`
`$363
`
`$700
`
`$500
`
`$300
`
`$100
`
`$228
`
`$180
`
`$158
`
`$135
`
`$250
`
`$200
`
`$150
`
`$100
`
`$50
`
`FY10
`
`FY11
`
`FY12
`
`FY13
`
`FY10
`
`FY11
`
`FY12
`
`FY13
`
`GeneDX 1013, pg. 4
`
`

`

`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`FORM 10-K
`
`(Mark One)
`È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934
`For the fiscal year ended June 30, 2013
`‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934
`For the transition period from
`
`to
`Commission file number: 0-26642
`MYRIAD GENETICS, INC.
`
`(Exact name of registrant as specified in its charter)
`
`Delaware
`(State or other jurisdiction
`of incorporation or organization)
`
`87-0494517
`(I.R.S. Employer
`Identification No.)
`
`320 Wakara Way,
`84108
`Salt Lake City, UT
`(Zip Code)
`(Address of principal executive offices)
`Registrant’s telephone number, including area code: (801) 584-3600
`Securities registered pursuant to Section 12(b) of the Exchange Act:
`Title of each class
`Name of each exchange on which registered
`Common Stock, $.01 Par Value Per Share
`The NASDAQ Global Select Market
`Securities registered pursuant to Section 12(g) of the Exchange Act: None
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
`Act. Yes ‘ No È
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
`1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
`such filing requirements for the past 90 days. Yes È No ‘
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
`required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
`such shorter period that the registrant was required to submit and post such files). Yes È No ‘
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
`contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
`Form 10-K or any amendment to this Form 10-K. ‘
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
`company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
`(Check one):
`Large accelerated filer È
`Accelerated filer
`Smaller reporting company ‘
`Non-accelerated filer ‘ (do not check if a smaller reporting company)
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È
`The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant (without admitting that any person whose
`shares are not included in such calculation is an affiliate), computed by reference to the price at which the common stock was last sold on
`December 31, 2012, the last business day of the registrant’s most recently completed second fiscal quarter, was $2,209,171,779.
`As of August 1, 2013 the registrant had 80,446,692 shares of common stock outstanding.
`DOCUMENTS INCORPORATED BY REFERENCE
`The following documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K: Certain information required
`in Part III of this Annual Report on Form 10-K is incorporated from the Registrant’s Proxy Statement for the Annual Meeting of Stockholders to
`be held on December 5, 2013.
`
`‘
`
`GeneDX 1013, pg. 5
`
`

`

`TABLE OF CONTENTS
`
`PART I
`
`Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 1.
`Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 2.
`Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 3.
`Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`PART II
`
`Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
`Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 6.
`Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . .
`Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 8.
`Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 9.
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . .
`Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`PART III
`
`Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 12.
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
`Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . .
`Item 14.
`Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`PART IV
`
`Item 15. Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`Signatures
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`Page
`
`3
`20
`36
`36
`37
`38
`
`39
`42
`45
`55
`55
`56
`56
`58
`
`59
`59
`
`59
`59
`59
`
`60
`
`61
`
`“We,” “us,” “Myriad” and the “Company” as used in this Annual Report on Form 10-K refer to Myriad Genetics,
`Inc., a Delaware corporation, and its subsidiaries.
`
`“Myriad,” BRACAnalysis, COLARIS, COLARIS AP, MELARIS, PANEXIA, PREZEON, TheraGuide, Prolaris,
`TruCulture, DiscoveryMAP and RodentMap are registered trademarks or trademarks of Myriad.
`
`2
`
`GeneDX 1013, pg. 6
`
`

`

`BUSINESS
`
`PART I
`Item 1.
`Overview
`We are a leading molecular diagnostic company dedicated to making a difference in patients’ lives through the
`discovery and commercialization of transformative tests which assess a person’s risk of developing disease,
`guide treatment decisions and assess risk of disease progression and recurrence. We believe in improving
`healthcare for patients by providing physicians with critical information to solve unmet medical needs. By
`understanding the underlying genetic basis of disease, we believe that individuals who have a greater risk of
`developing disease can be identified and physicians may be able to use this information to improve patient
`outcomes and better manage patient healthcare. In addition, by understanding the RNA expression levels of
`certain genes, we believe that we can improve patient healthcare by providing information on the aggressiveness
`of their disease. Further, we believe that the analysis of the expression of groups of proteins may provide a
`physician with life-saving information to guide treatment decisions for their patients with cancer and other major
`diseases.
`
`Our goal is to provide physicians with this critical information that may guide the healthcare management of
`their patients to prevent disease, diagnose the disease at an earlier stage, determine the most appropriate therapy,
`or assess the aggressiveness of their disease. We employ a number of proprietary technologies, including DNA,
`RNA and protein analysis, that help us to understand the genetic basis of human disease and the role that genes
`and their related proteins may play in the onset and progression of disease. We use this information to guide the
`development of new molecular diagnostic tests that are designed to assess an individual’s risk for developing
`disease later in life (predictive medicine), identify a patient’s likelihood of responding to drug therapy and guide
`a patient’s dosing to ensure optimal treatment (personalized medicine), or assess a patient’s risk of disease
`progression and disease recurrence (prognostic medicine).
`
`Our business strategy for future growth is focused on three key initiatives. First, we are working to grow and
`expand our existing products and markets. Second, we are developing our business internationally and have
`recently established operations in Europe. Finally, we intend to launch new transformative products across a
`diverse set of disease indications, complementing our current businesses in oncology, women’s health and
`urology.
`
`We offer nine commercial molecular diagnostic tests, including six predictive medicine tests, two personalized
`medicine tests, and one prognostic medicine test. We market these tests through our own sales force of
`approximately 400 people in the United States. We also market our BRACAnalysis, COLARIS, COLARIS AP,
`and Prolaris tests through our own European sales force and have entered into marketing collaborations and
`distributor agreements with other organizations in selected Latin American, European, Asian and African
`countries. We also generate revenue by providing companion diagnostic services to the pharmaceutical and
`biotechnology industries and medical research institutions utilizing our multiplexed immunoassay technology.
`Total revenue was $613.2 million for the year ended June 30, 2013, an increase of 24% over the prior fiscal year.
`
`During the fiscal year ended June 30, 2013, we devoted our resources to supporting (i) our predictive medicine,
`personalized medicine and prognostic medicine tests, (ii) our companion diagnostic business, and (iii) our
`research and development efforts on future molecular diagnostic candidate tests. For the year ended June 30,
`2013, we had net income of $147.1 million. For the years ended June 30, 2013, 2012 and 2011, we had research
`and development expense of $53.7 million, $42.6 million and $27.8 million, respectively. Additional financial
`information about our three reportable segments is included in Note 10 to our audited financial statements for the
`fiscal year ended June 30, 2013 included with this Annual Report.
`
`Our Business Strategy
`Our business strategy is to understand the relationship between genes and their protein products and human
`diseases in order to develop the next generation of molecular diagnostic tests. Through our proprietary
`
`3
`
`GeneDX 1013, pg. 7
`
`

`

`technologies, we believe we are positioned to identify important disease genes, the proteins they produce, and the
`biological pathways in which they are involved to better understand the underlying molecular basis for the cause
`of human disease. We believe that identifying these genes, proteins, and pathways will enable us to develop
`novel molecular diagnostic tests. Our business strategy includes the following key elements:
`
`• Discover important DNA, RNA and protein biomarkers, understand their function and determine their
`role in human disease. We plan to continue to use our proprietary DNA sequencing, RNA expression
`and protein analysis technologies, including our supporting bioinformatics and robotic technologies, in
`an effort to efficiently discover important genes and their proteins and to understand their role in
`human disease. We believe that our technologies provide us with a significant competitive advantage
`and the potential for numerous product opportunities.
`
`• Acquire promising biomarkers from other organizations. We intend to continue to take advantage of
`in-licensing or acquisition opportunities to augment our in-house tests development programs. For
`example, in September 2011, we obtained a three-year exclusive option to acquire Crescendo
`Bioscience, Inc., a company that is developing and marketing molecular diagnostic tests for patients
`suffering from autoimmune disorders, including rheumatoid arthritis, as described further in Note 13 to
`our financial statements for the fiscal year ended June 30, 2013 included in this Annual Report. We
`recognize that we cannot meet all of our research discovery goals internally and can benefit from the
`research performed by other organizations. We hope to leverage our financial strength, product
`development expertise, and sales and marketing presence to acquire new product opportunities in
`molecular diagnostic areas of focus.
`
`•
`
`Independently develop and commercialize new transformative molecular diagnostic tests. Our goal is
`to internally develop informative molecular diagnostic tests that can save lives and improve the quality
`of life of patients. Additionally, we plan to sell these tests through our own internal sales force and
`marketing efforts. In connection with any additional tests that we may launch, we plan to expand our
`existing oncology, urology, and women’s health sales forces and build new sales forces to address
`other physician specialty groups.
`
`• Grow our molecular diagnostic business in the United States across multiple disease indications. We
`plan to continue to seek to expand our markets and increase the market penetration of our existing
`molecular diagnostic tests. Additionally, we plan to pursue new test opportunities in oncology,
`women’s health, urology, dermatology, autoimmune and neuroscience diseases to capitalize on our
`leadership position in the molecular diagnostic industry.
`
`• Expand our molecular diagnostic business internationally. We believe that the market for our
`molecular diagnostic products in the major market countries in Europe, Latin America and Asia
`represents an attractive commercial opportunity. We have established sales offices in Canada, France,
`Spain, United Kingdom, Germany, Switzerland and Italy; laboratory operations in Germany; and
`international headquarters in Switzerland. We believe that our predictive medicine, personalized
`medicine, prognostic medicine and companion diagnostic products would benefit patients world-wide
`by assisting physicians in guiding their health care decisions. Our strategy is to continue to focus
`primarily on Europe and then expand to Latin America and Asia.
`
`Molecular Diagnostic Tests
`
`Our molecular diagnostic tests are designed to analyze genes, their mutations, expression levels and proteins to
`assess an individual’s risk for developing disease later in life, determine a patient’s likelihood of responding to a
`particular drug, and assess a patient’s risk of disease progression and disease recurrence. Armed with this
`valuable information, physicians may be able to more effectively manage their patient’s healthcare to prevent or
`delay the onset of disease and ensure that patients receive the most appropriate treatment for their disease.
`
`4
`
`GeneDX 1013, pg. 8
`
`

`

`We offer nine primary commercial molecular diagnostic tests. Our current commercial molecular diagnostic tests
`are:
`
`• BRACAnalysis ®: predictive medicine test for hereditary breast and ovarian cancer. Our
`BRACAnalysis test is an analysis of the BRCA1 and BRCA2 genes for assessing a woman’s risk of
`developing hereditary breast and ovarian cancer. A woman who tests positive for a deleterious
`mutation with the BRACAnalysis test has up to an 87% risk of developing breast cancer and up to a
`44% risk of developing ovarian cancer by age 70. As published in the Journal of the National Cancer
`Institute, researchers have shown that pre-symptomatic individuals who have a high risk of developing
`breast cancer can reduce their risk by approximately 50% with appropriate preventive therapies.
`Additionally, as published in the New England Journal of Medicine, researchers have shown that pre-
`symptomatic individuals who carry gene mutations can lower their risk of developing ovarian cancer
`by approximately 60% with appropriate preventive therapies. Additionally, BRACAnalysis may be
`used to assist patients already diagnosed with breast or ovarian cancer and their physicians in
`determining the most appropriate therapeutic interventions to address their disease.
`
`According to the American Cancer Society, in 2013 there will be approximately 255,000 women in the
`United States diagnosed with breast cancer or ovarian cancer. The test is currently priced at $3,340 and
`is covered by all major managed care organizations, or MCOs, and health insurance providers in the
`United States. We own or have exclusive rights to 24 U.S. patents covering BRACAnalysis testing.
`BRACAnalysis accounted for 75.1% of our total revenue during the year ended June 30, 2013.
`
`• BART ® (BRACAnalysis Large Rearrangement Test): predictive medicine test for hereditary breast and
`ovarian cancer. Our BART test is a predictive medicine test for detecting large genomic rearrangements
`in the genes involved in hereditary breast and ovarian cancer patients.
`
`As published in the journal Cancer, researchers have shown that up to 10% of hereditary breast and
`ovarian cancer susceptibility is due to large rearrangement mutations that can’t be detected using
`conventional sequencing technology. BART may be used to identify these mutation carriers. The test is
`currently priced at $700 and is covered by all major MCOs and health insurance providers in the
`United States. We own seven U.S. patents covering BART testing. BART accounted for 9.6% of our
`total revenue during the year ended June 30, 2013.
`
`• COLARIS ®: predictive medicine test for hereditary colorectal cancer and uterine cancer. Our
`COLARIS test is an analysis of the MLH1, MSH2, MSH6, PMS2, EPCAM and MYH genes for
`assessing a person’s risk of developing colorectal cancer or uterine cancer. Individuals who carry a
`deleterious mutation in one of the colon cancer genes in the COLARIS test have a greater than 80%
`lifetime risk of developing colon cancer and women have up to a 71% lifetime chance of developing
`uterine cancer. Highly effective preventive measures for colon cancer include colonoscopy and the
`removal of precancerous polyps and for uterine cancer includes hysterectomy. Through proper
`application of screening and polyp removal, colon cancer is a preventable disease.
`
`According to the American Cancer Society, approximately 192,000 new cases of colorectal or uterine
`cancer will be diagnosed in 2013. According to the American Society of Clinical Oncologists, familial
`forms of colorectal cancer are estimated to account for 10% to 30% of all cases. The test is currently
`priced at $4,480 and is covered by all major MCOs and health insurance providers in the United States.
`We own or have non-exclusive licensed rights to eight U.S. patents covering COLARIS testing.
`
`• COLARIS AP®: predictive medicine test for hereditary colorectal cancer. Our COLARIS AP test
`detects mutations in the APC and MYH genes, which cause a colon polyp-forming syndrome known as
`Familial Adenomatous Polyposis (FAP), a more common variation of the syndrome known as
`attenuated FAP, and the MYH-associated polyposis signature (MAP). Individuals who carry a
`deleterious mutation in the APC or MYH gene may have a greater than 90% lifetime risk of developing
`colon cancer. Effective preventive measures include colonoscopy and the removal of pre-cancerous
`polyps and prophylactic surgery.
`
`5
`
`GeneDX 1013, pg. 9
`
`

`

`Our COLARIS AP test is currently priced at $2,050 and is covered by all major MCOs and health
`insurance providers in the United States. We own or have exclusive rights to ten U.S. patents covering
`COLARIS AP testing.
`COLARIS and COLARIS AP accounted for 8.5% or our total revenue during the year ended June 30,
`2013.
`• MELARIS ®: predictive medicine test for hereditary melanoma. Our MELARIS test analyzes mutations
`in the p16 gene to determine genetic susceptibility to malignant melanoma. Individuals who test
`positive for a deleterious mutation in the p16 gene with the MELARIS test have a 75-fold increased
`risk of developing melanoma during their lifetimes as compared to the general population. Melanoma
`may be prevented through appropriate screening and a specific threshold of action for mutation
`carriers, in which pre-cancerous lesions are removed before cancer can develop.
`According to the American Cancer Society, approximately 77,000 new cases of melanoma will be
`diagnosed in the United States in 2013. Melanoma is lethal within five years in 86% of cases where it
`has spread to another site in the body. However, when melanoma is diagnosed at an early stage, fewer
`than 10% of patients die within five years. The MELARIS test is currently priced at $900 and is
`covered by most major MCOs and health insurance providers in the United States. We own or have
`license rights to five U.S. patents covering MELARIS testing.
`• PANEXIA™: predictive medicine test for pancreatic cancer. Our PANEXIA test is a comprehensive
`analysis of the PALB2 and BRCA2 genes for assessing a person’s risk of developing pancreatic cancer
`later in life. Individuals with a mutation detected by the PANEXIA test have up to an 8.6-fold higher
`risk than the general population of developing pancreatic cancer. If an individual with a family history
`of pancreatic cancer receives the PANEXIA test and is identified as having a deleterious mutation,
`increased surveillance and other predictive steps can be taken in an effort to detect the cancer at an
`early stage where it may be more treatable.
`According to the American Cancer Society, pancreatic cancer is estimated to affect approximately
`45,000 men and women in the United States in 2013. Pancreatic cancer generally has a very poor
`prognosis for most patients because it is usually detected at a late stage after the cancer has already
`metastasized to other parts of the body. The PANEXIA test is currently priced at $3,025. We own or
`have exclusive patent rights to ten U.S. patent applications covering PANEXIA testing.
`• PREZEON®: personalized and prognostic medicine test for cancer. Our PREZEON test is an
`immunohistochemistry test that analyzes the PTEN gene and assesses loss of PTEN function in many
`cancer types. The PTEN gene is one of the most important tumor suppressor genes and its loss of
`function is associated with more aggressive disease progression and poorer survival. The PTEN gene
`plays a role in the disease progression of all four of the major cancers—breast, prostate, colon, and
`lung cancer. The PTEN gene also plays a critical role in cell signaling pathways that are the target of a
`number of cancer drugs such as EGFR, mTOR and PIK3CA inhibitors. Analysis of PTEN function
`may help oncologists in identifying patients who may not respond to these classes of cancer drugs.
`According to the American Cancer Society, approximately 844,000 new cases of these cancers will be
`diagnosed this year. The PREZEON test is currently priced at $500. We own or have exclusive patent
`rights to six U.S. patents covering PREZEON testing.
`• Prolaris®: prognostic medicine test for prostate cancer. Our Prolaris test is a 46-gene molecular
`diagnostic assay that assesses whether a patient is likely to have a slow growing, indolent form of
`prostate cancer that can be safely monitored through active surveillance, or a more aggressive form of
`the disease that would warrant aggressive intervention such as a radical prostatectomy or radiation
`therapy. The Prolaris test was developed to meet this significant need to improve physicians’ ability to
`predict disease outcome and to thereby optimize treatment. The Prolaris test is based on the
`understanding of cell division and tumor growth and provides rigorous, quantitative measures of the
`expression levels of multiple genes related to progression of the cell cycle. As published in the British
`Journal of Cancer, researchers analyzed the Prolaris test scores of 352 men with prostate cancer who
`
`6
`
`GeneDX 1013, pg. 10
`
`

`

`were managed through active surveillance and the Prolaris test was the strongest predictor of prostate
`cancer death and was highly statistically significant (p = 1.4 x 10-10). The Prolaris test outperformed
`both the Gleason and PSA score in this study.
`
`According to the American Cancer Society, in the United States approximately 239,000 men are
`expected to be diagnosed with prostate cancer this year. The Prolaris test is currently priced at $3,400.
`We own or have exclusive patent rights to four U.S. patent applications covering Prolaris testing.
`
`•
`
`TheraGuide® 5-FU: personalized medicine test for drug toxicity. Our TheraGuide 5-FU test analyzes
`mutations in the DPYD gene and variations in the TYMS gene to assess patient risk of toxicity to 5-FU
`(fluorouracil) anti-cancer drug therapy. Cancer patients who test positive for a deleterious mutation in
`the DPYD gene and variations in the TYMS gene have an increased risk of suffering toxicity from
`5-FU chemotherapy and up to 20% of patients will experience medically significant toxicity issues
`(grade 3 or 4 toxicity). These patients should be considered for either a reduced dose of 5-FU or other
`chemotherapy regimens. 5-FU is widely prescribed for the treatment of colorectal cancer, metastatic
`breast cancer, skin cancer, and head and neck cancers.
`
`According to IMS prescription data, there are approximately 425,000 prescriptions written for patients
`who receive 5-FU therapy each year in the United States. The TheraGuide 5-FU test is currently priced
`at $1,175 and is covered by many MCOs and health insurance providers in the United States. We own
`or have exclusive rights to two U.S. patent applications covering TheraGuide 5-FU testing.
`
`We plan to launch three new molecular diagnostic tests in fiscal year 2014. These planned new diagnostic tests
`include:
`
`• myRisk Hereditary Cancer™: predictive medicine test for hereditary cancer. Our myRisk Hereditary
`Cancer test represents the next generation of our existing hereditary cancer franchise and will
`eventually replace our current predictive medicine test offer