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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

OR

 

¨	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: 001-34275

 

 

MYREXIS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		26-3996918
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
305 Chipeta Way Salt Lake City, Utah		84108
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (801) 214-7800

 

 

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  x    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  x    No  ¨

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		¨		Accelerated filer		x
Non-accelerated filer		¨  (Do not check if a smaller reporting company)		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  x

As of May 4, 2012, the registrant had 26,732,104 shares of common stock outstanding.

 

 

 

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MYREXIS, INC.

INDEX TO FORM 10-Q

 

				Page
		PART I     FINANCIAL INFORMATION
Item 1.		Financial Statements
		Balance Sheets as of March 31, 2012 and June 30, 2011 (unaudited)		1
		Statements of Operations for the three and nine months ended March 31, 2012 and 2011 (unaudited)		2
		Statements of Cash Flows for the nine months ended March 31, 2012 and 2011 (unaudited)		3
		Notes to Financial Statements (unaudited)		4
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		16
Item 4.		Controls and Procedures		16
		PART II     OTHER INFORMATION
Item 1.		Legal Proceedings		17
Item 1A.		Risk Factors		17
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 3.		Defaults Upon Senior Securities		17
Item 4.		Mine Safety Disclosures		17
Item 5.		Other Information		17
Item 6.		Exhibits		17
SIGNATURES				19

 

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PART I – FINANCIAL INFORMATION

 

Item 1.

Financial Statements

MYREXIS, INC.

Balance Sheets (Unaudited)

(In thousands, except per share amounts)

 

		March 31, 2012				June 30, 2011
Assets
Current assets:
Cash and cash equivalents		$	13,022			$	19,189
Marketable investment securities			55,177				86,446
Prepaid expenses and other assets			476				1,861
Total current assets			68,675				107,496
Equipment and leasehold improvements:
Equipment			3,500				4,320
Leasehold improvements			1,197				1,192
			4,697				5,512
Less accumulated depreciation			2,748				2,197
Net equipment and leasehold improvements			1,949				3,315
Long-term marketable investment securities			28,180				10,243
Other assets			206				206
Total assets		$	99,010			$	121,260
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	1,140			$	1,210
Accrued liabilities			4,447				2,100
Total current liabilities			5,587				3,310
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 5,000 shares; no shares issued and outstanding			—				—
Common stock, $0.01 par value, authorized 60,000 shares; 26,700 shares issued and outstanding at March 31, 2012; 26,053 shares issued and outstanding at June 30, 2011			267				261
Additional paid-in capital			205,596				203,301
Accumulated other comprehensive income			7				47
Accumulated deficit			(112,447	)			(85,659	)
Total stockholders’ equity			93,423				117,950
Total liabilities and stockholders’ equity		$	99,010			$	121,260

See accompanying notes to financial statements (unaudited).

 

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MYREXIS, INC.

Statements of Operations (Unaudited)

(In thousands, except per share amounts)

 

		Three Months Ended March 31,								Nine Months Ended March 31,
		2012				2011				2012				2011
Research revenue		$	—			$	55			$	—			$	185
Costs and expenses:
Research and development expense			5,603				7,935				13,672				18,646
General and administrative expense			5,216				5,088				13,442				13,889
Total costs and expenses			10,819				13,023				27,114				32,535
Operating loss			(10,819	)			(12,968	)			(27,114	)			(32,350	)
Other income, net			127				125				325				1,633
Net loss		$	(10,692	)		$	(12,843	)		$	(26,789	)		$	(30,717	)
Loss per basic and diluted share		$	(0.40	)		$	(0.50	)		$	(1.02	)		$	(1.21	)
Weighted-average shares used to compute net loss per basic and diluted share			26,484				25,605				26,270				25,392

See accompanying notes to financial statements (unaudited).

 

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MYREXIS, INC.

Statements of Cash Flows (Unaudited)

(In thousands)

 

		Nine Months Ended March 31,
		2012				2011
Cash flows from operating activities:
Net loss		$	(26,789	)		$	(30,717	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			1,002				1,265
Share-based compensation expense			1,291				3,858
Gain on sale of marketable investment securities			(2	)			—
Loss on impairment of assets			282				—
Gain on sale of assets			(52	)			—
Changes in operating assets and liabilities:
Prepaid expenses			1,248				(648	)
Other current assets			137				(60	)
Accounts payable			(70	)			(1,165	)
Accrued liabilities			2,347				2,672
Net cash used in operating activities			(20,606	)			(24,795	)
Cash flows from investing activities:
Capital expenditures for equipment			(55	)			(89	)
Proceeds from sale of assets			189				—
Purchase of marketable investment securities			(121,409	)			(119,762	)
Proceeds from maturity of marketable investment securities			134,703				128,818
Net cash provided by investing activities			13,428				8,967
Cash flows from financing activities:
Net proceeds from common stock issued under share-based compensation plans			1,011				1,064
Net cash provided by financing activities			1,011				1,064
Net decrease in cash and cash equivalents			(6,167	)			(14,764	)
Cash and cash equivalents at beginning of period			19,189				35,911
Cash and cash equivalents at end of period		$	13,022			$	21,147

See accompanying notes to financial statements (unaudited).

 

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MYREXIS, INC.

Notes to Financial Statements (Unaudited)

 

(1)	Organization and Basis of Presentation

 

(a)

Organization and Business Description

Myrexis, Inc. (“Myrexis” or the “Company”) a biotechnology company, located in Salt Lake City, Utah, that has generated a strong pipeline of differentiated product candidates in oncology and autoimmune diseases announced in February 2012, that the Company has suspended development activities of all its preclinical and clinical programs and retained Stifel Nicolaus Weisel, an investment banking firm, to assist in reviewing and evaluating a full range of strategic alternatives to enhance shareholder value. The Company continues to actively pursue business development opportunities for each of its programs.

In March 2012, the Company initiated an alignment of its resources. The alignment is a phased reduction in the Company’s workforce. The Company has 30 employees as of March 31, 2012 and expects to have approximately 10 employees remaining at June 30, 2012, the end of its fiscal year. In connection with the resource alignment, the Company recorded one-time severance costs of approximately $3.6 million in the three months ended March 31, 2012.

 

(b)

Basis of Accounting and Combination

The accompanying financial statements have been prepared by Myrexis in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying financial statements contain all adjustments necessary to present fairly all financial statements in accordance with GAAP, which consists of only normal recurring adjustments. The financial statements herein should be read in conjunction with the Company’s audited financial statements and notes thereto for the fiscal year ended June 30, 2011, included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2011. Operating results for the three and nine months ended March 31, 2012 may not necessarily be indicative of results to be expected for any other interim period or for the full year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

(2)	Marketable Investment Securities

The amortized cost, gross unrealized holding gains and losses, and fair value for available-for-sale securities by major security type and class of security at March 31, 2012 and June 30, 2011 were as follows:

 

(In thousands)		Amortized cost				Gross unrealized holding gains				Gross unrealized holding losses				Estimated fair value
March 31, 2012:
Available-for-sale:
Money market funds		$	11,954			$	—			$	—			$	11,954
Corporate bonds and notes			28,887				2				—				28,889
Federal agency issues			54,216				5				—				54,221
Total		$	95,057			$	7			$	—			$	95,064

 

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(In thousands)		Amortized cost				Gross unrealized holding gains				Gross unrealized holding losses				Estimated fair value
June 30, 2011:
Available-for-sale:
Money market funds		$	18,071			$	—			$	—			$	18,071
Corporate bonds and notes			13,963				12				—				13,975
Federal agency issues			82,431				40				(6	)			82,465
Total		$	114,465			$	52			$	(6	)		$	114,511

In addition, the Company holds $200,000 restricted cash in an 18-month certificate of deposit as collateral for a corporate purchasing card program and $48,000 in a restricted cash account as collateral for office equipment. These amounts are included in long-term marketable securities on the balance sheet as of March 31, 2012. Maturities of debt securities classified as available-for-sale are as follows at March 31, 2012:

 

(In thousands)		Amortized cost				Estimated fair value
March 31, 2012:
Available-for-sale:
Due within one year		$	55,170			$	55,178
Due after one year through three years			27,933				27,932
		$	83,103			$	83,110

 

(3)	Fair Value Measurements

The fair value of the Company’s financial instruments reflects the amounts that the Company estimates to receive in connection with the sale of an asset or be paid in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels:

Level 1—quoted prices in active markets for identical assets and liabilities.

Level 2—observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities.

Level 3—unobservable inputs.

The substantial majority of the Company’s financial instruments are valued using quoted prices in active markets or based on other observable inputs. The following table sets forth the fair value of the Company’s financial assets that the Company re-measured at March 31, 2012 and June 30, 2011:

 

(In thousands)		Level 1				Level 2				Level 3				Total
March 31, 2012
Money market funds		$	11,954			$	—			$	—			$	11,954
Corporate bonds and notes			—				28,889								28,889
Federal agency issues			—				54,221				—				54,221
Total		$	11,954			$	83,110			$	—			$	95,064

 

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(In thousands)		Level 1				Level 2				Level 3				Total
June 30, 2011
Money market funds		$	18,071			$	—			$	—			$	18,071
Corporate bonds and notes			—				13,975				—				13,975
Federal agency issues			—				82,465				—				82,465
Total		$	18,071			$	96,440			$	—			$	114,511

 

(4)	Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive income. Specifically, the Company includes in other comprehensive income the changes in unrealized gains and losses on its holdings of available-for-sale securities, which are excluded from its net loss. The following table sets forth the calculation of the Company’s comprehensive net loss:

 

		Three Months Ended March 31,								Nine Months Ended March 31,
(In thousands)		2012				2011				2012				2011
Net loss		$	(10,692	)		$	(12,843	)		$	(26,789	)		$	(30,717	)
Other comprehensive loss:
Change in unrealized gain and on marketable securities			6				43				40				28
Total comprehensive loss		$	(10,686	)		$	(12,800	)		$	(26,749	)		$	(30,689	)

 

(5)	Earnings Per Share

The loss per basic and diluted share is calculated by dividing net loss by the weighted-average number of shares outstanding during the reporting period. For the three and nine months ended March 31, 2012, there were outstanding potential common equivalent shares of 3,020,086 and 2,716,187, respectively, compared to 2,827,043 and 2,666,558, respectively, in the same periods in 2011 which were excluded from the computation of diluted earnings per share because the effect would have been anti-dilutive. These potential dilutive common equivalent shares may be dilutive to basic earnings per share in future periods.

The calculation of diluted loss per share is the same as the basic loss per share since the inclusion of any potentially dilutive securities would be anti-dilutive.

 

(6)	Share-Based Compensation

The Company recognizes compensation expense using a fair-value based method for costs related to stock options and other equity-based compensation. The expense is measured based on the grant date fair value of the awards that are expected to vest, and the expense is recorded over the applicable requisite service period. In the absence of an observable market price for a share-based award, the fair value is based upon a valuation methodology that takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of the underlying shares, the expected volatility of the underlying share price based on peer companies, the expected dividends on the underlying shares and the risk-free interest rate.

The Company has adopted two equity incentive plans, the Myrexis, Inc. 2009 Employee, Director and Consultant Equity Incentive Plan (the “Equity Incentive Plan”) and the Myrexis, Inc. 2009 Employee Stock Purchase Plan (the “ESPP”). The Company is authorized to issue a total of 10,063,259 shares under the plans.

 

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The Company’s Equity Incentive Plan provides for the issuance of common stock based awards, including restricted stock, restricted stock units, stock options, stock appreciation rights and other equity based awards to its directors, officers, employees and consultants.

The Company’s ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended. Full-time employees of Myrexis who will own less than five percent of Myrexis’s outstanding shares of common stock are eligible to contribute a percentage of their base salary, subject to certain limitations, over the course of six-month offering periods for the purchase of shares of common stock. The purchase price for shares of common stock purchased under the ESPP will equal 85 percent of the fair market value of a share of common stock at the beginning or end of the relevant six-month offering period, whichever is lower.

Share-based compensation expense recognized for Myrexis employees included in the statements of operations for the three and nine months ended March 31, 2012 and 2011 was as follows:

 

		Three Months Ended March 31,								Nine Months Ended March 31,
		2012				2011				2012				2011
Research and development		$	156			$	470			$	695			$	1,734
General and administrative			132				627				596				2,124
Total employee stock-based compensation expense		$	288			$	1,097			$	1,291			$	3,858

During the three months ended March 31, 2012, the Company granted no options or restricted stock units under the Equity Incentive Plan. During the nine months ended March 31, 2012, the Company granted 1,097,400 options and 53,400 restricted stock units under the Equity Incentive Plan. The weighted-average exercise price was $2.79 per share for options and the weighted average grant price was $2.82 per share for restricted stock units.

During the three months ended March 31, 2012, 313,837 stock options were exercised at a weighted average price of $1.69 per share. During the nine months ended March 31, 2012, 487,176 stock options were exercised at a weighted average price of $1.61 per share. As of March 31, 2012, unrecognized compensation expense related to the unvested portion of stock options granted to Myrexis employees was approximately $2.1 million, which will be recognized over a weighted-average period of 2.72 years.

The fair value of each option grant is estimated on the grant date using the Black-Scholes option pricing model. Expected option lives were based on historical option lives under the Myrexis equity compensation plan and volatilities used in fair value calculations are based on a benchmark of peer companies with similar expected option lives. The related expense is recognized on a straight-line basis over the vesting period.

Currently eligible Myrexis employees are participating in the ESPP offering period that began December 1, 2011 and will close May 31, 2012. Expense associated with Myrexis employees participating in the ESPP for the three and nine month periods ended March 31, 2012 was approximately $50,000 and $170,000, respectively.

 

(7)	Income Taxes

In accordance with the interim reporting requirements, the Company uses an estimated annual effective rate for computing its provision for income taxes. The effective rate was zero for each of the three and nine month periods ended March 31, 2012 and 2011.

The Company reduces deferred tax assets by a valuation allowance if, based on the weight of evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At March 31, 2012 the Company has certain deferred tax assets, primarily from NOL’s and research and development tax credits generated since June 30, 2009, which have been offset in total by a valuation allowance.

The Company has adopted Accounting for Uncertainty in Income Taxes. For the three months and nine months ended March 31, 2012, the Company recorded approximately $13,000 and $102,000, respectively, of additional liability for unrecognized tax benefits related to research tax credits. The Company includes any interest and penalties associated with any unrecognized tax benefits within the provision for income taxes on the statement of operations. The Company does not anticipate any material changes in the liability for unrecognized benefits in the next 12 months.

At March 31, 2012, the Company had Federal and State net operating loss carryforwards of approximately $114,690,000, of which $12,120,000 is attributable to excess tax benefits for which no deferred tax asset has been established. In addition, the Company had Federal research credit carryforwards of $2,650,000 and Utah research credit carryforwards of $960,000. These carryforward tax benefits can be used in certain circumstances to offset future tax

 

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liabilities. Pursuant to Sections 382 and 383 of the Internal Revenue Code, with which Utah complies, the Company’s use of the carryforward tax benefits may be limited in any given year as a result of certain changes in the Company’s ownership, including significant increases in ownership by the Company’s 5-percent shareholders. While the Company believes that its carryforward tax benefits as of March 31, 2012 are not limited under Sections 382 and 383, significant changes in ownership in the future may limit such usage. In March, 2012, in an effort to protect the use of its carryforward tax benefits, the Company adopted a Tax Benefits Preservation Rights Agreement that is designed to deter significant changes in ownership of the Company’s stock that might limit the use of its carryforward tax benefits.

 

(8)	Commitments and Contingencies

Myrexis has assumed all rights and obligations under a license agreement for exclusive rights to utilize certain intellectual property rights related to the drug candidate Azixa. Under this agreement Myrexis may pay milestone payments totaling up to $23 million. Payment of milestones is based on the occurrence of potential future events, including the initiation of certain human clinical trials, filing of a New Drug Application with the U.S. Food and Drug Administration, receipt of regulatory approval, and the achievement of specific revenue targets.

Various legal claims have been filed against Myrexis that relate to the ordinary course of business and are currently pending resolution. In the opinion of management and upon consultation with legal counsel, the ultimate resolution of these matters is not expected to have a material adverse effect on the financial position or future results of operations of Myrexis.

 

(9)	Reorganization

On March 1, 2012, Myrexis announced an alignment of the Company’s resources following the February 2012 announcement to suspend development activities of all its preclinical and clinical programs. The alignment is a phased reduction in the Company’s workforce. The Company had 30 employees as of March 31, 2012 and expects to have approximately 10 employees remaining at June 30, 2012, the end of its fiscal year. In connection with the resource alignment, the Company recorded one-time severance costs of approximately $3.6 million in the three months ended March 31, 2012. Of this amount, $1.2 million was paid during the three months ended March 31, 2012, and $2.4 million was accrued and is expected to be paid during the fourth fiscal quarter. These one-time expenses, which are reflected in the statement of operations, include $1.0 million in general and administrative and $2.6 million in research and development for the three and nine months ended March 31, 2012.

Also, in conjunction with the reorganization, the Company determined that there were indicators of impairment of certain fixed assets based on quoted market prices, and evaluated whether the carrying value of assets with impairment indicators is recoverable. Management concluded that $282,000 of impairment loss should be recognized during the quarter. This one-time expense is reflected in the statement of operations in general and administrative for the three and nine months ended March 31, 2012.

 

(10)	NOL Rights Agreement

On March 29, 2012, the Company’s Board of Directors adopted a Tax Benefits Preservation Rights Plan (the “Rights Agreement”) designed to help protect and preserve its substantial tax attributes primarily associated with net operating loss carryforwards (NOLs) and research tax credits, under Section 382 and 383 of the Internal Revenue Code. The Rights Agreement replaces the Shareholder Rights Plan that Myrexis adopted in 2009, which the Myrexis Board of Directors terminated immediately prior to the adoption of the Rights Agreement. The rights issued under the Rights Agreement will expire on March 29, 2015. The rights may also expire on an earlier date upon the occurrence of certain events. Pursuant to the terms of the Rights Agreement, the Board declared a dividend distribution of one preferred share purchase right (“Right”) for each outstanding share of the Company’s common stock. Each Right entitles the registered holder thereof to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock of the Company at a specified exercise price, subject to adjustment, under certain conditions specified in the Rights Agreement.

 

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read this discussion together with the financial statements, related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. The following discussion may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2011 filed with the Securities and Exchange Commission, as supplemented under the heading “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. These risks could cause our actual results to differ materially from any future performance suggested below.

Overview

We are a biotechnology company that has generated a strong pipeline of differentiated drug candidates in oncology and autoimmune diseases. We announced in February 2012, that we had suspended development activity on all of our preclinical and clinical programs and retained Stifel Nicolaus Weisel, an investment banking firm, to assist in reviewing and evaluating a full range of strategic alternatives to enhance shareholder value. We do not know if we will be successful in pursuing any strategic alternative or that any transaction will occur, however, we are committed to conducting a review and evaluation of a full range of potential strategic alternatives to enhance shareholder value. During this review and evaluation of such alternatives, we continue to actively pursue business development opportunities for each of our programs.

In March 2012, we initiated an alignment of our resources. The alignment is a phased reduction in our workforce. We had 30 employees as of March 31, 2012 and expect to have approximately 10 employees remaining at June 30, 2012, the end of our fiscal year. In connection with the resource alignment, we recorded one-time severance costs of approximately $3.6 million in the three months ended March 31, 2012.

Our Oncology Programs

We have two programs in oncology:

 

•

Hsp90 Inhibitor Program. MPC-3100 is an Hsp90 inhibitor for the treatment of cancer. In November 2011, we presented the results of an open-label, dose-escalating, multiple-dose, Phase 1 study of MPC-3100 in 26 patients with recurrent cancer or cancer refractory to available systemic therapy. MPC-0767 is a novel L-alanine ester pro-drug of MPC-3100 that was designed to have improved aqueous solubility compared to MPC-3100. As of March 2012, we have completed all preclinical activities required for submission of an investigational new drug application, or IND, for MPC-0767 and have suspended all further development activities for this program.

 

•

Cancer Metabolism Inhibitor Program. MPC-8640 is our lead preclinical compound for the Cancer Metabolism Inhibitor, or CMI, program. It is currently in IND enabling studies and we expect these studies to be completed by the 2012 fiscal year end. We have suspended any further development activities for this program.

Our Hsp90 Inhibitor Program for the Treatment of Cancer

Heat shock protein 90, or Hsp90, is involved in the folding and stabilization of many proteins, including mutant oncogenes that become reliant on Hsp90 to maintain their activity, making them particularly sensitive to Hsp90 inhibition. Targeted therapies against such mutant oncogenes, such as ALK, HER2, FLT3 and B-RAF, have proven to be efficacious in the clinic and we believe that by inhibiting these targets through a different mechanism, we can improve clinical efficacy and the duration of response, either as monotherapy or in combination with these targeted therapies.

The potential for Hsp90 inhibitors to improve therapeutic outcomes across a number of oncogene “addicted” cancers, coupled with the oral bioavailability, long half-life and the relative safety profile of our compounds makes our Hsp90 inhibitor program a strong therapeutic and commercial opportunity.

MPC-3100 and MPC-0767: Preclinical Development

MPC-3100 and MPC-0767, a pro-drug of MPC-3100, are fully synthetic, orally bio-available, non-geldanamycin Hsp90 inhibitors that have shown significant and broad preclinical anti-tumor activity in mouse models of human cancers. These unique molecules are structurally distinct from the geldanamycin family of early Hsp90 inhibitors, which are associated with certain toxicities. MPC-3100 inhibits Hsp90 by binding to the same site as geldanamycin and has displayed potent anti-cancer activity in multiple in vitro and in vivo models. MPC-3100 significantly and dose-dependently reduced tumor growth in studies conducted in mice implanted with a variety of human cancer cell lines, including colon, prostate, myeloid leukemia, small-cell lung, gastric, breast, and ovarian cancers. In April 2011, we reported additional preclinical data on our Hsp90 inhibitor program at the annual meeting of the American Association for Cancer Research in Orlando, Florida. The data presented included a demonstration that the combination of MPC-3100 with other targeted therapies, including erlotinib and sorafenib, showed greater in vivo anti-tumor activity compared to either agent alone, suggesting the potential of combining MPC-3100 with these

 

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targeted cancer therapies in the clinic. We also presented a preliminary assessment of MPC-0767, a novel L-alanine ester pro-drug of MPC-3100, which is designed to have improved aqueous solubility. Animal studies showed that MPC-0767 displayed pharmacokinetics comparable to MPC-3100 and equivalent efficacy, inducing significant tumor regressions.

MPC-3100: Clinical Development

We submitted an IND application for MPC-3100 in the first quarter of 2009 and initiated patient enrollment of a Phase 1 clinical trial in the second quarter of 2009 to investigate the safety and tolerability of MPC-3100, pharmacokinetics, and the potential for anti-tumor activity. The Phase 1 study was an open-label, dose-escalating, multiple-dose study in which 26 patients aged 45-85 years with recurrent cancer or cancer refractory to available systemic therapy were treated with MPC-3100. Patients received oral MPC-3100 either once daily for 21 days followed by seven days off (cohorts 1-5, at doses of 50, 100, 165, 245, and 340mg/m², respectively) or continuously for a 28-day cycle at doses spaced 12 hours apart (cohorts 6-7, at total daily doses of 480mg/kg and 640mg/kg, respectively). The primary objective of the Phase 1 study was to determine the safety and tolerability of MPC-3100 in cancer patients. The study also included secondary objectives such as characterization of the pharmacokinetic parameters, determining anti-tumor activity of MPC-3100, and evaluating certain pharmacodynamic biomarkers. In November 2011, we presented the results of this study at the AACR-NCI-EORTC Molecular Targets and Cancer Therapeutics meeting in San Francisco. The study demonstrated that MPC-3100 was generally safe and well tolerated at doses below 600mg/kg per day. The most common adverse events were gastrointestinal, including diarrhea, nausea, and vomiting. Pharmacokinetic analysis indicated that the maximum plasma concentration, or Cmax, and the area under the curve, or AUC (0-12h), increased proportional to the dose of MPC-3100. The terminal plasma half-life of MPC-3100 ranged from 4.8 to 21.4 hours with a mean half-life of 11.2 hours. The best clinical response was stable disease (12/26; 46%), with a median duration of 11.1 weeks (range 3.0-52.3 weeks). On target activity of MPC-3100 was confirmed by biomarker analysis, which suggested effective and persistent in vivo inhibition of Hsp90.

MPC-3100 and MPC-0767: Future Clinical Development

We have conducted non-clinical studies as well as other technical, regulatory and market assessments with the objective of identifying optimal cancer indications and drug combination regimens to potentially advance one or both of our Hsp90 inhibitor compounds into Phase 2 clinical development. As of March 2012, we believe we have completed all preclinical activities required for submission of an IND for MPC-0767. We continue to actively pursue business development opportunities for this program and have suspended all further development activity.

Our Cancer Metabolism Inhibitor Program

Our CMI program is focused on the inhibition of Nicotinamide phosphoribosyltransferase, or Nampt, an enzyme involved in the production of Nicotinamide Adenine Dinucleotide, or NAD, which is an essential cofactor for the production of cellular energy that is critical for cell survival, growth, and DNA repair.

Cancer cells, in addition to spending energy on rapid, unregulated growth, must also invest significant energy on DNA synthesis and repair mechanisms to cope with the DNA damage. As a result, cancer cells are more susceptible to metabolic downshifts than healthy cells, and the NAD depletion caused by Nampt inhibitors has a greater effect on tumors versus normal tissue.

MPC-8640 is our lead preclinical compound for our CMI program. MPC-8640 is an orally bio-available pro-drug of a follow-on molecule to our prior CMI drug candidate, MPC-9528, that has enhanced solubility and distinct pharmacokinetic advantages and is being developed for the treatment of cancer. Both the active moiety of MPC-8640 (MPI-0487316) as well as MPC-9528 inhibit Nampt in vitro and in cells at picomolar drug concentrations and are tumoricidal in every cancer line tested to date representing 17 different tumor tissue types. Both compounds display on-target activity by potently reducing NAD levels, which leads to inhibition of glycolysis, energy deprivation and cell death in tumor cells, while NAD levels in normal tissues are less affected. In preclinical efficacy studies, MPC-8640 and MPC-9528 causes dramatic tumor regressions in multiple tumor types when administered orally with either a low daily dosing or a higher intermittent dose regimen and are well tolerated. This anti-tumor activity is dose-dependent and tightly correlated to the level of NAD depletion, confirming the on-target mechanism of action. The sensitivity of tumor cells to our Nampt inhibitors in vitro appears to parallel their anti-tumor potency in xenograft models and is linked to basal Nampt expression levels. Nampt expression levels may therefore have utility for predicting tumor response to Nampt inhibitors. Nicotinic acid is converted to NAD through an alternative pathway that is dependent upon the enzyme Nicotinic acid phosphoribosyltransferase (Naprt1) which does not involve Nampt. In tumor cell types with sufficient Naprt expression to support this NAD biosynthetic pathway, nicotinic acid (niacin, Vitamin B3) can completely block the NAD-reducing and tumoricidal activity of MPC-9528. Our studies have found that approximately 40% of tumor cell lines are deficient in Naprt1 and in these cells, nicotinic acid has little to no effect on MPC-9528 tumoricidal activity. Furthermore, in animal model studies, a combination of nicotinic acid with MPC-9528 increases the tolerated dose of MPC-9528, while still causing growth inhibition of tumors deficient in Naprt1. This demonstrates the potential to increase the therapeutic index and efficacy of a Nampt inhibitor by combining it with nicotinic acid to treat patients with tumors that are deficient in Naprt1. A diagnostic method designed to measure Naprt1 expression could be used to identify those patients with Naprt1 deficient tumors that are most likely to benefit from this combination therapy.

 

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Additional preclinical studies of MPC-9528 support the potential of Nampt inhibitors for broad spectrum tumoricidal activity as monotherapy and in a variety of combinations with other agents. Inhibition of Nampt by MPC-9528 was shown to exhibit synergistic anti-tumor activity when coupled with DNA damaging agents, such as alkylating agents and thymidylate synthase inhibitors. These common classes of chemotherapy drugs also reduce NAD cellular levels as a result of their mechanism of action, specifically by activating the NAD-consuming enzyme poly (ADP-ribose) polymerase (PARP). The mechanism of action of our Nampt inhibitors is distinct from these other agents, leading to a combined effect on cellular NAD levels and synergistic anti-tumor activity.

In June 2011, preclinical studies on MPC-9528 and MPI-0487316, a structurally distinct Nampt inhibitor and the active moiety of MPC-8640, were presented at the annual meeting of the American Society of Clinical Oncology (ASCO) in Chicago. Oral administration of either compound resulted in tumor regressions in animal model studies across multiple dosing schedules. MPC-8640 is a pro-drug of MPI-0487316 with enhanced solubility and distinct pharmacokinetic advantages. In November 2011, we presented data from preclinical studies of MPC-8640 at the AACR-NCI-EORTC Molecular Targets and Cancer Therapeutics meeting in San Francisco. In these studies, mice with HT1080 human fibrosarcoma xenograft tumors were treated orally with MPC-8640 on either a once-daily or twice-daily dosing schedule. After one week of treatment, the mice demonstrated complete tumor growth inhibition at lower doses and substantial tumor regression at higher doses. Significantly, tumor regression could be achieved well below the maximum tolerated dose of MPC-8640 and the anti-tumor response observed after one week of dosing was maintained for at least one week without further treatment. The results also demonstrated that MPC-8640 is effectively converted into active Nampt inhibitor, either in the gut or immediately upon absorption, as evidenced by the lack of significant plasma concentrations of intact MPC-8640. Taken together, these results demonstrate that oral treatment with MPC-8640 is an effective mode of delivery of active Nampt inhibitor and that administration of this drug results in significant anti-tumor activity in animal models of cancer. We are completing in progress IND enabling studies on MPC-8640 and have suspended any new development activities on this program. We expect to complete the current in process studies by fiscal 2012 year end and we continue to actively pursue business development opportunities for this program.

Our Small-Molecule Autoimmune Disease Program

MPI-0485520 is our lead preclinical compound in our small-molecule anti-interferon program for autoimmune diseases. It has demonstrated proof of concept activity in an animal model of the autoimmune disease rheumatoid arthritis, or RA. We are completing in process lead optimization activities and evaluation of potential IND candidates, and have suspended any new development activities on this program. We expect to complete the current in process activities by fiscal 2012 year end. The Company continues to actively pursue business development opportunities for this program.

 

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Oral Anti-interferon Program for the Treatment of Autoimmune Diseases

IKKe and TBK1 are kinases that serve as key regulators of the pathway that activates alpha and beta interferon expression. Inhibition of these kinases thereby inhibits a major pro-inflammatory pathway involved in a number of autoimmune diseases, including RA, Lupus and psoriasis. We have demonstrated in preclinical studies that treatment with our oral anti-interferons, or OAI’s, inhibits the interferon response in several animal models, including significant inhibition of this response and reduction in the severity of clinical symptoms in a mouse model of RA.

MPI-0485520 is an orally-available small molecule that potently and selectively inhibits IKKe and TBK1 and is our lead preclinical compound in our small molecule anti-interferon program for autoimmune diseases. MPI-0485520 exhibits high oral bio-availability, favorable absorption, distribution, metabolism, and excretion pharmacokinetic properties and efficacy in an in vivo mouse model of RA. In cellular models of type I interferon production, MPI-0485520 potently inhibits induction of type I interferons (IFNa/b) following stimulation of a variety of receptors that mediate the type-I interferon to pathogens, such as TLR3, TLR4, RIG-I, and MDA-5. Inhibition of type I interferon production by IKKe/TBK1 inhibitors may benefit patients with autoimmune disorders such as RA, systemic lupus erythematosus (SLE), scleroderma, Sjögren’s syndrome, and polymyositis. In April 2011, results from preclinical studies of MPI-0485520 were presented at the European League Against Rheumatism (EULAR) Annual European Congress of Rheumatology in London. In a proof of concept study, in the well characterized collagen-induced mouse model of arthritis, mice treated with MPI-0485520 show a dose-dependent and statistically significant reduction in the severity of clinical symptoms and paw and joint histopathology, as well as lower weight loss compared to control mice. MPI-0485520 is one compound out of an extensive portfolio of potent and selective IKK epsilon/TBK1 inhibitors identified by our oral anti-interferon program.

Critical Accounting Policies and Use of Estimates

Critical accounting policies are those policies which are both important to the portrayal of a company’s financial condition and results and require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are as follows:

 

•

income taxes;

 

•

clinical trial expenses; and

 

•

share-based payment expense.

Income Taxes

Our income tax provision is based on income before taxes and is computed using the liability method in accordance with Accounting Standards Codification, or ASC, 740—Income Taxes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using tax rates projected to be in effect for the year in which the differences are expected to reverse. Significant estimates are required in determining our provision for income taxes. Some of these estimates are based on interpretations of existing tax laws or regulations, or the expected results from any future tax examinations. Various internal and external factors may have favorable or unfavorable effects on our future provision for income taxes. Those factors include, but are not limited to, changes in tax laws, regulations and/or rates, the results of any future tax examinations, changing interpretations of existing tax laws or regulations, changes in estimates of prior years’ items, past levels of R&D spending, acquisitions, changes in our corporate structure, and changes in overall levels of income before taxes all of which may result in periodic revisions to our provision for income taxes.

Developing our provision for income taxes, including our effective tax rate and analysis of potential uncertain tax positions, if any, requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and any estimated valuation allowance we deem necessary to offset deferred tax assets. We have determined that a valuation allowance is necessary to fully offset our deferred tax assets. Our judgment and tax strategies are subject to audit by various taxing authorities. While we believe we have provided adequately for our uncertain income tax positions in our consolidated financial statements, adverse determination by these taxing authorities could have a material adverse effect on our consolidated financial condition, results of operations or cash flows. Interest and penalties on income tax items are included as a component of overall income tax expense.

Clinical Trial Expenses

The cost of our clinical trials is based, in part, on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial centers and clinical research organizations, or CROs. In the normal course of business, we contract with third parties to perform various clinical trial activities in the ongoing development of our drug candidates. The financial terms of these agreements vary from contract to contract, are subject to negotiation and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients or the completion of portions of the clinical trial or similar conditions. The objective of our accrual policy is to match

 

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the recording of expenses in our financial statements to the actual services received and efforts expended. As such, we recognize direct expenses related to each patient enrolled in a clinical trial on an estimated cost-per-patient basis as services are performed. In addition to considering information from our clinical operations group regarding the status of our clinical trials, we rely on information from CROs, such as estimated costs per patient, to calculate our accrual for direct clinical expenses at the end of each reporting period. For indirect expenses, which relate to site and other administrative costs to manage our clinical trials, we rely on information provided by the CRO, including costs incurred by the CRO as of a particular reporting date, to calculate our indirect clinical expenses. In the event of early termination of a clinical trial, we would recognize expenses in an amount based on our estimate of the remaining non-cancelable obligations associated with the winding down of the clinical trial, which we would confirm directly with the CRO.

If our CROs were to either under or over report the costs that they have incurred or if there is a change in the estimated per patient costs, it could have an impact on our clinical trial expenses during the period in which they report a change in estimated costs to us. Adjustments to our clinical trial accruals primarily relate to indirect costs, for which we place significant reliance on our CROs for accurate information at the end of each reporting period.

Share-Based Payment Expense

Share-based compensation expense standards set accounting requirements for “share-based” compensation to employees, including employee stock purchase plans, and require us to recognize, as expense, in our statements of operations, the grant date fair value of our stock options and other equity-based compensation. The determination of grant date fair value is estimated using an option-pricing model, which includes variables such as the terms of each grant, the expected volatility of our share price, the exercise behavior of our employees, interest rates, and dividend yields. These variables are projected based on our historical data, experience, and other factors. Changes in any of these variables could result in material adjustments to the expense recognized for share-based payments.

Results of Operations for the Three and Nine Months Ended March 31, 2012 and 2011

Revenue

Research revenue is comprised of research services related to short-term research agreements. In connection with our March 2011 corporate reorganization, we stopped all contract research services activity. As a result, research revenue for each of the three and nine months ended March 31, 2012 was $0 compared to $55,000 and $185,000 in the same periods in 2011. Research revenue for the three and nine months ended March 31, 2011 reflects revenues earned utilizing our prior expertise to identify and characterize protein-protein interactions.

Research and Development

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 nine months ended March 31, 2012 were $5.6 million and $13.7 million compared to $7.9 million and $18.6 million in the same periods last year. The respective 29% and 26% decrease in each period was primarily due to:

 

•

decreased preclinical development costs of approximately $2.7 million and $6.3 million, respectively, resulting from reductions in headcount and suspension of all preclinical and clinical programs; partially offset by

 

•

increased external drug candidate costs of approximately $0.5 million and $1.6 million, respectively.

Our drug research and development expenses include costs incurred for our drug candidates. The only costs we track by each drug candidate are external costs such as services provided to us by clinical research organizations, manufacturing of drug supply, and other outsourced research. We do not assign or allocate internal costs such as salaries and benefits, facilities costs, lab supplies and the costs of preclinical research and studies to individual development programs. In the past, we have also incurred costs related to external research collaborations. We track all underlying principal costs associated with our research collaborations. All development costs for our drug candidates and external research collaborations are expensed as incurred.

Research and development costs for the three and nine months ended March 31, 2012 and 2011 were as follows:

 

		Three Months Ended March 31,								Nine Months Ended March 31,
(In thousands)		2012				2011				2012				2011
External costs, drug candidates:
Azixa		$	(31	)		$	337			$	1,397			$	991
MPC-4326			14				12				38				(131	)
MPC-3100			33				329				208				1,117
MPC-0767			404				—				950				—
MPC-8640			518				—				1,003				—
MPC-9528			—				8				—				230
MPI-0485520			222				—				237				—
Sub-total direct costs			1,160				686				3,833				2,207
Internal costs, drug candidates			1,741				1,548				4,482				4,089
Preclinical development costs			2,702				5,349				5,357				11,666
External research collaborations			—				352				—				684
Total research and development		$	5,603			$	7,935			$	13,672			$	18,646

 

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We expect to see reduced research and development costs as a result of the decision to suspend further development activities for all preclinical and clinical programs.

General and Administrative

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 nine months ended March 31, 2012 were $5.2 million and $13.4 million compared to $5.1 million and $13.9 million for the three and nine months ended March 31, 2011. The 2% increase during the three months ended March 31, 2012, was due primarily to higher one-time severance and impairment expenses of approximately $1.3 million associated with reductions in headcount, offset by reductions in depreciation and equity compensation expense. The 4% decrease in general and administrative expenses during the nine months ended March 31, 2012, was due primarily to reductions in equity compensation, depreciation and legal expenses.

Other Income

Other income of $127,000 and $325,000 for the three and nine months ended March 31, 2012, compared to $125,000 and $1.6 million for the same periods in 2011, respectively, reflects a one-time $1.2 million grant received in November 2010 as a part of the qualifying therapeutic discovery project under section 48D of the Internal Revenue Code in addition to interest income earned on our marketable investment securities. The 2% increase and 80% decrease in other income for the three and nine month periods, respectively, was a result of the one-time grant recognized in November 2010 and a reduction in our invested balance in marketable securities for the three and nine months ended March 31, 2012 as compared to 2011, partially offset by gains on disposal of assets of $49,000 and $52,000, respectively, for the three and nine months ended March 31, 2012.

Liquidity and Capital Resources

Net cash used in operating activities was $20.6 million during the nine months ended March 31, 2012 compared to $24.8 million used in operating activities for the same nine months in 2011. The change in cash flow from operating activity can be attributed primarily to the timing and payment of liabilities and reduced share-based compensation expense, which were offset, in part, by a lower net loss in 2012.

Our investing activities provided $13.4 million in cash during the nine months ended March 31, 2012 compared to $9.0 million provided for the same nine months in 2011. The change is primarily due to maturity of our marketable securities and timing of new purchases to manage our overall cash position.

Approximately $1.0 million in cash was provided by financing activities during the nine months ended March 31, 2012 as a result of proceeds from stock options exercised during the period compared to $1.1 million for the same nine months in 2011. The change is primarily due to a lower stock price during the nine months ended March 31, 2012 resulting in fewer option exercises.

As of March 31, 2012, we had $96.4 million in cash, cash equivalents and marketable securities. Our future capital requirements, cash flows, and results of operations could be affected by and will depend on many factors that are currently unknown to us, including:

 

•

the outcome of our review and evaluation of strategic alternatives;

 

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changes in our business strategy;

 

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•

regulatory developments or enforcement in the United States and foreign countries;

 

•

developments or disputes concerning patents or other proprietary rights;

 

•

changes in estimates or recommendations by securities analysts, if any cover our common stock;

 

•

the ability to partner, sell or out-license rights to our programs on favorable terms;

 

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failure to secure adequate capital to fund our operations if and when needed, or the issuance of equity securities at prices below the current market price;

 

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litigation;

 

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future sales of our common stock;

 

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general market conditions;

 

•

economic and other external factors or other disasters or crises;

 

•

period-to-period fluctuations in our financial results; and

 

•

overall fluctuations in U.S. equity markets.

To the extent our capital resources are insufficient to meet our future capital requirements, we will need to finance our future cash needs through public or private equity offerings, collaboration agreements, debt financings or licensing arrangements. However, the credit markets and the financial services industry have recently been experiencing a period of unprecedented turmoil and upheaval that have made equity and debt financing more difficult to obtain. Additional funding may not be available to us on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders. For example, if we raise additional funds by issuing equity securities or by selling convertible debt securities, further dilution to our existing stockholders may result. If we raise funds through collaboration agreements or licensing arrangements, we may be required to relinquish rights to our technologies or drug candidates, or grant licenses on terms that are not favorable to us.

We may elect to raise additional funds even before we need them if the conditions for raising capital are favorable. We have an effective universal shelf registration statement on Form S-3 pursuant to which we may issue up to $80 million of securities.

 

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Certain Factors That May Affect Future Results of Operations

The Securities and Exchange Commission, or SEC, encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains such “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Words such as “may,” “anticipate,” “estimate,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance, identify forward-looking statements. All forward-looking statements are management’s present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to those set forth under the heading “Risk Factors” contained in Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2011 that we have filed with the SEC, as supplemented under the heading “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this Quarterly Report on Form 10-Q might not occur. Stockholders are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable to Myrexis, Inc. or to any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

We maintain a portfolio of cash, cash equivalents and short term and long term marketable securities which are subject to interest rate risk. Our investments consist primarily of highly liquid securities of various types and maturities of two years or less, with a maximum average maturity of one year. Changes in interest rates affect the fair market value of these marketable investment securities. There have been no material changes in our exposure to market risk as compared to our disclosures under Item 7A in our Annual Report on Form 10-K for the year ended June 30, 2011.

 

Item 4.

Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Controls. There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

The following risk factor is added to the risk factors included in our Annual Report on Form 10-K for the year ended June 30, 2011.

The impact and results of our evaluation of strategic alternatives are uncertain and may not be successful.

As announced in February 2012, we have suspended development activities on all of our pre-clinical and clinical programs, and with the assistance of Stifel Nicolaus Weisel as our financial advisor, we are reviewing and evaluating a full range of strategic alternatives available to us to enhance shareholder value. There can be no assurance that the exploration of strategic alternatives will result in any initiatives, agreements or transactions that will enhance shareholder value. Further, any strategic transaction that is completed ultimately may not deliver the anticipated benefits or enhance shareholder value.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

 

(a)		Exhibits
3.1		Amended and Restated Certificate of Incorporation of the Registrant. Incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K filed September 13, 2010 (File No. 001-34275).
3.1.1		Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock. Incorporated by reference to Exhibit 3.1.1 to the Registrant’s Annual Report on Form 10-K filed September 13, 2010 (File No. 001-34275).
3.1.2		Certificate of Amendment to Restated Certificate of Incorporation of the Registrant. Incorporated by reference to Exhibit 3.1.2 to the Registrant’s Annual Report on Form 10-K filed September 13, 2010 (File No. 001-34275).
3.1.3		Amended Certificate of Designation, Rights and Preferences of Series A Junior Participating Preferred Stock. Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed March 30, 2012 (File No. 001-34275).
4.1		First Amendment, dated March 29, 2012, to Shareholder Rights Agreement by and between Myrexis, Inc. (f/k/a Myriad Pharmaceuticals, Inc.) and American Stock Transfer & Trust Company, LLC, dated June 30, 2009. Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed March 30, 2012 (File No. 001-34275).

 

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4.2		Tax Benefits Preservation Rights Agreement by and between Myrexis, Inc. and American Stock Transfer & Trust Company, LLC, dated March 29, 2012, which includes as Exhibit B the Form of Right Certificate. Incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed March 30, 2012 (File No. 001-34275).
31.1		Certification of principal executive officer under Section 302(a) of the Sarbanes-Oxley Act of 2002.
31.2		Certification of principal financial officer under Section 302(a) of the Sarbanes-Oxley Act of 2002.
32.1		Certifications of the principal executive officer and the principal financial officer under Section 906 of the Sarbanes-Oxley Act of 2002.
101*		The following materials from Myrexis, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the Unaudited Balance Sheets as of March 31, 2012 and June 30, 2011, (ii) the Unaudited Statements of Operations for the three and nine months ended March 31, 2012 and 2011, (iii) the Unaudited Statements of Cash Flows for the nine months ended March 31, 2012 and 2011, and (iv) Notes to Unaudited Financial Statements, tagged as blocks of text.

 

*

Users of the XBRL data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		MYREXIS, INC.
Date: May 10, 2012		By:		/s/ ROBERT J. LOLLINI
				Robert J. Lollini.
				President and Chief Executive Officer
				(principal executive officer)
Date: May 10, 2012		By:		/s/ ANDREA KENDELL
				Andrea Kendell
				Chief Financial Officer
				(principal accounting and financial officer)

 

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