Myriad Genetics - 10-K annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K



(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended June 30, 2001



[_]  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

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MYRIAD GENETICS, INC.

(Exact name of registrant as specified in its charter)



Delaware                            87-0494517

--------                            ----------

(State or other jurisdiction      (I.R.S. Employer Identification No.)

of incorporation or organization)



320 Wakara Way, Salt Lake City, UT                84108

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(Address of principal executive offices)           (Zip Code)



Registrant's telephone number, including area code: (801) 584-3600



Securities registered pursuant to Section 12(b) of the Exchange Act: None



Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, $.01 Par Value Per Share

Preferred Share Purchase Rights

(Title of Class)



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 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.  [_]



The aggregate market value of the registrant's voting stock held by non-

affiliates of the registrant (without admitting that any person whose shares are

not included in such calculation is an affiliate) on September 1, 2001 was

$1,025,819,971, based on the last sale price as reported by The Nasdaq Stock

Market.



As of September 1, 2001 the registrant had 23,527,981 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 November 8, 2001.



1

PART I



Item 1.  BUSINESS



Overview



We are a leading biopharmaceutical company focused on the development and

marketing of novel therapeutic and predictive medicine products. We have

developed a number of proprietary proteomic technologies which permit us to

identify genes, their related proteins and the biological pathways they form.

We use this information to better understand the role proteins play in the onset

and progression of human disease. We operate two wholly owned subsidiaries,

Myriad Pharmaceuticals, Inc. and Myriad Genetic Laboratories, Inc., to

commercialize our therapeutic and predictive medicine discoveries.  Myriad

Pharmaceuticals, Inc. develops and intends to market novel therapeutic products.

Myriad Genetic Laboratories, Inc. focuses on the development and marketing of

predictive medicine products that assess an individual's risk of developing a

specific disease.



Myriad researchers have made important discoveries in the fields of cancer,

viral diseases such as AIDS, and acute thrombosis.  These discoveries point to

novel disease pathways and have paved the way for the development of new drugs.

Additionally, our pipeline of drug targets offers therapeutic opportunities for

the treatment of diseases such as heart disease, rheumatoid arthritis,

Alzheimer's disease and other central nervous system disorders.  We have

identified 141 drug targets to date.  We have also established a portfolio of 12

drug candidates that are under development at Myriad.  Four of these drug

candidates are in pre-clinical testing, while our lead therapeutic product for

the treatment of prostate cancer recently completed a phase II human clinical

trial.  We intend to independently develop and, subject to regulatory approval,

market our therapeutic products, particularly in the area of cancer and

infectious diseases.



We also have developed and commercialized three innovative predictive

medicine products: BRACAnalysis(R), which is used to assess a woman's risk of

developing breast and ovarian cancer, COLARIS(TM), which is used to determine a

person's risk of developing colon cancer, and CardiaRisk(R), which is used for

therapeutic management of hypertensive patients. We market these products using

our own internal 75 person sales force in the United States and we have entered

into marketing collaborations with other organizations in Austria, Canada,

Germany, Japan and Switzerland. Revenues from these proprietary products grew

approximately 94% from the prior year to $17.1 million in the fiscal year ended

June 30, 2001.



We believe that the future of medicine lies in the creation of new classes

of drugs that prevent disease from occurring or progressing and that treat the

cause, not just the symptoms, of disease. In addition, we believe that advances

in the emerging field of predictive medicine will improve our ability to

determine which patients are subject to a greater risk of developing these

diseases and who therefore should receive these new preventive medicines.



We have devoted substantially all of our resources to maintaining our

research and development programs, undertaking drug discovery and development,

and operating our predictive medicine business. Our revenues have consisted

primarily of research payments received pursuant to collaborative agreements,

upfront fees, milestone payments, and sales of predictive medicine products. We

have yet to attain profitability and, for the year ended June 30, 2001, we had a

net loss of $7,174,493 and as of June 30, 2001 had an accumulated deficit of

$59,836,475.



We have formed strategic alliances with 10 major pharmaceutical or

multinational companies including Bayer Corporation, Eli Lilly and Company,

Novartis Corporation, Hoffmann-LaRoche Inc., Pharmacia Corporation, Schering-

Plough Corporation, Schering AG, Hitachi Ltd., Oracle Corporation, and Torrey

Mesa Research Institute, formerly known as Novartis Agricultural Discovery

Institute. We intend to enter into additional collaborative relationships to

discover genes, proteins, and protein networks associated with common diseases

as well as to continue to fund internal research projects.  However, we may be

unable to enter into additional collaborative relationships on terms acceptable

to us.



In April 2001, we announced the formation of Myriad Proteomics, Inc., a new

venture with Hitachi, Ltd. and Oracle Corporation to map the human proteome.

Myriad Proteomics, which is 50 percent owned by the Company, intends to market a

proprietary map of the human proteome to pharmaceutical and biotechnology

companies for



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therapeutic and diagnostic product development. We have a perpetual,

subscription-free right to study all of the data generated by Myriad Proteomics

for our own internal drug development and predictive medicine programs.



We expect to incur losses for at least the next several years, primarily

due to expansion of our research and development programs, expansion of our drug

discovery and development efforts, launch of new predictive medicine products,

and expansion of our facilities. Additionally, we expect to incur substantial

sales, marketing and other expenses in connection with building our predictive

medicine business. We expect that losses will fluctuate from quarter to quarter

and that such fluctuations may be substantial.





Industry Background



Understanding the cause of a disease at the level of genes, proteins and

biological pathways can be very helpful in determining how best to treat the

disease. Historically, technologies used to discover treatments for the symptoms

of diseases have been less effective against complex diseases that arise through

a combination of genetic and environmental factors, such as cancer and heart

disease. In order to treat complex diseases effectively, it is imperative to

understand how the body uses its genetic information, how the disruption of

important biological pathways can lead to disease, and how drugs can be

developed to prevent, halt or reverse disease progression. As the scientific

community learns more about the genetic basis of disease, we believe that the

current methods of drug development will be revolutionized.



The majority of diseases are treated by modifying the activities of

proteins in affected cells and tissues. The quest for safer and more effective

treatments for a wider range of diseases has led pharmaceutical companies to

employ genomics and proteomics in their drug discovery and development programs.



Modern gene-based small molecule drug discovery and development programs

typically involve the following steps:



Target Discovery.   Target discovery involves identifying genes and their

proteins related to disease susceptibility, onset or progression. A better

understanding of some diseases has resulted from the identification of disease-

related proteins and the subsequent understanding of their function.



Protein Function and Biological Pathway Determination.   Proteins control

virtually all cellular processes, including important disease processes. The

determination of a protein's function and clarifying the role of a protein in

the biological pathway of a disease, leads to the identification of key

regulators in that pathway or drug target.



Target Validation.   After identifying an important disease-related

protein, the drug target must be validated to confirm that it is at a control

point in a disease-related pathway and that a drug which interacts with the

target is expected to have a beneficial effect. If through the validation

process a protein is not qualified to serve as a drug target, other proteins in

the same disease pathway can be examined as potential targets.



Assay Development and High-Throughput Screening.   A specific assay must be

developed for each validated drug target to identify compounds that inhibit or

activate the specific protein.  To identify potential drugs, a target is tested

through high-throughput screening against a chemically diverse library, usually

comprised of millions of different small molecule compounds. The screening

process frequently produces several compounds that interact with the identified

drug target.



Drug Development.   Compounds that may be suitable for development into

potential drugs undergo selection and optimization. Once selected, the compound

is optimized by synthesizing and testing a series of closely related compounds.

Based on expected activity, safety and bioavailability, the most promising leads

are selected.  If the disease results from the loss of function of a specific

protein, protein replacement therapy may represent an attractive alternative.

Following optimization, lead compounds and protein therapeutics enter into pre-

clinical testing to establish their efficacy and safety in animals. If pre-

clinical tests are successful, candidate drugs enter clinical trials to

determine their efficacy and safety in humans.



Predictive Medicine.  Predictive medicine is the analysis of genes and

their proteins to predict individuals' risks for developing diseases and their

responses to specific treatments. Armed with this risk assessment information,



3

individuals can increase surveillance and take preventive action to prevent or

delay the onset of disease. As drugs are developed and approved for use,

knowledge about side effects and efficacy in specific individuals emerges. Using

this pharmacogenomic knowledge, personal genetic profiles can be developed to

predict responses of individuals to drugs.





Our Business Strategy



We believe that the future of medicine lies in the creation of new classes

of drugs that are safer and more effective; drugs that not only treat disease

but that also prevent disease from occurring. We also believe that the emerging

field of predictive medicine will revolutionize the practice of medicine by

identifying an individual's risk of developing diseases later in life.



Our business strategy is to understand the relationship between proteins

and diseases in order to develop the next generation of therapeutic and

predictive medicine products. Through our proprietary technologies, we are

uniquely positioned to identify these proteins and the biological pathways they

form, and develop novel therapeutic and predictive medicine products. Our

business strategy includes the following key elements:



.   Use our proteomics platform to discover important disease genes and

proteins, understand their functions and identify lead compounds. We

plan to expand our proprietary proteomic technologies to uncover

additional disease pathways, discover functions for many of the

proteins in these pathways and identify high quality drug targets. In

addition, we will continue to employ our high-throughput screening

technology in order to rapidly identify novel small molecule drugs. We

believe this will result in the identification of numerous lead

compounds for potential drug development. Based on the specific

characteristics of our drug targets, we will augment our small molecule

drug development capability with protein replacement therapy and

antibody therapy.



.   Develop and commercialize therapeutic products.   We intend to take

selected compounds, particularly in the areas of cancer and infectious

diseases such as AIDS, through the clinical development process

ourselves. We are focusing on these diseases due to the large unmet

need for effective and less toxic drugs, and the oftentimes shorter and

less expensive clinical trials resulting from the potential for fast

track status that the U.S. Food and Drug Administration, or FDA, has

typically afforded novel drugs in these areas. Additionally, we will be

able to leverage the expertise of our existing oncology sales force in

the marketing of novel cancer therapies and intend to expand our

existing sales force to address the AIDS market as well.



.   Grow and expand our predictive medicine business.   We will continue to

increase the domestic and foreign market penetration of our existing

predictive medicine products and create additional products to

capitalize on the emerging areas of predictive medicine.



.   Capitalize on our strategic alliances with major pharmaceutical

companies. We expect to maintain our strategic alliances focused on the

discovery of novel drug targets. This will shift much of the financial

risk associated with drug development to our partners, while permitting

us to benefit from our partners' drug development expertise and

marketing strength.





Our Integrated Proteomic Platform



We have developed and integrated a powerful set of proteomic technologies

that enable us to discover genes of commercial importance and understand their

role in disease pathways. Our technology platform provides the knowledge to

develop therapeutic and predictive medicine products, based on a vastly improved

understanding of the genetic basis of disease.



We believe that because virtually all cellular processes are controlled by

proteins, including important disease processes, knowledge of protein

interactions and functions can be extremely valuable in the identification of

novel drug targets for therapeutic development. In order to determine the

function of genes and their role in disease pathways, we use our proprietary

ProNet(R) and ProSpec(TM) technologies. These technologies enable us to identify

human proteins, to discover the other proteins with which they interact and to

improve our understanding of their



4

involvement in important disease pathways. Each protein and its interacting

partners form a network, which reads like a map, positioning the protein in the

disease pathway and tracing the protein's role in that pathway.



Using our high-throughput proteomic technologies, we screen target proteins

with our proprietary libraries constructed from a variety of different tissues

and organs, such as heart, brain, kidney, liver, breast and prostate. We have

constructed over 20 proprietary libraries each containing approximately 10

million protein fragments. We apply our proprietary automation and robotic

capabilities to the protein search process to allow high-throughput processing

of protein interactions. Our current capacity allows us to identify hundreds of

protein interactions each day.



We believe that ProNet(R) and ProSpec(TM) provide significant opportunities

to identify and develop novel drug targets by:



.   discovering new proteins in the disease pathways;



.   discovering functions for novel proteins;



.   identifying new functions for known proteins;



.   identifying proteins involved in critical interactions along the

pathway; and



.   selecting high quality drug targets from disease pathways.



We have developed a proprietary drug screening technology called

ProTrap(TM) which allows us quickly and cost effectively to build high-

throughput drug screens using a yeast-based system. We believe that yeast-based

screens offer a number of distinct cost and time advantages in comparison to the

more commonly used mammalian or cell-free screens. Yeast are inexpensive and

easy to grow and yeast screens can be run through our liquid handling robotics

platform.



In the ProTrap(TM) system, yeast are manipulated genetically so that they

produce a human or viral protein. When the protein is produced in one of a

variety of proprietary yeast strains, it causes the strain to change in a way

that can be easily detected. Therefore, when a small molecular weight compound

inhibits or activates the protein, a further change in the characteristics of

the yeast strain is identified. The drug discovery screens are designed to be

run in parallel, such that each screen controls for false positives in other

screens. The result is greater efficiency and a higher screening throughput.

Additionally, our ProTrap(TM) technology has been extended to complement our

other target validation technologies by determining the functions of proteins.

It can also determine the biological activity of mutant proteins that may have

utility in pharmacogenomics.



Our high-throughput sequencing and screening systems use a robotics

platform and bioinformatics software custom designed by our scientists and

software engineers. This integrated system has been expanded to incorporate the

introduction of a large number of genes and research populations, permitting the

rapid comparison of novel mutations in candidate genes between individuals with

diseases and healthy individuals drawn from the same population. This high-

throughput, automated system enables us to rapidly detect genes and proteins,

which are highly correlated with disease, and in many instances can be shown to

be causal.



The gene and drug discovery process generates vast amounts of information.

Accordingly, we have designed proprietary bioinformatics systems, which provide

significant analytical and data management capabilities. Our systems are based

on integrated, protocol-driven database management software, which is used to

track experiments and collect relevant data.  In addition, we have developed a

proprietary laboratory information management system. This system has the

advantages of simplicity of design, ease of maintenance, and speed of

development. To date, we have used our information management software for our

high-throughput systems for protein analysis, genotyping, genomic sequencing,

mutation screening and compound screening. This has been of fundamental

importance in sample tracking and quality assessment and quality control. We

believe our strength in bioinformatics provides us with a substantial

competitive advantage.



5

We employ state-of-the-art robotics platforms in all of our high-throughput

systems. We use the same robotics software and hardware to ensure efficiency

throughout our operations. Each of our robotics systems is connected continually

in a real time interface with our proprietary laboratory information management

system to maintain a high degree of precision in sample tracking. Our robotics

systems have been designed to ensure that the sample volumes used for each of

the applications are kept at minimum levels to maintain reagent cost savings in

each of our operations. The high level of automation as well as the concerted

effort in optimizing biochemistry and reducing reagent volumes allows us to

produce data at a very competitive cost in the industry.





Therapeutic Product Development



The pharmaceutical industry has been successful in developing medicines to

treat the symptoms of disease. However, as the current generation of compounds

nears the end of its patent protection, the industry has begun to seek new

approaches to disease treatment. We believe that the future of medicine will be

in the creation of new drugs that either prevent disease from initially

developing or prevent disease from progressing by treating the cause, not just

the symptoms, of disease. We believe that we can capture a greater portion of

the potential value of drug targets that we discover by identifying and

developing lead compounds, protein replacement therapies, and antibody therapies

and taking these drug candidates through human clinical trials.  For those

therapeutic products in the area of cancer, we would be able to leverage the

marketing efforts of our existing oncology sales force.  Given the concentrated

nature of the AIDS market, we intend to expand our sales force to address this

market ourselves.



We formed Myriad Pharmaceuticals, our wholly owned subsidiary, to use our

proprietary proteomics technologies to discover and develop novel therapeutic

products. We believe that our technology provides us with a significant

advantage in drug discovery because it enables us to generate a large number of

potential drug targets.  Once these targets have been identified, we can rapidly

screen a large number of these drug targets against our library of compounds.

This integrated platform enables us to pursue a rapid and cost effective

approach to identifying potentially valuable drug candidates.



Our high-throughput screening is highly automated using robot workstations

and a proprietary computerized management system that monitors each step of the

process, confirms that each step has been performed to eliminate operator errors

and automatically correlates results with compound identity and drug target.

Current capacity is approximately 40 million screening data points per year.



We also build mammalian cell secondary assays to evaluate the initial

compounds arising from the primary drug discovery screens. To date, we have

completed the evaluation of these assays for colon cancer, other solid tumors,

AIDS and inflammatory diseases and have developed protocols to evaluate the

mammalian toxicity of all compounds found in our drug discovery screens.  We are

exploring the biology around genes that we believe are involved in a variety of

disease areas, including arteriosclerosis, chronic pain, chronic obstructive

pulmonary disease and sleep disorders, and have selected 1,046 proteins for

further evaluation using our ProNet(R) technology.



To date, we have discovered 141 drug targets. We have built drug discovery

screens for 56 of our proprietary drug targets and are screening them against

our own compound library.  We have identified 36 candidate drug compounds from

our drug discovery screens, including drug candidates for cancer, heart disease,

rheumatoid arthritis, Alzheimer's disease, HCV, HBV, acute thrombosis, and HIV

targets, which satisfy the initial criteria of showing selectivity for one

molecular target without obvious toxicity. Furthermore, the compounds have been

shown to display a good dose response curve, showing increased activity at

higher concentrations and decreased activity at lower concentrations.



We have 12 drug candidates currently under development. Four of these drugs

are in pre-clinical studies and our lead drug for the treatment of prostate

cancer has recently completed a phase II clinical study. The following table

outlines the status of our major drug development programs:



6

Advanced Drug Development



<TABLE>

<CAPTION>

DRUG             LEAD               LEAD          PRECLINICAL         CLINICAL          NDA

CANIDATE        DISCOVERED        OPTIMIZATION        STUDIES            TRIALS         APPROVAL

<S>                  <C>              <C>               <C>                 <C>             <C>

CANCER

MPC-7869            XXXXXXXXXXXXX     XXXXXXXXXXXXX     XXXXXXXXXXXXX     XXXXXXXXXXXXX

MPI-42511           XXXXXXXXXXXXX     XXXXXXXXXXXXX     XXXXXXXXXXXXX

MPI-176716          XXXXXXXXXXXXX     XXXXXXXXXXXXX     XXXXXXXXXXXXX

MPYS-197            XXXXXXXXXXXXX     XXXXXXXXXXXXX

MPYS-413            XXXXXXXXXXXXX



ANTIVIRAL

MPI-49839           XXXXXXXXXXXXX     XXXXXXXXXXXXX     XXXXXXXXXXXXX

MPYS-900            XXXXXXXXXXXXX     XXXXXXXXXXXXX

MPYS-188            XXXXXXXXXXXXX



THROMBOSIS

MPC-1203            XXXXXXXXXXXXX     XXXXXXXXXXXXX     XXXXXXXXXXXXX



RHEUMATOID ARTHRITIS

MPYS-333            XXXXXXXXXXXXX     XXXXXXXXXXXXX

MPYS-563            XXXXXXXXXXXXX     XXXXXXXXXXXXX



ALZHEIMER'S DISEASE

MPYS-315            XXXXXXXXXXXXX

</TABLE>



MPC-7869: Candidate Drug for Prostate Cancer. MPC-7869 is a novel drug for

the treatment of prostate cancer and is our most advanced therapeutic program.

It has completed a phase II human clinical trial. In animal models of cancer,

MPC-7869 demonstrated marked anti-tumor and anti-metastatic activity,

significantly reducing the incidence of primary and secondary prostate tumors.

In humans, the drug was well tolerated in normal healthy subjects and in

advanced prostate cancer patients who have relapsed. The drug has good

bioavailability and would be given in pill form, once a day. Among relapsing

prostate cancer patients, the level of prostate specific antigen (PSA) increases

dramatically. After MPC-7869 was given to a group of these patients, 52%

experienced a reduction in the growth rate of their PSA levels. This is an

exciting result and we are not aware of any other drug to achieve a similar or

better response measured by PSA level, and this drug does so without toxic side

effects. MPC-7869, therefore, holds promise as an effective, safe drug for the

treatment and prevention of prostate cancer. Four patents have issued on the

drug.



MPI-176716: Candidate drug for Solid Tumors, Leukemia and Lymphoma.

MPI-176716 is a novel small-molecule drug that inhibits an important step in the

pathway controlling programmed cell death. As a result, most dividing cancer

cell types tested to date are sensitive to this drug. We expect this drug

candidate to address solid tumors as well as leukemia and lymphomas and

possibly, to inhibit angiogenesis. These cancers account for an expected 1.3

million cases in 2001, according to the American Cancer Society. Drugs that have

the potential to treat a common underlying mechanism of cancer have broad

application to the treatment of disease and therefore, a very large market

potential worldwide.



MPI-49839: Candidate Drug for AIDS. Our novel drug, MPI-49839, represents

a new approach to the treatment of AIDS. The concept behind the drug may enable

the creation of an entirely new class of therapeutics. The drug is distinct from

the protease inhibitors and reverse-transcriptase inhibitors, which are the

current generation of AIDS drugs, or fusion and integrase inhibitors, which are

other classes of anti-HIV drugs being studied. Our anti-HIV drug is especially

exciting in that it has the potential to improve on these current treatments for

AIDS. With the evolution of multi-drug resistant strains of the virus comes an

increased need for therapies that act through different mechanisms. Although

current drugs have been quite successful in improving survival for AIDS

patients, the drugs do not eliminate the virus, thus drug therapy becomes a

life-long commitment. Researchers



7

at the University of California recently estimated that an alarming 42% of HIV-

infected individuals will be resistant to the current generation of drugs by

2005Financial Printing GroupFinancial Printing Groupat the University of

California recently estimated that an alarming 42% of HIV-infected individuals

will be resistant to the current generation of drugs by 2005. The ability to

establish long-term suppression of viral activity requires new drugs that are

more impervious to viral resistance. Novel approaches such as Myriad's may well

provide that extended therapeutic benefit to patients. MPI-49839 is in pre-

clinical studies, and if successful, we plan to enter human clinical trials in

AIDS patients.



MPI-42511:  Candidate Drug for Colon Cancer.  MPI-42511 is a novel small-

molecule drug that inhibits a key regulator of a cancer pathway that is involved

in 95% of all cases of colon cancer. Our scientists employed a rapid, high-

throughput two-tier screening procedure to discover this potential colon cancer

drug. Initially, we screened our library of small molecules for their ability to

inhibit the activity of the drug target. We isolated several candidates, which

were subsequently screened for the ability to specifically kill human colon

cancer cells without harming normal cells. These compounds provide the potential

to prevent unchecked cell growth during the progression of colon cancer. The

lead drug is now in pre-clinical evaluation, and if successful, we plan to enter

human clinical trials in colon cancer patients.



MPC-1203:  Candidate Drug for Acute Thrombosis.  MPC-1203 is a proprietary

recombinant form of the human protein, anti-thrombin III. Anti-thrombin III

plays a critical role in helping to maintain the flow of blood by inhibiting

clot formation. It is a circulating plasma protein that is produced in the

liver. Following severe trauma or major surgery, this essential protein is

degraded by enzymes, and can no longer prevent the blood from clotting. Our

proprietary form effectively resists degradation by these enzymes, which are

released during inflammatory events. By resisting inactivation, MPC-1203 remains

in circulation, available to carry out its function in the body. Blood clotting

is a major concern following orthopedic surgery such as hip replacement surgery,

open heart surgery and other critical trauma to the body. Clotting of the blood

is also a cause of organ failure and death following sepsis and cancer. MPC-1203

is the subject of two United States patent applications and eight foreign patent

applications. Our protein drug is in pre-clinical testing, and if successful, we

plan to enter human clinical trials.





Predictive Medicine Products



Predictive medicine identifies those individuals at risk for the

development of specific diseases, and guides the healthcare management of those

predisposed individuals to delay the onset or prevent the occurrence of specific

diseases. Once a predisposed individual is identified, that individual can make

more informed decisions in selecting the most appropriate surveillance measures

and therapeutic course of action. Because predictive medicine guides the

healthcare management of those predisposed individuals, this allows healthcare

resources to be focused on individuals who have the greatest need and may reduce

waste in the healthcare system.



Personalized medicine establishes a genetic response profile to drug

therapy for specific individuals. Knowing how a patient will likely respond to

particular drugs may decrease the occurrence of adverse side effects from

medications while improving their effectiveness, possibly leading to better

outcomes and lower overall healthcare costs. Both predictive and personalized

medicine are of interest to healthcare payors who seek to lower costs and

improve the effectiveness of medical care.



Through our wholly owned subsidiary, Myriad Genetic Laboratories, we are

committed to the development and marketing of novel products for the emerging

market opportunities of predictive medicine and personalized medicine. We

provide educational and support services to physicians and healthcare

professionals as part of our predictive medicine business. The predictive

medicine products we have developed and currently market are not subject to FDA

approval, but are subject to oversight and approval under the Clinical

Laboratory Improvement Amendments, or CLIA.  We have obtained all approvals

required by CLIA.



Our strategy is to first introduce predictive medicine products in the

United States, and then to make them available worldwide through strategic

marketing partnerships abroad. We have developed three predictive medicine

products, BRACAnalysis(R), COLARIS(TM) and CardiaRisk(R). We are currently

marketing these products in the United States directly through our own 75 person

sales force. We are in the process of developing additional predictive medicine

products, PROLARIS(TM) for genetic susceptibility to prostate cancer and

MELARIS(TM) which assesses a person's risk for melanoma, a deadly form of skin

cancer.



8

The potential international market for our predictive medicine products is

estimated to be at least twice the size of the United States market. After

introducing predictive medicine products in the United States, we plan to

introduce our products in foreign markets primarily through strategic marketing

partners. We have completed marketing agreements with MDS Laboratory Services in

Canada, Falco Biosystems, Ltd. in Japan and Bioscientia, Ltd. in Germany,

Austria and Switzerland.



BRACAnalysis(R): Predictive Medicine Product for Breast and Ovarian Cancer.

It is estimated that each year, approximately 190,000 women in the United States

are diagnosed with breast cancer and approximately 25,000 women are diagnosed

with ovarian cancer. Each year in the United States, an estimated 40,000 women

will die from breast cancer, which has the second highest cancer mortality rate

among women, and an estimated 14,500 women will die of ovarian cancer.  BRCA1

and BRCA2 appear to be responsible for approximately 84% of the early onset

hereditary breast cancer and approximately 90% of hereditary ovarian cancer. A

study of women in the United States published in the American Journal of Human

Genetics indicates that a woman with a BRCA1 mutation has an 86% risk of

developing breast cancer by age 80 as compared to a general population risk of

10%. Additionally, according to a study published in Lancet, the risk to a woman

with a BRCA1 mutation of developing ovarian cancer by age 70 is approximately

44%, compared to a general population risk of approximately 1%. Women with BRCA2

mutations have approximately the same risk of breast cancer as BRCA1 mutation

carriers. BRCA2 mutations also increase the risk of ovarian cancer in women,

although not as much as in those with BRCA1 mutations.



BRACAnalysis(R) is a comprehensive analysis of the BRCA1 and BRCA2 genes

for determining a woman's susceptibility to breast and ovarian cancer.

BRACAnalysis(R) provides important information that we believe will help the

patient and her physician make better informed lifestyle, surveillance,

chemoprevention and treatment decisions. The price for the test is currently

$2,680 and is covered by health maintenance organizations and health insurance

providers in the United States. We have nine issued United States patents

covering BRACAnalysis(R).



COLARIS(TM): Predictive Medicine Product for Colon Cancer and Uterine

Cancer. Colorectal cancer is the second leading cause of cancer deaths in the

United States, with approximately 135,000 new cases expected to be diagnosed in

the year 2001. Familial forms of colorectal cancer were estimated in 1997 to

account for 10% to 30% of all cases according to the American Society of

Clinical Oncologists. The health care management considerations in these

hereditary syndromes are similar to those for breast and ovarian cancer at-risk

individuals. Individuals who carry a mutation in one of the two colon cancer

genes have a greater than 80% lifetime risk of developing colon cancer and women

have a 60% life time chance of developing uterine cancer. Highly effective

preventive measures include colonoscopy and the removal of precancerous polyps.

To illustrate the predictive medicine value of molecular testing in colorectal

cancer syndromes, it has been shown that individuals who carry gene mutations

can lower their risk of developing cancer by more than 50% with appropriate

preventive and surveillance measures.



COLARIS(TM) is a comprehensive analysis of the MLH1 and MSH2 genes for

determining a person's risk of developing colon cancer or uterine cancer.

COLARIS(TM) provides important information that we believe will help in the

surveillance and possible prevention of colon cancer.  The price for the test is

$1,950 and is covered by health maintenance organizations and health insurance

providers in the United States.



CardiaRisk(R): Personalized Medicine Product for Hypertension.

Approximately 50 million people in the United States are hypertensive.

Hypertension has a significant genetic component and is a major risk factor for

cardiovascular disease, kidney failure and stroke. The angiotensinogen gene, or

AGT gene, is believed to be involved in the salt-dependent form of hypertension,

which accounts for approximately 35% of all hypertension. Therapy for these

patients includes the use of a low-salt diet, other dietary regimens, and

numerous drug therapies to control blood pressure. Results of a recent study of

1,509 patients by the National Institutes of Health showed that of all patients

placed on a low-salt diet, only patients with the AGT mutation achieved a

significant reduction in blood pressure over the three-year course of the study.

Patients in this study with the variant form of the AGT gene were also found to

be 42% more likely to experience hypertension earlier in life and more severely.



CardiaRisk(R) identifies individuals likely to respond to specific high

blood pressure therapies by screening for mutations of the AGT gene. Using

CardiaRisk(R) to help predict the specific therapies and drugs to which a

patient will respond may improve patient compliance, reduce adverse side effects

and decrease overall healthcare costs. CardiaRisk(R) is a fully automated test

that we perform using DNA extracted from a patient's blood sample. The cost for

the test is $295 and it is not currently reimbursed by health insurance. We

believe CardiaRisk(R) is one of the first



9

commercially available personalized medicine products. We have six issued United

States patents covering CardiaRisk(R).



MELARIS(TM): Predictive Medicine Product for Melanoma.  We have a

substantial development program on a predictive medicine product for genetic

susceptibility to melanoma. The incidence of melanoma, a malignant form of skin

cancer, has increased approximately 4% per year since the early 1970's and is

the second fastest growing cancer in the United States. This year over 51,000

Americans are expected to be diagnosed with melanoma, according to the American

Cancer Society. We discovered that mutations in the p16 gene are involved in

cancer and can be inherited and predispose individuals to melanoma, as reported

in the September 1994 issue of the journal Nature Genetics. 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. We believe that approximately 10% of melanoma

cases are hereditary.



MELARIS(TM), which assesses a person's risk of developing melanoma,

provides important information that we believe will be useful in the

surveillance and prevention of melanoma. Melanoma can be prevented through

appropriate screening and a specific threshold of action for mutation carriers,

in which precancerous lesions are removed before cancer can develop. MELARIS(TM)

is scheduled for introduction to the market in the Fall of 2001 through our 75

person oncology sales force and represents our fourth commercial product. We

have 12 issued United States patents covering MELARIS(TM).



PROLARIS(TM):  Predictive Medicine Product for Prostate Cancer. We have a

substantial development program on a predictive medicine test for prostate

cancer based upon our discovery of the HPC2 prostate cancer gene, as reported in

the February 2001 issue of the journal Nature Genetics.  Prostate cancer is

diagnosed in approximately 198,000 men each year in the United States. According

to the American Cancer Society, over 31,000 men will die of the disease in 2001,

making it the second most common cause of cancer death in men. Early diagnosis

is effective in increasing the survival for patients with prostate cancer.

Diagnosis at the local and regional stages is associated with a five-year

survival rate approaching 100%, although survival rates for more advanced tumors

decline rapidly.  Tests such as PSA have had a positive effect on survival with

prostate cancer, and close monitoring of PSA levels among men identified as high

risk from the PROLARIS(TM) test offer potential for early diagnosis and improved

survival.





Strategic Alliances



In order to limit the financial risks associated with the development of

therapeutic products, including costs associated with related clinical trials of

such drugs, our strategy is to enter into alliances with corporate partners who

assume such risks and other assorted financial costs. In addition to our current

strategic alliances, we are actively pursuing other partners in areas that we

believe may enhance our ability to develop and exploit our technology. The

financial structure of our strategic alliances varies with each agreement and

may include research payments, equity investments, milestone payments, upfront

license payments, and royalty payments or profit sharing.



Events that trigger milestone payments to us may include:



.   the discovery of a gene or protein;



.   the determination of the function of a gene or protein;



.   the filing of an investigational new drug application with the FDA;



.   the commencement of Phase III clinical trials; and



.   the submission of a new drug application with the FDA.



We are dependent on each strategic partner to commercialize the therapeutic

products identified during our collaboration. If our partner commercializes the

product, we will receive a royalty on sales of the product or share in the

profits derived from sales of the drug. If any of our strategic partners cease

efforts to commercialize any



10

therapeutic products identified during our collaboration, the rights to

commercialize those products will revert back to us.



We have established research collaborations with 10 major pharmaceutical or

multinational companies, including Bayer Corporation, Eli Lilly and Company,

Hitachi Ltd., Novartis Corporation, Oracle Corporation, Pharmacia Corporation,

Hoffmann-LaRoche Inc., Schering AG, Schering-Plough Corporation, and Torrey Mesa

Research Institute.



We intend to enter into additional collaborative relationships with other

corporate partners to locate and sequence genes and proteins, to discover

protein networks associated with other common diseases, and to identify lead

compounds which may be developed into commercial therapeutic products by those

partners.





Patents and Proprietary Rights



We intend to seek patent protection in the United States and major foreign

jurisdictions for genes, proteins, protein interactions, antibodies, drug

targets, drug compounds, transgenic animals, technology related methods and

processes and other inventions which we believe are patentable and where we

believe our interests would be best served by seeking patent protection. We also

intend to seek patent protection or rely upon trade secret rights to protect

certain other technologies which may be used in discovering and characterizing

new genes and proteins and which may be used in the development of novel

predictive medicine and therapeutic products. To protect our trade secrets and

other proprietary information, we require that our employees and consultants

enter into confidentiality and invention assignment agreements. These

confidentiality and invention assignment agreements may not provide us with

adequate protection. In addition, any such patents may not issue, and the

breadth or the degree of protection of any claims of such patents may not afford

us with significant protection.



We own or have licensed rights to 65 issued patents and numerous patent

applications in the United States and foreign countries. However, any patent

applications which we have filed or will file or to which we have licensed or

will license rights may not issue, and patents that do issue may not contain

commercially valuable claims. In addition, any patents issued to us or our

licensors may not afford meaningful protection for our technology or products or

may be subsequently circumvented, invalidated or narrowed.



Our processes and potential products may also conflict with patents which

have been or may be granted to competitors, academic institutions or others. As

the biotechnology industry expands and more patents are issued, the risk

increases that our processes and potential products may give rise to

interferences in the U.S. Patent and Trademark Office, or to claims of patent

infringement by other companies, institutions or individuals. These entities or

persons could bring legal actions against us claiming damages and seeking to

enjoin clinical testing, manufacturing and marketing of the related product or

process. If any of these actions are successful, in addition to any potential

liability for damages, we could be required to cease the infringing activity or

obtain a license in order to continue to manufacture or market the relevant

product or process. We may not prevail in any such action and any license

required under any such patent may not be made available on acceptable terms, if

at all.



Our failure to obtain a license to any technology that we may require to

commercialize our technologies or potential products could have a material

adverse effect on our business. There is also considerable pressure on academic

institutions to publish discoveries in the genomic and proteomic fields. Such a

publication by an academic collaborator of ours prior to the filing date of our

application, if it covers a discovery claimed in the application, may preclude

the patent from issuing or the filing of foreign patent applications, or if a

patent was issued, may invalidate the patent.



We also rely upon unpatented proprietary technology, and in the future may

determine in some cases that our interests would be better served by reliance on

trade secrets or confidentiality agreements rather than patents or licenses.

These include some of our genomic, proteomic, robotic and bioinformatic

technologies. We may not be able to protect our rights to such unpatented

proprietary technology and others may independently develop substantially

equivalent technologies. If we are unable to obtain strong proprietary rights to

our processes or products after obtaining regulatory clearance, competitors may

be able to market competing processes and products.



11

Others may obtain patents having claims which cover aspects of our products

or processes which are necessary for or useful to the development, use or

manufacture of our services or products. Should any other group obtain patent

protection with respect to our discoveries, our commercialization of predictive

medicine products and potential therapeutic products could be limited or

prohibited.



In addition, we are a party to various license agreements which give us the

rights to use certain technology in our research, development and testing

processes. We may not be able to continue to license this technology on

commercially reasonable terms, if at all. Our failure to maintain rights to this

technology could have a material adverse effect on our business.





Competition



Competition is intense in our existing and potential markets. Our

competitors in the United States and abroad are numerous and include, among

others, major pharmaceutical and diagnostic companies, specialized biotechnology

firms, universities and other research institutions. Many of our potential

competitors have considerably greater financial, technical, marketing and other

resources than we do. We expect competition to intensify in the fields in which

we are involved as technical advances occur in these fields and become more

widely known.



We expect to encounter significant competition with respect to any drugs

that may be developed using our technologies. Companies that complete clinical

trials, obtain required regulatory approvals and commence commercial sales of

therapeutic products prior to us may achieve a significant competitive

advantage. We may not be able to develop such products successfully and we may

not obtain patents covering such products that provide protection against

competitors. Moreover, competitors may succeed in developing therapeutic

products that circumvent our products, our competitors may succeed in developing

technologies or products that are more effective than those developed by us or

that would render our technologies or products less competitive or obsolete.



The technologies for discovering genes that predispose persons to major

diseases and approaches for commercializing those discoveries are new and

rapidly evolving. Rapid technological developments could result in our potential

services, products, or processes becoming obsolete before we recover a

significant portion of our related research and development costs and associated

capital expenditures. If we do not discover disease-predisposing genes,

characterize their functions, develop predictive medicine products and related

information services based on such discoveries, obtain regulatory and other

approvals, and launch such services or products before our competitors, we could

be adversely affected. Moreover, any predictive medicine products that we may

develop could be made obsolete by less expensive or more effective tests or

methods that may be developed in the future.





Governmental Regulation



Regulation by governmental authorities in the United States and foreign

countries is a significant factor in the development, manufacture and marketing

of our proposed products and services and in our ongoing research and

development activities. The therapeutic products and predictive medicine

products developed by us will require regulatory approval by governmental

agencies prior to commercialization. Various federal statutes and regulations

also govern or influence the testing, manufacturing, safety, labeling, storage,

record keeping, and marketing of therapeutic products. The process of obtaining

these approvals and the subsequent compliance with applicable statutes and

regulations require the expenditure of substantial time and financial resources.

Any failure by us or our collaborators, licensors or licensees to obtain, or any

delay in obtaining, regulatory approval could have a material adverse effect on

our business.



Therapeutics. We intend to develop independently therapeutic products based

on our discoveries. Such products will be subject to regulation by the FDA and

foreign regulatory authorities and require approval before they may be

clinically tested and commercially marketed for human therapeutic use in the

United States and other countries. The precise regulatory requirements with

which we will have to comply are undergoing frequent revisions and refinement.

It is also uncertain whether the clinical data generated in such studies will be

acceptable to the FDA



12

such that the FDA will approve the marketing of such products. In addition,

obtaining FDA approval for therapeutic products is a costly and time consuming

process.



The steps required before a pharmaceutical agent may be marketed in the

United States include:



.    pre-clinical laboratory, in vivo and formulation studies;



.    the submission to the FDA of an Investigational New Drug, or IND,

application, which must become effective before human clinical trials

may commence;



.    adequate and well-controlled human clinical trials to establish the

safety and efficacy of the drug;



.    the submission of a New Drug Application, or NDA, to the FDA; and



.    FDA approval of the NDA, including approval of all product labeling

and advertising.



The testing and approval process requires substantial time, effort, and

financial resources and we cannot be certain that any approvals for any of our

products will be granted on a timely basis, if at all.



Human clinical trials are typically conducted in three sequential phases

which may overlap:



.    PHASE I: The drug is initially introduced into healthy human subjects

or patients and tested for safety, dosage tolerance, absorption,

metabolism, distribution and excretion.



.    PHASE II: Involves studies in a limited patient population to identify

possible adverse effects and safety risks, to determine the efficacy

of the product for specific targeted diseases and to determine dosage

tolerance and optimal dosage.



.    PHASE III: When Phase II evaluations demonstrate that a dosage range

of the product is effective and has an acceptable safety profile,

Phase III trials are undertaken to further evaluate dosage and

clinical efficacy and to further test for safety in an expanded

patient population at geographically dispersed clinical study sites.



In the case of products for severe or life-threatening diseases such as

cancer, the initial human testing is often conducted in patients rather than in

healthy volunteers. Since these patients already have the target disease, these

studies may provide initial evidence of efficacy traditionally obtained in Phase

II trials and thus these trials are frequently referred to as Phase I/II trials.

We cannot be certain that we will successfully complete Phase I, Phase II or

Phase III testing of any compound within any specific time period, if at all.

Furthermore, the FDA or the sponsor may suspend clinical trials at any time on

various grounds, including a finding that the subjects or patients are being

exposed to an unacceptable health risk.



The results of product development, pre-clinical studies and clinical

studies are submitted to the FDA as part of a NDA. The FDA may deny a NDA if the

applicable regulatory criteria are not satisfied or may require additional

clinical data. Even if such data is submitted, the FDA may ultimately decide

that the NDA does not satisfy the criteria for approval. Once issued, the FDA

may withdraw product approval if compliance with regulatory standards is not

maintained or if problems occur after the product reaches the market. In

addition, the FDA may require testing and surveillance programs to monitor the

effect of approved products which have been commercialized, and the FDA has the

power to prevent or limit further marketing of a product based on the results of

these post-marketing programs.



On November 21, 1997, President Clinton signed into law the Food and Drug

Administration Modernization Act. That Act codified the FDA's policy of granting

"fast track" approval for therapies intended to treat severe or life-

threatening diseases such as cancer and AIDS. This new policy is intended to

facilitate the study of life saving therapies and shorten the total time for

marketing approvals; however, there can be no assurance that these fast track

procedures will shorten the time of approval for any of our products.



13

Satisfaction of the above FDA requirements or similar requirements of

state, local and foreign regulatory agencies typically takes several years and

the actual time required may vary substantially, based upon the type, complexity

and novelty of the product or indication. Government regulation may delay or

prevent marketing of potential products for a considerable period of time and

impose costly procedures upon our or our partners' activities. The FDA or any

other regulatory agency may not grant any approvals on a timely basis, if at

all. Success in early stage clinical trials does not assure success in later

stage clinical trials. Data obtained from clinical activities is not always

conclusive and may be susceptible to varying interpretations which could delay,

limit or prevent regulatory approval. Even if a product receives regulatory

approval, the approval may be significantly limited to specific indications and

dosages. Further, even after regulatory approval is obtained, later discovery of

previously unknown problems with a product may result in restrictions on the

product or even complete withdrawal of the product from the market. Delays in

obtaining, or failures to obtain regulatory approvals may have a material

adverse effect on our business. In addition, we cannot predict what adverse

governmental regulations may arise from future U.S. or foreign governmental

action.



Any products manufactured or distributed by us pursuant to FDA approvals

are subject to pervasive and continuing regulation by the FDA, including record-

keeping requirements and reporting of adverse experiences with the drug. Drug

manufacturers and their subcontractors are required to register their

establishments with the FDA and certain state agencies, and are subject to

periodic unannounced inspections by the FDA and certain state agencies for

compliance with current good manufacturing practices, or cGMP, which impose

certain procedural and documentation requirements upon us and our third-party

manufacturers. We cannot be certain that we or our present or future suppliers

will be able to comply with the cGMP regulations and other FDA regulatory

requirements.



Predictive Medicine. We are subject to governmental regulation at the

federal, state, and local levels as a clinical laboratory. We have received CLIA

certification from the Department of Health and Human Services. On the state

level, New York has implemented regulations concerning molecular diagnostic

testing and we have received approval from the State of New York for breast and

ovarian cancer susceptibility, colon and uterine cancer susceptibility and

hypertension/heart disease risk. We are aware of several other states that

require licensing or registration of general clinical laboratory activities. We

believe that we have taken all steps required of us in such jurisdictions in

order for us to conduct business in those jurisdictions. However, we may not be

able to maintain state level regulatory compliance in all states where we may do

business. Failure to maintain state regulatory compliance, or changes in state

regulatory schemes, could result in a substantial curtailment or even

prohibition of our clinical activities and could have a material adverse effect

on our business.



CLIA authorizes the Department of Health and Human Services to regulate

clinical laboratories. These regulations, which affect us, mandate that all

clinical laboratories be certified to perform testing on human specimens and

provide specific conditions for certification. These regulations also contain

guidelines for the qualification, responsibilities, training, working conditions

and oversight of clinical laboratory employees. In addition, specific standards

are imposed for each type of test which is performed in a laboratory. CLIA and

the regulations promulgated thereunder are enforced through quality inspections

of test methods, equipment, instrumentation, materials and supplies on a

periodic basis. Any change in CLIA or these regulations or in the interpretation

thereof could have a material adverse effect on our business.



Our business is also subject to regulation under state and federal laws

regarding environmental protection and hazardous substances control, including

the Occupational Safety and Health Act, the Environmental Protection Act, and

the Toxic Substance Control Act. We believe that we are in material compliance

with these and other applicable laws and that our ongoing compliance will not

have a material adverse effect on our business. However, statutes or regulations

applicable to our business may be adopted which impose substantial additional

costs to assure compliance or otherwise materially adversely affect our

operations.





Human Resources



As of September 1, 2001, we had 452 full-time equivalent employees,

including 57 persons holding doctoral or medical doctor degrees. Most of our

employees are engaged directly in research, development, production and

marketing activities. We believe that the success of our business will depend,

in part, on our ability to attract and retain qualified personnel.



14

Our employees are not covered by a collective bargaining agreement, and we

consider our relations with our employees to be good.





Risk Factors





We are a company in the early stages of development and commercialization and

may never achieve the goals of our business plan.



We may be unable to continue to successfully develop or commercialize our

products. Certain of our products are still in the early stages of development.

We began operations in 1991 and have been engaged primarily in research directed

toward the discovery and sequencing of genes, proteins, and protein pathways

that predispose people to common diseases and the development of therapeutic and

predictive medicine products. In October 1996 we introduced for commercial use

BRACAnalysis(R), our first predictive medicine product. In January 1998 we

introduced for commercial use CardiaRisk(R), our second predictive medicine

product. In August 2000, we announced the launch of COLARIS(TM), our most recent

predictive medicine product to be introduced.



Our lead therapeutic compound has recently completed a Phase II human

clinical trial. Other therapeutic products are in various stages of pre-clinical

development. Any therapeutic products under development by us will take several

more years to develop and undergo extensive pre-clinical and clinical testing.

Additionally, therapeutic products are subject to substantial regulatory review.

We may be unable to discover or develop any therapeutic or additional predictive

medicine products through the utilization of our technologies. Even if we

develop products for commercial use, we may not be able to develop products

that:



.    meet applicable regulatory standards, in a timely manner or at all;



.    successfully compete with other technologies and products;



.    avoid infringing the proprietary rights of others;



.    are manufacturable in sufficient quantities or at reasonable cost; or



.    are successfully marketed.



We have a history of operating losses and expect to continue to incur losses in

the future.



We have a limited operating history and have experienced operating losses

since our inception. We expect these losses to continue for the next several

years and we may never be profitable or achieve significant revenues. For

example, we experienced net losses of $7,174,493 during the fiscal year ended

June 30, 2001, $8,722,102 during the year ended June 30, 2000 and $9,995,453

during the year ended June 30, 1999. We had an accumulated deficit of

$59,836,475 as of June 30, 2001. In order to develop and commercialize our

products, we expect to incur significant increases in our expenses over the next

several years. As a result, we expect to incur operating losses at least for the

foreseeable future. Our ability to achieve significant revenues or profitability

will depend upon numerous factors, including our ability to:





.    identify drug targets and lead compounds that may lead to future

therapeutic products;



.    create and introduce additional marketable predictive medicine

products; and



.    obtain and maintain strategic collaborations.



15

If we are unable to overcome financial and regulatory obstacles, including those

that arise in connection with new technologies, then we may never be able to

develop commercially viable therapeutic products.



We are currently initiating the development of potential therapeutic

products, which will require significant research and development expenditures,

extensive pre-clinical and clinical testing and regulatory approvals.

Preclinical and clinical testing will require the expenditure of significant

funds. Even after spending significant funds, we may not be able to develop or

successfully commercialize any potential therapeutic products.



Therapeutic products that we may develop will be subject to the risks of

failure inherent in the development of therapeutic products based on new

technologies. These risks include the possibilities that:



.    potential therapeutic products will be found to be unsafe or

ineffective or otherwise fail to receive necessary regulatory

clearances;



.    the products, if safe and effective, will be difficult to manufacture

on a large scale or uneconomical to market;



.    proprietary rights of third parties will preclude us or our partners

from marketing our products; or



.    third parties will market superior or equivalent products.



In addition, before receiving all required FDA approvals to market any

product, we will have to demonstrate that the product is safe and effective on

the patient population and for the diseases that would be treated. The clinical

testing, manufacturing and marketing of products are subject to the rigorous

testing and approval process of the FDA and equivalent foreign regulatory

authorities, which can take many years and requires the expenditure of

substantial financial and other resources. We may never obtain regulatory

approvals for any products that we develop. Moreover, if regulatory approval of

a product is granted, this approval may impose limitations on the indicated uses

for which it may be marketed. Further, even if such regulatory approval is

obtained, a marketed product and its manufacturer are subject to continuing

review, and the discovery of previously unknown problems with a product or

manufacturer may result in restrictions on such product or manufacturer,

including withdrawal of the product from the market.



Clinical trials or marketing of any potential therapeutic products may

expose us to liability claims from the use of these therapeutic products. We may

not be able to obtain product liability insurance or, if obtained, sufficient

coverage may not be available at a reasonable cost. In addition, as we develop

therapeutic products internally, we will have to make significant investments in

therapeutic product development, marketing, sales and regulatory compliance

resources. We will also have to establish or contract for the manufacture of

products, including supplies of drugs used in clinical trials, under the current

good manufacturing practices of the FDA, which can be time consuming and costly.



If we are unable to maintain relationships with current collaborative partners

or enter into new collaborative arrangements, then our business will be harmed.



We currently depend heavily and will depend heavily in the future on third

parties for support in product development, manufacturing, marketing and

distribution. Part of our current business strategy is to form collaborative

arrangements with strategic partners to develop and commercialize therapeutic

products based on our gene discoveries. We may not be able to maintain our

current collaborative arrangements or negotiate additional acceptable

collaborative arrangements in the future.



The research phase of our collaborations expire after a fixed term. Any

current or future collaborative arrangement may not be successful. Failure of

any collaborative arrangement, or termination by any of our collaborative

partners of their respective agreements, could have a material adverse effect on

our business. Further, additional milestone payments and future potential

royalty payments from our collaborators are dependent upon their continuing to

develop products based on the potential therapeutic targets we delivered to

them. These partners



16

may decide not to develop any products based on these targets. Even if these

partners commence such development, they could decide to terminate it at any

time.



In addition, our collaborative partners may pursue alternative technologies

or develop alternative products either on their own or in collaboration with

others, including our competitors, as a means of developing diagnostic products

or treatments for the diseases targeted by the collaborative programs. Our

interests may not continue to coincide with those of our collaborative partners,

and some of our collaborative partners may develop, independently or with third

parties, therapeutic or diagnostic products that could compete with those

developed in collaboration with our partners or independently. Additionally,

disputes over rights or technology or other proprietary interests may arise.

Such disputes or disagreements between us and our collaborative partners could

lead to delays in collaborative research projects, or could result in litigation

or arbitration, any of which could have a material adverse effect on our

business. In addition, there have been a significant number of recent

consolidations among pharmaceutical companies. These consolidations among the

companies with which we are collaborating could result in the diminution or

termination of, or delays in, the development or commercialization of the

products or research programs under one or more of our collaborative agreements.



BRACAnalysis(R), CardiaRisk(R), COLARIS(TM) and any other predictive medicine or

therapeutic products that we may develop may never achieve significant

commercial market acceptance.



We may not succeed in achieving significant commercial market acceptance of

any of our products. While we have marketed BRACAnalysis for several years and

have gained some acceptance with oncologists and surgeons, we need to convince

the larger group of obstetricians/gynecologists and primary care physicians of

the benefits of BRACAnalysis in order to increase our sales of the product.  We

introduced our newer products CardiaRisk in August 1998 and COLARIS in August

2000 and may not succeed in achieving commercial acceptance of either product.

Our ability to successfully commercialize BRACAnalysis, CardiaRisk and COLARIS,

as well as any other predictive medicine or therapeutic products that we may

develop, will depend on several factors, including:



.    Our ability to convince the medical community of the safety and

clinical efficacy of our products and their potential advantages over existing

therapeutic products and predictive medicine techniques.



.    The agreement by third-party payors to provide full or even partial

reimbursement coverage for our products, the scope and extent of which will

affect patients willingness or ability to pay for our products and will likely

heavily influence physicians' decisions to recommend our products.  To date, no

third-party payors have been willing to reimburse patients for CardiaRisk.



.    The willingness of physicians and patients to utilize predictive

medicine products which are difficult to perform and interpret. This difficulty

is caused by a combination of factors, including the large number, sometimes

many hundreds, of different mutations in the genes which our tests analyze, the

need to characterize each specific mutation, and the ability of our products to

predict only as to a statistical probability, not certainty, that a tested

individual will develop the disease for which the test has been completed.



These factors present obstacles to significant commercial acceptance of our

products, which we will have to spend substantial time and money to overcome, if

we can do so at all. Our inability to successfully do so will harm our business.



If we do not compete effectively with scientific and commercial competitors, we

may not be able to successfully commercialize our products.



Research in the field of genomics and proteomics is intense and highly

competitive. This research is characterized by rapid technological change. Our

competitors in the United States and abroad are numerous and include, among

others, major pharmaceutical and diagnostic companies, biotechnology firms,

universities and other research institutions. Many of our potential competitors

have considerably greater financial, technical, marketing and other resources

than we do, which may allow these competitors to discover important genes and

determine their function before we do. We could be adversely affected if we do

not discover genes, proteins or protein pathways and characterize their

function, develop therapeutic and predictive medicine products based on these

discoveries, obtain regulatory and other approvals and launch these products and

their related services before our competitors. We also



17

expect to encounter significant competition with respect to any therapeutic or

predictive medicine products that we may develop or commercialize. Those

companies that complete clinical trials, obtain required regulatory approvals

and commence commercial sales of therapeutic products before we do may achieve a

significant competitive advantage in marketing and commercializing their

products. We may not be able to develop therapeutic or predictive medicine

products successfully and may not obtain patents covering these products that

provide protection against our competitors. Moreover, our competitors may

succeed in developing therapeutic or predictive medicine products that

circumvent our technologies or products. Or, our competitors may succeed in

developing technologies or products that are more effective than those developed

by us or that would render our technologies or products less competitive or

obsolete. We expect competition to intensify in the fields in which we are

involved as technical advances in these fields occur and become more widely

known.



If our current collaborators or scientific advisors terminate their

relationships with us or develop relationships with a competitor, our ability to

discover genes and commercialize therapeutic and predictive medicine products

could be adversely affected.



We have relationships with collaborators at academic and other institutions

who conduct research at our request. These collaborators are not our employees.

As a result, we have limited control over their activities and, except as

otherwise required by our collaboration agreements, can expect only limited

amounts of their time to be dedicated to our activities. We have established

collaborations with the University of Utah, Intermountain Health Care, and

Galileo Genomics, Inc. to pursue the discovery of genes involved in cancer,

cardiovascular disease, obesity, osteoporosis, asthma, and certain central

nervous system disorders. Our ability to discover genes, proteins, and protein

pathways involved in human disease and commercialize therapeutic and predictive

medicine products will depend in part on the continuation of these

collaborations. If any of these collaborations are terminated, we may not be

able to enter into other acceptable collaborations. In addition, our existing

collaborations may not be successful.



Our research collaborators and scientific advisors may have relationships

with other commercial entities, some or all of which could compete with us. Our

research collaborators and scientific advisors sign agreements which provide for

the confidentiality of our proprietary information and the results of studies

conducted at our request. We may not, however, be able to maintain the

confidentiality of our technology and other confidential information in

connection with every collaboration. The dissemination of our confidential

information could have a material adverse effect on our business.



If our current operating plan changes and we find that our existing capital

resources will not meet our needs, we may find it necessary to raise additional

funding, which funding may not be available.



We anticipate that our existing capital resources will enable us to

maintain currently planned operations for at least the next two years. However,

we base this expectation on our current operating plan, which may change. We

have incurred, and will continue to incur, significant costs in the discovery,

development and marketing of current and prospective therapeutic and predictive

medicine products. Our ongoing gene discovery programs and our efforts to

develop therapeutic and predictive medicine products will require substantial

cash resources. If, for example, a new disease gene is discovered through these

efforts, we would require funds in addition to our current operating plan to

develop and launch a new predictive medicine product. Additionally, if we

discover a new drug target with promising therapeutic properties, we would

require funding in addition to our current operating plan to move the candidate

drug into pre-clinical studies and human clinical trials. If, due to changes in

our current operating plan, adequate funds are not available, we may be required

to raise additional funds. Sources of additional capital resources include, but

are not limited to, public or private equity financings, establishing a credit

facility, or selling convertible debt securities. This additional funding may

not be available to us or, if available, it may not be on reasonable terms.



Because of our potential long-term capital requirements, we may access the

public or private equity markets whenever conditions are favorable, even if we

do not have an immediate need for additional capital at that time. If additional

funds are raised by issuing equity securities, existing shareholders may suffer

significant dilution.



18

If we are unable to comply with applicable governmental regulations, we may not

be able to continue our operations.



The establishment and operation of our predictive medicine laboratory and

the production and marketing of services and products developed through our

technologies, as well as our ongoing research and development activities, are

subject to regulation by numerous federal, state and local governmental

authorities in the United States and by comparable regulatory agencies in other

countries where we might seek to market services and products that may be

developed. On the state level, only New York has implemented regulations

concerning predictive medicine products and we have been accredited under the

Clinical Laboratory Evaluation Program by the Department of Health of the State

of New York for BRACAnalysis(R), CardiaRisk(R), and COLARIS(TM). Failure to

maintain state regulatory compliance, or changes in state regulatory schemes,

could result in a substantial curtailment or even prohibition of Myriad

Laboratories' clinical activities and could have a material adverse effect on

our business. We have received federal accreditation from the Department of

Health and Human Services under the Clinical Laboratory Improvement Amendments,

or CLIA, to operate our predictive medicine laboratory. However, our

accreditation may subsequently be revoked, suspended or limited, or our

accreditation may not be renewed on an annual basis as required. Furthermore,

while the FDA has elected not to substantially regulate the activities or

diagnostic tests performed by laboratories like our clinical laboratory, the FDA

has stated that it has the right to do so, and the FDA may seek to regulate or

require clearance or approval of our products in the future. If the FDA should

require that these products receive FDA approval prior to their use in our

laboratory, this approval may not be received on a timely basis, if at all.



If the FDA decides to regulate predictive medicine products, or if groups such

as insurance companies and employers discriminate against individuals with a

genetic predisposition to a disease, then demand for our predictive medicine

products may decrease.



Predictive medicine products have raised ethical issues regarding

confidentiality and the appropriate uses of information provided by these

products. For these reasons, governmental authorities place restrictions on, or

regulate the use of, predictive medicine products.  While largely prohibited

through federal and state laws, it is possible that discrimination by insurance

companies against patients shown to have a genetic predisposition to a

particular disease could occur through the raising of premiums by insurers to

prohibitive levels, outright cancellation of insurance or unwillingness to

provide coverage. We could experience a delay in market penetration or a

reduction in the size of our potential serviceable market, which would adversely

affect future revenue, if insurance discrimination were to become a significant

barrier to testing acceptance. Similarly, employers could discriminate against

employees with a genetic predisposition to a disease due to the increased risk

for disease resulting in possible cost increases for health insurance and the

potential for lost employment time. Any of these scenarios could cause us to

experience a delay or reduction in product acceptance, which could materially

adversely affect our business.



If we are not able to protect our proprietary technology, our business will be

harmed and we may not remain competitive.



Our success will depend, in part, on our ability to obtain patent

protection, both in the United States and in other countries, for genes we

discover, for the function of the protein produced by the genes and related

technologies, processes, methods and other inventions that we believe are

patentable. Our ability to preserve our trade secrets and other intellectual

property is also critical to our long-term success. The patent position of

biotechnology firms generally is highly uncertain and involves complex legal and

factual questions. To date there has not emerged from the United States Patent

and Trademark Office("PTO"), the United States courts, or from patent offices or

courts in foreign countries, a consistent policy regarding the breadth of claims

allowed in biotechnology patents. Our or our licensors' patent applications may

never issue as patents, and the claims of any issued patents may not afford

meaningful protection for our technology or products. In addition, any patents

issued to us or our licensors may be challenged, and subsequently narrowed,

invalidated or circumvented.



Our products may also conflict with patents that have been or may be

granted to others. As the biotechnology industry expands and more patent

applications are filed and patents are issued, the risk increases that our

products may give rise to a declaration of interference by the PTO, or to claims

of patent infringement by other companies, institutions or individuals. These

entities or persons could bring legal proceedings against us seeking damages or



19

seeking to enjoin us from testing, manufacturing or marketing our products.

Patent litigation is costly, and even if we prevail, the cost of such litigation

could have a material adverse effect on us. If the other parties in any such

actions are successful, in addition to any liability for damages, we could be

required to cease the infringing activity or obtain a license. Any license

required may not be available to us on acceptable terms, if at all. Our failure

to obtain a license to any technology that we may require to commercialize our

products could have a material adverse effect on our business. In addition,

there is considerable pressure on academic institutions to publish discoveries

in the genetic field. Such a publication by an academic collaborator of ours,

prior to the filing of a patent application on this discovery, may compromise

our ability to obtain U.S. and foreign patent protection for the discovery.



If a third party files a patent application with claims to a gene or

protein we have discovered, the PTO may declare an interference between

competing patent applications. If an interference is declared, we may not

prevail in the interference. If the other party prevails in the interference, we

may be precluded from commercializing services or products based on the gene or

protein, or may be required to seek a license. A license may not be available to

us on commercially acceptable terms, if at all.



We also rely upon unpatented proprietary technologies. We may not be able

to adequately protect our rights in such unpatented proprietary technologies,

which could have a material adverse effect on our business. For example, others

may independently develop substantially equivalent proprietary information or

techniques or otherwise gain access to our proprietary technologies or disclose

our technologies to our competitors.



If we were sued for patent infringement by third parties, we might incur

significant costs and delays in product introduction.



Our industry includes many organizations seeking to rapidly identify and

characterize genes through the use of gene expression analysis and other

technologies. To the extent any patents are issued to those organizations on

partial or full-length genes or uses for such genes, the risk increases that the

sale of our predictive medicine products currently being marketed or under

development, and any sales of therapeutic drugs developed by us, may give rise

to claims of patent infringement. Others may have filed and in the future are

likely to file patent applications covering genes or gene products that are

similar or identical to our products. Any of these patent applications may have

priority over our patent applications. Any legal action against us or our

collaborators claiming damages and seeking to enjoin commercial activities

relating to the affected products and processes could, in addition to subjecting

us to potential liability for damages, require us or our collaborators to obtain

a license in order to continue to manufacture or market the affected products

and processes or could enjoin us from continuing to manufacture or market the

affected products and processes, thereby significantly increasing our costs

associated with, and significantly delaying, product introduction and marketing.

We may not prevail in any of these actions and any license required under any of

these patents may not be available on commercially acceptable terms, if at all.

We believe that there may be significant litigation in the industry regarding

patent and other intellectual property rights. If we become involved in this

litigation, it could consume a substantial portion of our managerial and

financial resources.



If we fail to retain our key personnel and hire, train and retain qualified

employees and consultants, we may not be able to successfully continue our

business.



Because of the specialized scientific nature of our business, we are highly

dependent upon our ability to attract and retain qualified management,

scientific and technical personnel. We are currently recruiting additional

qualified management, scientific and technical personnel. Competition for such

personnel is intense. Loss of the services of or failure to recruit additional

key management, scientific and technical personnel would adversely affect our

research and development programs and predictive medicine business and may have

a material adverse effect on our business as a whole.



Our agreements with our employees generally provide for employment that can

be terminated by either party without cause at any time, subject to specified

notice requirements. Further, the non-competition provision to which each

employee is subject expires on the applicable date of termination of employment.



20

We depend on a limited number of third parties for some of our supplies of

equipment and reagents. If these supplies become unavailable, then we may not be

able to successfully perform our research or operate our business at all or on a

timely basis.



We currently rely on two suppliers to provide our gene sequencing machines

and reagents required in connection with our research. We believe that currently

there are limited alternative suppliers of gene sequencing machines and

reagents. The gene sequencing machines or the reagents may not remain available

in commercial quantities at acceptable costs. If we are unable to obtain when

needed additional gene sequencing machines or an adequate supply of reagents or

other ingredients at commercially reasonable rates, our ability to continue to

identify genes and perform molecular diagnostic testing would be adversely

affected.



If we were successfully sued for product liability, we could face substantial

liabilities that exceed our resources.



Our business exposes us to potential liability risks inherent in the

testing, marketing and processing of predictive medicine products, including

possible misdiagnoses. Although we are insured against such risks up to a

$13,000,000 annual aggregate limit in connection with the use of our products,

our present product liability insurance may be inadequate. A successful product

liability claim in excess of our insurance coverage could have a material

adverse effect on our business. Any successful product liability claim may

prevent us from obtaining adequate product liability insurance in the future on

commercially desirable or reasonable terms. An inability to obtain sufficient

insurance coverage at an acceptable cost or otherwise to protect against

potential product liability claims could prevent or inhibit the

commercialization of our products. Our business also may expose us to liability

inherent in the testing, manufacturing and marketing of prospective therapeutic

products. Liability claims may be asserted against us. We have obtained product

liability and other related insurance, but we may not be able to maintain this

insurance on acceptable terms.



Our business involves environmental risks that may result in liability for us.



In connection with our research and development activities, we are subject

to federal, state and local laws, rules, regulations and policies governing the

use, generation, manufacture, storage, air emission, effluent discharge,

handling and disposal of certain materials, biological specimens and wastes.

Although we believe that we have complied with the applicable laws, regulations

and policies in all material respects and have not been required to correct any

material noncompliance, we may be required to incur significant costs to comply

with environmental and health and safety regulations in the future. Although we

believe that our safety procedures for handling and disposing of controlled

materials comply with the standards prescribed by state and federal regulations,

accidental contamination or injury from these materials may occur. In the event

of such an occurrence, we could be held liable for any damages that result and

any such liability could exceed our resources.



Our stock price is highly volatile and our stock may lose all or a significant

part of its value.



The market prices for securities of biotechnology and genomic companies

have been volatile. This volatility has significantly affected the market prices

for these securities for reasons frequently unrelated to the operating

performance of the specific companies. These broad market fluctuations may

adversely affect the market price of our common stock. The market price for our

common stock has fluctuated significantly since public trading commenced in

October 1995, and it is likely that the market price will continue to fluctuate

in the future. In addition, the stock market has experienced extreme price and

volume fluctuations. Events or factors that may have a significant impact on our

business and on the market price of our common stock include the following:



.    quarterly fluctuations in operating results;



.    announcements by us, our collaborative partners or our present or

potential competitors;



.    technological innovations or new commercial products or services;



.    regulatory approval developments;







21

.    developments or disputes concerning patent or proprietary rights;



.    public concern regarding the safety, efficacy or other implications of

our products or services; or



.    general market conditions out of our control.





Item 2.   FACILITIES



Our headquarters and facilities are located in Salt Lake City, Utah. We

currently lease a 92,000 square foot building dedicated to research and

development, administration and laboratory space that has received federal

certification under CLIA. Activity related to our research, drug development and

predictive medicine segments is performed at this location. We have also

committed to lease a 57,000 square foot building which is currently under

construction.  This new structure will be attached to our current facility.

Additionally, we lease 6,440 square feet for various research support functions.

The lease on our primary facility has a term of ten years, and provides for a

renewal option for a term of up to ten additional years.



We believe that our existing facilities and equipment are well maintained

and in good working condition. We believe our current facilities will provide

adequate capacity for the foreseeable future. We continue to make investments in

capital equipment as needed to meet the research requirements of our

collaborative agreements, our drug development requirements, and the anticipated

demand for our predictive medicine products.





Item 3.  LEGAL PROCEEDINGS



We are not a party to any material legal proceedings.





Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



No matters were submitted during the fourth quarter of the year ended June

30, 2001.



22

PART II



Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS



Market Information



The Company's Common Stock began trading on the Nasdaq National Market on

October 6, 1995 under the symbol "MYGN". The following table sets forth, for the

last two fiscal years, the high and low sales prices for the Common Stock, as

reported by the Nasdaq National Market:



<TABLE>

High         Low

----         ---

<S>                                            <C>          <C>

Fiscal 2001:

Fourth Quarter.....................  $  79.85     $ 29.50

Third Quarter......................  $  81.75     $ 31.25

Second Quarter.....................  $ 138.00     $67.188

First Quarter......................  $ 92.813     $ 53.00

Fiscal 2000:

Fourth Quarter.....................  $ 76.063     $ 19.00

Third Quarter......................  $116.063     $21.313

Second Quarter.....................  $ 25.375     $  8.25

First Quarter......................  $   9.75     $ 4.323

</TABLE>



As of September 1, 2001, there were approximately 141 stockholders of

record of the Common Stock and, according to the Company's estimates,

approximately 13,762 beneficial owners of the Common Stock.  The Company has not

paid dividends to its stockholders since its inception and does not plan to pay

cash dividends in the foreseeable future.  The Company currently intends to

retain earnings, if any, to finance the growth of the Company.



Sale of Unregistered Securities



None.



23

Item 6.  SELECTED CONSOLIDATED FINANCIAL DATA



The following table sets forth our consolidated financial data as of and

for each of the five years ended June 30, 2001.  The selected consolidated

financial data as of and for each of the five years ended June 30, 2001 have

been derived from our consolidated financial statements.  The consolidated

financial statements and the report thereon for the year ended June 30, 2001 are

included elsewhere in this Annual Report on Form 10-K.  The information below

should be read in conjunction with the consolidated financial statements (and

notes thereon) and "Management's Discussion and Analysis of Financial Condition

and Results of Operations," included in Item 7.





<TABLE>

<CAPTION>

Years Ended June 30,

--------------------------------------------------------------------------------

2001             2000             1999             1998             1997

----             ----             ----             ----             ----

<S>                                         <C>              <C>              <C>              <C>              <C>

Consolidated Statement

of Operations Data:

Research revenue..........................  $ 28,071,252     $ 25,219,766     $ 20,093,057     $ 20,999,598     $ 14,732,054

Predictive medicine revenue...............    17,091,139        8,793,272        5,220,349        2,210,983          504,045

------------     ------------     ------------     ------------     ------------

Total revenues........................    45,162,391       34,013,038       25,313,406       23,210,581       15,236,099

Costs and expenses:

Predictive medicine cost of revenue.....     7,402,906        3,986,473        3,066,354        1,391,368          340,461

Research and development expense........    33,818,144       28,098,769       23,452,220       23,002,340       18,580,229

Selling, general and administrative

expense..............................    17,077,846       13,474,923       11,105,520       11,807,023        8,755,217

------------     ------------     ------------     ------------     ------------

Total costs and expenses..............    58,298,896       45,560,165       37,624,094       36,200,731       27,675,907

------------     ------------     ------------     ------------     ------------

Operating loss........................   (13,136,505)     (11,547,127)     (12,310,688)     (12,990,150)     (12,439,808)

Other income (expense):

Interest income.........................     6,850,479        3,208,506        2,348,827        3,223,683        3,414,379

Interest expense........................            --               --           (6,278)         (32,681)         (66,661)

Other...................................      (305,134)        (383,481)         (27,314)           2,113         (114,190)

------------     ------------     ------------     ------------     ------------

Net loss before income taxes.........    (6,591,160)     ($8,722,102)     ($9,995,453)     ($9,797,035)     ($9,206,280)



Income taxes..............................      (583,333)              --               --               --               --

------------     ------------     ------------     ------------     ------------

Net loss..............................   ($7,174,493)     ($8,722,102)     ($9,995,453)     ($9,797,035)     ($9,206,280)

============     ============     ============     ============     ============



Basic and diluted net loss per share......        ($0.31)          ($0.43)          ($0.53)          ($0.53)          ($0.52)

============     ============     ============     ============     ============

Basic and diluted weighted average shares

outstanding..............................    22,815,035       20,220,446       18,782,244       18,578,962       17,807,836

============     ============     ============     ============     ============



As of June 30,

--------------------------------------------------------------------------------

2001             2000             1999             1998             1997

----             ----             ----             ----             ----

Consolidated Balance

Sheet Data:

Cash, cash equivalents and

marketable investment securities......  $145,954,968     $ 88,655,844     $ 38,926,459     $ 53,109,493     $ 63,077,439

Working capital.........................   104,615,236       57,263,118        8,348,224       21,806,290       38,796,960

Total assets............................   172,145,355      106,375,305       53,550,940       67,391,972       76,063,331

Notes payable less current

portion...............................            --               --               --               --          128,844

Stockholders' equity.....................   139,561,798       77,706,647       48,215,736       57,481,013       66,178,975

</TABLE>



24

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATION



Overview



We are a leading biopharmaceutical company focused on the development and

marketing of novel therapeutic and predictive medicine products. We have

developed a number of proprietary proteomic technologies which permit us to

identify genes, their related proteins and the biological pathways they form.

We use this information to better understand the role proteins play in the onset

and progression of human disease. We operate two wholly owned subsidiaries,

Myriad Pharmaceuticals, Inc. and Myriad Genetic Laboratories, Inc., to

commercialize our therapeutic and predictive medicine discoveries.  Myriad

Pharmaceuticals, Inc. develops and intends to market novel therapeutic products.

Myriad Genetic Laboratories, Inc. focuses on the development and marketing of

predictive medicine products that assess an individual's risk of developing a

specific disease.



Myriad researchers have made important discoveries in the fields of cancer,

viral diseases such as AIDS, and acute thrombosis.  These discoveries point to

novel disease pathways and have paved the way for the development of new drugs.

Additionally, our pipeline of drug targets offers therapeutic opportunities for

the treatment of diseases such as heart disease, rheumatoid arthritis,

Alzheimer's Disease and other central nervous system disorders.  We have

identified 141 drug targets to date.  We have also established a portfolio of 12

drug candidates that are under development at Myriad.  Four of these drug

candidates are in pre-clinical testing, while our lead therapeutic product for

the treatment of prostate cancer recently completed a phase II human clinical

trial.  We intend to independently develop and, subject to regulatory approval,

market our therapeutic products, particularly in the area of cancer and

infectious diseases.



We also have developed and commercialized three innovative predictive

medicine products: BRACAnalysis, which is used to assess a woman's risk of

developing breast and ovarian cancer, COLARIS, which is used to determine a

person's risk of developing colon cancer, and CardiaRisk, which is used for

therapeutic management of hypertensive patients. We market these products using

our own internal 75 person sales force in the United States and we have entered

into marketing collaborations with other organizations in Austria, Canada,

Germany, Japan and Switzerland. Revenues from these proprietary products grew

approximately 94% from the prior year to $17.1 million in the fiscal year ended

June 30, 2001.



We believe that the future of medicine lies in the creation of new classes

of drugs that prevent disease from occurring or progressing and that treat the

cause, not just the symptoms, of disease. In addition, we believe that advances

in the emerging field of predictive medicine will improve our ability to

determine which patients are subject to a greater risk of developing these

diseases and who therefore should receive these new preventive medicines.



We have devoted substantially all of our resources to maintaining our

research and development programs, undertaking drug discovery and development,

and operating our predictive medicine business. Our revenues have consisted

primarily of research payments received pursuant to collaborative agreements,

upfront fees, milestone payments, and sales of predictive medicine products. We

have yet to attain profitability and, for the year ended June 30, 2001, we had a

net loss of $7,174,493 and as of June 30, 2001 had an accumulated deficit of

$59,836,475.



We have formed strategic alliances with 10 major pharmaceutical or

multinational companies including Bayer Corporation, Eli Lilly and Company,

Novartis Corporation, Hoffmann-LaRoche Inc., Pharmacia Corporation, Schering-

Plough Corporation, Schering AG, Hitachi Ltd., Oracle Corporation, and Torrey

Mesa Research Institute, formerly known as Novartis Agricultural Discovery

Institute. We intend to enter into additional collaborative relationships to

discover genes, proteins, and protein networks associated with common diseases

as well as to continue to fund internal research projects.  However, we may be

unable to enter into additional collaborative relationships on terms acceptable

to us.



In April 2001, we announced the formation of Myriad Proteomics, Inc., a new

venture with Hitachi, Ltd. and Oracle Corporation to map the human proteome.

Myriad Proteomics, which is 50 percent owned by the Company,



25

intends to market a proprietary map of the human proteome to pharmaceutical and

biotechnology companies for therapeutic and diagnostic product development. We

have a perpetual, subscription free right to study all of the data generated by

Myriad Proteomics for our own internal drug development and predictive medicine

programs.



We expect to incur losses for at least the next several years, primarily

due to expansion of our research and development programs, expansion of our drug

discovery and development efforts, launch of new predictive medicine products,

and expansion of our facilities. Additionally, we expect to incur substantial

sales, marketing and other expenses in connection with building our predictive

medicine business. We expect that losses will fluctuate from quarter to quarter

and that such fluctuations may be substantial.





RESULTS OF OPERATIONS



Years ended June 30, 2001 and 2000.



Research revenues for our fiscal year ended June 30, 2001 were $28,071,252

as compared to $25,219,766 for the fiscal year ended June 30, 2000. The increase

in our research revenue of 11% is primarily attributable to increased revenue

recognized from both our Hitachi and TMRI collaborations. Research revenue from

our research collaboration agreements is generally recognized as related costs

are incurred. Consequently, as these programs progress and costs increase or

decrease, revenues increase or decrease proportionately.



Predictive medicine revenues of $17,091,139 were recognized in the fiscal

year ended June 30, 2001, an increase of 94% or $8,297,867 over the prior year.

Predictive medicine revenue is comprised of sales of predictive medicine

products resulting from our discovery of important disease genes.  The

successful launch of COLARIS, as well as increased sales and marketing efforts,

together with wider acceptance of our products by the medical community, have

given rise to the increased revenues for the fiscal year ended June 30, 2001.

However, there can be no assurance that predictive medicine revenues will

continue to increase at historical rates.



Research and development expenses for the year ended June 30, 2001

increased to $33,818,144 from $28,098,769 for the prior year, an increase of

20%. This increase was primarily due to an increase in the drug discovery and

drug development efforts of Myriad Pharmaceuticals, Inc., our wholly-owned

subsidiary, as well as research activities relating to our strategic

collaborations.



Selling, general and administrative expenses for the fiscal year ended June

30, 2001 were $17,077,846 compared to $13,474,923 for the fiscal year ended June

30, 2000.  This increase of 27% was primarily attributable to costs associated

with the ongoing promotion of our predictive medicine business, including the

launch of COLARIS, that was introduced in September 2000.  We have also

bolstered our sales force to 75 full time employees, which will allow us to

increase awareness of our predictive medicine business through direct contact

with health care professionals.  We expect that our selling, general and

administrative expenses will continue to fluctuate as needed in support of our

predictive medicine business and our drug discovery and development efforts.



Cash, cash equivalents, and marketable investment securities increased

$57,299,124, or 65%, from $88,655,844 at June 30, 2000 to $145,954,968 at June

30, 2001.  This increase in our cash, cash equivalents and marketable investment

securities was primarily attributable to the sale of approximately $68,581,000

of our Common Stock in private placements during the year, as well as receipt of

approximately $10,000,000 from license fees and milestone payments. As a result

of our increased cash position, interest income for the fiscal year ended June

30, 2001 was $6,850,479 compared to $3,208,506 for the fiscal year ended June

30, 2000, an increase of 114%.   The loss on disposition of assets of $305,134

in the fiscal year ended June 30, 2001 was primarily the result of our retiring

unproductive assets.



Years ended June 30, 2000 and 1999.



Research revenues for our fiscal year ended June 30, 2000 were $25,219,766

as compared to $20,093,057 for the fiscal year ended June 30, 1999. The increase

of 26% in our research revenue was primarily attributable to revenue recognized

from the TMRI collaboration that began in July 1999, the Roche collaboration

which began in December 1999, and the Hitachi collaboration which began in May

2000. Research revenue from our research



26

collaborations is generally recognized as related costs are incurred.

Consequently, as these programs progress and costs increase or decrease,

revenues increase or decrease proportionately.



Predictive medicine revenues of $8,793,272 were recognized in the fiscal

year ended June 30, 2000, an increase of 68% or $3,572,923 over the prior year.

Predictive medicine revenue is comprised of sales of predictive medicine

products resulting from our discovery of disease genes. Sales and marketing

efforts, together with increased demand as a result of wider acceptance of our

products by the medical community, gave rise to the increased revenues for the

fiscal year ended June 30, 2000. There can be no assurance, however that

predictive medicine revenues will continue to increase at historical rates.



Research and development expenses for the year ended June 30, 2000

increased to $28,098,769 from $23,452,220 for the prior year, an increase of

20%. This increase was primarily due to an increase in research activities as a

result of our collaborations with TMRI, Roche, and Hitachi as well as those

programs we funded internally. The increased level of research spending also

included the ongoing drug discovery efforts of Myriad Pharmaceuticals, our

wholly-owned subsidiary, continued development and utilization of ProNet, and

third-party sponsored research programs.



Selling, general and administrative expenses for the fiscal year ended June

30, 2000 were $13,474,923 compared to $11,105,520 for the fiscal year ended June

30, 1999. This increase of 21% was primarily attributable to costs associated

with the ongoing promotion of our predictive medicine business, including

preparations for the launch of COLARIS, a predictive medicine test for

hereditary colon and uterine cancer launched in September 2000. Increased costs

also resulted from the establishment of international license agreements and the

related costs of increasing our infrastructure to support our increased

predictive medicine business. We expect our selling, general and administrative

expenses will continue to fluctuate as needed in support of our predictive

medicine business and our research and development efforts.



Cash, cash equivalents, and marketable investment securities were

$88,655,844 at June 30, 2000 as compared to $38,926,459 at June 30, 1999. This

increase of approximately $49,750,000 in our cash, cash equivalents and

marketable investment securities was primarily attributable to the private sale

of approximately $34,000,0000 of our Common Stock during the fiscal year ended

June 30, 2000, as well as receipt of $500,000 from license payments, $1,000,000

in non-recurring milestone payments and approximately $44,000,000 in research

payments from our collaborators. These cash receipts were offset by expenditures

we incurred in the ordinary course of business. As a result of our increased

cash position, interest income for the fiscal year ended June 30, 2000 was

$3,208,506 as compared to $2,348,827 for the fiscal year ended June 30, 1999.

The loss on disposition of assets of $383,481 in the fiscal year ended June 30,

2000 was primarily the result of our retiring unproductive assets.



LIQUIDITY AND CAPITAL RESOURCES



Net cash used in operating activities was $3,775,307 during the fiscal year

ended June 30, 2001 as compared to $17,163,535 provided by operating activities

during the prior year. Deferred revenue, representing the difference in

collaborative research payments we have received and research revenue which we

have recognized, increased by $342,932 during the fiscal year ended June 30,

2001, as compared to an increase of $18,837,682 during the fiscal year ended

June 30, 2000 due to upfront payments from TMRI and Hitachi. Trade receivables

increased $1,392,216 between June 30, 2000 and June 30, 2001. This increase is

primarily attributable to the 94% increase in predictive medicine revenue during

fiscal 2001. Trade receivables as a percentage of predictive medicine revenue

has dropped to 21% at June 30, 2001 compared to 27% at June 30, 2000 as a result

of our continuing effort to improve collections. Related party receivables

increased $1,811,517 during the fiscal year ended June 30, 2001 as a result of

our performing work, both scientific and administrative, for Myriad Proteomics,

Inc. Prepaid expenses increased $1,540,053 during the fiscal year ended June 30,

2001, which included advance payments to purchase lab supplies at a discount,

advanced royalties, and insurance premiums. Accounts payable and accrued

expenses increased by $3,571,968 during the fiscal year ended June 30, 2001 as a

result of our efforts to manage cash flows and extend payment terms.



The Company's investing activities used $85,083,233 of cash in the fiscal

year ended June 30, 2001 and $4,335,576 in the fiscal year ended June 30, 2000.

Investing activities were comprised primarily of net purchases of $77,128,020 of

marketable investment securities using cash received from private equity

placements, license fees



27

and milestone payments, and predictive medicine sales during the fiscal year

ended June 30, 2001. These funds were invested in accordance with our investment

guidelines as established by our Board of Directors. Additional investing

activities included capital expenditures of $5,255,213 for research equipment

and facility improvements, and a $2,700,000 equity investment in a privately

held biopharmaceutical company.



Financing activities provided $68,580,621 during the fiscal year ended June

30, 2001.  In August 2000, we sold 350,000 shares of Common Stock in a private

placement for an aggregate purchase price of $22,000,000.  In October 2000 we

sold an additional 400,000 shares of Common Stock in a private placement for an

aggregate purchase price of $41,000,000.  We subsequently registered these

750,000 shares with the Securities and Exchange Commission, as required under

the stock purchase agreements.  Additional cash was provided from the exercise

of stock options during the fiscal year ended June 30, 2001.



We believe that with our existing capital resources, we will have adequate

funds to maintain our current and planned operations for at least the next two

years, although no assurance can be given that changes will not occur that would

consume available capital resources before such time. Our future capital

requirements will be substantial and will depend on many factors, including:



.    the progress of our research and development programs;



.    the progress of our drug discovery and drug development programs;



.    the cost of developing and launching additional predictive medicine

products;



.    the costs of filing, prosecuting and enforcing patent claims;



.    the costs associated with competing technological and market

developments;



.    the payments received under collaborative agreements and changes in

collaborative research relationships;



.    the costs associated with potential commercialization of our

discoveries, if any, including the development of manufacturing,

marketing and sales capabilities; and



.    the cost and availability of third-party financing for capital

expenditures and administrative and legal expenses.



Because of our significant long-term capital requirements, we intend to

raise funds when conditions are favorable, even if we do not have an immediate

need for additional capital at such time.



Effects of Inflation



We do not believe that inflation has had a material impact on our business,

sales, or operating results during the periods presented.





Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



The Company maintains an investment portfolio in accordance with its

Investment Policy.  The primary objectives of the Company's Investment Policy

are to preserve principal, maintain proper liquidity to meet operating needs and

maximize yields.  The Company's Investment Policy specifies credit quality

standards for the Company's investments and limits the amount of credit exposure

to any single issue, issuer or type of investment.



The Company's investments consist of securities of various types and

maturities of three years or less, with a maximum average maturity of 12 months.

These securities are classified either as available-for-sale or held-to-

maturity.  Available-for-sale securities are recorded on the balance sheet at

fair market value with unrealized gains or losses reported as part of

accumulated other comprehensive loss.  Held-to-maturity securities are recorded

at



28

amortized cost, adjusted for the amortization or accretion of premiums or

discounts. Gains and losses on investment security transactions are reported on

the specific-identification method. Dividend and interest income are recognized

when earned. A decline in the market value of any available-for-sale or held-to-

maturity security below cost that is deemed other than temporary results in a

charge to earnings and establishes a new cost basis for the security. Premiums

and discounts are amortized or accreted over the life of the related held-to-

maturity security as an adjustment to yield using the effective-interest method.



The securities held in the Company's investment portfolio are subject to

interest rate risk.  Changes in interest rates affect the fair market value of

the available-for-sale securities.  After a review of the Company's marketable

securities as of June 30, 2001, the Company has determined that in the event of

a hypothetical ten percent increase in interest rates, the resulting decrease in

fair market value of the Company's marketable investment securities would be

insignificant to the consolidated financial statements as a whole.



Certain Factors That May Affect Future Results of Operations



The Securities and Exchange Commission encourages companies to disclose

forward-looking information so that investors can better understand a company's

future prospects and make informed investment decisions.  This Annual Report

contains such "forward-looking statements" within the meaning of the Private

Securities Litigation Reform Act of 1995.  These statements may be made directly

in this Annual Report, and they may also be made a part of this Annual Report by

reference to other documents filed with the Securities and Exchange Commission,

which is known as "incorporation by reference."



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

from those described in the forward-looking statements. These risks and

uncertainties include, among other things: our inability to further identify,

develop and achieve commercial success for new products and technologies; the

possibility of delays in the research and development necessary to select drug

development candidates and delays in clinical trials; the risk that clinical

trials may not result in marketable products; the risk that we may be unable to

successfully finance and secure regulatory approval of and market our drug

candidates; our dependence upon pharmaceutical and biotechnology collaborations;

the levels and timing of payments under our collaborative agreements;

uncertainties about our ability to obtain new corporate collaborations and

acquire new technologies on satisfactory terms, if at all; the development of

competing systems; our ability to protect our proprietary technologies; patent-

infringement claims; and risks of new, changing and competitive technologies and

regulations in the United States and internationally.  Please also see the

discussion of risks and uncertainties under "Risk Factors" in Item 1 of this

Report.



In light of these assumptions, risks and uncertainties, the results and

events discussed in the forward-looking statements contained in this Annual

Report or in any document incorporated by reference might not occur.

Stockholders are cautioned not to place undue reliance on the forward-looking

statements, which speak only of the date of this Annual Report or the date of

the document incorporated by reference in this Annual Report.  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

the Company 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.



29

Item 8.   FINANCIAL STATEMENTS



<TABLE>

<CAPTION>

MYRIAD GENETICS, INC.

Index to Financial Statements                                                                    Number

-----------------------------                                                                    ------

<S>                                                                                                   <C>

Independent Auditors' Report....................................................................  F-1

Consolidated Balance Sheets as of June 30, 2001 and 2000........................................  F-2

Consolidated Statements of Operations for the Years Ended June 30, 2001, 2000 and 1999..........  F-3

Consolidated Statements of Stockholders' Equity and Comprehensive Loss for the Years Ended

June 30, 2001, 2000 and 1999...............................................................  F-4

Consolidated Statements of Cash Flows for the Years Ended June 30, 2001, 2000 and 1999..........  F-6

Notes to Consolidated Financial Statements......................................................  F-7

</TABLE>



Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE



Not applicable.



30

PART III





Item 10.  DIRECTORS AND OFFICERS OF THE REGISTRANT



The response to this item is incorporated by reference from the discussion

responsive thereto under the captions "Management" and "Section 16(a) Beneficial

Ownership Reporting Compliance" in the Company's Proxy Statement for the 2001

Annual Meeting of Stockholders to be held on November 8, 2001.





Item 11.  EXECUTIVE COMPENSATION



The response to this item is incorporated by reference from the discussion

responsive thereto under the caption "Executive Compensation" in the Company's

Proxy Statement for the 2001 Annual Meeting of Stockholders to be held on

November 8, 2001.





Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The response to this item is incorporated by reference from the discussion

responsive thereto under the caption "Security Ownership of Certain Beneficial

Owners and Management" in the Company's Proxy Statement for the 2001 Annual

Meeting of Stockholders to be held on November 8, 2001.





Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



The response to this item is incorporated by reference from the discussion

responsive thereto under the caption "Executive Compensation--Employment

Agreements, Termination of Employment and Change of Control Arrangements" in the

Company's Proxy Statement for the 2001 Annual Meeting of Stockholders to be held

on November 8, 2001.



31

PART IV



Item 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K



Item 14(a).    The following documents are filed as part of this annual report

on Form 10-K.





Item 14(a)(1). See "Index to Consolidated Financial Statements and Financial

and (2)        Statement Schedules" at Item 8 to this Annual Report on Form 10-

K. Other financial statement schedules have not been included

because they are not applicable or the information is included in

the financial statements or notes thereto.



Item 14(a)(3)  Exhibits

--------



The following is a list of exhibits filed as part of this Annual

Report on Form 10-K.



Exhibit

Number      Description

------      -----------

<TABLE>

<CAPTION>

<S>          <C>

(3.1 (a))    -Restated Certificate of Incorporation of the Registrant

(3.1 (b))    -Certificate of Amendment of Restated Certificate of Incorporation

(3.1 (c))    -Certificate of Designations

(3.2)p       -Restated By-Laws of the Registrant (Filed as Exhibit 3.2)

(4.1)        -See Exhibits 3.1(a), 3.1(b), 3.1(c) and 3.2

(4.2)        -Form of Common Stock Certificate

(4.3)g       -Rights Agreement, dated as of July 17, 2001, between the

Registrant and Mellon Investor Services LLC (Filed as Exhibit 4.1)

(10.1)$      -1992 Employee, Director and Consultant Stock Option Plan as

amended and restated September 20, 2001

(10.2)*$     -Employee Stock Purchase Plan (Filed as Exhibit 10.2)

(10.3)*$     -Employment Agreement between Myriad Genetics, Inc., Myriad Genetic

Laboratories, Inc. and Peter D. Meldrum, dated May 15, 1993 (Filed

as Exhibit 10.3)

(10.4)*$     -Employment Agreement between Myriad Genetics, Inc., Myriad Genetic

Laboratories, Inc. and Mark H. Skolnick, Ph.D., dated January 1,

1994 (Filed as Exhibit 10.4)

(10.5)*$     -Employment Agreement between Myriad Genetics, Inc., Myriad Genetic Laboratories, Inc. and

Jay M. Moyes, dated July 12, 1993 (Filed as Exhibit 10.5)

(10.6)#      -Collaborative Research and License Agreement between the Registrant and Novartis

Corporation, dated April 27, 1995 (Cardiovascular Diseases) (Filed as Exhibit 10.10)

(10.7)#      -Research Collaboration and License Agreement between the Registrant, Eli Lilly & Company

and Hybritech Incorporated, dated August 1, 1992 (Breast Cancer--BRCA1) (Filed as Exhibit 10.11)

(10.8)#      -Collaborative Agreement between the Registrant and Hybritech Incorporated, dated March 5,

1993 (BRCA1 Test Kits) (Filed as Exhibit 10.12)

(10.9)#      -Exclusive License Agreement between the Registrant and the University of Utah Research Foun-

dation, dated October 8, 1991, as amended (Breast Cancer--BRCA1) (Filed as Exhibit 10.13)

(10.10)#     -Standard Research Agreement and Form of License Agreement between the Registrant and the

University of Utah, effective January 1, 1993, as amended (Genes Predisposing to Cancer)

(Filed as Exhibit 10.14)

(10.11)#     -Exclusive License Agreement between the Registrant and the University of Utah Research

Foundation, dated August 4, 1993 (Angiotensinogen Variants and Predisposition to

Hypertension) (Filed as Exhibit 10.15)

(10.12)#     -Exclusive License Agreement between the Registrant and the University of Utah Research

Foundation, dated June 21, 1994 (MTS1 or p16) (Filed as Exhibit 10.16)

(10.13)#     -Exclusive License Agreement between the Registrant and the University of Utah Research

Foundation, dated November 23, 1994 (Breast Cancer--BRCA2) (Filed as Exhibit 10.17)

(10.14)#     -Standard Research Agreement dated May 1, 1995 between the Registrant and the University of

</TABLE>



32

<TABLE>

<CAPTION>

<S>          <C>

Utah (Cardiovascular Disorders and Coronary Heart Disease Database) (Filed as Exhibit 10.18)

(10.15)#     -Exclusive License Agreement dated May 1, 1995 between the Registrant and the University of

Utah Research Foundation (Cardiovascular Disorders and Coronary Heart Disease Database)

(Filed as Exhibit 10.19)

(10.16)#     -Standard Research Agreement dated July 31, 1995 between the Registrant and the University of

Utah (Obesity Database) (Filed as Exhibit 10.20)

(10.17)#     -Exclusive License Agreement dated July 31, 1995 between the Registrant and the University of

Utah Research Foundation (Obesity Database) (Filed as Exhibit 10.21)

(10.18)#     -Co-Exclusive License Agreement among the Registrant, the University of Utah Research

Foundation and Institut National de la Sante et de la Recherche Medicale, dated October 6,

1993 (Angiotensinogen and Predisposition to Essential Hypertension) (Filed as Exhibit 10.22)

(10.19)#     -License Agreement between the Registrant and California Institute of Technology, dated

April 21, 1994 (MTS1 or p16) (Filed as Exhibit 10.23)

(10.20)*     -Research Agreement between the Registrant and California Institute of Technology, dated

June 3, 1994 (MTS1 or p16) (Filed as Exhibit 10.24)

(10.21)#     -Collaborative Research and License Agreement between the Registrant and Bayer Corporation,

dated September 11, 1995 (Filed as Exhibit 10.28)

(10.22)z@     Research Agreement between the Registrant and IHC Health Services, Inc., dated as

of June 24, 1996

(10.23)!     -Lease Agreement, dated October 12, 1995, between the Boyer Research Park Associates V, by its

general partner, the Boyer Company and the Registrant (Filed as Exhibit 10.2)

(10.24)!     -Amendment to Lease Agreement, dated March 29, 1996 between the Boyer Research Park Associates V,

by its general partner, the Boyer Company and the Registrant (Filed as Exhibit 10.3)

(10.25)!@    -Letter Agreement, dated March 4, 1996, among the University of Utah, Genetic Epidemiology and

the Registrant regarding Extension of Standard Research agreement and Form of License Agreement

between the Registrant and the University of Utah, effective January 1, 1993, as amended (Genes

Predisposing to Cancer) (Filed as Exhibit 10.4)

(10.26)q@    -Patent and Technology License Agreement dated December 2, 1996 among the Board of Regents of the

University of Texas System, the University of Texas M.D. Anderson Cancer Center and the

Registrant (Filed as Exhibit 10.1)

(10.27)=@    -Collaborative Research and License Agreement among the Registrant, Schering Corporation and

Schering-Plough, Ltd., dated April 22, 1997 (Prostate and Other Cancers) (Filed as Exhibit 10.36)

(10.28)++@   -Standard Research Agreement between the Company and Valley Mental Health dated September 1, 1997

(central nervous system disorders) (Filed as Exhibit 10.1)

(10.29)%@    -Amendment and Supplement to Collaborative Research and License Agreement dated November 19, 1997

between Bayer Corporation and the Registrant (Filed as Exhibit 10.1)

(10.30)k     -Lease Agreement-Research Park Building Phase II, dated March 6, 1998, between the Research Park

Associated VI, by its general partner, the Boyer Company, L.C. and the Registrant

(10.31)&     -Memorandum of Lease between the Company and Boyer Foothill Associates, Ltd. dated August 24,

1998 (Filed as Exhibit 10.1)

(10.32)&     -Memorandum of Lease between the Company and Boyer Research Park Associates VI, L.C. dated August

24, 1998 (Filed as Exhibit 10.2)

(10.33)&     -Subordination Agreement and Estoppel, Attornment and Non-Disturbance Agreement (Lease to Deed of

Trust) between the Company and Wells Fargo Bank, National Association dated June 24, 1998 (Filed

as Exhibit 10.3)

(10.34)w     -Master Lease Agreement dated December 31, 1998 between General Electric Capital Corporation and

the Company (Filed as Exhibit 10.1)

(10.35)w     -Addendum No. 1 to Master Lease Agreement dated December 31, 1998 between General Electric

Capital Corporation and the Company (Filed as Exhibit 10.2)

(10.36)w     -Addendum No. 2 to Master Lease Agreement dated December 31, 1998 between General Electric

Capital Corporation and the Company (Filed as Exhibit 10.3)

(10.37)w     -Biotech Equipment Schedule Schedule No. 001 dated December 31, 1998 to Master Lease Agreement

dated December 31, 1998 between General Electric Corporation and the Company (Filed as Exhibit

10.4)

(10.38)w     -Annex A to Equipment Schedule No. 001 to Master Lease Agreement dated December 31, 1998 between

General Electric Corporation and the Company (Filed as Exhibit 10.5)

</TABLE>



33

<TABLE>

<CAPTION>

<S>          <C>

(10.39)w     -Annex B to Equipment Schedule No. 001 to Master Lease Agreement dated December 31, 1998 between

General Electric Corporation and the Company (Filed as Exhibit 10.6)

(10.40)w     -Addendum to Schedule No. 001 to Master Lease Agreement dated as of December 31, 1998 between

General Electric Corporation and the Company (Filed as Exhibit 10.7)

(10.41)w@    -Collaborative Research, License and Co-Promotion agreement dated as of October 5, 1998 between

Schering Aktiengesellschaft and the Company (Filed as Exhibit 10.8)

(10.42)w@    -Collaborative ProNet Research and License Agreement dated as of November 11, 1998 between

Monsanto Company and the Company (Filed as Exhibit 10.9)

(10.43)w@    -Letter Amendment to the Collaborative Research and License Agreement dated as of November 30,

1998 between Bayer Corporation and the Company (Filed as Exhibit 10.10)

(10.44)m@    -Collaboration and License Agreement between the Company and Novartis Agricultural Discovery

Institute, Inc. dated July 27, 1999 (Filed as Exhibit 10.1)

(10.45)m     -Subscription Agreement between the Company and Peter Friedli dated September 30, 1999 (Filed as

Exhibit 10.2)

(10.46)m     -Securities Purchase Agreement and Standstill Agreement between the Company and Schering Berlin

Venture Corporation dated October 15, 1999 (Filed as Exhibit 10.3)

(10.47)f     -Mater Lease Agreement dated October 25 between Comdisco Laboratory and Scientific Group, a

Division of Comdisco Healthcare Group, Inc. and the Company (Filed as Exhibit 10.1)

(10.48)f     -Addendum to the Master Lease Agreement dated October 25, 1999 between Comdisco Laboratory and

Scientific Group, a Division of Comdisco Healthcare Group, Inc. and the Company (Filed as

Exhibit 10.2)

(10.49)f     -Amendment No. 1 to the Master Lease Agreement dated October 25, 1999 between Comdisco Laboratory

and Scientific Group, a Division of Comdisco Healthcare Group, Inc. and the Company (Filed as

Exhibit 10.3)

(10.50)f     -Equipment Schedule No. SG01 dated November 10, 1999 to the Master Lease Agreement dated October

25, 1999 between Comdisco Laboratory and Scientific Group, a Division of Comdisco Healthcare

Group, Inc. and the Company (Filed as Exhibit 10.4)

(10.51)v     -Purchase Agreement dated as of August 28, 2000 between the Registrant and Acqua Wellington North

American Equities Fund, Ltd.

(10.52)v     -Registration Rights Agreement dated as of August 28, 2000 between the Registrant and Acqua

Wellington North American Equities Fund, Ltd.

(10.53)s     -Purchase Agreement dated as of October 27, 2000 between the Registrant and Acqua Wellington

North America Equities, Ltd. (Filed as Exhibit 10.1)

(10.54)s     -Registration Rights Agreement dated as of October 27, 2000 between the Registrant and Acqua

Wellington North America Equities, Ltd. (Filed as Exhibit 10.2)

(10.55)e     -Lease Agreement, dated March 31, 2001 between the Registrant and Boyer Research Park Associates

VI, by it general partner, The Boyer Company, L.C. (Filed as Exhibit 10.1)

(10.56)e     -Agreement, dated March 31, 2001, between the Registrant and Boyer Research Park Associates VI,

by its general partner, The Boyer Company, L.C. (Filed as Exhibit 10.2)

(10.57)e@    -License Agreement, dated December 7, 2000, between the Registrant and Encore Pharmaceuticals,

Inc. (Filed as Exhibit 10.3)

(21.1)       -List of Subsidiaries of the Registrant

(23.1)       -Consent of KPMG LLP

</TABLE>

-------------------

*    Previously filed with the Commission as Exhibits to, and incorporated

herein by reference from, the Company's Registration Statement filed on

Form S-1, File No. 33-95970.



#    Previously filed with the Commission as Exhibits to, and incorporated

herein by reference from, the Company's Registration Statement filed on

Form S-1, File No. 33-95970, and for which Confidential Treatment has been

granted by the Securities and Exchange Commission as to certain portions.



@    Confidential Treatment has been granted by the Securities and Exchange

Commission as to certain portions.



p    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending September 30, 1995.



34

$    Management contract or compensatory plan or arrangement required to be

filed as an exhibit to this Form 10-K pursuant to Item 14(c) of this

report.



z    Previously filed and incorporated herein by reference from the Form 10-K

for the period ending June 30, 1996.



!    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending September 30, 1996.



q    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending December 31, 1996.



=    Previously filed and incorporated herein by reference from the Form 10-K

for the period ending June 30, 1997.



++   Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending September 30, 1997.



%    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending December 31, 1997.



k    Previously filed and incorporated herein by reference from the Form 10-K

for the period ending June 30, 1998.



&    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending September 30, 1998.



w    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending December 31, 1998.



m    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending September 30, 1999.



f    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending December 31, 1999.



v    Previously filed and incorporated herein by reference from the Form 10-K

for the period ending June 30, 2000.



s    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending December 31, 2000.



e    Previously filed and incorporated herein by reference from the Form 10-Q

for the period ending March 31, 2001.



g.   Previously filed and incorporated herein by reference from the Form 8-K

filed on July 18, 2001.



Where a document is incorporated by reference from a previous filing, the

Exhibit number of the document in that previous filing is indicated in

parentheses after the description of such document.





Item 14(b)  Reports on Form 8-K

-------------------



On July 18, 2001, we filed a Form 8-K in conjunction with our adoption of a

Shareholders' Rights Agreement.



35

SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) 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, in Salt Lake City,

Utah on September 24, 2001.



MYRIAD GENETICS, INC.



By:    /s/ Peter D. Meldrum

-------------------------------------

Peter D. Meldrum

President and Chief Executive Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, this

report has been signed below by the following persons on behalf of the

registrant and in the capacities indicated below and on the dates indicated.



<TABLE>

<CAPTION>

Signatures                                     Title                      Date

----------                                     -----                      ----

<S>                                <C>                             <C>

By:    /s/ Peter D. Meldrum        President and Chief Executive   September 24, 2001

-----------------------------

Peter D. Meldrum                Officer and Director

(principal executive officer)



By:    /s/ Jay M. Moyes            Vice President of Finance       September 24, 2001

-----------------------------

Jay M. Moyes                    (principal financial and

accounting officer)



By:    /s/ Hugh A. D'Andrade       Chairman of the Board           September 26, 2001

-----------------------------

Hugh A. D'Andrade



By:    /s/ Walter Gilbert          Vice Chairman of the Board      September 26, 2001

-----------------------------

Walter Gilbert, Ph.D.



By:    /s/ Mark H. Skolnick        Chief Scientific Officer and    September 26, 2001

-----------------------------

Mark H. Skolnick, Ph.D.         Director



By:    /s/ Arthur H. Hayes, Jr.    Director                        September 26, 2001

-----------------------------

Arthur H. Hayes, Jr., M.D.



By:    /s/ Dale A. Stringfellow    Director                        September 26, 2001

-----------------------------

Dale A. Stringfellow, Ph.D.



By:    /s/ Linda S. Wilson         Director                        September 26, 2001

-----------------------------

Linda S. Wilson, Ph.D.

</TABLE>



36

EXHIBIT INDEX



Exhibit

Number           Description of Exhibits

------           -----------------------

(3.1 (a))    -   Restated Certificate of Incorporation of the Registrant

(3.1 (b))    -   Certificate of Amendment of Restated Certificate of

Incorporation

(3.1 (c))    -   Certificate of Designations

(4.2)        -   Form of Common Stock Certificate

(10.1)       -   1992 Employee, Director and Consultant Stock Option Plan as

amended and restated September 20, 2001

(21.1)       -   List of Subsidiaries of the Registrant

(23.1)       -   Consent of KPMG LLP

Independent Auditors' Report





The Board of Directors and Stockholders

Myriad Genetics, Inc.:



We have audited the accompanying consolidated balance sheets of Myriad Genetics,

Inc. and subsidiaries, as of June 30, 2001 and 2000, and the related

consolidated statements of operations, stockholders' equity and comprehensive

loss, and cash flows for each of the years in the three-year period ended June

30, 2001.  These consolidated financial statements are the responsibility of the

Company's management.  Our responsibility is to express an opinion on these

consolidated financial statements based on our audits.



We conducted our audits in accordance with auditing standards generally accepted

in the United States of America.  Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement.  An audit includes examining, on a

test basis, evidence supporting the amounts and disclosures in the financial

statements.  An audit also includes assessing the accounting principles used and

significant estimates made by management, as well as evaluating the overall

financial statement presentation.  We believe that our audits provide a

reasonable basis for our opinion.



In our opinion, the consolidated financial statements referred to above present

fairly, in all material respects, the financial position of Myriad Genetics,

Inc. and subsidiaries as of June 30, 2001 and 2000, and the results of their

operations and their cash flows for each of the years in the three-year period

ended June 30, 2001, in conformity with accounting principles generally accepted

in the United States of America.





KPMG LLP



Salt Lake City, Utah

August 17, 2001



F-1

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Consolidated Balance Sheets



<TABLE>

<CAPTION>

June 30,

-----------------------------------

Assets                                                            2001                2000

---------------     ---------------

<S>                                                                                   <C>                 <C>

Current assets:

Cash and cash equivalents                                                         $    35,936,817          56,214,736

Marketable investment securities                                                       91,282,481          24,286,955

Prepaid expenses                                                                        4,219,037           2,678,984

Trade accounts receivable, less allowance for doubtful

accounts of $255,000 in 2001 and $145,000 in 2000                                    3,634,370           2,352,154

Other receivables                                                                         314,571             398,947

Related party receivables                                                               1,811,517                  --

---------------     ---------------

Total current assets                                                137,198,793          85,931,776

---------------     ---------------



Equipment and leasehold improvements:

Equipment                                                                              21,425,910          16,965,545

Leasehold improvements                                                                  3,721,345           4,005,729

---------------     ---------------

25,147,255          20,971,274

Less accumulated depreciation and amortization                                         12,416,209           9,719,556

---------------     ---------------

Net equipment and leasehold improvements                             12,731,046          11,251,718

Long-term marketable investment securities                                                 18,735,670           8,154,153

Other assets                                                                                3,479,846           1,037,658

---------------     ---------------

$   172,145,355         106,375,305

===============     ===============

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable                                                                  $     9,657,385           4,262,359

Accrued liabilities                                                                     3,082,799           4,905,857

Deferred revenue                                                                       19,843,373          19,500,442

---------------     ---------------

Total current liabilities                                            32,583,557          28,668,658

---------------     ---------------

Commitments and contingencies



Stockholders' equity:

Preferred stock, $0.01 par value.  Authorized 5,000,000 shares;

no shares issued and outstanding                                                            --                  --

Common stock, $0.01 par value.  Authorized 60,000,000 shares;

issued and outstanding 23,441,659 shares in 2001 and 21,866,482

shares in 2000                                                                         234,417             218,666

Additional paid-in capital                                                            198,800,273         130,235,403

Accumulated other comprehensive gain (loss)                                               363,583             (85,440)

Accumulated deficit                                                                   (59,836,475)        (52,661,982)

---------------     ---------------

Total stockholders' equity                                          139,561,798          77,706,647

---------------     ---------------

$   172,145,355         106,375,305

===============     ===============

</TABLE>



See accompanying notes to consolidated financial statements.



F-2

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Consolidated Statements of Operations

<TABLE>

<CAPTION>



Years ended  June 30,

----------------------------------------------------------

<S>                                                               <C>                   <C>                  <C>

2001                 2000                 1999

----------------     ----------------     ----------------



Research revenue                                                   $     28,071,252           25,219,766           20,093,057

Predictive medicine revenue                                              17,091,139            8,793,272            5,220,349

----------------     ----------------     ----------------



Total revenues                       45,162,391           34,013,038           25,313,406

----------------     ----------------     ----------------



Costs and expenses:

Predictive medicine cost of revenue                                   7,402,906            3,986,473            3,066,354

Research and development expense                                     33,818,144           28,098,769           23,452,220

Selling, general, and administrative expense                         17,077,846           13,474,923           11,105,520

----------------     ----------------     ----------------



Total cost and expenses              58,298,896           45,560,165           37,624,094

----------------     ----------------     ----------------



Operating loss                      (13,136,505)         (11,547,127)         (12,310,688)



Other income (expense):

Interest income                                                       6,850,479            3,208,506            2,348,827

Interest expense                                                             --                   --               (6,278)

Other                                                                  (305,134)            (383,481)             (27,314)

----------------     ----------------     ----------------



Net loss before taxes                (6,591,160)          (8,722,102)          (9,995,453)



Income taxes                                                                583,333                   --                   --

----------------     ----------------     ----------------



Net loss                       $     (7,174,493)          (8,722,102)          (9,995,453)

================     ================     ================



Basic and diluted loss per common share                            $          (0.31)               (0.43)               (0.53)

================     ================     ================



Basic and diluted weighted-average shares outstanding                    22,815,035           20,220,446           18,782,244

================     ================     ================





See accompanying notes to consolidated financial statements.

</TABLE>



F-3

MYRIAD GENETICS, INC,

AND SUBSIDIARIES



Consolidated Statements of Stockholders' Equity and Comprehensive Loss



Years ended June 30, 2001, 2000, and 1999

<TABLE>

<CAPTION>

Accumu-

lated

other

Additi-    compre-                            Compre-

Common stock         tional    hensive  Deferred    Accum-        hensive       Stock-

----------------------   paid-in    income    compen-    ulated        income       holders'

Shares      Amount     capital    (loss)    sation     deficit       (loss)        equity

----------  ---------- -----------  -------  --------  -----------   -----------  -----------

<S>                                <C>         <C>        <C>          <C>      <C>       <C>           <C>          <C>

Balances at

June 30, 1998                    18,675,002  $  186,750  91,813,659    1,477  (576,446) (33,944,427)                57,481,013



Issuance of

common stock for

cash upon exercise

of options and

warrants                            137,654       1,377     364,918     --        --           --            --        366,295



Issuance of common

stock for cash                       44,808         448     203,146     --        --           --            --        203,594



Amortization of

deferred

compensation                           --          --          --       --     230,610         --            --        230,610



Forfeiture of deferred

compensation                           --          --       (98,062)    --      98,062         --            --           --



Net loss                                 --          --          --       --        --     (9,995,453)   (9,995,453)  (9,995,453)



Unrealized gains (losses)

on marketable

investment securities:

Unrealized holding

gains arising

during period                      --          --          --       --        --           --        (115,287)        --



Less: classification

adjustment for

gains included

in net loss                        --          --          --       --        --           --          44,964         --

-----------

Other comprehensive loss                 --          --          --    (70,323)     --           --         (70,323)     (70,323)

-----------



Comprehensive loss                       --          --          --       --        --           --     (10,065,776)        --

===========

Balances at                        ----------  ---------- -----------  -------  --------  -----------                -----------

June 30, 1999                    18,857,464     188,575  92,283,661  (68,846) (247,774) (43,939,880)                48,215,736

==========  ========== ===========  =======  ========  ===========                ===========

Issuance of

common stock for

cash upon exercise

of options and warrants           1,092,958      10,930   6,525,622     --        --           --            --      6,536,552



Issuance of common

stock for cash, net of

offering costs                    1,916,060      19,161  31,426,120     --        --           --            --     31,445,281



Amortization of

deferred compensation                  --          --          --       --     247,774         --            --        247,774



Net loss                                 --          --          --       --        --     (8,722,102)   (8,722,102)  (8,722,102)



Unrealized losses

on marketable

investment securities:

Unrealized holding

losses arising

during period                      --          --          --       --        --           --         (63,638)        --



Less: classification

adjustment for

losses included

in net loss                        --          --          --       --        --           --          47,044

-----------

Other comprehensive loss                 --          --          --    (16,594)     --           --         (16,594)     (16,594)

-----------

Comprehensive loss                       --          --          --       --        --           --      (8,738,696)        --

===========

Balances at                        ----------  ---------- -----------  -------  --------  -----------                -----------

June 30, 2000                21,866,482     218,666 130,235,403  (85,440)     --    (52,661,982)                77,706,647

==========  ========== ===========  =======  ========  ===========                ===========

(Continued)

</TABLE>

F-4

MYRIAD GENETICS, INC.

AND SUBSIDIARIES







Consolidated Statements of Stockholders' Equity and Comprehensive Loss



Years ended June 30, 2001, 2000, and 1999



<TABLE>

<CAPTION>

Accumu-

lated

other

Additi-      compre-                               Compre-

Common stock            tional       hensive       Deferred   Accum-       hensive     Stock

----------------------      paid-in      income         compen-   ulated        income    holders'

Shares        Amount      capital      (loss)         sation    deficit       (loss)     equity

----------    --------    -----------    -------       --------  ----------   ---------   -------

<S>                              <C>          <C>           <C>          <C>           <C>        <C>        <C>         <C>

Issuance of

common stock for

cash upon exercise

of options and warrants          811,219    $  8,112      4,960,754           --         --          --          --   4,968,866



Issuance of common

stock for cash, net of

offering costs                   763,958       7,639     63,604,116           --         --          --          --  63,611,755



Net loss                                  --          --             --           --         --  (7,174,493) (7,174,493) (7,174,493)



Unrealized gains (losses)

on marketable

investment securities:

Unrealized holding

gains arising

during period                    --          --             --           --                            449,023          --



Less: classification

adjustment for

losses included

in net loss                      --          --             --           --          --         --                     --

---------

Other comprehensive gain                  --          --             --      449,023          --         --    449,023     449,023

---------



Comprehensive loss                        --          --             --           --          --         -- (6,725,470)         --

=========

----------    --------    -----------    ---------    --------  ---------            -----------

Balances at

June 30, 2001                 23,441,659    $234,417    195,800,273     363,583           -- (59,836,475)          139,561,798

==========    ========    ===========    ========     ========  ==========           ===========



</TABLE>



See accompanying notes to consolidated financial statements.



F-5

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Consolidated Statements of Cash Flows

<TABLE>

<CAPTION>



Years ended June 30,

-----------------------------------------------

2001            2000            1999

---------------  ---------------  -------------

<S>                                                                         <C>                <C>            <C>

Cash flows from operating activities:

Net loss                                                               $    (7,174,493)     (8,722,102)     (9,995,453)

Adjustments to reconcile net loss to net cash provided by

(used in) operating activities:

Depreciation and amortization                                            3,728,563       3,284,734       3,223,779

Loss (gain) on sale of assets                                              305,134         383,481         (17,650)

Loss on sale of investment securities                                           --          47,044          44,964

Bad debt expense                                                           110,000          71,561           7,439

Changes in operating assets:

Trade receivables                                                     (1,392,216)     (1,100,765)       (859,062)

Prepaid expenses                                                      (1,540,053)     (2,056,284)       (356,021)

Other receivables                                                         84,376       1,456,749      (1,738,643)

Related party receivables                                             (1,811,517)             --              --

Other assets                                                                  --         465,663              --

Accounts payable and accrued expenses                                  3,571,968       4,495,772      (2,387,557)

Deferred revenue                                                         342,931      18,837,682      (2,059,355)

---------------   -------------   -------------

Net cash provided by (used in) operating activities                 (3,775,307)     17,163,535     (14,137,559)

---------------   -------------   -------------

Cash flows from investing activities:

Proceeds from sale of equipment                                                     --          14,851       3,604,579

Capital expenditures                                                        (5,255,213)     (4,617,196)     (3,975,813)

Investments in other companies                                              (2,700,000)       (750,000)             --

Purchase of investment securities held-to-maturity                        (119,683,435)     (4,126,628)    (17,462,407)

Maturities of investment securities held-to-maturities                     126,610,618       5,957,410      20,001,804

Purchase of investment securities available-for-sale                      (129,650,517)    (19,857,144)   (274,244,194)

Sale of investment securities available-for-sale                            45,595,314      19,043,131     276,582,454

---------------   -------------   -------------

Net cash provided by (used in) investing activities                (85,083,233)     (4,335,576)      4,506,423

---------------   -------------   -------------

Cash flows from financing activities:

Payments on notes payable                                                           --              --        (128,843)

Net proceeds from issuance of common stock                                  68,580,621      37,981,833         569,889

---------------   -------------   -------------

Net cash provided by financing activities                           68,580,621      37,981,833         441,046

---------------   -------------   -------------

Net increase (decrease) in cash and cash equivalents                           (20,277,919)     50,809,792      (9,190,090)



Cash and cash equivalents at beginning of year                                  56,214,736       5,404,944      14,595,034

---------------   -------------   -------------

Cash and cash equivalents at end of year                                   $    35,936,817      56,214,736       5,404,944

===============   =============   =============

Supplemental disclosure of cash flow information -

interest paid                                                          $            --              --           6,278

===============   =============   =============

Supplemental disclosures of noncash investing and financing activities:

Decrease in additional paid-in capital as a result of

forfeitures of stock options                                         $            --              --         (98,062)

Fair value adjustment on marketable investment securities

charged to stockholders' equity                                              449,023         (16,594)        (70,323)

===============   =============   =============



See accompanying notes to consolidated financial statements.

</TABLE>



F-6

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





(1)  Summary of Significant Accounting Policies



(a)  Organization and Business Description



Myriad Genetics, Inc. and subsidiaries (collectively, the Company) is

a leading biopharmaceutical company focusing on the development and

marketing of novel therapeutic and predictive medicine products. The

Company has developed a number of proprietary proteomic technologies

that permit it to identify genes, their related proteins, and the

biological pathways they form. The Company uses this information to

understand the role they play in the onset and progression of major

human disease. The Company operates two wholly owned subsidiaries,

Myriad Pharmaceuticals, Inc. and Myriad Genetic Laboratories, Inc., to

commercialize its therapeutic and predictive medicine discoveries. The

Company's operations are located in Salt Lake City, Utah.



(b)  Principles of Consolidation



The consolidated financial statements presented herein include the

accounts of Myriad Genetics, Inc., and its wholly owned subsidiaries

Myriad Genetic Laboratories, Inc., Myriad Pharmaceuticals, Inc. and

Myriad Financial, Inc. All intercompany amounts have been eliminated

in consolidation.



(c)  Cash Equivalents



Cash equivalents of $15,376,672 and $27,205,844 at June 30, 2001 and

2000, respectively, consist of short-term securities. The Company

considers all highly liquid debt instruments with maturities at date

of purchase of 90 days or less to be cash equivalents.



(d)  Equipment and Leasehold Improvements



Equipment and leasehold improvements are stated at cost. Depreciation

and amortization are computed using the straight-line method based on

the lesser of estimated useful lives of the related assets or lease

terms. Equipment and leasehold improvements have depreciable lives

which range from five to seven years.



(e)  Income Taxes



Income taxes are recorded using the asset and liability method. Under

the asset and liability method, deferred tax assets and liabilities

are recognized for the future tax consequences attributable to

differences between the financial statement carrying amounts of

existing assets and liabilities and their respective tax bases and

operating loss and tax credit carryforwards. Deferred tax assets and

liabilities are measured using enacted tax rates expected to apply to

taxable income in the years in which those temporary differences are

expected to be recovered or settled. The effect on deferred tax assets

and liabilities of a change in tax rates is recognized in income in

the period that includes the enactment date.



(Continued)



F-7

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





(f)  Revenue Recognition



The Company recognizes revenue from research contracts in accordance

with the terms of the contract and the related research activities

undertaken. This includes recognizing research revenue from research

contracts over time as research is performed using the percentage-of-

completion method based on costs incurred relative to total estimated

contract costs. Payments to the Company under these agreements cover

the Company's direct costs and an allocation for overhead and general

and administrative expenses. Payments received on uncompleted long-

term research contracts may be greater than or less than incurred

costs and estimated earnings and have been recorded as other

receivables or deferred revenues in the accompanying consolidated

balance sheets.



Predictive medicine revenue is recognized upon completion of the test

and communication of results. Payments received in advance of

predictive medicine work performed are recorded as deferred revenue.

Revenues related to technology license fees when continuing

involvement or services by the Company are required, are recognized

over the period of performance. Up-front payments related to marketing

agreements are recognized ratably over the life of the agreement.



(g)  Net Loss Per Common and Common Equivalent Share



Loss per common share is computed based on the weighted-average number

of common shares and, as appropriate, dilutive potential common shares

outstanding during the period. Stock options are considered to be

potential common shares.



Basic loss per common share is the amount of loss for the period

available to each share of common stock outstanding during the

reporting period. Diluted loss per share is the amount of loss for the

period available to each share of common stock outstanding during the

reporting period and to each share that would have been outstanding

assuming the issuance of common shares for all dilutive potential

common shares outstanding during the period.



In calculating loss per common share the net loss and the weighted

average common shares outstanding were the same for both the basic and

diluted calculation.



For the years ended June 30, 2001, 2000, and 1999, there were

antidilutive potential common shares of 4,121,061, 3,892,248, and

4,144,330, respectively. Accordingly, these potential common shares

were not included in the computation of diluted earnings per share for

the years presented, but may be dilutive to future basic and diluted

earnings per share.



(h)  Use of Estimates



Management of the Company has made a number of estimates and

assumptions relating to the reporting of assets and liabilities and

the disclosure of contingent assets and liabilities at the date of the

consolidated financial statements and the reported amounts of revenues

and expenses during the reporting period. Actual results could differ

from these estimates.



(Continued)



F-8

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





(i)  Marketable Investment Securities



The Company accounts for marketable investment securities by grouping

them into one of two categories: held-to-maturity or available-for-

sale. Held-to-maturity securities are those securities that the

Company has the ability and intent to hold until maturity. All other

securities are classified as available-for-sale.



Held-to-maturity securities are recorded at amortized cost, adjusted

for the amortization or accretion of premiums or discounts. Available-

for-sale securities are recorded at fair value. Unrealized holding

gains and losses, net of the related tax effect, on available-for-sale

securities are excluded from earnings and are reported as a separate

component of stockholders' equity until realized.



Gains and losses on investment security transactions are reported on

the specific-identification method. Dividend and interest income are

recognized when earned. A decline in the market value of any

available-for-sale or held-to-maturity security below cost that is

deemed other than temporary results in a charge to earnings and

establishes a new-cost basis for the security. Premiums and discounts

are amortized or accreted over the life of the related held-to-

maturity security as an adjustment to yield using the effective-

interest method.



(j)  Fair Value Disclosure



At June 30, 2001, the financial statement carrying amount of the

Company's financial instruments approximates fair value except as

disclosed in note 2.



(k)  Stock-Based Compensation



The Company has adopted the disclosure provisions of Statement of

Financial Accounting Standards No. 123, Accounting for Stock-Based

Compensation (SFAS 123). SFAS 123 permits entities to adopt a fair

value based method of accounting for stock options or similar equity

instruments. However, it also allows an entity to continue measuring

compensation cost for stock based compensation using the intrinsic-

value method of accounting prescribed by Accounting Principles Board

(APB) Opinion No. 25, Accounting for Stock Issued to Employees (APB

25). The Company has elected to continue to apply the provisions of

APB 25 and provide pro forma disclosures required by SFAS 123.



(l)  Other Assets



Other assets are comprised of security deposits and investments in

privately held biotechnology and pharmaceutical companies. The private

biotechnology and pharmaceutical company investments are both

accounted for under the cost method. Management reviews the valuation

of both investments for possible impairment on an ongoing basis.



(Continued)



F-9

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





(m)  Recent Accounting Pronouncements



In July 2001, the Financial Accounting Standards Board issued

Statement of Financial Accounting Standards No. 141, Accounting for

Business Combinations and No. 142, Accounting for Goodwill and Other

Intangible Assets (SFAS 141 and SFAS 142). SFAS 141 is effective for

the Company beginning July 1, 2001 and establishes accounting and

reporting standards for business combinations and prohibits the use of

the pooling-of-interests method of accounting for those transactions

after June 30, 2001. SFAS 142 is effective for the Company beginning

July 1, 2002 (though early adoption is permitted) and establishes

accounting and reporting standards for goodwill and intangible assets

whereby entities will no longer amortize goodwill and certain

intangibles, but will test for impairment at least annually. The

impact of adopting SFAS 141 is not expected to be material to the

financial statements. The Company is currently evaluating the impact

of adopting SFAS 142.



In December 1999, the Securities and Exchange Commission issued Staff

Accounting Bulletin No. 101, Revenue Recognition in Financial

Statements (SAB 101). SAB 101 provides guidance on the recognition,

presentation and disclosure of revenue in financial statements. The

Company's adoption of SAB 101 during fiscal 2001 did not have a

material impact on its financial statements.



(2)  Marketable Investment Securities



The amortized cost, gross unrealized holding gains, gross unrealized

holding losses, and fair value for available-for-sale and held-to-maturity

securities by major security type and class of security at June 30, 2001

and 2000, were as follows:



<TABLE>

<CAPTION>

Gross             Gross

unrealized        unrealized

Amortized          holding           holding

cost             gains            losses           Fair value

-----------       ----------        ----------         ----------

<S>                                                      <C>               <C>               <C>                <C>

At June 30, 2001:

Held-to-maturity:

Auction rate securities                               $ 2,005,912               --                --          2,005,912

U.S. government obligations                             7,633,745           12,529                --          7,646,274

Corporate bonds and notes                                 721,210               --              (385)           720,825

-----------       ----------        ----------         ----------

$10,360,867           12,529              (385)        10,373,011

===========       ==========        ==========         ==========

Available-for-sale:

Commercial paper                                      $39,103,968           25,900            (2,165)        39,127,703

Corporate bonds and notes                              38,882,060          203,281           (20,748)        39,064,593

Certificates of deposit                                 6,013,253              433            (6,185)         6,007,501

Asset-backed securities                                   134,257            1,157            (4,108)           131,306

Euro dollar bonds                                      15,160,163          170,770            (4,752)        15,326,181

-----------       ----------        ----------         ----------

$99,293,701          401,541           (37,958)        99,657,284

===========       ==========        ==========         ==========

</TABLE>



(Continued)



F-10

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





<TABLE>

<CAPTION>

Gross             Gross

unrealized        unrealized

Amortized          holding           holding

cost             gains            losses           Fair value

-----------       ----------        ----------         ----------

<S>                                                      <C>               <C>               <C>                <C>

At June 30, 2000:

Held-to-maturity:

U.S. government obligations                           $15,081,371           42,889           (58,065)        15,066,195

Corporate bonds and notes                               2,010,932               --           (10,932)         2,000,000

-----------       ----------        ----------         ----------

$17,092,303           42,889           (68,997)        17,066,195

===========       ==========        ==========         ==========



Available-for-sale:

U.S. government obligations                           $ 9,609,981               --           (13,333)         9,596,648

Mortgage-backed securities                              1,337,514               --           (46,305)         1,291,209

Corporate bonds and notes                               3,511,553               --           (26,350)         3,485,203

Certificates of deposit and

domestic bank obligations                                 975,197              548                --            975,745

-----------       ----------        ----------         ----------

$15,434,245              548           (85,988)        15,348,805

===========       ==========        ==========         ==========

</TABLE>



Maturities of debt securities classified as available-for-sale and held-to-

maturity are as follows at June 30, 2001:



<TABLE>

<CAPTION>

Amortized            Fair

cost               value

-----------        ----------

<S>                                                                 <C>                <C>

Held-to-maturity:

Due within one year                                                $ 6,601,324         6,607,283

Due after one year through three years                               3,759,543         3,765,728

-----------        ----------

$10,360,867        10,373,011

===========        ==========

Available-for-sale:

Due within one year                                                $84,323,177        84,681,157

Due after one year through three years                              14,970,524        14,976,127

-----------        ----------

$99,293,701        99,657,284

===========        ==========

</TABLE>



(Continued)



F-11

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





(3)  Leases



The Company leases office and laboratory space and equipment under three

noncancelable operating leases. Future minimum lease payments under these

leases as of June 30, 2001 are as follows:



<TABLE>

<C>                                                <S>

Fiscal year ending:

2002                                  $ 4,538,928

2003                                    4,889,759

2004                                    3,879,429

2005                                    2,966,871

2006                                    2,966,871

Thereafter                             16,468,357

-----------

$35,710,215

===========

</TABLE>



Rental expense was $4,447,203 in 2001, $3,777,738 in 2000, and $1,855,679

in 1999.



(4)  Stock-Based Compensation



Prior to 1992, the Company granted nonqualified stock options to directors,

employees, and other key individuals providing services to the Company. In

1992, the Company adopted the "1992 Employee, Director, and Consultant

Stock Option Plan" and has reserved 6,000,000 shares of common stock for

issuance upon the exercise of options that the Company plans to grant from

time to time under this plan. The exercise price of options granted in

2001, 2000, and 1999 is equivalent to the estimated fair market value of

the stock at the date of grant. The number of shares, terms, and exercise

period are determined by the Board of Directors on an option-by-option

basis. Options generally vest ratably over four or five years and expire

ten years from date of grant. As of June 30, 2001, 14,407 shares are

reserved for future grant under the 1992 plan. For financial statement

presentation purposes, the Company has recorded as deferred compensation

the excess of the deemed value of the common stock at the date of grant

over the exercise price. All deferred compensation was amortized ratably

over the vesting period. Amortization expense was $0, $247,774, and

$230,610, for the years ended June 30, 2001, 2000, and 1999, respectively.



(Continued)



F-12

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





A summary of activity is as follows:



<TABLE>

2001                       2000                       1999

----------------------     ----------------------     ----------------------

Weighted-                  Weighted-                  Weighted-

Number      average        Number      average        Number      average

of       exercise          of       exercise          of       exercise

shares       price         shares       price         shares       price

---------    ---------     ---------    ---------     ---------    ---------

<S>                               <C>          <C>           <C>          <C>           <C>          <C>

Options

outstanding at

beginning of year      3,826,748     $ 16.48       3,909,582    $  6.32       3,284,954    $  9.24



Plus options granted    1,299,784       71.03       1,286,850      36.51       2,155,186       5.31



Less:

Options exercised       (805,528)       6.36      (1,007,232)      5.92        (137,654)      3.14

Options canceled

or expired             (265,443)      46.17        (362,452)      7.24      (1,392,904)     11.98

---------                   ---------                  ---------



Options

outstanding at end

of year                4,055,561     $ 34.03       3,826,748    $ 16.48       3,909,582    $  6.32

=========                   =========                  =========

Options exercisable

at end of year         1,039,248     $ 14.14       1,093,510    $  6.17       1,444,960    $  5.67



Weighted-average

fair value of

options granted

during the year                      $ 56.35                    $ 27.51                    $  3.00

</TABLE>



The following table summarizes information about fixed stock options outstanding

at June 30, 2001:



<TABLE>

<CAPTION>

Options outstanding             Options exercisable

------------------------------------  -----------------------

Number     Weighted-                 Number

outstanding    average     Weighted-  exercisable   Weighted-

Range of          at        remaining     average       at         average

exercise        June 30,   contractual   exercise     June 30,    exercise

prices           2001        life         price        2001        price

--------------   -----------  -----------  ----------  -----------  ----------

<S>              <C>          <C>          <C>         <C>          <C>

$ 1.75 -  5.56    1,090,530      6.44        $  4.70      459,412     $  4.09

5.69 - 25.06    1,381,025      7.62          17.77      500,426       14.76

30.78 - 70.13      900,625      9.52          61.48       41,000       57.50

72.13 - 93.81      683,381      9.42          77.54       38,410       80.04

---------                             ---------

4,055,561      8.03        $ 34.03    1,039,248     $ 14.14

=========                             =========

</TABLE>



(Continued)



F-13

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





The Company accounts for these plans under APB Opinion No. 25, under which

no compensation cost has been recognized for those options granted whose

exercise price was equivalent to the estimated fair market value at the

date of grant. Had compensation cost for these plans been determined

consistent with SFAS 123, the Company's net loss and loss per share would

have been the following pro forma amounts:



<TABLE>

<CAPTION>

2001          2000          1999

------------   -----------   -----------

<S>                               <C>           <C>            <C>           <C>

Net loss                As reported   $  7,174,493     8,722,102     9,995,453

Pro forma       19,400,559    13,565,122    14,585,479



Basic and diluted loss

per share              As reported   $      0.31          0.43          0.53

Pro forma            0.85          0.67          0.78

</TABLE>



The fair value of each option grant is estimated on the date of the grant

using the Black-Scholes option pricing model with the following weighted-

average assumptions used for grants in 2001, 2000, and 1999, respectively:

risk-free interest rates of 5.2 percent, 6.3 percent, and 4.8 percent;

expected dividend yields of zero percent for all years; expected lives of

6.3 years, 5.4 years, and 4.3 years; and expected volatility of 93 percent,

89 percent, and 69 percent.



(5)  Income Taxes



The Company recorded $583,333 of foreign income tax expense in 2001 and no

income tax expense in 2000 or 1999. The difference between the expected tax

benefit for all periods presented and the actual tax expense (benefit) is

primarily attributable to the effect of net operating losses being offset

by an increase in the Company's valuation allowance, plus the effect of

foreign income taxes in 2001. The tax effects of temporary differences that

give rise to significant portions of the deferred tax assets and deferred

tax liabilities at June 30, 2001 and 2000, are presented below:



<TABLE>

2001                2000

------------        ------------

<S>                                                                   <C>                 <C>



Deferred tax assets:

Net operating loss carryforwards                           $ 44,469,000          27,109,000

Unearned revenue                                              7,402,000           7,274,000

Research and development credits                              1,749,000           1,463,000

Accrued expenses and other                                      936,000             851,000

Capital loss carryforwards                                       34,000              28,000

------------     ---------------

Total gross deferred tax assets                         54,590,000          36,725,000

Less valuation allowance                                    (54,138,000)        (36,123,000)

------------     ---------------

Net deferred tax assets                                    452,000             602,000

------------     ---------------

Deferred tax liability - equipment, principally due to

differences in depreciation                                     452,000             602,000

------------     ---------------

Total gross deferred tax liability                         452,000             602,000

------------     ---------------

Net deferred tax liability                            $         --                  --

============     ===============

</TABLE>



(Continued)



F-14

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





The net change in the total valuation allowance for the years ended June

30, 2001 and 2000, was an increase of $18,015,000 and $15,114,000,

respectively. Approximately $32,572,000 of deferred tax assets at June 30,

2001, if recognizable in future years, will be recognized as additional

paid-in capital and the remainder will be allocated as an income tax

benefit to be reported in the consolidated statement of operations.



At June 30, 2001, the Company had total tax net operating losses of

approximately $119,219,000 and total research and development credit

carryforwards of approximately $1,749,000, which can be carried forward to

reduce federal income taxes. If not utilized, the tax loss and research and

development credit carryforwards expire beginning in 2007 through 2021.



Under the rules of the Tax Reform Act of 1986, the Company has undergone

changes of ownership and, consequently, the availability of the Company's

net operating loss and research and experimentation credit carryforwards in

any one year is limited. The maximum amount of carryforwards available in a

given year is limited to the product of the Company's value on the date of

ownership change and the federal long-term tax-exempt rate, plus any

limited carryforward not utilized in prior years. Management believes that

these limitations will not prevent these net operating losses from being

utilized.



(6)  Common Stock Warrants



During the year ended June 30, 2000 the Company completed private

placements of common stock wherein the placement agents received warrants

to purchase 65,500 shares of the Company's common stock through the year

2003 at a weighted average price of $22.51, of which 65,500 are still

outstanding at June 30, 2001.



(7)  Employee Deferred Savings Plan and Stock Purchase Plan



The Company has a deferred savings plan which qualifies under Section

401(k) of the Internal Revenue Code. Substantially all of the Company's

employees are covered by the plan. The Company makes matching contributions

of 50 percent of each employee's contribution with the employer's

contribution not to exceed four percent of the employee's compensation. The

Company's contributions to the plan were $531,174, $379,930, and $358,325

for the years ended June 30, 2001, 2000, and 1999, respectively.



The Company has an Employee Stock Purchase Plan (the Plan) which was

adopted and approved by the Board of Directors and stockholders in December

1994, under which a maximum of 400,000 shares of common stock may be

purchased by eligible employees. At June 30, 2001, 127,394 shares of common

stock had been purchased under the Plan. Because the discount allowed to

employees under the Plan approximates the Company's cost to issue equity

instruments, the Plan is not deemed to be compensatory and, therefore, is

excluded from the pro forma loss shown in note 4.



(Continued)



F-15

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





(8)  Collaborative Research Agreements



In May 2000, the Company entered into a $26.0 million license agreement and

research collaboration to utilize the Company's protein interaction

technology (ProNet). Under the agreement, the licensee will receive a

nonexclusive, fully paid, worldwide license to utilize ProNet and receive

support and related upgrades from the Company on a when-and-if-available

basis over the support period. Revenue related to the license agreement is

being recognized ratably over the service period and revenue related to the

research collaboration is being recognized as the costs of the contract are

incurred on a percent complete basis.



In August 1999, and as expanded in December 2000, the Company entered into

a two-year collaboration to perform research related to cereal crop

genomics. The Company has received the full $33.5 million specified in the

agreement. Revenue related to this research collaboration is being

recognized as the research is performed on a percent complete basis.



In September 1995, the Company entered into a collaborative research and

license agreement to perform various research for a pharmaceutical company.

This agreement was expanded in 1997 and 1998. Under the agreement, as

expanded, the Company expects to receive $42.7 million through December

2002, which is being recognized as revenue as the research is performed on

a percent complete basis.



Under some agreements the Company may license to the collaborator certain

rights to therapeutic applications. The Company is entitled to receive

royalties from sales of therapeutic products made by its collaborators.

Revenue from research collaborations is recognized as research is performed

using the percentage-of-completion method based on costs incurred relative

to total estimated contract costs.



Because the Company has granted therapeutic rights to some of its

collaborative licensees, the success of the programs is partially dependent

upon the efforts of the licensees. Each of the above agreements may be

terminated early. If any of the licensees terminates the above agreements,

such termination may have a material adverse effect on the Company's

operations.



(9)  Segment and Related Information



The Company's business units have been aggregated into two reportable

segments: (i) research and (ii) predictive medicine. The research segment

is focused on the discovery and sequencing of genes related to major common

diseases, the discovery of proteins and their related biological pathways,

and the development of therapeutic products for the treatment and

prevention of major diseases. The predictive medicine segment provides

testing to determine predisposition to common diseases.



The accounting policies of the segments are the same as those described in

the summary of significant accounting policies (note 1). The Company

evaluates segment performance based on loss from operations before interest

income and expense and other income and expense. The Company's assets are

not identifiable by segment.



(Continued)



F-16

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





<TABLE>

<CAPTION>

Predictive

Research            medicine             Total

------------        ------------        ------------

<S>                                                                    <C>                 <C>                 <C>

Year ended June 30, 2001:

Revenues                                                    $ 28,071,252          17,091,139          45,162,391

Depreciation and amortization                                  2,597,297           1,131,266           3,728,563

Segment operating loss                                         7,460,775           5,675,730          13,136,505

Year ended June 30, 2000:

Revenues                                                    $ 25,219,766           8,793,272          34,013,038

Depreciation and amortization                                  2,494,333             790,401           3,284,734

Segment operating loss                                         5,373,891           6,173,236          11,547,127

Year ended June 30, 1999:

Revenues                                                    $ 20,093,057           5,220,349          25,313,406

Depreciation and amortization                                  2,262,503             961,276           3,223,779

Segment operating loss                                         6,315,948           5,994,740          12,310,688



<CAPTION>

2001                2000                1999

------------        ------------        ------------

<S>                                                                    <C>                 <C>                 <C>

Total operating loss for reportable segments                 $(13,136,505)        (11,547,127)        (12,310,688)

Unallocated amounts:

Interest income                                                6,850,479           3,208,506           2,348,827

Interest expense                                                      --                  --              (6,278)

Other                                                           (305,134)           (383,481)            (27,314)

Income taxes                                                    (583,333)                 --                  --

------------        ------------        ------------

Net loss                                            $ (7,174,493)         (8,722,102)         (9,995,453)

=============       ============        ============

</TABLE>



All of the Company's revenues were derived from research and testing

performed in the United States. Additionally, all of the Company's long-

lived assets are located in the United States. All of the Company's

research segment revenue was generated from six, seven, and four

collaborators in fiscal 2001, 2000, and 1999, respectively. Further,

revenue from two of the seven collaborators was in excess of ten percent of

the Company's consolidated revenues for each year presented.



(10) Investment in Myriad Proteomics, Inc.



In April 2001, the Company announced the formation of a new alliance with

Hitachi, Ltd. (Hitachi), Friedli Corporate Finance A.G. (Friedli) and

Oracle Corp. (Oracle) to map the human proteome. The newly-formed entity,

Myriad Proteomics, Inc. (Myriad Proteomics), intends to market its

proprietary database to pharmaceutical and biotechnology companies for

therapeutic and diagnostic product development. The Company contributed

technology to Myriad Proteomics in exchange for a 50 percent ownership

interest and Hitachi, Friedli and Oracle contributed a combined $82 million

in cash in exchange for the remaining 50 percent ownership in Myriad

Proteomics.



(Continued)



F-17

MYRIAD GENETICS, INC.

AND SUBSIDIARIES



Notes to Consolidated Financial Statements



June 30, 2001, 2000, and 1999





The Company is accounting for its investment in Myriad Proteomics using the

equity method. Because the Company's initial investment in Myriad

Proteomics consisted of technology with a financial statement carrying

value of $-0- on the Company's financial statements, and given the

uncertainty of the realizability of the difference between the $82 million

carrying amount and the Company's proportionate share of the net assets of

Myriad Proteomics, the Company's initial investment in Myriad Proteomics

was recorded as $-0-. The Company has allocated $41 million of this

difference to technology and this amount is being reduced as the related

technology charges, including in-process research and development, are

incurred at Myriad Proteomics. At June 30, 2001, the remaining technology

basis difference is estimated to be $18 million, and is dependent on the

completion of a valuation study at Myriad Proteomics. The remaining $41

million of unallocated basis difference is being accreted to income over

the period of expected benefit of 15 years.



As part of the formation of Myriad Proteomics, the Company entered into

administrative and scientific outsourcing agreements with Myriad

Proteomics. These agreements expire on December 31, 2001 and may be

extended thereafter on a month-to-month basis at the option of Myriad

Proteomics.



Charges to Myriad Proteomics for services incurred related to the

administrative and scientific outsourcing agreements are based on actual

time and expenses incurred by the Company on behalf of Myriad Proteomics.

During the year ended June 30, 2001, the Company provided $1,644,498 of

administrative and scientific services and purchased equipment totaling

$2,886,949 for Myriad Proteomics. As of June 30, 2001, the Company has

received payments of $2,719,930 from Myriad Proteomics for these services

and the remaining $1,811,517 is included in related party receivables on

the accompanying consolidated balance sheet.



(11) Subsequent Events



On July 16, 2001 the Board of Directors adopted a stockholder rights plan

and declared a dividend distribution of one preferred share purchase right

for each outstanding share of the Company's common stock. Each right will

entitle registered holders of the Company's common stock to purchase one

one-hundredth of a share of a new series of junior participating preferred

stock, designated as "Series A Junior Participating Preferred Stock". The

rights generally will be exercisable only if a person (which term includes

an entity) or group (i) acquires 15 percent or more of Myriad's common

stock or (ii) announces a tender offer the consummation of which would

result in ownership by that person or group of 15 percent or more of the

common stock. Once exercisable, and in some circumstances if certain

additional conditions are met, the rights plan allows Myriad stockholders

(other than the acquirer) to purchase common stock in Myriad or in the

acquiror at a substantial discount.



F-18