Myriad Genetics' Meldrum Is Best In Biotech

The winner of the Best Biotech CEO of the Year award goes to Myriad Genetics (MYGN) Chief Executive Peter Meldrum.

Meldrum takes home the Swanson Trophy (named in honor of Robert Swanson, Genentech's(DNA) founding CEO) for pulling off one of the smartest drug licensing deals of all time.

Last May, Meldrum persuaded Danish drug firm Lundbeck to fork over $100 million upfront in exchange for European commercial rights to Myriad's experimental Alzheimer's disease drug Flurizan.

It wasn't the biggest licensing deal of the year, but certainly the most well timed since a bit more than one month later, Flurizan was gone, the victim of a failed phase III study.

Unfortunately for Lundbeck, that $100 million payment to Myriad was non-refundable. Myriad lost Flurizan, which didn't really matter since very few investors thought it had any chance of working anyway, but the company got to keep the $100 million, which essentially recouped the cost of the phase III study.

Some might call Meldrum's deal making dumb luck. I call it brilliant. Myriad Genetics was already under pressure from investors to stop spending heavily on drug development, including Flurizan, because it was muzzling profits in the company's fast-growing genetic cancer testing business.

With the swipe of a pen, Meldrum essentially recouped the company's investment in Flurizan. When the Flurizan failed and Myriad announced that it was putting the drug on the shelf to focus on the diagnostics business, investors cheered and the company's stock went up.