Repeated dilutive financings can be maddening for biotech investors. Small, development-stage biotechs need them to raise cash to fund expensive drug trials. So whenever I come across a biotech company that has multiple promising drug candidates yet doesn't need to dilute shareholders, my ears always perk up. Myriad Genetics (NASDAQ:MYGN) is one such company.

Much like another Rule Breakers pick, PDLBiopharma (NASDAQ:PDLI), Myriad uses the gobs of cash generated from a stable source of revenues -- its predictive medicine division (which provides royalties in PDL Biopharma's case) -- to finance the much riskier drug development side of the company. (Predictive medicine provides tests to determine an individual's future risk for a disease.) Myriad's second-quarter earnings announcement Tuesday clearly shows how successful this strategy can be.

In the most recent quarter, revenues from the company's predictive medicine business grew 37% year over year to $29 million. That may not sound like a lot of sales, but gross margins in this division were 72%. With an estimated potential market opportunity of more than $700 million in this division, but only $114 million in fiscal 2006 sales, there is obviously lots of growth left in these products.

To further spur growth in its four predictive medicine products, Myriad will start a direct-to-consumer marketing campaign later this year. Combine that with the 40 salespeople added to this division earlier in the year, and revenue growth should be strong for the foreseeable future.

And with more than $227 million in the bank, Myriad definitely won't need additional cash anytime soon. Even with two large and costly clinical trials underway for its lead drug candidate -- Flurizan for Alzheimer's disease -- the company predicts its cash on hand will last another four years.

Flurizan, though, is the reason why I'm not yet overly excited about Myriad. Over the years, many promising drug candidates from companies such as Elan (NASDAQ:ELN) or Forest Laboratories (NYSE:FRX) have shown us investors, via failed clinical trials, how difficult it is to treat Alzheimer's.

Furthermore, the phase 2 Flurizan data, while promising, has not convinced me that the company's phase 3 trials will be a success. At this point, I just don't want to invest in Myriad ahead of the first Flurizan phase 3 data announcements, which are expected in the fall of 2007.

For less risk-adverse investors, the 5% pullback in Myriad's shares Tuesday might offer a great chance to invest in this well-run company. I'll definitely be watching Myriad from the sidelines until the Flurizan data comes out, because at this point Flurizan simply brings too much risk to these shares for my tastes.

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Fool contributor Brian Lawler does not own shares of Myriad Genetics. He welcomes your myriad feedback . The Fool has a disclosure policy .