Myriad Genetics has agreed to acquire Assurex Health for up to $410 million, in a deal that expands the buyer into genetic testing for psychotropic medicine selection.
The deal, disclosed yesterday, gives Myriad its first commercial neuroscience diagnostic test, GeneSight®, whose potential market according to the company exceeds $4 billion based upon current and future indications.
“This acquisition provides an experienced commercial organization in the neuroscience market that we believe will be one of the highest growth areas for personalized medicine and completes our infrastructure expansion consistent with our four-in-six strategy,” Myriad President and CEO Mark C. Capone said in a statement.
“Four-in-six” is Myriad’s mission of answering patients’ four most pressing questions—Will I get a disease? Do I have a disease? Should I treat this disease? How should I treat this disease?—in neuroscience and five other medical specialties, oncology, preventive care, urology, dermatology, and autoimmune.
GeneSight is Myriad’s first offering in the neuroscience market, which according to the company consisted of more than 76 million people and $150 billion of healthcare spending in the U.S.
Myriad also reasons that GeneSight will complement its myPath Bipolar test, now in development by the company for major depressive disorder and bipolar disorder. And because most prescriptions for major depressive disorder and other mental health conditions are ordered by primary care physicians, Myriad said it plans to use its preventive care sales team to sell them the GeneSight tests, potentially more than doubling its addressable market.
Assurex generated revenue of more than $60 million and tested more than 150,000 patients in Myriad’s fiscal year 2016, which ended June 30.
Added Virginia C. Drosos, president and CEO, Assurex Health: “Myriad has the reimbursement, regulatory and commercial expertise to expand the long-term potential of Assurex’s neuroscience products and ensure even more patients can benefit from better outcomes through our diagnostic tests.”
Myriad agreed to pay $225 million upfront plus up to $185 million in additional payments tied to achieving performance-based milestones.
Myriad said it intended to fund the acquisition through cash on hand and debt, having obtained committed debt financing from JPMorgan Chase & Co. The company had cash and cash equivalents of $286 million as of the end of its fiscal third quarter, which ended March 31.
The acquisition is expected to close before the end of the first quarter of fiscal year 2017, which ends September 30 of this year, and is subject to satisfaction of customary closing conditions and regulatory approvals.