NEW YORK (GenomeWeb) – Myriad Genetics announced today that it plans to acquire mental health-focused pharmacogenetics firm Assurex Health for $225 million in upfront payments.
The deal, which will grant Myriad entry into the neuroscience space, also includes the potential for $185 million in performance-based milestone payments, the company added.
"This acquisition provides [Myriad] an experienced commercial organization in the neuroscience market that we believe will be one of the highest growth areas for personalized medicine," Myriad CEO Mark Capone said in a statement. Assurex CEO Virginia Drosos added that Myriad's reimbursement, regulatory, and commercial capabilities will allow for expanded the adoption of Assurex's neuroscience products.
Founded in 2006, Mason, Ohio-based Assurex markets GeneSight, a test that analyzes a person's cheek swab sample for a panel of PGx markers that doctors can use to personalize their patients' antipsychotic and antidepressant medications. During Myriad's fiscal year 2016, Assurex tested more than 150,000 patients and netted revenues of over $60 million.
There are an estimated 76 million people in the US with a mental disorder, which racks up $150 billion in direct healthcare costs. "The neuroscience market is characterized by subjective diagnosis and trial and error approaches to prescription drugs," Capone said during a call with analysts. "We see a substantial role for personalized medicine to improve healthcare decision making and patient outcomes in this field."
Assurex has a number of indications for GeneSight, but Myriad's presentation focused on GeneSight Psychotropic, which is used to guide treatment selection for patients with major depressive disorder with refractory, moderate, or severe depression, also known as treatment-resistant depression. According to Capone, Myriad will aim to expand the adoption of this test in the primary care setting and increase the test's indications into anxiety, bipolar disorder, and schizophrenia.
Myriad believes that the GeneSight test has less than 5 percent penetration into the market based on fiscal year 2016 revenues, but estimates that it has a $4 billion global market potential based on current and future indications of the test.
The GeneSight product also fits well with Myriad's own efforts to develop a test that can differentiate between major depressive disorder and bipolar disorder, called MyPath Bipolar. The company plans to leverage Assurex's 160 sales reps who market GeneSight to psychiatrists to market its internally developed neuroscience products. Additionally, since primary care physicians write the majority of prescriptions for mental health conditions, Myriad plans to use its preventive care sales team to market GeneSight to these physicians, which could double its addressable market.
Myriad will provide additional financial guidance on the acquisition next week during a call to discuss its financials in fiscal year 2016, which ended on June 30. The Assurex transaction is slated to close in the first quarter of fiscal year 2017. Myriad said it will pay for the transaction through cash on hand and debt. JP Morgan Chase will provide debt financing for the deal. Myriad had $286 million in cash and cash equivalents at the end of the last fiscal quarter.