Dive Brief:
- Myriad Genetics announced Wednesday it had acquired Assurex Health for $225 million upfront plus $185 million in milestone payments. Assurex's lead product, GeneSight Psychotropic, tests how a patient's genes affect the body's response to different treatment options.
- The acquisition is an opportunity for Myriad to expand its presence to the neuroscience space ahead of the company's potential 2019 release of MyPath Bipolar, a diagnostic test aimed at distinguishing bipolar disorder from depression. Myriad hopes it can leverage GeneSight's sales force to boost the product's launch.
- More than 76 million people have mental disorders in the U.S., and the country's healthcare system spends over $150 billion a year to treat these disorders, according to the company. Depression represents a quarter of this market, and another 5 million people have bipolar disorder.
Dive Insight:
GeneSight is designed to determine how a patient's genetic makeup could affect the body's response to different treatment options, matching the condition to the best possible medicine. Of the approximate 31 million people taking anti-depressants in the U.S. each year, roughly 8% of the patients develop resistance to treatments.
Average reimbursement for a GeneSight test is currently $400 as 99% of current payers are either non-contract or public. However, Myriad thinks it can secure a higher average sales price of $2,000 by expanding commercial insurance coverage.
Myriad also expects to be able to tap into its sales network to boost product revenue in a way Assurex had been unable to do.
"It is worth noting that if the current testing volume was fully reimbursed, revenue for fiscal 2016 would have been over $300 million in revenue," compared to the $60 million reported by Assurex, according to Scott Gleason, Myriad's vice president of investor relations.
"As one of the world’s leading molecular diagnostic companies, 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,” said Virginia Drosos, president and CEO of Assurex Health.