A genetics testing outfit is bailing on its CRO services, choosing instead to refocus around precision drugs
In the past few months, there’s been a string of consolidation in the CRO space, with big players merging together and headline names in contract manufacturing snapping up research teams. But a Texas genetics player is now going the other way, bailing on its CRO offerings to instead focus on precision medicine.
Salt Lake City-based Myriad is selling its Austin contract research lab to North Carolina’s Q2 Solutions, the company said Monday. The deal is expected to be closed in Q3 and will allow Myriad to focus efforts on women’s health, oncology and mental health, CEO Paul Diaz said in a press release.
“Our agreement with Q2 Solutions provides a good home for Myriad RBM teammates, delivers strong value, and provides significant capital for future growth,” Diaz said in the release.
It’s the first of three planned business unit sales for Myriad, which hopes to rake in up to $375 million all told. The company reported a $173 million increase in revenue in its Q1 report earlier in May, and saw its stock jump up soon after.That came on the heels of a slow Q4 shares tumble 34% after posting disappointing results and initial 2020 guidance.
Myriad has provided researchers with quantitative data on the Covid-19 pandemic in areas such as cytokine storm testing, multiplex serology and T cell response, the firm said in a release. The pandemic proved lucrative for Myriad after the company posted a poor Q4 2019 with stocks dipping 34% and revenue guidance lagging.
Just four days ago, the Myriad appointed Melissa Gonzales to be president of its women’s health business. A 20-year veteran of the field, she is now responsible for providing patients with genetic tests that help women assess their risk of hereditary cancer and provide insights during pregnancy.
The company discovers and commercializes tests that determine the risk of developing disease, assess the risk of disease progression and guide treatments in spaces in which genetic insight can both improve patient care and lower costs, Myriad said.
Much like the CDMO space, CRO has been a hot area of investment in recent months as big players have looked to spend their healthy cash reserves. On the high end of the spectrum, Thermo Fisher Scientific unveiled a $17.4 billion plan to buy out CRO giant PPD back in April, looking to boost its own contract research offerings.
Just weeks before, ICON and PRA Health Sciences — the fifth and sixth biggest CROs in the space — uncorked a $12 billion merger deal that will make them the second largest firm behind IQVIA. The deal is expected to close in the third quarter of 2021.