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SALT LAKE CITY – February 4, 2014 – Myriad Genetics, Inc. (Nasdaq:MYGN) announced today that it has entered into a definitive agreement to acquire Crescendo Bioscience, Inc., a global leader in autoimmune diagnostics, for $270 million in cash which will be reduced by $25 million for the repayment of a loan made to Crescendo and customary adjustments in accordance with the acquisition agreement.
The transaction is expected to close before the end of Myriad’s fiscal year 2014, pending satisfactory completion of customary closing items and regulatory approval. A discussion of the acquisition will be provided during Myriad’s second fiscal quarter earnings call later today at 4:30 pm EST.
“Crescendo Bioscience fits well into our diagnostic portfolio that is focused on saving lives and improving the quality of life of patients across major diseases,” said Peter D. Meldrum, president and CEO of Myriad Genetics. “Crescendo has pioneered protein-based diagnostics for monitoring disease activity in patients with rheumatoid arthritis and this acquisition diversifies our business into a new high growth, multibillion dollar market opportunity. We are pleased to welcome the 130 employees of Crescendo to the Myriad team and look forward to the impact of this innovative and dedicated group on our organization.”
“Crescendo has built a strong and growing position in the rheumatoid arthritis diagnostic market, and I believe Myriad will enable us to move to the next level in terms of scale and growth,” said William Hagstrom, president and CEO of Crescendo Bioscience. “We envision multiple opportunities over the next several years where, as a combined company, we can expand our presence into international markets and provide new innovative products that help improve the lives of patients suffering from autoimmune diseases.”
Crescendo was founded in July 2002 and is a leading molecular diagnostic laboratory in the area of inflammatory and autoimmune diseases. Their core product, Vectra® DA, is a quantitative, protein-based test to routinely assess rheumatoid arthritis disease activity and provide rheumatologists with expanded clinical insights to more effectively treat their patients. In the United States, more than 1.5 million individuals suffer from rheumatoid arthritis (RA) resulting in over $11 billion in healthcare costs. Crescendo is also building a comprehensive understanding of the biology of other autoimmune diseases and has a pipeline of products under development for a wide range of diseases and conditions managed by rheumatologists. Crescendo additionally has created novel software products for physicians, including VectraView™ which allows a comprehensive overview of all RA patients’ level of disease activity and trends and MyRA® which is a patient tracking and communications tool.
In 2013, Crescendo was ranked the 2(nd) fastest growing healthcare company in North America on Deloitte’s 2013 Technology Fast 500 list. During the quarter ended December 31, 2013, Crescendo tested 27,000 RA patient samples, an increase of 23 percent over the prior quarter ended September 30, 2013. Crescendo Bioscience, Inc. will retain its name and operate as a wholly owned subsidiary of Myriad Genetics, Inc. based in South San Francisco.
Benefits of the Transaction
Facilitates Myriad’s Entry into the High Growth Autoimmune Market: Myriad
sees a major growth opportunity for molecular diagnostics to aid patients
in the autoimmune market. Beyond rheumatoid arthritis there are several
other areas in rheumatology as well as the broader autoimmune market
where molecular diagnostics could play a major role in patient risk
assessment, diagnosis, prognostic outlook and therapy selection. This
complements Myriad’s current disease focus which includes products in
oncology, women’s health, urology, and dermatology.
Diversifies Myriad’s Product Revenues: A core strategic initiative for
Myriad is to continue to diversify its revenue stream into new attractive
markets. Vectra DA represents a $3.0 billion global market opportunity,
and Myriad believes Crescendo will be a major growth driver for the
Company looking forward.
Enhances Myriad’s Strength in Protein-Based Diagnostics: Myriad, a world
leader in molecular diagnostics, believes that it will further strengthen
its leadership position in protein diagnostics with the acquisition of
Crescendo. The three major sources of novel biomarkers are DNA, RNA, and
proteins and Myriad believes that Crescendo will contribute significantly
to Myriad’s industry leading diagnostic product pipeline and complement
the protein expertise at Myriad RBM.
Creates Opportunities to Leverage Myriad’s Commercial Infrastructure: As
one of the largest molecular diagnostic laboratories in the United States,
Myriad expects to leverage its operational expertise in customer service,
sales and marketing, managed care, and product development to further
expand Crescendo’s domestic business. Additionally, Myriad’s expects that
its international presence will open up new market opportunities for
Crescendo’s products outside of the United States.
Offers Long-Term Financial Benefits: Myriad expects Crescendo to generate
significant operating profits in the future and to be accretive to
earnings beginning in fiscal year 2016. In April 2013, Vectra DA received
national coverage for reimbursement by the Centers for Medicare and
Medicaid Services (CMS) and is in the process of obtaining private
insurance coverage. The typical RA patient may be monitored with a Vectra
DA test at least twice per year.