Mayo Clinic-funded firm sells for $225 million
The $225 million sale of an Ohio biotech company could be a financial boon for Mayo Clinic.
Assurex Health launched in 2006 with funding from Mayo Clinic Ventures and Mayo Clinic plus the company licensed its premier product, GeneSight Psychotropic test, from Mayo Clinic.
GeneSight is a test that analyzes psychiatric patients' genes to determine the best antidepressant and antipsychotic drugs to treat the patient. It was developed by the late Dr. David Mrazek, Dr. Dennis O'Kane and Dr. John L. Black.
The Mason, Ohio-based Assurex investment portfolio company was purchased by biopharma giant Myriad Genetics for $225 million earlier this month. The deal could reach $410 million if Assurex hits specific performance goals. The sale is expected to close in October.
It is unclear how much the Myriad sale earned Mayo Clinic and Mayo Clinic Ventures on their 10-year investment and collaboration with Assurex.
"Mayo Clinic licensed intellectual property to Assurex Health and owns equity in the company. Mayo Clinic will no longer hold equity in the company after the merger is completed," wrote Mayo Clinic's Duska Anastasijevic.
While Mayo Clinic's equity tied to licensed intellectual property is coming to an end with this deal, it could retain some investment.
"With respect to investment-related questions, Mayo Clinic does have an investment in Assurex Health, but as I mentioned to you previously, we are not able to disclose confidential information related to investment amounts or financial returns," wrote Anastasijevic.
The purchase could prove to be a very profitable one for Myraid. CEO and President Mark Capone estimated the worldwide market for GeneSight at "greater than $4 billion." Last year, doctors used Assurex's tests on more than 150,000 patients.
Medicare approved the use of GeneSight in 2014. Now, the goal is to broaden the use of test.
"First, the largest component of this market is not even being addressed today, since most patients with depression are treated in the primary care segment. Assurex already submitted an LCD (Local Coverage Determinations) expansion request to Medicare to obtain approval for primary care physicians to order GeneSight. Importantly, this market is relatively concentrated with 16,000 high-prescribing primary care physicians responsible for 40 percent of the antidepressant prescriptions," said Capone during a conference call.
Capone also added, "Additionally, Assurex is pursuing two very important indication expansions in both anxiety and bipolar disorder. These two indications in combination would more than double the current GeneSight addressable market opportunity."
The more than 450 Assurex employees are expected to keep their jobs with the change in ownership to Myraid. The plan is to keep Assurex based in Ohio.