Myriad Genetics, Inc. ( MYGN Quick Quote MYGN - Free Report) recently announced the completion of the divestment of its wholly-owned subsidiary -- Myriad RBM -- to Q2 Solutions. With this divestment, the company is expected to successfully capitalize on its core business and get closer to achieving its long-term growth and profitability targets.
Per Myriad Genetics’ management, the agreement with Q2 Solutions offers a good home for Myriad RBM teammates, delivers strong value and provides significant capital for growth. Notably, Myriad RBM specializes in laboratory services for clinical research for the pharmaceutical industry and will be added to the overall Q2 Solutions menu and offerings.
Significance of the Divestment
The divestiture of Myriad RBM enables Myriad Genetics to accelerate the execution of the company’s transformation plan and focus on enhancing the core businesses in Women’s Health, Oncology and Mental Health.
This remains part of the company’s 2021-released transformation plan and growth initiative with focus on organic growth expansion and leadership position in core business segments, including women’s health, oncology and mental health.
Going by its transformation plan, Myriad Genetics is currently taking initiatives to focus on expanding its reach and organic growth, expense control and advancing in genetic testing and precision medicine. In this line, company is working continuously to focus on core units with planned divesture.
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In this line, in June 2021, Myriad Genetics divested its wholly-owned subsidiary -- Myriad myPath Melanoma, LLC to Castle Biosciences, Inc -- for a total value of $32.5 million in cash.
In May 2021, Myriad Genetics entered into a definitive agreement to vend select operating assets and intellectual property (IP), including the Vectra test, from Myriad Autoimmune’s business unit to
Laboratory Corporation of America Holdings or Labcorp ( LH Quick Quote LH - Free Report) for $150 million in cash.
The company in its May update noted that the progress in its transformation plan, and growth initiatives and planned divestitures will provide the company a foundation for consistent, long-term growth and profitability. The company is looking to deploy capital and expand strategic partnerships with other healthcare leaders to deliver value for patients, providers, payors and shareholders.
Industry Prospects Per a report by Grand View Research, the global women’s health market size was valued at around $32 billion in 2019 and is projected to see a CAGR of 4.9% by 2027. Rise in the population of women aged over 60 and adoption of unhealthy lifestyle habits and the introduction of novel medicines for women are the factors driving the market. Per a report by Allied Market Research, the global oncology drugs market was valued at $128,352 million in 2019 and is projected to reach $222,380 million by 2027, at a CAGR of 7.4%. Rise in incidence of various cancer conditions, increase in popularity of advance therapies (biological and targeted drug therapies) are the key factors driving the market. Price Performance
Shares of the company have surged 170.4% in a year’s time against the
industry’s fall of 1.7%. Zacks Rank and Key Picks
Currently, the company carries a Zacks Rank #3 (Hold).
A few better-ranked stocks from the broader medical space are
Envista Holdings Corporation ( NVST Quick Quote NVST - Free Report) and IDEXX Laboratories, Inc. ( IDXX Quick Quote IDXX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.
Envista Holdings has an estimated long-term earnings growth rate of 26%.
IDEXX Laboratories has a projected long-term earnings growth rate of 20%.
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