Myriad Genetics (NASDAQ:MYGN), Inc. MYGN has been in the headlines lately, thanks to the company’s efforts to focus on its core Women Health, Oncology and Mental Health businesses. In this line, the company recently divested its wholly-owned subsidiary -- Myriad myPath Melanoma, LLC to Castle Biosciences (NASDAQ:CSTL), Inc -- for a total value of $32.5 million in cash.
For investors’ note, Myriad myPath Melanoma is a laboratory that offers the myPath Melanoma test. It is being used by almost 40,000 patients to guide treatment decisions and has been ordered by nearly 20% of dermatopathologists in the country.
Given the developments, the company is expected to successfully capitalize on its core business and get closer to achieving its long-term growth and profitability targets.
Few Words on Castle Biosciences
Castle Biosciences is a skin cancer diagnostics company that offers personalized genomic information to improve cancer treatment decisions. It develops and commercializes diagnostic and prognostic tests for dermatologic cancer.
Notably, the company’s tests offer clinically actionable, tumor-specific genomic information to enable more accurate treatment plan decisions.
Significance of the Divestment
Per Myriad Genetics’ management, the divestment of Myriad myPath Melanoma to Castle Biosciences will enable the former to meet its objective of ensuring that patients continue to have access to this important test and provide value to shareholders. Moreover, the divestiture will offer growth capital for the company’s future investment.
Other Divestments
In May 2021, Myriad Genetics entered into a definitive agreement to sell Myriad RBM, Inc. to Q2 Solutions. The divestiture will enable the company to accelerate the execution of the transformation plan and focus on advancing its core businesses in Women’s Health, Oncology and Mental Health.
In the same month, 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 (NYSE:LH) Holdings or Labcorp LH for $150 million in cash Notably, the divestiture will help the company increase its operational focus and improve execution of its Women’s Health, Oncology, and Mental Health businesses.
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.
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%.
Per a report by RESEARCH AND MARKETS, the global behavioral health care software and services market size is expected to reach $5.0 billion by 2027, at a CAGR of 11.1%.
Increasing burden of complex women’s health diseases along with growing worldwide demand for cancer therapeutic market and health care software and services is expected to be major market growth drivers.
Price Performance
Shares of the company have surged 80.7% in a year’s time against the industry’s fall of 7.6%.
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 Asensus Surgical, Inc. ASXC and The Cooper Companies, Inc. COO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.
Asensus Surgical has a projected long-term earnings growth rate of 71%.
The Cooper Companies has a projected long-term earnings growth rate of 11%.
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