Myriad Genetics announced on Tuesday that it acquired consumer-focused prenatal and pediatric genomic test developer Gateway Genomics for $67.5 million in cash. The deal could pay Gateway an additional an additional $32.5 million of cash payments in 2023 and 2024 if certain revenue, volume synergy and EBITDA targets are achieved.
Via the Gateway acquisition, Myriad adds the SneakPeek Early Gender DNA test to its portfolio of women’s health products. According to the companies, SneakPeek is the top selling at-home gender test for expectant families and can deliver results with 99% accuracy only six weeks into the term of a pregnancy. Other products in Myriad’s women’s health line include the Prequel non-invasive prenatal screen, Foresight carrier screen, and MyRisk Hereditary Cancer Test with RiskScore for all ancestries.
“Gateway Genomics and the SneakPeek test reinforce our mission to advance health and well-being for all with innovative science-based tests that bring relevant genetic information to consumers and clinicians in a way that is accurate, affordable and easy to use,” said Paul J. Diaz, president and CEO, Myriad Genetics in a press release. “As a trusted lab source for prenatal and hereditary cancer testing, Myriad can now offer a comprehensive suite of women’s health testing solutions before, during, and after pregnancy.”
Gateway anticipates total revenue of around $20 million in 2022 and is forecast to grow at a compound annual growth rate of 20% over the next three to five years according Myriad’s estimates. The company is expected to have a neutral impact on Myriad’s earning in 2023, but will be accretive in 2024.
According to Chris Jacob, CEO of Gateway Genomics, the acquisition should help propel growth of its core testing products via Myriad’s position in the market and existing infrastructure.
“With more than 750,000 SneakPeek Early Gender DNA Tests sold to date, Gateway Genomics has advanced our shared mission to expand access to affordable genetic testing and improve family planning outcomes,” Jacob said. “Together, we will empower and support every woman through her pregnancy journey with advanced prenatal screening to help their family thrive from the start.”
The Gateway management team is expected to remain with Myriad, noted Diaz. The company, based in La Jolla, Calif., was founded in 2014 when it launched the first iteration of its SneakPeek test, which at the time provided fetal gender identification at nine weeks. Since its founding, the company has continued to hone the sensitivity of the test and have been able to provide test results with 99% accuracy at progressively early times in a woman’s pregnancy.
In July this year, the company published research in the journal Clinics in Mother and Child Health, demonstrating that SneakPeek had accurately predicted the fetal gender six weeks into the gestational period in all 115 cases enrolled in the study, making it the only company to publish data showing accurate fetal sex results at 6 weeks into pregnancy. The latest research was the ninth such paper published by the company detailing the accuracy of its test.
“We believe any commercial lab test offered to customers should undergo rigorous review by the scientific community to be credible,” Jacob said at the time of the publication. “This paper in the Clinics in Mother and Child Health journal is the ninth one that’s been published on SneakPeek technology. Because we’re delivering a life-changing piece of information to families, we hold ourselves to the highest scientific standards to ensure parents can trust and depend on the results we provide them.”