Tuesday, October 4, 2022

561.316.3330

Biotechnology News Magazine

Castle Biosciences to Acquire AltheaDx

Furthers mid- and long-term growth with strategic advance into pharmacogenomics and mental health

Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, today announced it has signed a definitive agreement to acquire AltheaDx, Inc. (AltheaDx).

AltheaDx is a commercial-stage molecular diagnostics company specializing in the field of pharmacogenomics (PGx) testing services that are focused on mental health. IDgenetix® is its PGx test for depression, anxiety and other mental health conditions.

“As a company, we focus on transforming disease management through the personalized information our innovative tests provide,” said Derek Maetzold, Castle’s president and chief executive officer. “Similar to our acquisition of Cernostics in December 2021, the pending acquisition of AltheaDx enables us to offer a testing solution that we believe has the potential to accelerate our impact on patient care in an area of high unmet clinical need, significantly expand our in-market expected estimated U.S. TAM to approximately $8 billion and offer incremental value to patients and clinicians over standard of care. Further, this acquisition would enable us to potentially develop a mental health franchise, starting with a test that currently receives Medicare reimbursement for depression.”

“Castle Biosciences has strong expertise in providing advanced tests that improve health and guide patient care, and we are excited to join the team,” said David Nikodem, Ph.D., chief executive officer of AltheaDx. “Precision medicine solutions, such as IDgenetix, have great potential as clinical decision support tools by providing critical genetic information to healthcare providers in pursuit of personalized care.”

Maetzold continued, “Data from a randomized controlled clinical trial in patients diagnosed with moderate and severe depression and anxiety supported the clinical utility of IDgenetix over standard of care, when physicians used the test prior to prescribing a medication. The data demonstrated that in patients diagnosed with moderate and severe depression, response rates and remission rates were significantly higher in the IDgenetix-guided group as compared to the control group at 12 weeks. We believe two forward-looking decisions made by AltheaDx contributed to these study results. The first was recognizing that both drug-gene and drug-drug interactions may impact the effectiveness of individual therapies, and the second was their proprietary approach to analyzing genetic data.

“As it relates to the unmet clinical need, assessing treatment response is critical, particularly when considering response to selective serotonin reuptake inhibitors (SSRIs) because rates of response to these treatments varies from 40-60% of patients and remission rates range from 30-45%.1 We believe the value of IDgenetix lies in providing important genetic information to clinicians, with the potential to help improve their patients’ chances of response and/or remission, by identifying appropriate medications more efficiently than the standard of care trial-and-error approach.”

Transaction Terms and Other Information

Under the terms of the definitive agreement, AltheaDx will become a wholly owned subsidiary of Castle Biosciences. At closing, Castle will pay $65.0 million in initial consideration to AltheaDx security holders, which will consist of $32.5 million in cash, subject to adjustments for cash, debt, transaction expenses and working capital, and $32.5 million in common stock of Castle. Further, up to an additional $75.0 million in cash and common stock will be payable in connection with the achievement of certain milestones based on 2022, 2023 and 2024 performance and expanded Medicare coverage for IDgenetix. The transaction is expected to close in the second quarter of 2022, subject to customary conditions to closing.

Upon closing of the transaction, the executive management team and other AltheaDx staff are expected to stay with Castle. AltheaDx’s laboratory and operations are expected to remain in San Diego.

Conference Call and Webcast Details

Company management will host a conference call and webcast to discuss this transaction at 4:30 p.m. Eastern time today. A live webcast of the conference call can be accessed here: https://event.on24.com/wcc/r/3703718/43292F55EF3242D27D296AF9E1F79C24 or via the webcast link on the Investor Relations page of the Company’s website (https://ir.castlebiosciences.com/overview/default.aspx). During the call and webcast, the Company will present a slide deck associated with the announcement, which has been posted to the Investor Relations page of the Company’s website.

Please access the webcast at least 10 minutes before the conference call start time. An archive of the webcast will be available on the Company’s website until April 21, 2022.

To access the live conference call via phone, please dial 1 844 200 6205 from the United States and Canada, or +1 929 526 1599 internationally, at least 10 minutes prior to the start of the call, using the conference ID 717384.

There will be a brief Question & Answer session following management commentary.

About AltheaDx and IDgenetix

AltheaDx, Inc. is a San Diego-based commercial stage molecular diagnostics company specializing in the field of pharmacogenomics (PGx) and focused on mental health. With an experienced team in place, AltheaDx maintains a CAP-accredited, CLIA-certified laboratory (State of California), which is also approved by the New York State Department of Health. IDgenetix® is a PGx product test for depression and anxiety and is supported by a published/peer-reviewed randomized controlled trial. This trial demonstrated clinical utility over standard of care when physicians used IDgenetix prior to prescribing a medication. IDgenetix for depression has been reimbursed by Medicare since the fall of 2020.

1 https://effectivehealthcare.ahrq.gov/products/depression-treatment-ssri/research-protocol

Latest

BRAINBox Solutions Announces New U.S. Patent Allowance, Strengthening Biomarker Portfolio for Multi-Modal Mild Traumatic Brain Injury Test

BRAINBox Solutions notes the new patent covers both diagnosis of TBI and patient monitoring post-injury, particularly for determining return to work or play.

ImaginAb Provides Business Update

ImaginAb has made significant progress this year in its clinical development plans as it pursues the goal to achieve regulatory approval for CD8 ImmunoPET imaging agent across multiple geographies and increases the number of partnerships using this technology. In January 2022, ImaginAb announced a major expansion of its pipeline with four active programs focused on the development of Radiopharmaceutical Therapies.

Newsletter

spot_img
Biotechnology News Magazine
Biotechnology News Magazine reports the latest biotech, pharma, FDA updates, biotechnology clinical trials, biotechnology mergers, biotechnology acquisitions, biotechnology funding, articles of interest and other important news.