Buying the Myriad assets will expand Labcorp’s portfolio of specialty tests for women’s health.

Myriad’s prenatal care business centers on four tests. FirstGene and Prequel are prenatal screens that assess the risk of common and chromosomal conditions, respectively, starting at eight weeks’ gestation. Foresight screens potential parents to detect the couple’s risk of passing down serious inheritable health conditions. SneakPeek reveals the predicted fetal sex of a child as early as six weeks into pregnancy.

Sales of the prenatal tests fell 16% year over year to $81.7 million over the first half of the year. Product volumes and revenue per test declined in the second quarter. On an earnings call in July, Myriad executives blamed the trends on “elevated payer friction,” the timing of sales force expansion and competitive dynamics.

The tests will slot into Labcorp’s portfolio of products for women’s health, one of the company’s specialty testing focus areas. The fit between the tests and Labcorp’s existing portfolio is reasonable, Evercore analysts said in a note to investors. The analysts are focused on whether Labcorp can leverage its infrastructure and provider relationships to improve the commercial performance of the tests.

Women’s health has been a tough market with BillionToOne and Natera taking share, the analysts said, adding that the key to Labcorp’s success “will be its ability to use its broad sales force to help reverse those trends.”

The analysts predict Labcorp can almost double adjusted operating margins for the tests. 5% once the products are fully integrated into its portfolio, the analysts said.

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