Exact Sciences and Genomic Health in $2.8bn merger
Exact Sciences will acquire Genomic Health in a merger deal worth $2.8 billion.
Based in Wisconsin, Exact focuses on colorectal cancer diagnostics and prevention. California-based Genomic’s products include breast cancer detection tools. According to a press release, the new combined company will offer “two of the strongest and fastest-growing brands in cancer diagnostics, Cologuard and Oncotype DX”.
Oncotype DX is Genomic’s flagship product. According to the California-based diagnostics company, it is the “only genomic test proven to predict a patient’s individual benefit from chemotherapy”.
The combined company expects to generate $1.6 billion in revenue and $1.2 billion in gross profit in 2020.
The merger is expected to be completed by the end of the year.
Kevin Conroy, chairman and CEO of Exact, said that “combining industry pioneers Exact Sciences and Genomic Health is a pivotal step toward building the leading cancer diagnostics company in the world”.
Revenue from Exact’s colorectal cancer detection product Cologuard have risen dramatically in recent years, with a 94% increase year-over-year in the second quarter of 2019.
"Exact Sciences is continuing to grow sales and expand adoption of Cologuard at a rapid pace, and Genomic Health's Oncotype DX is the global standard of care to inform treatment decisions for women with breast cancer,” Conroy said of the new company’s combined portfolio.
Kim Popovits, chairman and CEO of Genomic, said the merger would prove to be good value for Genomic’s shareholders.
“This transaction provides immediate value to Genomic Health stockholders through an upfront cash payment, as well as ownership in a combined company with enhanced financial strength and the commercial and R&D capabilities to continue to drive significant growth into the future," Popovits said.
The $2.8 billion includes a 19% premium on Genomic’s share price on the eve of the deal being announced.
Exact shareholders will own approximately 91% of the new company, the press release said.
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