Exact Sciences has put down $190 million to buy testing laboratory PreventionGenetics, aiming to expand its diagnostics franchise into hereditary cancer screening.
PreventionGenetics offers more than 5,000 DNA tests, including germline and whole exome sequencing panels, to help users identify potential risks they may have inherited for developing cancer or other diseases.
Calling the deal a “natural fit,” Exact Sciences CEO Kevin Conroy said the company’s genetic tests will help catch tumors earlier, when treatments can be more effective. They will be offered alongside Exact’s at-home colon cancer screener Cologuard and its Oncotype DX breast cancer test—the latter acquired in 2019 through a $2.8 billion deal for Genomic Health.
PreventionGenetics also maintains its own CLIA-certified genomics lab in Exact Sciences’ home state of Wisconsin—along with a line of health and wellness tests, plus rare disease screening offerings—and Exact plans to pull its products up through its commercial teams based in the U.S. and internationally.
The closed deal was split 50-50 in cash and stock. The companies estimate PreventionGenetics will report about $36 million in revenue for the full year of 2021.
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Exact Sciences, meanwhile, offered a preliminary look at its fourth-quarter and total 2021 earnings ahead of an investor presentation scheduled for Wednesday during the annual J.P. Morgan healthcare conference. The company said it expects to report revenues between $472 million and $475 million for last year’s fourth quarter and about $1.76 billion for all of 2021, in line with its previous estimates.
The yearly total represents a total increase of 18%. As COVID-19 revenues declined over the course of 2021, dropping by 39% compared to 2020, the company’s other precision oncology and screening programs rebounded with 29% growth.
"The Exact Sciences team delivered outstanding results to finish 2021, setting us up for years of strong growth and a clear path to profitability," Conroy said in a statement.
The company’s most recent full earnings report, published last November, showed a net loss of $166.9 million for 2021’s third quarter. Exact Sciences plans to release its full fourth-quarter earnings report in February.
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Separately, Exact Sciences also said it has signed a licensing deal with OncXerna Therapeutics to bring the precision medicine company’s tumor microenvironment panel into its fold.
OncXerna's Xerna test aims to identify patients most likely to respond to certain immunotherapies using RNA-based gene expression data and has previously been employed in the company’s own drug development efforts.
It will first be offered as part of Exact Sciences’ GEM ExTra tumor sequencing test, and the company said it plans to develop Xerna into a future companion diagnostic.