As can­cer de­tec­tion com­pa­nies thrive, Ex­act Sci­ences looks to con­sol­i­date by spend­ing $2.8B to ac­quire peer Ge­nom­ic Health

As pre­dict­ed by Bloomberg, can­cer di­ag­nos­tics com­pa­ny Ex­act Sci­ences is buy­ing peer Ge­nom­ic Health in a $2.8 bil­lion cash-and-stock deal. 

Ex­act Sci­ences’ flag­ship col­orec­tal can­cer test Co­lo­guard will com­ple­ment Ge­nom­ic Health’s On­co­type DX, a test de­signed to help doc­tors de­ter­mine the best course of treat­ment for women with breast can­cer. To­geth­er the tests help in­form treat­ment de­ci­sions in col­orec­tal, breast and prostate can­cer, rep­re­sent­ing rough­ly 40% of all sol­id tu­mor in­ci­dence, the com­pa­nies said.

Last year, Ex­act Sci­ences en­list­ed Pfiz­er as a US mar­ket­ing part­ner to ex­pand Co­lo­guard adop­tion. The tie-up has ramped up the use of the test — in the sec­ond quar­ter of 2019, Co­lo­guard rev­enue grew 94% year-over-year.

“We re­main Out­per­form on EXAS with our view that Co­lo­guard is still high­ly un­der-pen­e­trat­ed in a pa­tient pop­u­la­tion man­age­ment pegs at 101M where EXAS could de­liv­er 40%+ pen­e­tra­tion or $6B+ in rev­enue longer-term, from just ~5% pen­e­tra­tion to­day,” Leerink an­a­lysts wrote in a note in May.

Ge­nom­ic Health re­port­ed a 19% year-over-year jump in sec­ond-quar­ter rev­enue and es­ti­mates its On­co­type DX suite of prod­ucts in on­col­o­gy and urol­o­gy have a to­tal avail­able mar­ket of $2 bil­lion.

Com­bined un­der one roof, the com­pa­nies are look­ing to take ad­van­tage of economies of scale, as ri­vals loom large. South San Fran­cis­co biotech Freenome raised $160 mil­lion last week to con­duct a piv­otal tri­al for its blood test for col­orec­tal can­cer. Mean­while, Il­lu­mi­na spin­off Grail has raised $1.5 bil­lion to work on a mul­ti-can­cer de­tec­tion test and Third Rock-backed Thrive has scored $110 to build its liq­uid biop­sy plat­form for ear­ly can­cer de­tec­tion.

Kevin Con­roy Ex­act Sci­ences

“To­geth­er, with our col­lec­tive re­sources and broad­er plat­form, we will be able to pro­vide our ex­ist­ing tests to more peo­ple, while al­so ac­cel­er­at­ing the de­vel­op­ment and launch of fu­ture can­cer di­ag­nos­tic tests,” Ex­act Sci­ences chief Kevin Con­roy said in a state­ment on Mon­day. 

“Though we be­lieve the pipeline ben­e­fits, po­ten­tial for kit­ted prod­ucts, ex­pan­sion in­to in­ter­na­tion­al mar­kets…and ex­pe­ri­ence with FDA are win­ning as­pects of the deal; EXAS is like­ly to get more in­vestor ques­tions on the near-mid term strate­gic ra­tio­nale and $25M in 3rd year syn­er­gies,” Leerink an­a­lysts wrote in a note.

On Sat­ur­day, Bloomberg re­port­ed the deal was in­com­ing, cit­ing peo­ple fa­mil­iar with the mat­ter.

Ex­act Sci­ences shares $EXAS closed up about 1.6% on Fri­day at $117.92, while Ge­nom­ic Health’s stock $GHDX closed up 5.5% at $68.66.

Un­der the deal, which is ex­pect­ed to close at the end of the year, Ge­nom­ic Health stock­hold­ers will re­ceive $27.50 in cash and $44.50 in shares of Ex­act Sci­ences stock. If con­sum­mat­ed, Ex­act Sci­ences share­hold­ers are set to own about 91% of the com­bined com­pa­ny, while Ge­nom­ic Health stock­hold­ers will be left with the rest. Next year, the com­bined en­ti­ty ex­pects to gen­er­ate rev­enue of ap­prox­i­mate­ly $1.6 bil­lion and a gross prof­it of ap­prox­i­mate­ly $1.2 bil­lion. 

So­cial im­age: Ex­act Sci­ences

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

UP­DAT­ED: Boehringer nabs FDA's first in­ter­change­abil­i­ty des­ig­na­tion for its Hu­mi­ra com­peti­tor — but will it mat­ter?

The FDA late Friday awarded Boehringer Ingelheim the first interchangeability designation for its Humira biosimilar Cyltezo, meaning that when it launches in July 2023, pharmacists will be able to automatically substitute the Boehringer’s version for AbbVie’s mega-blockbuster without a doctor’s input.

The designation will likely give Boehringer, which first won approval for Cyltezo in 2017, the leg up on a crowded field of Humira competitors.

Bio­gen hit by ALS set­back with PhI­II fail­ure for tofersen — but fol­lows a fa­mil­iar strat­e­gy high­light­ing the pos­i­tive

Patients and analysts waiting to hear Sunday how Biogen’s SOD1-ALS drug tofersen fared in Phase III didn’t have to wait long for the top-line result they were all waiting for. The drug failed the primary endpoint on significantly improving the functional and neurologic decline of patients over 28 weeks as well as the extension period for continued observation.

In fact, there was very little difference in response.

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Two drug­mak­ers hit with PDU­FA date de­lays from FDA amid back­log of in­spec­tions

As the FDA is weighed down with more and more pandemic responsibilities, the agency is beginning to miss PDUFA dates with more frequency too. Two different companies on Monday said they received notices that the FDA has not completed their drug reviews on time.

The review of an NDA for Avadel Pharmaceuticals’ candidate treatment for narcolepsy is not coming this month, the company said, and the review of UCB’s BLA for bimekizumab, used to treat moderate to severe plaque psoriasis, will miss its target date as well.

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Reshma Kewalramani, Vertex CEO (YouTube)

Ver­tex gets much-need­ed win with ‘ex­tra­or­di­nary’ first pa­tient re­sults on po­ten­tial di­a­betes cure

Vertex said Monday that the first patient dosed with its cell therapy for type 1 diabetes saw their need for insulin injections vanish almost entirely, a key early step in the decades-long effort to develop a curative treatment for the chronic disease.

The patient, who had suffered five potentially life-threatening hypoglycemic — or low blood sugar — episodes in the year before the therapy, was injected with synthetic insulin-producing cells. After 90 days, the patient’s new cells produced insulin steadily and ramped up their insulin production after a meal like normal cells do, as measured by a standard biomarker for insulin production.

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Covid-19 vac­cine boost­ers earn big thumbs up, but Mod­er­na draws ire over world sup­ply; What's next for Mer­ck’s Covid pill?; The C-suite view on biotech; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

You may remember that at the beginning of this year, Endpoints News set a goal to go broader and deeper. We are still working towards that, and are excited to share that Beth Snyder Bulik will be joining us on Monday to cover all things pharma marketing. You can sign up for her weekly Endpoints MarketingRx newsletter in your reader profile.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Scott Struthers, Crinetics CEO

Cri­net­ics spins out ra­dio­phar­ma ef­forts in­to a new com­pa­ny, high­light­ing the grow­ing field­'s al­lure

Largely known for its nonpeptide small molecule research, Crinetics has been keeping its radiopharma work comparatively under wraps. But that changed Monday afternoon as the California biotech spun out a new company focused solely on the burgeoning field.

Crinetics launched Radionetics after the closing bell Monday, the company announced, seeding the new entity with $30 million raised from 5AM Ventures and Frazier Healthcare Partners. Radionetics will start with its own radiopharma-centric platform and a pipeline of 10 programs aimed at solid tumors.

Amit Etkin, Alto Neuroscience CEO (Alto via Vimeo)

A star Stan­ford pro­fes­sor leaves his lab for a start­up out to re­make psy­chi­a­try

About five years ago, Amit Etkin had a breakthrough.

The Stanford neurologist, a soft-spoken demi-prodigy who became a professor while still a resident, had been obsessed for a decade with how to better define psychiatric disorders. Drugs for depression or bipolar disorder didn’t work for many patients with the conditions, and he suspected the reason was how traditional diagnoses didn’t actually get at the heart of what was going on in a patient’s brain.