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

Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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Novartis CEO Vas Narasimhan [via Bloomberg/Getty]

I’m not per­fect: No­var­tis chief Vas Narasimhan al­most apol­o­gizes in the wake of a new cri­sis

Vas Narasimhan has warily stepped up with what might pass as something close to a borderline apology for the latest scandal to engulf Novartis.

But he couldn’t quite get there.

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FDA to Sarep­ta: Your wide­ly an­tic­i­pat­ed fol­lowup to Ex­ondys 51 is not get­ting an ac­cel­er­at­ed OK for Duchenne MD

In one of the least anticipated moves of the year, the FDA has rejected Sarepta’s application for an accelerated approval of its Duchenne MD drug golodirsen after fretting over safety issues.

In a statement that arrived after the bell on Monday, Sarepta explained the CRL, saying:

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Levi Garraway. Broad Institute via Youtube

Roche raids Eli Lil­ly for its next chief med­ical of­fi­cer as San­dra Horn­ing plans to step down

We found out Monday morning where Levi Garraway was headed after he left Eli Lilly as head of oncology R&D a few days ago. Roche named Garraway as their new chief medical officer, replacing Sandra Horning, who they say is retiring from the company.

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Af­ter a posse of Wall Street an­a­lysts pre­dict a like­ly new win for Sarep­ta, we're down to the wire on a crit­i­cal FDA de­ci­sion

As Bloomberg notes, most of the Wall Street analysts that cover Sarepta $SRPT are an upbeat bunch, ready to cheer on the team when it comes to their Duchenne MD drugs, or offer explanations when an odd setback occurs — as happened recently with a safety signal that was ‘erroneously’ reported last week.

Ritu Baral Cowen
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UP­DAT­ED: No­var­tis spin­off Nabri­va fi­nal­ly scores its first an­tibi­ot­ic ap­proval

In May, Nabriva Therapeutics suffered a setback after the FDA rejected its antibiotic for complicated urinary tract infections — the Novartis spinoff has now had some better luck with the US agency, which on Monday approved its other drug for community-acquired bacterial pneumonia.

The drug, lefamulin, has been developed as an intravenous and oral formulation and been tested in two late-stage clinical trials. The semi-synthetic compound, whose dosing can be switched between the two formulations, is engineered to inhibit the synthesis of bacterial protein by binding to a part of the bacterial ribosome.

Saqib Islam. CheckRare via YouTube

Spring­Works seeks $115M to push Pfiz­er drugs across fin­ish line while Sat­suma sells mi­graine play in $86M IPO

SpringWorks and Satsuma — both biotech spinouts that have closed B rounds in April — are loading up with IPO cash to boost their respective late-stage plans.
SpringWorks

Bain-backed SpringWorks is the better-known company of the two, and it’s gunning for a larger windfall of $115 million to add to $228 million from previous financings. In the process, the Stamford, CT-based team is also drawing the curtains on the partnerships it has in mind for the pair of assets it had initially licensed from Pfizer.

Mi­nor­i­ty racial groups con­tin­ue to be dis­mal­ly rep­re­sent­ed in can­cer tri­als — study

Data reveal that different racial and ethnic groups — by nature and/or nurture — can respond differently in terms of pharmacokinetics, efficacy, or safety to therapeutics, but this disparity is not necessarily accounted for in clinical trials. A fresh analysis of the last decade of US cancer drug approvals suggests the trend continues, cementing previous research that suggests oncology trials are woefully under-representative of the racial makeup of the real world.

Van­da shares slide af­ter FDA spurns their big end­point and re­jects a pitch on jet lag re­lief

Back in the spring of last year, Vanda Pharmaceuticals $VNDA served up a hot stew of mixed data for a slate of endpoints related to what they called clear evidence that their melatonin sleep drug Hetlioz (tasimelteon) could help millions of travelers suffering from jet lag.

Never mind that they couldn’t get a planned 90 people in the study, settling for 25 instead; Vanda CEO Mihael H. Polymeropoulos said they were building on a body of data to prove it would help jet-lagged patients looking for added sleep benefits. And that, they added, would be worth a major upgrade from the agency as they sought to tackle a big market.