Cancer diagnostic test manufacturer Exact Sciences bought Genomic Health in a $2.8 billion deal. The sale is not likely to affect the companies' current products–Cologuard and Oncotype DX assays–but may promote development of new tests to detect other cancers.

Exact Sciences' recent purchase of Genomic Health could speed the development of new cancer screening assays for a variety of tumor types—and build upon the success of the companies' Cologuard and Oncotype DX tests.

Madison, WI–based Exact Sciences, which has more than 2,200 employees, produces Cologuard, a colon cancer screening test. Approved by the FDA in 2014, Cologuard assesses stool samples for blood and 11 types of DNA alterations that may indicate colon cancer or advanced polyps, including mutations in KRAS and abnormal methylation of BMP3. In 2018, the company's revenue was $454.5 million.

Genomic Health, headquartered in Redwood City, CA, employs about 900 people. Its flagship products are the Oncotype DX assays that provide treatment guidance for patients with breast, colon, or prostate cancers. The breast cancer test, for example, uses expression levels of 21 genes, such as KI67, ERBB2, and PGR, to gauge the likelihood of a distant recurrence and predict whether a patient will benefit from chemotherapy. The company reported $394.1 million in total revenue last year.

Both companies are also working on new products, such as the blood biomarker assays that Exact Sciences is creating for other malignancies—including liver, lung, and pancreatic cancers—in collaboration with academic partners.

Exact Sciences and Genomic Health announced the $2.8 billion sale at the end of July. “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,” says Kevin Conroy, JD, chairman and CEO of Exact Sciences.

The purchase likely won't have any impact on the companies' current assays, says Brian Weinstein, a health care analyst at William Blair & Company in Chicago, IL. He predicts, for instance, that the deal will not affect the price of Cologuard or Oncotype DX; the costs of the tests have already been negotiated with payers such as insurance companies. Nor will the deal reduce competition, because the target groups for the assays don't overlap. “These are two very different products,” he says.

Uniting the companies' efforts will increase investment in R&D and likely lead to the development of innovative diagnostic products. The deal combines their experience and expertise, Weinstein says, and “provides a broader organization for Exact Sciences to draw from down the road.”

Another upside, Weinstein says, is that the deal could help Exact Sciences expand internationally when its new products are available. Cologuard is sold only in the United States, whereas Oncotype DX assays are available in 90 countries.

Overall, he says, the acquisition will allow Exact Sciences to show that “it's not just the Cologuard company,” but “a broad-based cancer diagnostic company.” –Mitch Leslie

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