Skip to main content
Premium Trial:

Request an Annual Quote

Exact Sciences to Acquire Thrive Earlier Detection for up to $2.15B; Q3 Revenues Spike 87 Percent

NEW YORK – Exact Sciences said on Tuesday morning that it has entered into a definitive agreement to acquire liquid biopsy test developer Thrive Earlier Detection for cash and stock consideration of up to $2.15 billion. Exact also said that it has acquired DNA methylation analysis company Base Genomics for $410 million.

Exact also reported that its third quarter revenues increased 87 percent year over year, largely in part to COVID-19 testing revenue, and announced an approximately $869 million direct-to-market stock offering.

Cambridge, Massachusetts-based Thrive has raised at least $357 million in financing since its founding, including a $257 million series B financing in July and a $110 million Series A financing in May 2019.

Terms of the acquisition call for Thrive to receive total consideration of up to $2.15 billion, of which $1.7 billion would be payable at closing, comprising 65 percent in Exact Sciences common stock and 35 percent in cash. An additional $450 million would be payable based upon the achievement of certain milestones related to the development and commercialization of Thrive's CancerSeek, a blood-based, multi-omic, early-stage, pan-cancer screening test.

Developed by researchers at Johns Hopkins University, CancerSeek has been validated in a 10,000-patient prospective interventional study. In the study, JHU researchers used Thrive's combined DNA mutation and protein analysis to detect early-stage cancers in 10 different organs, seven of which did not have standard-of-care screening, with few false positives.

Exact said that combining CancerSeek with its own scientific platform, clinical organization, and commercial infrastructure will help establish it as a leading competitor in blood-based, multi-cancer screening.

"We have long respected the Thrive team for their rigorous scientific approach, having participated in both funding rounds as an investor," Exact Sciences Chariman and CEO Kevin Conroy said in a statement. "We are proud to take our partnership to the next level by leveraging Exact Sciences' established R&D team and highly accurate testing platform to augment development of CancerSeek and accelerate its commercialization. By combining the expertise of both organizations, we believe we can bring this powerful technology to patients faster."

Exact said that both companies' boards have unanimously approved the transaction, which is anticipated to close in the first quarter of 2021, subject to regulatory approval and the satisfaction of other conditions.

Exact also said on Tuesday that it has acquired Base Genomics, an epigenetics company developing methylation analysis methods for early cancer detection. Base Genomics' platform enables the analysis of DNA methylation and mutations in a single sample, and is highly complementary to Exact's existing methylation expertise and multi-marker approach, Exact said. According a US Securities and Exchange Commission filing on Tuesday, Exact is acquiring Base Genomics for $410 million.

Q3 financial results

For the three months ended Sept. 30, Madison, Wisconsin-based Exact reported revenues of $408.4 million compared to $218.8 million a year ago, crushing analysts' average expectation of $337.4 millon.

Screening revenues fell 2 percent to $214.6 million, and the company reported precision oncology revenues of $91.6 million in the recently completed quarter. Screening includes laboratory service revenues from Exact's Cologuard colorectal cancer screening test and revenues from Biomatrica products, while precision oncology includes laboratory service revenues from global Oncotype DX products and revenues from its Q4 2019 acquisition of Paradigm Diagnostics.

Exact also reported COVID-19 testing revenue of $102.2 million for the quarter, almost tripling the $34.6 million in COVID-19 testing revenue logged in the second quarter. Like many companies in the molecular diagnostics space, Exact forayed into COVID-19 testing earlier this year.

Exact's Q2 net loss widened to $219.9 million, or $1.46 per share, from $40.5 million, or $.31 per share, in the year-ago period. 

The company's R&D costs for the quarter fell 9 percent year over year to $31.5 million from $34.7 million, while its SG&A expenses ballooned 52 percent to $252.1 million from $166.3 million.

Exact ended the quarter with $806.7 million in cash and cash equivalents and $476.3 million in marketable securities.

Exact also said on Tuesday that it has entered into agreements to sell and aggregate of 6,605,483 shares of its common stock in a registered direct offering to 10 institutional investors, including some of its largest shareholders and as well as healthcare specialist firms Casdin Capital and Rock Springs Capital.

Each share is being sold for a purchase price of $101 per share, resulting in gross proceeds of approximately $869.2 million and net proceeds, after estimated offering expenses, of approximately $866.0 million. The offering is expected to close on or about Oct. 29, and is being made without an underwriter or a placement agent, Exact said.

Exact intends to use the net proceeds from the offering for general corporate purposes, which may include the repayment of debt, working capital, and business acquisitions, including the payment of the cash consideration related to the Thrive acquisition.

In early morning trading on Nasdaq, Exact's shares were up more than 18 percent at $126.19.