Exact Sciences Corp., the Madison-based maker of the Cologuard take-home colon cancer test and one of the largest public companies in Wisconsin, is acquiring California's Genomic Health in a cash and stock deal valued at $2.8 billion, the company announced Monday.
Under its Oncotype DX brand, Genomic Health, based in Redwood City, California, has a portfolio of tests for screening breast, colon and prostate cancer.
The combined company is expected to generate revenue of approximately $1.6 billion in 2020 and have a commercial presence in more than 90 countries with a cancer test portfolio that reaches across primary care, oncology, OB/GYN, gastroenterology and urology.
"Uniting the best minds and molecular diagnostics capabilities will advance the fight against cancer," said Kevin Conroy, chairman and CEO of Exact Sciences, in a statement. "Combining industry pioneers Exact Sciences and Genomic Health is a pivotal step toward building the leading cancer diagnostics company in the world."
The deal is expected to be completed by the end of 2019. Under the terms of the agreement, for each share of Genomic Health common stock they own, Genomic Health stockholders will receive $27.50 in cash and $44.50 in shares of Exact Sciences stock for a total value of $72 per share.
Genomic (Nasdaq: GHDX) reported revenue of $394.1 million for 2018. For its recent second quarter, the company had revenue of $114.1 million and total revenue of $222.9 million for the six months of 2019 ending June 30.
Exact Sciences, meanwhile, reported 2018 revenue of $454.5 million. For its most recent second quarter, the company generated $199.9 million in revenue with 415,000 completed Cologuard tests, which represents growth of 94% and 93%, respectively, compared with the same quarter in 2018.
"This transaction provides immediate value to Genomic Health stockholders through an upfront cash payment, as well as ownership in a combined company with enhanced financial strength and the commercial and R&D capabilities to continue to drive significant growth into the future," said Kim Popovits, chairman, CEO and president of Genomic Health in a statement.
Exact Sciences' stock was down more than 13% in early morning trading to $101.41 per share. Genomic's stock was also down 3.2% in early trading to $68.7 per share.
