Madison-based cancer diagnostics company Exact Sciences Corp. completed its $2.8 billion cash-and-stock deal with Redwood City, California-based Genomic Health, the company announced.
Exact Sciences produces Cologuard, a noninvasive, at-home screening test that detects the presence of colon cancer in stool samples. Genomic Health develops Oncotype IQ, a portfolio of genomic tests and services that check for various cancers, including breast and prostate.
“Today marks a pivotal step toward building the world’s leading advanced cancer diagnostics company,” said Kevin Conroy, chairman and CEO of Exact Sciences. “We’re excited to bring together some of the greatest minds in cancer diagnostics and continue to deliver advanced tests to providers and patients along their cancer journey.”
As a combined entity, the companies expect to generate revenue of about $1.6 billion and a gross profit of about $1.2 billion in 2020. The deal is expected to generate annualized cost synergies of about $25 million within the third full year, the companies said.
Under the terms of the deal, Genomic Health stockholders will receive $27.50 in cash and $44.50 in shares of Exact Sciences stock.
Genomic Health CEO Kim Popovits is leaving the company as part of the acquisition.
As a result of the transaction’s close, Genomic Health’s common stock will now cease to be traded on the NASDAQ.
In June, Exact Sciences opened a new 169,000-square-foot clinical laboratory and warehouse in Madison. The facility is expected to help bring the company’s total annual Cologuard processing capacity to 7 million tests, 3 million of which will be produced at its original lab in Madison. It has 2,300 employees, about three-fourths of whom work in Wisconsin.