Global pharmaceutical company Pfizer Inc. has entered into a four-year agreement with Exact Sciences Corp. to co-promote and sell the Madison company’s noninvasive stool DNA-based colorectal cancer take-home test in the United States.
The agreement takes effect in the fourth quarter of 2018.
Under the terms of the agreement, which runs through December of 2021, the companies will form a joint committee that will approve marketing plans and marketing budgets and will invest $174 million in the marketing and and promotion of Cologuard over the next four years. The breakdown consists of investments of $24 million each for 2018; $22 million each for 2019; $21 million each in 2020 and $20 million apiece in 2021. Exact Sciences must maintain its originally planned commitment to spend $80 million in each of the four years on out-of-pocket marketing and promotional material.
Also under the agreement, Pfizer’s sale representatives will make no less than 625,000 sales pitches in a calendar year. For the remainder of 2018, Pfizer’s salespeople must make 140,000 sales pitches.
Exact Sciences (Nasdaq: EXAS) will also pay Pfizer a promotional fee on a quarterly basis based on a percentage of laboratory service revenue, which is anticipated to increase from $441 million this year to $622 million in 2019; $861 million in 2020 and nearly $1.2 billion by 2021.
“This partnership marks a turning point in the fight to end colorectal cancer,” said Kevin Conroy, chairman and CEO of Exact Sciences, in a statement. “Pfizer is joining Exact Sciences’ mission of eradicating colorectal cancer by helping detect the disease at its earliest, most treatable stages. Together we can help reduce the prevalence of colorectal cancer by combining the power of Cologuard and the talented Exact Sciences team with Pfizer’s experience, relationships and resources.”
In 2017, 571,000 people were screened with Cologuard, according to Exact Sciences (Nasdaq: EXAS), and prior to the announcement of its agreement with Pfizer, the company anticipated completing between 900,000 and 920,000 screenings during 2018.
Exact Sciences generated $266 million in revenue in 2017, a 168 percent increase from the previous year. The company’s stock rose roughly 30 percent to $65.10 per share Wednesday after the co-marketing announcement was released.
New York-based Pfizer (NYSE: PFE), which produces cancer-fighting drugs and other cancer therapies among its offerings, generated $52.5 billion in revenue in 2017.