— Exact Sciences is purchasing a California company called Genomic Health for $2.8 billion, expanding its reach in the cancer diagnostics market.
The company’s colon cancer test, called Cologuard, will be sold alongside Genomic Health’s Oncotype IQ suite of products, which help guide treatment decisions for cancer patients. The acquisition is expected to be finished by the end of the year.
“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,” said Kevin Conroy, chairman and CEO of the Madison company.
According to a release, Genomic Health’s product portfolio has been used in treating more than 1 million cancer patients around the world. The company’s most recent performance information shows it had 19 percent revenue growth over the year in the second quarter of this year. The California company estimates its suite of products for oncology and urology have a total available market of $2 billion.
By comparison, Exact Sciences estimates Cologuard has a total available U.S. screening market of $15 billion for people over 50, with a potential for $3 billion more if the recommended screening window is expanded to cover people over 45. The release shows Exact Sciences has submitted an application to the FDA for such an expansion.
Once the acquisition goes through, the combined company will have more than 1,000 employees including sales and marketing staff, research specialists and others. The release shows increased investment in research and development is planned, supporting the development of new diagnostic products.
In a statement, the companies said the deal is expected to lead to $25 million in cost savings within three years.
“Together, we have a stronger financial profile than on our own, allowing us to continue to invest in new growth opportunities,” Conroy said on a conference call Monday. “Not only will we have the scientific capabilities to develop new products, but we will have the commercial scale to deliver them to physicians and patients.”
— Exact Sciences is reporting $199 million in revenue for the second quarter of this year, an increase of 94 percent from the same period of 2018.
And the company’s Q2 test volume for the Cologuard colon cancer test was 415,000 — up 93 percent from that period last year.
That brings the company closer to its goal of capturing 40 percent of the U.S. colorectal cancer screening market, according to Exact Sciences Chairman and CEO Kevin Conroy. The Madison company currently has about 6 percent of the addressable market, a release shows.
Since the Cologuard was first launched, close to 174,000 health care providers have ordered the test. About 13,000 of those ordered their first Cologuard test during the second quarter of 2019.
The average revenue per test remained the same as last quarter, at $479. And the average cost to the company per Cologuard test was $123, for a decrease of $2 per test.
Operating expenses for Q2 were $181.1 million, for an increase of 68 percent over the previous second quarter.
Exact Sciences expects up to $810 million in revenue this year, updating the previous expectation of up to $740 million. It’s noted in the release this updated expectation doesn’t include the impact of the acquisition of Genomic Health.
— The Kimberly-Clark Corp. has hired three lobbyists from Foley & Lardner LLP, the third firm it has retained over the last calendar year.
The firm declined to comment when asked by WisPolitics.com why they had been hired after the company went without a registered lobbyist for the first six months of the Evers administration.
Lobbying records from the Wisconsin Ethics Commission show Kimberly-Clark retained outside lobbyists in August 2018 to push for an incentive package that would have given the company up to $115 million over 15 years in tax credits for job retention and capital expenditures. The proposal came in response to Kimberly-Clark announcing it planned to close two Wisconsin plants as part of a global restructuring.
The bill passed the Assembly in February 2018 but stalled in the Senate. Kimberly-Clark first retained Randall Pirlot of The Hamilton Consulting Group in August 2018, then moved to hire five lobbyists from the Schreiber GR Group ahead of the bill’s public hearing in the Joint Finance Committee in November 2018.
Despite a lobbying effort that spent 678 hours and over $131,000 on behalf of the measure, four GOP senators publicly expressed opposition and the measure was not taken up during the extraordinary session in December. Outgoing Gov. Scott Walker then agreed to a five-year package worth up to $28 million to keep open the larger of the two plants.
The paper manufacturer last week authorized Joe Leibham, Jason Childress and Jennifer Malcore of Foley & Lardner to lobby on their behalf.
— Stakeholders in Sheboygan have launched a feasibility study for a community innovation hub that could bring together educators and industry partners for collaborative efforts.
The study was approved by the Sheboygan County Economic Development Corporation, Lakeshore Technical College and Lakeland University. It follows a model called Innovate2, which is launching a separate hub in Milwaukee that will connect to the proposed hub in Sheboygan.
Sheboygan’s feasibility study looks specifically at the potential for such a hub at the FreshTech Innovation District, south of downtown Sheboygan.
“The mission of FreshTech is to provide programming and coordination to invigorate our local innovation ecosystem,” stated Gary Dulmes, chair of the SCEDC.
By partnering with Lakeshore Technical College and Lakeland University as well as employers, Dulmes says “we know we can create a vibrant exchange of ideas, business challenges and technology that attracts talent.”
The feasibility study will take up to three months, focusing on the needs of the community such as talent retention or attraction, new product development and more.
— WEDC has named economic development specialist Mary Gage as the organization’s new vice president of business and community development.
A release shows Gage has worked at the community level for more than 20 years, both for the Wisconsin Economic Development Corporation and the previous Department of Commerce.
She’s been a senior loan officer, a director of business finance and compliance, a regional account manager and a consultant. Most recently, she managed a team of seven regional economic development directors who oversee WEDC programs.
Gage succeeds Barb LaMue, who left WEDC in June to become executive director of New North, an economic development effort in northeast Wisconsin.
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# FOOD AND BEVERAGE
– Calzone restaurant plans to open this week on Milwaukee’s east side
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# HEALTH CARE
– Exact Sciences to buy California-based Genomic Health for $2.8 billion
– Madison’s Exact Sciences to buy cancer diagnostic company in $2.8B deal
– Exact Sciences buying Genomic Health in $2.8 billion deal
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# REAL ESTATE
– Former Kenosha union hall acquired by Bear Development
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# PRESS RELEASES
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