Exact Sciences Takes $24.5M Genzyme Deal, Sequenom to Drop Buyout Offer

1/28/09

Exact Sciences, a diagnostics firm that had been running low on cash, has sold its assets related to prenatal and reproductive health to big biotech Genzyme for $24.5 million—prompting Sequenom to end its pursuit to buy Exact in an all-stock deal valued at $41 million, according to statements from Exact and Sequenom.

Saying it could find a better deal, Marlborough, MA-based Exact’s (NASDAQ:EXAS) board of directors rejected San Diego-based Sequenom’s offer earlier this month to acquire Exact through the purchase of each share of Exact common stock for $1.50 worth of Sequenom (NASDAQ:SQNM) common stock. Despite Exact rejecting its bid, Sequenom yesterday launched an exchange offer to acquire all shares of Exact. But Sequenom ended the exchange offer this morning on the heels of Exact’s deal with Cambridge, MA-based Genzyme (NASDAQ:GENZ).

With the sale of its prenatal and reproductive health assets, Exact added cash to its ailing coffers. The firm says it plans to focus its resources to develop an updated version of its stool-based test for colorectal cancer and ask the FDA to approve the test in 2011.

Genzyme has given Exact $16.65 million in cash and agreed to conditional payments of $1.85 million more over the next 18 months for the prenatal and reproductive assets. Exact also received $6 million in the sale of 3 million shares of its common stock to Genzyme. Genzyme’s purchase of Exact common stock for $2 per share is a 127-percent premium on 30-day average closing price of the stock. In connection with the deal, Genzyme amended a 1999 license to Exact, giving Exact rights to sell tests that screen for two additional genetic mutations that may be indications of colorectal cancer.

Genzyme plans to use the intellectual property acquired from Exact in its Genzyme Genetics business unit, which provides prenatal and reproductive tests, company spokeswoman Sarah Millerick says.

Sequenom, which has a lead prenatal test for Down syndrome in development, had pursued the buyout of Exact to gain more IP for cancer diagnostics. (Here’s a profile story that Luke wrote about Sequenom late last year.)

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