After Fending Off Sequenom Takeover, Exact Sciences Replaces CEO and CFO with Diagnostics Vets

3/19/09

Exact Sciences, a Marlborough, MA, developer of a DNA-based stool test for detecting colorectal cancer, says that its board of directors has replaced the firm’s CEO and chief financial officer. The management changes follow the firm’s successful maneuvering to avoid a takeover by San Diego-based diagnostics firm Sequenom (NASDAQ:SQNM).

The board of Marlborough, MA-based Exact (NASDAQ:EXAS) has named Kevin Conroy as its new chief executive and Maneesh Arora as CFO. Conroy, 43, and Arora, 40, are the former CEO and CFO, respectively, of Third Wave Technologies, a Madison, WI, provider of genetic tests for women’s health and infectious diseases that was sold last year to Bedford, MA-based Hologic (NASDAQ:HOLX) for $582 million. Exact says that previous CEO Jeffrey Luber and CFO Charles Carelli have agreed to resign, and the new top executives will take over their posts April 2.

Luber and Carelli were credited with brokering a $24.5 million deal in January with Cambridge, MA-based biotech powerhouse Genzyme (NASDAQ:GENZ). The deal, which involved the sale prenatal and reproductive health assets to Genzyme, prompted Sequenom to drop its bid to buy Exact for $41 million in Sequenom common stock—an acquisition that Sequenom was pursuing over the objections the Massachusetts firm’s board. Sequenom, a developer of prenatal tests for Down syndrome and other disorders, wanted to buy Exact to improve its footing in the cancer diagnostics market.

Exact has struggled to gain widespread adoption of its DNA-based stool test for colorectal cancer, the second-leading cause of cancer deaths in the U.S., and it plans to seek FDA approval of a new version of the test by 2011. The company’s board members are banking on Conroy and Arora to ensure that the firm realizes its goals. (Hologic is already enjoying the fruits of Conroy and Arora’s labor, winning recent FDA approvals of a pair of human papillomavirus tests previously developed at their former firm Third Wave.)

“[Conroy and Arora's] unique experience with the development of complex molecular diagnostic products and successful management of both clinical and regulatory programs is precisely what Exact needs at this stage in the company’s development,” Patrick Zenner, chairman of Exact’s board of directors, said in a statement.

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