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Exact Sciences Seeks Up to $190M in Latest Stock Offering

Xconomy Wisconsin — 

Exact Sciences said Friday that it plans to raise up to $190 million through the sale of notes that can be converted into cash or shares of the company’s stock, starting in 2025.

Madison, WI-based Exact (NASDAQ: EXAS) is developing several screening tests for cancer patients. Its flagship product is Cologuard, a non-invasive, stool-based DNA test for colorectal cancer.

The conversion price of $75.43 a share represents a premium of nearly 20 percent more than Exact’s closing share price of $63.20 Thursday. Exact said it will pay interest to investors who hold the notes at a rate of 1 percent per year.

Exact raised $690 million by issuing convertible notes in January. The offering announced Thursday “is a reopening of, and will be part of the same series as,” the notes issued earlier this year, Exact said in a press release.

In a prospectus filed Thursday with the SEC, Exact said it plans to use the proceeds from the offering “for general corporate purposes, including working capital and possible acquisitions.”

Last year, the company made two acquisitions. One was its purchase of Armune BioScience, a cancer diagnostic startup based in Michigan. Exact said in an SEC filing that it paid $12 million in upfront cash for Armune, and could be on the hook for up to $17.5 million more in potential milestone payments. Exact also acquired the Salt Lake City-based IT business Sampleminded for $3.2 million in cash, plus shares of stock in Exact.

The company said in the prospectus that its laboratory in Madison is currently able to process 2 million tests of Cologuard per year. Exact said it’s expanding the facility so that it will allow the company to process more than 3 million of the tests per year there by the end of 2018.

Exact also began building a second lab in late 2017. The company said it expects construction of the facility—which is being built on land about a mile south of Exact’s headquarters on Madison’s west side—to be complete in mid-2019. When the second lab opens, Exact estimates it will be able to complete about 5 million Cologuard tests a year.

In April, Exact projected that it would complete at least 900,000 Cologuard tests this year. It completed about 571,000 of the tests in 2017.