Tuesday, October 27, 2020

Very Brief Blog: Exact Sciences to Aquire THRIVE for $2B

Exact Sciences, whose Cologuard test is the largest single molecular test paid by Medicare in 2019, has been on a roll since October 2014, when it received CMS coverage for Cologuard under a Parallel Review NCD.  Share price and market cap are up 10X since then.  Exact acquired Genomic Health for $2.8B in July 2019, just over a year ago (here).

October 27, Exact announces it will acquire THRIVE, in a deal valued up to $2.1B ($1.7B up front).   Concurrently, Exact acquires DNA methylation analysis company Base Genetics for $410M.  Exact also announced a $879M fundraising event.  

According to Genomeweb, THRIVE has garnered over $350M in investments.  In the same space, note that Illumina recently agreed to acquire GRAIL for $8B (here).  

Policy Events Contribute

Policy events are contributing to the roll in minimal detection and screening uses of liquid biopsy in cancer.  A few weeks ago, CMS announced a proposed NCD under which it would cover all FDA approved liquid biopsy cancer screening tests if they meet pre-determined CMS performance standards.  (Here).  The MolDx program announced it was proposing to cover minimal disease detection tests for cancer monitoring (such as recurrence and chemotherapy response) in both hematopoeitic and solid cancers.  (Here, here.)

EXACT is up 12X from $9 to $125 since October 2015.  Since a Covid dip of $58 on March 1, it's more than doubled to $125 today.  (The DJIA is up from 20,000 to 27,000 during the same interval).


My video on the CMS liquid biopsy policy is online here; it's a 5 minute overview and a 10 minute deep dive.  


See an open-access, JPM-inspired article in January 2020 in BioWorld on "Wall Street Wonders Where is Exact Sciences Headed" here.


Interestingly, when Illumina acquired Grail in mid September, its share price dipped from $350 to $270, before quickly bouncing back up to $320.   

In contrast, Exact's share price popped 18% on today's announcement (Exact market cap now $19B, about 40% of ILMN's market cap of $47B today.)  Note that the mid-September Grail acquisition was several weeks before the October 16 CMS NCD announcement that it was planning to issue open-ended FDA-approved colorectal test coverage.