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Jan 28, 2009

Exact Receives $22.65M from Genzyme in Asset Purchase Agreement and Equity Investment

  • Genzyme paid $16.65 million for certain Exact Sciences’ intellectual property related to prenatal and reproductive health. Genzyme also bought 3 million shares of Exact common stock for $6 million.

    With the signing of this agreement, Sequenom reports that it is terminating its exchange offer to acquire Exact Sciences. When Sequenom made its $41 million proposal earlier this month, it said that it would terminate the exchange offer if Exact entered into any out-licensing agreement, collaboration or financial restructuring.

    Instead Exact stands to earn a total of $24.5 million from Genzyme. Besides the up-front fee, Exact could receive an additional $1.85 million over the next 18 months. The firm will also receive double-digit percentage of Genzyme’s sublicensing income derived from the purchased intellectual property outside the fields of prenatal and reproductive health.

    Exact retains exclusive, worldwide rights to its colorectal cancer screening and stool-based DNA testing assets. Additionally, Exact will receive exclusive rights in these fields to improvements on the purchased intellectual property that may be developed by Genzyme. Exact will also receive rights in these fields to improvements resulting from any joint developments between the companies.

    Exact and Genzyme also amended their March 1999 license to provide Exact with the additional rights necessary to distribute FDA-approved kits for stool-based detection of disease and colorectal cancer screening based on the detection of APC and P53 mutations. Exact notes that the license amendment as well as the ongoing assumption by Genzyme of certain patent costs will reduce its cash outlays going forward.

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