Exact raising $63.7M on rocky road to FDA approval

Exact Sciences CEO Kevin Conroy

Exact Sciences ($EXAS) is looking to haul in $63.7 million through a stock sale, cash the company needs to get its stool-based cancer diagnostic through the FDA process and onto U.S. shelves.

The company is offering 5.5 million shares to the public at $12.35 apiece, giving its underwriters an over-allotment option of 825,000 additional shares. Exact figures it can close the offering by Friday, and some of the proceeds will go toward scaling up its commercialization network.

Earlier this month, Exact submitted the final data in its application to get FDA approval for Cologuard, a colorectal cancer screening test. In a pivotal trial of 10,000 patients, the test demonstrated 92% colon cancer sensitivity, but, in results that alarmed investors, just 42% sensitivity to precancerous polyps and 66% for polyps two centimeters in size or larger.

When that data first came to light in April, the market punished Exact with a 30% share price plunge in just 24 hours. But the company has rallied as it nears a final FDA decision, trading at around $12.70 on Tuesday morning, more than 50% above its April bottom-out.

Whether the FDA will be deterred by the results that spooked shareholders remains to be seen, but Exact has been in contact with the agency throughout the PMA process, using the FDA's new modular approval system in which regulators provide incremental feedback as companies hand over data.

The latest fundraising is all part of Exact's plan to pile up cash and hit the ground running once it can commercialize Cologuard. The company raised $57.8 million in its August IPO, and CEO Kevin Conroy said the company is well on track to capitalize on the demand for high-sensitivity colorectal cancer diagnostics.

- read the announcement

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