Exact Sciences has closed the acquisitions of Paradigm Diagnostics and Viomics, adding to its oncology testing capabilities as it looks to expand beyond its flagship Cologuard cancer test.
In a statement Tuesday, Exact Sciences framed the takeovers of the Phoenix, Arizona-based companies as part of efforts to leverage its commercial platform, add to its R&D capabilities and reach more cancer patients.
- Paradigm recently received a Medicare local coverage determination for its solid tumor test. Viomics published data on a lung cancer test in 2016, but Exact has said it doesn't expect a new product in the near term.
Exact Sciences is growing quickly on the back of rising demand for colorectal cancer test Cologuard. However, with companies such as Guardant Health planning to muscle in on the colorectal cancer space, Exact Science is working to build on its head start by acquiring assets. That effort took a big step forward late last year when Exact closed the $2.8 billion takeover of Genomic Health.
Exact is now adding to its oncology testing capabilities with the acquisitions of Paradigm and Viomics, which are small enough for Exact to withhold the terms of the deals from investors. Exact did reveal it is handing over stock to buy Paradigm and cash and stock to merge with Viomics but declined to say how much it is paying.
Exact has been more forthcoming about its motivations for buying the companies. Paradigm is the more advanced of the two, having recently received a local coverage determination from the Medicare administrative contractor Palmetto GBA. The decision covered the use of the Paradigm Cancer Diagnostic in the sequencing of solid tumors.
Jeff Elliott, the CFO of Exact Sciences, told investors last month not to expect Paradigm to make a material contribution to sales in 2020. Exact Sciences thinks the test has growth potential, though, pointing to the turnaround time and reduced sample input as differentiators. The test uses tissue samples but Exact plans to introduce a blood-based version.
The Viomics takeover is likely to take longer to bear fruit. Exact has worked with Viomics on biomarker discovery in the past. By bring those capabilities in house, it hopes to boost efforts to support blood-based therapy selection and testing for residual disease.
At one time, Viomics was working to bring a blood-based assay for the early detection of lung cancer, called LungVantage, to market. However, Exact has made no mention of the test in its comments about Viomics, focusing instead on the biomarker-discovery capabilities of the newly acquired business.