-- Focus on a Strategic Transaction While Preserving Cash --
-- Company to Host Conference Call on Friday--
MARLBOROUGH, Mass.--(Business Wire)--
EXACT Sciences Corporation (NASDAQ: EXAS) today announced that it
is revising its corporate strategy to take immediate actions to
preserve existing cash while pursuing a strategic alternative for the
business. Although the ongoing strategic evaluation process has not
yet resulted in a merger or acquisition offer, the Company believes
that with recent regulatory clarity and Laboratory Corporation of
America(R) Holdings' (LabCorp(R)) launch of their new stool-based DNA
(sDNA) screening test for colorectal cancer (CRC), EXACT is better
positioned to pursue a transaction. After considering current market
conditions, EXACT's current share price and the cost of capital, and a
potential delisting of its shares from NASDAQ, EXACT is implementing a
set of cost reduction measures rather than seeking to raise capital at
this time. The Company believes that these actions, combined with the
ongoing efforts with collaborators on its sDNA technologies, will
provide EXACT with greater flexibility in its pursuit of strategic
alternatives.
As part of the Company's cost reduction efforts, EXACT is
suspending the clinical validation study of its Version 2 technology,
eliminating approximately eight positions, and seeking the
re-negotiation of certain fixed commitments. EXACT anticipates that
these initiatives will extend the Company's existing cash, based on
current operating plans, at least through the second quarter of 2009.
The Company expects to record estimated restructuring charges ranging
from approximately $200,000 to $400,000 in the third quarter of 2008
in connection with one-time employee termination benefits, including
severance, outplacement and other fringe benefits. These estimated
charges will result in future cash expenditures. In addition, EXACT
may incur additional non-cash restructuring charges in the third
quarter of 2008 related to write-downs of fixed assets or other
intangible assets after performing the requisite impairment analysis.
"Based on our available cash and our determination not to raise
capital under existing conditions, we have made the difficult but
necessary decision to suspend our clinical study and engage in other
cost reduction efforts to extend the time period for pursuing a
strategic transaction," said Jeffrey R. Luber, President & CEO of
EXACT Sciences. "We believe that our recent news of a more clearly
defined regulatory path for our technologies and LabCorp's new product
launch will assist us in our discussions with potential acquirers and
collaborators."
On July 14, 2008, LabCorp announced the launch of its new
laboratory developed CRC screening test based on the Vimentin gene - a
methylated DNA marker that in published studies was shown to be
associated with colorectal cancer. This single-marker test replaces
LabCorp's prior 23-marker stool-based DNA testing service,
PreGen-Plus(TM), that has been the subject of the U.S. Food and Drug
Administration (FDA) inquiry. EXACT is entitled to the same royalty
structure relating to LabCorp's sales of the new CRC test as it had on
LabCorp's prior sDNA-based testing service.
Conference Call Information
EXACT Sciences will host a conference call to discuss the
Company's revised corporate strategy, NASDAQ's notification of
non-compliance, and provide an update on EXACT's efforts that are
underway to identify strategic alternatives for the business on
Friday, July 18, 2008 at 8:30 a.m. ET. A live web cast of the
conference call can be accessed at EXACT Sciences' web site,
www.exactsciences.com, through the Investor Relations link. The
conference call and the web cast are open to all interested parties.
An archived version of the web cast will be available at
www.exactsciences.com, through the Investor Relations link, for one
month. A replay of the conference call also will be available for 48
hours, beginning two hours after the completion of the live call.
Information for the call is as follows:
Domestic callers: 888.396.2369
International callers: 617.847.8710
Participant Passcode: 24069967
The conference call replay information is as follows:
Domestic callers: 888.286.8010
International callers: 617.801.6888
Passcode: 18506759
EXACT Sciences Corporation
EXACT Sciences Corporation uses applied genomics to develop,
patient-friendly screening technologies for use in the detection of
cancer. EXACT maintains an exclusive license agreement with Laboratory
Corporation of America(R) Holdings (LabCorp(R)) relating to the
Company's intellectual property. EXACT Sciences' stool-based DNA
technology is included in the colorectal cancer screening guidelines
of the American Cancer Society and the U.S. Multi-Society Task Force
on Colorectal Cancer (a group comprised of representatives from the
American College of Gastroenterology, American Gastroenterological
Association, and American Society for Gastrointestinal Endoscopy), and
the American College of Radiology. EXACT Sciences is based in
Marlborough, Mass.
Certain statements made in this press release that are not based
on historical information are express or implied forward-looking
statements relating to, among other things, EXACT Sciences'
expectations concerning its process to explore strategic alternatives,
anticipated expense reductions, anticipated cash balances,
restructuring charges, business prospects and plans, and similar
matters. These statements are neither promises nor guarantees, but are
subject to a variety of risks and uncertainties, many of which are
beyond EXACT Sciences' control, and which could cause actual results
to differ materially from those contemplated in these forward-looking
statements. In particular, the risks and uncertainties include, among
other things, EXACT Sciences' ability to secure FDA approval or
clearance for any of its products; changes in FDA guidance or policy;
the ability to attract prospective collaborators or other parties to
enter into a collaboration, acquisition or other strategic transaction
with EXACT; the ability to raise additional capital on acceptable
terms; the clinical performance and market acceptance of its
technologies; the reproducibility of its research results in
subsequent studies and in clinical practice; sufficient investment in
the sales and marketing of EXACT Sciences' technologies; the success
of its strategic relationship with LabCorp; EXACT Sciences' ability to
license certain technologies or obtain raw materials for its
technologies; the ability to convince Medicare and other third-party
payors to provide adequate reimbursement for EXACT Sciences'
technologies; the ability to convince medical practitioners to order
tests using EXACT Sciences' technologies; the ability to increase the
performance its technologies; the ability of EXACT Sciences or LabCorp
to lower the cost of stool-based DNA screening technologies through
automating and simplifying key operational processes; the number of
people who decide to be screened for colorectal cancer using EXACT
Sciences' technologies; competition; the ability to protect EXACT
Sciences' intellectual property and the cost of enforcing or defending
EXACT Sciences in litigation relating to intellectual property rights;
and the possibility that other companies will develop and market novel
or improved methods for detecting colorectal cancer. Existing and
prospective investors are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. EXACT Sciences undertakes no obligation to update or revise
the information contained in this press release, whether as a result
of new information, future events or circumstances or otherwise. For
additional disclosure regarding these and other risks faced by EXACT
Sciences, see the disclosure contained in EXACT Sciences' public
filings with the Securities and Exchange Commission including, without
limitation, its most recent Annual Report on Form 10-K and subsequent
Quarterly Reports on Form 10-Q filed with the SEC.
EXACT Sciences Corporation
Jeffrey R. Luber, +1-508-683-1275
President & Chief Executive Officer
Copyright Business Wire 2008
