Exact Sciences' Freenome CRC Screening Acquisition Draws Scrutiny as Q2 Revenues Rise 16 Percent
NEW YORK – Exact Sciences simultaneously released its second quarter 2025 revenues and announced its move to acquire rights to Freenome's single indication, blood-based colorectal cancer screening test after the close of the market on Wednesday.
The company has been developing its own blood-based colorectal cancer screening test internally for several years, alongside a multi-cancer screening assay also supported by an acquired technology from Johns Hopkins spinout Thrive Earlier Detection.
But Exact said Monday that results from the pivotal study for its in-house CRC screening test had fallen short of the requirements set out by Medicare for coverage, which include sensitivity of 75 percent or higher. Exact's test only reached 73 percent sensitivity.
Investors reacted negatively to the news as Exact's stock dropped about 12 percent to $41.32 on the Nasdaq Wednesday morning.
Concurrent with the disclosure of its CRC test results, Exact announced its deal with Freenome, which gives Exact the exclusive rights in the US to that firm's assay technology for noninvasive colorectal cancer screening. The terms of the agreement call for an initial payment of $75 million, with up to $700 million to follow based on milestones related to regulatory approval and guideline inclusion.
Exact is committing $20 million per year over the next three years to jointly research and develop the Freenome test. It is also purchasing from Freenome a senior convertible note with an aggregate principal amount of $50 million with a 5 percent coupon rate due in 2030.
During a call with investors discussing the firm's Q2 revenues, Exact Chairman and CEO Kevin Conroy said that the company was disappointed with its CRC test results but was not giving up.
"Science is not always a straight path, and we are proud of our R&D team's work. We gained many insights that we believe will lead to future portfolio benefits. We are continuing internal testing and evaluation," he said.
Conroy also noted that the current results reflected a version of its test that included 3 methylation markers and a protein marker but not the additional targets that it has reported at recent scientific meetings.
Freenome published a study in June highlighting its own results and has already submitted all of the necessary data for its premarket approval application to the US Food and Drug Administration. According to Conroy, the company is also advancing a next-generation version of the test that is designed to improve advanced pre-cancer sensitivity.
Exact's deal with Freenome is exclusive to colorectal cancer, although Freenome does have its own plans for multi-cancer screening. Conroy said that Exact will launch its own multi-cancer detection test, Cancerguard, next month, and is confident in its ability to market the assay, based on its existing presence in the market.
With "over 1,000 reps calling on primary care physicians, oncologists, and health systems … we are confident in our ability to lead the [multi-cancer early detection] market," he said.
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