MDxHealth SA (Nasdaq: MDXH), a precision diagnostics company with its U.S. headquarters and laboratories in Irvine, said it’s acquired a prostate cancer business for up to $100 million from Madison, Wis.-based Exact Sciences Corp.
The acquisition of the Oncotype DX Genomic Prostate Score test includes most of its team of urology sales and marketing professionals.
MDxHealth, which says its own diagnostics products can improve early detection of prostate cancer in a noninvasive manner and reduce the number of false negatives, says the acquisition now allows the company to provide “the most comprehensive menu
of advanced molecular tests for urology in prostate cancer.”
“Our expanded menu provides clear and clinically actionably results to guide both patients and clinicians through the complex and often confounding prostate cancer diagnostic pathway,” Chief Executive Michael McGarrity said in a statement.
Under the deal, MDxHealth paid $25 million in cash and another $5 million in shares.
MDxHealth has also agreed to pay up to $70 million to Exact Sciences upon achievement of certain revenue milestones through 2025.
MDxHealth financed the acquisition in part through a $35 million loan and security agreement with an affiliate of Innovatus Capital Partners LLC.
Jefferies LLC was the sole financial adviser and Foley Hoag acted as lead legal counsel to MDxHealth; Baker McKenzie was lead legal counsel for the loan.
It’s the first big splash for MDxHealth since the company raised around $45 million in an initial public offering late last year, in part “to expand our menu in prostate cancer and other urologic diseases.”
The commercial-stage company’s stock is also listed on the Euronext Brussels.
The company recently reported second-quarter revenue climbed 22% to $6.9 million.
MDxHealth is increasing its 2022 revenue guidance for its existing business to $27 million to $29 million, up from previous revenue guidance of $25 million to $27 million. Last year, it reported $22.2 million in sales.
The company also expects another $13 million in revenue for the acquired Oncotype DX GPS business over the August to December period.
MDxHealth’s primary commercial focus is the United States, where over 95% of its tests are performed and its revenues are generated. Most of its 190 employees are based in Irvine, where it operates out of 32,000 square feet of facilities near the local operations of chipmaker Broadcom Corp.
The company says its “entire executive management team and over 90% of staff [are] based in or reporting to our U.S. laboratory and headquarters in Irvine.”
The company in 2019 hired McGarrity, who has more than 30 years of experience in the medical device sector.
Prostate cancer is the second deadliest form of cancer in men. Approximately 25 million prostate specific antigen (PSA) tests are performed each year, for which 3 million men, or 15%, are informed of their heightened risk for prostate cancer.
The typical way to diagnose prostate cancer is a procedure that uses a biopsy needle, which can have side effects like bleeding, infection, sepsis and urinary retention.
By contrast, MDxHealth’s test uses a urine sample that measures the mRNA levels of two biomarker genes and combines that information with data such as age and prostate size to give each patient with a personalized cancer risk profile, which it says provides more accurate information than PSA and digital rectal exams used by clinicians.