Molecular diagnostics firm Exact Sciences has signed a definitive agreement to acquire genomic diagnostics maker Genomic Health for a total of approximately $2.8bn in cash and stock.

As part of the deal, Genomic Health stockholders will gain $27.50 in cash and $44.50 in Exact Sciences stock, totalling $72 per share.

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The merger of Exact Sciences with Genomic Health will create a cancer diagnostics-focused company with a commercial footprint across more than 90 countries.

Under the deal, Exact Sciences’ Cologuard stool DNA test for colorectal cancer will be supported by Genomic Health’s Oncotype DX gene expression tests meant to facilitate therapy decisions for colorectal, breast and prostate cancers.

Cologuard is said to have a total available screening market of $15bn in the US. The product recorded 94% year-over-year revenue growth in the second quarter of this year.

Exact Sciences aims to increase its share in the US colorectal cancer screening market from the current 6% to approximately 40% over the long-term.

Oncotype DX oncology and urology products are estimated to have a total available market of $2bn, with Genomic Health’s Oncotype IQ portfolio demonstrating 19% year-over-year overall revenue growth in the second quarter.

Following the completion of the transaction, the combined company will work to boost access to existing tests and offer new diagnostics for cancer patients.

In 2020, the combined firm is expected to see around $1.6bn in revenue and about $1.2bn of gross profit.

The deal will additionally combine the companies’ research and development (R&D) team, which will involve a total of more than 1,000 employees.

Besides enhanced clinical capabilities, the combined company will have extended presence for tests in primary care, oncology, obstetrics / gynaecology, gastroenterology and urology cancer areas.

The organisation will further leverage Genomic Health’s lab infrastructure in the San Francisco Bay Area, US.

Exact Sciences chairman and CEO Kevin Conroy said: “Together, with our collective resources and broader platform, we will be able to provide our existing tests to more people, while also accelerating the development and launch of future cancer diagnostic tests.”

The transaction has been approved by the boards of directors of both companies. It is subject to customary closing conditions and is expected to be completed this year.