Under the terms of the asset purchase agreement signed by the companies, MDxHealth has purchased the Oncotype DX GPS test as well as the Exact Sciences’ team of urology sales and marketing professionals.
According to the deal terms, the company paid $25m in cash and will provide 691,171 American Depositary Shares (ADS), worth $5m, to Exact Sciences.
Additionally, MDxHealth will make up to $70m in milestone payments to Exact Sciences. These payments will be split into $30m in 2023 and $40m in 2024.
The company stated that the deal will further strengthen its position in the precision diagnostics urology market.
The Oncotype DX GPS assay has been designed for men with low-, intermediate-, and high-risk localised prostate cancer.
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It examines the prostate cancer gene activity to predict disease aggressiveness and help guide treatment decisions during diagnosis.
MDxHealth CEO Michael McGarrity said: “We are excited to announce this transformational acquisition of Oncotype DX GPS, expanding MDxHealth’s current menu of tests targeted into urology and prostate cancer and reflecting our strategy to generate sustainable growth.
“After discussions with the Exact Sciences team, it became clear to both companies the substantial value we could unlock by adding the Oncotype DX GPS test to MDxHealth’s molecular test menu of Select MDx and Confirm MDx, as well as our newly launched advanced molecular test for urinary tract infections (UTIs).”
The company has partly funded the purchase through a $35m loan and security agreement with Innovatus Capital Partners’ affiliate.
Its loan from Innovatus replaces the existing €9m ($9.19m) debt facility with Kreos Capital.
Furthermore, MDxHealth intends to secure an additional $35m from Innovatus, comprising a $20m term B loan in 2024 and a $15m term C loan in 2025.
For the transaction, Foley Hoag served as lead legal counsel, Jefferies acted as exclusive financial advisor to MDxHealth, and Baker McKenzie served as lead legal counsel for the debt facility.
In 2018, MDxHealth developed a new liquid biopsy test to guide personalised treatment for castration-resistant prostate cancer (CRPC) patients.