precise Sciences Raises $174M, just about Doubles war Chest For Diagnostics

Jeff Engel

actual Sciences is significantly boosting its coffers because it continues pushing sales of its first molecular diagnostic take a look at and goes to work creating extra products.

Madison, WI-based precise (NASDAQ: EXAS) said it expects to earn about $ 174 million this week in a stock offering, after deducting bills and underwriting discounts. exact offered 7 million shares of its fashionable stock to underwriters Jefferies and Robert W. Baird & Co. at a value of $ 25 per share. The underwriters then became round and sold these shares on the open market at an initial worth of $ 25.50 per share. The offering is anticipated to close the next day to come, exact said in an SEC filing as of late.

Jefferies and Baird have an method to purchase some other 1.05 million shares, precise stated, which might push the corporate’s whole capital lift to about $ 200 million. (Disclosure: precise is an Xconomy underwriter, but our protection is determined independently through our editors.)

exact inventory was once trading at $ 25.55 per share as of this writing, up 1 percent from (July 24, 2015)’s closing price of $ 25.29. the corporate’s inventory opened the week at $ 28.49, a pair hours after releasing 2d-quarter financial numbers and a couple of hours before asserting the public inventory offering. It closed Tuesday—the day the $ 25.50 share price of the offering was once introduced—at $ 25.15 per share.

the new cash buttresses the $ 210.8 million in money and marketable securities the corporate already had within the bank on the finish of the 2nd quarter.

the money offers exact quite a lot of breathing room because it continues spending on gross sales and advertising for Cologuard, its stool-primarily based DNA test for detecting colorectal most cancers, which was once approved with the aid of the FDA and received Medicare protection closing year. On Monday, the company reported 2d-quarter revenue of $ 8.1 million on more than 21,000 completed Cologuard assessments—ninety % extra checks than the previous quarter. but the company used to be $ 39.1 million in the purple, or 44 cents per share, as a result of elevated spending on things like growing its gross sales body of workers to 200 individuals, an increase of about 60 throughout the second quarter, Baird financial analysts stated.

the money infusion additionally permits exact to continue investing in analysis and development. It recently outlined plans to create merchandise for the early detection of lung, pancreatic, and esophageal cancers. those exams could take more than five years and $ four hundred million in R&D spending to deliver to market, according to early estimates by using Baird analysts—which means exact may have to show to the public market for more capital someday.

however for now, “this is making certain we proceed to have a powerful monetary steadiness sheet to deal with a long runway as we improve this pipeline of products,” actual spokesman J.P. Fielder said in an interview.

The capital lift displays precise likes to aggressively go on the offensive to keep its budget wholesome, William Blair financial analysts mentioned in a report to investors this week. This was actual’s 2nd stock providing in the past eight months, following the $ one hundred and one million it netted in a December providing of four million shares. That transaction was once additionally underwritten by Jefferies and Baird.

“that is in line with the corporate’s history of elevating capital when it does not need it, to ensure that it’s not subjected to the whims of the broader fairness-capital markets,” William Blair analysts wrote.

on the other hand, the analysts have been still “a little confused about the strategic want” for the additional cash, they wrote. “We concede that it makes sense to boost money in this type of efficient capital-raising layout (the corporate would store about $ 10 million in charges doing a carry this fashion), and that it lets in management vital flexibility,” William Blair analysts wrote. “however, with the corporate fully funding the Cologuard rollout and all key R&D initiatives, we would no longer expect this cash to end in any incremental spending in the intervening time.”

William Blair rates exact’s inventory as “outperform.”

Xconomy

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