Exact Sciences acquires rights to Freenome’s blood-based CRC tests

MADISON - Exact Sciences Corp. (NASDAQ:EXAS), a healthcare diagnostics company with annual revenue of $2.83 billion and strong liquidity position, has entered an agreement to acquire exclusive U.S. rights to Freenome’s current and future blood-based colorectal cancer (CRC) screening tests, according to a press release statement. According to InvestingPro analysis, the company’s shares currently appear undervalued based on their proprietary Fair Value model.

The deal expands Exact Sciences’ colorectal cancer screening portfolio beyond its existing Cologuard test, building on the company’s impressive 11.57% revenue growth over the last twelve months. Freenome recently submitted the final module of its premarket approval application to the FDA for its first-version test.

According to complete findings from the PREEMPT study published in JAMA, Freenome’s test demonstrated 81% sensitivity for colorectal cancer and 14% for advanced precancerous lesions at 90% specificity, based on U.S. Census adjusted results.

Under the agreement terms, Freenome will receive $75 million in cash by November 2025, with potential additional payments of up to $700 million tied to regulatory approvals and guideline inclusions. With a current ratio of 2.73, InvestingPro data shows Exact Sciences maintains ample liquidity to support this strategic investment. For deeper insights into the company’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. The milestone payments include $100 million upon FDA approval for first-line screening of the initial test and another $100 million for the next-generation test if it meets specific performance benchmarks.

"This exclusive license expands our leadership in cancer screening with the addition of blood-based options," said Kevin Conroy, Chairman and CEO of Exact Sciences. "We’re now able to offer a complementary blood-based option to the over 50 million unscreened Americans."

Exact Sciences also committed $20 million annually over the next three years for joint research and development. Additionally, the company will purchase a $50 million senior convertible note from Freenome with a 5.0% coupon rate due in 2030.

The exclusivity provision is contingent upon FDA approval and expiration or termination of the applicable Hart-Scott-Rodino waiting period. Prior to exclusive licensing, Exact Sciences can co-exclusively commercialize a lab-developed version of the test. With a market capitalization of $8.82 billion and analysts maintaining a strong buy consensus, the company appears well-positioned to execute this strategic expansion.

Exact Sciences also shared initial results from its own internal CRC blood test, showing 73% sensitivity for colorectal cancer and 14% for advanced precancerous lesions at 90% specificity.

In other recent news, Exact Sciences Corp. announced an expanded partnership with Humana Inc. to make its Cologuard Plus colorectal cancer screening test available as an in-network service for eligible Humana Medicare Advantage members starting in August 2025. This agreement aims to provide access to the non-invasive screening test to Humana’s approximately 5.8 million Medicare Advantage members. Exact Sciences is also set to release its second quarter 2025 financial results on August 6, 2025, followed by a webcast and conference call to discuss their performance.

In the realm of analyst ratings, Canaccord Genuity reiterated its Buy rating and maintained a $75.00 price target on Exact Sciences, ahead of the company’s upcoming BLUE-C study data readout. Meanwhile, Raymond James upgraded Exact Sciences to Market Perform after the company announced positive Medicare coverage for its Oncodetect molecular residual disease test. This coverage applies to stage II to IV colorectal cancer patients, enhancing the company’s offerings in cancer diagnostics. These developments reflect Exact Sciences’ ongoing efforts to expand its market presence and product accessibility.

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