A Diagnostics & Imaging Week

Sequenom (San Diego) said it intends to move forward with an exchange offer to acquire Exact Sciences (Marlborough, Massachusetts) in an all-stock transaction valued at $41 million, even though Exact reported earlier this week that its board has already rejected an acquisition proposal by Sequenom.

According to the offer, each share of Exact would be exchanged for $1.50 in Sequenom stock, subject to a floating exchange rate within a 15% collar, in which the price of Sequenom's common stock is between $20.74 and $28.06 a share.

Exact said earlier this week that is actively pursuing a strategic alternative that its board believes can provide a greater value to Exact and its shareholders than the Sequenom proposal.

"We are disappointed that the board of Exact Sciences has rejected our proposal. Unfortunately, the board of Exact Sciences has failed to recognize the potential value the combination of our two companies could provide to our respective shareholders," said Harry Stylli, PhD, president/CEO of Sequenom. "Based on the public statements of the EXACT board, we continue to be concerned that Exact may enter into transactions which may not be in the best interest of its shareholders. Therefore, in the event Exact Sciences enters into any material out-licensing agreement, collaboration or financial restructuring, we will immediately withdraw our offer."

Stylli added that the company has decided to move forward with this acquisition because Exact is "essentially a shell with intellectual property assets," and Sequenom expects it would be straightforward to assimilate the assets into its operations with minimal near-term cash outlay and execution risk to its current initiatives.

"Exact Sciences is facing multiple, significant business challenges, and we believe our proposal will address several of these including the risk of delisting from The Nasdaq Capital Market, uncertain prospects for future financing, the need for further restructuring and significant execution risk," Stylli said.

Sequenom said the acquisition of Exact, a developer of noninvasive stool-based DNA screening technologies for colorectal cancer, would provide the company with an expanded noninvasive diagnostics offering in oncology, and position it with one of the most comprehensive noninvasive cancer diagnostic portfolios.

In other dealmaking activity, Siemens Healthcare (Malvern, Pennsylvania) and U-Systems (San Jose, California) reported a technology licensing agreement for U-Systems' Somo-Viewer advanced workstation for automated breast ultrasound for use with Siemens' Acuson S2000 Automated Breast Volume Scanner, which recently received FDA 510(k) clearance.

According to the companies, this will allow physicians to obtain the comprehensive 3-D view of the breast with the intuitive anatomical coronal plane not available with conventional ultrasound systems. The agreement will facilitate the adoption of Automated Breast Volume Ultrasound for women's healthcare providers, Siemens said.

U-Systems is a private, venture-backed company with Siemens Venture Capital as an investor.