A Medical Device Daily
Exact Sciences (Marlborough, Massachusetts) reported it has an expanded agreement with Laboratory Corporation of America Holdings (LabCorp; Burlington, North Carolina) that allows for broader distribution of Exact’s DNA technology of colorectal cancer (CRC) screening.
Exact has agreed to extend LabCorp’s exclusivity period through 2010 in exchange for other terms including Exact’s right to also license the technology to select organizations and other commercial service laboratories.
Prior to this amendment with LabCorp, Exact was eligible to receive up to $45 million in payments from LabCorp related to certain objectives including $30 million relating to the achievement of sales targets, and $15 million related to policy-level reimbursement approval from key payors including Medicare and inclusion of stool-based DNA screening in clinical practice guidelines.
In the agreement, $40 million in potential milestone payments remain, all of which are now payable to Exact upon achievement of significant sales thresholds.
In exchange for the extended exclusivity, LabCorp also gave up any rights it had to receive about $3 million from Exact in connection with certain historical third-party royalty amounts.
Under the terms of the agreement, Exact will potentially be obligated to reimburse LabCorp for certain third-party royalties, up to a maximum of $1 million annually.
The amended agreement also provides that LabCorp will pay Exact a 15% royalty on LabCorp’s net revenues from PreGen-Plus, an amount that could increase to 17% if annual net revenues exceed a specified threshold. LabCorp also retains preferential pricing terms as compared to third parties to whom Exact may license its stool-based DNA screening technology.
“We are very committed to our partnership with Exact and have taken steps to enable even broader distribution for PreGen-Plus,” said David King, president/CEO of LabCorp. “This extended exclusivity, with provisions for LabCorp to allow additional labs to distribute the technology, will facilitate further market penetration for the assay. It also provides expanded testing opportunities for what we hope will be a positive decision by the American Cancer Society [Atlanta] and the U.S. Multi-Society Task Force to include stool-based DNA (sDNA) in the updated CRC screening guidelines.”
Exact uses applied genomics to develop effective, patient-friendly screening technologies for use in the detection of cancer. LabCorp is a clinical laboratory with annual revenues of 3.6 billion in 2006.
In other agreement news:iMedica (Dallas), a clinical information company for physician practices, reported an agreement with Practice Wise (Wilsonville, Oregon) to serve as a value-added reseller for iMedica’s Patient Relationship Manager.
Practice Wise will customize iMedica’s PRM to meet individual practice needs by providing pre-loaded lists of local insurance payers and referring physicians and helping practices meet state reporting requirements, such as pediatric vaccination reports and Medicare PQRI reporting.
Practice Wise is a consulting firm.