By Matthew Willett

Exact Sciences Corp. shares began trading Wednesday following an initial public offering that priced at $14 per share.

The 4-million-share offering, led in the U.S. by Merrill Lynch Pierce Fenner & Smith Inc., of New York; CIBC World Markets Corp., of New York; and Thomas Weisel Partners LLC, of San Francisco, grossed the company $56 million. Exact filed for the offering in October.

Underwriters were granted the option to purchase an additional 480,000 shares to cover overallotments associated with the U.S. portion of the offering, 3.2 million shares.

The international portion of the offering, about 800,000 shares, carries an overallotment option for underwriters to purchase an additional 120,000 shares.

The company, based in Maynard, Mass., estimates net proceeds from the offering, both in the U.S. and abroad, of $54.8 million, and said it will use $51.1 million of the funding to advance its clinical development and research programs, for working capital and for other corporate purposes.

Exact, founded in 1995, uses an applied genomics approach to the development of early detection technologies for several types of cancer. Its initial focus is on colorectal cancer.

The company uses several methods for cancer detection, including multiple mutation detection, the identification of a single mutation of a cancer-related gene. Exact also has deletion technology that detects short deletions and insertions in the BAT-26 region of a specific gene and a DNA integrity assay, which detects longer DNA fragments associated with abnormality.

The company also measures the enumerated loss of heterozygosity in a sample for cancer detection. That method enumerates the ratio of paternal DNA compared to maternal DNA at a given genomic site to identify the chromosomal loss characteristic of many cancers.

Exact has begun enrollment for clinical testing of its colorectal cancer screening test. It said in its filing that its proprietary technology isolates DNA from the colon in a stool sample, then detects abnormal DNA associated with colorectal cancer.

In preclinical testing, conducted since 1998 in association with The Mayo Clinic, the technology demonstrated efficacy, Exact said.

Of the $51.1 million dedicated to clinical advancement and research funding, Exact said it anticipates spending $19 million on clinical trials and $24 million for research. The balance will be dedicated to working capital and general corporate expenses.

After the offering, Exact has about 18.69 million shares outstanding. Its shares trade on Nasdaq under the symbol "EXAS." On the first day of trading the company's shares closed at $14.75, up 75 cents from the offering price.

As of Sept. 30, the company had about $30.23 million in cash and cash equivalents.

Exact's leading shareholders, The OneLiberty Fund Entities, of Cambridge, Mass., and Greylock Equity Ltd. Partnership, of Boston, saw their stakes in Exact reduced from 17.8 percent to 14 percent and 15.1 percent to 11.9 percent, respectively, after the offering.