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Exact Sciences to Cut Eight Staffers, Suspends Validation Study

NEW YORK (GenomeWeb News) – Exact Sciences said today that it is undertaking a number of cost-reduction efforts, including laying off eight employees and suspending validation studies of its Version 2 stool-based technology for colorectal cancer screening, in an effort to conserve cash while “pursuing a strategic alternative for the business.”
The Marlborough, Mass.-based firm said that in addition to the layoffs and suspension of studies it would also seek to renegotiate “certain fixed commitments.” Exact expects to record restructuring charges of between $200,000 and $400,000 in the third quarter of 2008 connected to employee termination benefits. In addition, it may incur additional non-cash restructuring charges during the quarter related to write-downs, fixed assets, or other intangible assets.
Exact said that it decided on the restructuring after considering current stock market conditions, its share price and the cost of capital, and the potential delisting of its shares from the Nasdaq exchange.
As reported by GenomeWeb Daily News last week, Exact recently received a notice from Nasdaq that it is not in compliance with the Nasdaq Global Market’s listing requirement of a minimum $40 million market capitalization.
The firm noted that LabCorp recently launched a new laboratory-developed colorectal screening cancer test based on the vimentin gene, a methylated DNA marker. Exact is entitled to royalties from LabCorp on sales of the test.
“We believe that our recent news of a more clearly defined regulatory path for our technologies and LabCorp’s new product launch will assist us in our discussions with potential acquirers and collaborators,” Exact President and CEO Jeffrey Luber said in a statement.
In Thursday afternoon trade, shares of Exact were down 20 percent at $.80 per share.