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Exact Sciences' Q2 Loss Up 14 Percent; Reports Revenue from Genzyme Deal

NEW YORK (GenomeWeb News) – Exact Sciences today reported that its net loss for the quarter increased 14 percent on increased R&D spending and the recognition of revenues from its alliance with Genzyme announced earlier this year.

The Madison, Wis.-based molecular diagnostics firm reported total revenues of $1.3 million for the quarter, of which $1.2 million came from license fees and $11,000 came from product royalty revenues. In comparison, for the second quarter of 2008, Exact had license fees of $338,000 and reported negative $495,000 in product royalty fees that it paid out.

Exact said that the revenues for Q2 2009 increased due to the quarterly non-cash allocation resulting from its January intellectual property deal with Genzyme. Under that agreement, it sold to Genzyme certain intellectual property assets related to the fields of prenatal and reproductive health in a deal that is expected to provide Exact with a cash infusion of $24.5 million. It also sold to Genzyme 3 million shares of its common stock.

Exact's net loss for the quarter increased to $2.4 million, or $.08 per share, from $2.1 million, or $.08 per share.

Its R&D spending rose sharply to $2 million from $528,000 year over year, while its SG&A expenses ticked up to $1.6 million from $1.5 million.

"We made significant progress during the second quarter advancing our top priorities," Exact President and CEO Kevin Conroy said in a statement. "We closed an $8-million funding round, completed a licensing and collaboration agreement with Mayo Clinic, and hired a clinical diagnostics veteran as the company's chief scientific officer."

Conroy joined Exact in March, after serving as president and CEO of Third Wave Technologies, which was sold to Hologic last year for $582 million.

Exact finished the quarter with $12.3 million in unrestricted cash and cash equivalents and $15.5 million in short-term investments.

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