Full Press Release Details
Acquires Oncotype DX GPS Prostate Cancer Business
and Reports Preliminary Half Year 2022 Results
Conference Call and Webcast Today at 4:30PM
IRVINE, CA, and HERSTAL, BELGIUM -
August 2, 2022 - MDxHealth SA (NASDAQ/Euronext: MDXH) ("mdxhealth" or the "Company"), a commercial-stage
precision diagnostics company, today announced it has entered into an asset purchase agreement with Genomic Health, Inc., a subsidiary
of Exact Sciences Corporation ("Exact Sciences"), to acquire the Oncotype DX GPS (Genomic Prostate Score ) test
from Exact Sciences along with most of its team of urology sales and marketing professionals. This addition further solidifies the Company's
leadership in the precision diagnostics urology market. Additionally, the Company reported strong preliminary financial results for the
half year ended June 30, 2022 and raised its current full year 2022 revenue guidance.
Michael McGarrity, CEO of mdxhealth, commented:
"We are excited to announce this transformational acquisition of Oncotype DX GPS, a broadly commercialized and clinically validated
test available today across the urology community, expanding mdxhealth's current menu of tests targeted into urology and prostate
cancer and reflecting our strategy to generate sustainable growth. After discussions with the Exact Sciences team, it became clear to
both companies the substantial value we could unlock by adding the Oncotype DX GPS test to mdxhealth's molecular test menu of Select
mdx and Confirm mdx as well as our newly launched advanced molecular test for urinary tract infections (UTIs). We look forward to welcoming
Exact Sciences' Oncotype DX GPS prostate commercial team to mdxhealth, increasing our commercial footprint and providing this newly
expanded sales team with a broader, highly complementary offering of precision diagnostic tests to better serve our combined customers
"We also believe this acquisition positions
mdxhealth as one of the leaders in the urology and prostate cancer space with one of the most comprehensive menus of precision diagnostics.
Our expanded menu provides clear and clinically actionably results to guide both patients and clinicians through the complex and often
confounding prostate cancer diagnostic pathway."
Kevin Conroy, Chairman and CEO of Exact Sciences
commented: "We believe the mdxhealth team is well positioned to serve patients and customers in the urology space. Adding the
Oncotype DX GPS test and technology to their comprehensive urology test menu will provide an enhanced experience and more information
to help patients and health care providers navigate a prostate cancer diagnosis."
Acquisition of the Oncotype DX GPS Prostate
Under the terms of the asset purchase agreement,
mdxhealth acquired the Oncotype DX GPS prostate cancer business of Exact Sciences for an aggregate purchase price of up to $100 million,
of which an amount of $25 million was paid in cash and an amount of $5 million will be settled through the delivery of 691,171 American
Depositary Shares ("ADSs") of the Company, at a price per ADS of $7.23. Following the closing, which took place today, an additional
aggregate earn-out amount of up to $70 million is to be paid by mdxhealth to Exact Sciences upon achievement of certain revenue milestones
related to fiscal years 2023 through 2025, with the maximum earn-out payable in relation to 2023 and 2024 not to exceed $30 million and
$40 million, respectively. At the option of mdxhealth, the earn-out amounts can be settled in cash or through the issuance of additional
ADSs of the Company (valued in function of a volume weighted average trading price of the Company's shares at the end of the relevant
earn-out period) to Exact Sciences, provided that the aggregate number of shares representing the ADSs held by Exact Sciences shall not
exceed more than 5% of the outstanding shares of mdxhealth.
Debt Financing of the Acquisition
Mdxhealth has financed the acquisition in part
through a $35 million loan and security agreement with an affiliate of Innovatus Capital Partners, LLC ("Innovatus"),
which loan also replaces the Company's existing EUR 9 million debt facility with Kreos Capital. Furthermore, at the option of the
Company, an additional $35 million can be drawn from Innovatus, consisting of a $20 million term B loan and a $15 million term C loan,
that can be drawn in 2024 and 2025 respectively, subject to certain conditions. The loans are secured by assets of the Company, including
intellectual property rights. Remaining proceeds of the loans will be used for working capital purposes and to fund general business requirements.
The loans accrue interest at a floating per annum
rate equal to the sum of (a) the greater of (i) the prime rate published in The Wall Street Journal in the "Money Rates" section
or (ii) 4.00%, plus (b) 4.25%, and require interest-only payments for the initial four years. At the election of the Company, a portion
of the interest may be payable in-kind by adding an amount equal to 2.25% of the outstanding principal amount to the then outstanding
principal balance on a monthly basis until August 2, 2025. The loans mature on August 2, 2027. The lenders shall have the right to convert,
prior to August 2, 2025, up to 15% of the outstanding principal amount of the loans into ADSs of the Company at a price per ADS equal
to $11.21, reflecting a substantial premium to the trading price prior to the announcement of the acquisition. Amounts converted into
ADSs of the Company will be reduced from the principal amount outstanding under the loan. Notable fees payable to Innovatus consist of
a facility fee equal to 1% of the total loan commitment, due on the funding date of the relevant loans, and an end-of-loan fee equal to
5% of the amount drawn, payable upon final repayment of the relevant loans. As part of the new funding, the Company's debt facility
with Kreos for an outstanding principal amount of EUR 9 million will be repaid in cash, except that the Company also agreed that
the outstanding amount of the Kreos discretionary convertible debt (being EUR 382,500, which is part of the EUR 9 million loan) will
be converted into new shares of the Company or repaid in cash.
Jefferies LLC acted as sole financial advisor
and Foley Hoag acted as lead legal counsel to mdxhealth for the acquisition; Baker McKenzie acted as lead legal counsel to mdxhealth for
First Half 2022 Preliminary Financial Results
and FY 2022 Guidance
"Our focus on execution and growth as well
as operating discipline, coupled with the early stages of patient flow returning from the impact of the pandemic, generated revenue
of $13.0 million for the first half of 2022, an increase of 21% as compared to the first half of 2021." concluded Mr. McGarrity.
Michael K. McGarrity, Chief Executive Officer,
and Ron Kalfus, Chief Financial Officer, will host a conference call and Q&A session today at 4:30PM ET / 10:30PM CET. The call will
be conducted in English and a replay will be available for 30 days.
To participate in the conference call, please
select your phone number below and use the Conference ID: 8001522.
United States: 800-289-0720
International: 323-701-0160
The Netherlands: 0800 020 2591
United Kingdom: 0800 279 6877
To ensure a timely connection, it is recommended
that users register at least 10 minutes prior to the scheduled start time.
Mdxhealth is a commercial-stage precision diagnostics
company that provides actionable molecular diagnostic information to personalize the diagnosis and treatment of cancer. The Company's
tests are based on proprietary genetic, epigenetic (methylation) and other molecular technologies and assist physicians with the diagnosis
of urologic cancers and prognosis of recurrence risk. The Company's European headquarters are in Herstal, Belgium, with laboratory
operations in Nijmegen, The Netherlands, and U.S. headquarters and laboratory operations based in Irvine, California, with additional
facebook.com/mdxhealth and linkedin.com/company/mdxhealth.
About Exact Sciences Corporation
provider of cancer screening and diagnostic tests, Exact Sciences relentlessly pursues smarter solutions providing the clarity to take
life-changing action, earlier. Building on the success of the Cologuard and Oncotype tests, Exact Sciences is investing in its
product pipeline to support patients before and throughout their cancer diagnosis and treatment. Exact Sciences unites visionary collaborators
to help advance the fight against cancer. For more information, please visit the company's website at www.exactsciences.com, follow
Exact Sciences on Twitter @ExactSciences, or find Exact Sciences on Facebook.
About Innovatus Capital Partners, LLC
Innovatus Capital Partners, LLC, is an independent
adviser and asset management firm with approximately $1.7B in assets under management. Innovatus adheres to an investment strategy that
identifies disruptive and growth opportunities across multiple asset categories with a unifying theme of capital preservation, income
generation, and upside optionality. The firm has a dedicated team of life sciences investment professionals with deep experience in healthcare,
including life sciences. Innovatus and its principals have significant experience providing debt financing to medical device, diagnostics,
and biotechnology companies that address unmet medical needs, improve patient outcomes, and reduce overall healthcare expenditures. To
date Innovatus Life Sciences Strategy has made over $1.1B in capital commitments for debt and equity support. Further information can
be found at www.innovatuscp.com.
For more information:
LifeSci Advisors (IR & PR)
Important information