Full Press Release Details
Report of Independent Auditors
To the Management of Exact Sciences Corporation
the accompanying special purpose combined financial statements of the Oncotype DX Prostate Score Test
("GPS"), a diagnostic test offered by Exact Sciences Corporation, which comprises the special purpose combined statements
of assets acquired and liabilities assumed as of December 31, 2021 and 2020, and the related special purpose combined statements of revenues
and direct expenses for the years then ended, including the related notes (collectively referred to as the "special purpose combined
financial statements").
the accompanying special purpose combined financial statements present fairly, in all material respects, the assets acquired and liabilities
assumed of the Oncotype DX Prostate Score Test as of December 31,
2021 and 2020, and its revenues and direct expenses for the years then ended in accordance with accounting principles generally accepted
in the United States of America.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors'
Responsibilities for the Audit of the Special Purpose Combined Financial Statements section of our report. We are required to be independent
of GPS and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
special purpose combined financial statements were prepared in connection with Exact Sciences Corporation's divestiture of the Oncotype
DX Prostate Score Test and, as described in Note 1, were prepared for
the purpose of complying with the rules and regulations of the Securities and Exchange Commission. These special purpose combined financial
statements are not intended to be a complete presentation of the financial position, results of operations or cash flows of the Oncotype
DX Prostate Score Test of Exact Sciences Corporation. Our opinion
is not modified with respect to this matter.
Responsibilities of Management for the Special Purpose Combined
Financial Statements
Management is responsible for the preparation and fair presentation
of the special purpose combined financial statements in accordance with accounting principles generally accepted in the United States
of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of special purpose combined financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibilities for the Audit of the Special
Purpose Combined Financial Statements
Our objectives are to obtain reasonable assurance about whether the
special purpose combined financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material
if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user
based on the special purpose combined financial statements.
In performing an audit in accordance with US GAAS, we:
We are required to communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters
that we identified during the audit.
/s/ PricewaterhouseCoopers LLP
ONCOTYPE DX PROSTATE SCORE TEST
SPECIAL PURPOSE COMBINED STATEMENTS OF ASSETS
ACQUIRED AND LIABILITIES ASSUMED
(In thousands - audited)
| Assets acquired | December 31, 2021 | December 31, 2020 | ||||||
| Intangible assets, net | $ | 46,348 | $ | 52,248 | ||||
| Total assets acquired | 46,348 | 52,248 | ||||||
| Total liabilities assumed | - | - | ||||||
| Net assets acquired and liabilities assumed | $ | 46,348 | $ | 52,248 |
The accompanying Notes are integral to the Special
Purpose Financial Statements.
ONCOTYPE DX PROSTATE SCORE TEST
SPECIAL PURPOSE COMBINED STATEMENTS OF ASSETS
ACQUIRED AND LIABILITIES ASSUMED
| Assets acquired | June 30, 2022 (unaudited) | December 31, 2021 (unaudited) | ||||||
| Intangible assets, net | $ | 43,398 | $ | 46,348 | ||||
| Total assets acquired | 43,398 | 46,348 | ||||||
| Total liabilities assumed | - | - | ||||||
| Net assets acquired and liabilities assumed | $ | 43,398 | $ | 46,348 |
The accompanying Notes are integral to the Special
Purpose Financial Statements.
ONCOTYPE DX PROSTATE SCORE TEST
SPECIAL PURPOSE COMBINED STATEMENTS OF REVENUES
(In thousands - audited)
| December 31, 2021 | December 31, 2020 | |||||||
| Net revenues | $ | 37,464 | $ | 35,165 | ||||
| Direct expenses | ||||||||
| Cost of sales (excludes amortization) | 8,084 | 10,248 | ||||||
| Research and development | 2,295 | 1,917 | ||||||
| Sales and marketing | 31,077 | 27,133 | ||||||
| Amortization | 5,900 | 5,900 | ||||||
| Total direct expenses | 47,356 | 45,198 | ||||||
| Net revenue less direct expenses | $ | (9,892 | ) | $ | (10,033 | ) |
The accompanying Notes are integral to the Special
Purpose Financial Statements.
ONCOTYPE DX PROSTATE SCORE TEST
SPECIAL PURPOSE COMBINED STATEMENTS OF REVENUES
(In thousands - unaudited)
| June 30, 2022 | June 30, 2021 | |||||||
| Net revenues | $ | 18,513 | $ | 19,463 | ||||
| Direct expenses | ||||||||
| Cost of sales (excludes amortization) | 4,702 | 4,157 | ||||||
| Research and development | 1,104 | 1,022 | ||||||
| Sales and marketing | 15,512 | 14,392 | ||||||
| Amortization | 2,950 | 2,950 | ||||||
| Total direct expenses | 24,268 | 22,521 | ||||||
| Net revenue less direct expenses | $ | (5,755 | ) | $ | (3,058 | ) |
The accompanying Notes are integral to the Special
Purpose Financial Statements.
NOTES TO SPECIAL PURPOSE COMBINED FINANCIAL STATEMENTS
1. Asset Purchase Agreement, Description of Oncotype DX
Prostate Score Test, and Basis of Presentation
Asset Purchase Agreement
On August 2, 2022, Genomic Health, Inc. ("GHI", the "Company",
or the "Seller"), a wholly owned subsidiary of Exact Sciences Corporation, entered into an asset purchase agreement with MDxHealth,
SA ("MDx" or the "Buyer") for the intellectual property and know-how related to the Company's Oncotype DX
Prostate Score test ("GPS"). Consideration for purchased assets comprised of $ 25.0 million in cash and $5.0 million
in American Depository Shares ("ADS") payable. The asset purchase agreement requires the Buyer to pay up to an additional
$70.0 million based upon future business revenue for the years ending December 31, 2023, 2024, and 2025.
Description of Oncotype DX Prostate Score Test and Basis of Presentation
The Company's Oncotype DX portfolio delivers
actionable insights to inform prognosis and cancer treatment after a diagnosis for breast, prostate, and colon cancers. The Company's
GPS test helps men with newly diagnosed early-stage prostate cancer make the most informed treatment decision for their individual disease,
including active surveillance. The prostate needle biopsy-based, multi-gene test has been clinically validated to predict aggressive cancer
at the time of diagnosis, helping to identify those men who need immediate surgery or radiation therapy versus those who can confidently
choose active surveillance. The result is a more precise and accurate assessment of risk, which helps more men avoid the lifelong complications
associated with treatments they do not need, while directing aggressive therapy to those men who require immediate treatment.
The accompanying Special Purpose Combined Statements of Assets Acquired
and Liabilities Assumed as of December 31, 2020 and 2021, and June 30, 2021 and 2022 (unaudited), and the Special Purpose Combined Statements
of Revenues and Direct Expenses for the years ending December 31, 2020 and 2021, and six-month periods ending June 30, 2021 and 2022 (unaudited),
(collectively, the "Special Purpose Combined Financial Statements") have been prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP"). The accompanying Special Purpose Combined Financial Statements
were prepared in connection with GHI's divestiture of GPS and were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission.
GPS has not historically been accounted for
as a separate entity, subsidiary, or division of GHI. Accordingly, management is not required to evaluate whether there are
conditions or events that raise substantial doubt about GPS's ability to continue as a going concern. In addition, standalone
financial statements related to GPS have not previously been prepared, and GHI's information systems were not designed to
identify the assets, liabilities, or cash transactions on a product basis. Therefore, it was impractical to prepare full standalone
or carve-out financial statements for GPS in accordance with the Securities and Exchange Commission's Regulation S-X. These Special
Purpose Combined Financial Statements reflect the Assets Acquired and Liabilities Assumed by GHI and Statement of Revenues and