Kevin Conroy, CEO of Exact Sciences, spoke at the Cap Times Ideas Fest in the fall of 2018. 

For observers in medicine, biotechnology and finance, Monday’s news that the Madison biotechnology company Exact Sciences plans to buy a California cancer detection firm for $2.8 billion was a big deal.

Big deal as in, Jim Cramer goes on a rant on “Mad Money,” big deal.

“You have got a gigantic diagnostic machine going now for one of the most terrible diseases ever known to man,” effused Cramer, the theatrical finance guru, speaking about the merger on his CNBC broadcast.

Exact Sciences, a maker of screening tools for colorectal cancer, announced the acquisition of Genomic Health in a joint conference call Monday morning. Company leaders say the deal, approved by the boards of both companies but still subject to shareholder and regulatory approval, will be finalized by the end of the year.

Exact is one of Madison’s flagship biotechnology firms, a publicly traded company that boasts an employee headcount of about 2,300 across six sites in Madison. It primarily manufactures Cologuard, a test that analyzes fecal samples to screen patients for colorectal cancer.

Genomic Health is based in Redwood, California, with a staff of just under 900 employees. Whereas Exact Sciences focuses on early detection, Genomic’s specialty is on treatment decisionmaking: Its flagship line of products, Oncotype DX, performs genomic tests to figure out what sorts of therapies are appropriate for patients with breast, prostate and colon cancer.

Leaders with the companies say the merger will create a bigger platform for disseminating what will now be a suite of cancer screening and therapy tools, with the potential for faster development of new technologies and treatments. They also said that the merger could help increase cancer screening and therapy around the globe, thanks to their increased reach.

“The combination with Genomic Health is one that we think is going to really pay off in the near, mid and long term,” said Kevin Conroy, the CEO and president of Exact Sciences, speaking to Cramer on “Mad Money.”

Josh Lang, an oncologist at the UW Carbone Cancer Center, said that he was excited about what the combination of the two company’s knowledge bases would mean for cancer patients. He said that especially given the two companies’ complementary focuses, their merger could help spur advances in research on biomarkers for cancer.

“Exact Sciences has a wealth of knowledge about how to screen …the other company is about later-stage patients who have a diagnosis,” he said. “This is really going to spur biomarker development.”

Lisa Johnson, the CEO of the state biotechnology advocacy group BioForward Wisconsin, said that there have been plenty of examples of biotech companies in the area getting acquired. But for a local company to be the one making the acquisition, she said, is very exciting.

She said that when she sees major growth from a biotech firm in other parts of the country, it’s often from companies that pursue acquisition strategies. She said that Conroy's decision to pursue a similar strategy portends well for Wisconsin's biohealth industry.

“He’s putting us in a different playing field,” said Johnson, of Conroy. “He’s putting a different image on this state.”

Other biomedical entrepreneurs said that the deal showed promise.

“It seems like a very strategic investment with good synergy and a similar customer base. I also think that Kevin Conroy has demonstrated that he is a savvy biotech CEO and I have no doubts he has thought of all of the angles,” wrote Rock Mackie, a longtime entrepreneur in Madison’s biotech sector, in an emailed statement.

Some financial observers noted that investors may have met the announcement with some degree of skepticism. Exact Sciences stocks slipped 12 percent on Monday after the announcement, before climbing back to close out Tuesday at $117 per share.

Observers — including Cramer — speculated that the “seesawing” stocks reflected both skepticism as well as encouragement from the strong numbers Exact Sciences also revealed to shareholders on Monday. The company reported to have screen 415,000 customers in the past quarter, and to have taken in close to $200 million in revenue.

“That quarter you announced this morning was the biggest blowout of the year,” gushed Cramer to Conroy.

The exact details of what the deal would portend for Exact Sciences’ operations in Madison remain to be seen. Exact Sciences declined to comment on this story, referring the public to a press release and investor materials.

The announcement comes on the heels of massive local expansion for the company. It recently unveiled a new production facility on Madison’s south side, and construction continues on its new headquarters at University Research Park, slated to be completed in 2020.

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Erik Lorenzsonn is the Capital Times' tech and culture reporter. He joined the team in 2016, after having served as an online editor for Wisconsin Public Radio and having written for publications like The Progressive Magazine and The Poughkeepsie Journal.