Exact Sciences Corp. is making it official: The Madison cancer test company will announce today that it has bought the former Spectrum Brands property on the city’s Southwest Side and will expand there.
Exact will build a second laboratory at the site to process its Cologuard DNA-based stool test to screen for colorectal cancer, as the Wisconsin State Journal reported in October.
The new lab will create 250 jobs “over time,” Exact CEO Kevin Conroy said in an interview.
The company also is remodeling the four-story office building at 601 Rayovac Drive that had housed Spectrum Brands’ headquarters, and it will tear down the aging, adjacent building, at 630 Forward Drive, that had served as Spectrum Brands’ research and development center. A parking ramp will go up in its place.
The sale took place Monday. Groundbreaking ceremonies will take place Wednesday and the new lab is expected to open in mid-2019.
“Exact Sciences is really excited about the future of Cologuard and the future of the company,” Conroy said in an interview with the State Journal. “To meet the strong demand of Cologuard, we really needed to pick a new site where we could grow both our clinical lab and also grow our office space. This gives us a lot of options into the future.”
Exact already occupies the office building, whose address will be changed to 1 Exact Lane. About 350 employees have moved in over the past month — all transferred from other Exact locations — to handle call center, information technology and other administrative support functions. Conroy said that number “could grow to 1,000 people, over time,” with most of them new hires.
Conroy said no decision has been made yet on whether or not the company will move its headquarters from University Research Park, where Exact Sciences occupies three buildings and part of a fourth building.
The company’s current processing lab in the town of Madison is being expanded, raising its capacity from the current 1 million test samples a year to 2.5 million. The new lab, whose address will be 650 Forward Drive, will be 137,000 square feet with enough room to handle 2 million tests a year, raising the the company’s total capacity to 4.5 million tests a year.
Exact Sciences has projected it will process up to 572,000 Cologuard tests in 2017. Conroy has not said how soon he expects the company to reach the 4.5 million mark. He said future cancer-screening products by Exact could be handled at the West Side lab, as well.
The company has more than 1,100 employees, with more than 850 of them in the Madison area.
In documents provided to the city several months ago, the project was estimated at $57.3 million. Conroy now says it will cost “at least that” much, but declined to give an updated figure.
He also declined to say how much the company spent to buy the land, just south of the Beltline near Gammon and Watts Roads. The city assessor’s office’s website had not updated information on the property Tuesday. Owned by AREH (Ray), part of Icahn Enterprises, since 1999 and vacant for four years, the two parcels were assessed at $6.8 million for 2017, down from $10 million in 2016.
Exact Sciences officials had also considered a 32-acre site in Fitchburg’s Uptown development, at East Cheryl Parkway and Lacy Road. Conroy said the Madison location had more room for future expansion and an existing office building that could be remodeled, holding down project expenses.
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He said he’s also committed to helping residents of lower-income areas nearby obtain skills to get jobs at Exact. The company has said it will conduct an internship, apprenticeship and training program aimed at disadvantaged youth and unskilled adults in the neighborhood, working with the Urban League of Greater Madison’s Park Edge/Park Ridge Employment and Training Center on Gammon Road, a few blocks away.
“We think, over time, there will be a lot of employees who will be able to work for Exact Sciences. We think we can have a strong impact on the community,” Conroy said.
Documents given to the Madison City Council in October show wages at the new lab will range from $31,200 a year to more than $100,000 a year. Three-fourths of the jobs will pay $15 to $25 an hour, or $31,200 to $52,000 a year.
The project will get $2.5 million in tax incremental financing from the city of Madison — with some conditions attached. The first $1.8 million will be provided when Exact shows it has spent at least that much on the project. The other $688,000 will be postponed until the lab is built and occupied and it has at least 125 full-time-equivalent employees.
Under tax incremental financing, developers get a loan to help pay project costs and the money is later recouped by the city through the higher taxes the company pays on the buildings constructed.
The Wisconsin Economic Development Corp. “has not been involved” in the project, Exact spokesman Scott Larrivee said.
Potter Lawson is the architect on the project, and J.H. Findorff & Son is the general contractor.
Spectrum Brands left the site and moved to a new building in Middleton in October 2013.
Cologuard, a stool sample test kit that people can use in their homes, has been on the market since September 2014. Exact Sciences also is working on a series of blood tests, commonly referred to as liquid biopsies, to screen for other types of cancer.
As for Conroy’s vision for the company, five years from now, he said, “We expect Cologuard will be a main screening option for colon cancer and we will be an awfully large company in the healthcare space — certainly a major company within Wisconsin — and we will have introduced new tests that will help detect cancer early.”
A blood test to screen for lung cancer will likely be among them, Conroy said. He said the company plans to meet with the U.S. Food and Drug Administration in the next several months “about a path forward.”
Conroy said in July that a “pivotal study” on a lung cancer test would likely start in the first half of 2018. A preliminary study of nearly 400 people, whose results were released earlier this year, correctly identified those with cancer more than nine out of 10 times.
Through Exact’s collaboration with Mayo Clinic and the company’s own scientists, Conroy said he has high hopes for the company’s future prospects. “We think we will be known as the leading company in the liquid biopsy space,” he said.
‘We think, over time, there will be a lot of employees who will be able to work for Exact Sciences. We think we can have a strong impact on the community.’ Kevin Conroy, CEO, Exact Sciences Corp.