Exact Sciences’ falling stock prices have fueled renewed criticism of the Judge Doyle Square project, with opponents saying the company is insolvent while Exact Sciences officials maintain the company remains strong.
The company’s shares tumbled Tuesday, dropping nearly 50 percent, after it was announced Cologuard, the companies test which detects colorectal cancer, was not recommended by the U.S. Preventative Task Force. Ald. David Ahrens, District 15, said this is further proof that the city is making a bad investment in funding their new headquarters within Judge Doyle Square. The company said it would not affect its hiring ability.
Ahrens said the collapse of Exact Sciences’ share value was not itself a cause for concern, but it is indicative of a bleak future for the company. According to him, the news, combined with half a billion dollar losses previously, means the company will likely not survive.
Mayor Paul Soglin has often defended the public investment in Exact Sciences by citing the company’s promise to create hundreds of jobs, a moot point should the company fail.
Soglin touts benefits of Judge Doyle Square; derides critics
Ahrens said Cologuard had been recommended as an alternative test and this would put Exact Sciences in a very difficult position.
“It’s hard to tell physicians ‘don’t do this thing that’s recommended, do this alternative thing,’” Ahrens said.
Exact Sciences spokesperson J.P. Fielder said the alternative recommendation was given because their test is newer and has less data supporting it than more mature alternatives. He contends the losses sustained by his company are the byproduct of an extensive research and development effort to create Cologuard and are not unusual for a biotech firm.
He said there have been studies validating the test, including one which featured 10,000 subjects. He said the market’s reaction to the preventative task force announcement resulted from confusion in the task force’s use of new language.
“Right now there’s a lot of uncertainty as to what this means, and if there’s anything Wall Street doesn’t like, its uncertainty,” Fielder said.
In previous years, the task force had given letter grades on effectiveness to different technologies based on evidence available.
Ahrens said the overwhelming majority of biotech firms do not last for a considerable amount of time and it is folly for the city to believe that somehow they have selected the one which will survive.
Fielder said Cologuards’ prior, enormous market success, even while it had an “I” or insufficient rating by the task force, is a testament to the continued strength of Exact Sciences. He said sales have topped 100,000 since the test was released.
Fielder said it is important to note the recommendations are only drafts for now and his company will continue to work with the task force.
Ahrens said he hopes the city will be more cautious in its investment in Judge Doyle Square moving forward.
