SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

In October 2020, the Company and Pfizer entered into an Amended and Restated Cologuard Promotion Agreement (the “Restated Agreement”), which modifies, and amends and restates in its entirety, the Promotion Agreement effective August 2018. The term of the Restated Agreement runs until December 31, 2022. The Restated Agreement extends the relationship between the Company and Pfizer and restructures the manner in which the Company compensates Pfizer for promotion of Cologuard and provision of certain other sales and marketing services related to Cologuard. The Company agreed to pay Pfizer specified amounts for each instance Pfizer promotes Cologuard to a healthcare provider that is eligible to prescribe Cologuard, which includes a one-time lump sum payment for the promotion of Cologuard between April 1, 2020 and September 30, 2020. The Company also agreed to pay Pfizer certain bonuses during 2020 and 2021, certain quarterly fees in 2020 and 2021, and a one-time fee in connection with Pfizer securing certain media and advertising for Cologuard for 2022. During the last year of the term of the Restated Agreement, the Company agreed to pay Pfizer a royalty based on Cologuard revenues over a specified threshold. See Note 8 for further discussion on the Promotion Agreement with Pfizer.

On October 26, 2020, the Company acquired all of the outstanding capital stock of Base Genomics Limited, headquartered in Cambridge, England, for $410.0 million in cash, net of cash received and certain other adjustments. This acquisition was funded with cash on hand and is expected to enhance the Company’s efforts in multi-cancer and colorectal cancer screening, as well as other cancers across the continuum.

On October 26, 2020, the Company entered into a definitive agreement and plan of merger (the “Thrive Merger Agreement”) with Thrive Earlier Detection Corporation (“Thrive”), which contemplates that, among other things, Thrive will be merged with and into one of the Company’s wholly owned subsidiaries, with the Company’s previously existing subsidiary surviving. Thrive is a healthcare company dedicated to incorporating earlier cancer detection into routine medical care. The Company expects that combining Thrive’s early-stage screening test, CancerSEEK, with the Company’s scientific platform, clinical organization and commercial infrastructure will establish the Company as a leading competitor in blood-based, multi-cancer screening. Under the terms of the Thrive Merger Agreement, Thrive will receive total consideration of $2.2 billion, of which $1.7 billion would be payable at closing, comprised of 35% in cash and 65% in the Company’s common stock. An additional $450.0 million would be payable in cash based upon the achievement of certain milestones related to the development and commercialization of a blood-based, multi-cancer screening test. The Thrive merger was approved by the Company’s board of directors and the board of directors and stockholders of Thrive. The Company currently expects the Thrive merger to close during the first quarter of 2021, subject to customary closing conditions and regulatory approvals.