Mayor asks Exact Sciences questions about falling stock value
Madison Mayor Paul Soglin is giving Exact Sciences officials two weeks to respond to questions about how a recent drop in the company’s stock price will affect the Judge Doyle Square project.
The city recently entered into a final negotiation with Exact Sciences to give a large area of downtown a face-lift. The city’s proposal would provide more than $46 million in public funds to help Exact Sciences relocate to Judge Doyle Square.
The company’s stock value dropped to about $10 per share the first week of October after investors learned the U.S. Preventive Services Task Force issued draft recommendations about colorectal screenings, suggesting Exact Sciences’ at-home, DNA-based colon cancer test, called cologuard, be used as an “alternative screening test” instead of a “recommended” test. The stock has continued to drop.
Soglin sent a letter to JDS Development and Exact Sciences Wednesday.
“A week ago, I stated publicly that it was premature to come to any conclusions regarding Exact Sciences and in the next month the city would get better information on the long term consequences of that announcement,” Soglin said in the letter.
Soglin said since the company and the developer have had a week to reflect on the impact of the USPSTF recommendation he is asking them to answer questions about the potential impact on the Judge Doyle Square project, like whether the company plans to appeal the recommendation, if the company has decided not to locate its headquarters at the JDS facility and whether the expected number of people they plan to hire has changed.
“They probably will not be hiring as rapidly though they will continue to ramp up,” Soglin told News 3 This Morning. “This could then change the design of the project.”
Exact Sciences officials previously emphasized the federal suggestions are not a final decision, with public comments due Nov. 2, and the decision expected sometime in 2016.
Exact Sciences issued a statement Wednesday in response to the mayor’s letter.
“We are confident Exact Sciences will continue to grow and remain successful because Cologuard is an effective colon cancer screening test that physicians and patients want. We appreciate Mayor Soglin’s ongoing engagement and are in active discussions with the mayor, city council and our developers to evaluate a headquarters option that is fiscally responsible for everyone involved. Exact Sciences remains a very strong business that is well funded and driven toward a mission of helping eradicate colon cancer.”
Soglin has asked for a response to his questions by Oct. 28.
Madison’s Common Council approved the final negotiated version of the Judge Doyle Square project, in a 12-6 vote. The city entering into a final development agreement could have Exact Sciences’ breaking ground on a new downtown headquarters by December. If that final agreement is approved, it would grant the largest subsidy in city history, more than $46 million in public dollars. $20.8 million would be used to build private parking.