City waits for JDS developer’s answers after Exact Sciences stock drop
Members of the city’s Judge Doyle Square negotiating committee say they are waiting for developer Bob Dunn to answer if the 46 percent stock drop of biotech company Exact Sciences could impact the project.
The city recently entered into a final negotiation with Exact Sciences to give a large area of downtown a face-lift.
“We want the developer to tell us how Exact Sciences’ stock drop affects the lease they’re negotiating. If it affects their ability to get financing,” JDS negotiation committee member Natallie Erdman said.
Until those questions can be answered though, many of the 12 alders who voted in favor of a final negotiation, which would allow more than $46 million public dollars to help Exact Sciences relocate to Judge Doyle Square, say they are now waiting to see.
The company’s stock value dropped to about $10 per share Tuesday morning 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.
“While modeling can be used to understand the impact of the test’s reduced specificity and increased false-positive rate, empiric evidence is lacking on appropriate follow-up of abnormal results, making it difficult to accurately bound the potential net benefit of this screening test,” the statement said.
However, Exact Sciences Spokesperson J.P. Fielder said the company had only anticipated their test would receive a better rating. The company was taken by surprise by the draft guidelines that had a new, alternative category.
“Instead of giving individual technologies letter grading they put them into two separate areas,” Fielder said.
Despite the stock drop, Fielder said since the company’s test previously had an insufficient rating, and now appears on an alternative list, Exact Sciences remains committed to the Judge Doyle Square project.
“Where we stand today, our business strategy remains the same,” Fielder said. “There certainly is that need to bring the entire team together that we’ve talked about for the last couple months.”
However one of the six no votes, Alder David Ahrens, said the stock drop proves Exact Sciences’ product is a risky venture.
“The fact that they’re alternate means they’re not recommended,” Ahrens said. “Now when doctors get the sheet from the federal government, what’s recommended, they’re not on it.”
Ahrens is now urging alders who said yes to reconsider a final OK.
“I think this gives us the opportunity to rethink a bad decision,” Ahrens said. “And if we went through with that, and they built a building with that and we help pay their rent. We could end up with an empty city building.”
Madison Mayor Paul Soglin said he’s not concerned about a stock price drop saying he didn’t think the stock price is relevant to Exact Science’s agreement to redevelop Judge Doyle Square.
“It’s a result of a change in classification, and it’s not a final decision,” he said. “We don’t see that it changes Exact Sciences’ hiring, which is what’s critical to this decision.”
Exact Sciences officials also emphasize the federal suggestions are not a final decision, with public comments due Nov. 2, and the decision expected sometime in 2016.
The council still has 26 separate Judge Doyle Square issues to approve before Exact Sciences would receive the public money. Many of those votes are scheduled for November.
Madison’s Common Council approved the final negotiated version of the Judge Doyle Square project last week, 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.