The Human Body — Cancer (Photo credit: n0cturbulous)
EXAS : NASDAQ : US$9.21
BUY
Target: US$14.00
COMPANY DESCRIPTION:
Exact Sciences Corporation is a molecular diagnostics company focused on the early detection and prevention of colorectal cancer. It is developing a patient-friendly, stool-based (sDNA) test known as Cologuard, for the early detection of colorectal pre-cancer and cancer. Cologuard has completed validation studies and has commenced its pivotal study for FDA review. The company employs 50 people and is based in Madison, WI.
Investment recommendation
We believe FDA will approve Cologuard given its superiority to FIT/FOBT and increase compliance rates for colon cancer screening. We raise our price target to $14 from $13 and reiterate our BUY rating.
Investment highlights
Q1 takeaways. EXAS reiterated its enthusiasm following recent release of top-line data that demonstrated superiority over FIT; notably with 42% and 66% pre-cancer sensitivity for polyps > 1cm and 2cm, respectively. EXAS estimates 7-year cumulative precancer sensitivity rises to 90% with repeat testing on 3-yr. intervals.
Timing remains on track. We do not expect any changes to the timeline for dual path approval: third module submitted to FDA by June; FDA advisory panel later this year; FDA approval by early 2014; and a CMS coverage decision shortly after.
Commercialization strategy. EXAS will initially target the 1% of PCPs that order 20% of the FIT/FOBT testing in the U.S., and focus on health care systems with strong existing screening programs. EXAS expects to build its own CLIA-lab and may seek a partner to help with operational aspects.
Service strategy. EXAS seeks to become a value-added partner, making it easy for doctors to order Cologuard. EXAS looks to send kits to patients, provide patient follow-up, and track patient use, ensuring high rates of compliance.
Related articles
- Study: New Test for Colorectal Cancer and Polyps — Without Colonoscopy (latinospost.com)
- Exact Sciences Colon Cancer Screen Results Disappoint Wall Street. (thestreet.com)
- Why EXACT Sciences Shares Nosedived (fool.com)
