On Friday, Exact Sciences Corp (NASDAQ:EXAS) maintained its positive outlook from Leerink Partners following the U.S. Food and Drug Administration's (FDA) approval of the company's Cologuard Plus (CG+) test for individuals aged 45 and older who are at average risk of colorectal cancer. The new test is being recognized for setting a higher standard in non-invasive stool-based screening due to its improved accuracy.
The CG+ test boasts a sensitivity of 95% and a specificity of 94%, with an adenoma detection rate (AA) of 43%. These metrics are a significant enhancement over the original Cologuard test, which had a specificity of 87%. The reduction in false positives from 13% to 6% is particularly noteworthy for healthcare providers.
While the FDA has yet to release the official label for Cologuard Plus, conversations with Exact Sciences indicate that the Instructions for Use will highlight the test's sensitivity and specificity figures. The company plans to market these performance metrics directly to primary care physicians and providers.
Management at Exact Sciences clarified that the 95% sensitivity rate is specific to the average risk population, as opposed to the 94% sensitivity reported in a New England Journal of Medicine (NEJM) paper, which included both average risk and cancer populations. Similarly, the 94% specificity rate is based on an age-weighted U.S. population without findings, compared to 91% specificity in the NEJM study.
The anticipation is that the Instructions for Use will detail all the performance statistics, but marketing materials are expected to focus on the 95% sensitivity, 94% specificity, and 43% adenoma detection rate. Leerink Partners reiterates an Outperform rating with a $100.00 price target on Exact Sciences, reflecting confidence in the company's market position following this latest FDA approval.
In other recent news, Exact Sciences Corp. has had a series of significant developments. The U.S. Food and Drug Administration (FDA) approved the company's Cologuard Plus test for colorectal cancer screening, based on the results of the BLUE-C study. The test, which is expected to be commercially available in 2025, has shown significant improvement over the current Cologuard test, reducing false positives by more than 30%.
Exact Sciences also reported a year-over-year revenue increase of 12%, reaching $699 million in its second quarter earnings, primarily attributed to the use of its Cologuard test by over a million people and record global patient testing with Oncotype DX.
In the realm of analysts' perspectives, firms such as TD Cowen, Canaccord Genuity, BTIG, Citi, and Piper Sandler have maintained or raised their price targets for the company, largely maintaining a Buy rating.
The company has also initiated the Falcon Registry study for Multi-Cancer Early Detection at Baylor Scott & White Health in Texas, aiming to enroll up to 25,000 participants.
InvestingPro Insights
The recent FDA approval of Exact Sciences' Cologuard Plus test aligns with the company's strong market position, as reflected in its current financials and market performance. According to InvestingPro data, Exact Sciences boasts a market capitalization of $12.5 billion, indicating significant investor confidence. The company's revenue growth of 13.54% over the last twelve months and a robust gross profit margin of 73.19% suggest a solid financial foundation to support the rollout of its new test.
InvestingPro Tips highlight that Exact Sciences has shown strong returns over the last month and three months, with price total returns of 16.24% and 53.76% respectively. This positive momentum could be further bolstered by the Cologuard Plus approval. However, it's worth noting that analysts do not anticipate the company to be profitable this year, which aligns with the reported operating income margin of -10.81%.
For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips for Exact Sciences, providing deeper insights into the company's financial health and market position.
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