Exact Sciences (NASDAQ:EXAS)
- Advisory Committee unanimously votes that ColoGuard should be approved
- Stock Sells off after decision
Unanimous Advisory Committee
On Thursday, the molecular and clinical genetics panel of the Medical Devices Advisory Committee (AD COMM) voted unanimously that Exact Sciences' colon cancer screening test, ColoGuard, was both safe and effective as a screening tool for colon cancer.
Anyone who even glanced at the Briefing documents for the AD COMM could have discerned that EXAS had run a very thorough set of clinical tests and that the vote was most likely going to be positive.
Stock Sells Off
On Friday, after a brief spike in early trading, EXAS sold off and closed lower, ending the week at $12.86 despite the good news. Our view is that, ahead of the AD COMM, a successful result was priced in as we tweeted earlier in the week.. While investors accept that Cologuard will most likely be approved, attention now turns to the expense of launching a test and the difficulty of getting that test reimbursed by insurers. As noted by the company, stool-based DNA technology is already included in the colorectal cancer screening guidelines of the American Cancer society and the United States Multi-Society Task Force on Colorectal Cancer. Inclusion the the guidelines definitely helps in securing reimbursement coverage. Investors are likely concerned that as a small biotech diagnostics company, EXAS does not have the marketing muscle itself to pull off a successful change in the way colon cancer is screened.
