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EXAS: A Biotech Stock Screening to Prevent Colorectal Cancer
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Exact Sciences Corporation (EXAS - Free Report) is a biotechnology firm focused on using molecular diagnostics to screen for cancer and identify candidates who may be at a higher risk of getting cancer. The company was founded in 1995, and it has an approved and effective product for detecting colorectal cancer known as Cologuard. The product is an at-home stool DNA screening test, and the American Cancer Society’s guidelines include Cologuard as a recommended screening option for colorectal cancer. The stool test detects traits which indicate the presence of colorectal cancer or precancerous lesions.
Growth Potential
In general, stool testing is an attractive means of testing for cancer because of its non-invasive nature. The colorectal cancer screening industry stands to provide a growth platform for the company since colorectal cancer is the second deadliest cancer in the US, and because Cologuard is the first and only FDA-approved stool DNA-based colorectal cancer screening test. Screening methods stand to see an increase in demand since colorectal cancer is one of the most preventable forms of cancer. Cancerous cells can also be carried in blood vessels and spread into the liver, lungs, abdominal cavity, and other organs and tissues, so people in general need to become more aware of the benefits that come with detecting colorectal cancer in its earlier stages.
It is estimated that close to 5% of Americans will be diagnosed with colorectal cancer in their lifetime. Survival rates after five years from diagnosis vary depending on what stage the cancer is in. For stage 1 and stage 2 patients who receive diagnosis, the five year survival rate is 90%. Patients who receive diagnosis in stage 3 and 4 see their five year survival rates drop down to 70% and 13% respectively.
Promising Results and Approvals
Exact Sciences recently released its 2016 second quarter results, and revenues came in at $21 million. This represents 161% growth year-over-year, and 43% growth compared to the first quarter. Demand as well as sentiment for Cologuard has been picking up, and the United States Preventive Services Task Force (USPSTF) has included the product as a recommended screening test for detecting colorectal cancer.
According to a presentation from Exact Sciences, commercial insurers will typically pay for the preventive care services included in recommendations from the USPSTF. The group gave Cologuard an “A” grade for screening average-risk individuals between the ages of 50 and 75. Approval from the group could help push the demand for Cologuard since stool DNA-based tests tend to be more expensive, and getting coverage from insurers will make patients more willing to use the product.
EXAS expects to sell more than 240,000 Cologuard tests this year and it believes that it will generate revenues between $90 and $100 million in fiscal 2016. Cologuard had a 100% cancer detection rate in a study conducted by Mayo Clinic Proceedings in October 2015. As a non-invasive measure, Cologuard’s ability to detect colorectal cancer is very good, and an impressive 4 in 10 Cologuard users have relied on it as their first means of screening for colorectal cancer. In a survey conducted for Exact Sciences, 98% out of 300 physicians believed that Cologuard met or exceeded their expectations. The product also had a high rating among patients who have used the product.
Going Beyond Colorectal Cancer
While the company’s colorectal product gives it a platform to build growth from, it is not done innovating. Exact Sciences also seeks to expand its product line by making diagnostics tests for the detection of pancreatic, lung, and esophageal cancers.
EXAS has found success in developing Cologuard through its partnership with the prestigious Mayo Clinic, and it has entered into a new multi-year agreement with David Ahlquist, M.D., a gastroenterologist and his lab at Mayo Clinic. Through the renewed agreement, EXAS seeks to develop effective screening tests to detect and diagnose esophageal and pancreatic cancer. These two diseases are among the some of the most deadly cancers out there, and they affect many people across the globe.
EXAS has also entered a partnership in mid-2015 with the University of Texas MD Anderson Cancer Center to develop screening and diagnostic tests for lung cancer, the most deadly form of cancer in the world. The two collaborators are working on developing and commercializing a blood-based screening and diagnostics test for detecting lung cancer. MD Anderson already has extensive research on predictive biomarkers for lung cancer, so Exact Sciences could benefit from having to do less research on biomarkers for detecting the cancer.
The Power to Surprise
12 analysts have raised their EPS (earnings per share) expectations on EXAS stock for the current quarter within the last 60 days. In that time span, our consensus has improved, going from an EPS estimate of -$0.51 to -$0.44. EXAS has beaten our consensus estimate in each of the last three quarters, so there is a good chance that it could surprise us once again when it reports its quarterly earnings in early November. EXAS is a Zacks Rank #2 (Buy).
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EXAS: A Biotech Stock Screening to Prevent Colorectal Cancer
Exact Sciences Corporation (EXAS - Free Report) is a biotechnology firm focused on using molecular diagnostics to screen for cancer and identify candidates who may be at a higher risk of getting cancer. The company was founded in 1995, and it has an approved and effective product for detecting colorectal cancer known as Cologuard. The product is an at-home stool DNA screening test, and the American Cancer Society’s guidelines include Cologuard as a recommended screening option for colorectal cancer. The stool test detects traits which indicate the presence of colorectal cancer or precancerous lesions.
Growth Potential
In general, stool testing is an attractive means of testing for cancer because of its non-invasive nature. The colorectal cancer screening industry stands to provide a growth platform for the company since colorectal cancer is the second deadliest cancer in the US, and because Cologuard is the first and only FDA-approved stool DNA-based colorectal cancer screening test. Screening methods stand to see an increase in demand since colorectal cancer is one of the most preventable forms of cancer. Cancerous cells can also be carried in blood vessels and spread into the liver, lungs, abdominal cavity, and other organs and tissues, so people in general need to become more aware of the benefits that come with detecting colorectal cancer in its earlier stages.
It is estimated that close to 5% of Americans will be diagnosed with colorectal cancer in their lifetime. Survival rates after five years from diagnosis vary depending on what stage the cancer is in. For stage 1 and stage 2 patients who receive diagnosis, the five year survival rate is 90%. Patients who receive diagnosis in stage 3 and 4 see their five year survival rates drop down to 70% and 13% respectively.
Promising Results and Approvals
Exact Sciences recently released its 2016 second quarter results, and revenues came in at $21 million. This represents 161% growth year-over-year, and 43% growth compared to the first quarter. Demand as well as sentiment for Cologuard has been picking up, and the United States Preventive Services Task Force (USPSTF) has included the product as a recommended screening test for detecting colorectal cancer.
According to a presentation from Exact Sciences, commercial insurers will typically pay for the preventive care services included in recommendations from the USPSTF. The group gave Cologuard an “A” grade for screening average-risk individuals between the ages of 50 and 75. Approval from the group could help push the demand for Cologuard since stool DNA-based tests tend to be more expensive, and getting coverage from insurers will make patients more willing to use the product.
EXAS expects to sell more than 240,000 Cologuard tests this year and it believes that it will generate revenues between $90 and $100 million in fiscal 2016. Cologuard had a 100% cancer detection rate in a study conducted by Mayo Clinic Proceedings in October 2015. As a non-invasive measure, Cologuard’s ability to detect colorectal cancer is very good, and an impressive 4 in 10 Cologuard users have relied on it as their first means of screening for colorectal cancer. In a survey conducted for Exact Sciences, 98% out of 300 physicians believed that Cologuard met or exceeded their expectations. The product also had a high rating among patients who have used the product.
Going Beyond Colorectal Cancer
While the company’s colorectal product gives it a platform to build growth from, it is not done innovating. Exact Sciences also seeks to expand its product line by making diagnostics tests for the detection of pancreatic, lung, and esophageal cancers.
EXAS has found success in developing Cologuard through its partnership with the prestigious Mayo Clinic, and it has entered into a new multi-year agreement with David Ahlquist, M.D., a gastroenterologist and his lab at Mayo Clinic. Through the renewed agreement, EXAS seeks to develop effective screening tests to detect and diagnose esophageal and pancreatic cancer. These two diseases are among the some of the most deadly cancers out there, and they affect many people across the globe.
EXAS has also entered a partnership in mid-2015 with the University of Texas MD Anderson Cancer Center to develop screening and diagnostic tests for lung cancer, the most deadly form of cancer in the world. The two collaborators are working on developing and commercializing a blood-based screening and diagnostics test for detecting lung cancer. MD Anderson already has extensive research on predictive biomarkers for lung cancer, so Exact Sciences could benefit from having to do less research on biomarkers for detecting the cancer.
The Power to Surprise
12 analysts have raised their EPS (earnings per share) expectations on EXAS stock for the current quarter within the last 60 days. In that time span, our consensus has improved, going from an EPS estimate of -$0.51 to -$0.44. EXAS has beaten our consensus estimate in each of the last three quarters, so there is a good chance that it could surprise us once again when it reports its quarterly earnings in early November. EXAS is a Zacks Rank #2 (Buy).
The Zacks Rank is a truly marvelous trading tool. Our ranking system has beaten the S&P 500, yielding an average return of 25% per year for the last 29 years! Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>