Yes EXAS, Exact Science
I have had a position for about one year
Andy
Andy,
Interesting that you mentioned EXAS, I have a friend that has been recommending I get into the stock, but I hadn’t had time to look into it yet. You say you’ve been in about a year, looks like the stock has about tripled during that time. You want to give a quick write up about why you bought and your views of it’s prospects going forward?
By coincidence I was already working on a write up for EXACT Science be warned I am new at this. I purchased EXAS a month ago and I am up about 7% so far. I have been following this board for the last month or so. I want to thank Saul and everybody else for the information posted here. I changed jobs a couple years back and put my 401k in a rollover IRA. Many of the stock in it now are from this message board. I am trying to get to the point where I can find my own stock picks and below is one company I found on my own. I am curious as to what others on this board think about it. Thanks in advance.
John
XACT SCIENCES CORPORATION (EXAS)
Exact Sciences Corporation is a molecular diagnostics company. The Company focuses on the early detection and prevention of some forms of cancer. It offers a non-invasive screening test called Cologuard for the early detection of colorectal cancer and pre-cancer. Cologuard is the first noninvasive screening test for colorectal cancer that analyzes both stool DNA and blood biomarkers and has been proven to find 92 percent of cancers and 69 percent of the most advanced precancerous polyps in average risk patients. Cologuard, which is available through healthcare providers, offers people 50 and older at average risk for colorectal cancer an easy-to-use screening test they can do in the privacy of their own home.
The American Cancer Society recommends that all people 50 and older be screened for colon cancer. Screening compliance is poor and nearly 2/3 of colon cancer diagnosis is made in the late stages. The five-year survival rates for stage 3 and 4 colon cancer are 67% and 12% respectively. If caught in the early stages the survival rates are much higher. Exact sciences believes that the “unscreened and inadequately screened patients represent a significant opportunity for a patient-friendly screening test”. In 2010 14 billion was spent on colon cancer treatment and is expected to increase to 40 billion by 2020.
Currently there’s a 80 million person market and Cologuard is only penetrated about 2%. Of that 51% have not been screened. 38% have had a colonoscopy and 11% were screened with a fecal occult blood test (gFOBT) or Fecal immunochemical test (FIT). Colonoscopy is the most effective at screening colon cancer but it is also the most invasive. The Cologuard is the next most effective detecting about 92% of colon cancer.
Currently about 86% of the target population are covered by insurance for the Cologuard test including Medicare and Medicaid. With only a 2% capture of this population the company has plenty of room to grow. This company has been selling a lot of their test they sold 149% more test this 2nd quarter compared to same quarter one year ago. Their revenue was 57.6 million compared to 21.2 million last year for the same quarter. The company completed 244,000 tests in 2016 and estimate they will complete 550,000 in 2017 up from the previous estimate of 470,000. Revenue guidance was raised to $230-240 million for 2017, from $195-205 million.
Revenue:
2016: 14.8, 21.1, 28.1, 35.2
2017: 48.3, 57.6
What I like about the company is that they are growing very fast and they have a large market they are trying to capture. A negative is that the company is not yet making money but they are spending heavy on advertising and marketing but it is already starting to pay off, and it is just a matter of time before they are profitable. They are also working on test that will detect lung , esophageal, and pancreatic cancer. My understanding is they are going to release information on the lung cancer test in 2018.
Thanks for the write up, JohnBee.
One question I had, you said Cologuard is the second most effective method of detecting colon cancer at 92%, where a Colonoscopy is the most effective. Do you know what the % effectiveness of the colonoscopy is? Just curious how large of a difference between the two tests?
The revenue growth numbers are pretty impressive (yes, I know, off of a small base, but impressive none the less).
Sequential growth has been:
2Q16: 43%
3Q16: 33%
4Q16: 25%
1Q17: 37%
2Q17: 19%
With YOY growth:
1Q17: 226%
2Q17: 173%
(BTW, I just used your rev numbers, didn’t bother checking them myself yet).
92 percent of cancers
what is the false positive rate, i.e. saying there is cancer when there is no cancer?
69 percent of the most advanced precancerous polyps in average risk patients. not very good.
How do results compare to fecal occult blood tests which you can get without an RX?
My insurance pays 100% of cost of colonoscopy. Not out of the goodness of their hearts but because it it costs so much less than paying for colon cancer.
HAs anybody done studies of combining this with an occult blood test done at same time on the same specimen? It would add little to the cost.
Fact is many at risk are just not going to do a colonoscopy. Which really isn’t as bad as it sounds but has risks, especially if you are old.
nice analysis
My understanding is that Exact will exclude you from testing if you have any of several risk factors, i.e., if you are in the higher risk pool, they will push to the actual colonoscopy. This means that they are making things more pleasant for the low risk pool.
What I like about the company is that they are growing very fast and they have a large market they are trying to capture. A negative is that the company is not yet making money but they are spending heavy on advertising and marketing but it is already starting to pay off, and it is just a matter of time before they are profitable.
A key metric is insurance coverage. Are insurance companies paying for the procedure? If so, how much?
Denny Schlesinger
My insurance pays 100% of cost of colonoscopy. Not out of the goodness of their hearts but because it it costs so much less than paying for colon cancer.
Not so much. They have to cover it 100% now due to the ACA.
http://nccrt.org/coverage-colonoscopies-affordable-care-act/…
Hi,
First, John Bee’s summary, #31950, explains it thoroughly and better than anything I can add. I got in EXAS when another service I subscrbe to, somewhat similar to RB, recommended it. The test requires no prep, is simple to use, and then sent away by mail for analysis. It is as a later post says for the low risk pool. Price targets keep getting raised suggesting that fund managers will be adding shares and therefore moving the price up. More hospitals and Doctors are likely to use it as it becomes more and more accepted and as more insurace companies cover it.
But the short and perhaps over simple answer is that I felt more and more people would use it, thus creating momentum for the stock. But, yes, the company is not profitable so a slowdown could hit it hard. As one of the posts says, EXAS is developing tests for other conditions. Seems like a good bet to me.
Obviously, my anaylsis is more intuitive than a careful review of the financials but that is how I often make trades.
Best,
Andy
Also, today it is at an all time high.
Andy
One question I had, you said Cologuard is the second most effective method of detecting colon cancer at 92%, where a Colonoscopy is the most effective. Do you know what the % effectiveness of the colonoscopy is? Just curious how large of a difference between the two tests?
I chose Cologuard over colonoscopy. The doctor told me that three Cologuard tests (over the course of every 2-3 years, I think) was as effective as a colonoscopy. Personally, there was a bit of the ick factor, but the few minutes it took was far better than having to have to go through the advance prep and then sedation/anesthesia for the procedure itself, not to mention having to take a day off work for the procedure. Insurance paid for all of it. Insurance paid for almost all of my husband’s colonoscopy which was far more expensive and invasive. I’m glad I had a choice.
The subject of colonoscopy has come up from time to time with friends and most have not heard of Cologuard. So it’s too new, or not marketed well, or docs are concerned about its effectiveness. Interesting possibility of an investment though.
Yet, I have seen advertisements many times on tv, can’t recall if MSNBC and/or CNBC or CNN.
Yes, they are covering it in at least some cases that I know of. I would think they would be delighted because it is far less expensive than a colonoscopy.
I chose Cologuard over colonoscopy.
Thanks random130, nice hearing from someone that has used the Cologuard option. I’m looking into it not just from an investment standpoint, but am also at the age that I’m supposed to get a colonoscopy and it’s nice to know there’s another option to consider that I hadn’t been told about before.
You learn all kinds of things on this board!
That test was NEVER anticipated to replace colonscopy and it is very naive to assume that it can.
It misses colon cancer and it really misses the polyps that can turn into cancers.
Look up the literature…the intention was for the test to be used on people who were NOT candidates for colonoscopy (health risks) or who would otherwise refuse colonoscopy. But in head to head comparison against colonscoopy…the latter is the gold standard.
The colonscopy identifies early curable cancers AND it removes polyps that would eventually turn into cancers…the latter may be its greatest value…every 10 year test vs every 3 year stool EXACT test (that is less reliable).
Thanks Duma!
"HAs anybody done studies of combining this with an occult blood test done at same time on the same specimen? It would add little to the cost. "
FOBT (Fecal occult blood test) has almost no utility in screening for anything other than full blown colon cancer. Pre-cancerous lesions almost never cause an FOBT to turn positive. If someone tries to tell me it caught theirs I wouldn’t believe them as it was likely + for some other reason (diverticulosis, esophagitis, AVM’s in the small bowel, etc., which was clinically silent and simultaneous with the polyp). A screening test by definition should have high sensitivity to detect whatever it is supposed to detect (>95%). That being said, Cologuard and FOBT both fail that standard but Cologuard at least has promise.
Another problem with FOBT is it can be falsely + for a number of reasons… like a nosebleed.
Carry on…
MC
this was on medicare
Medicare covers this test once every 24 months if you’re at high risk for colorectal cancer. If you aren’t at high risk for colorectal cancer, Medicare covers this test once every 120 months, or 48 months after a previous flexible sigmoidoscopy.
Medicare Now Covers Stool DNA Screening Test Cologuard. Last week, the Centers for Medicare & Medicaid Services (CMS) announced that Cologuard is now covered for Medicare patients based on a CMS National Coverage Decision. … Currently, each state makes the decision about coverage of Cologuard for Medicaid coverage.Oct 14, 2014
"some people with colon polyps experience:
Rectal bleeding. This can be a sign of colon polyps or cancer or other conditions, " source Mayo Clinic.
And in fact years ago I did have one , big but still benign, visible blood in stool, lead to colonoscopy. Once twas removed no more bleeding.
Recently my MD informed me that at my age colonoscopy are “high risk”
I did it anyway. Good thing I did.
Even if the test only picked up cancer, early stage beats late stage
Obviously this is nowhere near as good as a colonoscopy. But some people won’t/don’t get colonoscopy.Even if the test only picked up cancer, early stage beats late stage
You are correct it can never completely replace a colonoscopy but it can be used for low risk individuals and the American Cancer Society recommends every three years and then a colonoscopy if you have a abnormal result. Ultimately it is a decision between a patient and his doctor you do need a prescription for the test. A colonoscopy is a very invasive procedure and compliance rates are poor, in my opinion this is a good alternative for low risk individuals. (FYI I am a 51 year old RN and I plan on talking to my doctor about this test on my next visit)
The following is from the Cologuard web site:
Who can get screened with Cologuard?
Cologuard is approved for use by men and women, 50 years of age and older, who are at average risk for colorectal cancer.
Cologuard is not for everyone. It is not a replacement for diagnostic or surveillance colonoscopy in high-risk individuals. You may be a high-risk individual if:
•You have a personal history of colon cancer, polyps, or other related cancers
•You have a family history of colon cancer
•You have had a positive result for another screening method in the last six months
I know there were a few questions raised in this thread and I plan on addressing them soon. I work 16 hour days on the weekend and its been pretty busy at work and I have just not had a lot of time. Also I have had a chance to read more about the company and their are few concerns that I came across that I will post when I get a chance. Thanks.
John B