Following first-quarter financial results that were better than expected, Exact Sciences' (EXAS 3.75%) shares are rocketing 25.6% higher at 12:00 p.m. EST today.
Exact Sciences' Cologuard is the company's only commercial product, but sales of it are rising rapidly, and that's putting the company in a better position to turn a profit.
Colonoscopies remain the best way to determine a patient's risk of colon cancer, but Cologuard provides a lower-cost and less-invasive screening option, and that makes it appropriate for many patients who might otherwise avoid screening.
Cologuard's advantages appear to be resonating with doctors and patients, because in the first quarter, Exact Sciences performed Cologuard tests for 100,000 patients, up 150% from the same quarter last year. The average price per test fell 25% to $170, but volume growth more than made up for lower prices, and as a result, revenue reached $48.4 million in the quarter, up 227% year over year.
Spending continues to outstrip revenue, but the ratio of expenses to sales is improving and the company's net loss of $34.9 million in the quarter was 26.5% better than last year.
Exact Sciences' management thinks it can complete 115,000 Cologuard tests in the second quarter and at least 470,000 tests in 2017. Previously, management was estimating it would perform roughly 415,000 tests this year. In 2016, the company completed 244,000 tests.
Although the fact that Exact Sciences is still losing money makes it a bit of a risky stock to buy, I think this company's still got a lot of opportunity to grow because of aging baby boomers, and if I'm right, it's not unreasonable to think this company's shares are going to continue their winning ways.