Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Exact Sciences Corporation Stock Is Jumping Again Today

By Keith Speights - Aug 23, 2018 at 12:57PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's deal with Pfizer to co-promote the Cologuard colorectal cancer test continues to excite investors.

What happened

Shares of Exact Sciences Corporation ( EXAS 1.30% ) jumped as much as 12.9% on Thursday morning. The stock was up 6.3% as of 11:45 a.m. EDT. Exact Sciences continued to move higher after the stock's big gain on Wednesday following its announcement of a deal with Pfizer ( PFE -2.96% ) to co-promote DNA colorectal cancer test Cologuard.

So what

Investors are still digesting just how good the news of the Pfizer agreement is for Exact Sciences. And it should be really good news.

Cologuard packaging and materials

Image source: Exact Sciences.

After missing Wall Street analysts' revenue estimate in the second quarter, Exact Sciences' management team played up the fact that they would add more sales reps in the coming months. There's nothing like sales crews on-site to spread the word among physicians and healthcare systems.

Partnering with Pfizer could go a long way in making more physicians aware of -- and comfortable with -- Cologuard. Pfizer doesn't have a drug approved to treat colorectal cancer yet. However, the big drugmaker has a huge sales force and an established presence in the gastrointestinal space thanks to some of its other drugs. 

Exact Sciences said that Pfizer will augment its internal efforts in reaching out to physicians and healthcare systems. The company also stated that the big drugmaker will "actively participate in extending and deepening the Cologuard marketing campaign."   

Now what

Don't expect any impact from Exact Sciences' deal with Pfizer in the company's Q3 results. Pfizer won't begin co-promoting Cologuard until the fourth quarter. However, investors are likely to see the effects of the partnership with Pfizer when Exact Sciences reports its full-year and Q4 results in early 2019.

I continue to think that Exact Sciences' long-term prospects look quite good. Cologuard presents an attractive alternative for early colorectal cancer screening to patients who don't want to undergo a colonoscopy. The American Cancer Society's recommendation to lower the minimum age for colorectal cancer screening from 50 to 45 could pay off for Exact Sciences if insurers change their policies.

However, Exact Sciences will probably remain a very volatile stock with big moves both up and down. The stock's valuation is based on expectations of tremendous growth. That means Exact Sciences must meet these expectations or see the stock fall hard. While I like the stock, it's only suitable for highly aggressive investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Exact Sciences Corporation Stock Quote
Exact Sciences Corporation
$86.57 (1.30%) $1.11
Pfizer Inc. Stock Quote
Pfizer Inc.
$52.40 (-2.96%) $-1.60

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.