What happened

Shares of Exact Sciences (NASDAQ:EXAS), a cancer diagnostics company, gained 42.8% in January, according to data from S&P Global Market Intelligence. It looks like a marketing partnership with Pfizer (NYSE:PFE) is working better than expected.

So what

During the fourth quarter, Pfizer began helping Exact Sciences' sales team get its colorectal-cancer screening in front of more physicians and health systems, in return for a small share of the profits. Exact Sciences surged last month after reporting preliminary sales results that suggest Pfizer's contribution is worth the promotion fees.

Businessperson with a rocket on his back

Image source: Getty Images.

Nearly 15,000 healthcare providers ordered their first Cologuard test during the fourth quarter, which was a big improvement over the 11,000 new providers from whom Exact Sciences received first orders during the previous quarter. The number of tests completed also soared 21% compared to the previous quarter, to 292,000, and there's still plenty of room to grow.

Check out the latest Exact Sciences earnings call transcript.

Now what

Right now, just about everyone over the age of 55 in the U.S. can get a Cologuard test every three years, at a price of around $500 per test (which Medicare or their insurer has to cover completely). Test volume rose 64% to 934,000 last year, and with Pfizer's assistance, another big gain in 2019 seems likely.

Exact Sciences has been trading at 23.7 times trailing revenue, which should make anyone cautious. But with millions of potential customers, a heavy-hitting marketing partner, and an enormous potential customer base, it could be worth the risk.