There has been an extraordinary leap in understanding the human genome and its role in health and disease in recent years. That knowledge, combined with machine learning, is giving rise to the kind of diagnostic progress we could only have dreamed of a decade ago. Let's take a look at two companies that could make you money while changing the course of medicine.

Staying on the cutting edge

Exact Sciences (NASDAQ:EXAS) made a splash in the world of cancer detection with the 2014 introduction  of Cologuard, a noninvasive screening tool for colon cancer, America's second-deadliest cancer. Until Cologuard came along, colonoscopies, which are far more inconvenient and expensive, were the standard for cancer detection.

Exact Sciences explains the revolutionary test this way: "Cologuard identifies DNA mutations that are acquired over time in cells lining the colon; these mutations can be associated with the presence of colon cancer or precancerous lesions." 

The stool sample testing kit has a 94% cancer sensitivity and is saving many lives due to higher screening rates leading to earlier and greater detection of cancer. For the fourth quarter, preliminary reports show 477,000 Cologuard tests were administered, an increase of 63% year over year. 

In November, Exact Sciences completed its acquisition of Genomic Health, a company with two decades of experience in cancer diagnostics, in a $2.8 billion stock and cash transaction. The combination brought a seasoned range of cancer testing expertise to Exact Sciences. Genomic Health's Oncotype DX portfolio of breast, colon, and prostate cancer tests break down the unique biology of a tumor, helping doctors recommend optimal cancer treatments. 

Test tubes containing genome tests

Image source: Getty Images.

Cancer-detecting blood tests will be the next breakthrough to make a big impact. Exact Sciences gained an advantage over rivals by partnering with the Mayo Clinic on a long-term project of identifying biomarkers for the 15 deadliest cancers using liquid biopsies. 

On Jan. 12, Exact Sciences offered investors a preview of its fourth-quarter earnings report, scheduled for release in mid-February. Preliminary results showed expected total revenue of $294 million to $296 million, including screening segment revenue (i.e., Cologuard) of $229 million to $230 million, an increase of 61% from 2018. Precision oncology revenue (from the Genomic Health acquisition, which closed in the fourth quarter) is anticipated to be $65 million to $66 million for the period Nov. 8, 2019 through Dec. 31, 2019. Full-year 2020 guidance for the newly combined company was not shared but will be included in the Feb. 20 conference call. 

Exact Sciences has laid a solid foundation to build upon and is on the path to profitability. The company has used cash wisely and continues to grow and innovate. Exact Sciences is a must for investors' watch lists, and a buy at these levels for investors who can tolerate a moderate amount of risk.

Being first-to-market makes all the difference

Based in San Francisco, Veracyte (NASDAQ:VCYT) operates internationally as a leading genomic diagnostic testing company. Genomic diagnostics are used to provide early detection of disease, determine the diagnosis, and guide treatment choices. 

The company seeks to provide accurate, minimally invasive testing that prevents unnecessary surgeries. This strikes a chord with patients and medical providers alike. Veracyte's revenue and testing volumes have been increasing. Revenue for its fiscal year 2019 is projected to be $121 million, or 31% higher than 2018, while genomic test volume is estimated to have increased about 22% over 2018. 

Being first-to-market in disease testing is critical, and Veracyte currently has three first-to-market tests. The products are Afirma (for thyroid cancer), Percepta (for lung cancer), and Envisia (for idiopathic pulmonary fibrosis). The company sees the market opportunity for these three commercial products at almost $2 billion combined. 

As a leader in the genomic testing industry, Veracyte makes for a desirable partner. Veracyte established a strategic collaboration in 2018 with Johnson & Johnson's Lung Cancer Initiative to advance diagnostics of a nasal swab test for early lung cancer detection. The company believes the addressable lung cancer diagnostic global market opportunity to be in excess of $30 billion. 

Additionally, Veracyte has a major research collaboration with Loxo Oncology, recently acquired by Eli Lilly, for the development of therapies for patients with genetically defined cancers, and announced a multiyear partnership with AstraZeneca's Acerta Pharma to deliver genomic data contributing to advanced oncology therapeutics.

These partnerships validate Veracyte's stature in genomic diagnostic testing and help power forward the outlook and financial future of the company. Combine the partnerships with Veracyte's first-to-market products, and Veracyte has a bright future. At its current price, Veracyte's stock is a great investment choice for investors looking for growth in a market that's hitting all-time highs.