Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of EXACT Sciences (NASDAQ:EXAS), a molecular diagnostics company focused on cancer and pre-cancer colorectal screening tests, nosedived as much as 30% following the release of top-line data from the company's Deep-C clinical trial for Cologuard.
So what: Cologuard is EXACT's proprietary molecular analyzer that looks to differentiate the difference between the DNA of normal cells shed daily from the colon, and cells from cancerous and pre-cancerous polyps that express mutated DNA signatures. This is done by a patient sending in a stool sample to EXACT's lab, and EXACT using Cologuard to make that determination. In trials, Cologuard was successful at detecting cancer 92% of the time and identified pre-cancerous polyps 42% of the time, including a 66% success rate if they were in excess of two centimeters. However, many Wall Street analysts had been looking for the pre-cancerous polyp detection number to be much higher than it actually was.
Now what: I labeled EXACT Sciences as a risky bet in my Tackling Cancer series for this exact reason. However, I feel today's drop may be a tad bit overdone. Although the pre-cancerous efficacy was lower than many had expected, Cologuard met its primary endpoint and delivered strong enough results from its non-invasive test that I feel the Food and Drug Administration would eventually approve it. It's not perfect, but it's a considerably more pleasant alternative to a colonoscopy and a starting point for diagnosing colon cancer for high-risk patients.
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