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Not Exactly What Investors Were Looking For

By Dave Williamson - Apr 19, 2013 at 5:32PM

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How can a stock react so badly to a successful phase 3 trial?

Exact Sciences' (EXAS 1.13%) phase 3 trial for its colon cancer detection test passed, but the stock dropped 20%. What gives? In this video, David Williamson goes into the details of Exact Sciences' DNA-based test. The overall effectiveness of the Cologuard test was 92%. However, the detection rate was 42%, less than colonoscopy, and the 87% overall accuracy rate leads to a higher false positive rate than most doctors would like to see. Is Exact Sciences doomed? Not really -- it has $100 million in the bank. It may be a takeover target, and David sees Intuitive Surgical (ISRG 1.92%) as a possible buyer.

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Stocks Mentioned

Exact Sciences Corporation Stock Quote
Exact Sciences Corporation
$48.43 (1.13%) $0.54
Intuitive Surgical, Inc. Stock Quote
Intuitive Surgical, Inc.
$222.58 (1.92%) $4.19

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