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Source: Exact Sciences Corporation

Collaboration with the MD Anderson Cancer Center to develop a new lung cancer test and updated guidance for its Cologuard colon cancer test caused shares of Exact Sciences Corporation (NASDAQ:EXAS) to jump more than 10% in June.

Innovating diagnostics
The MD Anderson Cancer Center and Exact Sciences will work together to develop and commercialize a new early detection blood test for lung cancer, the second most common cancer behind skin cancer.

Specifically, the two will attempt to create a blood-based screening test that can be used to determine whether doctors should recommend the use of low-dose computed tomography, an expensive test that often identifies benign cancers.

If successful, the test could offer a new approach to screening the more than 11 million Americans who are considered high-risk smokers and former smokers.

Turning the corner?
The lung cancer collaboration is intriguing, but investors are probably more interested in seeing Exact Sciences' ColoGuard colon cancer test gain traction.

The company began marketing this stool-sample test last year, but tepid sales have weighed down the company's shares and led many investors to establish short positions.

Given that backdrop, investors are applauding Exact Sciences' report late last month that it expects to complete 21,000 tests in the second quarter and 32,000 in the third quarter. For comparison, Exact Sciences completed 11,000 tests in the first quarter, which led to sales of just $4.3 million.

Looking ahead
Exact Sciences will report its second-quarter results in July, and hopefully, the pick-up in completed tests will translate into sizable revenue growth. That will depend a lot on pricing for the test associated with recent agreements, allowing Cologuard to qualify for reimbursement by health-insurance plans. While Exact Sciences is intriguing, investors might want to stay on the sidelines, at least until we get more insight into how profitable the tests were last quarter.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.