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Exact Sciences Idea Proposal (EXAS)

Exact Sciences Idea Proposal (EXAS)
 

Will demand for Cologuard tests continue to surge and drive growth for Exact Sciences?

 

Report Available: December 7, 2017

 

Blueshift’s ongoing research shows the use of EXAS’ Cologuard test for colorectal cancer screening continuing to gain traction with patients and physicians. Cologuard is picking up endorsements from the medical community and contracts with insurers, leading to more than 85% of the test’s target population now being covered by CMS or third-party health insurance for Cologuard. Still there is controversy surrounding the value of Cologuard since a colonoscopy is considered the gold standard for colorectal cancer screening. And Citron Research has published a cautionary report on EXAS and Cologuard, questioning the quality of the test and criticizing its direct-to-consumer marketing approach.

 

Observations

  1. EXAS has consistently beaten Wall Street’s expectations and its Q3 results were no exception, with earnings and revenue outperforming consensus. EXAS performed 161,000 Cologuard tests, representing a 136% increase compared to last year. The direct-to-consumer TV ad campaign was a key component for driving new patients and physicians to use the test. The continued growth and adoption of the Cologuard test has led management to increase its full year guidance and up its long-term market share goal from 30% to 40% of the 80 million Americans eligible for screening.
  2. EXAS has a goal for Cologuard to become the standard of care in colon cancer screening. Toward that end, EXAS and Cologuard continue to rack up medical endorsements and additional insurance coverage. In April, the Centers for Medicare and Medicaid Services (CMS) included Cologuard in its updated Medicare Advantage Star Ratings program. Beginning in 2018, Medicare Advantage plans will receive quality credit for Cologuard tests completed in 2014, 2015, 2016 and the Star Ratings program is expected to broaden adoption of Cologuard over time. In May, United Healthcare reversed a previous decision not to reimburse for Cologuard and began reimbursement for the test on July 1st , becoming the last of the major U.S. health insurance providers to cover the test. According to EXAS, about 87% of eligible Americans are now covered by CMS or third-party payers for Cologuard.
  3. Recent Blueshift interviews with a gastroenterologist and a general practitioner illustrate the diverse medical opinions of the Cologuard test. The GP said the test is great and he is ordering more and more of them for low-risk patients, those that refuse to get a colonoscopy, and patients that would be at risk from the colonoscopy prep and/or procedure. He added that patients are coming to him asking for the test as a direct result of the TV ads. The gastroenterologist said she does not recommend the Cologuard test. She cited studies that show it produces too many false positive results and is not as accurate as a colonoscopy.
  4. In May, noted activist short seller Citron Research published a scathing report on EXAS and the Cologuard test. Citron claims Cologuard is an inferior product, criticizes EXAS for losing money, and notes a loophole in Obamacare that made it obligatory for insurance reimbursement. Citron points out that a study funded by EXAS showed Cologuard less effective and more expensive than alternatives. It quotes United Healthcare saying tests like Cologuard are unproven and not medically necessary. And it claims Cologuard is getting only 1.4 prescriptions per physician per quarter, which is unchanged over the last two years.
  5. Blueshift’s Aug. 31, 2016, report revealed that the inclusion and equal footing of EXAS’ Cologuard in the 2017 Healthcare Effectiveness Data and Information Set (HEDIS) quality measures would increase adoption and may spur additional insurers to reimburse for the colorectal cancer (CRC) test. This is according to 15 of the 19 physicians, medical professionals, third-party payers, and industry specialists. EXAS’ direct-to-consumer advertising program was raising patient and physician awareness and contributing to increased adoption, according to 11 sources. Cologuard was expected to gain modest share among the one-third of 50-year-old and older patients who refuse or cannot tolerate a colonoscopy. And sources said EXAS would achieve 5% to 20% share of the CRC screening market but said the forecast of 30% was lofty.

 

Is Cologuard becoming a front-line colon cancer screening test? Is it now or will it be considered a standard of care? Are more physicians and medical professionals adopting the test? At what rate? What effect is the DTC campaign having on physicians/patients? What are insurers seeing as far as reimbursement demands for Cologuard? How much of a deterrent is the stool collection obstacle? Can Cologuard secure 40% market share of the eligible population? To gain insight into Cologuard and the colon cancer screening market, Blueshift will gather data and issue a market research report from independent sources in the following areas: Testing institutions, Physicians and related medical professionals, Third party payers/insurers, Sales channel, and Industry specialists.

 

Companies: Exact Sciences (EXAS), Boston Scientific (BSX), Medigus (MDGS), Check-Cap Ltd. (CHEK), VolitionRX Ltd. (VNRX)

 

Research Begins: November 13, 2017