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Exact Sciences Idea Proposal (EXAS)

Exact Sciences Idea Proposal (EXAS)
 

Will the inclusion of Cologuard in the 2017 HEDIS quality measures drive growth for Exact Sciences?

Report Available:August 31, 2016

 

Blueshift’s initial research shows that momentum for Cologuard, EXAS’s colon cancer screening test, has picked up recently as a governing body clarified language that the test is on equal standing among other screening tests, showing signs that physician and payer adoption could hasten. Until now, Cologuard has faced significant adoption and reimbursement headwinds since its August 2014 FDA approval.

 

Observations

  1. EXAS Q2 earnings surprised the Street, handily beat expectations. Revenue was up 161% year to year. EPS was $-0.46 vs. the Street expectation of $-0.55. EXAS saw a 160% increase in completed Cologuard tests compared to a year ago. Strong execution by its sales team and their direct-to-consumer advertising is creating broad patient awareness and increased physician adoption.  The DTC campaign has generated an average of 700 new physicians per week ordering Cologuard vs. 500 prior to the marketing program.
  2. On July 13, EXAS announced it had received word from the National Committee for Quality Assurance (NCQA) that the proposed 2017 Healthcare Effectiveness Data and Information Set (HEDIS) quality measures for colorectal cancer screening would include Cologuard on a three-year schedule. If approved, this should speed adoption of Cologuard by physicians and encourage broader reimbursement from third-party-payers as 90% of America’s health plans use HEDIS to measure quality.
  3. EXAS has been challenged to secure a meaningful portion of what management has calculated to be an addressable market in the U.S. of $4 billion for Cologuard. The slow adoption by physicians and health insurers may have been caused by the U.S. Preventative Services Task Force (USPSTF) initial colorectal cancer-screening guidelines that labeled Cologuard an alternative screening option. It is expected that the 2017 proposed guidelines will no longer rank different types of tests, providing EXAS a clear case for increased utilization and reimbursement for the Cologuard test.
  4. In Blueshift’s 14, 2015, report, sources said Cologuard was unlikely to become the colorectal screening test of choice, though it was seen as a strong option for the one-third of 50-year-old patients who are recommended to get a colonoscopy but who refuse it or are unable to undergo the preparation and procedure. The test has high clinical value at a reasonable cost, though sources noted challenges to adoption, including the unpleasant stool collection process and lack of awareness in the medical community. The direct-to-consumer and general practitioner sales and marketing campaign were viewed positively and were expected to drive Cologuard’s adoption.

 

 

What will be the effect of the new HEDIS quality measures on adoption of the Cologuard test? How will physicians respond with regard to their screening recommendation? What will be the effect on payment and reimbursement? What effect is the DTC campaign having on physicians? How does this compare to pre-DTC efforts? How much of a deterrent is the stool collection obstacle? 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/insurance, Sales channel, and Industry specialists.

 

 

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

 

Research Begins: August 15, 2016