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Exact Sciences Idea Proposal (EXAS)

Exact Sciences Idea Proposal (EXAS)
 

Will the negative results of the CMS-sponsored cost-effectiveness analysis derail EXAS’s Cologuard sales growth?

Report Available: October 16, 2019

 

Blueshift’s current research found EXAS navigating the negative findings of a multitarget stool DNA (mtSDNA) cost-effectiveness report commissioned by the Centers for Medicare and Medicaid Services (CMS) (Cologuard is a mtSNDA screening). Despite posting excellent Q2 results and making a significant acquisition to promote future growth, EXAS must now defend Cologuard from the study’s findings that its colorectal cancer (CRC) screening test is “less effective and considerably more costly” than alternatives.

 

Observations

  1. On September 4th, the results of a Cologuard cost-effectiveness study commissioned by CMS were published. The findings were a blow to EXAS which has been sailing along with increasing adoption and utilization of its CRC screening test. The study’s conclusion said, “Compared to no screening, triennial multitarget stool DNA (mtSDNA) screening reduces CRC incidence and mortality at acceptable costs. However, compared to nearly all other CRC screening strategies reimbursed by CMS, it is less effective and considerably more costly, making it an inefficient screening option.”
  2. EXAS responded to the study results saying, “nearly 3 million people have been screened for colorectal cancer with Cologuard since FDA approval with half of those tested being previously unscreened. Not only is Cologuard increasing the number of screened Americans, peer reviewed data shows that Cologuard is a cost-effective alternative for people at average risk for colorectal cancer (CRC).” Regarding the study’s findings, EXAS said, “Naber analysis and other analyses that utilize the CISNET models understates Cologuard’s value proposition by employing unrealistic assumptions such as adherence rates (i.e., 100% adherence, or relative adherence over a fairly narrow range) for screening, follow-up and surveillance procedures. This academic approach is not reflective of clinical practice. In order to overcome these limitations, it is recommended that Naber and others utilizing CISNET models for analysis incorporate more accurate real-world data regarding adherence rates.”
  3. EXAS reported a loss but still posted strong results in its Q2. Revenue was up 94% year to year and beat the Street’s forecast by almost 10%. EPS beat expectations by 46%. 415,000 Cologuard tests were performed during the quarter, representing a 93% increase compared to a year ago. EXAS said the new sales and marketing relationship with PFE is generating increased usage of Cologuard. During the quarter, the company submitted Cologuard for a label expansion to screen 45- to 50-year-olds for CRC. When approved, the TAM will expand by 19 million Americans. The strong results led EXAS to increase full-year 2019 guidance. EXAS also announced the purchase of Genomic Health Inc. for $2.8 billion. The purchase will expand EXAS’s offering of cancer tests beyond the colon cancer test to include Genomic’s breast and prostate cancer tests while providing an international presence.
  4. Blueshift’s Feb. 15 report found that EXAS’s Cologuard has a significant runway left for growth among the one-third (about 20 million people) of 50-year-old patients who refuse or cannot tolerate a colonoscopy, the CRC gold standard. This is a continuation of Blueshift’s positive stance in our Aug. 31, 2016, and Aug. 14, 2015, reports. Eleven of 13 sources, including medical professionals, medical sales professionals, and industry specialists, said EXAS’s new sales and marketing partnership with PFE will increase the number of Cologuard prescribers and promote steady usage among physicians and health systems for low-risk patients refusing or unable to tolerate a colonoscopy. (EXAS credited PFE with boosting the number of Cologuard tests done in Q4 2018 to 292,000, ahead of the forecast of 268,000.)

 

 

Will the negative CMS sponsored mtSDNA report findings derail Cologuard adoption and sales? Is EXAS’ position that the report findings understate the value of Cologuard accurate? Will Cologuard prescribing medical professionals abandon the test in favor of a less costly alternative? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Medical professionals prescribing Cologuard, Medical professionals that are not prescribing Cologuard, Medical sales professionals, Third-party payers/insurers, and Industry specialists.  

 

 

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

 

Research Begins: September 30, 2019

 

To see other ideas Blueshift Research is currently working on, please click here.

 

 

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