Monday, December 23, 2013

Seeking Alpha: The Inexact Art Of Valuing Exact Sciences's Opportunity

In the year or so since I last looked at Exact Sciences (EXAS), quite a bit has changed and most of it for the better. While top-line data from the company's pivotal study of Cologuard didn't live up to the most bullish hopes, I believe it was more than enough for approval and commercial adoption. The company has also decided to keep its tests in-house (meaning it doesn't have to share profits with testing companies) and laid out a logical marketing strategy to target the most probable high-volume users. Last and not least, the company should have a Medicare coverage decision in hand not too long after approval and in time for the commercial launch.

Even with all of these ostensibly positive developments, the shares have lagged the market over the past year (up about 12%). Some of this can be tied to excessive optimism and some of the normal pessimism that tends to hit med-tech stocks as commercialization looms larger on the horizon. Some can also be tied to concerns about reimbursement and whether the Cologuard data was good enough for real commercial uptake. I'm bullish on Exact Sciences at these levels, though I expect a great deal of debate about the ultimate level of reimbursement and market share for the company.

Follow this link for the full article:
The Inexact Art Of Valuing Exact Sciences's Opportunity

No comments: