Outlook Improves For Exact Sciences After Task Force Tweaks Ratings
The U.S. Preventive Services Task Force on Wednesday announced changes to how it classifies colorectal cancer screening methods, a shift that could have implications for Madison, WI-based Exact Sciences (NASDAQ: EXAS) and its flagship product, a stool-based DNA test for colorectal cancer.
In October, the task force released draft guidelines that proposed identifying Exact’s test, known as Cologuard, as an “alternative” screening method, leaving it out of a group of “recommended” tests. Shares in Exact fell more than 40 percent the day after the draft guidelines were made public.
But in a statement published Wednesday in The Journal of the American Medical Association (JAMA), the task force said it removed the terms “recommended” and “alternative” from its final 2016 colorectal cancer screening recommendation in order to “better communicate the primary message of importance.”
According to the statement, “There is no ‘one size fits all’ approach to colorectal cancer screening.” However, “There is convincing evidence that screening for colorectal cancer provides substantial benefit for adults aged 50 to 75 years, and a sizable proportion of the eligible U.S. population is not taking advantage.”
The task force said the changes were made in response to feedback the group received during a public comment period between Oct. 6 and Nov. 2.
While the task force’s revisions to its evaluation system may not have been the best possible outcome for Exact—which might’ve been hoping that the group would re-classify Cologuard as a “recommended” screening method—CEO Kevin Conroy appeared to be satisfied with the change.
“We’re pleased with the clarity of these recommendations,” Conroy said in a prepared statement. He added that the task force’s final recommendations “reflect the rapid evolution that [has] occurred among cancer screening technologies during the past eight years,” and provide “an opportunity to increase the number of people getting screened, detect more early-stage cancers, and eventually get closer to eradicating this preventable disease.”
Shares in Exact closed down 0.6 percent on Wedneday. That follows a Tuesday spike in which the company’s stock price increased 33 percent. A copy of the task force’s final recommendations was leaked early, according to multiple reports, including one on the website StreetInsider.com that shows a version of the statement in JAMA dated June 21, 2016. The leak apparently led investors to bid up the company’s shares ahead of the official release on Wednesday.
Exact spokesman JP Fielder declined to comment on who might have been responsible for the leak, and said inquiries should be directed to the task force. “The process for distribution is a question for the parties who manage the guidelines,” Fielder said in an e-mail message.
Exact has previously predicted that it will complete more than 240,000 tests of Cologuard this year. The test earned FDA approval and Medicare coverage in 2014, and numerous private health insurers have agreed to cover Cologuard.
Statements and guidelines released by the task force are watched closely within the healthcare industry because under the Affordable Care Act, insurers must cover recommended preventative services, according to the Kaiser Family Foundation.
“We believe the final recommendations provide an important level of clarity to patients, physicians, and insurers, and that Cologuard should receive the benefits given to A-rated preventive services under the Affordable Care Act,” Conroy said.