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FDA Decision Expands Market for Exact Sciences’ Cologuard Test

Xconomy Wisconsin — 

Exact Sciences has taken another step toward ramping up sales of its flagship product, a non-invasive, stool-based screening test for colorectal cancer. The FDA has approved the test, Cologuard, for eligible, average-risk patients ages 45 and older, which expands the market that Madison, WI-based Exact can address with its product.

The Monday decision by the FDA is not a major surprise. In May 2018, the American Cancer Society released new guidelines that lowered the recommended age at which patients should first get screened for colorectal cancer from 50 to 45. Up to this point, Exact has primarily focused on marketing Cologuard to patients who had already turned 50, or were about to.

Expanding Cologuard’s indication to patients ages 45 to 49—a range that includes an estimated 19 million average-risk people in the US—gives Exact a significantly larger market to target. According to a note by research analysts at Robert W. Baird & Co., the FDA decision increases Cologuard’s addressable US market to about 106 million people, up about 21 percent from the 87 million average-risk patients ages 50 to 85.

Exact has previously said the 19 million patients represent an opportunity to increase the value of Cologuard’s addressable market by $3 billion; the company previously estimated the potential market for the test was $15 billion.

Shares in Exact (NASDAQ: EXAS) finished the trading day down slightly, to $103.77 a share from Friday’s close of $103.97 per share.

Cologuard received clearance from the FDA and the Centers for Medicare and Medicaid Services in 2014, and about 3 million patients have been screened with the test to date, according to Exact. Its revenues eclipsed $450 million in 2018, a 71 percent increase over the previous year.

The incidence of colorectal cancer is on the rise among American adults younger than 50, Exact says, citing last year’s update to the American Cancer Society (ACS) screening guidelines for the disease.

“The ACS recommends that adults aged 45 years and older with an average risk of [colorectal cancer] undergo regular screening with either a high-sensitivity stool-based test or a structural (visual) examination, depending on patient preference and test availability,” researchers wrote in the update.

Colonoscopy is still generally considered the gold standard when it comes to colorectal cancer screening. One reason is that it’s both diagnostic and therapeutic; healthcare providers find potentially cancerous or pre-cancerous polyps during a procedure, remove them, and send them to a lab for further analysis.

However, some patients are hesitant to undergo a colonoscopy because it’s a costly, invasive, and somewhat risky procedure. Cologuard, by contrast, involves sending a stool sample to Exact’s lab. The next step for most patients who receive a positive Cologuard result is a colonoscopy.

Some health insurers, such as CVS Health (NYSE: CVS) subsidiary Aetna, have already said they will cover the cost of colorectal cancer screening for members ages 45 to 49.

Baird analysts Catherine Ramsey Schulte and Thomas Peterson write in their note that they believe the FDA’s decision “will be important in educating physicians about the rising incidence in this age group and Cologuard’s value proposition/ability to increase screening.”

In order to get more patients ages 45 to 49 screened for colorectal cancer, a key step is ensuring their primary care providers and other physicians know about the recent changes to the ACS guidelines, Anjee Davis, president of the advocacy group Fight Colorectal Cancer, says in a news release.

“There is a need to educate the public about colorectal cancer screening and the array of reliable screening options,” Davis says. “Expanding the screening age to 45 for Cologuard provides an additional tool to reach the unscreened populations.”

Exact has been growing at a rapid clip since Kevin Conroy took the top job at the company a decade ago. In July, Exact said it was acquiring Genomic Health, a California-based developer of diagnostic tests that analyze gene activity in tumor tissue samples from cancer patients, in a $2.8 billion cash-and-stock deal.

Exact is also developing diagnostic tests for liver cancer and other diseases.