Exact Sciences' Cologuard Added To United Healthcare's Preventive Care Guidelines: Should You Care?

Baird reiterated its Outperform rating on Exact Sciences Corporation EXAS as analyst Catherine Schulte set a new $40 price target.

3 Key Points

1. Strong Management Team: Schulte highlighted Exact Sciences' strong management, with its CEO and chief operations officer both having prior executive leadership experience and experience with molecular diagnostics.
2. Targeting An Unmet Need: One of Exact Sciences' main focuses is screening for detection and prevention of CRC. Schulte noted “colorectal cancer (CRC) is very preventable, yet in the U.S. there are about 135,000 new cases (60 percent caught late-stage) and 50,000 deaths annually, and $14 billion is spent on treatment.”
3. Cologuard Added To UnitedHealthcare UNH)’s Preventive Care Guidelines: Schulte thinks Exact Sciences' CRC screening technology, Cologuard, could be a game-changer for CRC with its superiority over fecal immunochemical testing and its patient-friendly format. The screening method, which can be done at home and only needs to be performed every three years, has been validated through a 10,000-patient study and has reported superior compliance rates that are well above FIT’s.

Overall, Schulte sees over 11-percent upside in Exact Sciences which was trading at $36.00 at the time of publication.

At time of publication, shares of Exact Sciences were up 10.44 percent at $36.06.