Cologuard's Improved Performance to Accelerate Growth, Analyst Raises Expectations

Tuesday, Exact Sciences Corp EXAS announced topline results from the pivotal BLUE-C study, showing that next-generation Cologuard met all study endpoints.

It showed improvement in every topline metric, including a 30% lower false positive rate compared to DeeP-C, the FDA registrational trial for Cologuard.

The blood-based cancer test demonstrated 94% sensitivity for colorectal cancer at 91% specificity.

Canaccord Genuity reiterated its Buy rating and increased the price target to $115 from $92. 

After a comprehensive investor day and potentially conservative financial targets, the analyst is incrementally bullish on the company's outlook.

Exact indicated it should achieve positive free cash flow in 2Q23 and discussed its capital allocation priorities over time. 

Notably, the company provided long-term financial targets that the analyst has confidence that Exact can meet or exceed with relative ease. 

The analyst writes that the Cologuard business should be bolstered by high-compliance rescreening and age 45-49 screening (about $1 billion in revenue from these categories in two years). 

Additionally, the BLUE-C Cologuard 2.0 data exceeded management's expectations and should accelerate growth, given the test's improved performance.

Price Action: EXAS shares are down 2.16% at $93.00 on the last check Friday.