It is not often that I get excited about playing clinical trials. Generally I feel that they are too risky, as the majority of the time there is not a set catalyst date to allow for a run-up. What can happen with clinical trials and data validation studies are the results are announced unexpectedly. You may go to bed with $5 shares and wake up with $1 shares. However, there is the rare occasion when we have the opportunity to play the run-up on a clinical trial. (Note: EXAS 2Q earnings are to be released 7/28)
EXAS (Exact Sciences) is one of these rare occasions, and the prospects are exciting. Take a look:
About Exact Sciences
Exact Sciences Corporation (Exact) is a molecular diagnostics company focused on the early detection and prevention of colorectal cancer. It has exclusive intellectual property protecting its non-invasive, molecular screening technology for the detection of colorectal cancer. The Company’s focus is on the commercial development and seeking FDA clearance and approval of its stool-based (DNA) colorectal cancer screening product. Its sDNA screening test can detect pre-cancers and cancers early. By detecting pre-cancers and cancers early with the sDNA-based test, affected patients can be referred to colonoscopy, during which the polyp or lesion can be removed.
Why is this so Exciting?
Colorectal cancer (commonly known as colon cancer) is the second leading cause of cancer deaths in the United States and is the most deadly cancer among non-smoking men and women. Annually, there are nearly 154,000 colorectal cancer cases diagnosed and nearly 50,000 deaths due to this disease.
It is estimated that roughly one-third of colorectal cancer-related deaths could be avoided if more people underwent regular screening. Of those diagnosed, nearly half are expected to die within five years because most cases are detected when cancer has progressed and is less treatable.
For those whose cancer is detected at an earlier stage, the five-year survival rate can be greater than 90%. The American Cancer Society recommends that all Americans age 50 and older be regularly screened for colorectal cancer. Unfortunately, only a fraction of this population is screened for the disease because screening techniques currently available are widely considered too invasive or inaccurate. Nobody wants to have a colonoscopy when nothing is seemingly wrong with them.
Exact Sciences’ stool DNA (sDNA) test now in development will make screening more patient-friendly, and will allow for much earlier detection of the disease state. Early detection may save lives by detecting both pre-cancer and cancer, leading to a longer and better quality of life.
What is the Estimated Market Share?
EXAS estimated that even only a 30% of the screening market will reflect $1.2 Billion dollars annually. Currently the market cap for EXAS is only $144M.
EXAS Financials
Take a look at the following slide from the EXAS Annual Meeting (7/16/10):
Why Will it Run-Up?
Normally I would avoid a clinical trial, even one as promising as EXAS. However, notice this slide from their annual meeting:
Above is the key. We have a data release date. They have chosen to release the data from their validation study at the American Association of Cancer Research Conference in Philadelphia. Because of this, I am planning on taking a position in EXAS soon, and holding the shares for a run-up.
Media Attention
See the links below for some of the media attention EXAS has experienced.
· The Wall Street Journal - Exact Sciences Seeks Colon Cancer Screen
· OMED – Exact presents update to World Organization of Digestive Endoscopy at DDW 2010
· OMED abstract
· OMED presentation
· NASDAQ.com - Exact Sciences opens the NASDAQ Stock Market March 10, 2010
· CNBC - Kevin Conroy, CEO and President of Exact Sciences, interviewed on CNBC March 10, 2010
· Milwaukee State Journal - Company wants to ease colon cancer detection
· TheStreet.com - Exact Sciences Finds its Mojo
Disclosure:
Long EXAS
Tags: EXAS
Twitter
Facebook
RSS
Email
I think the shares of exas are to cheap. The mayo clinlic has said they will be able to detect many different cancers from dna in the stool. exas owns stool testing thru patents. colon cancer is only the beginning.
Another great find! I love this site. Are you planning to hold through the 10/29 results? The Street says it is expecting FDA filing in 2012, so are you planning to run this in the typical biorunup strategy?
I usually never hold through results, however I may take some profits from any run-up and play options through 10/29.
exas is a failed play. just check its history and you will discover that quickly
like your site, but this smells like pump and dump
Sorry Mark!
I respectfully disagree. EXAS is no where near pump and dump. Even Adam Feuerstein agrees…
Exact faces two main challenges that keep
PreGen-Plus from becoming a mainstream exam for
laboratories. Unlike FOBT tests, PreGen-Plus is not
included in cancer screening guidelines, which are
followed closely by doctors and significant third-party
payers. PreGen-Plus is also currently excluded from
Medicare reimbursement due to an issue about whether
PreGen-Plus can be sold without an official FDA approved
label.
test results are immaterial right now you need to wait till 2012 for FDA approval
hence no run up
Adam is not an authority on Bio tech, just check his record
you might have him beat
Exact Sciences to Host Second-Quarter 2010 Conference Call
MADISON, Wis., Jul 21, 2010 (BUSINESS WIRE) — Exact Sciences Corp. (Nasdaq: EXAS) today announced that the company will host a conference call and question-and-answer session on July 28, 2010, at 10 a.m. EDT, to discuss the company’s second-quarter 2010 financial results.
What do you think about buying exas just bfr the earnings release
Thanks WK.
There should not be too many surprises in the Q2 earnings, as EXAS just went over the financials at the annual meeting. However, with biotechs you never know- it present a great opportunity to get in low, or the price may jump it. Its a tough call, but remember, they have little to no income, as they are developing a product.
Lost money on them in the past, would be cautious and will review. Their pricing and decision to work through LH was a blunder years ago. Not sure if they are any smarter now.
If you review the literature, sensitivity and specificity are in a trade-off relationship; i.e., a gain in one means a loss in the other. I have not read of a test which has 100% sensitivity and specificity before. Results like that mean a test is perfect; there are no false positives ( a risk with high sensitivity) or false negatives ( a risk with high specificity). I cannot think of a reason this test would be not approved.
It is just a matter of time for the patients to accept the need to do the test.