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Exact Sciences Corporation Message Board

  • cobalt_nw cobalt_nw Apr 25, 2006 4:13 PM Flag

    Earnings Call: 4/25/06

    A lot of good information has been released in the last week. I've posted the 3 abstracts referred to in the conference call, as well as the Berger study which was referred to in the last conference call. I believe the reason for lack of movement in the stock price is that the information was leaked a few weeks ago, leading to the spike to >$3. Here are the main points I took away from the earnings call:

    1. The Itzkowitz abstract which revealed a sensitivity of 88% is due to a new formulation in which has improved processing of DNA integrity (DIA) and the addition of a new marker, vimentin methylation (V29). The things of interest that are missing are: 1) what were the stages of the 40 patients with colorectal cancer?, and 2) was the study blinded? The final presentation and publication should shed light on this questions, but still this is great news.

    2. While the second Itzkowitz abstract involving ulcerative colitis patients is important, the target population is considerably smaller and therefore of less interest to investors when compared to wide based screening of the normal population.

    3. The cost-effectiveness abstract by Parekh showed fDNA is cost effective assuming >50,000/life-yr gained is the cutoff for a cost effective screening test. It assumed a cost of $300 per test. 65% sensitivity would yield $14,200/life-yr gained, while 82% sensitivity would yield $13,000/life-yr gained. The key here is that this is compared to no screening. What was not revealed in the call was that "With 100% adherence, FOBT was both more effective and less costly than either NS or fDNA" and "fDNA with 100% adherence every 5 yrs and FOBT with 35%/yr adherence had comparable effectiveness, but FOBT remained cost-saving vs NS or fDNA."

    4. The Berger study is touted as showing that patients previously unwilling to undergo colonoscopy but would be willing to undergo colonoscopy after a postive fDNA test. That is true; however the study is not very good. Consider that only 3 patients of the 159 with positive fDNA ended up with a cancer. Also, 90 with positive fDNA did not have colonoscopy. What gives?

    5. The test is still offered by LabCorp at a cost of $495. Third party payers will likely reimburse >$400 of that cost..

    6. The hope (and I stress hope) is for fDNA testing every 3-5 years as a REPLACEMENT to colonoscopy. I doubt that even with guideline inclusion it will be listed as the preferred technique, rather as an alternative to colonoscopy given the years of experience with it.

    7. The timing for a commercial version of the new formulation is unknown.

    8. At the current state, cash will run out at the end of 2007.

    9. EXAS was very quiet about current status with FDA, but that is to be expected. They don't want to be ruffling any feathers at the FDA which may make things harder for them.

    10. Guideline committee meeting is expected mid-year. That will be preferable given the fact that a good deal of information will be further clarified at the DDW presentations.

    I think all that was revealed this morning shows that things are on track. More information needs to be known about the sensitivity study to know whether this will be compelling enough for guideline inclusion. While guideline inclusion on a selective basis is hopeful, this is by no means a guarantee. I think the price of the stock will be relatively stable at this point with increases coming with 1) FDA approval, 2) guideline inclusion, and 3) payer acceptance (insurance companies and CMS). I know sometimes I seem a bit too critical, but I'm just trying to keep things real.

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EXAS
28.23+0.58(+2.10%)Jan 27 4:00 PMEST

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