Shares in Exact Sciences (EXAS) spiked 27% on Thursday after the company’s CEO Kevin Conroy gave an encouraging presentation at the Cowen Liquid Biopsy Summit. While Exact has focused on its Cologuard diagnostic test for colon cancer, it is now planning to expand into screening for multiple cancer types.
At the event, EXAS released initial data for a blood-based screening test for six different cancer types (esophageal, liver, lung, ovarian, pancreatic, and stomach).
The test, which incorporates five methylation markers and three proteins, identified 87% of cancers in its training cohort (n=292) and 83% in its validation cohort (n=145), at 95% specificity.
Across the 180 cancers included in the training and validation cohorts, EXAS’ multi-cancer test delivered the following cancer-specific sensitivities: esophageal (89%), liver (83%), lung (78%), ovarian (90%), pancreatic (90%), and stomach (87%).
“We believe the initial data is promising and should be viewed positively, especially in light of the rising interest in multi-cancer screening tests following ILMN’s acquisition of GRAIL on Monday” cheered Canaccord Genuity’s Max Masucci after the event. On September 21, gene sequencing firm Illumina announced that it was snapping up Grail, a company focused on multi-cancer early detection, for $8 billion.
As a result, the analyst reiterated his EXAS buy rating while ramping up his price target from $115 to $120 (27% upside potential).
According to Masucci, there is no reason why EXAS should be denied equal credit for its multi-cancer screening program (vs. GRAIL), which may imply that EXAS’ market cap is, in fact, undervalued.
“That said, EXAS’ multi-cancer screening program still has a long way to go (which EXAS will be the first to admit), and continued execution will be necessary to support a premium multiple” he admitted. (See EXAS stock analysis on TipRanks)
Overall, the Street shares Masucci’s bullish take on Exact Sciences. The stock has scored 11 back-to-back buy ratings in the last three months. Meanwhile, with shares up only 2% year-to-date, the $119 average analyst price target indicates upside potential of 26%.
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