This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Biotech Stock Mailbag: Dismantling The Exact Sciences Short Thesis

The true-positive rates observed in this study for those found to have cancer in either population are likely to overestimate the true sensitivity of screen-detected cancers in the general population because the diagnostic cohort was included. The design is powerful for determining relative sensitivity, as results are paired for these tests. Better estimates of true sensitivity come from the screening population (Tables 3 and 4), although because not everyone had a colonoscopy, results shown in Table 4 represent the upper limit of actual sensitivity within the limitation of the number of detected cases."

In other words, InSure Fit's 88% sensitivity for cancer and 43% sensitivity for pre-cancer are not realistic, real-world measures. They're over-estimations, according to the study authors.

What does a more realistic evaluation of Insure Fit's accuracy in detecting cancer and pre-cancer look like? Thankfully, the Cancer paper tells us:

An estimate of true sensitivity can be obtained from results in those screening cases where colonoscopy was performed (Table 4). Although numbers were relatively small, InSure was significantly more sensitive for cancer (75% vs. 37.5%) and significant adenomas (27% vs. 15%).

Oh! When the study authors looked only at patients where colonoscopy was performed -- the most accurate method to diagnose colon cancer -- the performance metrics of Insure Fit are downgraded significantly.

Cancer sensitivity is really 75%, not 88%. Pre-cancer sensitivity is 27%, not 43%, as "Alpha Exposure" claims.

The hedge fund doesn't include these more real-world Insure Fit numbers in its Seeking Alpha article because they're numerically inferior to Cologuard -- and that just ruins the entire premise of the short thesis.

The remaining four parts of the "Alpha Exposure" short thesis on Exact Sciences might be more convincing. Part one was not.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
EXAS $24.90 3.11%
AAPL $123.38 0.50%
FB $95.29 1.19%
GOOG $628.00 0.12%
TSLA $264.82 4.67%

Markets

Chart of I:DJI
DOW 17,630.27 +189.68 1.09%
S&P 500 2,093.25 +25.61 1.24%
NASDAQ 5,089.2060 +49.43 0.98%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs