The next significant event for Exact Sciences should be publication of the Cologuard pivotal "Deep-C" validation study in a medical journal before the FDA advisory panel on March 27.
Exact Sciences announced top-line results from the Cologuard study last April, showing a 92% sensitivity to detect colon cancer and a 42% sensitivity for the detection of pre-cancerous lesions (the best and most important data from the study.) The specificity in the Deep-C trial was 87%.
We should get more details on Cologuard's stool-based colon-cancer screening performance from the journal publication, including specifics on the comparison to fecal immunochemical testing (FIT). Exact has already told investors Cologuard was superior to FIT for cancer and pre-cancer sensitivity, but we haven't seen the FIT sensitivity numbers yet.On March 26, an FDA panel will review the blood-based mSEPT9 colon cancer screening test developed by Epigenomics. mSEPT9 is potential competition to Cologuard but sensitivity is weak -- 48% for cancer and 11% for (pre-cancerous) adenomas. mSEPT9 was most accurate in detecting stage IV colon cancer (77% sensitivity) but the benefit for patients is catching colon cancer early when it's most treatable, preferably when lesions are still pre-cancerous. The Epigenomics blood-based screen is convenient but doesn't appear to be particularly useful. On March 27, the same FDA panel will review Cologuard. Unless there are major, hidden problems with the Deep-C data (I don't expect there will be), the panel should be uneventful and positive with a recommendation to approve Cologuard. Two potential Cologuard controversies which may crop up at the March 27 panel: The appropriate testing interval, meaning how frequently should the Cologuard test be used. From a compliance and commercial standpoint, Exact Sciences would prefer a longer testing interval like once every three years. Anything shorter, like a recommendation that patients be screened every year, could be seen as a negative by investors. The other potential hiccup would be pushback or criticism from the panel experts about the clinical significance of a 42% sensitivity for pre-cancerous lesions. The Cologuard detection rate for pre-cancerous lesions is superior to any currently available screening tests, but perhaps panel experts will find a nit to pick. All in, I don't see a lot of downside risk in Exact Sciences going into publication of the Deep-C data or the FDA panel. (Knock on wood.) I also don't expect the stock to move significantly higher if the panel votes to recommend Cologuard's approval. The bull-bear debate over Cologuard is focused -- appropriately -- on the commercial launch later this year. I'm an Exact Sciences bull and believe Cologuard will be a commercial success, but convincing people to poop in a bucket is going to be a challenge. Some investors are skeptical about Cologuard for this reason, understandably so.
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