BTIG Affirms Exact Sciences (EXAS) at 'Buy' Following Leaked JAMA Article; Sees Easier Reimbursement
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BTIG affirms EXACT Sciences (Nasdaq: EXAS) with a Buy rating and $9 price target, noting a leaked JAMA article Tuesday contributing to volatility in the name.
Analyst Sean Lavin commented,
The USPSTF has not issued a formal recommendation. However, a link to a JAMA article dated 6/21 with final recommendations drove shares 34% higher today and as discovered by more investors, will likely push shares higher. The old less positive guidance cut shares from ~$18 to below $10. The article states the USPSTF highly recommends colon cancer screening from age 50 to 75, but will no longer rank tests; instead, it is providing a list of acceptable ones that includes FITDNA (Cologuard). While this seems like a bailout by the Task Force and we wonder why it is so reluctant to strongly recommend other tests vs. colonoscopy (relationships would not stun us), we believe being put on par with colonoscopy will help EXAS gain routine reimbursement and more rapid adoption.
Lavin believes that
the guidelines will help EXAS obtain routine reimbursement more quickly than the company may have under the previous recommendation. While the update is not a perfect result, we see it as a major positive for the company and expect shares to rally further ... Widespread reimbursement is most important in our view, but with the USPSTF still saying EXAS could lead to extra scopes (makes no sense to us since one would assume after a positive test and negative scope another screening test would not occur for ten years), we feel the company will need to make sure docs understand it’s unlikely that EXAS will increase the number of scopes per patient.
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