Exact Sciences: Strong Commercial Position Though Some Risk

Exact Sciences (EXAS) is on track to file a US PMA submission for its Cologuard stool-based CRC screening product in Q213, on the back of results from the “DeeP-C” pivotal trial, due in March. With c $120m of cash, Exact is in a strong position to commercialise its test, but its valuation (EV is $459m) reflects some pretty high expectations for the product. We highlight the commercial risk (and also the valuation disparity) in relation to Epigenomics*, whose blood-based mSept9 test is at the same regulatory stage and has shown broadly similar performance data.

Pivotal trial completes enrolment
Enrolment has now completed in the 12,700-patient DeeP-C pivotal trial, which is evaluating the accuracy of the Cologuard stool-based screening test vs traditional screening methods in 50 to 84-year-old patients at average risk of CRC. The results of this trial, due in March, will form the basis for its PMA FDA submission.

Promising case-control data
Results from a 1,003-patient case-control study that included 93 CRC cases, 114 advanced pre-cancer cases and 796 controls showed that at a nominal specificity of 90%, Exact’s test detected 98% of CRC and 83% of pre-cancers with high-grade dysplasia, the majority of which progress to cancer. However, the test only demonstrated 57% sensitivity for advanced pre-cancers ≥1cm. The test's sensitivity increased with the size of the pre-cancers, rising to 83% for pre-cancers ≥3cm.

Similar results to competition
Exact is one of a handful of companies developing non-invasive screening tests for CRC. Epigenomics’ blood-based Epi proColon test has shown sensitivity of 68% and a specificity of 80% in a 7,940-patient prospective study. Sensitivity increases to 89% if early-stage sub-mucosal tumours are excluded. An earlier case-control study showed a sensitivity of 95% and a specificity of 85%.

Valuation: EV of $459m prices in potential for trade sale
Exact’s EV of $459m reflects its strong commercial position and prices in some potential for a likely future trade sale. However, we highlight the commercial risk (and a marked valuation disparity) in relation to Epigenomics, whose rival mSept9 blood-based test will be a competitor. A hypothetical trade sale of Epigenomics, whose EV is currently just €3m, to a major player represents a major downside risk.

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