Exact Sciences (NASDAQ:EXAS) stock dropped Friday after news that the Molecular and Clinical Genetics Panel of the U.S. Food and Drug Administration's (FDA) Medical Devices Advisory Committee has strongly recommended FDA approval of Guardant Health 's (NASDAQ:GH) Shield blood test for colorectal cancer (CRC).
EXAS is currently down 3.7% at $52.08 after falling to a low of $50.53 per share earlier in the session. The stock declined due to its competing test, Cologuard, which is already approved.
The recommendation signals the advisory committee panel's consensus on Shield's safety and effectiveness.
However, while offering a valuable perspective, the recommendations to the FDA are non-binding, and the FDA is expected to decide whether to approve Shield later this year.
"The advisory committee's strong support for the approval of Shield reinforces the crucial role that a blood test option can have in improving CRC screening rates for those at average risk," said AmirAli Talasaz, co-CEO of Guardant Health.
Reacting to the news, analysts at TD Cowen said it was good news for GH, but a risk for EXAS. They also highlighted that five of six Yes votes want the label to reflect Shield sensitivity for S1 CRC and AA is poor.
"We expect GH to rally and reduce [the] EXAS price target from $100 to $80," said analysts at TD Cowen, noting that the new target represents "still very attractive upside."