24/7 Wall Street Insights

• Early cancer detection is the first line of defense in preventing the disease’s progression and reducing fatalities.
• Wall Street analysts are unanimously bullish on Exact Sciences’ stock, with Ark Capital projecting as much as a 90% price increase in 12-months. As a result, 24/7 Wall Street is choosing Exact Sciences for its Single Best Stock to Buy Under $50 for July.
• 24/7 Wall Street has a free report to read on “the next Nvidia” and how it can change your life.

Cancer Strikes Indiscriminately

If asked what Chadwick Boseman (Black Panther), Justice Ruth Bader Ginsberg, Sharon Osbourne, baseball legend Darryl Strawberry, and film icon Audrey Hepburn all had in common, what would be the odds of guessing the correct answer? Colon cancer is likely not the response that most people would have come to, although it is the common thread between these five celebrities.

Although colon cancer survival rates have improved considerably, this is largely due to early detection and intervention. Among the FDA approved early detection platforms for colorectal cancer, Cologuard from Madison, WI based Exact Sciences Corporation (NASDAQ: EXAS) has emerged as one of the leading US companies in the pack. Cologuard’s testing combination of DNA and biomarker analyses make it one of the top 2 rated US companies in the field, the other rival being Clinical Genomics Technologies, Pty Ltd. The rest of the competition are either Japanese (3) or European (5). 

Since going public, Exact Sciences has undergone many of the trials and tribulations common to the biotech industry. The stock has traded as low as $1 and as high as $130, and its price gyrations would not be prescribed for the faint of heart. Nevertheless, Exact Sciences has been able to use the capital markets effectively to expand by acquisition and move beyond being a Cologuard one-trick pony company. With an $8.37 billion market cap at the time of this writing and 15 “buy” or “strong buy” Wall Street analyst recommendations, Exact Sciences has been covered in the past by 24/7 Wall Street and is its current pick for Single Best Stock to Buy Under $50 for July. 

Changing the Exit Strategy to Becoming a Whale

Founded in Massachusetts in the mid-1990s, Exact Sciences was created for the noninvasive colorectal cancer testing being developed by Anthony Shuber and Stanley Lapidus. Going public as a pre-revenue company on NASDAQ in 2001, the initial exit strategy for Exact Sciences was anticipated to be via acquisition by a larger biotech firm. That scenario never materialized, and the stock would drop to $1, languishing in single digits for the next decade or so. With no sellable products, the company faced closing down, but instead opted to plow forward tenaciously. 

2009 saw several breakthroughs: current CEO Kevin Conroy took the helm, a relocation of Exact Sciences offices to Madison, WI, and a licensing agreement with the prestigious Mayo Clinic. The Mayo Clinic connection afforded credibility and a host of other benefits for Exact Sciences, smoothing the path for FDA approval of Cologuard in 2014. 

The explosion of Cologuard sales would buoy the company’s fortunes, allowing Conroy to start a series of acquisitions that would concurrently boost Exact Sciences’ market cap proportionately, to its present $8.37 billion. 

• Sampleminded, a healthcare IT company, was acquired in 2017.
• Armune Bioscience, another cancer diagnostics company, was acquired in 2018.
• Sample preservation company Biomatrica was sold to Exact Sciences later that same year.
• 2019 found Exact Sciences acquiring genetic cancer detection company Genomic Health for $2.8 billion, and announcing a new 169,000 square foot lab for Cologuard. Genomic Health’s Oncotype IQ tests would expand Exact Sciences’ product offerings as well as give the company a wider network of marketing to customers internationally, as well as in the US.
• In 2020, Exact Sciences folded both Paradigm Diagnostics and Viomics into its umbrella, along with those companies’ R&D and laboratory assets. 
• 2020 Q4 closed out with two more acquisitions with strong complementary verticals to Cologuard – Thrive Earlier Detection and Base Genomics (UK). Both of these companies’ blood-based cancer screening was a natural fit for Exact Sciences’ core business.
• Ashion Analytics and PFS Genomics were acquired in 2021, and a JV with The Translational Genomics Institute (TGEN) was announced, along with an exclusive license for TGEN’s proprietary liquid biopsy-based test technology, Tardis. 

Thanks to its strategic acquisitions, Exact Sciences now has multiple screening products for colorectal, prostate and breast cancers.

More Arrows in the Quiver For the Future

With an eye towards moving forward, Exact Sciences is continuing to push the envelope, devoting R&D resources to several new projects which can potentially add significantly to the company’s bottom line:

• Breast Cancer Radiation Efficacy Screening – With technology developed by its PFS Genomics subsidiary, Exact Sciences will be able to evaluate patients for the presence of 16 different cancer genes. This will be able to determine which breast cancer patients have favorable or unfavorable statistical efficacy odds in undergoing radiation therapy post-surgery. It is expected that this can greatly aid in customization of treatment and reduction of unnecessary and potentially dangerous side effects from radiation treatments. 
• Cologuard 2.0 – Exact Sciences’ flagship product has been in development for a new and improved version with greater accuracy without any loss of convenience. Early results from a 20,000 test patient study are promising with a 30% decrease in false positives (from 13% to under 10%).
• LBgard Blood Tubes – Derived from its Biomatrica subsidiary, these whole blood stabilization products are expected to enhance laboratory efficiency and reduce waste from failed or incomplete lab testing due to contamination and other sample problems.
• Oncodetect – Molecular Residual Disease (MRD) is the incidence of fragmented DNA from tumors remaining in the bloodstream, which can trigger recurrences. Oncodetect is a blood test designed specifically to identify the presence of MRD. The potential market of patients who could benefit from Oncodetect exceeds 3 million in the US.
• Cancerguard –  This is a new diagnostic that Exact Sciences has in development for screening of multiple types of cancer from a single blood draw.

The Analysts Are Bullish

The sentiment among the Wall Street analysts covering Exact Sciences is unanimously bullish, in spite of price pullbacks in the stock over the past few months, since April. The new projects in the works, along with the following prognostications, are underpinning their enthusiasm:  

• Cathie Woods of Ark Invest is among the most bullish among analysts; she has a 12-month target for Exact Sciences of $83.46. This would be around 90% higher than market price at the time of this writing. 
• Like many other biotech companies, Exact Sciences still has yet to make a profit. Current estimates expect that to change in 2026, with projected profits of $124 million.

The most recent analyst reports since May, in addition to Ark Invest, are all bullish, were issued by the following firms:

• Evercore ISI
• Jeffries
• BTIG
• Scotiabank
• Guggenheim
• TD Cowen
• Craig-Hallum
• Leerink Partners
• Piper Sandler
• Bank of America

The need for faster and earlier detection of cancer is vitally important for reducing cancer-related fatalities, as well as the huge costs for later stage oncology treatment. Exact Sciences is already a leader in colorectal cancer and can very well replicate its success in other cancers as well, based on the current data. As such, 24/7 Wall Street has selected Exact Sciences as its Single Best Stock to Buy Under $50 for the month of July.

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