'Flawed' Taiwan Study Causes Drop in Shares of Exact Sciences (EXAS)

Exact Sciences (NASDAQ: EXAS), maker of colon cancer screening test Cologuard, was defended by several Wall Street analysts Wednesday after an abstract by a Taiwan-based company sent shares sharply lower.

The rival study detailed performance of a blood-based colorectal cancer screening test that looked impressive compared to Cologuard, which uses a stool sample type, but analysts pointed out concerns about the study’s size and design, and warned that the sell-off in Exact Sciences was “overdone.”

“…this is a relatively small, single-site study that includes a disproportionate amount of diseased patients," said Cowen analyst Doug Schenkel, who has an Outperform rating on Exact Sciences’ stock. Seventy percent of patients in the study were diseased, noted the analyst, adding “a truly randomized study would likely have a diseased rate of 6-7%.”

Schenkel also said the study design looks biased by blood draw timing.

“It is unclear if the blood draw was taken before or after a colonoscopy or other cancer diagnostic procedure. This timing is important, as the procedure could impact the amount of detectable CTCs,”

Schenkel concluded that since this was a study outside the U.S. at a single-site, it is unclear if FDA level standards were applied. Analysts at William Blair and Baird expressed similar concerns about the study's comparability to Cologuard.

Despite potential problems with the study, Exact Sciences declined as much as 13% and was set to end the day down about 11%.

StreetInsider Premium first published a variation of this article on at 9:59AM ET. Try StreetInsider Premium for two weeks free here.

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