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FDA Expands Approval of Exact Sciences Colorectal Cancer Test to Younger People

NEW YORK – Exact Sciences said today that it has received approval from the US Food and Drug Administration to expand the indication for its Cologuard colorectal cancer test to average-risk individuals aged 45 and older.

The test had previously been indicated for people aged 50 and older. The label expansion will provide approximately 19 million average-risk individuals in the US aged 45 to 49 with the option to use Cologuard, the company said. During its second quarter earnings conference call in July, Exact noted that Cologuard has a total available US screening market of $15 billion, with an additional potential $3 billion opportunity among people ages 45 to 49.

"About three million people have been screened for colorectal cancer with Cologuard, with nearly half of those surveyed saying they were previously unscreened. With the FDA now approving the use of Cologuard for this vulnerable 45 to 49 age group, we are giving healthcare providers a sensitive, noninvasive option that has the potential to help combat the rise of colorectal cancer rates among this younger group of people," Exact Chairman and CEO Kevin Conroy said in a statement.

In 2018, the American Cancer Society updated its colorectal cancer screening guidelines to include people aged 45 to 49, the company noted. The prior ACS recommendation called for screening to begin at age 50.

In a note to investors, William Blair analyst Brian Weinstein said the label expansion — which came earlier than the company's formal guidance for approval in the first half of 2020 — will take the addressable, on-label population from 85 million to more than 100 million Americans.

"As it relates to what this could mean for uptake of the test, we had not included any specific contribution from this age group in our modeling and thus this adds to our confidence in the team's ability to achieve our 2020 Cologuard volumes of 2.31 million, as well as potentially add a bit of upside to our 2019 target of 1.67 million," Weinstein wrote.

He also noted that there are already some payors that are covering the test in this age range, and that the label expansion will give Exact leverage to more actively engage with other payors.

"Overall, this is a nice win for the company, and one that we think could get the stock moving in the right direction," Weinstein wrote. "While much of the discussion of late has been on the recent Genomic Health acquisition announcement, this is a nice reminder that the base Cologuard business is continuing to post monster results and has additional levers to ensure this continues."

Cowen analyst Doug Schenkel concurred, writing in a note to investors that the label expansion will add about 19 million eligible people, representing about $3.2 billion of incremental annual revenue opportunity.

He also noted that the approval will likely position the company well for Cologuard's expansion to be included in the next review of the US Preventive Services Task Force (USPSTF).

"If expanded Cologuard (45 to 49) was included in the next USPSTF guidelines, we believe this could create a competitive barrier for the company considering how infrequently the USPSTF committee meets (every six to eight years based on historical trends)," Schenkel added.

Exact's shares rose nearly 5 percent to $108.85 in morning trading on the Nasdaq.