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UBS Initiates Coverage of Exact Sciences, Natera, Guardant Health

This story has been updated from a version posted May 5, which linked to an incorrect article. 

NEW YORK – Investment bank UBS has initiated coverage of Natera and Guardant Health at Buy ratings and of Exact Sciences at a Neutral rating.

UBS provided a price target of $76 for Natera, $40 for Guardant Health, and $73 for Exact Sciences.

In a research note on Natera, UBS analysts Elizabeth Garcia and Christopher Mercado wrote that "the company is poised over the next several years to increase its penetration across three key markets: noninvasive prenatal [testing] in average risk pregnancies, minimal residual disease testing in oncology, and organ transplant monitoring."

They added that consensus expectations underestimate the MRD adoption and repeat testing opportunities, given growing indication approvals. Furthermore, they forecast Natera reaching cash flow breakeven by 2025.

In a separate note on Guardant, the analysts wrote that "the focus on [Guardant's] early cancer detection assay, Shield, has overshadowed the company's leading position in liquid biopsy therapy selection [for] oncology, where there is still a multiyear runway for continued penetration of this oncology market."

In another note about Exact Sciences, they wrote that they anticipate market share for Cologuard, the firm's colorectal cancer screening test, to rise, "driven by per-doctor order rates increasing in tandem with provider migration onto digital ordering platforms."

Recently, Blue Shield of California, as well as Blue Cross and Blue Shield of Louisiana, began reimbursing for Natera's Signatera MRD test for multiple cancer indications and Guardant Health obtained Medicare coverage for its Guardant360 immunotherapy response monitoring liquid biopsy test.

In Friday trading on the Nasdaq, shares of Natera were up 3 percent at $54.50, shares of Guardant were up 2 percent at $23.24, and shares of Exact Sciences were up 2 percent at $66.96.