NEW YORK (GenomeWeb) – The US Food and Drug Administration on Monday approved Exact Sciences' Cologuard colorectal cancer screening test, while the Centers for Medicare and Medicaid Services issued a proposed national coverage determination for the test.
FDA's approval had been widely expected following a unanimous recommendation by an agency panel in March to approve the non-invasive stool-based test, and today investors greeted the FDA's decision by pushing up shares of Exact more than 7 percent to $18.34 in morning trading on the Nasdaq.
Exact submitted its premarket approval application to FDA in modules between December 2012 and July 2013 and had sought approval of Cologuard as an adjunct to other existing testing methods, such as colonoscopy. The test analyzes hemoglobin, multiple DNA methylation biomarkers, mutations in the KRAS gene, and the total amount of DNA in stool samples.
As part of the PMA process, Exact submitted data from its 10,000-patient DeeP-C trial, which compared Cologuard with fecal immunochemical testing. Cologuard was able to detect cancers and advanced adenomas more often than the FIT test, FDA said. Cologuard detected 92 percent of colorectal cancers and 42 percent of advanced adenomas in the study population, while the FIT test detected 74 percent of cancers and 24 percent of advanced adenomas.
However, FDA said, the FIT test performed better at correctly identifying study subjects who were negative for colorectal cancer or advanced adenomas. The FIT test provided accurate negative test screening results for 95 percent of the study population, compared to Cologuard's 87 percent.
Simultaneous to seeking FDA approval, Madison, Wis.-based Exact also pursued a parallel review process with CMS in order to gain Medicare reimbursement. The company said that Cologuard is the first product to take part in the parallel review pilot program, and a final national coverage determination is anticipated to be posted in October/November following a public comment period.
Cologuard will cost $599 and will be available to patients through their healthcare providers. After the test is ordered, the kit will be mailed directly to the patient, who will collect a stool sample and return the kit to Exact through a pre-paid mailer. Test results will be achieved in as little as two weeks, Exact said.
Exact also plans to make Cologuard available to select countries in Europe following CE Mark.
The fortunes of Exact had rested squarely on the FDA decision. While it currently has other tests in the pipeline, a negative decision by FDA would have been a major blow to the firm, which currently has no products on the market, and last month reported no revenues for its second quarter.
Mizuho Securities analyst Peter Lawson said in a research note late on Monday that with the approval, he anticipates Exact will do a soft launch of Cologuard in the current quarter with "minimal revenue" resulting from the commercialization.
Goldman Sachs' Isaac Ro added that the approval removes a "key regulatory overhang… [as] conversations with many investors reflected continued concerns surrounding the potential for Cologuard to be denied by the FDA."
In a statement, Exact President, Chairman, and CEO Kevin Conroy said that "the FDA approval of Cologuard represents a major achievement in Exact Sciences' mission to make a noninvasive, patient-friendly screening test for colorectal cancer available. Cologuard addresses a critical need for a more convenient screening option for patients to aid in prevention and early detection."
"This approval offers patients and physicians another option to screen for colorectal cancer," Alberto Gutierrez, director of the Office of In Vitro Diagnostics and Radiological Health at the FDA's Center for Devices and Radiological Health, said in a statement. "Fecal blood testing is a well-established screening tool and the clinical data showed that the test detected more cancers than a commonly used fecal occult test."
The agency said that the approval does not change current practice guidelines for colorectal cancer screening, and noted that stool-based DNA testing is not currently recommended as a method to screen for the disease by the US Preventive Services Task Force, which suggests that people between the ages of 50 and 75 who are at average risk for colon cancer should be screened using fecal occult blood testing, sigmoidoscopy, or colonoscopy.
Meanwhile, CMS is proposing to cover testing using Cologuard once every three years for Medicare beneficiaries who are between the ages of 50 and 85, are asymptomatic for colorectal disease, and are at average risk for developing the disease.
William Blair analyst Brian Weinstein called the approval a "validation of [Exact's] unique and rigorous approach" to getting Cologuard on the market, and noted that when the company first unveiled its plan years ago to seek FDA approval for the test, the likelihood of such designation, as well as CMS reimbursement, "seemed very far off and frankly a bit unlikely.
"But with a well-thought-out, methodical, and at times creative approach on the science and technology, execution of a very complex clinical trial, and brilliant strategic maneuvering with the FDA and CMS, we see this as a watershed moment for the company," Weinstein said.