Wednesday, October 21, 2020

A Small Cap Equity holding: Exact Sciences (EXAS, $107.14): “Exact Sciences in The Exact Spot for More Growth” by: Jack Cyganiak, AIM Student at Marquette University

Exact Sciences (EXAS, $107.14): “Exact Sciences in The Exact Spot for More Growth”

By: Jack Cyganiak, AIM Student at Marquette University

Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.


• Exact Sciences Corp. (NYSE:EXAS) is a molecular diagnostics company that focuses on the early detection and prevention of collateral cancer. 

• EXAS and Pfizer have amended and extended their sales and marketing deal which was originally made back in 2018.

• EXAS has announced a new test called Oncotype MAP Pan-Cancer Tissue designed for advanced cancer patients.

• EXAS is partnering with Veeva Systems. The partnership will improve Exact Science’s overall efficiency when running clinical trials. 

• EXAS has produced great returns for the AIM Small-Cap fund and is trading near it’s 52 week high.

Key points: Exact Sciences Corp. has made big announcements in the month of October. First, on October 7thExact Sciences and Pfizer announced they have extended and amended their Cologuard promotion agreement. Under the new terms, Pfizer will continue to provide sales and the marketing of Cologuard through the end of 2022 and their health system support through the end of 2021. In exchange, Exact Sciences will compensate PFE for their provided services. Since the agreement was originally made back in 2018, over 3 million people were screened with Cologuard and more than 90,000 healthcare providers ordered Cologuard for the first time.

Exact Sciences made their second big announcement on October 12th when they introduced their new product, Oncotype MAP Pan-Cancer Tissue test, previously known as PCDx. This test is designed for patients with advanced, metastatic, refractory, or recurrent cancer. This test includes a fast turnaround time of 3-5 business days in order to guide prompt treatment decisions, small sample requirements with as little as 3 mmof tissue or 2-3 slides, highly accurate and comprehensive results, and a significantly increased rate of progression-free survival compared to patients who did not take the test (43% vs. 5%). 

Their final big announcement came on October 14th when Veeva Systems announced that Exact Sciences selected Veeva Vault Clinical Suite to design and run clinical studies. Exact Sciences will utilize various services of Veeva Vault Clinical Suite to streamline clinical data and trial processes onto a single cloud platform. With this partnership, Exact Sciences can scale to run more trials, speed innovations, ensure compliance, and increase efficiency.

What has the stock done lately?

Exact Sciences has had a great year thus far and has risen 9.44% over the last three months. The COVID-19 pandemic knocked the stock price down to its 52 week low of $35.25, but it has since recovered and achieved its 52 week high in early October. In late September the stock price decreased to $73.44 per share but has since recovered and is currently trading at $107.14 per share as of market close on 10/19/2020.  

Past Year Performance: EXAS has increased 11.06% over the last year with a 52 week range of $35.25-110.74, outperforming the benchmark which is up 5.22% over the last year. Since it was purchased in March of 2016, the stock has produced a return of 1587.24% compared to benchmark of just 48.37%. 

Source: FactSet

My Takeaway

Since it was pitched in 2016, Exact Sciences has helped save many lives and will continue to do so with the development of new tests. On top of saving lives, EXAS’s stock price will continue to grow with the announcement of new partnerships and a revised marketing plan with Pfizer. EXAS has been a tremendous holding for the AIM Small-Cap Fund producing phenomenal returns of over 1500%, and they are poised to continue to grow. My recommendation is to continue to hold its current position with a bright future still ahead.

Source: FactSet