EXACT Sciences: Becoming Tempting

Let me admit from the outset that I hate investing in pharma and biotech. I’m not a science guy, and the business model of many companies in these sectors perplexes me.

That said, I have added EXACT Sciences (Nasdaq:EXAS) to my watchlist. According to the company, it “uses applied genomics to develop patient-friendly screening technologies for use in the detection of cancer.” I hope the company paid its PR person well for that description, because it sure sounds a lot more glamorous than “our tests check poop for signs of colorectal cancer.”

I’m not a buyer yet, nor am I a fan of headlines that read “Exact’s losses widen amid revenue challenges.” However, I do like that EXACT is working with a $24.5 infusion from Genzyme (GENZ), that EXACT is trying to upgrade its management, and that it continues to win new patents. Fundamentals look like they are improving.

Technically, this is an easy one. Quite obviously, EXACT is in a consolidating wedge. More likely than not, it will resolve to the upside, but if it breaks support at $.75, all bets are off.

DISCLOSURE: No position.