Despite a key endorsement by the American Cancer Society for EXACT Science's (NASDAQ:EXAS) stool DNA-based colorectal cancer screening test earlier this year, the stock continues to languish at multi-year lows on light average volumes. EXACT is expected to finalize its FDA protocol for the V2 technology of its test to gain the agency's approval and also engaged Leerink Swan to explore strategic alternatives over three months ago. In April , the Company submitted its pre-IDE study protocol to the FDA for a de novo 510(k) filing of its V2 technology. I expect the FDA protocol to be finalized soon, resulting in the filing of a 510(k) application with the agency and the potential for a lucrative partnership deal for this test to alleviate funding concerns and bolster the dwindling cash reserves of $9.5 million.
Recent reports suggest that EXACT is now planning to make the latest version of its fecal DNA-based colorectal cancer screening test available to consumers on an over-the-counter [OTC] basis in 2009, pending successful FDA approval at that time. Meanwhile, partner LabCorp (NYSE:LH) has stopped offering PreGen-Plus as of June 1, as it was previously the focus of a FDA warning letter in October 2007. LabCorp plans to launch a single-marker, lab-based fecal DNA screening test later this year to replace PreGen-Plus as a "homebrew" test that does not require FDA approval.
EXACT's partnership with LabCorp will continue for this new single-marker test as it existed previously for PreGen-Plus. However, the focus of EXACT for the future lies with its V2 technology, which reportedly will seek to obtain FDA approval for OTC sale to consumers. The LabCorp deal does not inlcude FDA-approved versions of EXACT's colorectal cancer screening tests; so the potential for a major licensing deal to fund this initiative is the hopeful outcome for investors of the strategic review by Leerink Swan.
Disclosure: Author holds long positions in EXAS, LH