Exact Sciences: Thanks For The Party, Where Is The Exit?

Gilbert Gerber profile picture
Gilbert Gerber
29 Followers

In the last few days I had been working on an update of my January piece. It was both a fundamental and a comprehensive analysis of the colorectal cancer screening market and of the two front-running companies in the field of innovative, non-invasive early detection: Berlin based Epigenomics AG (OTCQX:EPGNF) and Madison based Exact Sciences Inc. (NASDAQ:EXAS). (The Seeking Alpha article is itself a summary of a paper that can be downloaded from my homepage)

The bottom line was unambiguous:

"EpiProColon is not a perfect test, but it brings to the party all you need to revolutionize the CRC early detection market:

1) performance is good enough and at least matches the performance of FIT, the best non-invasive and FDA approved option. This will lead to PMA certification by the FDA mid 2013 and guidelines inclusion further down the road.

2) its ease of use will boost compliance to levels not achievable by any stool-based or invasive alternatives. Even PCPs will actively support it because it minimises the time spent trying to convince patients to take a test in the first place.

3) its economics are attractive to all parties, most critically to the labs.

4) all payors, private and CMS, will eventually support it, as the body of pharmaco-economic evidence grows."

But that was that. Recent events have forced me to reconsider priorities. I should be back soon with more fundamentals, but let me indulge in some hotter, actionable issues first.

I don't have the experience of Jim Chanos, I'm not a short-seller by trade, but every so often I recognise a good short when I see one. And time has come for EXAS.

Smart money is selling, quant/momentum money is buying.

The triggering event was last Friday's market price action. With 4,9m shares traded, 2m of which at the

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Gilbert Gerber profile picture
29 Followers
European portfolio manager, biotech, health care.

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