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DECEMBER 30, 2002

INSIDE WALL STREET

From Exact Sciences, a Better Cancer Test

 
By Gene G. Marcial
Gene Marcial

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 Inside Wall Street Archive

Some pros are getting bullish on Exact Sciences (EXAS ), a little-known biotech whose PreGen-Plus appears to be the most effective noninvasive test for colorectal cancer. PreGen-Plus is expected to be on the market in the first half of 2003. The first clinical trials for PreGen-Plus showed that its diagnoses were accurate 64% of the time--much higher than for existing tests, says Ivonne Marondel of securities firm Gerard Klauer Mattison, who rates the stock a buy. The data confirm previous results that PreGen-Plus is an "accurate, safe, and noninvasive new screening method for early detection of colorectal cancer," says Marondel. The test isolates DNA from stool samples to identify genetic changes associated with cancer.


In July, Exact's stock was at 17 before it slid on reports by the shorts that it was overvalued, says Pete Donaldson, also of Gerard. Some 1.6 million shares, 10% of shares outstanding, have been shorted. The stock is now at 10.91, but Marondel thinks it is worth 20. She figures Exact will turn profitable in 2005, earning 98 cents a share. One of the current tests, fecal occult blood testing, has disadvantages PreGen-Plus doesn't have, such as high rates of false positives, says Matt Geller of CIBC World Markets, who rates Exact an "overweight."


Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.


By Gene G. Marcial
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