Oct 13, 201512:15 PMInside Wisconsin
with Tom Still
Taking the long view on the Exact Sciences stock plunge
(page 1 of 2)
Let’s face it: If we knew precisely why stock markets surge up, down, and sideways at the drop of a hat, we would all be a lot richer.
Such is the inexact science of trying to make sense of why the stock of Exact Sciences, a Madison-based cancer diagnostics company, took a nosedive last Tuesday over a draft report from an independent healthcare review panel.
Stockholders and others who follow the company may want to take a deep breath before concluding the stock plunge is anything more than a speed bump in what has been an otherwise fast and smooth road for Exact Sciences.
The company’s stock fell about 50% on Oct. 6 with the release of a report from the U.S. Preventative Services Task Force, which is a panel of national experts who make recommendations about clinical preventive services such as screenings and preventive medicines.
This panel is not the U.S. Food and Drug Administration, which approved Exact’s flagship colorectal cancer test — Cologuard — almost precisely a year ago. Nor is it the Centers for Medicare and Medicaid Services, which issued its final “national coverage determination” for the non-invasive stool test at the same time. In fact, Cologuard was the first medical device to receive FDA and CMMS clearance in one fell swoop.
Rather, the task force is a volunteer group that grades various products, devices, and services in order to provide guidance to practitioners and patients alike. An influential group, yes; the final word on what those practitioners and patients choose to do, no.
In its draft statement, which is open for public comment through Nov. 2, the task force rated Cologuard as an “alternative test,” meaning it is useful in select clinical circumstances rather than being a main screening test at this time. That was up from a previous grade of “I,” the equivalent to an incomplete on a school report card, which the task force issued before Cologuard passed muster with the FDA, CMMS, and a host of peer-reviewed clinical trials.
To move from an “I” to an alternative test is progress by most standards, but some industry analysts didn’t see it that way. Many stockholders — mostly institutional — exercised their right to bail out. That’s capitalism and a better system has yet to be invented.