Changing the Landscape for Colorectal Cancer Screening Print E-mail
By Brian Wilson - Lead Contributor   
Thursday, 19 December 2013 10:39
Molecular diagnostics companies are continuing to show a lot of promise. Currently, we are taking a look at Exact Sciences (NASDAQ: EXAS) – one of the best up and coming plays in the colorectal cancer (CRC) space. This is a market with huge potential, and we believe this will represent one of the fastest areas for growth in cancer diagnostics.

Colorectal Cancer Overview

CRC is the second leading cause of death related to cancer. Survival of CRC patients is pegged at ~2/3, and this is often due to late detection of the cancer in patients. Screening for this disease has become a big priority, and it is the reason behind the increasingly large number of colonoscopies that are being performed on middle-aged people.

However, these procedures can be incredibly expensive. Although many patients are insured by the time they are going in for colonoscopy screening, increased pressure on healthcare costs increases the need for effective in vitro testing for colorectal cancer. Millions of patients need to be screened, which means that any improvements will make a truly enormous impact.

The current options are quite limited. Perhaps the most common test right now is the fecal occult blood test (FOBT), which identifies the presence of blood in a stool sample. However, these tests have a very high false positive rate and are generally considered unreliable. They are also incapable of detecting the presence of precancerous polyps, which start as benign growths but should be removed before the transition into malignant growth.


Exact Sciences has developed a non-invasive in vitro test to challenge the colonoscopy/FOBT routine that is currently used. It is called Cologuard, and it is a test that uses genetic markers that are related to colorectal cancer and precancer.

Cologuard is very convenient for both doctors and patients, and it doesn’t require patients to go on a certain diet – or to prepare their bowels prior to the actual test. It would also be significantly less expensive than a colonoscopy, which can cost about $10,000 when performed in a hospital. Because of these basic but important advantages, we’d expect adoption of Cologuard to be quite rapid given that it becomes FDA approved as a colorectal cancer test. Patient compliance and ease-of-use are incredibly important factors to consider, and they can make or break medical products.

Cologuard’s most recent data, from a ~10,000 patient trial (Deep-C) showed 92% sensitivity to colorectal cancer and a 42% sensitivity to pre-cancerous polyps and 87% specificity. Although these numbers weren’t perfect, we believe that they still represent a huge upgrade from FOBT figures, which is a very poor indicator because of its sensitivity.

Many sales figures have been thrown around, and we believe that the $100-200 M range is quite reasonable for year 2016 given that the development of Cologuard continues to progress according to the company’s expectations. The growth could be quite amazing after the first few years, since it will take a while for physicians to get used to a new test.


Another company called VolitionRx (VNRX) is building a very similar product that uses epigenetic markers to detect the presence of colorectal cancer. The science is vaguely similar, but still quite different from that being used by Exact Sciences.


We are optimistic on molecular diagnostic tests in colorectal cancer. Although it may take a few more years to play out, we believe that there is huge potential to replace FOBT and other in vitro diagnostic tests for CRC. These new genetic tests may also be used along with current tests, although we will hopefully see them as a standard precursor to colonoscopy 5 years from now.




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