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EXACT Sciences (NASDAQ: EXAS)

EXACT Sciences (NASDAQ: EXAS) is developing a next-generation (V3), stool DNA (sDNA) based screening test for colorectal cancer (CRC) which has demonstrated the ability to detect both early-stage cancer and pre-cancerous growths. The Company's sDNA-based screening technology platform has also demonstrated the ability to detect related GI cancers and pre-cancers.

 

EXAS 3Q09 Update / Overview Report - Mike Havrilla 11/7/09

 

In June 2009, EXACT Sciences announced a collaboration and licensing agreement with the Mayo Clinic that is focused on developing patient-friendly diagnostics that reduce deaths from CRC. According to projections by the American Cancer Society (ACS) there will be 146,970 new cases of CRC and nearly 50,000 deaths attributable to the disease in 2009 in the U.S. alone, representing the second most common cause of cancer-related death following lung cancer (60,000 deaths) and ahead of breast cancer (about 41,000 deaths).

Under the license agreement, the Company has secured exclusive rights to intellectual property (IP) developed by David Ahlquist, M.D., Mayo Clinic, including patents that cover advances in sample processing, analytical testing and data analysis associated with non-invasive, sDNA screening for CRC. EXAS will make up-front, milestone, and royalty payments to the Mayo Clinic and will provide funding for future work in Dr. Ahlquist's lab in exchange for the exclusive rights to commercialize any promising results from this collaboration.

EXACT Sciences owns a strong patent estate for CRC screening, including the following: (1) platform technology: exclusive licenses to digital PCR and BEAMing technology (both stool + peripheral blood detection) from Johns Hopkins University (JHU) for the detection of CRC; (2) content: APC (adenomatous polyposis coli)and p53 (these are two common genetic mutations associated with CRC) licensed from GENZ with diagnostic testing kit rights + exclusive licenses to key tumor biomarkers such as Vimentin; (3) methods: broad IP for stool sample processing.

Last summer, EXAS announced the published results of a study in which stool and blood plasma were compared head-to-head for the detection of CRC using an improved BEAMing DNA detection technology (V3) from JHU. Study results demonstrated 92% sensitivity for detecting CRC in stool samples, which outperformed blood plasma testing - especially in the detection of early stage disease, which is crucial to have a positive impact and decrease mortality as CRC has a much better treatment outcome when diagnosed at early stages.

BEAMing describes an assay technology which incorporates the use of "Beads, Emulsion, Amplification, and Magnetism". The technology is a useful method for performing single-molecule analysis of DNA or "Digital PCR" that has been demonstrated to provide a high level of sensitivity for the detection of mutations or deletions in gene sequences of interest.

In the study, a total of 25 sDNA samples from CRC patients were analyzed and a next generation sDNA technology (V3) correctly identified 23 (92%) of the cancers. In the 16 of 25 cases where there were paired stool and plasma DNA samples, the sDNA technology detected mutated DNA in stool in 14 cases (88%) while only 8 (50%) corresponding plasma DNA samples had detectable levels of mutated DNA. In addition, when late-stage disease (Stage IV) is removed from the total, non-invasive sDNA performance remained at 86% (12/14) while plasma DNA performance fell to 43% (6/14). The results of the study, Analysis of Mutations in DNA Isolated from Plasma and Stool of Colorectal Cancer Patients, were published in the August journal of Gastroenterology.

Over the past decade, intense research has shown the underlying basis of colorectal cancer to be an accumulation of genetic alterations. Approximately 75% to 85% of colorectal cancers are not inherited, but rather a disease of the genome, which means every cancerous cell has some genetic alteration. This knowledge of genomics forms the basis of this new method of colorectal cancer (CRC) screening. Known DNA alterations associated with screen relevant neoplasia can be identified.

 

 

This Vogelgram, as it is called, details the specific molecular events of carcinogenesis - the transition of a normal cell in the epithelial lining of the colon through early and late adenoma and early and late cancer. Specific DNA alterations (APC, K-ras, p53 and BAT-26) occur as discrete steps in this cascade. By identifying these stages, Dr Vogelstein's work has allowed the development of a DNA analysis technique based largely on these genetic markers of screen relevant neoplasia found in the DNA recovered from rapidly growing cells in cancers and adenomas shed into the large bowel lumen and passed in the feces.

 

David Ahlquist, M.D. / Mayo Clinic Research

Data that was presented at the Digestive Disease Week 2009 Meeting in early June demonstrates the potential to expand the application of stool DNA testing for the diagnosis of multiple GI-related cancers. EXACT Sciences (NASDAQ: EXAS) is currently developing a V3 stool DNA test kit for the detection and diagnosis of colorectal cancer (CRC) / pre-cancers, which will be evaluated in a Phase 3 clinical trial for FDA marketing clearance. Click here for my previous articles and reports on EXAS at BioMedReports.com.

Dr. David Ahlquist discusses how Mayo Clinic researchers have demonstrated that a noninvasive, stool DNA-based screening test can detect not only CRC, but a variety of other GI-related cancers such as pancreatic, stomach, biliary, and esophageal cancers. This video is also available at YouTube, in addition to the preceding link at the Mayo Clinic website.

Results demonstrated that target mutations were not detected in control stools while target mutations were detected in stools from 68% (47/69) of patients with a GI neoplasm and 71% (36/51) of patients with cancer, including the following breakdown.

1.) 40% (2/5) with oropharyngeal cancer

2.) 65% (11/17) with esophageal cancer

3.) 100% (4/4 ) with gastric / stomach cancer

4.) 55% (6/11) with pancreatic cancer

5.) 75% (3/4) with biliary / gallbladder cancer

6.) 100% (10/10) with CRC

7.) 61% (11/18) with pre-cancers, including 100% (2/2) with pancreatic intraductular papillary mucinous neoplasia and 56% (9/16) with colorectal advanced adenoma

The Mayo Clinic researchers concluded that the capacity for the pan-detection of GI neoplasms could substantially expand the value of stool DNA testing and change the screening paradigm and further validation studies are clearly indicated. Importantly, the test remained negative for all healthy participants in the study, which indicates that the test is feasible for further development and evaluation.

 

Colorectal Cancer Screening Statistics

Only 24% of an estimated 90M individuals in the U.S. are currently compliant with CRC screening recommendations, which results in 68M people who are non-compliant. The early detection of CRC saves both lives and money by avoiding the high costs of dealing with late-stage disease through expensive anti-cancer drugs and/or palliative care. Late stage (III/IV) CRC accounts for 60% of diagnoses, but the five-year survival rates for Stage III CRC is 60% and just 11% for Stage IV disease. Compare those stats to early stage disease, which includes a 90% five-year survival rate for Stage I CRC and 70% for Stage II.

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EXACT Sciences (NASDAQ: EXAS): CEO Interview

While Kevin T. Conroy will not pursue a run for Wisconsin governor, the president and CEO of Exact Sciences Corp. (NASDAQ: EXAS) has turned his attention to growing the company, which relocated to Madison from the Boston area just months after Conroy was appointed to lead the medical diagnostics firm.

See the full article by Lynn Welch for Wisconsin Technology Network (WTN Media) below:

http://wistechnology.com/articles/6850/

EXACT Sciences 3Q09 Conference Call Summary

A summary of the conference call and upcoming milestones for EXAS includes the following:  

1.) Data is expected by 3Q10 to provide external validation of the Company's stool DNA based CRC test kit.  

2.) A clinical trial to support marketing clearance of the CRC test kit from the FDA is expected to begin during 2-3Q11. EXAS expects total costs of approximately $15-20 million for the FDA study, which will involve 20-30 sites.  

3.) A submission to the FDA for marketing clearance is expected during 2012 via the 510(k) de novo route (since no predicate device exists with FDA marketing clearance). EXAS has received extensive input from the FDA for the design of this clinical trial and will remain in close contact with the Agency, following the same model of success applied at Third Wave for that Company's HPV test.  

4.) EXAS provided guidance for an average cash burn rate of about $1 million per month during 2010, which is expected to increase slightly as the Company continues to expand and adds additional personnel.  At the end of 3Q09, EXAS had $26.9 million in cash / equivalents. 

5.) EXAS expects a reimbursement rate of $300 for its next-generation (V3) stool DNA based test kit for CRC while the Company would likely receive approximately $150 per kit with gross margins in excess of 65% (roughly $100 per test kit in gross profit).  

6.) The Senior Research Analyst for Life Sciences / Diagnostics, Quintin J. Lai, Ph.D., CFA, of Robert W. Baird was also on the call asking questions and previously followed Third Wave from its early stages of development. Analyst coverage for EXAS is likely to occur well ahead of its planned FDA clinical trial and 510(k) de novo filing given the huge unmet medical need for an effective mass screening tool for CRC and the large commercial opportunity - including a market of about 90 million people in the U.S. alone that would represent over $1 billion with a 30% penetration rate according to the Company's estimates.  

7.)EXAS has thoroughly examined blood-based detection tests for CRC and concluded the technology is not commercially or clinically feasible at this time given very low detection of pre-cancer (18%) and early-stage (Stage I) CRC (36%) along with a 10% false positive rate.

EXACT Sciences Schedules 3Q09 Conference Call

MADISON, Wis.--(BUSINESS WIRE)--Exact Sciences Corp. (Nasdaq: EXAS - News) today announced that the company will host a conference call and question-and-answer session on Nov. 3, 2009, at 10 a.m. ET, to discuss the company's third-quarter 2009 financial results.

Date:        Tuesday, Nov. 3, 2009 

Time:    10 a.m. ET, 9 a.m. CT 

Internet:    The live webcast can be accessed at http://www.exactsciences.com/  

Telephone:    Domestic callers, dial 888-224-1065 

International callers, dial 913-312-1427 

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The Emerging Diagnostics Index is actively managed and tracks the performance of companies with market caps below $500 million at the time of inclusion. The index includes diabetes monitoring device makers, laboratory services, clinical diagnostics, diagnostic imaging, diagnostic equipment makers, and molecular diagnostics.

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