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Exact Sciences a buy on weakness: Canaccord

May 15, 2017

Short-seller Citron Research’s report about the diagnostics company Exact Sciences Corp. prompted the company’s stock to drop as much as 8% early Monday, paring back to a 4% drop by Monday’s close.

The bulk of Citron’s criticism centers around Exact Sciences’ EXAS, -3.97%  colon cancer test, which works using stool samples from patients, which is far less invasive than a colonoscopy.

The Cologuard test is “a seriously inferior product and a disastrous business model,” alleged Citron Research, which cited as among its reasons that the test doesn’t work and the company isn’t profitable.

But  Canaccord Genuity analyst Mark Massaro said instead that Citron Research is wrong, and recommends buying on Exact Sciences’ Monday weakness.

 

Massaro took issue with Citron Research’s assertion that colonoscopies are “the gold standard,” for one. The U.S. Preventative Services Task Force, an independent panel of national experts, lists stool-based tests as among several colon-cancer screening strategies, he noted.

“Short reports always have some elements to truth to them,” Massaro said. “It would be wrong to say that Cologuard is the standard of care, but it would also be wrong to say that colonoscopies are… There is no perfect screening test.”

http://on.mktw.net/2r9VaFU

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