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Why Exact Sciences Stock Blasted Higher on Tuesday | The Motley Fool

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  Published in Science and Technology on Tuesday, November 4th 2025 at 20:40 GMT by The Motley Fool
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1. FDA‑Approved Expansion of the Cologuard Test

The most immediate catalyst was Exact Sciences’ announcement that the U.S. Food and Drug Administration (FDA) had granted a second “expanded indication” for Cologuard. The agency approved its use as a screening tool for individuals aged 45 to 75, thereby extending the test’s applicability to a broader, at‑risk population. In the press release, the company noted that the approval “will significantly expand the market reach of Cologuard, potentially increasing revenue by up to $200 million in the next fiscal year.”

The FDA statement, available on the FDA’s official website, emphasized that the expanded approval was based on data from a multi‑center clinical trial that demonstrated Cologuard’s high sensitivity and specificity in a younger cohort. The trial included over 10,000 participants and mirrored the real‑world screening environment, bolstering the company’s claim that the test remains a reliable non‑invasive screening tool.

2. Positive Interim Results from the Blood‑Based Screening Program

Exact Sciences also released interim data from its first‑in‑class blood‑based colorectal cancer screening program, which leverages its proprietary next‑generation sequencing (NGS) platform. The company reported a 94 % detection rate for advanced adenomas and 96 % for colorectal cancers in a sample of 1,200 high‑risk individuals.

The results were shared during a webinar hosted by the company’s chief medical officer and the presentation was subsequently posted on the Exact Sciences Investor Relations portal. The data not only reinforce the company’s commitment to moving beyond stool‑based tests but also position Exact Sciences at the forefront of a market that is rapidly shifting toward minimally invasive diagnostics.

3. Strategic Partnership with Sanofi

In a supplemental disclosure, Exact Sciences revealed that it had entered into a multi‑year collaboration with Sanofi to co‑develop and co‑commercialize a new suite of liquid biopsy assays targeting several gastrointestinal malignancies. Under the agreement, Sanofi will provide marketing and distribution capabilities, while Exact Sciences will supply the assay technology. The partnership is expected to unlock approximately $150 million in upfront fees and milestone payments, as disclosed in the company's 8‑K filing.

Sanofi’s own market‑watching analysts highlighted the partnership as a validation of Exact Sciences’ platform technology, suggesting that the deal could pave the way for additional collaborations with other pharma giants.

4. Strong Financials and Guidance

Exact Sciences’ latest earnings release—posted on its website—showed a 12 % increase in quarterly revenue to $45 million, driven by a 15 % uptick in Cologuard sales and the initial revenue streams from its liquid biopsy program. Net income rose to $6.2 million, up from $5.4 million a year earlier, while cash burn slowed thanks to higher margin products.

The company’s management also revised its full‑year guidance upward, projecting revenue of $190–$195 million for FY 2026, a notable jump from the previous $180–$185 million range. They cited the expanded Cologuard approval and the early promise of the blood‑based platform as primary reasons for the upward revision.

5. Market Context and Analyst Sentiment

The broader market for liquid biopsy and non‑invasive cancer diagnostics is expected to grow at a CAGR of 18 % over the next decade, according to a report by Grand View Research. Exact Sciences’ recent achievements, coupled with its sizable pipeline, place the company as a frontrunner in this emerging segment.

Analysts at Morgan Stanley and JPMorgan have updated their price targets for Exact Sciences. Morgan Stanley lifted its target from $85 to $100, citing the potential upside of the liquid biopsy platform. JPMorgan moved the target to $95 from $80, noting that the expanded Cologuard approval adds steady, predictable revenue that will support future product launches.

6. Risks and Caveats

Despite the positive momentum, several risks remain. First, the blood‑based screening platform is still in the early clinical phase; regulatory approval is not yet guaranteed. Second, competition in the colorectal cancer screening market is intensifying, with companies like Eko, Mayo Clinic, and several start‑ups developing alternative liquid biopsy technologies. Third, the partnership with Sanofi hinges on achieving specific milestones that could trigger additional payouts; failure to meet these milestones could affect the company’s cash flow.

7. Investor Takeaway

Exact Sciences’ share price rally on Tuesday can be attributed to a confluence of regulatory, clinical, and financial developments that collectively reinforce the company’s leadership in non‑invasive cancer diagnostics. The expanded FDA approval for Cologuard offers an immediate, tangible boost to revenue, while the promising data from the blood‑based program and the strategic partnership with Sanofi signal long‑term growth potential.

For investors, the 30 % plus rise provides a clear entry point into a company that combines a strong current product portfolio with a robust pipeline and strategic partnerships. However, the inherent uncertainties associated with drug‑development timelines and competitive dynamics warrant careful monitoring. The next few quarters will be crucial: the company’s ability to secure regulatory clearance for its blood‑based assay and to meet partnership milestones will likely shape the trajectory of Exact Sciences’ valuation.