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Exact Sciences Inks Cologuard Co-Promotion Deal With Pfizer

Zacks Equity Research logoZacks Equity Research 8/23/2018 Zacks Equity Research

Exact Sciences Corp. EXAS announced that it has entered into an agreement with drug giant Pfizer PFE to co-promote its Cologuard test for the detection of colorectal cancer in the United States. Cologuard is the first and only FDA-approved non-invasive DNA screening option for colorectal cancer. This nationwide co-promotion deal will be valid through the end of 2021.

Following this news on Aug 22, shares of the molecular diagnostics company surged more than 30%. As a matter of fact, the stock has rallied 24.3% year to date versus the industry’s decline of 5.9%.

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Per the terms of the deal, Pfizer will provide a marketing support to Cologuard and join Exact Sciences’ sales representatives in reaching out to the physicians as well as health systems from fourth-quarter 2018 onward. Exact Sciences will be solely responsible for all other aspects of manufacturing and laboratory operations of Cologuard. Whereas Pfizer will share gross profits and marketing expenses equally on contractual basis.

While Pfizer will contribute more than $65 million to Cologuard marketing efforts over the next three years, Exact Sciences will increase its spending on television and other direct-to-consumer marketing initiatives.

Colorectal is widely recognized as the most preventable yet least prevented form of cancer. It still remains the second leading cause for cancer deaths in the United Sates with more than 50,000 causalities recorded every year. This deal could prove to be a game changer for Exact Sciences. The partnership backed by Pfizer’s brand, experience and its breadth of resources notably in the primary care space is expected to help accelerate the Cologuard adoption.

Exact Sciences Corporation Price and Consensus

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Exact Sciences Corporation Price and Consensus | Exact Sciences Corporation Quote

Zacks Rank

Exact Sciences currently carries a Zacks Rank #4 (Sell).

Two better-ranked stocks in the pharma sector are Gilead Sciences, Inc. GILD and Illumina, Inc. ILMN, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead Sciences’ earnings estimates have been moved 7.7% north for 2018 and 2.2% for 2019 over the past 60 days. The stock has gained 3% year to date.

Illumina’s earnings estimates have been revised 11.1% upward for 2018 and 8.7% for 2019 over the past 60 days. The stock has soared 53.6% so far this year.

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