Exact Sciences Dip A Chance To Buy As Freenome Deal Fortifies Future: Analyst

Exact Sciences Corp. (NYSE:EXAS) on Thursday reported a second-quarter 2025 EPS loss of 1 cent, up from a 9-cent loss a year ago, beating the analyst consensus loss estimate of 19 cents.

Revenues increased to $811.085 million, beating the consensus of $774.34 million.

Sales jumped 16% on a reported and core revenue basis, including Screening revenue of $628 million and Precision Oncology revenue of $183 million.

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Gross margin was 69%, and adjusted gross margin was 72%.

In addition, Exact Sciences shared initial results from an internal version of its colorectal cancer (CRC) blood test, showing sensitivities of 73% for CRC and 14% for APL at 90% specificity.

Internal testing and evaluation of the assay are ongoing.

Outlook

Exact Sciences raised its fiscal 2025 sales guidance from $3.07 billion-3.12 billion to $3.13 billion-$3.17 billion versus the consensus of $3.099 billion.

The guidance includes a Screening segment sales forecast of $2.44 billion-$2.47 billion, compared to previous guidance of $2.39 billion-$2.43 billion.

Precision Oncology sales are expected to be $690 million-$700 million, compared to prior guidance of $680 million-$695 million.

The company expects 2025 adjusted EBITDA of $455 million-$475 million, up from previous guidance of $425 million-$455 million.

M&A Deal

Exact Sciences on Thursday agreed to acquire exclusive rights in the United States to current and future versions of Freenome’s blood-based, single-indication colorectal cancer (CRC) screening tests.

Complete findings from the prospective PREEMPT study were recently published in JAMA.

Results show Freenome’s first version test achieved sensitivities of 81% for CRC and 14% for advanced precancerous lesions (APL) at specificity of 90%.

Freenome recently submitted the last module of the premarket application to the FDA. Freenome then plans to submit a supplement to the FDA for its next-generation test once final clinical validation data are available.

Analyst Reaction

William Blair writes that investors are most focused on acquisition of the exclusive rights to Freenome’s current and future blood-based colorectal cancer (CRC) screening tests.

The announcement comes as the company’s blood CRC test did not meet expectations in the pivotal trial. Analyst Andrew Brackmann notes that shares are trading lower, representing an opportunity to build or add to positions.

William Blair notes that the Freenome deal helps the company move faster in making money from these tests, reduces the threat from competitors, and eases investor concerns that blood-based CRC tests could slow down growth in its screening business.

It strengthens the company’s position as the top player in noninvasive CRC screening. William also expects the numbers to improve later this year and into 2026. William Blair reiterated the Outperform rating.

Barclays maintained its Overweight rating but adjusted its price forecast downward from $65 to $55. Similarly, RBC Capital kept its Sector Perform rating for Exact Sciences, reducing its price forecast from $54 to $46. Finally, UBS reiterated its Neutral stance on the company, lowering its price forecast from $61 to $53.

Price Action: EXAS stock is trading lower by 12.3% to $41.13 at last check Thursday.

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