06 Oct Exact Sciences shares down sharply after panel’s ruling on colon test
Shares of Exact Sciences Corp. plunged Tuesday morning after the U.S. Preventive Services Task Forceissued a preliminary recommendation, saying it considers the company’s non-invasive colon cancer test as an “alternative test.”
The Madison company’s stock dropped more than 40% in morning trading. The shares, which closed at $18.53 on Monday, dipped nearly as low as $10 Tuesday morning.
The decline occured because investors are worried that the task force’s recommendation will hurt Exact’s negotiations with private insurers over how much they will pay for the test.
“It will still get adopted because at the end of the day it’s cheaper, it’s more effective and it’s more convenient for patients to use,” said said James T. Evans, chief investment officer at Thompson Investment Management Inc., Madison. “But they’re losing the upper hand in pricing negotiations with private insurers.”