On Monday, the Centers for Medicare & Medicaid Services posted final payment determinations for its 2025 Clinical Laboratory Fee Schedule.
Included was a final decision related to CMS pricing for Exact Sciences Corp’s (NASDAQ:EXAS) Cologuard Plus, a second-generation test that received FDA approval in October.
William Blair writes that the determinations effectively raise reimbursement by 16% versus the current Medicare rate for the first-generation Cologuard test (to $592 for Cologuard Plus from $509 for Cologuard).
Also Read: Colorectal Cancer Diagnostic Focused Exact Sciences Stock Plunges On Weak Annual Guidance, Analyst Sees Compelling Long-Term Entry Point
The determination reverses the September preliminary decision but aligns with a proposal made during the public comment period.
The analyst writes that reimbursement for Cologuard Plus will now be calculated based on two components: three times the fee for methylation analysis of Septin-9 ($192 x 3) and the fee for a FIT test ($15.92).
This pricing adjustment is expected to take effect for Medicare volumes when the test officially launches in late first quarter or early second quarter of 2025. Medicare fee-for-service volumes should reflect the new pricing immediately upon launch, with Medicare Advantage following soon after.
The company is also likely to renegotiate commercial contracts for higher pricing, which may gradually roll out over the coming quarters and years.
William Blair reiterates the Outperform rating on the stock.
The analyst highlights that the update is a positive outcome for the company, as it simplifies the process of implementing a price increase compared to the more complex advanced diagnostic laboratory test (ADLT) pathway.
From a financial perspective, this decision is expected to support a moderate pricing boost starting in 2025. Based on William Blair’s estimates, this could add at least 300 basis points to Cologuard's growth rate next year, which is projected to be around 15% overall.
Exact Sciences said it will present 10 abstracts demonstrating the breadth of its Precision Oncology portfolio at the 2024 annual San Antonio Breast Cancer Symposium scheduled next month.
Price Action: EXAS stock is up 7.60% at $59.33 at last check Tuesday.
Read Next:
- Analog Devices Q4 Earnings: Beats Estimates, Automotive Rebound, Cautiously Optimistic Outlook & More
Illustration of Phrama lab worker created with MidJourney.
Latest Ratings for EXAS
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Feb 2022 | Wells Fargo | Maintains | Equal-Weight | |
| Feb 2022 | Citigroup | Maintains | Neutral | |
| Feb 2022 | Raymond James | Maintains | Outperform |
View More Analyst Ratings for EXAS
View the Latest Analyst Ratings
UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets.
Get the latest stock analysis from Benzinga?
- EXACT SCIENCES (EXAS): Free Stock Analysis Report
This article Why Is Exact Sciences Stock Trading Higher On Monday? originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments