On the Cowen Liquid Biopsy Summit yesterday, Exact Sciences presented a breakthrough in its liquid biopsy test using blood samples to diagnose multiple cancer types (see slide from the company’s presentation) at an early stage. The company already has a commercial liquid biopsy test for detecting colon cancer and has been a true US biotechnology success story growing revenue from $39mn in 2015 to $1.13bn in 2019. The technology offers a lot of hope in cancer treatment as early detection increases the probability of successful treatment. Liquid biopsies are also much more scalable and effective than scanning of tumors or dysplasia (changes in body cells).
The share price jumped 27% on the news as the test results show the potential of this cancer diagnostics technology. Exact Sciences is leading in this new frontier of diagnosis and has 250+ R&D people working on finding cancer markers. The company has over 3,000 patents filed for these cancer markers providing a strong competitive advantage. While the company has grown revenue impressive over the past five years the company has invested heavily in R&D and production, and thus the company is still not profitable generating negative free cash flow of $240mn in the past 12 months.