Healthcare
EXAS’s Cologuard business (~75% of revenues) faces disruption from upcoming blood-based colorectal cancer tests by Guardant Health and Freenome, as well as competition from several new stool-based tests. Encouraged by EXAS management, OWS believes investors are underestimating these competitive threats. Meanwhile, the group’s strategy to expand beyond Cologuard appears to be floundering. A string of Precision Oncology acquisitions have shown little success so far and growth of the acquired businesses appears to be slowing significantly. TP $39 (40% downside) is based on 2.5x OWS's 2028 sales estimate of $3.5bn.
Edition: 175
- 08 December, 2023