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Exact Sciences Sketches Out Strategy for End-to-End Cancer Testing With Ashion Acquisition

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NEW YORK – Exact Sciences planned acquisition of sequencing lab Ashion Analytics from the Translational Genomics Research Institute (TGen), announced this week, is part of the firm's strategy to build an end-to-end cancer testing pipeline, including diagnostics for minimal residual disease (MRD), and comes one month after the firm secured a worldwide exclusive license to the Targeted Digital Sequencing (TARDIS) liquid biopsy method from TGen for use in MRD testing.

The Ashion acquisition, which is expected to close in the second quarter, will strengthen the relationship between Exact and TGen through a planned 10-year research collaboration to develop differentiated MRD testing capabilities for patients and establish the clinical evidence necessary to drive widespread clinical adoption of MRD testing.

Ashion has developed a comprehensive cancer test called GEM ExTra and provides access to whole-exome, matched germline, and transcriptome sequencing capabilities, Exact said, and Ashion researchers will help to incorporate the TARDIS technology into Exact's MRD test.   

"The Ashion cancer panel is nearly 20,000 genes and about 170 introns. It is a robust panel that's primarily used by academic centers and more in terms of research," Exact Chairman and CEO Kevin Conroy said on the conference call to discuss the firm's quarterly earnings on Tuesday. "It also serves as a foundation for a tissue-first, and then liquid, approach to MRD."

He added that Ashion's approach of germline subtraction reduces the number of false positive results and that the firm's bioinformatics is "tremendously powerful," and said that the panel comes with evidence curation software, which allows for automated interpretation of the results.

He did not provide more details about the MRD assay the company is looking to develop but said the company will be in a better position to talk about it in coming quarters.

He did note that the firm plans to combine the Ashion acquisition, the TARDIS license, its own testing platform, existing collaborations with oncologists, and expertise in early-stage breast cancer testing to possibly use fat tissue samples as a sample type for testing.

"We also know which patients are at the highest risk of recurrence. So our collaborators are really excited about the opportunity to work with us in the breast and colon space, and then expand beyond," he added.

Exact is also continuing to develop its multi-cancer screening test, CancerSeek, which it is creating through a combination of its methylation-focused technology and the mutation detection-focused technology it acquired from Thrive Earlier Detection. At this point, the company is focused on improving the test's sensitivity while holding specificity relatively constant, Conroy said. Exact will be conducting additional studies in the second half of the year to validate this approach and expects to launch the pivotal study to support US Food and Drug Administration approval in 2022.

The company also believes that FDA approval is absolutely essential to getting broad-based reimbursement and patient buy-in. In order to get there, Conroy said, the firm is planning to conduct a large, population-based randomized study that will include average-risk and higher-risk patients.

"We believe that CancerSeek can be one of the most impactful diagnostic tests ever developed because of its ability to detect asymptomatic people with cancer earlier," he added. The firm will first work with case-control samples to validate the approaches used by the test, he said, then put them together and conduct a larger study in the second half of the year to lock its algorithm before starting an interventional, randomized study next year.

He pointed to the case-control study from which the company published data last September, where it detected 86 percent of cancers, though detection was biased towards later-stage samples.

"As we can see from Cologuard, methylation and mutation are typically not directly overlapping," Conroy noted. "So, there is going to be some improvement there. And we just have to wait to see what that is."

Importantly, he added, multi-cancer screening will be a "game changer" in MRD, and combined with the colon cancer testing market, Exact believes the total addressable market for all three of these diagnostic opportunities is about $60 billion a year.

"Then when you layer on top of it the ability to mine the data, do deep learning on the data, then prompt and make suggestions to oncologists and to patients based upon that combined data, [that's] pretty powerful," Conroy said, pointing to an even longer-term play for the future of cancer diagnostics at Exact.

In the shorter term, the company is also proceeding with its liver cancer test, which is on track to launch in the first half of this year. Exact CFO Jeff Elliott noted that the test is specifically aimed at patients who are at high risk of liver disease — typically, patients with cirrhosis and hepatitis B.

He said the company has deep relationships with the gastroenterologists, health systems, and primary care physicians, and "all of this will come into play in liver disease."

The company is also developing tests for recurrence and a test for therapy selection. "On top of that, I think our team is very, very good at generating the clinical evidence," he said. "That’s so important for getting the early test launched, getting adoption, securing reimbursement, and guidelines."

In notes to investors on Wednesday, analysts seemed excited at the direction Exact is taking. William Blair's Brian Weinstein said while the call didn't contain much incremental information on what the company is planning every three months, "the pieces are slowly coming together and we are clearly picking up on the same increasingly bullish tone and enthusiasm we heard from the management team" when Cologuard was in its infancy.

"We still see an incredibly long runway ahead for Exact, and while there are certainly hurdles to jump over as it expands its presence and capabilities, we believe this team has proved over and over again that faith in the vision and patience as it works through the science and strategy behind the scenes is needed during a period where not much new can be said," he added.

Canaccord Genuity analyst Max Masucci concurred, noting that the big picture for Exact is that Cologuard is less than 6 percent penetrated into the colorectal cancer testing market, and that the company has several clear-cut growth drivers.

"Beyond this," he added, "Exact Sciences is no longer a one-product company, and its success is now pegged to Cologuard alongside the several other compelling tests launching into its market-leading commercial engine over the coming years."