Editor’s note: The title of this story has been updated to correct an error related to the reported day of the week.
On Monday, the Centers for Medicare & Medicaid Services released final payment determinations for its 2025 clinical laboratory fee schedule.
A final decision related to CMS pricing was included for Exact Sciences Corporation (NASDAQ:EXAS) Cologuard Plus, a second-generation test that received FDA approval in October.
William Blair writes that the determinations effectively increase reimbursement by 16% compared to the current Medicare rate for the first-generation Cologuard test (to $592 for Cologuard Plus from $509 for Cologuard).
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The determination reverses September’s preliminary decision but aligns with a proposal made during the public comment period.
The analyst writes that the Cologuard Plus reimbursement will now be calculated based on two components: three times the fee for Septin-9 methylation analysis ($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 Q1 or early Q2 2025. Medicare fee-for-service volumes should reflect the new prices immediately after the launch, and Medicare Advantage will follow shortly after.
The company is also likely to renegotiate commercial contracts to obtain higher prices, which could be phased in 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 route of advanced diagnostic laboratory testing (ADLT).
From a financial perspective, this decision is expected to support a moderate price increase starting in 2025. According to William Blair’s estimates, this could add at least 300 basis points to Cologuard’s growth rate next year, which will be projects at 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 for next month.
Price action: EXAS shares were up 7.60% at $59.33 at last check on Tuesday.
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Phrama lab worker illustration created with MidJourney.
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Date |
Firm |
Action |
Of |
TO |
|---|---|---|---|---|
|
February 2022 |
Wells Fargo |
Maintains |
equal weight |
|
|
February 2022 |
citi group |
Maintains |
Neutral |
|
|
February 2022 |
Raymond James |
Maintains |
Get over |
See more analyst ratings for EXAS