Shares of Exact Sciences soared toward an all-time high before the opening bell Friday after the company said its new colon cancer test will be covered by Medicare.
The medical diagnostic test maker Sciences is still locking up pricing for its Cologuard test, the coverage determination made by the Centers for Medicare and Medicaid Services goes into effect immediately, the company said.
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Exact Sciences, based in Madison, Wisconsin, traded 36 percent higher even with major U.S. markets falling sharply Friday.
The CMS decision came nearly two months after the Food and Drug Administration approved Cologuard as the first screening test for colon cancer that uses DNA found in patient stool to help spot potentially deadly tumors and growths.
Doctors have long used stool tests to look for hidden blood that can be a warning sign of tumors and precancerous polyps. Company studies showed that Cologuard was more accurate than those tests at detecting cancerous tumors and worrisome polyps, though it is less accurate at correctly ruling out cancer.
Medicare coverage is key because it covers elderly patients, a population that should be screened regularly for colon cancer.
Current federal guidelines recommend traditional stool tests every year and a colonoscopy every 10 years for patients between ages 50 and 75. A colonoscopy is the most accurate method for spotting colon cancer but many adults are reluctant to undergo the invasive procedure, which requires sedation as doctors probe the colon with a camera-fitted endoscope.
Colorectal cancer is the second leading cause of cancer death in the United States, with over 50,000 deaths expected this year, according to the American Cancer Society.
Shares of Exact Sciences Corp. rose $6.58 to $24.70 in premarket trading and are up 84 percent over the past year, hitting a new high of $23.20 in early September.