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With EXAS missing the expected numbers by 10K tests and on revenues the share price has retreated. There have been several articles on this site that examine the why far more closely than I will on this board. I did not listen to the presentation, but I have looked over the powerpoint which you can access at which is thin on the financial numbers but did bring about one nugget. A test for detecting liver cancer is showing some promise of effectiveness. To me this is indicating that the monies being devoted to R&D are bearing some fruit. Also, there is a slide that shows the capacity to process test results will not be a bottleneck for several years, giving the company plenty of runway to bring on expansion if need be.

The troubling aspect to me, though, is that management blamed part of their miss on some end users reluctance to return their kit because they thought the test would not be covered by their medical insurance. I'm not sure what segment of the market they are referring to, though. If it is people below age fifty, they may well be correct since the screen recommendation change has only recently been suggested. Just because an organization endorses a procedure doesn't make it an automatic that an insurer will, too. I would have thought that the new segment wouldn't have any near term impact. Perhaps the customer service work that initially helped to keep the return rate high needs to figure out how to clarify for customers when the test is covered and if an insurer has agreed to cover what part or all of the cost.

Last, the rate of customers that have a second Cologuard test should be part of future management presentations. This is the year that initial test users would be up for a retest. Just as a colonoscopy is suggested on intervals (three to five years, depending on variables) the sample test is recommended every three years. If the repeat numbers are good from the early adopters, then the potential for growing sales notches up again. If not, then management needs to determine why and address that issue.


Still long, still my largest holding by value, still looking at selling some shares to achieve greater diversity, but not in any hurry. On a cost basis (initial cost net of subsequent sales) the outlay is in line with my investment goals.
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