De Kerpel Van KBC Securities heeft gesproken mbt de EXAS demarche (Bron: KBC securities). Conclusie is dat hij het EXAS dreigement niet echt als een groot gevaar ziet en al zeker niet op korte termijn. Koersdoel MDXH blijft op 5,5 EUR.
We understand the request of Exact to lower the royalty rate is ongoing for a while. The current contract stipulates that Exact has to pay royalties to MDxHealth in the low to mid-single digit range as long as the NDRG4 patent stands, which is until 2028. While Exact does have an exclusive license for the use in colorectal cancer, we have the impression the term sheets do not include a break-up fee should Cologuard no longer make use of the marker.
The NDRG marker has been shown to be an important DNA methylation marker for the detection of colon cancer and contributes significantly to the assay performance, especially to rule-out cancer. We understand Exact has the ambition to replace the biomarker with a (unvalidated) marker obtained from the Mayo clinic, but it remains to be proven if this new marker can obtain the same assay performance. MDxH states it has a solid IP position on the gene and technology, and potentially additional IP on the combination of FIT+MSP which has been issued in the EU and is under review in the US, so we feel we are in a strong position.
Cologuard is currently FDA approved, Medicare reimbursed and covered by many managed care contracts. Moreover, a substantial data package has been gathered to support the product’s inclusion in oncology guidelines. From this perspective, it is important to understand what would be the consequence for Exact if it would indeed replace the MDXH biomarker by another marker. Replacing a gene changes the assay configuration and performance, which would most likely require them to start over the process with the FDA, Medicare, managed care providers and even more importantly the wealth of clinical and other supportive data. Or at least put all these elements at risk for a low to mid-single digit royalty to MDxH.
Exact is under pressure as Cologuard’s market penetration is not living up the market’s sky high expectations, which has resulted in 75% drop of its stock since the peak in 3Q15. The question is thus if Exact’s CEO is making the statement to replace the MDXH biomarker or just to improve his negotiation position towards MDxHealth?