FDA Letter Warns Exact “That’s a Medical Device You’re Selling”

10/17/07

Ouch. After years of waiting for the good news that would push its test into the mainstream, Exact Sciences instead just got a warning letter from the FDA. It could just be a temporary setback, but it means Marlborough, MA-based Exact (NASDAQ: EXAS) needs to have its ducks in a row to negotiate this critical juncture.

Exact is the developer of the Pre-Gen-Plus stool-based DNA test for colorectal cancer screening. That test was licensed by Burlington, NC’s LabCorp, which has been selling it since 2003. The noninvasive test detects changes in DNA shed in stool that can signal cancer; it competes with a much older test that looks for blood in stool.

The test got to market along the least stringent regulatory pathway: It’s processed at LabCorp’s facilities, which have received a special CLIA (Clinical Laboratory Improvement Amendment) seal of approval. But the FDA has increasingly been scrutinizing these CLIA-certified tests, and asking for a stricter review for some of them. According to Exact’s management, the letter they received from FDA says Pre-Gen-Plus “is a medical device requiring premarket approval or clearance.” That means direct review by FDA.

That could mean months to years of additional testing, depending on the data that Exact already has in hand. The company plans to meet with FDA “in the next few weeks” according to Jeffrey Luber, Exact’s president. It is now shooting for a 510(k) approval—a slightly more stringent approval pathway than CLIA. “We’ve met with them (FDA) before about a filing strategy and we have a breadth of data to submit, including [a] New England Journal of Medicine study and new data we will announce this quarter,” Luber says.

FDA has not made public exactly what its concerns are. “I cannot speculate what they are focused on,” Luber says. (FDA has not yet responded to our inquiry.) In the meantime, the test is not coming off the market. According to a LabCorp spokesperson, “At this time we are comfortable and will continue offering the test.”

Meanwhile, the size of the market for the Pre-Gen-Plus is uncertain. So far, sales volumes “have been low” Luber admits. But he says the company has been waiting for “a key catalyst” that would open the market to their test.

One such catalyst would be the test’s inclusion in the colorectal cancer screening guidelines put together by various medical societies. Exact has been in discussions with these groups since 2003, and argues that its test is much better than the older non-invasive test that they currently recommend. (Neither test can really replace a direct look at the colon by a doctor, but a better screening tool might send more of the right people for follow-ups.)

Exact also recently submitted an application to the Centers for Medicare & Medicaid Services, seeking to have its test covered under Medicare. “About 70 percent of colorectal cancer hits the Medicare population,” says Luber. “And the screening goals are not being met.” It may have been that Medicare submission that triggered the FDA’s letter. “What is unique now is that Medicare is deciding whether or not to approve this test for its 40 million beneficiaries,” Luber says. “They reached out to FDA and the agency is just doing its job.”

Now Exact has to do its job, which is to pony up the right kind of data and argue for the fastest but most appropriate type of approval pathway. Exact’s shares are currently trading at $4.49, down more than 25 percent from this morning’s open.

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  • Richard Berenson

    This looks like an MVIA, since they are doing some kind of calculation based on the expression rate of at least 4 genes (APC, K-ras, p53 and BAT-26). Does anyone have another theory?

  • http://www.focusoncancer.info/cancer/colon-cancer.php Colon Cancer Guy

    Colon cancer can become fatal if the cancer has spread through the lymphatic system or the bloodstream to other areas of the body. This cancer has become known as “the silent killer”, since quite often symptoms do not seem to show up until after the cancer has far spread. We should all get tested more frequently throughout our lives!