Exact Sciences Corp. shares dropped 6.4% to $31.68 on Monday morning after short-seller Citron Research released a report about the company that called its colon cancer test “a seriously inferior product and a disastrous business model.” Exact Sciences’ Cologuard screening test works using a stool sample that patients send in and, if positive, should be followed by a colonoscopy, according to Exact Sciences. But Citron Research alleged in its report that the product is bad and that not only are doctors not ordering more of it, but Medicare will pay less for the test next year. The company has been successful because “some men think they are ‘too cool’ (or too scared) to get a colonoscopy, despite the real dangers of colon cancer,” the Citron Research report said. But, the report continued, “we believe Exact Sciences is what happens when Wall Street meets bad medicine.” Exact Sciences did not immediately respond to a request for comment. Exact Sciences shares have skyrocketed 61.1% over the last three months, compared with a 2.3% rise in the S&P 500 .
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News