UNH Shield Coverage Sends Stock +14%; Thoughts & Framing the Potential Impact

研报英文原文证据摘录

UNH Shield Coverage Sends Stock +14%; Thoughts & Framing the Potential Impact

387,125 Screening % of Commercial 20%

Current $290

Upside $320

% 10%

Total Revs

Current $1,632.6

Upside $1,662.6

ASP Upside 10.4%

$ Upside $30

Rev Upside 1.8%

Source: TD Cowen

Next Steps / Outlook

We'll look for insight from the company on a # of these variables to assess what is

realistic. We expect at the time UNH and eventually other commercial payers were to

go in network with a contract, the price such HMOs pay will be closer to GH's $700

LT target price (though could be higher or lower). Hence, this is why we ran the full

commercial payment scenario above at $700.

GH's Shield previously received a favorable endorsement from the American Cancer

Society (ACS) for Shield (here), which will trigger commercial coverage for 40% of

covered lives within the ~12 states that follow ACS. Our initial math revealed this ruling

represents ~3% upside potential to '27 revenues (we had a few different underlying

assumptions for this math vs. our analysis today, hence more like 2% with some of our

current assumptions).

Prior diligence on broader screening with a former Aetna CMO reflected an ACS

endorsement could result in coverage from 3-4 of the big 5 national payers within

2 years while an NCCN update was less meaningful. Hence, this adds credence

to the idea that today's UNH decision will be followed by additional coverage

announcements.

Details on the First-Line Coverage Decision

UNH indicated blood-based CRC screening to be proven and medically necessary for average

risk, asymptomatic individuals ages 45-75 not up to data on screening and willing to undergo

a colonoscopy after a positive test result. For ages 76-85, the test is covered for those never

2 TDSecurities.com