Analyst Catherine Ramsey of Robert W. Baird is bullish on EXACT Sciences Corporation (NASDAQ:EXAS) and Cerus Corporation (NASDAQ:CERS) following positive developments surrounding their products. Below, the analyst discusses Exact Sciences’ new recommendation and Cerus’ new deal.

EXACT Sciences Corporation

Ramsey discusses the long term prospects of Exact Sciences following a recent recommendation from the United States Preventive Services Task Force (USPSTF). The USPSTF  included Cologuard, Exact Sciences’ flagship product, in its final 2016 colorectal cancer-screening recommendations. Cologuard is an at-home colon cancer screener.

The analyst believes that this recommendation will increase long-term payor coverage and physician prescription levels. She notes that there will be minimal impact in 2016 because it takes time for payors to update their policies. Ramsey expects “some benefit in 2017 and more meaningful improvement in 2018 and beyond.”

Ramsey increased the estimated collection rate from commercial payors because she thinks that EXAS will have “increased leverage in contracting negotiations going forward.” The biggest reason physicians don’t use Cologuard is because of a lack of insurance coverage. The analyst expects Cologuard to soon gain broader insurance coverage and therefore expects the number of “ordering physicians and kits shipped per physician per quarter” to exceed her initial expectations.

Ramsey reiterates her Outperform rating for Exact Sciences with a price target of $15, marking a 50% increase from current levels.

According to TipRanks, out of the 7 analysts who have rated the company in the past 3 months, 71% gave a Buy rating and 29% gave a Neutral rating. The average 12-month price target for the stock is $12.17, marking a 21.82% upside from current levels.

Cerus Corporation

Following Cerus Corporation’s new contract with Biomedical Advanced Research and Development Authority, or BARDA, a government agency that supports “the development and procurement of vaccines, drugs, therapies, and diagnostic tools for public health medical emergencies.” Ramsey discusses the aspects of the deal and how it will help Cerus develop its new red blood cell product.

Cerus and BARDA agreed to a five-year contract with the possibility of up to $180.5 million in funding to support the development of a new red blood cell product, or RBC. At first, CERS will receive up to $30.8 million for work related to a clinical trial for its “Intercept RBCs in Puerto Rico and also for in vitro studies that could potentially enable pivotal Phase III clinical trials in the continental U.S.” Intercept refers to a system of blood transfusions that reduces the chance for infections.  The analyst feels these tests are crucial because the North American RBC market has an $880 million revenue opportunity for Cerus.

After the initial committed funding, BARDA has the option to fund “broader Intercept implementation in areas of Zika risk, clinical and regulation development program in support of FDA approval, and development, manufacturing and scale-up activities.” In addition to the possible $180.5 million that Cerus can get from BARDA, Cerus agreed to co-invest its own $14.5 million for manufacturing activities.

Ramsey reiterates her Outperform rating with a price target of $9, marking a 49% increase from current levels, in light of this agreement.

As of this writing, the 2 analysts polled by TipRanks (in the past 3 months) gave a Buy rating for CERS. The average 12-month price target for the stock is $10.00, marking a 65.56% upside from current levels.