SPAC Attack

$FRNM Jefferies initiates on @freenome with a PT of $17. "Multiple Screening Shots on Goal; Initiate at Buy, $17 PT Freenome is a cancer screening company developing blood-based tests across CRC, lung and other indications. Differentiation stems from the multiomics and AI-driven R&D platform, while Abbott and Roche partnerships support an asset-light commercialization strategy. Although broader commercialization only begins this fall, we see multiple avenues for value creation (royalties, milestones, indication expansion). Initiate at Buy, $17 PT supported by DCF. Nascent CLIA lab with unique screening playbook. Freenome (FRNM) is developing a portfolio of blood-based cancer screening tests spanning CRC (120M eligible U.S. patients), lung (15M) and 10+ other indications. Leveraging proprietary multi-omics capabilities and partnerships with ABT (CRC only) and ROP-SW (ex-U.S. IVD), we see FRNM as uniquely positioned from a development and commercial standpoint, with a multi-year penetration ramp ahead. Testing roadmap. Colorectal cancer screening (CRC) remains the near-term focus, following v1 FDA approval and recent release of v2 data, with a broader ABT-supported commercial launch in the fall. Longer term, FRNM's value proposition lies in pull-through revenues from patients receiving screening for CRC and at least one other indication (101M patients co-eligible), with lung (15M patient TAM) the next major indication. We see a steady cadence of reimbursement catalysts on deck, following American Cancer Society (ACS) guideline inclusion for CRC and potential for commercial coverage prior to USPSTF guideline review (expected late '27/'28). The benefit of an asset-light commercialization strategy. FRNM expects to have 300-400 sales reps at scale, aiming to capitalize on a top-down health system approach, in addition to leveraging EXAS/ABT's scale (1.4k commercial employees) while retaining exposure to $700M in potential milestones and royalties (up to 10%). Internationally, Roche provides kitting upside, alongside access to the nascent Axelios NGS ecosystem, which should allow FRNM to focus capital on assay development and R&D vs. building a global commercial engine from scratch. Financials. Revenues will be gated amid the initial CRC rollout (with GMs ramping towards a 10% royalty rate by YE27), however, FRNM should benefit from $170M in near-term milestones ($100M on v1 FDA approval, $70M on v2 approval and tech transfer to ABT). The launches of lung and other indications should support additional testing revenues, with a path to mid-teens royalties on Roche's ex-U.S. kit solution still viewed as upside. Initiating at Buy. With access to ABT's proprietary database of 7-10M patients who have not adhered to Cologuard, we see FRNM's launch ramp exceeding Shield's, albeit with an inferior economic profile (royalties). While there are always likely to be partnership risks and questions around ABT's commercial incentive to sell FRNM tests relative to other options, we see enough optionality (pull-through, milestones) to support the current EV ($800M) with room for expansion." My prior due diligence below: