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Encouraged By Continued Cologuard Growth, Exact Sciences Eyes Next-Gen Assay Launch in 2025


NEW YORK – Exact Sciences' optimism about its future in colorectal cancer screening continues to swell, having recently presented new data on the second generation of its Cologuard assay that will support an application for US Food and Drug Administration review and a clinical launch in early 2025.

At the same time, adoption of the first-generation assay continues to ramp up, with the company this week reporting clear third quarter gains in test volume and ordering physicians.

Exact reported after the close of the market on Wednesday that its Q3 revenues were up 20 percent year over year as sales of both Cologuard and its Oncotype DX breast cancer risk-assessment test hit quarterly records, and overall test volume topped 1 million.

Overall, Exact brought in $628.3 million during the quarter ended Sept. 30, up from $523.1 million in Q3 2022 and ahead of the Wall Street estimate of $616.8 million. Its screening revenue was up 31 percent at $472.0 million while precision oncology revenue rose 3 percent to $156.3 million.

Exact reported Q3 net income of $794,000, or $.00 per share, compared to a net loss of $148.8 million, or loss per share of $.84, a year ago.

During a call with investors, Exact CEO Kevin Conroy said that the company has made significant inroads in a crucial population, individuals between ages 45 and 49 who became eligible for screening about two years ago after an update to recommendations from the US Preventive Services Taskforce.

Conroy said Exact has now exceeded 1 million people screened in that new age range during those two and a half years.

He attributed that growth, and overall increases in penetration, to the firm's "deep relationships with payors and providers."

"More than 10,000 new healthcare professionals' orders were collected during the quarter," Conroy said. "More than 331,000 have been ordered since March. As we said last quarter, about 75 percent of [all] primary care physicians have now ordered Cologuard so we don't plan to continue to provide the number of new physicians starting next year."

Exact delivered its 13 millionth Cologuard test in Q3. "Based on known prevalence data, we estimate testing has helped find precancerous polyps and early-stage cancer in nearly half a million people over the past 10 years," Conroy said, arguing that the company's test is becoming "deeply ingrained in clinical practice."

For example, he noted, 169,000 healthcare providers ordered Cologuard in Q3, a new record. "Those providers are ordering Cologuard more frequently than last year," Conroy said, adding that nearly 70 percent of orders came in electronically, and that survey research indicates brand awareness among consumers has reached 87 percent.

Conroy estimated that there are 60 million eligible Americans not up to date with colon cancer screening. "We believe that we can go get a large percentage of those 60 million people screened. We also believe we can leverage this then outside the US over the next decade and reach well over 100 million people outside the US," he said.

Next generation

Starting in 2025, Exact expects to pursue those goals with the new and improved version of Cologuard. At the American College of Gastroenterology Conference last month, investigators presented data from the firm's Blue-C study results, demonstrating that next-generation Cologuard met all of the trial's predefined endpoints.

The study was designed to validate a pre-specified algorithm and enrolled over 20,000 people, including 98 with cancer and more than 2,000 with precancerous polyps, providing "excellent statistical power," Conroy said.

Overall, the test showed 94 percent sensitivity for detecting cancers, 93 percent sensitivity for detecting curable stage cancers up to stage III, 43 percent sensitivity for advanced precancerous lesions, and 91 percent specificity, up from 87 percent specificity seen in the FDA registrational trial for the initial version of Cologuard.

Including both non-neoplastic findings and patients with no findings as negatives, specificity rose to 93 percent.

Conroy said Exact is not prepared to talk about price at a detailed level, but he said that in taking a step up, Cologuard 2.0 provides a "significant increment in value" because improved specificity implies up to 30 percent fewer false positives.

"False positives lead to unnecessary colonoscopy, which lead to unnecessary complications, eventually leading to costs and diminished care," he said. "So, by eliminating those false positives, it gives tremendous value to commercial payors and to Medicare, and those are conversations that we plan to have." He further noted that the company will talk more about those plans in 2025 around the Cologuard 2.0 launch.

Exact Sciences CFO Jeff Elliott added that even without a change in pricing for Cologuard 2.0, Exact expects incremental revenue because a reduction in false positives means more patients stay with Exact and Cologuard over time rather than moving into colonoscopy.

"It would really help the re-screen business, which is doing well today," Elliott said. "And I think we can do even better going forward. Also, to remind you, we expect the cost of goods for 2.0 to be at least 5 percent below what we see today."

Notable data was also presented at the ACG meeting by an emerging competitor, Geneoscopy, which has developed an RNA-based stool assay called Colosense. Exact has been largely unopposed in this market since it launched Cologuard in 2014, but that appears poised to change.

At the conference, investigators shared data from Geneoscopy's Phase III clinical trial (CRC-PREVENT), which has supported a premarket approval application for the test as a Class III medical device. The trial recruited 8,920 participants for testing with a platform that combines a fecal immunochemical test (FIT), the measurement of eight RNA transcripts, and participant-reported smoking status into a predictive algorithm.

In the cohort, 36 colorectal cancers and 606 advanced adenomas were diagnosed by colonoscopy. Colosense sensitivity for colorectal cancer was 94 percent, its sensitivity for detecting advanced adenomas was 46 percent, and its specificity for no lesions on colonoscopy was 88 percent.

These numbers appear to outperform Cologuard 2.0 in advanced adenoma sensitivity but fall short on specificity.

That said, its specificity and sensitivity for both cancer and pre-cancers does slightly exceed that of the existing Cologuard test. Until Exact Sciences brings Cologuard 2.0 to market, the first-generation test is the one that Geneoscopy will be competing with.

Conroy said that there have been a "litany" of aspiring entrants to the stool-based CRC screening space during his time with the company.

"There is just a long list of things you need to do to get into the field," he said. "You need high-quality products, high-quality studies, [and] high-quality data published. You need to get through the gauntlet of FDA, Medicare … the US [Preventive Services Task Force], quality measure inclusion, commercial insurers. And we've yet to see any of these aspiring entrants get past first base there."

Asked about Exact's blood-based CRC screening assay, which has been in development for several years, Conroy said there are no updates yet. "As we've articulated, there are many people who refuse a colonoscopy, refuse a Cologuard test, and yet still need to be screened. And we know who those people are. They are in our database … so we will be able to reach out to patients … and help get those people screened," he said.

"We believe there is a need to address there, and we believe that our test is going to be able to meet that need," he added. "In terms of when to expect to see that data, that's next year, likely. We will complete that study midyear and then make the data available thereafter."

Exact is also advancing a platform for molecular residual disease testing in solid tumors. Conroy said the firm is on track to make this tumor-informed testing available for colon cancer patients by the end of the year, and for breast cancer patients next year.

"We are starting to see signs that there will be enough evidence developed that MRD testing will be used broadly, and it's a very different market than the screening markets which are unlocked generally by the [USPSTF]. In MRD, in oncology there are a number of different guidelines that will come into play," Conroy said. "We are making progress in terms of our own studies to support our MRD test. And we think this is going to be a huge change in oncology, a huge market, and one that we're excited to participate in."

In light of strong Q3, Exact increased its full-year 2023 outlook and now anticipates total revenue of $2.48 billion to $2.49 billion compared to prior guidance of $2.44 billion to $2.46 billion. This is anticipated to include screening revenue of approximately $1.85 billion, precision oncology revenue of $622 million to $627 million, and COVID-19 testing revenue of $6 million.

The company ended the quarter with $594.6 million in cash and cash equivalents and $139.8 million in marketable securities.