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Exact Sciences Q4 Revenues Up 148 Percent

NEW YORK (GenomeWeb) – Exact Sciences reported after the close of the market on Thursday that its fourth quarter revenues rose 148 percent year over year, in line with its preliminary Q4 revenues as reported in early January.

For the three months ended Dec. 31, 2017, the molecular diagnostics company reported revenues of $87.4 million, up from $35.2 million in Q4 2016, and beating the analysts' average estimate of $85.7 million.

The firm completed about 176,000 Cologuard noninvasive colon cancer screening tests during the quarter, a 115 percent increase over the same period last year, the firm said. Nearly 11,000 healthcare providers ordered their first Cologuard during Q4, and approximately 102,000 clinicians have ordered Cologuard since the test was launched. The average recognized revenue per test rose 15 percent during Q4 to $498.

"This was a transformative year for Exact Sciences and our efforts to significantly accelerate awareness and adoption of Cologuard," Exact Chairman and CEO Kevin Conroy said in a statement. "By focusing on our core priorities, we remain confident in our ability to efficiently broaden the awareness of Cologuard, increase the adoption, and invest to meet demand throughout 2018."

On a conference call with analysts following the release of the earnings, Exact CFO Jeff Elliott noted that the severe flu season is also affecting Cologuard volumes as influenza has "significantly reduced the number of patient wellness visits when colon cancer screening is usually discussed." In a survey of 600 primary care physicians conducted by Exact, the company found that physicians had canceled 21 percent of wellness visits over the last two months, and that 22 percent of physicians had taken time off work because of the flu.

"Many physicians are delaying preventative care while they deal with the flu. As the outbreak subsides, we expect normal wellness visit activity to return," Elliott said. "In the meantime, we have undertaken additional sales and marketing initiatives that we expect will benefit Cologuard growth for the remainder of the year."

Aside from the immediate needs of the business, Conroy added that for the long term, Exact is looking to reach a goal of 40 percent market share for Cologuard. The company is planning to add 100 sales reps in the field and 100 reps to its inside sales force during 2018. It will also continue its successful TV ad campaign, and plans to announce a celebrity spokesperson for Cologuard in March.

He also highlighted Exact's efforts in developing its pipeline of tests. "Early last year, we saw excellent results from the first case-control study [with the Mayo Clinic] in our lung program. More recently, we didn't see the same performance in the second case-control study, particularly in Stage 1 cancers," Conroy said. "Before we move the lung test forward to a pivotal trial, we will work to optimize its performance. We are presently evaluating additional markers, including protein markers recently acquired from Armune [Bioscience], to improve performance."

He added that the company expects to begin enrolling patients in a case-control study mid-year, followed by a prospective clinical trial, and noted that an abstract from the second round of feasibility data will be presented at a scientific meeting in the coming months.

The firm's net loss for Q4 narrowed to $21.8 million, or $.18 per share, from $37.2 million, or $.34 per share, a year earlier. Analysts had expected a loss per share of $.24 for Q4.

Exact's Q4 R&D costs rose 79 percent to $12.7 million from $7.1 million in the year-ago period, and its SG&A expenses rose 43 percent to $74.3 million from $52.0 million in Q4 2016.

For FY2017, Exact's revenues rose 168 percent to $266.0 million from $99.4 million in 2016, beating the consensus analysts' estimate of $264.5 million.

The firm completed about 571,000 Cologuard noninvasive colon cancer screening tests during the year, a 134 percent increase over 2016. On the call, Conroy noted that more than 40,000 new physicians and other healthcare providers ordered the test in 2017, and that the company has increased insurance coverage for Cologuard to nearly 90 percent of the addressable population.

The firm's net loss for 2016 narrowed to $114.4 million, or $.99 per share, from $167.2 million, or $1.30 per share, a year earlier. Analysts had expected a loss per share of $1.05 for the year.

Exact's 2017 R&D costs rose 26 percent to $42.1 million from $33.5 million in the year-ago period, and its SG&A expenses rose 39 percent to $262.9 million from $189.7 million in 2016.

The company ended the year with $77.5 million in cash and cash equivalents, and $347.2 million in marketable securities.

For 2018, the firm anticipates revenues of $420 million to $430 million and expects to complete 900,000 to 920,000 Cologuard tests. Analysts are expecting revenues of $422.1 million for 2018. On the call, Elliott also noted that the company is expecting Q1 Cologuard volume of 176,000 to 181,000 completed tests.

Exact's shares dropped about 7 percent to $41.71 in early morning trading on the Nasdaq on Friday.