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Exact Sciences Revenues More Than Double on Cologuard Sales

NEW YORK (GenomeWeb) – Exact Sciences reported before the opening of the market on Tuesday that its second quarter revenues more than doubled year over year thanks in large part to a 160 percent increase in the number of Cologuard colorectal cancer screening tests completed during the quarter.

For the three months ended June 30, the molecular diagnostics firm reported revenues of $21.2 million, up from $8.1 million a year ago, and beating the consensus Wall Street estimate of $18.5 million.

Exact completed approximately 54,000 Cologuard tests compared to 21,000 tests completed in Q2 2015. The cumulative number of physicians ordering Cologuard since its launch has expanded to more than 41,000, the firm added.

"Continued execution of our sales and direct-to-consumer marketing strategies during the second quarter drove an increase in new physicians ordering Cologuard and broader patient awareness and demand for our non-invasive colon cancer screening test," said Chairman and CEO Kevin Conroy in a statement. "As a result, we delivered another strong quarterly financial performance, highlighted by robust annualized revenue growth, a sequential increase in completed tests that exceeded our expectations, and solid expense control and favorable cash utilization."

The company also said it will continue to invest in its direct-to-consumer marketing strategy in the second half of the year, including a national television advertising campaign. On a call with analysts after the release of the results, Conroy said the company has seen "significant commercial progress in Q2" thanks in part to the television commercials. For example, visits to the company's website in the second quarter were up significantly, he noted, as were downloads of documents such as physician order forms. Conroy expects the growth to continue throughout the year.

The focus of the TV ad campaign will remain on Cologuard's target population, and on generating both new orders and reorders. The company has reinitiated the campaign and expects it to be on and off the air strategically throughout the rest of 2016.

Exact also credited the final recommendations on colorectal cancer screening from the US Preventive Services Task Force with increasing awareness of the test. Cologuard was one of the seven screening methods recommended by the task force.

"We anticipate that Cologuard's position in the final recommendations will have a meaningful, positive long-term effect on our efforts to expand commercial insurance coverage," Conroy added in the statement. "Commercial insurers typically cover cancer screening tests recommended by the task force and we are engaged in active discussions with insurers to cover Cologuard."

Exact further reported that Cologuard's patient compliance rate was 68 percent as of June 30. The 1 percent overall decline in compliance was likely caused by having a higher percentage of commercially insured patients, who typically have a lower compliance rate than Medicare patients, Conroy told analysts. However, the company does anticipate that the compliance rate will tick back up as the number of insurers covering the test increases.

The firm's net loss for the quarter widened to $44.8 million, or $.46 per share, from $39.1 million, or $.44 per share, a year ago, but beat analysts' average estimate for a loss of $.55 per share.

Its R&D costs rose 6 percent to $8.6 million from $8.1 million in Q2 2015, and its SG&A costs rose 39 percent to $47.6 million from $34.3 million.

Exact ended the quarter with $49.0 million in cash and cash equivalents.

On the call, Conroy said the company anticipates completing 65,000 or more tests in the third quarter. Exact's guidance for 2016 remained the same at more than 240,000 Cologuard tests completed and revenues of between $90 million and $100 million. Analysts are currently expecting revenues of $86.6 million for the year.

When asked by an analyst how the firm anticipates being able to ramp up test completions in order to reach the 240,000 goal for 2016, Conroy said he believes the back half of 2016 will show strong performance. "We see the key drivers being new physician adoption, which is up significantly since the start of the TV campaign, and also increased utilization by the same physicians," he noted. He added that the company anticipates the TV ad will continue to have a positive impact.

Exact's shares rose more than 32 percent to $16.50 in morning trading on the Nasdaq.