Q1 2021 Exact Sciences Corp Earnings Call

May 4, 2021

Okay.

Ladies and gentlemen, thank you for standing by and welcome to the exact Sciences first quarter 2021 earnings call at the.

All participants are in a listen only mode. After the speaker presentation. There will be a question and answer session. I think question. During the session you will need the best Star one on your telephone if you require any further assistance. Please press star zero. Thank you wouldn't like to hand, the conference over to your speaker of today, Mr. Arie called snap senior for.

Of that shall animist Sir please begin.

Thank you Ron and thank all of you for joining us for exact sciences first quarter 2021 and conference call on the call today are Kevin Conroy, the company's chairman and CEO and Jeff Elliott, our chief financial and Chief operating Officer.

The Act Sciences issued a news release earlier this afternoon detailing our first quarter financial results. This news release and today's presentation are available on our website at exact sciences dotcom.

During today's call we will make forward looking statements based on current expectations. Our actual results may be materially different from such statements reconciliations to GAAP figures are available in our earnings press release and descriptions of the risks and uncertainties associated with the exact sciences are included in our SEC filings both can be accessed through our website.

It is now my pleasure to introduce the company's chairman and CEO Kevin Conroy.

Thanks, Eric and thanks to everyone for joining us for this afternoon at the first quarter demonstrated exact sciences commitment to eradicating cancer and the suffering of causes.

Our talented team tested over 900000 people during one quarter.

The exact sciences is the leader in cancer diagnostics because of our people our scientific platforms and our powerful brands Cologuard and Oncotype.

We're developing life changing cancer solutions that will help patients today.

Today, We will review, our first quarter performance full year guidance and progress on our 2021 priorities.

I'd also like to congratulate Jeff Elliott on his well earned promotion to Chief operating Officer. In addition to his current CFO responsibilities.

Jeff will now review our financial results.

Kevin Good afternoon first quarter revenue was $402 million, an increase of 16% screening contributed $240 million or 10% growth.

During the quarter, we saw improved physician office access for our teams in the field.

Solid contributions from three year re screening and continued gains in electronic ordering rates of 43%, which was up 13 points year over year increase.

Our deep relationships with physicians are critical as we tried to get more people tested and prepare to launch solutions from our pipeline.

8000, new health care providers ordered cologuard during the quarter and more than 235000 have ordered since launch.

Precision oncology revenue was $129 million, an increase of 1%.

Mammography volumes have now largely recovered and physicians are working through a significant backlog of people needing to be screened for breast cancer.

The screening mammogram typically come before our Oncotype Dx breast test.

COVID-19 testing revenue was $32 million consistent with our guidance.

First quarter GAAP gross margin was 68% non-GAAP gross margin, which excludes amortization of acquired intangibles was 73%.

Non-GAAP gross margins were impacted by lower capacity utilization and of $6 million excess inventory charge both related to the sequential decline in COVID-19 testing.

Looking at Cologuard, specifically non-GAAP gross margins were stable year over year.

Sales and marketing expense was $186 million the.

The year over year change was due to investments in our sales teams and marketing campaigns to support our growth.

<unk> expense was $268 million, including $118 million related to acquisition and integration cost.

R&D expense was $116 million and included $52 million for the TARDIS license aside from Tartous growth in R&D was driven by the thrive acquisition.

Income tax benefit was $243 million due to the change in deferred tax asset valuation allowance, resulting from the thrive acquisition.

Adjusted EBITDA was a loss of $23 million, we ended the quarter with cash and securities of $1 4 billion.

Turning to our guidance, we are increasingly optimistic about growth. This year. The pandemic appears to be abating in the U S benefiting of wellness visits and in person access for it seems from the field.

That being said the pandemic is still here with the increasing cases in many parts of the world.

The physician office access and wellness visits remained muted compared to before the pandemic looking.

Looking at March data from Ikea in person sales visits were half of what they were before COVID-19 and patient wellness visits were down 10% to 20%.

With that in mind, we expect total revenue for the year to be between $1 69, and $1 73 5 billion.

This assumes the screening revenue between $1 125, and $1 one 5 billion.

Precision oncology revenue between $515 million and $525 million and COVID-19 testing revenue between 50 and $60 million.

For the second quarter, we expect revenue between 415 $430 million. This assumes screening revenue between 270 and $275 million.

Precision oncology revenue between 125, and $130 million and COVID-19 test and revenue between 20 and $25 million.

There is no change to our annual operating expense for Capex guidance from last quarter I will now turn the call back to Kevin.

Thanks, Jeff the exact sciences team is focused on three priorities. This year getting more people tested enhancing our customer experience and advancing new solutions, starting with our first priority.

As the pandemic abates, our sales team in the field are beginning to meet with health care providers more often than they have in the past year in person visits are typically the most productive way to help healthcare providers understand the benefits of Cologuard and Oncotype Dx.

And get more people test it.

Industry sources, and our internal data show field team access to health care provider offices is improving but far from where we were pre pandemic.

We're thrilled about the opportunity to get more people screened with cologuard through our new women's health sales team.

There are more than 40000, obgyns and the U S and about half of them see themselves as primary care providers.

They also pro form of about 15% of wellness checkups, and generally discuss colon cancer screening with multiple patients daily.

The COVID-19 pandemic has amplified the significant screening great GAAP that already existed among medically vulnerable populations.

Black and Hispanic Americans are more likely to be diagnosed with colorectal cancer at later stages due in part of lower screening access.

For example, Black Americans are 20% more likely to be diagnosed with colorectal cancer.

The 40% more likely to die from it.

Cologuard is an ideal solution to help address the 46 million Americans that need to be screened given it's at home convenience and superior sensitivity to the fit test.

Okay.

Cologuard detects 94% of early stage cancers.

The fifth detects 70%.

Cologuard also has higher patient compliance than fit and is broadly accessible across the United States.

Cologuard comes with a reminder, service educational information and of longitudinal relationship that fit often lacks making cologuard is suitable option to help improve screening rates for those populations.

We are supporting stand up to cancer to increase awareness about the importance of colorectal cancer screening with a focus on reaching medically vulnerable populations.

Our efforts include public service announcements, featuring Jamie Fox as well as supporting teams working in local communities to improve access to screening.

Our Oncotype Dx breast recurrence test continues to revolutionize the treatment decisions for women with early stage early stage breast cancer.

Last month the <unk>.

CCM made the Oncotype Dx breast recurrence test be the preferred test for prediction of chemotherapy benefit in HR positive <unk> negative post menopausal early stage breast cancer patients.

Patients and physicians placed their trust in the Oncotype Dx tests because of its powerful supporting evidence.

Especially the Taylor ex study and the more recent responder data.

Okay.

Oncotype map, our comprehensive genomic profiling test helps late stage cancer patients get answers quickly to make treatment decisions.

After a successful pilot launch last year, we're making oncotype map of available to our full precision oncology sales team.

That team has developed deep relationships with oncologists the spend many years educating them about architecture.

Oncotype map was recently included in coverage guidelines from anthem.

<unk> of July 1st and Cigna, adding $34 million and 14 million covered lives respectively.

Moving to our next priority, we're enhancing our customer experience to be an incredible partner to patients and providers.

Guidelines recommend cologuard used every three years.

We're implementing new ways to engage with patients electronically to get them screened on the three year cologuard to anniversary.

This year more than 600000 people will become eligible for the second Cologuard test.

The next year more than a million people will become eligible.

We've made cologuard easier to order by embedding it into epic the leading.

The HR platform.

We're making other significant investments and deepening our relationships with patients and their health care to stay in touch with these patients.

By building a robust ecosystem of engagement, we're able to get more people tested with their next Cologuard test.

Our goal is to have a lifelong relationship with the person to increase screening compliance and advance our mission of eradicating colon cancer early detection.

Yeah.

Our final priority. This year is to advance new solutions addressing the largest patient impact opportunities in diagnostics.

One of the greatest opportunities to eradicate cancer is through a multi cancer screening test.

More than 600000 Americans will die this year.

Because cancer is often detected too late 70% of incident cancers do not have screening tests, which means patients are frequently diagnosed only after experiencing symptoms.

We recently generated another set of internal validation data that appears promising.

We're planning to enhance the performance of our multi cancer screening tests by bringing together the R&D expertise of exact thrive and our partners at Mayo clinic and Johns Hopkins.

Once that step is completed we will conduct the validation study later this year, we plan to move into our prospective interventional Registrational study in the first half of next year.

Cologuard two <unk> is designed to enhance an already great test expanding our opportunity to help patients in colon cancer screening.

Blue C is on track to complete enrollment by late this year or early next year.

Blue C is our.

Prospective 10000 patient trial to support FDA approval for Cologuard to point all of.

Our hope is that Blue C will also be used to support FDA approval for our colon cancer blood test.

Today, we're announcing that we've acquired PFS genomics PFS genomics is focused on reducing unnecessary radiotherapy treatment in patients with early stage breast cancer.

<unk> show that the majority of patients who get radiation therapy are unlikely to benefit from it.

The challenge is knowing who is likely to benefit and who isn't.

The team at PFS genomics identified a gene expression signature.

Predict whether women with early stage and base of breast cancer treated with breast conserving surgery are likely to benefit from the addition of radiotherapy.

Similar to how the Oncotype Dx breast recurrence score test answers whether pace.

Patient will benefit from chemotherapy.

First is technology may help answer the question, who will benefit from radiotherapy.

PFS is new solution could provide additional answers to more than 100000 women in the U S with the opportunity to potentially be double of that internationally.

The.

This week, we are making uncle guard liver available to health care providers and patients.

The <unk> Gard liver is a simple yet sophisticated blood test that helps detect the most common form of liver cancer.

A pat of cellular carcinoma.

Liver cancer is the fastest growing incidence rate of any cancer in the U S.

There are more than 3 million patients eligible for testing in the U S and fewer than a third of them currently receive guideline recommended testing.

The current testing options for these patients also have sub optimal performance, especially for early stage cancer detection.

Encore guard liver has demonstrated high sensitivity in early stages of cancer when diagnosis are most critical.

On Cologuard liver developed with Mayo clinic was tested across multiple studies, including marker of selection algorithm setting and clinical validation results of these studies showed enhanced sensitivity and specificity for early stage disease.

We expect to publish the results of the anchor guard liver validation study by year end.

The near term goal of making uncle guard liver available as to generate real world evidence to support guideline inclusion broad reimbursement and adoption over time.

Our three priorities this year will help us make progress towards accomplishing our mission of eradicating cancer and the suffering it causes.

Our team scientific capabilities and our experience.

Position.

US to be a leader in advanced cancer diagnostics, our long term outlook gives us confidence to invest in growth today and into the future.

We plan to bring a full suite of life changing cancer tests to patients, helping improve outcomes through the course of their diagnosis and treatment.

We're now happy to take your questions.

As a reminder to ask the question you will need the press star one on your telephone to withdraw your.

Question press the pound key.

Okay.

The first question comes from the line of Brian.

Weinstein from William Blair. Your line is open.

Hey, guys. Good afternoon, thanks for taking the questions.

Yeah, I'll, let others kind of dissect the guide in the quarter and whatnot of kind of wanted to ask a higher level question or two in first.

With the acquisition that you announced today and the other deals that you've done.

Kevin I'm curious how you feel about the collection of assets that you have now.

You have now in place and that you've put together over the last 20 months or selling well. How you think of that really is going to differentiate you in what is becoming an ever more complicated than competitive fields and then even more broadly.

As you think about the future here I'm curious about what the criteria is these days on M&A and what the process you have because you've done scale deals product deals technology deals I'm curious what are the is that youre using for our criteria to evaluate those so sneaking in a couple of questions there.

For you to answer.

Thanks, Brian.

Start by asking a simple question is can we offer new tests or technology that will significantly.

Impact patient care, that's where everything starts the PFS deal is an example of that we believe it's going to.

Dramatically change.

How.

Certain patients with breast cancer are treated.

So we always start with what can we do to improve outcomes for patients.

And then we look at what is this incredible platform capable of so we have the broadest and most of advance capabilities our relationships our scientific platform and our commercial organization. We believe are second to none and we have a responsibility now to bring more in.

Better tests and services.

In data and data insights and artificial intelligence to the physicians that treat patients and the patients who desperately need new ways to be treated.

So.

That's how we look at this at a higher level does it impact the mission of moving to cancer eradication.

And there are many opportunities that come our way that are great companies with tremendous tests or technologies that we passed because they don't really fit.

Into that framework.

So we're being disciplined.

As we look at PFS.

We are tremendously excited about PFS because this is over 100000 women a year of who are faced with a really significant decision of whether they should get radio therapy, which is a month long course of treatment that can cause disfigurement and health problems for life. It is.

Also very expensive and just like Oncotype Dx breast for current scored dramatically changed the number of women getting chemotherapy. We believe those of possibility to do the same with PFS in the same patient population with the same customers and many of the same patients.

So this is.

An opportunity that we have to continue to Cree.

Create a flywheel effect by bringing better more impactful tests to the patients that need them over a long period of time.

Your next question comes from the line of Derik de Bruin from Bank of America. Your line is open.

Hi, good afternoon, thanks for taking my call.

Can we talk a little bit about the cologuard pacing as you sort of see it I mean, your your guide for the second quarter was pretty much spot on the rehab. It just sort of thinking about it for the rest of the year because they are sort of <unk>.

What youre thinking in and just recovery and going on and also.

Since we have pad issue in terms of.

I think there were some questions last quarter and the fourth quarter call about seasonality in the fourth quarter is that something else. You think will be playing this year I just would love to get your thoughts on the pacing and the level of conservatism that you sort of thinking and thats built in.

Derik. This is Jeff we were very pleased with the results the screening team delivered in the first quarter, we delivered about 10% year on year growth.

And that's the middle in the middle of the the pandemic and the fact, when you look year over year the impact of the pandemic got worse.

I think back I think three of four quarters ago, We said at that time that.

As the results of the pandemic long term cologuard adoption would be accelerated by a year or two in.

And sitting here today I firmly believe that there is still the case.

When you look at the backdrop here colonoscopy is down 10% to 20%.

Wellness visits down 10% to 20%.

Physician office access, which is such a key.

A contributor to the business.

Half of what it was before the pandemic with all of that in mind. We are very pleased with the results through the year, assuming the pandemic continues to abate and access continues to improve we expect continued growth in the business.

As reflected in the guidance you should think of the guidance is the most likely outcome for the year.

We're very excited about the state of this business. When you look ahead as Kevin talked about there are 46 million Americans, who today need to be screened and in this environment, where people are are still shying away from in office visits Cologuard. We believe is an ideal solution.

And then specifically for this year.

A multiple of new ways that we can reach out and screen more patients whether that's electronic ordering which I gave you an update on we've had tremendous improvement there.

All the guard 45, which we continue to expect to come on midyear with the Guy might update.

As well as have some creative new AD campaigns, and an expanded sales force.

We're in a very good position today and we're just really excited about the the opportunity to go out and have more people to get tested with cologuard.

Yeah.

Your next question comes from the line of Doug Schenkel from Cowen Your line is open.

Hey, good afternoon guys.

Thanks for taking the questions kind of kind of a follow up too.

On the.

<unk> questions. So just on Cologuard.

Given you did guide a little bit above what we were expecting for the year on screening.

And just.

At least for relative to our model. If you were a little bit ahead of what we expected, but marginally so I'm just wondering.

If you could comment on.

The momentum coming out of the first quarter and heading into the second quarter and then more broadly if you could just share any details on electronic ordering.

And repeat order rates, meaning folks who've got test at three years ago coming back into the system. So that those are the cologuard questions on guidance I apologize if I missed this but I just wanted to see if theres been any change to how youre thinking about operating line item.

<unk> so back in February you told US what you were expecting for different operating line I just want to make sure of that Hasnt changed and then my final question is just on multi cancer.

Screening I appreciate the update that you have provided on process and timelines I am just curious at this point. If you are considering any biomarkers beyond genomic mutations of methylation or if at this point.

For the most part you are pretty close to locking down in terms of the approach youre taking thank you.

Why don't I start it in the quickly hand, it over to Jeff.

One of the.

Things I think to keep Cologuard in context is the impact that it's having on patient in one quarter.

The incidents.

Right in the U S being at <unk> six.

Six per cent roughly and then of.

Of those people with cancer about 75% have early stage stage, one and two cancer there are probably in the ballpark of the.

Between one and 2000 people who were diagnosed with early stage.

Colon cancer because of Cologuard and one of those people were kind of an email from one of our employees who took the cologuard test.

Because he wanted to experience the.

He is on the customer service team and actually wanted to experience the test.

And that person was diagnosed with.

Stage, one cancers, so we're seeing the impact.

Of the tests. If you also look at the 5% prevalence rate of advanced Adenomas and the.

Over 50 population.

Can it potentially 25000 people, who had pre cancers removed last quarter.

So the impact is significant and it's growing.

Jeff Why don't you take Doug specific question Doug.

Doug on Cologuard momentum as I said to Doug's question, we're very pleased with the results from the quarter, you really need to keep in mind that there's a cumulative impact we've seen over the past year, our reps have been out of the field for much of the at that time period and same with our partner of our partner has been very conservative.

In terms of getting back into physicians offices, and helping educate them on cologuard so to deliver the results that we did.

We're very pleased with that and I think that speaks to the underlying momentum.

This is a huge market there are many patients who need to be screened so we're feeling good about it.

The electronic ordering.

I said in my remarks that today.

Over 43% of Cologuard orders are submitted electronically 43% of year ago. It was 30%. So I'm really proud of the progress of the teams have made and the.

For the past year.

Over 100 health systems today, who had the seamless interaction with us a bidirectional interface, where they can electronically submit an order to us.

We can take care of all of that patient testing and some of the results back.

So this has been a very big contributor and this is a really important aspect of our business for many years to come as we bring on new products still have the strong foundation from which to grow.

On re screens I think it was your third question.

Feeling very good about that last quarter I had talked about expecting at least $100 million of revenue I still believe that the teams here have made very good progress on re screens.

This really highlights one of the the.

The most powerful features of Cologuard is the cologuard not only as the getting more people tested about 50% of all of the people. We screened with Cologuard had never been tested before it also helps keep them. The screened for a long period of time the recommended interval per the guidelines is three years for Cologuard.

So we're keeping people screened for the longer period of time, you compare that to the fit test which is of when youre interval.

And our re screening compliance rates continues to grow so feeling very good about that.

On the operating lines no change to the numbers I gave last quarter, Doug So still feeling the same on those end capex for that matter no change.

Doug you.

Asked about multi cancer the team is.

Test.

Bringing to physicians and patients the very best multi cancer screening tests.

Confident that they will.

We'll do exactly that.

We haven't disclosed all of the different.

Aspects of the test scientifically.

More to come later, but really excited by the internal data that we're seeing.

Yes.

Your next question comes from the line of Brandon Couillard from Jefferies. Your line is open.

Hey, Thanks, good afternoon.

And Jeff Congrats on the C O O title more work St pay just like when you run the sulfide.

You've talked a lot about access this afternoon I'm just curious if you look at your internal sales force coupled with Pfizer reps, how much of that team is actually able to given the office today and are you assuming a return to more normal activity in <unk> or <unk>, just kind of help us understand what you are kind of the.

Assumed in for the balance of the year in terms of that access.

On the return Brandon we've assumed a gradual return I mean look everybody sees the pandemic is clearly still here in fact cases are rising in many states and parts of the country. So we've got to take care of our employees just as we try to take care of of patients. So we assumed a gradual return to the field our partner has been.

Im very cautious at returning their sales reps to the field.

Are all of our reps have the ability to go back to the field as it is safe to do so.

And to the extent of physicians are allowing.

Outside people into their office, and that's where we see today a lot of caution from primary care doctors the.

It is still per the acuity of data I cited.

Physician office face to face visits are less than half of what the word today.

Versus before the pandemic. So this is this is a two day. It is it is still a headwind to the business.

And that's why I'm. So pleased that we delivered 10% year on year growth for Cologuard, despite that and despite the the weather and all of the other the challenges out there over time as the team gets back out to the field I am confident that this business will continue to grow in and we will we will help you more patients tested.

Your next question comes from the line of Dan Arias from Stifel. Your line is open.

Afternoon, guys. Thanks for the questions here.

Kevin I think you said, you're hoping that blue C will be the trial that's necessary to allow you to bring a blood based assay to the market I don't know that Ive heard you phrase it like that just in terms of there being some uncertainty there is that of conscious change in thinking or am I and a lot over analyzing your words.

Interesting.

I was reading that Dan I was thinking how did I, let this slip.

In the transcript no no. This is.

We're confident because we know the data that we have with the current performance of our blood based tests, we've been in the.

We've had the good fortune of not feeling like we're compelled to release our internal data.

And the clinical trial is going well so thanks for cleaning that up there's no hope to it.

We will bring a blood based test to physicians and patients and we're confident about that.

Your next question comes from the line of Catherine shelf from Baird. Your line is open.

Hey, guys. Thanks for the question then all of that.

I can echo Brandon congrats to Jeff.

On the new role.

First I appreciate the commentary on the progress you've made with paradigm in Oncotype map, but any update on the Cheyenne integration and the path forward for MRV cash development secondly, on uncle Garg liver any comments on on the path.

Care coverage and when you think youll submit your dossier for a potential there.

Thanks, Katherine taking Cheyenne first the team there is his tremendous leadership and it's a team that has worked awfully hard to develop a.

High quality.

We'll exome.

Test.

Yes data infrastructure and bioinformatics and that team is going to do a lot of great things.

Think beyond the test that they currently offer today, it's going to be critically important in our minimum residual disease program.

And <unk> got to start with they are high quality.

Genomic analysis of the tumor is the starting point in order to be able to detect it recurrence.

Down the road.

So we're.

We believe that integration is going to go very smoothly because of the cultural fit of the two.

<unk> sits in the.

The same building physically as our paradigm team.

That's another.

Positive and we think that Arizona will become an increasingly important.

The R&D.

End of product development and testing site for us in terms of your question around.

The liver.

Oncall guard liver.

Is likely to be at least 18 months out from a time, where we would expect to get Medicare coverage for which is why we are framing non cologuard liver as making it available not.

As launching the test we.

We think of of launches occurring.

Around the time that you have Medicare coverage.

And this gives us.

Period of time to work with.

Partner Health systems individual physicians patients patient advocacy groups.

Even pharmaceutical companies really.

For.

Challenged the market to adopt a new standard of care and during that time period is when we would expect to have our data published which we think would be the starting point for getting <unk> gard liver into guidelines.

We're so excited about bringing this test of physicians and patients and about the data that support it.

And how it will change the standard of care.

The other thing that Encore guard liver does thats important is too.

Provide a blood draw infrastructure and capability that is going to be important as we launch into multi cancer testing.

Yeah.

Your next question comes from the line of Dan Brennan from UBS. Your line is open.

Great. Thanks for thanks for taking the questions guys congrats.

Congrats as well.

Maybe like a three parter and then I'll kind of go to mute listen.

So Kevin.

Would just love your latest thinking I'm sure it hasnt changed, but nonetheless with liquid biopsy data coming out later this year in early next test how we should be thinking about the likely outcome from that data from competitors and then b as a follow up for Dan's question just from your own liquid biopsy based approach is sound.

The more definitive there.

In your response of that product will come to market and have the role of the price of maybe just any additional color on how you think the performance will compare with Cologuard and then finally, just the <unk>.

<unk> on the new commercial leadership, just wondering kind of how that's going any notable changes of that go to market strategy of impact that you could call out. Thanks.

As it relates to CRC blood.

As we've said in the past, we expect our test and the.

The deep research that we have done in identifying markers and improving the platform technologies to be at least as good or better than what else is out there we're running.

The study, where you'll be able to evaluate.

CRC blood against a stool based testing and we think that the clinical trial design is.

Is better.

Is the best approach here.

Yeah.

Maybe more important than anything else is we have the platform the.

The relationships with health care providers and health systems.

With payors to rapidly bring of CRC blood tests to physicians and to the patients who could benefit from it.

And.

The way that that test will be provided as.

And how it will be positioned in the market is.

That we think that it will be of tests that would be used only after a patient refuses cologuard or colonoscopy.

It is going to be closer to where the.

The fit test is in performance you've seen that with data from other people trying to do the same thing so.

Ultimately the ideal colon cancer screening test is one that gives you more than a one year.

Interval for testing and Cologuard does that colonoscopy does that.

We believe that Cologuard still will get to a 40% overall share.

In terms of sales leadership.

We are really pleased with.

The new leadership over precision oncology and.

The screening business.

Matt and Pat.

Rapidly.

The assimilated into their new roles and I think you can see the results in the first quarter.

Our strong and Theres just the.

Each of those leaders have long runways importantly, the.

Whole organizations that.

That the help lead our.

Fired up.

Get back into physician offices and to make a difference with these amazing products Cologuard and Oncotype.

And so the team is firing on all cylinders there excited there, they're making a difference and you can feel the energy and your interactions with the.

With those commercial organizations.

Did I answer all three of your questions Dan.

Okay.

Your next question comes from the line of Vijay Kumar from Evercore ISI. Your line is open.

Hey, guys. Thanks for taking my question and now the not convert.

Good quarter here.

Kevin maybe on the on.

Yes.

On the Pan cancer side.

Any details on when we could expect the all the.

The timing of the validation data any details around perhaps the sample size of.

The trial.

We will be doing additional.

Testing this year as we head into a <unk>.

Prospective study.

In the early part of next year.

And so we will have that internal data when that gets published.

As yet to be determined.

That's the kind of data you want to make sure that you get published in the highest quality journals. So it really.

<unk> upon the timing of us having that data internally and then the next scientific conference or.

Venue to present that data up here. So we don't know yet when that data will be presented but the team is working under <unk>.

Tight timelines to be able to deliver that and we're excited about it. So we have a plan we're going to work that plan, we're going to deliver the results and we're going to start a clinical trial next year that we think is going to be game changing in terms of the early detection of cancer.

Your next question comes from the line of Patrick Donnelly from Citi. Your line is open.

Hey, guys. Thanks for taking the question.

Kevin maybe just on the patient wellness visits I think you guys talked about them being down maybe 10 or 20% kind of in past quarters, you've talked about maybe they have a little bit different feel today, where patients are going in for very specific reason and maybe it's not as applicable to the general kind of screening tight visit can you just talk through I guess, if youre seeing any changes there of what youre here.

Going from the field, just trying to get a sense for for kind of the visits that matter to your guidance if that makes sense.

Yes, it's starting to change and there's a huge backlog of people who haven't seen a primary care physicians in a year it's actually.

Another healthcare.

Price is brewing and that is a lack of preventive care and clearly that is changing.

And more people are going in for their wellness visits we think that will continue to grow throughout the year assuming that.

There is not a new.

COVID-19 variant that.

Changes the landscape in a meaningful way so offices are starting to open up the.

They are not fully open.

And as Jeff mentioned, our partner is not fully in the field, yet we expect that to change quickly here and the E.

If you combine both the.

Increase in wellness visits within increase in visits from our sales force, we think that's a recipe for growth.

Now for.

Years to come and another way to look at this Patrick is the.

The team delivered amazing results in terms of people being tested in the first quarter and that's despite the fact that January was still a pretty rough month in terms of the pandemic.

The wellness visits were way down that our office visits from our field force was way down.

And around this time last year, we said look we think that the pandemic is going to change the way people think about at home noninvasive colon cancer screening.

And we think that is true you can see it in this quarter were about where we.

The expected to be up last year without the pandemic.

And we're coming out of the quarter was strength.

<unk>.

So I think long term.

We are going to be in a better position than we otherwise would have been.

Once again to ask the question you will need the press star one on your telephone keypad your new.

Next question comes from the line of Jack Meehan from Nephron Research. Your line is open.

Thank you good afternoon.

Jeff I was curious on the precision oncology guidance you referenced the potential for some pent up demand, which makes sense when I look at the second quarter guidance. It looks like revenue is flattish sequentially. So why not can you just talk about what you're seeing regionally and Kevin If you don't mind me squeezing in one on multi cancer.

Sure.

Can you just give us your latest thoughts from the regulatory pathway. One of your competitors is launching of <unk>.

Do you still think the FDA route is required here.

Jack This is Jeff I'll start on precision oncology.

There is a significant amount of pent up demand here for much of last year mammography volume were severely depressed.

Think back to April one of last year, they were down by over 90%. So there's a big backlog for us in terms of revenue it probably translates into to easily north of $20 million of revenue of kind of pent up demand and unfortunately.

If a person is going to get breast cancer.

Theyre going to get at whether the pandemic is here or not.

So that will take time to play out when you think of the mammography capacity in this country not all of those patients can come back and get screened right away. It will take time, and then theres a natural delay between of mammography and the time that a physician would order oncotype Dx So I do expect to the.

Very strong year I think that is reflected in the guidance.

Though with the <unk> guidance as well, we do have to be realistic dependent makers in many parts of the U S. The pandemic is is increasing and globally. This is the global business we have.

A very strong first quarter, however, dependent making outside the U S is coming on very very strong. So we've tried to balance those two things very strong underlying momentum.

With realism that the pandemic is still here and it's likely to weigh on the.

The broader business for the course of the year.

And then Kevin you want to touch on multi cancer testing.

Sure.

<unk>.

I think the way to think about multi cancer testing is to go forward 10 years and look at what all of the things that are going to be required to be in place to have.

Multi cancer test team to be as common as the common blood.

Tests for other health conditions.

And we fundamentally believe that 10 years from now there is the.

The way people are going to be diagnosed with cancer by and large is going to be with <unk>.

Screening through through a blood test.

And thats not to displace other.

<unk> of screening, but it is going to be really critical and the way that's going to happen is starting with really strong evidence in large studies and that truthfully requires multiple companies.

The company's too.

The out there running those studies this is of <unk>.

Transformative approach to screening and it's going to require.

Many studies to convince guideline groups and payers and most importantly physicians in paint the patients too.

Get tested.

So that evidence is going to be critical.

Great technologies tests are going to be critical.

And broad reimbursement is going to be important not only of the tests, but also of any downstream follow up testing that is required whether it's the Pepsi T or a reflex test.

Or colonoscopy or an upper endoscopy or it's for CP skin and so this is kind of a mountain of evidence leading to ultimately Medicare coverage and broad commercial insurance coverage.

Medicare is highly unlikely to ever cover.

Of tests that is not FDA approved their policy this was true with Cologuard.

As they need of PMA before they will issue a national coverage decision, which is required.

And since the majority of cancers occur in the Medicare population, we believe that FDA approval is going to be required.

Participants.

In this.

Of this testing area are likely to bring lab developed tests.

We are working in a consortium with with others that have an interest in this space and that's an opportunity for us all to make sure that it's done it in a way that ultimately the greater society and consumers and physicians buying into it. So it's really important that this is done the.

Right way.

I think theres, the right way and are not right way to do of lab developed tests.

And.

It's important that all of these things are done incredibly responsibly.

If we are going to get trust in.

In this kind of testing in the future. This is not about technology.

As much as it is about evidence development guideline inclusion.

And ultimately the service that you're providing to patients. So that's.

That's how we look at the regulatory piece.

The FDA study that we're running it will be of pivotal study.

Involving tens and tens of thousands of people maybe as many as of 100000.

<unk>.

And we will take a few years before it fully reads out of new submitted to the FDA.

Your next question comes from the line of Puneet <unk>.

From SVP Leerink your line is open.

Okay, great. Thanks.

Thanks, Kevin.

In terms of if I could ask about the sales reps and apologize if this was covered.

Could you remind me the.

Number of reps that are in the Cologuard frontline sales channel today, and how you're viewing that number for the full year of.

Honestly sales reps have been key to getting the penetration of Cologuard to at this point and as you pointed out I mean, that's the recipe for growth, but given what Jeff said is about 50% of the sales reps are still of modern person I'm just wondering.

How youre looking at that overall frontline number for the year and then on precision oncology just wanted to get a sense of.

How did prostate the due in the in the quarter and are you seeing any changes in the competitive dynamics out there with another.

Acquisition in the space of recently.

For our prostate competitor. Thank you.

So plenty of this is Jeff I'll start of the sales reps you asked on Cologuard for frontline reps so out of the field today. Our team stands at around 500 sales reps, calling on primary care physicians. We are adding this team of women's health really obgyn sales.

The sales reps that Tim is around 50 people.

The Gi sales team is just over 50 people.

The inside team is a run of 150 people.

On top of that you also have the kind of the area managers that are very important for motivating kind of coaching and the success of this team.

We also have a separate team that's dedicated to the larger health systems, it's really important.

Over half of the primary care physicians in this country belong to our affiliated with or employed by the health system. So that Tim is crucial as we grow on the precision oncology side. The team there there's around 100 oncology reps around 50, urology reps and then of course, we have the international.

<unk> team, which is over 100 people in total outside the U S price.

Oncology you asked on the <unk>.

Prostate franchise.

There.

If you look at the prostate testing, which is so important because our oncotype GPS test is ordered after.

A patient is first diagnosed with prostate test in and done some follow up testing.

Prostate diagnoses of prostate cancer diagnoses are meaningfully down still.

They have not recovered the same way the breast cancer has breast cancer diagnose.

Diagnoses of it started to recover prostate still legs to that business.

Has not recovered as much as breast.

It is a bit of a drag on growth right now and look longer term, we're confident in the outlook for this business temporarily though that the pandemic has weighed on growth there.

Your next question comes from the line of Mark Massaro from BT IAG. Your line is open.

Yes.

Hey, guys. Thanks for taking the questions I have of all.

Also of a three part or I guess.

For the passing of Chadwick Boseman 43 years old.

Is there any movement to try to get even better to increase screening to the 40 to 45 population I also wanted to ask about PFS genomics.

It seems like it could be a diamond in Nebraska, how close is that assay either to commercial launch or reimbursement and then I also wanted to ask about Tardis.

You guys have put out data on breast cancer.

When can we expect additional data readouts and when do you think that tests can commercially launch.

Yes.

The cologuard in colon cancer screening in the 40% to 45.

<unk> group I think eventually that could occur as the incidence rate in that population continues to increase obviously somebody who is 42 years old has.

<unk> 40.

<unk> 40, or 50 expected life years left so even though the incidence rate is lower.

As the life years gained a significant February cancer, you find there.

We're not there yet they did that analysis. So the as soon as there could be of changes.

Five or six years from now.

So no change in the near term there clearly more people are motivated to get tested earlier in terms of PFS genomics the.

The.

All right.

There are a couple of publications that are out there already on what this team has done there is there are actually two classifiers here. One is for population that looks at whether you can avoid radiotherapy and then another classifier, which suggests.

<unk> suggests that the patient should definitely get.

Or would most likely benefit from radiotherapy and the.

There will be another retrospective set of samples from a.

Prospected.

Randomized studies like kind of this.

This would be level, one eight or one be evidence.

That would will be tested later this year for publication sometime thereafter that will serve as validation data to make the test available.

The insurance coverage would then be the typical of call it a year or two a year and a half thereafter.

And so it's a couple of years before there is a true launch.

It is I think more than.

A diamond in the rough.

Maybe that's the right way to describe it is a test that could impact.

Hundreds of thousands of women annually around the world and we have these are the the same customers that we work with on a daily basis in terms of the oncologists.

And the.

Breast surgeons that we work with.

And many of the the very same patients that received the Oncotype Dx breast recurrence score.

So it's a it's a big deal. We're excited it's an amazing team of leaders and we're excited.

To bring that company into the fold and finally your question was around.

<unk> and what the data and launch will provide greater perspective on that maybe in the next quarter or two because the team is really just coming together and mapping all of that out and they might be disappointed if I got out ahead of them. So.

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