Q3 2021 Exact Sciences Corp Earnings Call
Good day, and thank you for standing by and welcome to the exact Sciences Corp, third quarter 2021 earnings call. At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded if you need further assistance. Please press star Zero I would now like to hand, the conference over to your Speaker today Megan Jones. Please go ahead.
Thank all of you for joining us for exact sciences third quarter 2021 conference call on the call today are Kevin Conroy, the company's chairman and CEO and Jeff Elliott, our chief financial and cheap Chief operating officer.
Exact sciences issued a news release earlier this afternoon detailing our third 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.
Conciliation to GAAP figures are available in our earnings press release and descriptions of the risks and uncertainties associated with exact sciences are included in our SEC filings.
It can be accessed through our website. It's now my pleasure to introduce the company's chairman and CEO Kevin Conroy.
Thanks, Megan and thanks to everyone for joining us today.
<unk> science is advancing life changing solutions to transform cancer care offering new hope.
Patients and physicians.
This team has proven that they can take a test from an idea to standard of care.
We're currently focused on multi cancer early detection of colon cancer screening and minimum residual disease and recurrence monitoring.
We believe these opportunities will have the greatest impact on patients.
We have a powerful commercial engine, which will become more efficient as we introduce new test from our deep pipeline.
This team is mid to finding cancer earlier, even during a global pandemic.
Cancer screens have been de prioritized throughout COVID-19 and the need to get people tested is urgent.
Early detection can improve cancer outcomes and getting more people screened as our top priority.
We're also focused on enhancing our customer experience and advancing new diagnostic solution.
Executing on these priorities will ensure genomic information is routinely used to detect diagnose and treat cancer.
Highlights from our third quarter include testing a record 950000 patients.
400 primary care field representatives from Pfizer, our co promotion partner <unk>.
Increasing covered lives for the 45 to 49 year old group to <unk> 70 per cent for Cologuard.
Generating promising data in our Cologuard two <unk> program.
Initiating an important minimum residual disease study.
Publishing Oncall guard liver clinical validation data.
And securing regulatory approval for Oncotype Dx breast in Japan.
Today, we'll discuss our third quarter performance in more detail fourth quarter and full year guidance and progress on our 2021 priorities, our CFO and FIFA Oh, Jeff Elliott will now review our financial results. Thanks, Kevin and good afternoon third quarter revenue was $456 million an increase of.
12% or 39% excluding COVID-19 testing.
Screening revenue contributed $280 million or 31% growth with strong contributions from Cologuard re screened and the 45 to 49 age group.
9000, new health care providers ordered cologuard during the quarter and 253000 have ordered since launch.
<unk> revenue was $145 million, an increase of 59%, including nine points of growth from our cyan acquisition.
Growth was driven by Oncotype Dx breath in the U S and internationally.
Covid testing revenue was $31 million as delta various cases increased rapidly during the quarter.
GAAP gross margin was 70% non-GAAP gross margin, which excludes amortization of acquired intangibles was 75% margins were down two points, mainly due to lower COVID-19 testing volume.
Sales and marketing expense was $197 million during.
During the quarter, we made investments in our commercial team to support continued growth.
G&A expense was $187 million. This includes $10 million of acquisition and integration costs and $10 million of legal settlement costs.
R&D expense was $75 million.
The increase was driven by our multi cancer and colorectal cancer programs adjust.
Adjusted EBITDA was a loss of $16 million, we ended the quarter with cash and securities of $1 $2 billion.
Turning to the market backdrop.
Cologuard grew slightly less than we had expected. This was due to a rapid rise in the Delta variant as Keith has tripled from late July to mid September reducing salesforce access to physician offices.
Growth was also impacted by actions taken by our commercial partner during the quarter.
Due to Covid concerns Pfizer pulled their sales representatives out of the field starting in late July through September and then reduce the size of their internal medicine team in mid September combined.
Combined the Delta variant and our partner Pfizer's decision cause or in person sales calls to decreased 70%. During this time period. This.
This led to a flattening of Cologuard orders in August and September and.
In October order growth accelerated during the months, reaching new weekly records due to an improving backdrop and actions we're taking.
Delta cases are coming down in person sales axis is improving and exact sciences hired 400 representatives from Pfizer and got them back in the field.
Takes about 30 days between that Cologuard order and a completed test when we recognize revenue.
This means that Cologuard orders in August and September had a modest impact on third quarter revenue and we will have a bigger impact on the fourth quarter.
Fourth quarter is also impacted by holidays, when seasonality leads to fewer orders around Thanksgiving and Christmas and a temporary delay in patients returning cologuard kit.
With that in mind, we're narrowing our full year revenue guidance towards the high end of our prior range.
We now expect between $1 72, and $1 $73 $7 billion, we've lowered our screening revenue assumption and expected to add 1.05 and 1.055 billion.
We've increased our precision oncology revenue assumptions and now expect between 547 and $552 million.
We've also increased our COVID-19 testing revenue assumption and now expect between 125 and $130 million.
For the fourth quarter, we expect revenue between 429 and $444 million. This assumes screening revenue between 265 and $270 million.
<unk> revenue between 134, and $139 million and Covid testing revenue between 29 and $34 million.
Turning to operating expense, we're decreasing our guidance for from a prior range. We now expect lower sales and marketing expense of $800 million to $820 million.
This is because our partner made fewer sales calls reducing our piece of that.
For G&A, we're raising our guidance of $635 million to $655 million due to.
Additional investment in.
And people to support growth.
This number excludes acquisition integration and legal settlement costs.
We're also lowering our R&D guidance to $370 million to $390 million due to the timing of enrollment for certain clinical studies, we continue to expect with $95 million for intangible amortization and $125 million of Capex I will now turn the call back to Kevin.
Thanks, Jeff achieving our mission of eradicating cancer starts with screening in the primary care setting.
And we're taking action to get more people tested.
We expanded our talented primary care sales team this quarter by welcoming more than 400 members of Pfizer's top internal medicine team to the exact sciences fans.
This is the same team we partnered with over the past three years, they have a deep commitment to our mission and long standing relationships with primary care physicians across the country.
Our strengthened commercial engine will fuel cologuard adoption and help reach 110 million Americans, who should be screened.
In the future, we expect our primary care sales team to educate physicians about cologuard two point al.
Our colon cancer screening blood tests are multi cancer early detection blood tests and others.
These tests will be easy to access powered by our our seamless customer experience.
Capabilities and deep relationships with health systems.
The pandemic has changed healthcare and emphasized the importance of digital engagement and <unk>.
Home solutions, our focus on the digital customer experience will benefit cologuard and our future screening tests.
Even with the backdrop of fewer cancer screenings throughout Poland and more recently due to the Delta Varian Cologuard is playing an important role in getting more people screened.
Because cologuard is accurate and convenient we have screened nearly 3 million people since the pandemic began.
We're focusing on three areas, where we can make an impact.
One building the best and most effective commercial organization in health care by investing in our leadership team training and sales force effectiveness.
Improving the customer experience by making it simpler to order cologuard electronically.
Continue recruiting patients every three years.
And three screening more people starting at age 45 to catch cancer early.
These cologuard growth initiatives are outperforming and will provide benefits for years to come.
Our electronic ordering rate continues to grow rising from 40% to 48% this year.
We've re screen more people with Cologuard this year than we did in the prior three years combined.
And we screen more people ages 45 to 49 in the third quarter than we did all of last year.
Our precision oncology business provides a differentiated growth platform with a powerful oncotype Dx brand and experienced team and strong evidence generation capabilities.
Cotype Dx breast is the standard of care because it is supported by unmatched evidence.
We've seen growth in a number of node positive patients tested with archetype Dx since sharing the responder study results last December.
Responder definitively showed which women with node negative disease will benefit from chemotherapy similar to tailor X for node negative.
The recent Japanese regulatory approval opens another growth opportunity for Oncotype Dx.
Breast cancer is the most common cancer in Japanese women with more than 90000, new breast cancer cases diagnosed in 2020, we plan to launch in Japan early next year and look forward to guiding more patients for the most effective guest breast cancer treatments.
We've successfully integrated new tests onto our precision oncology platform, improving our sequencing bioinformatics and proteomics capabilities in the process.
One example is the team that is China, which expanded our whole exome and transcriptome and matched germline sequencing capabilities.
And provides the foundation for our minimum residual disease testing capability.
Bringing the test from an idea to standard of care requires rigorous scientific evidence and we're entering an exciting period for our pipeline in 2022.
In colorectal cancer, we're thrilled by recent data generated internally for Cologuard two <unk>.
And plan to release that data at a conference in January.
We also plan to share key controlled data supporting our colon cancer blood test next year.
Our talented clinical trials team has enrolled nearly 12000 patients and blue C. Our pivotal prospective study to.
To power the study and support FDA approval for Cologuard, two <unk> and our colon cancer blood test.
We are increasing enrollment to more than 20000 patients due to lower than expected cancer incidents.
Because it will take time to enroll more patients we expect to read out top line Lucy results for Cologuard, two <unk> I know in late 2022 or early 2023.
And our blood first.
2023.
And multi cancer, we now expect to share two sets of case control data next year.
The first will show feasibility across multiple classes of Parker's second will show the power of combining the exact sciences thrive approaches one yes.
In the area of minimum residual disease, we recently announced we are partnering with the national surgical adjuvant breast and bowel project for NSA BP to conduct a prospective multicenter validation study with stage, two and three colorectal cancer patients.
We previously partnered with NSA BP on several important studies.
<unk> clinical validation studies for <unk> Dx breast.
The new study called correct <unk>.
As expected to enroll 750 patients to generate clinical validation data for <unk>.
Sure.
We will guide patients at every step.
Test predicts recurrence risk and informed treatment decisions.
Minimum residual disease test to detect disease.
Guide next steps after surgery.
Moving to liver.
Critical gastro neurology hematology published validation data showing a separate test reliably detect early stage liver cancer.
At 87% specificity of Cologuard liver demonstrated 82% early stage sensitivity nearly 20 points higher than the current guideline recommended testing options.
This publication supported our submission to mol Dx for reimbursement, which we expect to receive in about 18.
We have completed or are working on more than 220 clinical progress generating evidence for tests across the cancer continuum from screening through late stage treatment.
We're leveraging this expertise to support an outpouring of innovation from our deep pipeline.
Our scientific expertise and commercial engine positioning exact sciences to transform cancer care and defeat this terrible disease.
We envision a future where genomic information is used to detect diagnose and treat cancer routine.
We're at the forefront of this evolution, which will help us eradicate cancer.
We're now happy to take your questions.
Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Again that is star then the number one on your telephone keypad.
We'll pause for just a moment to compile the Q&A roster.
We have our first question coming from the line of Matt Skies with Goldman Sachs. Your line is open.
Hey, guys. This is Dave on for Matt Congrats on the quarter.
We were excited to see the sales folks we've hired from Pfizer and glad things are rebounding strongly there could you tell us a little bit more about what.
Theyre doing to adapt to some of these headwinds.
Into physician's offices.
And in the Covid environment.
And what will be some of the main changes for these folks now being full time exact employees.
Instead of Pfizer.
Well, let's first start with our incredible team that we've built over the last seven years and primary care promoting cologuard as a remarkable team and they've worked hand in hand with Pfizer reps.
Over the last three years of our partnership.
This team Pfizer reps.
<unk> team won with inherent within internal medicine, an average of 16 years of primary care experience.
Deeply committed to our mission.
And we're in the very early innings of this team coming on full time with Cologuard.
As their position one selling.
Goal.
And we're already seeing strong results just in October the first full month of.
Their promotion of Cologuard as part of our team.
Orders are up 10%.
Accelerating in the back half of the month, so we couldnt be more excited about what this combined best in class.
Primary care.
Sales organization can do combined with our obgyn Salesforce are.
GI sales force are health systems, Salesforce and Cologuard.
So we're awfully excited about what we believe we can do next year as our country.
As the U S comes out of the pandemic and the opportunity for screening.
Is desperately needed.
Thank you we have our next question coming from the line of Derek <unk> Brown with Bank of America. Your line is open.
Hi, good afternoon, Hey.
Kevin.
Why don't you think you've seen more telehealth.
Lino ordering.
For Cologuard, I mean, realizing that dependent mixing going on for a while but I think we would've expected just to see a little bit more pickup in that as opposed to the face time, given how long the products on the market and then I have a follow up on just a little bit more clarity on the Blue C. Delay there was some feedback on the line and I think I missed some of that so just.
You could go over that in sort of the reasons why.
Just again why the trial is being delayed a bit thank you.
Well, we're thrilled with how quickly the team moved to bring up Tele health.
And we're working to enhance that patient experience. So we learned a lot in terms of what all is required for a telehealth solution.
One of the things we've learned is still <unk>.
Cancer screening generally, whether it's mammography or colon cancer screening or cervical cancer screening is something that has initiated in the primary care setting.
And that that will continue to be the biggest growth driver.
With that said, we see that the.
Most significant opportunity.
To generate self.
Self initiated Cologuard testing is likely through partners that do faced.
Face to face telehealth visits for other reasons. So just like you get screened when youre going to see a doctor. We believe Youll also get screened as you initiate.
A telehealth visit.
We do continue to we don't break this out but we continue to see growth in this segment and we're excited about that and what that means over the long term.
The main growth drivers will continue to be our sales force and direct to consumer.
Thank you we have our next question comes from the line of Brian Weinstein with William Blair. Your line is open.
Hey, guys.
For taking the question I don't know if you wanted to adjust Eric's other question before answering my own formally but.
I guess as we just think more broadly.
CRC screening Kevin as you think about this opportunity is kind of a broad class. So not company specific here, but it is a broad class what do you think the mark.
For these products it looks like versus Cologuard. If class performance is as good as Cologuard and then if class performance is worst in cologuard on the metrics that matter like early detection.
Stage, one and pre cancer.
I am curious what you think performance for the broad classes are likely to be once all the data is it. Thanks.
Thanks, Brian and a prospective study class performance for a blood test is not going to be close to cologuard.
It's not going to be close to Cologuard, one point all our current version and it's certainly not going to be close to two point out we know that because of the work that we have done in this space.
However, with that said a blood test can play an important role there are 45 million Unscreened Americans.
We know that choice gets more people screened it's why we're investing in a blood based colon cancer screening program, we are well positioned to lead in this space with the quality of our test.
With our.
Brand with our sales capability with the infrastructure that we have built from electronic ordering too.
Being able to deliver blood results with that said.
A blood test basis real hurdles that we don't want to minimize.
The data that we have seen and others have generated.
That we have seen internally and others have generated.
He's control data.
He is controlled data, we would expect a significant falloff as you move into a prospective us.
Getting more so even than in AR.
Stool study.
Also we know from our Blue C enrollment.
That patients prefer a stool test over a blood test in fact in Blue C. We're seeing that.
20% of people choose to complete a cologuard test, but refused to get a blood draw.
So we know that the Cologuard brand will continue to be an incredibly important part of colorectal cancer screening for a long time to come.
Finally.
The main guideline group USPS TF opine on.
Blood based test until likely 2026.
Medicare is right now only proposing.
Proposing to pay for a blood test every three years. Despite we believe the performance that in prospective setting will probably only justify a one year interval. So these are some of the headwinds which.
Of course, we will confront and deal with but.
Yes.
Coming back to the first point there are 45 million Unscreened Americans blood testing hopefully will help get more people screened.
And then Brian to answer your second question on Blue C enrollment.
It's going to take more time to enroll a sufficient number of cancers really the goal of the largest prospective study like this.
However, the study by getting a sufficient number of cancers, it's going to take time, we have seen lower prevalence of cancer in the patients we have enrolled thus far so we will keep that study open.
North of 20000 people to ensure we get enough number enough cancers to to move forward with testing of both our cologuard two product as well as the colon cancer blood program.
Thank you we have our next question coming from the line of Vijay Kumar with Evercore ISI. Your line is open.
Hey, guys. Thanks for taking my question and I had a two parter one on not Q4 and one bigger picture question on M&A.
On the Q itself, Geoff I think you mentioned a six week.
Our a month delay between orders and revenue recognition.
Given how volumes have trended.
Can we quantify the impact.
Lower physician office visits and CTO.
Impacting revenues in Q4.
Did that.
<unk> office was its normalized should there be some impact in Q1. So thats. The key question on the queue. Kevin one for you on M&A is there a need for exact sciences to do a large.
A transaction at this point in time.
Considering that you guys have done a couple of large deals over the past 18 months. There is a lot to digest here.
I'll start on the quarter Vijay this is Jeff.
Look two things happened during the quarter.
First was the delta the variance place that we saw starting late and late in July and continuing through mid September.
That caused a significant decline in salesforce access to physician offices on top of that.
Actions taken by our partner Pfizer first by starting to pull reps out of the field in late July and that continued and then reducing the size of their sales force in mid September the combination of those two things led to a 70% decline in.
In person sales calls during the quarter and look Cologuard is marginally sensitive.
Normally when we have access we see a strong relationship between sales activities and orders we are starting to see that return now as Kevin mentioned during October we saw acceleration and acceleration of Cologuard orders with 10% growth during the month.
That makes us very optimistic as we exit this year. However, as I said there is a normal 30 day lag between an order and a.
A completed test, which is when we recognize revenue.
So the impact of orders, which was felt primarily in August and September.
<unk> Q3 modestly it has a much bigger impact on Q4 to quantify the impact as you add just.
Just look at what in Q3, two we delivered 31% growth the midpoint of guidance for Cologuard was 34% growth.
And I would say that thats, a pretty good indication of the impact on Q3.
And then if you compare the prior guide.
For Q4 were pointing to today that gives you a feel for the impact there. However, again theres a lot of reasons to be optimistic here.
Expanded sales team is now entirely and in the field, they're motivated they're talented.
The 400 people we welcome from Pfizer are thrilled to be part of this mission.
They are back on the field for the first time in 18 months.
We're also seeing wellness visits starting to improve they're not back to normal yet, they're probably down 10% to 15%, but trending in a good direction all of that speaks to a very exciting year next year for Cologuard.
And relating to your question about our M&A philosophy, our first priority is to.
Focused on Cologuard and to continue to grow as we as the pandemic abates, we're thrilled with the position that we're in heading into next year and.
Strong performance, we've seen that the team have as they have come back to the field.
Following the abatement of the Delta variant. So we're excited about that as we head into next year. There are other highlights for next year, the multi cancer Readouts Cologuard two point no data.
And our CRC blood program and our minimum residual disease. So we have teams that are.
Excited about delivering on the promise of.
End to end testing and being the platform and solution provider of choice for cancer screening and cancer testing.
If something contributes to our long term strategy and Theres a good cultural fit.
Can leverage this foundation that we built to help more patients we consider it.
Our first priority right now is to focus on that.
The basics of our business and growing and we're excited about that opportunity as we look at 2022.
Thank you we have our next question is coming from the line of Catherine Schulte.
With Baird. Your line is open.
Hey, guys. Thanks for the questions I guess.
Just looking at your fourth quarter guide it looks like it implies about 6% to 8% year over year growth in screening revenue in the fourth quarter, just given youre still early in terms of adoption and I would think the environment shouldn't be worse than the fourth quarter last year why shouldn't that.
Both rate be better and does the guide incorporate any assumption around another potential wave of Covid cases.
Hey, Kevin This is Jeff if you look at the Covid cases, they are still very elevated and the access to physicians is still very immunity I think right now the access is probably 50% of what it was before the pandemic. So there are still headwinds out there.
I talked about intra quarter in Q3 and that is what the guidance assumes.
I think that we've already seen.
As far as going forward, we do not assume another spike in Covid happened Covid as you know, it's very difficult to predict so we've assumed a continuation of the trends that we're currently seeing which is slow and steady.
<unk> October cases, and continued modest improvement in both in access and in patient wellness visits.
Thank you we have our next question coming from the line of Dan Brennan with Cowen Your line is open.
Okay.
Yeah.
Mr. Dan Brennan. Your line is open you may ask your question.
Okay.
Why don't we move on.
The next question will come back to Dan.
We have our next question coming from the line of Ken areas with Stifel. Your line is open.
Good afternoon, guys. Thank you, Kevin or Jeff on the outlook here I know you're going to tackle 2022, and the guide next quarter, but I was kind of hoping we could maybe just touch on the beginning of the year again and the reason I ask is because.
I know seasonality is a factor for you guys in <unk>. So as we think about the <unk> transition.
Cologuard acceleration in <unk>, the right way to think about it because youre still COVID-19 constrained in <unk>.
Or is that less likely to happen just because of the way that things typically start off for you guys. In the first couple of months of the year.
Jim This is Jeff in a normal year when you look at the impact from seasonality and the impact on revenue is larger in Q1 and Q4. So the normalized going forward you should expect a sequential decline in Q1 revenue versus Q4 for Cologuard.
There's a lot of moving pieces now we're not prepared today to guide to Q1.
But look the trends that Kevin talked about our very exciting I would add to that.
When you look at other growth factors that we've talked about before things like three year re screen tracking well above the prior guidance, we had to put up their well above $100 million.
Significant growth next year from restraints.
<unk> 45 to 49.
That launch there is going exceedingly well as Kevin mentioned in his remarks coverage has picked up meaningfully in fact, if you look at 45% to 49. The early pace of adoption is tracking faster than the initial launch of Cologuard did in the 15 over population. So really good signs there and let's say that I would add electronic ordering.
Today, we're up to 48% electronic ordering.
As compared to 40% to start the year and when somebody when a physician orders electronically the order far more than when they order via fax. So these are all very good trends that speak to a very exciting 'twenty two for cologuard.
Thank you we have our next question coming from the line of Andrew Cooper with Raymond James Your line is open.
Hi, everyone. Thanks for the question maybe first just.
Andrew are you there.
Can you hear me now.
Jim.
Sorry about that.
I don't know what was going on but maybe just asking Matt.
The near term question, a little bit differently. When we think back to last year. There was definitely some impact in <unk>. Despite COVID-19 really not turning on in the U S. More so into March and then Q2 in <unk>. It feels like there's a little bit of a difference in sort of the lag that we saw then as opposed to the sequential.
Ill move in the fourth quarter. So is there any way you can just sort of help balance maybe what's a little bit different now relative to today and is it just the seasonality how should we be thinking about why it might look, particularly a little bit different.
From a trajectory standpoint.
The biggest differences would be seasonality, Andrew and the initial spike of Covid happened kind of back half of March and into April.
Now, we're talking about heading into Q4.
Seasonality is going to be the biggest difference seasonally.
Period of kind of February March April may is normally it varies.
Very strong time for Cologuard orders.
Sitting here now we're heading into two things given when orders do decline, it's really because around the holidays fewer patients go in for physical and Cologuard is typically ordered during the physical.
And so 30 days later.
When you start to see a big impact. So it's the combination of Delta Delta variance being a very significant spike in Covid cases, and then you layer on top of that seasonality.
Thank you we have our next question coming from the line of Sandoz.
So it does with SBB Leerink your line is open.
Hi, Kevin Thanks for taking my question just a brief very quick to partner.
On the 20000 patient update just wondering if this is more of a class effect.
There are two trials in this space that have.
Now increased enrollment so far is there something about the event rate that you don't see that earlier on in the trial.
And just trying to understand the dynamic there is there something you could have seen potentially earlier and then just for Jeff sales were up as of today. How many would you say what percentage are in person and apologize if I missed that thank you.
For the first question, yes, we believe that.
Other aspiring entrants into this space are and we are experiencing the same day same dynamic that the overall prevalence rate of colon cancer appears.
In our studies to be significantly.
Lower than it was in the deep C study there.
There could be many reasons for that.
But that's that's what we're seeing and because this is an event based study that stops enrollment once you get through a sufficient number of patients with disease.
That that's what is driving the.
The need to continue enrollment.
Putting this is Jeff on your second question I believe you asked on Salesforce access to physician today, it's about 50% what it was prior to the pandemic started.
Thank you we have our next question coming from the line of Patrick Donnelly with Citi. Your line is open.
Hey, guys. Thanks for taking the question.
Kevin you touched a little bit on that.
Catalyst set for 'twenty two on some of the other products can you just dive into a little bit what we should expect in terms of timing you touched on the multi cancer Blue C. Obviously, it sounds like it'll be maybe late 'twenty two in terms of the data and then secondarily with the Blue team David the way when when do we expect Cologuard to point out on the <unk>.
Market commercial thank you.
Well Cologuard two point no we as I mentioned, we expect to.
Complete that study and complete testing.
By the end of next year or the beginning of 2023.
We will then need to submit to FDA and I don't want to.
The FDA is awfully busy so we'll see how long that takes following submission.
It's the.
In terms of the data supporting our belief that.
That test will be will improve both sensitivity and specificity performance, we expect to present that data in January.
Multi <unk> cancers screening, we expect two different readouts of case control study.
Studies throughout the year, we havent yet decided when.
We would present that data or how we would present that data but.
That will occur in two different.
Alright.
Rounds of testing.
<unk> earlier in the year and another a little bit later in the year.
Minimum residual disease testing will be most likely in the back half of next year.
Data on <unk> Gard liver.
Was published August 13th we touched upon that a little bit earlier, and then also our PFS genomics team expects to.
Present data at the San Antonio Conference coming up here in early December so lots of I am not sure I covered all of it but that's the best I can do for memory.
Lots of data coming next year, highlighting the significant and exciting investments that we're making from early cancer all the way through minimum residual disease testing.
Thank you we have our next question coming from the line of Mark Massaro with <unk>. Your line is open.
Hey, guys. Thanks for the question just one quick one Kevin if you could just maybe clarify your comments on the the <unk> initiative I think I heard you just say.
Youre expecting data to readout in the second half of next year and can you clarify I think you said 700 patients in your prepared remarks and.
Frankly, when what's the earliest time that you think you could launch this and I would assume that you're planning in <unk>. Thanks.
We are planning and LDP that data that we released next year is not from the <unk>.
Correct MRV to study, it's from another study, which I havent yet highlighted.
And we're also doing deep debt correct MRV to our NFS a bp's study so that will be additional data.
And we're working on other studies as well.
So.
The initial data will come from.
A separate study.
Does that answer your question.
Okay.
We have our next question coming from the line of Brandon <unk> with <unk>.
Jeffrey Your line is open.
Hey, guys. This is Matt on for Brandon. Thanks for taking my question, one for Kevin or Jeff curious your updated thoughts on when we may potentially return to more normal levels.
The office access or is there a possibility of a sort of new normal going forward. The next few quarters and can you touch on the various tools you guys have at your disposal in the scenario of this kind of new normal.
And <unk> and then into the first half of next year. Thanks.
The team is doing a great job of getting into offices.
And so things are opening up that's a real positive were seen at the signal again.
October was.
Great month of growth month over month.
We expect that to continue.
Many offices want.
Reps back in the.
It missed having.
Having reps in the office and you really see it now as is.
As physicians are trying to get there.
Heaters scores and their star scores.
They are calling and asking for help we've had.
Significant number of.
What we would call Pall Corp program orders of.
Practices that want.
Dozens hundreds and in some cases over a thousand people screened all at once.
So.
The signal is good and remember we've had 250000 physicians order cologuard.
Since launch so we know there are physicians that we can get access to the key things that were backed out on the field.
Because of the pandemic.
And because we were.
Partnership.
They've made decisions that were slightly different than ours in terms of field access and.
That team now being part of our team.
Has full access to the field and they are getting access to physician offices and face to face visits are.
Now up over I think 70% of all.
Business that we're doing and.
And thats with the principal healthcare providers, so we're getting to offices another point that.
I find we find compelling as we look at next year is the fact that a few segment our customer base.
Bottom, 60% in terms of ordering frequency, they're ordering at a rate of about 50%.
Higher than they were pre pandemic.
Now these are physicians that typically we don't call on that.
Power of the Cologuard brand as evidenced there.
Sure more are better customers to order cologuard more frequently.
They're ordering rate is down about 15% pre pandemic.
We are the most sensitive to promotion and so as we get now 850 people back out into the field.
Calling on.
Top 40% of ordering physicians, we expect to see.
Tremendous growth in 2022, and we're excited about that.
Okay.
Thank you we have our next question coming from the line of Jack Meehan with Nephron. Your line is open.
Thank you good afternoon.
I had two follow up questions on liquid biopsy. The first is in Blue C. Why is the timing of the blood readout later than that for Cologuard two point now.
And then second Kevin you commented that you think going from case control perspective.
Blood performance in colon cancer will drop more than what you showed in stool could you just elaborate on why you think that.
Yes.
Sure.
B.
The first question again.
Yeah.
It does.
Of colon blood versus Cologuard two <unk>.
The key thing there is that.
When you enroll a patient into the study you are asking for stool and blood.
20% of the time, they provide stool, but not blood.
And this is indicative of something that we have known for a long time as patients prefer preferred getting screen.
With an at home test than getting a blood draw.
We think that that is.
Powerful indicator of where the market is long term.
We believe that the two leading test will continue to be colonoscopy and cologuard.
Sure.
That is.
Really the significant one and as Jeff do you want to take the second one really comes down to the biology of the colon and relative to the biology of the bloodstream.
With this tool.
Tool goes to the colon it has come in direct contact and this is important as direct contact with polyps small early stage cancers in both lung cancers.
So the stool is it more of an enriched sample type and Thats why we can find through a stool sample very high levels of pre cancer and early stage cancer and blood do you think of how the biology of the corn works early stage colon cancer is generally do not protrude out into the outer wall for Colin.
That's by design is to keep us all from getting set.
Not until early stage cancer protrudes out typically late stage two stage three with.
Protrudes out into the outer layer of the coin whether its muscle, that's where there's a blood supply.
When you can turn to.
Relatedly pickup colon cancer and a blood sample.
So to sum it up it comes down to the biology of differences between a stool sample and a blood sample, which is what gives us confidence with cologuard two <unk> and beyond we will have the most accurate non invasive tests out there.
And to add on to that in the deep C study, we saw 40% of all cancers been stage one cancers.
About half of those 20% are are typically removed during the colonoscopy procedure because they are embedded in a large power.
Case control studies don't have access to those patients because the polyp is removed.
Already the cancer has gone prior to surgery, so collecting a blood sample.
Can't be done and that's why we see in blood studies.
Strong bias towards higher sensitivity for stage one than you would typically see in a post spectra study obviously, that's not the case.
When you collect a stool sample before.
Our prospective.
<unk>.
Sure.
Cologuard Colonoscopy comparator study. So these are the types of things that we all deal with when we're looking at a case control studies and then you have to do internal modeling to figure out where the ultimate sensitivity will be.
And Thats, where we come to the conclusion with our program that that sensitivity probably.
Drops because of that stage one dynamic.
Thank you we have our next question coming from the line of Dan Brennan with Cowen Your line is open.
Hey, Thanks for taking the question I apologize about before Kevin and Jeff and Megan.
Maybe just first one.
Just on Pfizer I know you talked about Kevin and I, just heard kind of read the notes already.
<unk> impact as we head into 'twenty, two any any way to think through just how impactful that could be I mean, certainly having.
The work we did when this deal with first sign was that Pfizer reps, having those relationships can really drive a lot of usage. So I'm just trying to think through just any way to help quantify or just the magnitude of the benefit now having these salespeople as part of the exact one things kind of normalize with with Goldman.
Well Theres always breeds.
To be cautious as we're coming out of the pandemic, we don't know what's around the next corner.
With that said this is an amazing.
<unk> team that we have built.
In primary care.
Our historical team combined with the team from Pfizer Obgyn Gi.
And our net promoter score has increased from 24, a year ago to 40 today.
The best among primary care physicians, that's a big deal, which is telling you that.
This dynamic of Cologuard getting a lot of attention during the pandemic when screenings were uniformly down.
Is having an impact now on how physicians think aw.
About cologuard and now getting this team back in the field, where we know the frequency of calling.
Absolutely correlates in a straight line.
With Cologuard test orders, especially among those are better customers. So when you look at those dynamics Theres every reason to be optimistic about 2022 in terms of quantifying that will have an opportunity to do that.
As we.
Enter next year.
I'd love to give you a number but I think Jeff would not be happy with me if I did that.
Thank you we have our next question coming from the line of Alex Nowak with Craig Hallum. Your line is open.
Great. Good afternoon, everyone already a number of MRV tests out there in the market and they are already going into additional cancers in CRC. So I just want to understand a bit better how you're positioning your recurrence test uniquely despite not being the first mover advantage there does it come down to the sales team.
And then does it come down and our sales team or I guess, what else are you trying to do to make that test unique when it comes to the market.
I think if you look at this long term you look at where the customers start their journey.
In colon cancer, many of them start with Cologuard and so we have a relationship with the physician in breast cancer, we're seeing.
Almost half of all breast cancer patients and their tissue samples.
So we have a deep relationship and the starting point for the tissue that would be the starting point for tissue informed test.
We also are unique in that we have deep methylation capabilities. So we.
Have the ability to.
Do both tissue informed and blood based native testing with Emaar D, which.
Nobody else has that type of combined capability and we also can leverage.
We're excited about this the technologies that come from our acquisition of thrive in this field, giving us.
Great scientific capabilities.
And then in addition to all of that our infra.
Infrastructure our epic.
Backbone allows us to.
Connect.
From.
From the initiation of testing all the way through ultimately.
Options presented for treatment based upon the data that's generated so we believe that this is.
We're obviously not first in this space, but over the long term, we have great strengths that will allow us to lead.
Thank you we have our next question comes from the line of Carl Mixon with Canaccord. Your line is open.
Thanks, Hi, everyone. Thanks for taking the questions. So just had a multi parter.
Simple window. So on Salesforce, just wondering what the productivity trends that youre, assuming in the fourth quarter guidance I guess, just like just for context. The 9000 providers added in the third quarter. Then access is still I guess, 50% pre Covid and then similar to that I guess, there is a broad range of companies trying to break into screening already been different.
Cancer is just obviously the benefit from your sales force in network provider for Lynch relationships surely David helps so would you ever consider maybe offering a portion of your of your sales force I don't like a temporary contract basis, maybe to a potential competitor and whether it's screening or again monitoring things like that.
And finally I just think there is like an important question to kind of asking to think about with all of these pipeline tests being launched in $23 25.
On a timeframe, there's a lot of long term potential obviously, what's going to be the most exciting thing.
Thinking about exact between now and then from an investor perspective.
Thanks.
This is Jeff I'll start on the sales force productivity trends questions. We have high expectations for this team we know what their key polo in this broader team now is getting back out into the field more fully relative to where we were at in August and September.
Productivity to improve throughout the rest of this year and into next year. So that's probably the biggest driver for the Cologuard business going forward.
On the second question, we reconsider I think it's I think the question is co promoting in the project. We would we love what we have internally with the rockers is capability.
<unk>.
Once we have the marketing engine that we have this is something that will only get more productive as we add other products to it and we do have a full pipeline Kevin talked a lot about that the same foundation, we've established for Cologuard down the road will support Cologuard to Plano multi cancer colon blood other products.
Until that will allow us to leverage this.
<unk> not only improves the productivity, but also improve the profitability of this investment so we would consider it although we love what we have internally.
Last on the busy timeframe 2023 through 2025, what is most of the study.
And so from myself personally I think it's the breadth of opportunities. We have are really unsurpassed in this space internally and we've talked a lot today about the growth of Cologuard the growth of our Oncotype franchise. We also have a robust pipeline and you hit on a really busy period for cologuard to multi.
Cancer and Marty.
It's going to be a really exciting next few years.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
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