Q1 2024 Exact Sciences Corp Earnings Call

[music].

Okay.

Danica: Thank you for standing by. My name is Danica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Exact Science first quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise.

Thank you for standing by my name is Danica and there will be a conference operator today.

Danica: At this time I would like to welcome everyone to the exact sciences first quarter 2024 earnings call.

Danica: All lines have been placed on mute to prevent any background noise.

Danica: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Please note, we will only have time for one question per person. Thank you. I would now like to turn the call over to Erik Holznecht, Manager, Investor Relations. Please go ahead.

Danica: The speaker's remarks, there will be a question and answer session. If you would like to ask a question. During this dream simply press star followed by the number one on your telephone keypad.

Erik Holznecht: If you would like to withdraw your question Press Star one again.

Erik Holznecht: We will only time for one question per person. Thank you.

Erik Holznecht: I would now like to turn the call over to Eric Bolton manager Investor Relations. Please go ahead.

Danica: Yeah.

Erik Holznecht: Danica, thank you for joining us for Exact Sciences' first quarter 2024 conference call. On the call today are Kevin Conroy, the company's Chairman and CEO, Jeff Elliott, our Chief Financial Officer, and Aaron Bloomer, Executive Vice President of Finance, who we recently announced as our next Chief Financial Officer. Everett Cunningham, our Chief Commercial Officer, will also be available for questions. Exact Sciences issued a news release earlier this afternoon detailing its first quarter financial results.

Erik Holznecht: Erika. Thank you for joining us for exact Sciences' first quarter 2024 conference call on the call today are Kevin Conroy, the company's chairman and CEO, Jeff Elliott, Our Chief Financial Officer, and Aaron Bloomer Executive Vice President of Finance, who we recently announced as our next Chief Financial Officer, Everett Cunningham, our Chief commercial officer.

Erik Holznecht: There will also be available for questions.

Erik Holznecht: This news release and today's presentation are available on our website at exactsciences.com. During today's call, we will make forward-looking statements based on current expectations. Our actual results may be materially different from such statements. Discussions of non-GAAP figures and reconciliations to GAAP figures are available in our earnings press release, and descriptions of the risk and uncertainties associated with exact sciences are included in our SEC filings. Both can be accessed through our website.

Erik Holznecht: <unk> 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 Dot com.

Erik Holznecht: During today's call we will make forward looking statements based on current expectations. Our actual results may be materially different from such statements discussions of non-GAAP figures and reconciliations to GAAP figures are available in our earnings press release and descriptions of the risks.

Erik Holznecht: <unk> associated with exact sciences are included in our SEC filings, both can be accessed through our website I'll now turn the call over to Kevin.

Kevin T. Conroy: I'll now turn the call over to Kevin. Thanks, Erik. The Exact Sciences team is off to a strong start to the year. During the first quarter, we advanced our purpose of Helping to Eradicate Cancer by Further Embedding Couillard in Standard of Care. Increasing adoption of Oxide DX International and deepening our relationships with health systems, payers, and patients. Highlights from the first quarter include testing more than a million people globally for cancer and rare diseases. Being recognized as a Gallup Exceptional Workplace, a prestigious award given to only 60 companies worldwide.

Speaker Change: Thanks, Eric.

Kevin T. Conroy: Exact sciences team is off to a strong start to the year during the first quarter, we advanced our purpose.

Kevin T. Conroy: Of helping to eradicate cancer by further embedding cologuard to standard of care.

Kevin: Increasing adoption of Oncotype Dx internationally.

Kevin T. Conroy: And deepening our relationships with health systems payers and patients.

Kevin: Highlights from the first quarter include testing more than 1 billion people globally for cancer and rare diseases.

Kevin T. Conroy: Being recognized as a gallup exceptional workplace a prestigious award given to only 60 companies worldwide.

Kevin T. Conroy: Increasing Colgard adoption in large health systems. Organized screening programs among payers and in federally qualified health plans, expanding the number of Oxide DX international ordering providers by more than 20% year over year. Making progress towards moving our Precision Oncology Portfolio onto ExactNexus, our proprietary IT plan, and launching our hereditary cancer test, RISC-R, through our oncology. Announcing that the New England Journal of Medicine published results of our Pivotal Blue Sea Study, which will support FDA approval of Cologuard Plus and Generating Evidence to Support Futures, including OncoDetect, our molecular residual disease.

Kevin T. Conroy: Increasing cologuard adoption and large health systems organized screening programs among payers.

Kevin T. Conroy: Andy in federally qualified health claims.

Kevin T. Conroy: Expanding the number of Oncotype Dx in our national ordering providers by more than 20% year over year.

Kevin T. Conroy: Making progress towards moving are proficient on.

Kevin T. Conroy: Our precision oncology portfolio onto exact nexis.

Kevin T. Conroy: Terry I'd platform.

Kevin T. Conroy: Launching our hereditary cancer test risk guard to our oncology channels.

Kevin T. Conroy: Announcing the new England Journal of Medicine published results of our pivotal Blue C study, which will support FDA FDA approval of Cologuard swaps and generating evidence to support future, including auto detect our molecular residual disease test.

Jeffrey T. Elliott: These achievements reflect our commitment to solving the needs of patients and health care providers, and we're well positioned to achieve our goals for the year. Jeff will now review our financial results for the quarter. Thanks, Kevin.

Kevin T. Conroy: These achievements reflect our commitment to solving the needs of patients and health care providers, and we are well positioned to achieve our goals for the year.

Jeffrey T. Elliott: Jeff will now review our financial results for the quarter.

Jeffrey T. Elliott: First quarter revenue of $638 million decreased 6% at a reported and core revenue base. Screamy revenue of $475 billion increased 7%. Recall screening revenue in the first quarter of last year was very strong and benefited from enhancements to our billing and patient compliance systems and a weak flu season. Growth was 24% on a two-year compounded basis. We expect year-over-year growth to be faster than Q1 for the rest of the year. Precision Oncology revenue grew 5% to $163 million, or 4% on a core basis, excluding FX and M&A.

Jeff: Thanks, Kevin first quarter revenue of $638 million grew 6% on a reported and core revenue basis screening revenue of $475 million increased 7%.

Jeffrey T. Elliott: Screening revenue in first quarter of last year was very strong and benefited from enhancements to our billing and patient compliance systems and a weak flu season.

Jeffrey T. Elliott: Growth was 24% on a two year compounded basis, we expect year over year growth to be faster than Q1 for the rest of the year.

Jeffrey T. Elliott: Precision oncology revenue grew 5% to $162 million or 4% on a core basis, excluding FX and M&A group.

Jeffrey T. Elliott: Growth was led by Archetype DX, which expanded 7% globally. Reference lab agreements were a headwind of three million or two points of precision oncology growth, as we discussed on our last call. First quarter gap gross margin was 70%. Not-gap gross margin, excluding amortization of acquired intangibles, was 73%.

Jeffrey T. Elliott: Growth was led by Oncotype, Dx, which expanded 7% globally.

Jeffrey T. Elliott: Reference lab agreements were a headwind of $3 million or two points of precision oncology grow as we discussed on our last call.

Jeffrey T. Elliott: First quarter GAAP gross margin was 70% non-GAAP gross margin, excluding amortization of acquired intangibles was 73%.

Jeffrey T. Elliott: Margins were slightly lower year over year. The added fixed cost of automation brought online temporarily weighed in Q1. We expect gross margins will improve over time as we realize the benefits from lab automation, leverage investments in lab infrastructure, and see an increased mix of rescreen patients. The net loss was $110 million.

Jeffrey T. Elliott: Margins were slightly lower year over year.

Jeffrey T. Elliott: Got it fixed cost of automation brought on online temporarily weighed on Q1, we.

Jeffrey T. Elliott: We expect gross margins will improve over time as we realize the benefits from lab automation leverage investments in our lab infrastructure and the increased mix of re screen patients.

Jeffrey T. Elliott: Net loss was $110 million adjusted.

Jeffrey T. Elliott: Adjusted EBITDA was $39 million. Of note, G&A included $4 million of unique one-time items related to facilities consolidation and $6 million of non-cash expense related to acquisition earnings. In the first quarter last year, G&A was reduced by $9 million from a non-cash gain related to earnings.

Jeffrey T. Elliott: Adjusted EBITDA was $39 million of note G&A.

Jeffrey T. Elliott: G&A included $4 million of unique one time items related to facilities consolidation and a $6 million $6 million of non cash expense related to acquisition earn outs and.

Jeffrey T. Elliott: In the first quarter last year, G&A was reduced by $9 million from a noncash gain related to earn outs.

Jeffrey T. Elliott: We continue to expect leverage across the PDAL this year, especially within GNA. We are taking further steps to optimize costs and increase operational efficiency, enabling us to reinvest in our core business and prepare for new product launches. Pre-cash flow was negative $120 million during the first quarter, consistent with our expectations and typical seasonal trends. We expect robust cash flow generation for the rest of the year. Weighed in during the quarter with cash insecurities of $652 million.

Jeffrey T. Elliott: We continue to expect leverage across the P&L this year, especially within G&A.

Jeffrey T. Elliott: We're taking further steps to optimize costs and increased operational efficiency, enabling us to reinvest in our core business and prepare for new product launches.

Jeffrey T. Elliott: Free cash flow was negative $120 million to the first quarter.

Jeffrey T. Elliott: With our expectations and typical seasonal trends, we expect robust cash flow generation for the rest of the year.

Jeffrey T. Elliott: We ended the quarter with cash and securities of $652 million in.

Jeffrey T. Elliott: In April, we announced a privately negotiated refining. Our primary goal was to smooth and extend existing temperatures. We accomplished this by issuing $621 million in 2031 notes at attractive financing rates. In return, we reduced our 2028 notes by $360 million and received $260 million in cash net of fees, bringing first quarter pro forma cash to $912 million. Our capital allocation priorities remain unchanged.

Jeffrey T. Elliott: In April we announced a privately negotiated refinancing our primary goal was to smooth and extend existing debt maturities. We accomplish this by issuing $621 billion in 2031 notes at attractive financing rates and return we reduced our 2028 notes by $360 million and received $260 million in cash net of fees.

Jeffrey T. Elliott: Bringing first quarter pro forma cash to $912 million.

Jeffrey T. Elliott: Our capital allocation priorities remain unchanged our number one priority continues to be growing cologuard and Oncotype Dx.

Jeffrey T. Elliott: Our number one priority continues to be growing Colgar and Akita FDF. Second, we're focused on high return pipeline opportunities with large patient impact. Turning to guidance, after a good start to the year, we're well positioned to achieve our annual revenue guidance of between $2.81 and $2.85 billion and adjusted EBITDA guidance of between $325 and $350 million. Our recent investments in sales and marketing have already started to pay off in the second quarter.

Jeffrey T. Elliott: Second we're focused on high return pipeline opportunities with large patient index.

Jeffrey T. Elliott: Turning to the guidance after a good start to the year, we're well positioned to achieve our annual revenue guidance of between $2 eight one and $2 85 billion and adjusted EBITDA guidance of between 325 at $350 million.

Jeffrey T. Elliott: Our recent investments in sales and marketing already started to pay off in the second quarter.

Jeffrey T. Elliott: We expect to see a bigger impact in the second half of the year, but we also face easier comparisons in the second half. In addition, we're seeing greater demand for COLAGARD and CARE GAP programs run by payers and health plans, which typically accelerates during Q3 and Q4. For the second quarter, we expect total revenue of between $677 and $697 million.

Jeffrey T. Elliott: We expect to see a bigger impact in the second half of the year, but we also face easier comparisons in the second half in.

Jeffrey T. Elliott: In addition, we're seeing greater demand for Cologuard caregiver programs run by payers and health systems, which typically accelerate during Q3 and Q4.

Jeffrey T. Elliott: During the second quarter, we expect total revenue of between 677 and $697 million. This assumes screening revenue between 522 and $532 million and precision oncology revenue between 155 and $165 million.

Jeffrey T. Elliott: This assumes screening revenue between $522 and $532 million and precision oncology revenue between $155 and $165 million. This is my last earnings call. It's been an honor to be part of the Exact Sciences team over the past eight years.

Aaron Bloomer: I'm extremely proud of what we have accomplished. Together, we've helped build Exact Sciences into a differentiated growth story with strong recurring revenue, healthy margins, and a robust balance sheet. Most importantly, we've delivered over 17 million cancer treatments. I also want to thank the many investors and analysts at Polixec's site. I've always appreciated your support and enjoyed interacting with you. The future of exact sciences is extremely bright. I'll now turn the call over to Aaron. Good afternoon, everyone.

Speaker Change: This is my last exact sciences earnings call. It's been an honor to be part of the team over the past eight years I am extremely proud of what we've accomplished together we've helped build exact sciences into a differentiated growth story with strong recurring revenue healthy margins and a robust balance sheet. Most importantly, we've delivered over 17 million cancer test.

Aaron Bloomer: I also wanted to take the many investors and analysts that follow exact sciences I've always appreciated your support and enjoyed interactions the future of exact sciences is extremely bright ill now turn the call over to Aaron.

Aaron Bloomer: I'd like to thank Jeff for his support during my transition. It is an honor to be Exact Sciences' next CFO, and I look forward to leading our talented finance team. During my career, I've had the privilege of working for Baxter International and 3M, where I focused on growth and operations. I also focused on margin expansion and free capital generation and played a key role in portfolio management and business development. Exact Sciences is in a prime position to be a global force in the fight against cancer for years to come.

Aaron Bloomer: Good afternoon, everyone I'd like to thank Jeff for his support during my transition. It is an honor to be exact sciences' next CFO I look forward to leading our talented finance team.

Aaron Bloomer: During my career I've had the privilege of working for Baxter International and three of them were emphasized growth and operational excellence also focused on margin expansion and free cash generation and played a key role portfolio management and business development.

Aaron Bloomer: Exact sciences is in a prime position to be a global force in the fight against cancer for years to come.

Aaron Bloomer: And I'm excited about the opportunities in front of us. Together, we'll continue delivering differentiated financial results, all in support of our purpose to help eradicate poverty. Thanks, Jeff. And thanks, Aaron.

Aaron Bloomer: I am excited about the opportunities in front of us.

Aaron Bloomer: We will continue delivering differentiated financial results all in support of our purpose to help eradicate cancer.

Everett V. Cunningham: Our commercial engine is fueling Cologuard growth through millions of targeted engagements with patients and health care. We continue to bring the power of the Colgar brand to life through new marketing experiences, offering a consistent flow of compelling content to patients ages 45 and older. Marketing investments like these lifted Cologuard brand awareness and customer satisfaction to an all-time high in the first quarter. Since the start of last year, 50,000 healthcare providers chose Cologuard and became new customers to Exact Sciences.

Speaker Change: Thanks, Jeff and thanks, Darren our commercial engine is fueling cologuard growth through millions of targeted engagements with patients and healthcare providers.

Everett V. Cunningham: We continue to bring the power of Cologuard of the Cologuard brand to life through new marketing experiences offering a consistent flow of compelling content to patients ages 45 and older.

Everett V. Cunningham: Marketing investments like these lifted cologuard brand awareness and customer satisfaction to an all time high in the first quarter.

Everett V. Cunningham: Since the start of last year 50000 health care providers chose Cologuard and became new customers to exact sciences.

Everett V. Cunningham: Our data show the more time we spend educating these health care providers about the benefits of Colgard, the more tests they order for their patients. Our productivity for customer visits set a record in the first quarter, and we have initiatives underway to drive that even higher to meet demand among our growing base of ordering providers. We will continue investing in high-impact sales and marketing. The number of patients due for their next colonoscopy test continues to increase, and our growing sales team can help improve the re-screen success rates in this patient population.

Everett V. Cunningham: Our data show the more time, we spend educating these health care providers about the benefits of Cologuard more testing order for their patients.

Everett V. Cunningham: Our productivity per customer visit set a record in the first quarter and we have initiatives underway to drive that even higher.

Everett V. Cunningham: To meet demand among our growing base of ordering providers, we will continue investing in high impact sales and marketing opportunities.

Everett V. Cunningham: The number of patients due for their next Cologuard test continues to increase and our growing sales team can help improve the re screened success rates in this patient population.

Everett V. Cunningham: Health systems and payers are highly motivated to improve screening rates through financial incentives built into quality measure programs. However, screening backlogs and colonoscopy wait times continue to increase. In addition, the new Quality Measure Reporting Standards evaluate colon cancer screening metrics at the population level rather than through random sampling, increasing the burden for payers and data. Colgart is an ideal solution, and it's emerging as a preferred choice within large, organized screening programs run by health systems and payers seeking to close their gaps in care.

Everett V. Cunningham: Health systems, and payers are highly motivated to improve screening rates through financial incentives built into quality measure programs.

Everett V. Cunningham: Screening backlogs and colonoscopy wait times continue to increase.

Everett V. Cunningham: In addition, the new quality measure reporting standards, a bit evaluate colon cancer screening metrics at the population level rather than through random sampling.

Everett V. Cunningham: Increasing the burden for payers and data.

Everett V. Cunningham: Cologuard is in is an ideal solution and its emerging as the preferred choice within large organized screening programs run by health systems and payers seeking to close their gaps in care.

Everett V. Cunningham: They're turning to COLAGuard because it's in the USPSTF guide and HEDIS and STARS Quality. COLAGuard is a highly accurate at-home test that offers three times more quality credit than the fifth, which has historically been used within these programs.

Everett V. Cunningham: They are turning to cologuard, because it's in USPS, TF guidelines and heaters and stars quality Mitch.

Everett V. Cunningham: Cologuard is a highly accurate accurate at home test that offers three times more quality credit.

Everett V. Cunningham: The fit test, which has historically been used within these programs.

Everett V. Cunningham: Our patient compliance engine and the ExactNexus platform simplify data reporting required for quality measures to help payers and health systems earn financial We're also helping health systems and payers unlock efficiency by leveraging artificial intelligence and their electronic health record systems to automate workflow, determine patient screening history, streamline patient communications, and track patient outcomes. This gives healthcare providers more time to solve real patient needs. Our Precision Oncology team delivered outstanding results during the first quarter by testing a record number of people globally with Oncotype DS.

Everett V. Cunningham: Our patient compliance engine and the exact Nexus platform simplified data reporting required and the quality measures to help payers and health systems earned financial objectives. We're also helping health systems and payers unlock efficiencies.

Everett V. Cunningham: By leveraging artificial intelligence and their electronic health record systems to automate workflows.

Everett V. Cunningham: Determined patient screening history streamlined patient communications and track patient outcomes. This gives healthcare providers more time to solve real patient needs.

Everett V. Cunningham: Our precision oncology team delivered outstanding results during the first quarter by testing a record number of people globally with Oncotype Dx.

Everett V. Cunningham: We're making great progress towards increasing Octide VX adoption internationally, with the number of ordering providers expanding by over 20% during the first quarter. However, there's still a huge unmet need to provide life-changing answers to women who aren't currently being tested, especially in markets like Japan, Italy, and Germany.

Everett V. Cunningham: We're making great progress towards increasing Oncotype Dx adoption internationally with the number of ordering providers expanding by over 20% during the first quarter. There is still a huge unmet need in.

Everett V. Cunningham: To provide life changing the answers to women, who aren't currently being tested.

Everett V. Cunningham: Specially in markets, like Japan, Italy, and Germany.

Everett V. Cunningham: Dedicated efforts are ongoing to broaden our reach and deepen relationships with providers around the world. Building our international presence and team also provides future growth opportunities across our broad portfolio of tests. Over the next 18 months, we're set to launch a range of new tests that will change how cancer is diagnosed, monitored, and treated, while also helping accelerate exact sciences growth. This includes OncoDetect, a bespoke MRD test to detect fragments of residual disease earlier than advanced imaging systems can, as well as OncoLiquid, a blood-based therapy selection test to complement our tissue-based OncoExtra often. It also includes Cologuard Plus, which will be the most efficient, non-invasive way to screen for colon cancer.

Everett V. Cunningham: Dedicated efforts are ongoing to broaden our reach and deepen relationships with providers around the world.

Everett V. Cunningham: Building, our international presence and team also.

Everett V. Cunningham: Provides future growth opportunities across our broad portfolio of tests.

Everett V. Cunningham: Over the next 18 months, we're set to launch a range of new tests that will change how cancer is diagnosed monitored and treated while also helping accelerate exact sciences' growth.

Everett V. Cunningham: This concludes encore detect.

Everett V. Cunningham: Bespoke MLR D tests to detect fragments of residual disease earlier than advanced imaging test systems can as well as uncle liquid a blood based therapy selection tests to complement our tissue based oncor extra offerings.

Everett V. Cunningham: It also includes Cologuard response, which will be the most efficient noninvasive ways to screen for colon cancer, The New England Journal of medicine publication of our pivotal.

Everett V. Cunningham: The New England Journal of Medicine publication of our PITBUL Blue Sea Study shows Cologuard Plus raises the performance bar in colon cancers. The test achieved 94% overall cancer sensitivity, 43% sensitivity for advanced pre-cancerous lesions, including SSL, 91% specificity when including patients with small polyps and other incidental findings, and 93% specificity with no findings on colonoscopy. No other non-invasive approach comes close to this

Everett V. Cunningham: Blue C study shows Cologuard plus raises the performance bar in colon cancer screening.

Everett V. Cunningham: Test achieved 94% overall cancer sensitivity.

Everett V. Cunningham: 43% sensitivity for advanced pre cancerous lesions, including asset sales.

Everett V. Cunningham: 91% specificity, when including patients with small polyps and other incidental bi and.

Everett V. Cunningham: And 93% specificity with no findings on colonoscopy.

Everett V. Cunningham: No other non invasive approach comes close.

Kevin T. Conroy: We plan to share data from Blue Sea later this year for our blood-based colon cancer screening test, which will be powered by ExactNexus, our unique technology platform, our proprietary PCR technology, and the commercial infrastructure supporting COAGR. Exact Sciences has deep relationships with over 350,000 health care providers and a powerful, powerful platform for screening blood. These unique advantages give us the opportunity to identify patients who refuse standard of care screening and offer our blood test as a second line option at a very reasonable cost. We have built an unrivaled foundation to engage patients and healthcare providers, and we are set to gain momentum with each new test added to this platform.

Everett V. Cunningham: We plan to share data from Lucy later, this year or a blood based colon cancer screening test, which will be powered by exact nexus our unique technology platform.

Kevin T. Conroy: Our proprietary PCR technology, and the commercial infrastructure supporting Cologuard.

Kevin T. Conroy: Exact sciences has deep relationships with over 350000 health care providers and a powerful.

Kevin T. Conroy: The powerful coal colon cancer screening database.

Kevin T. Conroy: These unique advantages give us the opportunity to identify patients who refused standard of care screening and.

Kevin T. Conroy: And offer our blood test as a second line option.

Kevin T. Conroy: Very reasonable cost.

Kevin T. Conroy: We have built an unrivaled foundation to engage patients and health care providers and we are set to gain momentum with each new test added to this platform.

Kevin T. Conroy: We're using this platform to help eradicate cancer by preventing, detecting it earlier, and guiding personalized treatment. Cologuard, Oncotype DX, and our pipeline of life-changing diagnostics will power years of double-digit growth and continued profitability, helping us achieve our purpose. Before we turn to Q&A, I'd like to thank Jeff for his many contributions to Exact Sciences over the last eight years. He's been an invaluable business partner and leader. We'll miss him once he departs.

Kevin T. Conroy: We are using this platform help eradicate cancer.

Kevin T. Conroy: Banning detecting it earlier and guiding personalized treatment.

Kevin T. Conroy: Cologuard Oncotype Dx and our pipeline of life changing diagnostics will power years of double digit growth and continued profitability.

Kevin T. Conroy: Peanuts achieve our purpose.

Danica: We wish him all the best as he enjoys his well-deserved time off. Now, we're happy to take questions. All right. At this time, I'd like to remind everyone, in order to ask a question, press the star, then the number one on your telephone keypad. We will only have time for one question per person.

Kevin T. Conroy: Before we turn to Q&A I'd like to thank Jeff for his many contributions to exact sciences over the last eight years. He has been in fail legal business partner and leader, we will miss him. Once he departs we wish him all the best as he enjoys his well deserved time off with his family.

Danica: We're now happy to take questions.

Danica: Great at this time.

Danica: I'd like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Danica: We will only have time for one question per person.

Unknown Executive: Your first question comes from Karen, Catherine Schulte with Baird. Please go ahead. Hey guys, thanks for the questions and congrats to Jeff; you will certainly be missed. Starting with Colagard, screening revenue grew 7% in the first quarter. Guidance implies, Unknown Attendee, Puneet Souda, Nathan Harrill, Kyle Stacey, Exact Sciences Corp. Sir, why don't I take the first part and hand it over to Jeff afterwards? Here's why we're excited about this year. The size of the opportunity remains enormous. Sixty million people in the U.S. are not up to date with colon cancer screening.

Speaker Change: Your first question comes from Karen Catherine Schulte with Baird. Please go ahead.

Catherine Walden Ramsey Schulte: Hey, guys. Thanks for the questions and congrats to Jeff and you will certainly be missed.

Catherine Walden Ramsey Schulte: Starting with Cologuard screening revenue grew 7% in the first quarter guidance implies more like 16% trade up full year kind of mid teens in the second quarter and over 20% in the back half. So can you just talk to what gives you confidence in that growth outlook and excites you about the Cologuard growth story from here and if I could just.

Speaker Change: Squeeze one in on profitability and you saw adjusted EBIT declined year over year in the first quarter. So if you could just talk to the drivers there that'd be great. Thank you.

Catherine Walden Ramsey Schulte: Sure why don't I take the first part and hand, it over to Jeff Afterwards.

Unknown Executive: Here's why we're excited about this year the size of the opportunity remains enormous 16 million people in the U S are not up to date with colon cancer screening and our customer relationships have broadened and deepened deepen it measurably over the last year.

Kevin T. Conroy: And our customer relationships have broadened and deepened immeasurably over the last year. There are over 330 health systems today that rely on electronic ordering and advanced tools that we provide are really our consulting services that we provide around I.T. Patients, there are over two million people today who are due for a rescreen. There will be 400,000 new patients due in Q2 alone. Payers, their gap closure programs will get into them.

Kevin T. Conroy: There are over 330 health systems.

Kevin T. Conroy: Today that rely on electronic ordering.

Kevin T. Conroy: Advanced tools that we provide are really our consulting.

Kevin T. Conroy: Services that we provide around it.

Kevin T. Conroy: Patients there are over 2 million people today, who are.

Kevin T. Conroy: Due for re screen, there will be 400000, new patients due in Q2 alone.

Kevin T. Conroy: Payers their gap closure programs will get into them, but that is a new and significant growth area at the biggest impact will be in Q4.

Kevin T. Conroy: But that is a new and significant growth area. The biggest impact will be in Q4. And then Q3, we'll start to see that impact. The power of the commercial team. The ExactNexus platform, our customer service, customer experience, and IT have been a differentiator for us with health systems and payers, and are clearly making an impact with patients.

Kevin T. Conroy: And then Q3 will start to see that impact.

Kevin T. Conroy: The power of the commercial team effort, we will get into talking about that.

Kevin T. Conroy: The exact nexus platform, our customer service customer experience and it has been a differentiator for us with health systems, and payers and clearly, making an impact with patients.

Kevin T. Conroy: And then the power of our brand. It hit an all-time high in Q1 in terms of brand awareness, the positive reaction to the creative digital and inline television commercials and social media engagement we've had. So all of these things are drivers.

Kevin T. Conroy: And then the power of our brand it hit an all time high in Q1 in terms of brand awareness.

Kevin T. Conroy: The positive reaction to the creative digital and.

Kevin T. Conroy: In line TV commercials and.

Kevin T. Conroy: And social media engagement, we've had so all of these things are drivers, yes, we we had a tough comp relative to Q1, we also.

Kevin T. Conroy: Yes, we had a tough comp relative to Q1. We also... You know, we turned down our sales and marketing investments, as you know, over the last year and really over the last couple of years, while we saw about approaching a billion dollars of growth. And the truth is, we probably turned that down a little bit too much.

Kevin T. Conroy: We recognize that at the back end of last year and starting in Q1, we increased our marketing investment. We, as of now, we have a complement of new primary care sales reps who are hitting the ground now. We've already seen the impact from the marketing investment in terms of accelerating growth. So that typically takes three to six months.

Kevin T. Conroy: You know, we turned down our sales and marketing investments.

Kevin T. Conroy: Investments as you know over the last year and really over the last couple of years, while we saw about.

Kevin T. Conroy: Approaching $1 billion of growth and the truth is we probably turned that down a little bit too much we recognize that.

Kevin T. Conroy: At the back end of last year and starting in Q1, we increased our marketing investments.

Kevin T. Conroy: We as of now we have a complement of new primary care sales reps who are.

Kevin T. Conroy: Are hitting the ground now.

Kevin T. Conroy: Already seen the impact from the marketing investment in terms of accelerating growth. So that typically takes three to six months and we're seeing that plus we are adding significant contingent of new reps around the country and we expect to see.

Kevin T. Conroy: And we're seeing that, plus we are adding a significant contingent of new reps around the country, and we expect to see additional growth from those. But our overall spend will still be less in sales and marketing in 24 than it was in 22.

Kevin T. Conroy: See additional growth from those reps.

Kevin T. Conroy: Our overall spend will still be less than sales and marketing and 20 for it than it was in 'twenty two.

Kevin T. Conroy: We know this added firepower will have a positive impact. And one thing that we always look at is the promotional response. The number of test orders that result from calling on deciles of physicians, and it's clear the more time, the more frequently our reps call on an office and a physician or nurse or physician assistant, you see a straight line increase with no flattening from zero to six calls per quarter.

Kevin T. Conroy: We know this added firepower will have a positive impact and one thing that we always look at is the promotional response to the.

Kevin T. Conroy: A number of test orders that result.

Kevin T. Conroy: I'm, calling on.

Kevin T. Conroy: Decile sub position and its clear the more time more frequently our reps call on an office and a physician or nurse or physician assistant you see a straight line increase with no flatly from zero to six calls per quarter that gives us.

Kevin T. Conroy: That gives us confidence that by adding reps, we will see it's just math. You will see an increase in the total number of tests. So I'll pause there.

Kevin T. Conroy: That by adding reps, we will see it it's math you will see.

Kevin T. Conroy: An increase in the total number of test orders. So I'll pause there, we'll be able to get into a lot of these areas is here and Jeff why don't you take the profitability, yes, and just to add to the Missouri remarks on on the comparison as I said in my remarks, we did have a really hard compare if you look at the two year stacked comp Q1 was up 24%.

Kevin T. Conroy: We'll be able to get into a lot of these areas. Everett is here, and Jeff, why don't you take the profitability? Yeah, and just to add to the comments or remarks on the comparison, as I said in my remarks, we did have a really hard comparison.

Jeffrey T. Elliott: If you look at the two-year stack comp, Q1 was up 24%. When you think back to last year, part of why the whole first half was so strong was because, late in 22, we made some pretty significant upgrades to both our billing systems and our patient compliance. That led to a bolus of high-margin revenue, really consider this really out of period revenue that helped out the first half of last year. Obviously, that's not going to keep repeating.

Jeffrey T. Elliott: When you think back to last year part of why we the whole first half with the strongest because of late in 'twenty. Two we've made some pretty significant upgrades to both our billing systems in a patient compliant systems that led to a bolus of high margin revenue really consider this really out of period revenue that helped out the first half of last year obviously.

Jeffrey T. Elliott: So we do face a really difficult comparison in the first half. Stefan, you can walk us through some of the comparisons. In the second half, comparisons do get much easier, and we do expect 20 percent growth plus in the second half. The reason I bring that up is also from a profitability standpoint; that comparison helped revenue and profits because when that revenue came in, it came in at a very high margin. So when you look at Q1, we expect that in a normal year, Q1 profitability will be the lowest of the year.

Jeffrey T. Elliott: That's not going to keep repeating so we do face a really difficult compare in the first half.

Stefan: Can you walk through some of.

Jeffrey T. Elliott: The comparisons in the second half comparisons do get much easier and we do expect 20% growth plus in the second half.

Jeffrey T. Elliott: The reason I bring that up is also from a profitability standpoint that comparison helped revenue and profits because when that revenue came in at <unk> at very high margin. So when you look at Q1, we expect Q1 in a normal year Q1 profitability will be the lowest of the year.

Jeffrey T. Elliott: We expect both the latest revenue growth and the highest OPEX as a percent of revenue throughout the year. However, I expect faster growth and lower OPEX as a percent of revenue. Again, the comparison is a bit easier.

Jeffrey T. Elliott: Thankfully the lightest revenue growth and the highest opex as a percent of revenue throughout the year I expect faster growth and lower opex as a percent of revenue.

Jeffrey T. Elliott: When you look at gross margin in Q1, it was a bit lighter, in part because of the automation we brought out. We had a huge step forward in automation. The team did a nice job bringing that online.

Jeffrey T. Elliott: Again, the comparisons get easier when you look at gross margin in Q1, they were a bit later.

Jeffrey T. Elliott: Because of the automation, we brought out we had a huge step forward in automation. The team did a nice job, bringing that online that will help margins approve overtime in the short term that added some fixed costs.

Jeffrey T. Elliott: Their margins a bit we also have this care gap initiatives that we've talked about bringing this source of revenue. It is adding significant EBITDA dollars, but it does come at a slightly lower gross margin that we'll work our way through but that did win in Q1 in Venezuela.

Speaker Change: Great. Thank you.

Jeffrey T. Elliott: That will help margins improve over time. In the short term, though, that added some fixed costs that weighed our margins a bit. We also have this Care Gap Initiative that we've talked about, which is bringing in a source of revenue. It is adding significant EBITDA dollars, but it does come at a slightly lower gross margin that we'll work our way through, but that did weigh in on Q1 a bit as well. Great, thank you. All right, our next question comes from Vijay Kumar with Evercore ISI. Please go ahead.

Jeffrey T. Elliott: Alright. Our next question comes from Vijay Kumar with Evercore ISI. Please go ahead.

Kevin T. Conroy: Hey guys, thanks for taking my question. And Jeff, wishing you all the best. My one question here, Kevin, perhaps, on what that is, you know, this comp that you didn't mention that are different ways of looking at it. Is the right way to look at this on a CAGR basis versus pre-pandemic levels, where it seems like it's pretty consistent when we do the CAGR math. And related to that, there's been some noise on the comparative landscape. I think one of the stool-based companies got an approval, an FDA approval. I'm curious about your thoughts on the comparative landscape.

Vijay Muniyappa Kumar: Hey, guys. Thanks for taking my question.

Kevin T. Conroy: Wishing you all the best My one question here, Kevin perhaps them.

Kevin T. Conroy: On what.

Kevin T. Conroy: What is that.

Kevin T. Conroy: Comps that you Didnt mentioned that there are different ways of looking at that is the right way to look at this as a key.

Kevin T. Conroy: AGR basis versus pre pandemic level, where it seems like it's pretty consistent when we do the CAGR path and related to that.

Kevin T. Conroy: Some noise on the <unk>.

Kevin T. Conroy: Competitive landscape I think one of them.

Kevin T. Conroy: <unk>.

Kevin T. Conroy: The stool based company, Scott and approvals and FDA approval I'm curious in your thoughts on the competitive landscape. Thank you.

Kevin T. Conroy: Thank you. Sure, let me go back to Colgaard and Colgaard Plus. Both have, and offer performance that is unequal to or superior to the fit and the performance of the studies that we ran were large studies, with a significant number of cancer patients across a broad age range, and ColoGuard Plus advanced the standard of care over COLA. Our specialized teams make sure that health care providers are aware of the broad studies that support co-occurrence, and we have the ability to deliver that in a very clear way, plus the strength of our platforms and all of that.

Kevin: Sure, Let me go back to Cologuard and Cologuard plus.

Kevin T. Conroy: <unk>.

Kevin T. Conroy: Both tests.

Kevin T. Conroy: Offer performance that is.

Kevin T. Conroy: On equal to.

Kevin T. Conroy: That is superior to.

Kevin T. Conroy: The fit test and the performance of the studies that we ran where large studies.

Kevin T. Conroy: With a significant number of cancers cancer patients across a broad eight.

Kevin T. Conroy: Age range and Cologuard plus advanced the standard of care over Cologuard.

Kevin T. Conroy: Our specialized teams make sure that healthcare providers are aware of.

Kevin T. Conroy: Broad studies that support Cologuard.

Kevin T. Conroy: And we have the ability to deliver that.

Kevin T. Conroy: In a very clear way plus the strength of our platforms and all of that but now you've got to go to remember anybody who brings a new screening test to market one of the key things that they need to do to have that test be relevant.

Kevin T. Conroy: But now you've got to go, remember, anybody who brings a new screening test to market, one of the key things that they need to do to have that test be relevant is to get in the quad. The path to getting into the quality measures is a very long one. We think a new test, and this excludes Colgard Plus because Colgard Plus, like Colgard, is already in the quality measures.

Kevin T. Conroy: As to get into the quality measures.

Kevin T. Conroy: The path to getting into the quality measures is a very.

Kevin T. Conroy: We've already, all that work has been done. New tests coming online need multiple studies, need broad studies. You need to study the Medicare population in a broad way and make it all the way through USPSTF, which is the trigger for quality. Well, USPSTF, our best guess is 2027 is the next update. And then it would be 28 or 29 for the quality. (Inaudible) As you know, we have a patent infringement and false advertising suit against an aspiring new entrant into the market. We won't be talking about that case, but we will, of course, defend our intellectual property aggressively. And Jeff, why don't you take the cake?

Kevin T. Conroy: We think.

Jeff: Our new test and this excludes cologuard pause because cologuard plus.

Kevin T. Conroy: Cologuard is already in the quality measures we've already.

Kevin T. Conroy: All of that work has been done.

Kevin T. Conroy: New tests coming online need multiple studies needs broad studies, you need to be studied the Medicare population in a broad way and make it all the way through USPS Tee up which is the trigger for the quality measures.

Jeff: Well USPS TF, our best guesses on 2027 is the next update and then it would be 28 or 29 for the quality measures.

Kevin T. Conroy: We.

Kevin T. Conroy: As you know, we have a patent infringement and false advertising suite.

Kevin T. Conroy: Hence an inspiring.

Jeff: New entrants into the market, we won't be talking about that case.

Jeff: We will of course defend our intellectual property.

Kevin T. Conroy: Aggressively and Jeff why don't you take the CAGR question sure Vijay on the two year stack I do think it's informative to look at the two year growth rates in this case because of the unusual growth we had last year.

Jeffrey T. Elliott: Sure. Vijay, on the two-year stack, I do think it's informative to look at the two-year growth rates in this case because of the unusual growth we had last year. It is informative, and to add some more color on it, if you look at some of the major growth drivers, like we've talked a lot about rescreens and 45. If you look at that two-year stack in the first quarter, both rescreens and that 45 to 49 younger age group both grew over 40% on a two-year stack, and that 50-plus age group grew consistently over 10%. So that gives us confidence that what we're seeing here is primarily a comparison issue. And again, when you look at the back half, the comparisons do get easier.

Jeffrey T. Elliott: As informative and to add some more color on it if you look at some of the major growth drivers that we've talked a lot about re screens in 45. If you look at the two year stack in the first quarter, both of re screens and that 45% to Fortinet younger age you. Both grew over 40% on a two year stack and that's 50 plus.

Jeffrey T. Elliott: Each group grew consistently over over up over 10%.

Jeffrey T. Elliott: So that gives us confidence that what we're seeing here is primarily a comparison issue.

Jeffrey T. Elliott: Again, when you look at the back half the comps do get easier so that.

Speaker Change: In addition to what Kevin talked about the investments that we're making will help accelerate growth after last year, leaving some growth on the table through through understanding.

Jeffrey T. Elliott: So in addition to what Kevin talked about, the investments that we're making will help accelerate growth after last year, leaving some growth on the table through underspending. Okay, our next question comes from Doug Schenkel with Wolf Research. Please go ahead. Hey, good afternoon.

Jeffrey T. Elliott: Okay. Our next question comes from Doug Schenkel with Wolfe Research. Please go ahead.

Douglas Anthony Schenkel: Hey, good afternoon.

Kevin T. Conroy: Kevin, thanks for all the comments on the market opportunity, which remains large and unpenetrated or underpenetrated. It's helpful to hear about your awareness building efforts and the progress you're making. And I think we recognize that the comparison was tough here. That said...

Douglas Anthony Schenkel: Kevin Thanks for all the comments on the.

Douglas Anthony Schenkel: Market opportunity, which remains large and on penetrated.

Kevin T. Conroy: Underpenetrated.

Douglas Anthony Schenkel: That's helpful to hear about your awareness building efforts and the progress Youre, making.

Douglas Anthony Schenkel: And I think we recognize that the comparison was top here.

Kevin T. Conroy: Said.

Unknown Executive: I do think that recognizing you're cutting things a smidge different, or at least not giving us quite as much information as you told us to be prepared for. It does seem like orders for practice dropped relative to what we saw maybe in every quarter last year. And I think it's fair to say that folks expected the COLA guard numbers to be a little bit better. I just want to make sure that we understand a few things. One, was there any transitory impact? Was there something that you maybe saw that was worse than expected when it came to respiratory or anything else that might have been transitory?

Douglas Anthony Schenkel: I do think recognizing youre cutting things, a smidge different or at least not giving us quite as much information as you told us to be prepared for it does seem like orders per practice drops relative to what we saw maybe in every quarter last year and I think it's fair to say that folks expected the cologuard number to be a little bit better.

Unknown Executive: So I.

Unknown Executive: I just wanted to make sure that.

Unknown Executive: We understand a few things like one.

Unknown Executive: Was there any transitory impact was there something that you maybe saw that was worse than expected when it came to respiratory or anything else that might have been transitory too was there anything different in terms of capturing reorder opportunities may be more of those lagged into the following quarter.

Kevin T. Conroy: Two, was there anything different in terms of capturing reorder opportunities, maybe more of those lagged into the following quarter? And then, kind of building off of this, when would you expect reps to make an impact? Is there still going to be a six to nine month lag, or is there something different here that could get you a quicker return on investment? All of this is meant to just get to the question of, based on what you're seeing in terms of trends, based on what we saw in the quarter, and, more importantly, as we look longer term and think about the opportunity, the progress you're making with awareness, all of those good things, Thank you.

Kevin T. Conroy: And then I guess kind of building off of this when would you expect reps to make an impact since they are still going to be a six to nine month lag or is there something different here that could get you a quicker return on investment.

Kevin T. Conroy: All of this is meant to just get to the question of.

Kevin T. Conroy: Based on what Youre seeing in terms of trends based on what we saw in the quarter more importantly, as we look longer term and think about the opportunity the progress youre, making with awareness all of those good things how do we get comfortable that cologuard for not just this year, but for the foreseeable future as a double digit growth franchise. Thank you.

Kevin T. Conroy: Yeah, well, let me start by saying despite the things you raised, I've never been more excited or confident about COAGAR. One thing that we learned from turning down the sales and marketing spend is that, well, you know, for six months, you'll see continued progress. I mean, and we saw that last year.

Speaker Change: Yes, well, let me start by saying.

Kevin T. Conroy: Despite the items you raised I've never been more excited or confident about cologuard.

Kevin T. Conroy: And one thing that we learned from turning down the sales and marketing spend is that.

Kevin T. Conroy: For six months, you'll see continued progress I mean.

Kevin T. Conroy: And we saw that last year.

Kevin T. Conroy: You can't go forever, though, with a brand as large and as impactful as Cologuard and the size of the investment that we were making. And the good news is, we have the data and analytics to back that up. We made the investments in the first quarter. And as we sit here today, without the addition of all of the salespeople in the first quarter, most of them are coming online right now.

Kevin T. Conroy: You can't go forever, though with a brand as large and as impactful as cologuard with the the size of the investment that we're making and the good news is we have the data and analytics to back that up we made the investments in the first quarter and as we sit here today.

Kevin T. Conroy: Without the addition of all of the salespeople.

Kevin T. Conroy: In the first quarter most of them are coming online right now.

Kevin T. Conroy: We've already seen a return to the growth that we've expected. So we have confidence that we're going to be able to deliver on this full year. And the other thing is this, and we'll get into this, and more dubs.

Kevin T. Conroy: Already seen a return to these.

Kevin T. Conroy: The growth that we expect so we have confidence that we're going to be able to deliver on this full year.

Kevin T. Conroy: And the other thing is this and we'll get into this.

Kevin T. Conroy: More debt.

Kevin T. Conroy: Health System. There are dozens and dozens and dozens of health systems who have come to us to say, please help us include our colon cancer screening with gap closure programs to help them optimize their EHR platforms, EPIC, etc. to use population health tools to get more people screened at a rate we have never seen before. And then these payer programs are significant programs. Last year was the first year we really saw that demand being generated, and just kudos to the team who's worked so hard to deliver it there.

Kevin T. Conroy: Health systems.

Kevin T. Conroy: There are dozens and dozens and dozens of health systems, who have come to us to say, please help us improve our colon cancer screening rates with gap closure programs with helping them optimize their.

Kevin T. Conroy: Sure.

Kevin T. Conroy: EHR platforms, FX et cetera to use population health tools to get more people screened that is.

Kevin T. Conroy: Better rate, we have never seen and then these payer programs are significant programs last year was the first year, we really saw that demand being generated and just kudos to the team has worked so hard to deliver there.

Kevin T. Conroy: And we already have strong insight into what is happening with those programs. So when we say we expect those programs to have an impact in Q3 and Q4, we have a line of sight into that. That's not guesswork. So Jeff, do you wanna add some color?

Kevin T. Conroy: <unk>.

Kevin T. Conroy: We already have strong insight into what is <unk>.

Kevin T. Conroy: Happening with those program. So when we say we expect those programs to have an impact in Q3 and Q4, we have line of sight into that Thats not guesswork. So Jeff do you want to add color sure. Doug you asked us initially on the reorder rate.

Jeffrey T. Elliott: Sure, yeah, Doug, you asked initially about the reorder rate. I know you like to do the math on this. The pool of doctors has grown, or ordering providers have grown so large, it's over 350,000 now. They're looking at that entire base for reordering math, which I think is kind of misleading.

Jeffrey T. Elliott: You'd like to do the math on this.

Jeffrey T. Elliott: The pool of doctors since Youre already providers has grown so large so over 350000 now theyre looking at that entire base for reordering, Matt I think is misleading.

Jeffrey T. Elliott: We internally often look at the different cohorts of doctors based on when they first ordered. So go back and look at the cohort that first ordered in 14, 15, you name it by year. And what I'll say is that every cohort of providers, based on when they first ordered, continues to climb. We have seen no slowing down. Kevin talked about that promotion response curve. It is up to the right.

Jeffrey T. Elliott: Charlie ought to look at the different cohorts of doctors based on when they first started so go back and look at the code. The first orders at 14 and 15 you name it by year and what I'll say is that every cohort of providers based on kind of when they first order continues to decline we have seen no slowing down Kevin talked about that promotion response curve. It is up into the right.

Jeffrey T. Elliott: The more time we spend educating a doctor, the more they order. And overall market share is still at this point, you know; we're about 12% now, and that's gonna continue climbing for years. You get a little misleading when that pool of 350,000 providers, some of those have since retired. So that puts a little downward pressure on the math you're doing, but the underlying trends there are very strong. Your second point on transitory impact. Yes, this year was a more normal flu season. Little bit more kind of fluid to like January, February. Last year the flu was almost non-existent; it was really early.

Jeffrey T. Elliott: The more time, we spend as you get a doctor the more they order and overall market share is still at this point, we're about 12% now that's going to continue to climb in for years.

Jeffrey T. Elliott: You get a little misleading when that pool of 350000 providers. Some of those have since retired so that puts a little downward pressure on the matter to it but the underlying trends there are very strong.

Jeffrey T. Elliott: Point on transitory impact this year was a more normal flu year.

Jeffrey T. Elliott: A little bit more fluid to the January February last year flu was almost nonexistent and was really early so this year. It was a more of a typical trend. When you look Q4 to Q1 Cologuard was down low single digits. That's more of a typical quarter to quarter progression that we got last year because last year at 22 Q4.

Jeffrey T. Elliott: So this year it was more of a typical trend. We need like Q4 to Q1. Colgate was down low single digits.

Jeffrey T. Elliott: That's more of a typical quarter to quarter progression than we got last year. Again, last year at 22, Q4 to Q1, we were up. That was unusual.

Jeffrey T. Elliott: So Q1 'twenty three we were up that was unusual.

Jeffrey T. Elliott: You asked about RIP impacts. On re-screening, the pool of patients becoming eligible grows by a third this year. It goes from 1.2 million last year to 1.6 million this year, so it's a significant growth driver for us. It's maybe the biggest growth driver this year, and our success rate at getting patients to come back to Colgate does continue to grow. When you look down on a quarter by quarter basis, the pool of patients becoming eligible in Q2 is significantly larger than Q1. This is just the way it works when you look back at the pool from three years ago.

Jeffrey T. Elliott: Don I think Kevin covered the question on Rip impacts on re screens the pool of patients becoming eligible grows by a third this year. It goes from $1 2 million last year to $1 6 billion. This year. So it's a significant growth driver for US is maybe the biggest growth driver this year and our success rate in getting patients to come back to Cologuard that does continue.

Jeffrey T. Elliott: To grow.

Jeffrey T. Elliott: When you look down on a quarter by quarter basis, the pool of patients to be coming to <unk>. In Q2 is significantly larger than Q1. This is just the way. It works when you look back at the quarter three years ago. So <unk> will be a huge driver is going to be a bigger driver in Q2 and beyond that it wasn't Q1.

Jeffrey T. Elliott: So re-screening will be a huge driver. It's gonna be a bigger driver in Q2 and beyond than it was in Q1. And if I could just add a little bit more color, Doug, this is Everett, to the rep impact and timeline. A couple things to that.

Everett: If I could just add a little bit more color. Doug. This is separate to the rep impact and timeline a couple.

Everett V. Cunningham: First of all, we were very intentional in hiring experienced reps that have deep relationships already existing in primary care. So while they're new to Exact Sciences, they are not new to primary care or selling in the space. And then the second thing is that we were, again, intentional about ensuring that they knew the geography, they had deep relationships already, these new reps did. So Kevin said they're in training now, they'll be in the field next week, and I'm confident that they'll hit the ground running. And because of our intentional nature, I think they're going to have a quicker impact than six months. I think it'll be more like three to four months.

Everett: Couple of things to that first of all we were very intentional to hire experienced reps that have deep relationships already existing in primary care. So while they are new to exact sciences. They are not new to primary care in selling in this space.

Everett V. Cunningham: And then the second thing is as we were again intentional to ensure that they know the geography. They have deep relationships already these new reps do so Kevin said, there and training now there'll be in the field next week and I am confident that they will hit the ground running and because of our intentional nature I think theyre going to have a quicker impact.

Everett V. Cunningham: Six months I think it'll be more three three or four months.

Unknown Executive: Great. Your next question comes from Patrick Donnelly with Citi. Please go ahead.

Everett V. Cunningham: Great. Your next question comes from Patrick Donnelly with Citi. Please go ahead.

Patrick Bernard Donnelly: Hey, guys, thanks for taking the questions. Obviously, a lot on the kind of reps, and the rep ad side, if I can just continue to add on that. Kevin, I guess, how do you think about potential revenue upside flowing through? I mean, obviously, last year, when you guys were able to raise the revenue targets, EBITDA seemed to go up by more every single time. You know, do you feel like now that you've added these reps and the cost basins set here, if you do see revenue upside, is the flow through there going to be pretty active? Or will additional costs come back?

Patrick Bernard Donnelly: Hey, guys. Thanks for thanks.

Speaker Change: Thanks for taking the questions.

Patrick Bernard Donnelly: See a lot on the kind of reps rep adds if I can just continue to add on that Kevin I guess, how do you think about potential revenue upside flowing through I mean, obviously last year you guys were able to raise the revenue targets EBITDA seem to go up by more every single time.

Patrick Bernard Donnelly: Do you feel like now that you've added kind of these reps in our cost base and set here.

Patrick Bernard Donnelly: If you do see revenue upside is.

Patrick Bernard Donnelly: Flow through they are going to be pretty attractive award us additional costs come back you've obviously mentioned a few times investing in these high impact sales marketing opportunities. So do you see more costs coming there is revenue upside or where are we in a pretty good spot here and then I don't know if I missed it but just the magnitude of the rep adds in terms of head count would be helpful. If you could bring.

Kevin T. Conroy: You've obviously mentioned investing in these high-impact sales marketing opportunities. So do you see more costs coming if there is revenue upside, or are we in a pretty good spot here?

Speaker Change: Thank you guys.

Kevin T. Conroy: And then I don't know if I missed it, but just the magnitude of the rep ads, you know, in terms of headcount, would be helpful if you could break that out. Thank you. Yeah, we're not, we are staying away from indicating the number of reps we are adding. But the math around this is pretty clear; you get a ton of leverage by adding these reps. So if there isn't, you know, you have a fixed amount of costs that you're adding. For example, we're not adding new area managers here. Our current area managers roughly end up with about one new rep per territory that they oversee.

Kevin T. Conroy: Yes, we're not we.

Kevin T. Conroy: Staying away from indicating the number of reps, we are adding but it is the math around this is pretty clear you get a ton of leverage by adding these reps. So there isn't.

Kevin T. Conroy: You have a fixed amount of cost that you are adding for example, we're not adding new area managers here, our current area managers roughly end up with about one.

Speaker Change: New Rep per territory that they oversee.

Kevin T. Conroy: And, and the leverage is incredible. I mean, what we have seen is the productivity in terms of the number of coal guard orders. Her call that our sales force makes continues to increase, um, year over year and, for that matter, quarter over quarter. So the productivity here is going to be significant, And we want to make sure that investors know we are doing this as we all would. We took a pause for the first time in 10 years in terms of the total number of reps promoting COLA.

Kevin T. Conroy: And.

Kevin T. Conroy: And the Leverages incredible I mean, what we have seen is the productivity in terms of the number of Cologuard orders per call that our Salesforce mix continues to increase.

Kevin T. Conroy: Year over year and for that matter quarter over quarter. So the productivity here is going to be significant and we wanted to make sure that investors know we are doing this as we.

Kevin T. Conroy: We took a pause for the first time in 10 years in terms of the total number of reps promoting cologuard.

Kevin T. Conroy: And what we're saying is, yeah, we probably shouldn't have taken that pause. We probably should have kept adding reps because of the size of the opportunity, and, um, so the leverage that we will continue to get over time by thoughtfully adding reps. We expect more reps and more revenue. Everett.

Kevin T. Conroy: And what we're saying is yes, we probably shouldn't have taken that pause, we probably should have kept.

Kevin T. Conroy: To keep adding but because of the size of the opportunity.

Kevin T. Conroy: And so the leverage that we will continue to get overtime by thoughtfully, adding reps, we expect more reps more revenue.

Everett V. Cunningham: Yeah. In addition to that, it was said earlier that there will be 50,000 new providers since the beginning of 2023. And we know based on what Kevin said, the more frequency that we have with not only our existing footprint but the 50,000 new providers, man, it's going to be so much leverage that our reps can generate with getting access into those offices. So we're excited. Our goal in Commercial Simple is to drive our existing footprint and to continue to create new providers writing COLA Guard first line. Just to add a little more color, this is Jeff.

Jeff: Yes. In addition to that it was.

Everett V. Cunningham: Said earlier that there is 50000 new provider since the beginning of 2023.

Everett V. Cunningham: And we know based on what Kevin said, the more frequency that we have with not only our existing footprint, but the 50000 new providers.

Everett V. Cunningham: It's going to be so much leverage that our reps can generate with getting access into those offices. So we're excited our goal is in commercial simple it's to drive our existing footprint and continue to create new provided providers writing Cologuard first line.

Everett V. Cunningham: We expect P&L leverage throughout every line in the P&L this year. It won't be the same kind of leverage we had last year. It would be like 16 points of improvement.

Everett V. Cunningham: I'll just add a little more color this is Jeff.

Everett V. Cunningham: We expect P&L leverage through every line in the P&L this year.

Jeff: It won't be the same kind of leverage we had last year that would be on the <unk> 16 points of improvement.

Speaker Change: We're tracking ahead of where we expect to be for a long term 27.

Speaker Change: Guidance, there so feel very good about hitting those numbers.

Jeffrey T. Elliott: We are tracking ahead of where we expect to be for our long-term 2027 guidance, and I feel very good about hitting those numbers. When you add new reps, though, again, leverage flows through very nicely.

Everett V. Cunningham: When you add new reps, so again leveraged fluids do a fairly nice you think of growth excellent gross margin, 80% plus and very strong throughout the P&L. So feel good about the peso leverage improvement from here. How did you did mentioned the upside I think you were tying that to the rest of investment I would just say that when we contemplated guidance start the year, we did assume these investments be it.

Jeffrey T. Elliott: So I wouldn't assume any growth we get from the reps in market and we're adding that's not above and beyond the guidance that is already baked into your guidance.

Jeffrey T. Elliott: Yes.

Jeffrey T. Elliott: Think of gross, extra gross margin, 80% plus, and very strong throughout the P&L. So feel good about the pace of leverage improvement from here. Patrick, you did mention the upside.

Jeffrey T. Elliott: Alright. Your next question comes from Dan areas with Stifel. Please go ahead.

Jeffrey T. Elliott: I think you were tying that to the rep investment. I would just say that when we contemplated guidance to start the year, we did assume these investments were made. So I wouldn't assume any growth we get from the reps or marketing we're adding. That's not above and beyond the guidance.

Patrick: Afternoon, guys. Thanks for the questions Kevin just looking at the presentations that you guys have teed up for Ww.

Jeffrey T. Elliott: One of them relates to helping docs work through colonoscopy backlog and then one relates to fit so.

Unknown Executive: That's already baked into the guidance. All right, your next question comes from Dan Arias with Stifel. Please go ahead. Good afternoon, guys.

Speaker Change: Two quick ones, if I can where do you think the collective backlog for colonoscopy is at this point.

Unknown Executive: Thanks for the questions. Kevin, just looking at the presentations that you guys have teed up for DUW, one of them relates to helping doctors work through the colonoscopy backlog, and then one relates to fit. So, two quick ones, if I can.

Daniel Anthony Arias: And then on fit do you have any data from the field on just how youre doing converting ship users is that is that success improving over time.

Kevin T. Conroy: Where do you think the collective backlog for colonoscopies is at this point? And then on fit, do you have any data from the field on just how you're doing converting fit users? Is that success improving over time? Yeah, so what we're seeing is it varies around the country, but let's say around three to six months. And we have seen that take up over the last three months. Actually, it's not a surprise.

Unknown Executive: Yes.

Kevin T. Conroy: So what we're seeing is it varies around the country, but let's say around.

Kevin T. Conroy: Three to six months backlog and we have seen that tick up over the over the last three months actually it's not a surprise.

Kevin T. Conroy: You have a fixed colonoscopy capacity in the U.S. of about five to six million screening colonoscopies a year and maybe about six plus million diagnoses. It's not changing because, on average, you get above net a couple hundred new GIs every year in the U.S., and Cologuard is taking a share from FIT. So what you're seeing is Cologuard is mainly getting people who've never been screened. They're getting people who have been screened with Cologuard in the past, and they're converting FIT. And colonoscopy utilization is staying the same. It's just not going to increase. And so these colonoscopy bathwalks aren't going to screen. My wife is overdue for a colon cancer screening. She has a family risk.

Kevin T. Conroy: The fixed colonoscopy capacity in the U S of about five to 6 million screening colonoscopy is here and maybe about six plus million diagnostic colonoscopy is not changing because on average you get about net a couple of hundred new <unk> every year in the U S.

Kevin T. Conroy: And Cologuard is taking share from fifth so what youre seeing is cologuard is mainly getting people who've never been screening theyre getting people, who have been screened with cologuard in the past and they are converting debt and colonoscopy utilization is staying the same it's just not going to increase and so these fees colonoscopy.

Kevin T. Conroy: Backlogs are.

Speaker Change: <unk> going to screen my wife.

Kevin T. Conroy: Is overdue for colon cancer screening she is has.

Kevin T. Conroy: Family risk.

Kevin T. Conroy: She's high-risk because of a family history, and her backlog is 9 to 12 months. Her wait time is 9 to 12 months to get screened.

Kevin T. Conroy: These high risk because of a family history.

Kevin T. Conroy: And.

Kevin T. Conroy: <unk> backlog is nine to 12 months or wait time is nine to 12 months to get screen. She said high risk.

Kevin T. Conroy: She said high risk. So we are seeing that all over the country. There are some parts of the country, New York, where you can get in pretty quickly, but that's not true in most parts of the country. Everett, do you want to add any color?

Kevin T. Conroy: So.

Everett: We are seeing that all over the country. There are some parts of the country, New York, where you can get them pretty quickly, but thats not true in most parts of the country average Q1 any color no. Thanks, Kevin I mean do my travels I've been in the field and I've seen this colonoscopy backlog situation.

Everett V. Cunningham: No, thanks, Kevin. I mean, in my travels, I've been in the field, and I've seen this colonoscopy backlog situation, and it is real; it's not going away. I have one example; we have hundreds of these examples, but one example is of a health system in Florida where they had 800 patients at average risk with an eight-month backlog. And we met with their C-suite. They, along with us, implemented an alert that went to all their physicians, and it alerted their physicians of a patient that came in. They were due for screening, and that alert stated that for that patient, they would get Cologuard first line.

Everett V. Cunningham: It is real it's not going away either one example, we have hundreds of these examples but one example of a health system in Florida, where they had 800 patients of average risk with a eight month backlog and we met with their C suite.

Everett V. Cunningham: They along with US implemented an alert that went to all of their position.

Everett V. Cunningham: And it is alerted their positions.

Everett V. Cunningham: Patient that came in.

Everett V. Cunningham: They were due for screening and that alert stated that for that patient that they would get cologuard first slide.

Everett V. Cunningham: And that's a good example of our partnership, making it easy, making it easy to be electronically ordered and have a partnership with the health system so that they can get their patients screened and not have a six month, eight month, 12 month backlog, and you're seeing these all over the, Alright, your next question comes from Jack Meehan with Nefron Research. Please go ahead. Thank you. Good afternoon.

Everett V. Cunningham: That's a good example of our partnership making it easy make it easy to be electronically ordered and have a partnership with a health system.

Jack Meehan: Their patient screening not have a six months eight months 12 month backlog and Youre seeing these all over the country.

Everett V. Cunningham: Alright. Your next question comes from Jack Meehan with Nephron Research. Please go ahead.

Jack Meehan: Thank you good afternoon.

Unknown Executive: Kevin, I think you mentioned the colon blood data from Blue Sea coming later this year. I was wondering if there was any more precision you could provide around the timing there and just update us on the benchmark you're looking for in terms of what would mark success. Sure, we had planned to generate that data in the summer, but that is now more likely to be in the fall, given the readouts that we have recently seen.

Everett V. Cunningham: Yeah.

Jack Meehan: Kevin I think you mentioned in the colon blood data from Blue C. Coming later this year I was wondering if there was any more precision than you can provide around the timing there and just update us on the benchmark you are looking for in terms of what would mark success.

Unknown Executive: Sure we had planned to generate that data in the summer that is now more more likely to be in the fall.

Unknown Executive: Even the Readouts that we have recently seen we have the luxury of time, and we've decided to take a little bit more time and run about 3000 more samples.

Unknown Executive: We have the luxury of time, and we've decided to take a little bit more time and run about 3,000 more samples, other samples with the test, and make sure that we collect more data on the specificity and the cutoff to make sure the test is as robust as possible, so that we plan to test it with several thousand prospectively collected samples in that extra time that we have. And we think that it's the right thing to do.

Unknown Executive: Other samples with the test and make sure.

Unknown Executive: We.

Unknown Executive: Collect more data on the specificity.

Unknown Executive: And the cutoff.

Unknown Executive: To make sure the test is as robust as possible.

Unknown Executive: So we plan to test it with several thousand post spectra bleed collected samples and debt.

Unknown Executive: Extra time that we have and we think thats the right thing to do.

Kevin T. Conroy: But let's position where we think our blood test is gonna be. We think that our blood test is probably going to perform similar to, maybe better than the other readouts that you have seen in the field. We've done seven case control studies, and you see the greatest amount of variability around pre-cancer detection, not around specificity or cancer.

Unknown Executive: But our position, where we think our blood test that's going to be we think that our blood test is probably going to perform similar to maybe better than.

Kevin T. Conroy: The other readouts that you have seen in the field.

Kevin T. Conroy: Done seven case control studies and you see the greatest amount of variability around pre cancer detection not around specificity our cancer detection.

Kevin T. Conroy: So that to me is the question mark, but at the end of the day, we're kind of assuming performance like we have seen. And then the thing to remember is that our test is a PCR test, or it's our proprietary version of PCR, which is a very low cost per test approach. And so when we have all the data about the people who have refused a frontline screening test, we have the ability to work with the providers, the health systems, the payers to get those people screened with our CRC blood tests and then to try to encourage them to switch to ColoGuard in the year after.

Kevin T. Conroy: That to me is the question Mark but at the end of the day, we're kind of assuming performance like we have seen.

Kevin T. Conroy: And then the thing to remember is that our test is a PCR test.

Kevin T. Conroy: <unk>.

Kevin T. Conroy: Our proprietary version of PCR, which is a very low cost per test approach and so when we have all the data about the people who.

Kevin T. Conroy: Have refused a frontline screening test, where we have the ability to work with the providers to health systems.

Kevin T. Conroy: The payers to get those people screened with.

Kevin T. Conroy: With our CRC blood test and then to try to encourage them to switch to cologuard and the year after that.

Kevin T. Conroy: So Beth, we think this is a meaningful opportunity for us, and we're clearly the best situated to deliver on that. Especially when you look at Medicare today, Medicare Part B is only about, it's under 20% of our overall opportunity, and Medicare Advantage is probably 22%.

Kevin T. Conroy: So we think this is a meaningful opportunity for us and we're clearly the best situated to deliver on that.

Kevin T. Conroy: Especially when you look at Medicare today, Medicare part D is only about it's under 20% of our overall opportunity in Medicare advantage is is probably 22% it's more than half of all the Medicare patients with the lower cost test we have the ability.

Kevin T. Conroy: It's more than half of all Medicare. With the lower cost test, we have the ability to go on contract with those Medicare Advantage plans with a clear plan to switch. Those patients take a test that gets a quality measure credit of three years, which is what they care about. So we're excited about this opportunity, and we think it can lead to getting more people screened and also drive growth at Exact. Your next question comes from Andrew Brackmann with William Blair. Please go ahead. Hi guys, good afternoon.

Andrew Frederick Brackmann: Go on contract with those Medicare advantage.

Andrew Frederick Brackmann: Our plans with a clear plan to switch those patients to a test that gets a quality measure credit up three years, which is what they care about.

Andrew Frederick Brackmann: We're excited about this opportunity and we think it can lead to getting more people screened.

Andrew Frederick Brackmann: And and.

Andrew Frederick Brackmann: Also drive growth at exact.

Andrew Frederick Brackmann: Next question comes from Andrew <unk> with William Blair. Please go ahead.

Unknown Executive: Thanks for taking the question. Jeff, thanks, and enjoy the time away. Best of luck. Aaron, welcome.

Andrew Frederick Brackmann: Hi, guys. Good afternoon. Thanks for taking the question, Jeff Thanks, and enjoy the time best.

Andrew Frederick Brackmann: Best of luck Eric welcome.

Unknown Executive: You know, you guys talked a couple times about your progress with health systems, but can you maybe sort of talk about your line of sight to additional partnerships with these groups and just sort of the nature of the discussions now versus maybe a couple of years ago? Yeah, thanks, Andrew. Yeah, in addition to, you know, the backlog of colonoscopies, health systems want to make sure that they can partner with companies that go beyond the product, that they have other things that can help them with workflow, can help them with staff turnover.

Andrew Frederick Brackmann: You guys talked a couple of times about your progress with health systems, but can you maybe sort of talk about your line of sight to additional partnerships with each groups and just sort of the nature of discussions now versus maybe a couple of years ago.

Unknown Executive: Yes.

Speaker Change: Thanks, Andrew Yes. In addition to backlog of Colonoscopy health systems.

Speaker Change: They want to make sure that they can partner with companies that.

Unknown Executive: Go beyond product that they have other things that can help them with workflow can help them with the staff turnover and Thats, where we fit really really nicely the workflow piece of it.

Unknown Executive: Electronically interface with our products, which is great.

Unknown Executive: And that's where we fit really, really nicely. The workflow piece of it, we're electronically interfaced with our products, which is great. In terms of adding additional things to them, we have an amazing customer service organization that not just, we're not just providing products, but we're helping them get their patients screened. And that back-end support is tremendous.

Speaker Change: In terms of adding additional things to them, we have an amazing customer service organization.

Unknown Executive: Not just we're not just providing product that we're helping them get their patients screened and that back end support is tremendous.

Everett V. Cunningham: The other thing I'll mention about health systems is the data and analytics that we provide. So a lot of health systems are actually blinded to, you know, a lot of data that they need to get at. So we actually go in with accurate lists that need to be screened the first time or re-screened, or we have a 45 to 49 population that they need to actually detect. When we provide that data and analytics to them, again, we're helping them with more than just the product. And that's where we're seeing these partnerships increase quarter over quarter. Okay, your next question comes from Puneet Souda with Lee Rink Partners. Please go ahead.

Unknown Executive: Other thing I'll mention about health systems are the data analytics that we provide so a lot of health systems are actually they are blinded to a lot of data that they need to get at so we actually go in with accurate list that need to be screened first time or re screen or we have a 45% to 49 population that they need to actually detect when we provide.

Puneet Souda: That data and analytics to them again, we're helping them broader than just the product and that's where we're seeing these partnerships increase quarter over quarter.

Puneet Souda: Okay. Your next question comes from Tony <unk> with Leerink Partners. Please go ahead.

Unknown Executive: Yeah, hey guys, thanks for taking my questions. And Kevin, I have a bigger question for you. You know, it appears that the relationship of Cologuard tests to Cologuard reps and the leverage is similar to what you had, you know, a few years ago. I mean, simply put, more reps means more Cologuard orders. I mean, as this is the first time you have slowed down investments in a decade on the reps. So, you know, the question is, if the lesson here is that you will need to continue to scale the sales force as you penetrate the market further for Cologuard in the next few years, is it safe to say that the scaling has to continue and the, you know, the investments into the business have to continue?

Puneet Souda: Yeah, Hey, guys. Thanks for taking my questions and Kevin a bigger question for you.

Unknown Executive: Yes.

Unknown Executive: It appears to the relationship of Cologuard tests to Cologuard reps and the leverage is similar to what you had few years ago, I mean simply put more reps means more cologuard orders I mean as.

Unknown Executive: As this is the first time, you had slowed down investments in a decade on the rep. So the question is if the lesson is here is that you will need to continue to scale. The sales force as you penetrate the market the market further for Cologuard in the next few years is it safe to say that scaling has to continue.

Unknown Executive: Or is there improved leverage that you will continue to get as we get into our penetration numbers for, you know, Cologuard? I think the answer to that is, and we will increase investments, and we will get more leverage. So as we become a $2, $2.5, $3, $4 billion category, we will continue to make additional investments. And it's the right thing to do.

Unknown Executive: The investments into the business have to continue or is there an improved the leverage that you will continue to get as we get into higher penetration numbers for cologuard.

Unknown Executive: I think the answer to that is and we will increase investments.

Unknown Executive: And we will get more leverage.

Unknown Executive: As we become a two two and a half three $4 billion.

Unknown Executive: Category.

Unknown Executive: It will.

Kevin T. Conroy: It's the right thing to do for patients. It's the right thing to do for our customers. They actually want us to come in and help educate their physicians or nurses, their physician assistants.

Unknown Executive: Continue to make additional investment and it's the right thing to do it's the right thing to do for patients. It's the right thing to do for our customers they actually want us to continue.

Kevin T. Conroy: And help educate their physicians or nurses there physician assistant. So we will have the ability to do this we're talking about a pretty modest investment in terms of <unk>.

Kevin T. Conroy: <unk> force growth relative to the <unk>.

Kevin T. Conroy: It takes.

Kevin T. Conroy: So we'll have the ability to do this. We're talking about a pretty modest investment in terms of Salesforce growth relative to the impact. It takes three to six months to get a return on the investment that you've made because the number of Couillard orders per office visit is high.

Kevin T. Conroy: Three to six months to get a return on the investment that you've made.

Kevin T. Conroy: Because the number of Cologuard orders FERC office visit is high we haven't I think laid out what that number is but it's 50% higher now than it was.

Kevin T. Conroy: We haven't, I think, laid out what that number is, but it's 50% higher now than it was two years ago, so it continues to grow, and it just makes sense. You would be disappointed in us, and investors would be disappointed in us if we didn't make continued investments in our sales. And I'll just, this is Everett. I'll just add one other thing to that is... As we. Unlock new opportunities in the field. And I think about our relationships with health.

Everett: Two years ago. So it continues to grow and it just makes sense.

Everett: I'd be disappointed investors would be sweet.

Everett: Appointed and I will say, we didn't make continued investments in our sales force.

Kevin T. Conroy: And I'll just this is Eric I'll just add one other thing to that is.

Everett: As we.

Everett: Unlock new opportunities in the field and I think about our relationships with health systems, our relationship with payers in terms of care gap opportunities.

Everett V. Cunningham: Our relationship with payers in terms of care gap opportunities. We're doubling down in terms of our federally qualified health centers, Challenged Geographies, and Zip Codes. I talked about the new providers that we generated in the last year. As we unlock these new segments of growth, we're going to need sales reps, account executives, and multicultural approaches to driving this business. And so it's not just adding reps for the sake of adding reps but adding reps to get at these new opportunities of growth.

Everett V. Cunningham: We are doubling down in terms of our federally qualified health centers in challenged geographies in Zip codes.

Everett V. Cunningham: I talked about the new providers.

Everett V. Cunningham: Generated in the last year as we as we unlock these new segments of growth.

Everett V. Cunningham: Going to need sales reps account executives.

Everett V. Cunningham: Multi cultural approaches to driving this business and so it's not just adding.

Everett V. Cunningham: Adding reps for the sake of adding reps, but adding reps to get these new opportunities of growth.

Speaker Change: Got it helpful guys. Thank you.

Unknown Executive: Helpful, guys. Thank you. All right, our next question comes from Matt Sykes with Goldman Sachs. Please go ahead.

Matthew Carlisle Sykes: Alright. Our next question comes from Matt <unk> with Goldman Sachs. Please go ahead.

Unknown Executive: Good afternoon, thanks for taking my questions. Apologies up front, I'm going to ask another marketing leverage question, but mine's focused on sort of the shift and mix towards larger health systems and whether that creates more leverage. I'm just wondering if that will allow you that operating leverage you're talking about in terms of increasing marketing spend leading to ever increasing revenue. Just how do the health systems play into that dynamic?

Matthew Carlisle Sykes: Hey, good afternoon. Thanks for taking my questions I apologize upfront I'm going to ask another marketing leverage question, but mine is focused on sort of the shift in mix towards larger health systems, and whether that creates more leverage.

Unknown Executive: Either from a centralized call point or the fact that some of the health systems once adopted kind of do some of the marketing for you within the system I'm. Just wondering if that will allow you that operating leverage youre talking about in terms of increasing marketing spend leading to ever increasing revenue just how does the health system play into that dynamic.

Kevin T. Conroy: You know, there is no doubt that you're seeing that leverage is going back over the last couple of years. And Jeff can provide the details in terms of the dollar amount of ColoGuard growth, I believe, around $800 million over the last couple of years, with a sales force that is smaller than it was two years ago, and a marketing spend that was smaller than it was. So we're not, you know, the leverage is obvious. The question is, how much do you eat that up?

Unknown Executive: That there is no doubt that youre seeing that leverage is going back over the last couple of years and Jeff can provide the details in terms of the.

Kevin T. Conroy: Dollar of Cologuard growth I believe around $100 million over the last couple of years with the sales force that is smaller than it was two years ago and our marketing spend that was smaller than it was so we're not.

Kevin T. Conroy: Leverage is obvious.

Kevin T. Conroy: <unk> is how much do you keep that up and we're eating it up less than the 2022 spent so.

Kevin T. Conroy: And we're eating it up less than the 2022 spend. So the leverage we're getting out of health systems, the leverage we're getting out of payers, The payer leverage is incredible because that is a very small team that is executing on those relationships, and then our IT team and a small group of people around customer experience are really delivering that impact. So the payer segment is a huge opportunity as we look out over the next five years. And the leverage gets even better over time.

Kevin T. Conroy: The leverage we're getting on with health systems, the leverage we're getting out of Payors.

Kevin T. Conroy: The payer leverages incredible because that is.

Kevin T. Conroy: A.

Kevin T. Conroy: Very small team that is executing on those relationships and then our.

Kevin T. Conroy: <unk> and.

Kevin T. Conroy: And a small group of people around customer experience are really delivering that so this is.

Kevin T. Conroy: Payer segment is a huge opportunity.

Kevin T. Conroy: Opportunity as we look out over the next five to 10 years.

Kevin T. Conroy: And the leverage gets even better over time today here, we are talking mainly about cologuard, but as we add new products.

Kevin T. Conroy: You know, today here we are talking mainly about Cologuard, but as we add new products, as we, you know, launch new products through the sales team, through this electronic ordering channels, through the same customer care team, the leverage gets even better. So we're still building some of the foundation here and getting leverage. And over time, I think things will get a lot more traction. Thank you very much. Your next question comes from Dan Brennan with E.D. Cohen.

Daniel Brennan: Launched new products with the sales team business electronic channels sort of same customer care team.

Kevin T. Conroy: Our leverage gets even better so we're still building some of the foundation here and getting leverage and over time, I think things get a lot more attractive.

Daniel Brennan: Thank you very much.

Kevin T. Conroy: Okay.

Kevin T. Conroy: Your next question comes from Dan Brennan with BD Kelly. Please go ahead.

Unknown Executive: Please go ahead. Great, thanks. Thanks for the question, Jeff. Obviously, good luck. Great working with you. Kevin, so I thought I heard you mention earlier to Doug's question, maybe something about the quarter off to a good start. Maybe there was some comment.

Daniel Brennan: Great. Thanks, Thanks for the question, Jeff Obviously, good luck, great working with you.

Daniel Brennan: Kevin I thought I heard you mentioned earlier to Doug's question, maybe something about the quarter off to a good start maybe there was some comment I just wanted to clarify that.

Kevin T. Conroy: I just wanted to clarify that. B, you know, you've talked about these payer programs in the back half of the year. Sounds like it could be notable. Could you just help frame how we think about those, like size and anything of that?

Daniel Brennan: Can you talk about these payer programs in the back half of the year. It sounds like it could be notable could you just help frame how we think about those like size and anything of that and then Jeff you talked about these out of period captures that you had last year would you be could you kind of share with us out of the $1 8 million Cologuard tests in the first half.

Kevin T. Conroy: And then Jeff, you know, you talked about these out-of-period captures that you had last year. Would you be, could you kind of share with us some of the 1.8 million Cologuard tests in the first half of last year? I know, you know, those grew 34% year over year. Does that make any sense, or can you help us think through it? What percent of those were kind of out of period so we can kind of normalize things and get a better sense of the underlying growth rate? And then any color on from 45 to 49?

Kevin T. Conroy: Last year I know those grew 34% year over year like any sense or can you help us think through just what percent of those kind of went out of period. So we can kind of normalize things you can get a better sense of the underlying growth rate.

Kevin T. Conroy: And then any color on 45% to 49 haven't been haven't heard it come up like in terms of kind of contribution or anything on the quarter.

Jeffrey T. Elliott: I haven't heard it come up, like in terms of kind of contribution or anything for the quarter. You know, we had 105 million in our model wondering if we were in the right zip code. Thank you.

Jeffrey T. Elliott: We had $105 million in my model I'm wondering if we were ninth ZIP code. Thank you.

Kevin T. Conroy: We'll try to keep track of all those questions. I think the first one, what I said, was just based on the marketing investment alone, the increased marketing investment in Q1. We are seeing accelerated growth in Q2, so we have confidence with the guide that we've given for Q2. And then when you add the Salesforce ads in, we have even more confidence. So in terms of payer programs in the back half, I don't think we're prepared to size that right now. Last year, it was in the 10s of millions of dollars, total, and we think it will be significantly more than that in the back half of this year.

Jeffrey T. Elliott: We will try to keep track of.

Kevin T. Conroy: All those questions I think the first one what I said was just based on the marketing investment alone the increased marketing investment in Q1.

Kevin T. Conroy: We have.

Kevin T. Conroy: Yes.

Kevin T. Conroy: Seeing accelerated growth.

Kevin T. Conroy: In Q2, so we have to have confidence with the guide that we've given for Q2.

Kevin T. Conroy: And then when you add the sales force.

Kevin T. Conroy: And we have even more confidence so.

Kevin T. Conroy: In terms of payer programs in the back half.

Kevin T. Conroy: Don't think we're prepared to.

Kevin T. Conroy: Is that right now.

Jeffrey T. Elliott: So we'll probably provide more clarity as time goes on, but that's about as much clarity as Jeff will allow in his last earnings call. Dan, thanks. A couple more here.

Kevin T. Conroy: Last year it was in the <unk>.

Jeffrey T. Elliott: Tens of millions of dollars total and we think it will be significantly more than that.

Jeffrey T. Elliott: In the back half of this year. So we'll probably provide more clarity as time goes on but that's about as much clarity as Jeff will allow.

Jeffrey T. Elliott: His last earnings call.

Jeffrey T. Elliott: Bob.

Unknown Executive: U.S. on 45 to 49; still very strong growth here. And, you know, when you look at the size of this opportunity, about 20 million people, about 4 million people turn 45 every year, and essentially all of them are on screens. So Colgate fits in really well.

Dan: Yeah. Thanks, a couple more here at 45% to 49 still very strong growth here.

Unknown Executive: When you look at the size of this opportunity is about 20 million people and about 4 million people turned 45 every year. It essentially all Martin screens, so cologuard fits in really well, it's a huge opportunity and it's approaching 20% of revenue of screening revenue today.

Jeffrey T. Elliott: It's a huge opportunity, and it's approaching 20 percent of revenue from screening revenue today. So, very strong growth. It did volume through double digits in Q1, even with that tough comp.

Jeffrey T. Elliott: So very strong growth.

Jeffrey T. Elliott: Volumes grew double digits in Q1, even with that tough comp, we expect strong growth there to continue.

Jeffrey T. Elliott: And we expect strong growth there to continue. Sever talked a bit about increasing some of the investments targeted at the cigarette population. But there's still a long way for this to go.

Jeffrey T. Elliott: We talked a bit about some of the investments targeted the sugar population. There is still a long ways for this to run on that.

Jeffrey T. Elliott: U.S. on the sequential kind of last year, what was the impact? We have given some clues here. We haven't sized it, but I'll kind of reiterate that in a normal year, you would expect Q4 to step down and then to rise in Q1. Last year, we saw the opposite. We saw Q1 up. I think it was up almost close to 10 percent. A few things happened. One was the abnormal flu season last year, very light, very early.

Jeffrey T. Elliott: The sequential kind of last year, what was the impact.

Jeffrey T. Elliott: We have to give us some clues here, we havent sized it but I'll kind of reiterate that in a normal year, you would expect Q4 to step down into Q1 bump last year. We saw the opposite we saw Q1 up I think it was up almost close to 10% a few things happened.

Jeffrey T. Elliott: Was the abnormal flu season last year very light very earlier this year more of a normal flu season.

Jeffrey T. Elliott: This year, more of a normal flu season. The other were the IT upgrades. Upgraded the billing systems and the patient compliance systems. So that whole delta is not out-of-period revenue.

Jeffrey T. Elliott: The other worthy.

Jeffrey T. Elliott: Upgrades upgraded the billing systems and efficient compliance system. So.

Jeffrey T. Elliott: Hope Delta is not out of period revenue some of that is backed up a little.

Jeffrey T. Elliott: Yeah.

Unknown Executive: Some of that is the impact of the flu. Okay, your next question comes from David Westenberg with Piper Sandler. Please go ahead.

Jeffrey T. Elliott: Okay. Your next question comes from David Westenburg with Piper Sandler. Please go ahead.

Unknown Executive: Hi, thank you for taking the question and congratulations, Jeff, and have a good Next Chapter in Your Life. Investors were a little bit concerned, I think, with some of the implications for the back half of the year ramp. I actually think you did lay out that the comps in the front half of the year were pretty challenging.

David Michael Westenberg: Hi, Thank you for taking the question and congrats Jeff.

Unknown Executive: Good.

Unknown Executive: Next chapter of life.

Speaker Change: Just wanted to.

Unknown Executive: Investors were a little bit concerned I think with some of the implications for the back half of the year ramp I actually think you did lay out the comps in the front half of the year.

Unknown Executive: Were pretty challenging and I know, we're kind of belaboring. The question that you just kind of duck question and.

Unknown Executive: And I know we're kind of belaboring the question, this kind of Doug question and Dan's as well, but can you give us any sense of trends in terms of hospital utilization in March and how much, you know, maybe that flows through? Give us a reminder of how long it takes to kind of flow through the P&L and see some of that impact, maybe in April and May. And I know, you know, you're not in the habit of giving kind of a month by month breakdown.

Unknown Executive: And as well, but can you give us any sense of trends in terms of.

Unknown Executive: Hospital utilization in March and how much maybe that flows through give US a reminder of how long. It takes you to kind of flow through the P&L.

Unknown Executive: Some of that impact maybe in April and May and I know you're not in the habit of giving kind of a month by month play, but I, just really think that.

Jeffrey T. Elliott: But I just really think that, you know, maybe a little bit of color on why that second half of the year step up is not that ridiculous. And then, just as a clarification, I mean, I think of our models and, you know, prior to this earnings release, sorry, prior to this print versus right now. I mean, we really aren't going to change very much, right? You're not really asking us to change almost anything from the initial guidance, right? So anyway, that's just it. Yeah, this is Jeff.

Jeffrey T. Elliott: It maybe a little bit of color on why that's again why that second half of the year step up is not that ridiculous and then just as a clarification I mean, I think of our models and <unk>.

Jeffrey T. Elliott: Prior to this this earnings or sorry prior to this print versus right now I mean, we really arent going to change very much right youre, not really asking us to change almost anything from the initial guidance right. So anyway, that's just that.

Jeffrey T. Elliott: I'll start. Agreed. We maintain guidance. Look, we're only 90 days in. It's a long year. We feel very good about our ability to achieve this year and the longer-term goals. I think we did articulate the comps as very challenging in the front half. They get easier as the year goes on.

Jeffrey T. Elliott: Yeah. This is Jeff I'll start up agreed we've maintained guidance.

Jeffrey T. Elliott: And it is in the long year.

Jeffrey T. Elliott: Feel very good about our ability to achieve this year and longer term goals.

Jeffrey T. Elliott: We talked about the investments. We were already starting to see the impact of the marketing investments, and the sales rep investments. And in the care gap program, Kevin Gayson clues on sizing, which inherently is more second-half weighted, seeing very good early demand and confident in the growth in the second half there. You asked about the flow through of kind of macro factors into our P&L. The typical timing from, let's say, from an order, which a physician typically would order Colagard or Oncotype during a face-to-face visit.

Jeffrey T. Elliott: I think we did articulate the comps very challenged in the front half they get easier as the year goes on we talked about the investments already starting to see the impact in April of the marketing investments.

Jeffrey T. Elliott: Sales rep investments very confident there that will play off.

Jeffrey T. Elliott: Kind of mid year and beyond again, we've done this before we know the reps curious very strong return and we're looking forward to seeing that.

Jeffrey T. Elliott: And then the Carryout program, Kevin gave some clues on sizing that inherently is more second half weighted seemed very good early demand.

Jeffrey T. Elliott: Confident that the growth in the second half there.

Jeffrey T. Elliott: You asked on the flow through.

Jeffrey T. Elliott: Kind of macro factors into our P&L. The typical timing bump from let's say from an order which.

Jeffrey T. Elliott: Consistent with the order cologuard or Oncotype during up a face to face visit cologuard as a wellness visit so think of 30% to 40 days or so from a wellness visit to the BP and at the time, we get to revenue there can be a longer tail.

Jeffrey T. Elliott: Colagard is a wellness visit. So think of 30 to 40 days or so from a wellness visit to the median time we get to revenue. But there can be a longer tail. It can be up to, say, 12 months, and most of that happens fairly early.

Jeffrey T. Elliott: It can be up to say 12 months most of that happens fairly early.

Jeffrey T. Elliott: You asked about overall hospital utilization. That's not something we typically monitor broadly. We look more at things like wellness visits and screening trends. Wellness visits have been softer. This is a multi-year trend we've seen. They have been softer. While there are still 60 million people out there who need to be screened today, we expect very strong growth to continue.

Jeffrey T. Elliott: When do you think you asked on kind of overall hospital utilization, that's not something we typically monitor broadly we look more at things like wellness visits and screening trends wellness visits have been softer. This is a multiyear trend we've seen that they have been softer while there is still 60 million people out there who need to be screened today we.

Jeffrey T. Elliott: <unk> very strong growth to continue what was it had been down year on year recently, I think close to 10% in recent in recent quarters, that's something that we can fight through given the opportunity that presents here.

Jeffrey T. Elliott: Yeah.

Speaker Change: Okay. Thank.

Speaker Change: Thank you.

Unknown Executive: I think it's even close to 10% in recent quarters. That's something that we can fight through, given the opportunity that is presented here. All right, we might be able to take one more question. Mark Massaro with BTIG, please go ahead.

Speaker Change: Maybe I'll sneak one more question.

Mark Anthony Massaro: Massaro with BTG. Please go ahead.

Unknown Executive: Hey guys, thank you, and Jeff, you'll be missed, and Aaron, welcome to Exact. So I'll ask you two questions. One is for you, Kevin, you talked about the USPSTF, perhaps now in 2027. I think many of us were thinking 2026, although we also recognize there's been a little bit of a delay with their bulletin. Can you just expand on why you think it'll go into 2027? And then maybe for you, Jeff or Kevin, you know, certainly, you know, I think one of the surprises of the call was your increased expansion. of salespeople

Mark Anthony Massaro: Hey, guys. Thank you and Jeff Youll be missed and Aaron welcome to exact.

Unknown Executive: So I'll ask two questions. One is for you Kevin you talked about USPS TF, perhaps now in 2027.

Unknown Executive: Many of US were thinking 2026, although we also recognize there has been a little bit of a delay.

Unknown Executive: With their bulletin can you just expand on why you think it will go into 'twenty seven and then maybe for you Jeff or Kevin.

Unknown Executive: Certainly I think one of the surprises on the call with your increased expansion of salespeople.

Kevin T. Conroy: Kevin, you indicated that overall spending will still be down in 24, relative to 23. Is that just on the sales and marketing line? Or is that total OPEX?

Kevin T. Conroy: Kevin you indicated that overall spending will still be down in 'twenty four relative to 'twenty three is.

Kevin T. Conroy: Is that just on the sales and marketing line or is that total opex and in order to keep your revenue guidance intact.

Kevin T. Conroy: Help us think about what some of the puts and takes might be in other words.

Kevin T. Conroy: Should we expect a little bit of less investment in R&D.

Kevin T. Conroy: And in order to keep your revenue guidance intact, help us think about what some of the puts and takes might be. In other words, should we expect a little bit of less investment in R&D through what I said was a sales and marketing expense? It will still be less than it was in 22.

Kevin T. Conroy: What I said was that sales and marketing expense.

Kevin T. Conroy: In 2000.

Kevin T. Conroy: Okay.

Kevin T. Conroy: Would still be less than it was in 'twenty two.

Kevin T. Conroy: So it will obviously be up from 23 and somewhere in that range. And obviously, we have a lot of room in our overall budget to be able to achieve all of our goals, both top line and bottom line, with the resources we have. And again, I'd like to emphasize that this is a modest increase in terms of our overall sales spend and marketing spend. But just for clarity's sake, we wanted to deliver that. And also, I will reiterate our confidence in the guys. So we know our business.

Kevin T. Conroy: So it will obviously be up from 23.

Kevin T. Conroy: Somewhere in that range and obviously we have.

Kevin T. Conroy: We have a lot of room in our overall budget be able to achieve all of our goals both topline and bottomline.

Kevin T. Conroy: With the resources, we have and again I'd like to emphasize that this is.

Kevin T. Conroy: Modest increase in terms of our overall sales spend.

Kevin T. Conroy: Marketing spend but just for clarity sake, we wanted.

Kevin T. Conroy: To deliver that and also I will reiterate our confidence in the guidance.

Kevin T. Conroy: We know our business, we know really well I'll repeat what I said earlier.

Kevin T. Conroy: We know it really well. I'll repeat what I said earlier with this. I've never been more confident about the near and long-term trajectory of Exact. And, you know, we're excited about Colgard and also the new product launches that we have that are coming as well. In terms of the USPSTF time, typically, what you would have seen already is, in the first quarter, a document that emanates from USPSTF laying out what the study plan is and what the whole schedule is.

Kevin T. Conroy: I've never been more confident about.

Kevin T. Conroy: The near and long term trajectory of exact and.

Kevin T. Conroy: And we've just heard that that may be pushed out another year. It's not a surprise. USPSTF is a really busy group with a fixed amount of resources. And if you remember COLAGuard, when it first got included in the guidelines in 2014, the prior update was eight years before that. So, although the stated schedule was five years, it was eight years. So, um, you know, it's not unusual for there to be a little bit of a delay and it's critical, you know, new, um, aspiring entrants can come to market, but we know how hard it was to, um, deliver on, uh, Cologuard in those early years when we weren't in the quality. It was... It was tough to get customers to order PoloGuard as a replacement for the FitTest, which was in the price range.

Kevin T. Conroy: We're excited about Cologuard and also the new product launches that we have that.

Kevin T. Conroy: At our coming as well.

Kevin T. Conroy: In terms of the USPS TF time.

Kevin T. Conroy: Typically what you would have seen already is in the first quarter.

Kevin T. Conroy: Yeah.

Kevin T. Conroy: Okay.

Kevin T. Conroy: Document that emanates from USPS TF laying out what the study plan is and what the whole schedule is.

Kevin T. Conroy: And we've just.

Kevin T. Conroy: Heard that that may be pushed out a year, that's not a surprise USPS TF is a really busy group with a fixed amount of resources and if you remember.

Kevin T. Conroy: Cologuard lamp for Scott included in the guidelines in 2014.

Kevin T. Conroy: Prior update was eight years before that so although the stated schedule is five years.

Kevin T. Conroy: It was eight years and then $5 60 was included.

Kevin T. Conroy: So.

Kevin T. Conroy: It's not unusual for there to be a little bit of a delay and it's critical.

Kevin T. Conroy: <unk>.

Kevin T. Conroy: Yes.

Kevin T. Conroy: Aspiring entrants can come to market, but we know how hard it was to.

Kevin T. Conroy: Deliver on.

Kevin T. Conroy: Cologuard in those early years, when we werent in the quality measures.

Kevin T. Conroy: It was.

Kevin T. Conroy: It was tough to get customers to order cologuard.

Kevin T. Conroy: Replacement for the fit test, which was in the quality metrics.

Kevin T. Conroy: So we're in a strong position. And here's another thing that people don't fully appreciate. We're already working on Cold Guard 3. And so, in terms of improved performance, even from Colgard plus, we're never going to stop investing in being the unquestioned leader in colon cancer screening. We've worked really hard to deliver on the impact that we've had on this disease. We're proud of it, and our R&D team is second to none. And our commercial organization, we've been talking about the new ads. The impact that Everett's organization has had has been remarkable, and the leverage that they've been able to deliver.

Kevin T. Conroy: So.

Kevin T. Conroy: We're in a strong position.

Kevin T. Conroy: Here's another thing that people don't fully appreciate we're already working on Cologuard three point.

Kevin T. Conroy: And so in terms of improved performance even from Cologuard plus.

Kevin T. Conroy: Never going to stop investing in.

Kevin T. Conroy: And being the unquestioned leader in colon cancer screening.

Kevin T. Conroy: <unk> worked really hard to deliver on the impact that we've had in this disease, we're proud of it.

Kevin T. Conroy: Our R&D team is second to none.

Kevin T. Conroy: And our commercial organization, we've been talking about the new ads.

Kevin T. Conroy: The impact.

Kevin T. Conroy: <unk> organization has had.

Kevin T. Conroy: Has been remarkable.

Kevin T. Conroy: And the leverage that they have been able to deliver really proud of what they've done and you're just going to see continued.

Kevin T. Conroy: They're really proud of what they've done, and you're just gonna see continued positive results. Great, thank you. We have a couple more questions here. I'm going to go to Eve Bernstein with Bernstein Research. Please go ahead. Eve, go ahead with your question. Hi there.

Eve Bernstein: Positive results.

Eve Bernstein: Great. Thank you.

Eve Bernstein: We have a couple more questions here I'm going to go to East Burstein with Bernstein Research. Please go ahead.

Eve Bernstein: Please go ahead with your question.

Unknown Executive: Thank you so much. Appreciate the time. I'll actually ask a question not about COLAGARD but about Oncotype DX Rest and how the FDA LDT rule affects it. This one's an interesting case because you're the clear market leader here, but some of your competitors in the space do have FDA approval. So there are a couple of parts to this.

Eve Bernstein: Hi, there.

Unknown Executive: Thank you so much I appreciate the time I'll actually ask a question not about call it about.

Unknown Executive: Oncotype Dx breast.

Unknown Executive: BT will affect that.

Unknown Executive: This one is an interesting close because you are the clear market leader here, but some of your competitors in the space do have FDA approval. So a couple of parts here one our understanding was that euro Ltte test would be grandfathered and you'd only need to pursue FDA approval. If you decided to change the tax which seems.

Kevin T. Conroy: One, our understanding is that your LDT test would be grandfathered in, and you'd only need to pursue FDA approval if you decided to change the test, which seems pretty unlikely. Is that right?

Kevin T. Conroy: Unlikely.

Kevin T. Conroy: Two, if you did choose to pursue FDA approval, have you already generated the data that you need to do so in the rich body of literature you already have, or would you need to do more work? And then three, if you didn't choose to pursue FDA approval, could you be at a new competitive disadvantage if the FDA-approved tests are out there? You are correct. There is a grandfathering provision in the new guidance document, so ONCATYPE-DX is in a great position in the U.S. and outside the U.S. based on our current regulatory position.

Kevin T. Conroy: That right.

Kevin T. Conroy: <unk> if you did choose to pursue FDA approval have you already generate a proposal that you would need to do so.

Kevin T. Conroy: The rich body of literature, you already have or would you need to do more work.

Kevin T. Conroy: And then three if you didn't choose to pursue FDA approval could you be at that new competitive different pharma express.

Kevin T. Conroy: They are out there.

Kevin T. Conroy: You are correct there is a grandfathering.

Kevin T. Conroy: Provision in the new guidance documents so.

Kevin T. Conroy: Can take Dx is.

Kevin T. Conroy: <unk> position in the U S and outside the U S.

Kevin T. Conroy: Based on our current regulatory position that won't change.

Kevin T. Conroy: That won't change, and we're also New York State approved, so there are two different ways that we are okay with the current approach. We also have the ability to submit for FDA approval should anything change in the future, which we don't expect it to, but we have more data with Oncotype DX than virtually any diagnostic ever developed. I think altogether, four or five New England Journal of Medicine publications, randomized studies, and well over a million, probably well over a million and a half total patient results.

Kevin T. Conroy: And we're also in New York State approved so there are two different.

Kevin T. Conroy: Ways that we are okay with the current approach.

Kevin T. Conroy: We also have the ability to submit for FDA approval should anything change in the future, which we don't expect to do but we have more data with oncotype dx than virtually any diagnostic ever.

Kevin T. Conroy: <unk> developed I think altogether.

Kevin T. Conroy: Five new England Journal of Medicine publications randomized studies.

Kevin T. Conroy: Well over 1 million probably.

Kevin T. Conroy: Well over $1 million and a half total patient results. So.

Kevin T. Conroy: So it may be one of the most studied cancer diagnostics of all time. We're in great shape. And that's important because Oncotype DX is the only test that has that level one, that tier one evidence because of the multiple randomized controlled studies, and other tests just have not been able to prove what we've been able to prove, both in terms of the ability to predict chemotherapy benefit and also determine the likelihood of recurrence.

Kevin T. Conroy: It may be one of the most studied diagnostics cancer diagnostics of all time, we're in great shape.

Kevin T. Conroy: And we're in great shape from a competitive perspective, and that's important because.

Kevin T. Conroy: Oncotype Dx as the only test that has that level, one that tier one evidence because of the multiple randomized controlled studies and other tests just have not been able to prove what we've been able to prove both in terms of the ability to predict chemotherapy benefit and also.

Kevin T. Conroy: Determined the likelihood of recurrence.

Kevin T. Conroy: Those are two benefits that nobody else has been able to show with the level of evidence that we've been able to show. So we're confident in continued growth. All right, ladies and gentlemen. That concludes today's call. I appreciate you all for joining. You may now disconnect.

Kevin T. Conroy: Our two benefits that nobody else has been able to show with the level of evidence that we've been able to show. So we're confident in.

Speaker Change: Continued growth.

Speaker Change: Alright, Thank you, ladies and gentlemen that concludes today's call and I. Appreciate you all for joining you may now disconnect.

Kevin T. Conroy: Okay.

Speaker Change: Please wait the conference will begin shortly.

Kevin T. Conroy: [music].

Kevin T. Conroy: Yes.

Kevin T. Conroy: Sure.

Kevin T. Conroy: [music].

Kevin T. Conroy: Okay.

Kevin T. Conroy: Yes.

Kevin T. Conroy: Yes.

Kevin T. Conroy: Sure.

Kevin T. Conroy: [music].

Kevin T. Conroy: Sure.

Kevin T. Conroy: [music].

Kevin T. Conroy: Okay.

Kevin T. Conroy: Yes.

Kevin T. Conroy: Okay.

Kevin T. Conroy: [music].

Kevin T. Conroy: Yes.

Kevin T. Conroy: [music].