Q2 2024 Exact Sciences Corp Earnings Call

Thank you for standing by. At this time, I would like to welcome everyone to today's Exact Sciences second quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise.

Operator: 2nd Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star one on your telephone keypad. Once again, press star one.

Operator: 2nd quarter, 2024 earnings call. All lines have been placed on mute to prevent any background noise.

Operator: After the speakers' remarks, there will be a question and answer session.

Operator: If you'd like to ask a question during this time, simply press star one on your telephone keypad. Once again, star one, and in the interest of time, we ask that you limit questions to one per caller.

Speaker Change: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star 1 on your telephone keypad. Once again, star 1. And in the interest of time, we ask that you limit questions to one per caller. Thank you.

Erik Holznecht: I would now like to turn the call over to Eric Holznecht, Manager of Investor Relations. Eric, please go ahead.

Operator: And in the interest of time, we ask that you limit questions to one per caller. Thank you. I would now like to turn the call over to Erik Holznecht, Manager of Investor Relations. Erik, please go ahead.

Speaker Change: I would now like to turn the call over to Erik Holznecht, Manager of Investor Relations. Erik, please go ahead.

Erik Holznecht: Thanks Operator. Thank you for joining us for Exact Sciences 2nd quarter 2024 conference call. On the call today are Kevin Conroy, the company's Chairman and CEO, and Aaron Bloomer, our Chief Financial Officer.

Erik Holznecht: Thanks, Operator. Thank you for joining us for Exact Sciences' second quarter 2024 conference. On the call today are Kevin Conroy, the company's chairman and CEO, and Aaron Bloomer, our chief financial officer. Exact Sciences issued a news release earlier this afternoon detailing our second quarter financial results. 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. However, 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, and Descriptions of the Risks and Uncertainties Associated with Exact are included in our SEC. Both can be accessed through our website.

Erik Holznecht: Thanks, Operator. Thank you for joining us for Exact Sciences' second quarter 2024 conference call. On the call today are Kevin Conroy, the company's Chairman and CEO , and Aaron Bloomer, our Chief Financial Officer.

Erik Holznecht: Exact Sciences issued a news release earlier this afternoon detailing our 2nd quarter financial results. 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 reconciliation to GAAP figures are available in our earnings press release. In descriptions of the risks and uncertainties associated with ExactSciences, are included in our SEC filings. Both can be accessed through our website.

Speaker Change: Exact Sciences issued a news release earlier this afternoon detailing our second quarter financial results. This news release and today's presentation are available on our website at exactsciences.com.

Speaker Change: During today's call, we will make forward-looking statements based on current expectations. Our actual results may be materially different from such statements.

Kevin T. Conroy: Discussions of non-GAAP figures and reconciliations to GAAP figures are available in our earnings press release, and descriptions of the risks and uncertainties associated with Exact Sciences are included in our SEC filings. 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. Our second quarter results show the power of Exact Sciences' platform and dedication of our world-class team. For the first time, we screened over one million people in a quarter with Cologuard for colon cancer, the number two deadliest cancer in the U.S. We tested more patients globally with Oncotype DX than ever before. Expanding and leveraging our platform led to record customer engagement. During the second quarter, more than 190,000 health care providers ordered our preeminent cancer tests. Additionally, over 350 health systems and oncology centers utilized ExactNexus, our proprietary technology platform. We made significant progress toward launching Colgard Plus, our Next Generation Coligard Test and OncoDetect. Our Molecular Residual Disease

Kevin Conroy: I'll now turn the call over to Kevin. Thanks, Eric. Our 2nd quarter results show the power of Exact Sciences platform and dedication of our world class team. For the first time, we screened over 1 million people in a quarter with Cologuard for colon cancer, the number two deadliest cancer in the U.S. We tested more patients globally with Oncotype DX than ever before. Expanding and leveraging our platform led to record customer engagement. During the 2nd quarter, more than 190,000 health care providers ordered our preeminent cancer tests. Over 350 health systems and oncology centers utilized Exact Nexus, our proprietary technology platform.

Kevin T. Conroy: Thanks, Erik. Our second quarter results show the power of Exact Sciences' platform and dedication of our world-class team.

Kevin T. Conroy: For the first time, we screened over one million people in a quarter with Cologuard for colon cancer, the number two deadliest cancer in the U.S.

Kevin T. Conroy: We tested more patients globally with Oncotype DX than ever before.

Kevin T. Conroy: Expanding and leveraging our platform led to record customer engagement.

Kevin T. Conroy: During the second quarter, more than 190,000 health care providers ordered our preeminent cancer tests.

Kevin T. Conroy: Over 350 health systems and oncology centers utilized ExactNexus, our proprietary technology platform.

Kevin Conroy: We made significant progress toward launching Colorguard Plus, our next generation Colorguard test, and Onco Detect, our molecular residual disease test. Our team also advanced several other key pipeline programs, including our blood-based colon cancer screening test and multi-cancer screening test. The strength of our infrastructure, commercial reach, peer relationships and exact Nexus allows us to offer these tests to millions of people around the world. We delivered year-over-year core revenue growth of 13% with a slight decline in operating expenses, leading to a record adjusted EBITDA of 110 million. Other highlights from the 2nd quarter include producing 71 million, a free cash flow, a 5 million improvement.

Kevin T. Conroy: We made significant progress toward launching Coligard Plus, our next-generation Coligard test, and OncoDetect, our molecular residual disease test.

Kevin T. Conroy: Our team also advanced several other key pipeline programs, including our blood-based colon cancer screening test and multi-cancer screening test.

Kevin T. Conroy: Our team also advanced several other key pipeline programs, including our blood-based colon cancer screening test and multi-cancer screening. The strength of our infrastructure, commercial reach, payer relationships, and exact nexus allows us to offer these tests to millions of people around the world. We delivered year-over-year core revenue growth of 13% with a slight decline in operating expenses, leading to a record adjusted EBITDA of $110 million.

Kevin T. Conroy: The strength of our infrastructure, commercial reach, payer relationships, and exact nexus allows us to offer these tests to millions of people around the world.

Kevin T. Conroy: We delivered year-over-year core revenue growth of 13% with a slight decline in operating expenses.

Kevin T. Conroy: Leading to a record adjusted EBITDA of $110 million.

Kevin T. Conroy: Other highlights from the second quarter include producing $71 million of free cash flow, a $5 million improvement, being recognized as a great place to work for the sixth consecutive year, and Securing an Exclusive License with Rights to Sublicense TwinStrands Patented Sequencing Technology. These achievements reflect our dedication to helping eradicate cancer, and we're well positioned to achieve our goals for the year. Aaron will now review our second quarter results. Thanks, Kevin, and good afternoon, everyone.

Kevin T. Conroy: Other highlights from the second quarter include producing $71 million of free cash flow, a $5 million improvement.

Kevin Conroy: Being recognized as a great place to work for the 6th consecutive year and securing an exclusive license with rights to sub-license twin strands patented sequencing technologies.

Kevin T. Conroy: Being recognized as a great place to work for the sixth consecutive year.

Kevin T. Conroy: and securing an exclusive license with rights to sub-license TwinStrands patented sequencing technologies.

Kevin Conroy: These achievements reflect our dedication to helping eradicate cancer, and we're well positioned to achieve our goals for the youth.

Kevin T. Conroy: These achievements reflect our dedication to helping eradicate cancer, and we're well positioned to achieve our goals for the year.

Aaron Bloomer: Here, Aaron will now review our second quarter results. Thanks, Kevin, and good afternoon, everyone. Second quarter results highlight strong operational execution, and we're pleased with the progress we made. Second quarter revenue of $699 million grew 12% year over year, or 13% on a core basis, excluding COVID testing effects and MNA. Growth was led by momentum and increased penetration of Colaguard, along with accelerated archetype DX growth internationally. Adjusted EBITDA margin expanded 500 basis points to a record 15.7%, and we generated $71 million in pre-cash flow. Screening revenue increased 15% to $532 million. We continued to see Colaguard orders consistently grow as health systems, health care professionals, and pairs increasingly embed the test into their practices.

Kevin T. Conroy: Aaron will now review our second quarter results.

Kevin T. Conroy: Second quarter results highlight strong operational execution, and we're pleased with the progress we made. Second quarter revenue of $699 million grew 12% year over year, or 13% on a core basis, excluding COVID testing, FX, and M&A.

Aaron Bloomer: Thanks, Kevin, and good afternoon, everyone. Second quarter results highlight strong operational execution, and we're pleased with the progress we made.

Aaron Bloomer: Second quarter revenue of $699 million grew 12% year-over-year, or 13% on a core basis, excluding COVID testing, FX, and M&A.

Aaron Bloomer: Growth was led by momentum and increased penetration of Coligard, along with accelerated Oncotype DX growth in an. Adjusted EBITDA margin expanded 500 basis points to a record 15.7%, and we generated $71 million in pre- Screening revenue increased 15% to $532 million. We continue to see COLAGARD orders consistently grow as health systems, health care professionals, and payers increasingly embed the test into their practice. We're proud of our sales and marketing teams and the work they're doing to drive adoption, especially within RISC screens and Care Gap programs.

Speaker Change: Growth was led by momentum and increased penetration of Cologuard, along with accelerated Oncotype DX growth internationally.

Aaron Bloomer: Adjusted EBITDA margin expanded 500 basis points to a record 15.7%.

Aaron Bloomer: And we generated $71 million in free cash flow.

Aaron Bloomer: Screening revenue increased 15% to $532 million. We continue to see COLAGARD orders consistently grow as health systems, healthcare professionals, and payers increasingly embed the test into their practices.

Aaron Bloomer: We're proud of our sales and marketing teams and the work they are doing to drive adoption, especially within pre-screened and care gap programs. Care gap programs generated more revenue in the first half of 2024 than all of 2023. Precision oncology revenue grew 7% to $168 million, or 6% on a core basis. Growth was led by archetype DX, which expanded 31% internationally. Our team has done significant work driving leverage and operational execution across the P&O. We generated $110 million in adjusted EBITDA, an increase of $43 million year over year, or 65% growth. Adjusted EBITDA margin expansion was driven by volume growth, productivity, and expense controls, especially within G&A, and we're pleased with this progress.

Aaron Bloomer: We're proud of our sales and marketing teams and the work they are doing to drive adoption, especially within Rescreens and Care Gap programs.

Aaron Bloomer: Care Gap programs generated more revenue in the first half of 2024 than all of 2023. Precision Oncology revenue grew 7% to $168 million, or 6% on a core basis. Growth was led by Archetype DX, which expanded 31% internationally.

Aaron Bloomer: Care Gap programs generated more revenue in the first half of 2024 than all of 2023.

Aaron Bloomer: Precision Oncology revenue grew 7% to $168 million, or 6% on a core basis.

Aaron Bloomer: Growth was led by Archetype DX, which expanded 31% internationally.

Aaron Bloomer: Our team has done significant work driving leverage and operational execution across the P&L. We generated $110 million in adjusted EBITDA, an increase of $43 million year-over-year, or 65% growth. Adjusted EBITDA margin expansion was driven by volume growth, productivity, and expense controls, especially within G&A, and we are pleased with this progress. This more than offset a decline in non-GAAP gross margin of about 190 basis points. Recall, gross margin in the second quarter of 2023 benefited from better cash collections due to improvements made to our billing systems that allowed us to correct claims from prior periods.

Speaker Change: Our team has done significant work driving leverage and operational execution across the P&L. We generated $110 million in adjusted EBITDA, an increase of $43 million year-over-year, or 65% growth.

Speaker Change: Adjusted EBITDA margin expansion was driven by volume growth, productivity, and expense controls, especially within G&A, and we are pleased with this progress.

Aaron Bloomer: This more than offset a decline in non-gab growth margin of about 190 basis points. Recall, growth margin in the second quarter of 2023 benefited from better cash collections due to improvements made to our billing systems that allowed us to correct claims from prior periods.

Speaker Change: This more than offset a decline in non-GAAP gross margin of about 190 basis points.

Speaker Change: Recall, gross margin in the second quarter of 2023 benefited from better cash collections due to improvements made to our billing systems that allowed us to correct claims from prior periods.

Aaron Bloomer: To simplify modeling and increase clarity, we introduced a new reconciliation within our press release that presents operating income or loss on a GAAP and adjusted basis. Using both methodologies, total operating expenses declined slightly year over year during the second quarter. We continue to see opportunities to optimize costs and increase operational efficiency, creating the capacity to reinvest back into growth areas while still expanding margins. For example, during the second quarter, we reinvested some of our cost savings back into high growth initiatives, including within sales and marketing. Free cash flow was $71 million, an increase of $5 million year over year, and up $191 million sequentially.

Aaron Bloomer: To simplify modeling and increase clarity, we introduced a new reconciliation within our press release that presents operating income or loss on a gap and adjusted basis. Using both methodologies, total operating expenses declined slightly year over year during the second quarter.

Speaker Change: To simplify modeling and increase clarity, we introduced a new reconciliation within our press release that presents operating income or loss on a gap and adjusted basis.

Speaker Change: Using both methodologies, total operating expenses declined slightly year-over-year during the second quarter.

Aaron Bloomer: We continue to see opportunities to optimize costs and increase operational efficiency, creating the capacity to reinvest back into growth areas while still expanding margins. For example, during the second quarter, we reinvested some of our cost savings back into high growth initiatives, including within sales and marketing. Free cash flow was $71 million, an increase of $5 million year over year and up $191 million sequentially. We ended the quarter with cash and securities of $947 million.

Speaker Change: We continue to see opportunities to optimize costs and increase operational efficiency.

Speaker Change: Creating the capacity to reinvest back into growth areas while still expanding margins.

Speaker Change: For example, during the second quarter, we reinvested some of our cost savings back into high-growth initiatives, including within sales and marketing.

Speaker Change: Free cash flow was $71 million, an increase of $5 million year-over-year, and up $191 million sequentially.

Aaron Bloomer: We ended the quarter with cash and securities of $947 million. Our strong balance sheet and positive free cash flow outlook allowed us to repay the full $50 million outstanding balance of our AR Securitization Facility and secure an exclusive license with Twin Strand Biles.

Speaker Change: We ended the quarter with cash insecurities of $947 million.

Aaron Bloomer: Our strong balance sheet and positive free cash flow outlook allowed us to repay the full $50 million outstanding balance of our AR securitization facility and secure an exclusive license with Twin Strand Biotech. Turning to Guidance We're maintaining our full-year revenue guidance and raising our adjusted EBITDA. We continue to expect full-year revenue between $2.81 and $2.85 billion and now expect adjusted EBITDA between $335 and $355 million, or a 12.2% margin rate at midpoint. During the third quarter, we expect total revenue between $705 and $725 million, or year-over-year growth of 14% at mid-year.

Speaker Change: Our strong balance sheet and positive free cash flow outlook allowed us to repay the full $50 million outstanding balance of our AR securitization facility and secure an exclusive license with Twin Strand Biosciences.

Aaron Bloomer: Turning to guidance, we're maintaining our full-year revenue guidance and raising our adjusted EBITDA guidance. We continue to expect full-year revenue between $2.81 and $2.85 billion, and now expect adjusted EBITDA between $335 and $355 million, or 12.2% margin rate at midpoint.

Speaker Change: Turning to guidance.

Speaker Change: We're maintaining our full-year revenue guidance and raising our adjusted EBITDA guidance.

Speaker Change: We continue to expect full-year revenue between $2.81 and $2.85 billion, and now expect adjusted EBITDA between $335 and $355 million, or a 12.2% margin rate at midpoint.

Aaron Bloomer: During the third quarter, we expect total revenue between $705 and $70,000. $725 million, or year-to-year growth of 14% at midpoint. This assumes screening revenue between $545 and $555 million, or growth of 17% at midpoint. And precision oncology revenue between $160 and $170 million, or growth of 6% at midpoint. Guidance applies 17% revenue growth year-over-year at midpoint in the second half of 2024, with 21% growth in screening and 6% growth in precision oncology. We expect second half screening revenue to be about 54% of full-year revenue, consistent with the historical average.

Speaker Change: During the third quarter, we expect total revenue between $705 and $725 million, or year-over-year growth of 14% at midpoint.

Aaron Bloomer: This assumes screening revenue between $545 and $555 million, or growth of 17% at midpoint, and Precision Oncology revenue between $160 and $170 million, or growth of 6% at mid-2020. Guidance supplies 17% revenue growth year-over-year at midpoint in the second half of 2024, with 21% growth in screening and 6% growth in precision on color. We expect second-half screening revenue to be about 54% of full-year revenue, consistent with the historical average.

Speaker Change: This assumes screening revenue between $545 and $555 million, or growth of 17% at midpoint, and precision oncology revenue between $160 and $170 million, or growth of 6% at midpoint.

Speaker Change: Guidance supplies 17% revenue growth year-over-year at midpoint in the second half of 2024, with 21% growth in screening and 6% growth in precision oncology.

Speaker Change: We expect second-half screening revenue to be about 54% of full-year revenue, consistent with the historical average.

Aaron Bloomer: Several key factors give us confidence in achieving guidance. First, the number of people eligible for the next coal-guard test grows by more than 10% sequentially, and our re-screen success rate continues to improve. We're making progress by sending patients digital reminders and educating providers about the option to order Coal-Guard in advance of a patient's three-year Coal-Guard anniversary. Once a re-screen test is ordered, more than 80% of second-time coal-guard users and 90% of third-time users go on to complete the test again, demonstrating a high level of patient preference and satisfaction. Second, we have more than 100 opportunities with payers and health systems to close care gaps with coal-guard through large organized screening programs. We also expect recent sales and marketing investments will support growth in the second half of the year, with a greater impact expected in the fourth quarter in the coming years.

Aaron Bloomer: Several key factors give us confidence in achieving this. First, the number of people eligible for the next Colgard test grows by more than 10% sequentially, and our re-screen success rate continues to improve. We're making progress by sending patients digital reminders and educating providers about the option to order Colgard in advance of a patient's three-year Colgard anniversary. Once a re-screen test is ordered, more than 80% of second-time Color Guard users and 90% of third-time users go on to complete the test again.

Speaker Change: Several key factors give us confidence in achieving guidance.

Speaker Change: First, the number of people eligible for the next Colgard test grows by more than 10% sequentially.

Speaker Change: And our re-screen success rate continues to improve.

Speaker Change: We're making progress by sending patients digital reminders and educating providers about the option to order Colgard in advance of a patient's three-year Colgard anniversary.

Speaker Change: Once a re-screen test is ordered, more than 80% of second-time Cologuard users and 90% of third-time users go on to complete the test again, demonstrating a high level of patient preference and satisfaction.

Kevin T. Conroy: demonstrating a high level of patient preference and satisfaction. Second, we have more than a hundred opportunities with payers and health systems to close care gaps with Cologuard through large, organized screening programs. We also expect recent sales and marketing investments will support growth in the second half of the year, with a greater impact expected in the fourth quarter and the coming year. Back to you, Kevin.

Speaker Change: Second, we have more than 100 opportunities with payers and health systems to close care gaps with Cologuard through large, organized screening programs.

Kevin T. Conroy: We also expect recent sales and marketing investments will support growth in the second half of the year, with a greater impact expected in the fourth quarter and the coming years. Back to you, Kevin.

Kevin Conroy: Back to you, Kevin. Thanks, Aaron. Over the past decade, coal-guard has revolutionized coal-and-cancer screening, and momentum continues to build. According to the CDC, coal-guard is the primary reason coal-and-cancer screening rates have increased 13 percentage points. We've delivered more than 16 million coal-guard test results to patients, and we're just getting started. For example, we've screened more than one and a half million people ages 45 to 49 since the screening age was lowered three years ago. Keeping these people screened until their 85 provides up to 20 million coal-guard testing opportunities. Coal-guard has become an embedded standard of care among patients, health care providers, health systems, and payers.

Kevin T. Conroy: Thanks, Aaron. Over the past decade, ColoGuard has revolutionized colon cancer screening, and momentum continues to build. According to the CDC, Coliguard is the primary reason colon cancer screening rates have increased 13%. We've delivered more than 16 million Cologuard test results to patients, and we're just getting started. For example, we've screened more than one and a half million people ages 45 to 49 since the screening age was lowered three years ago.

Kevin T. Conroy: Thanks, Aaron. Over the past decade, ColoGuard has revolutionized colon cancer screening and momentum continues to build.

Speaker Change: According to the CDC, Cologuard is the primary reason colon cancer screening rates have increased 13 percentage points.

Speaker Change: We've delivered more than 16 million ColoGuard test results to patients.

Kevin T. Conroy: and we're just getting started.

Kevin T. Conroy: For example, we've screened more than 1.5 million people ages 45 to 49 since the screening age was lowered three years ago.

Kevin T. Conroy: Keeping these people screened until they're 85 provides up to 20 million Cologuard testing opportunities. Cologuard has become an embedded standard of care among patients, healthcare providers, health systems, and payers. We're using our unparalleled commercial capability and the powerful ExactNexus platform to engage patients through personalized experiences. This is resulting in more patients completing Cologuard every three years, helping us achieve our goal of making screening routine. It's also playing a key role in our new approach to closing the screening gap. Let me give you an example.

Kevin T. Conroy: Keeping these people screened until they're 85 provides up to 20 million ColoGuard testing opportunities.

Kevin T. Conroy: Cologuard has become an embedded standard of care among patients, healthcare providers, health systems, and payers.

Kevin Conroy: We're using our unparalleled commercial capabilities and powerful Exact Nexus platform to engage patients through personalized experience. This is resulting in more patients completing Collegar every three years, helping us achieve our goal of making screening routine. It's also playing a key role in our new approach to closing the screening gap.

Kevin T. Conroy: We are using our unparalleled commercial capabilities and powerful ExactNexus platform to engage patients through personalized experiences.

Kevin T. Conroy: This is resulting in more patients completing COLAGARD every three years, helping us achieve our goal of making screening routine.

Kevin T. Conroy: It's also playing a key role in our new approach to closing the screening gap.

Kevin Conroy: Let me give you an example. One of our customers, a major payer, asked us to help screen 90,000 of their members with a goal of providing better care and improving their quality. Exact Sciences' state-of-the-art patient engagement tools in Exact Nexus guided and supported patients throughout the screening process, promoting adherence. Our customer was thrilled with the outcome and were already in discussions with them and many others about future care gap programs. Our precision oncology team is doing an outstanding job expanding the impact of Archetype DX internationally. We still have a major opportunity to provide important answers to eligible patients outside the US because about 70% aren't currently being tested.

Kevin T. Conroy: One of our customers, a major payer, asked us to help screen 90,000 of their members with a goal of providing better care and improving their quality measures. Exact Sciences' state-of-the-art patient engagement tools in ExactNexus guided and supported patients throughout the screening process, promoting adherence. Our customer was thrilled with the outcome, and we're already in discussions with them and many others about future care. Our Precision Oncology team is doing an outstanding job expanding the impact of Oncotype DX internationally.

Kevin T. Conroy: Let me give you an example.

Kevin T. Conroy: One of our customers, a major payer, asked us to help screen 90,000 of their members with a goal of providing better care and improving their quality measure scores.

Kevin T. Conroy: Exact Sciences' state-of-the-art patient engagement tools in ExactNexus guided and supported patients throughout the screening process, promoting adherence.

Kevin T. Conroy: Our customer was thrilled with the outcome and we're already in discussions with them and many others about future Care Gap programs.

Kevin T. Conroy: Our Precision Oncology team is doing an outstanding job expanding the impact of Oncotype DX internationally.

Kevin T. Conroy: We still have a major opportunity to provide important answers to eligible patients outside the US because about 70% aren't currently being tested. Healthcare Professionals Hospitals, and Health Systems trust Oncotype DX because it's supported by unmatched evidence. Oncotype DX is globally recognized as a standard of care and included in all major guidelines.

Kevin T. Conroy: We still have a major opportunity to provide important answers to eligible patients outside the U.S. because about 70% aren't currently being tested.

Kevin Conroy: Healthcare professionals, hospitals, and health systems trust archetype DX because it's supported by unmatched evidence. Ancetype DX is globally recognized as standard of care and included in all major guidelines. Thanks to our team's commitment, we've increased Ancetype DX adoption internationally by about 10 percentage points over the past year. We're making strong progress internationally, and our goal is to make sure all people eligible for Ancetype DX have access around the world. Expanding our presence globally also provides opportunities across our portfolio, which we're working towards.

Kevin T. Conroy: Healthcare professionals, hospitals, and health systems trust Oncotype DX because it's supported by unmatched evidence.

Kevin T. Conroy: Oncotype DX is globally recognized as standard of care and included in all major guidelines.

Kevin T. Conroy: Thanks to our team's commitment, we've increased Oncotype DX adoption internationally by about 10 percentage points over the past. We're making strong progress internationally, and our goal is to make sure all people eligible for Oncotype DX have access around the world. Expanding our presence globally also provides opportunities across our portfolio, which we're working on. The second quarter was a hallmark period for our pipeline, as we advanced our most impactful programs, colon cancer screening, molecular residual disease testing, and multi- We plan to share performance data from each of these programs by the end of the year.

Kevin T. Conroy: Thanks to our team's commitment, we've increased Oncotype DX adoption internationally by about 10 percentage points over the past year.

Kevin T. Conroy: We're making strong progress internationally and our goal is to make sure all people eligible for Oncotype DX have access around the world.

Kevin T. Conroy: Expanding our presence globally also provides opportunities across our portfolio, which we're working towards.

Kevin Conroy: The second quarter was a hallmark period for our pipeline as we advanced our most impactful programs: colon cancer screening, molecular residual disease testing, and multi-cancer screening. We plan to share performance data from each of these programs by the end of the year. Colleguard Plus will be the most efficient non-invasive way to screen for colon cancer, and we anticipate FDA approval in the coming months. Colleguard Plus sets a new performance standard with 94% overall cancer sensitivity, 43% sensitivity for advanced pre-cancerous lesions, 91% specificity when including patients with small polyps and other incidental findings, and 93% specificity with no findings on colonoscopy.

Kevin T. Conroy: The second quarter was a hallmark period for our pipeline as we advanced our most impactful programs, colon cancer screening, molecular residual disease testing, and multi-cancer screening.

Kevin T. Conroy: We plan to share performance data from each of these programs by the end of the year.

Kevin T. Conroy: Cologuard Plus will be the most efficient, non-invasive way to screen for colon cancer, and we anticipate FDA approval in the coming months. Cologuard Plus sets a new performance standard with 94% overall cancer sensitivity and 43% sensitivity for advanced precancerous lesions.

Kevin T. Conroy: Cologuard Plus will be the most efficient, non-invasive way to screen for colon cancer.

Kevin T. Conroy: and we anticipate FDA approval in the coming months.

Kevin T. Conroy: Cologuard Plus sets a new performance standard with 94% overall cancer sensitivity.

Kevin T. Conroy: 91% specificity when including patients with small polyps and other incidental findings, and 93% specificity with no findings on colonoscopy. This means the test achieved a 30% lower false positive rate relative to current cold guard, with cancer and pre-cancerous lesion detection improving as well. Colgard Plus could save the health care system billions of dollars for two reasons. Cologuard Plus presents an opportunity to further reduce colon cancer incidence and mortality, moving us one step closer towards helping a red. 2.

Kevin Conroy: This means the test achieved a 30% lower false positive rate relative to current Coal Guard, with cancer and pre-cancerous lesion detection improving as well. Colleguard Plus could save the health care system billions of dollars for two reasons. One, Colleguard Plus presents an opportunity to further reduce colon cancer incidence and mortality, moving us one step closer towards helping a red. Cate this disease. Two fewer patients will be sent to unnecessary follow-up colonoscopies. We recently ran our blood-based colon cancer screening test on more than 3,000 samples. The study consisted of 2,900 prospectively collected samples from healthy individuals, 90 advanced adenomas, the majority of which were collected prospectively, and 60 retrospectively collected cancer samples.

Kevin T. Conroy: Fewer patients will be sent to unnecessary follow-up colonoscopies. We recently ran our blood-based colon cancer screening test on more than 3,000 samples. The study consisted of 2,900 prospectively collected samples from healthy individuals, 90 advanced adenomas, the majority of which were collected prospectively, and 60 retrospectively collected cancers.

Kevin T. Conroy: We recently ran our blood-based colon cancer screening test on more than 3,000 samples.

Kevin Conroy: The results give us confidence our test will be at least comparable to others and will meet the Medicare requirements.

Kevin T. Conroy: The results give us confidence our test will be at least comparable to others and will meet the Medicare requirements. We plan on presenting these data before sharing top-line results from our pivotal Blue Seas study in the fourth quarter of 2024. Our blood-based colon cancer screening test will have an unrivaled cost profile. Once available, it will be supported by our commercial infrastructure, patient navigation engine, and ExactNexus technology platform, making ordering and results seamless for more than 350 health systems and available to our broad and deep customer base of healthcare. OncoDetect, our molecular residual disease test, will significantly impact decision-making, and we're supporting it with high-quality clinical trials. Our team recently generated impressive study results demonstrating OncoDetect is highly accurate at detecting residual disease in colon cancer.

Kevin T. Conroy: The results give us confidence our test will be at least comparable to others and will meet the Medicare requirements.

Kevin Conroy: We plan on presenting these data before sharing top-line results from our pivotal Blue Sea Study in the fourth quarter of 2024. Our blood-based colon cancer screening test will have an unrivaled cost profile. Once available, it will be supported by our commercial infrastructure, patient navigation engine, and Exact Nexus technology platform, making ordering and resulting seamless for more than 350 health systems, and available to our broad and deep customer base of health care providers. Anco-detect, our molecular residual disease test, will significantly impact decision-making, and we're supporting it with high-quality clinical evidence. Our team recently generated impressive study results demonstrating Anco-Detect is highly accurate at detecting residual disease and colon cancer patients.

Kevin T. Conroy: We plan on presenting these data before sharing top-line results from our pivotal Blue Seas study in the fourth quarter of 2024.

Kevin T. Conroy: Once available, it will be supported by our commercial infrastructure, patient navigation engine, and ExactNexus technology platform, making ordering and resulting seamless for more than 350 health systems.

Kevin Conroy: These findings will be published in a scientific journal later this year, and we're on track to launch Anco-detect with reimbursement next year 2025.

Kevin T. Conroy: These findings will be published in a scientific journal later this year, and we're on track to launch OncoDetect with reimbursement next year, 2025. We also strengthened our patent portfolio by signing an exclusive license to Twin Strands Cell-Free Nucleic Acid Sequencing. This license provides near and long-term opportunities across multiple areas of cancer diagnostics while complementing our existing IP, including Thrive, SafeSeq, and SaferSeq Technologies.

Kevin Conroy: We also strengthened our patent portfolio by signing an exclusive license to twin strands, cell-free nucleic acid sequencing technologies. This license provides near and long-term opportunities across multiple areas of cancer diagnostics while complementing our existing IT, including thrice, safe-seek, and safer-seek technologies.

Kevin T. Conroy: This license provides near and long-term opportunities across multiple areas of cancer diagnostics while complementing our existing IP, including Thrive's SafeSeq and SaferSeq technologies.

Kevin Conroy: Our multi-cancer screening test was recently authorized by the FDA to be used within a real-world evidence study, providing an opportunity to test 25,000 people over the next three years. Generating real-world evidence in a clinical setting will help optimize clinical workflows and support discussions with regulatory agencies, payers, and guideline groups. Our data presentation at the AACR meeting in April showed our multi-cancer screening test detected 51% of cancers at 98.5% specificity across 21 types of cancer in a large, well-designed study. 16 of those cancer types have no standard of care screening option available today. Next, we plan to present improved performance data at a scientific conference later this year, highlighting the benefits of combining this approach with thrice technology.

Operator: Our multi-cancer screening test was recently approved by the FDA to be used within a real-world evidence study, providing an opportunity to test 25,000 people over the next three years. Generating real-world evidence in a clinical setting will help optimize clinical workflows and support discussions with regulatory agencies, payers, and guidelines. Our data presentation at the AACR meeting in April showed our multi-cancer screening test detected 51% of cancers at 98.5% specificity across 21 types of cancer in a large, well-designed study.

Kevin T. Conroy: Our multi-cancer screening test was recently authorized by the FDA to be used within a real-world evidence study, providing an opportunity to test 25,000 people over the next three years.

Kevin T. Conroy: Generating real-world evidence in a clinical setting will help optimize clinical workflows and support discussions with regulatory agencies, payers, and guideline groups.

Kevin T. Conroy: Our data presentation at the AACR meeting in April showed our multi-cancer screening test detected 51% of cancers at 98.5% specificity across 21 types of cancer in a large, well-designed study.

Operator: Sixteen of those cancer types have no standard of care screening option available. Next, we plan to present improved performance data at a scientific conference later this year, highlighting the benefits of combining this approach with Thrive's technology. Our focus on helping eradicate cancer powers the Exact Sciences team, creating momentum within our business and allowing us to extend our platform. Continued execution, our growing portfolio of tests, and a leading presence in cancer screening and precision oncology put us in a prime position to achieve our goals.

Kevin T. Conroy: Sixteen of those cancer types have no standard of care screening option available today.

Kevin T. Conroy: Next, we plan to present improved performance data at a scientific conference later this year, highlighting the benefits of combining this approach with Thrive's technology.

Kevin Conroy: Technology. Our focus on helping eradicate cancer powers the Exact Sciences team, creating momentum within our business and allowing us to extend our platform. Continued execution, our growing portfolio of tests, and a leading presence in cancer screening and precision oncology, put us in a prime position to achieve our purpose.

Kevin T. Conroy: Our focus on helping eradicate cancer powers the Exact Sciences team, creating momentum within our business and allowing us to extend our platform.

Kevin T. Conroy: Continued execution, our growing portfolio of tests, and a leading presence in cancer screening and precision oncology.

Kevin T. Conroy: put us in a prime position to achieve our purpose.

Kevin Conroy: We're now happy to take your questions. Thank you.

Operator: We're now happy to take your questions. Thank you. And at this time, I would like to remind everyone that in order to ask a question, press star rather than the number one on your telephone. Again, star one.

Speaker Change: We're now happy to take your questions.

Operator: And at this time, I would like to remind everyone that, in order to ask a question, press star, then the number one on your telephone keypad. Again, star one. And once again, in the interest of time, we ask that you limit your questions to one per caller. And we'll pause just a moment to compile the Q&A roster.

Kevin T. Conroy: Thank you.

Speaker Change: And at this time, I would like to remind everyone that in order to ask a question, press star, then the number one on your telephone keypad. Again, star one. And once again, in the interest of time, we ask that you limit your questions to one per caller. And we'll pause just a moment to compile the Q&A roster.

Operator: And once again, in the interest of time, we ask that you limit your questions to one per caller. And we'll pause just a moment to compile the Q&A. And it looks like our first question today comes from the line of Patrick Donnelly with Citi. Patrick, please go ahead.

Patrick Donnelly: And it looks like our first question today comes from the line of Patrick Donnelly with the City. Patrick, please go ahead. Hey, thanks, guys. Thanks for taking the questions. Kevin, maybe on the course side, your obviously last quarter, the increase in rep hires got a lot of attention. Profitability is nice to see here. Nice to see the dumb fire. Can you talk to the key drivers there? And if anything has changed here in your confidence in long term expectations, just that trend line on the profit and profitability piece.

Speaker Change: And it looks like our first question today comes from the line of Patrick Donnelly with Citi. Patrick, please go ahead.

Kevin T. Conroy: Thanks guys. Thanks for taking the questions. Kevin, maybe on the cost side, you know, obviously last quarter, the increase in rep hires got a lot of attention. Profitability is nice to see here. Nice to see the EBITDA move higher. Can you just talk through the key drivers there?

Patrick Bernard Donnelly: Hey, thanks guys. Thanks for taking the questions. Kevin, maybe on the cost side, obviously last quarter, the increase in rep hires got a lot of attention.

Patrick Bernard Donnelly: Profitability is nice to see here. Nice to see the EBITDA move higher. Can you just talk through the key drivers there? And if anything has changed here on your confidence and long-term expectations, just that trend line on the profitability piece?

Patrick Donnelly: And then second, you know, certainly appreciate the update on your internal blood program. You know, that market continues to get a lot of attention, given the FDA approval last week for competitor. Just how do you think about your approach there on the cost commercialization side? Sounds like you're confident your data stacks up with anything out there. And the twin strand agreement doesn't seem like a change anything on that front. I guess that's just and said related, just like confirm that. Thank you, guys.

Speaker Change: And then second, you know, certainly appreciate the update on your internal blood program, you know, that market continues to get a lot of attention, given the FDA approval last week for a competitor. Just how you think about your approach there on the cost commercialization side? Sounds like you're confident your data stacks up with anything out there.

Kevin T. Conroy: And if anything has changed here on your confidence and long-term expectations, just that trend line on the profitability piece. And then second, you know, certainly appreciate the update on your internal blood program. You know, that market continues to get a lot of attention given the FDA approval last week for a competitor, just how do you think about your approach there on the cost commercialization side? Sounds like you're confident your data stacks up with anything out there. The Twin Strand Agreement. It doesn't seem like it changes anything on that front. I guess that's just MSED related. I just want to confirm that. Thanks. Yeah, why don't I start with the first one?

Speaker Change: And the twin strand agreement, it doesn't seem like it changes anything on that front. I guess that's just MSED related. I just want to confirm that. Thank you guys.

Kevin Conroy: Yeah, when I start with the first one and really excited about the growth that we're seeing: 15% screening growth, record 16% adjusted even at margins. Through a cross the board with what the team is doing to grow screening to grow precision oncology. That is leading to a tremendous growth in even, and we expect that to continue looking at the driver of growth.

Kevin T. Conroy: And really excited about the growth that we're seeing 15% screening growth record 16% adjusted EBITDA margins, thrilled across the board with what the team is doing to grow screening to grow precision oncology, that is leading to tremendous growth in EBITDA. And we expect that to continue, looking at the driver of growth. You are really focusing in on the screening; there are three things: increasing brand awareness of Cologuard, that it's the best non-invasive approach to screening.

Speaker Change: Yeah, why don't I start with the first one, and really excited about the growth that we're seeing, 15% screening growth, record 16% adjusted EBITDA margins, thrilled across the board with what the team is doing to grow.

Speaker Change: Screening to grow precision oncology, that is leading to a tremendous growth in EBITDA, and we expect that to continue.

Kevin Conroy: You really focusing in on the screening, there are three things: the increasing brand awareness of call of God that it's the best non-invasive approach to screening. It is now at parity with colonoscopy in terms of consumer awareness; really remarkable. And we're pleased to see that our commercial engine is doing great work. We expect even better performance in the back half of the year, moving into next year.

Kevin T. Conroy: It is now at parity with colonoscopy in terms of consumer awareness, really remarkable. And we're pleased to see that our commercial engine is doing great work. We expect even better performance in the back half of the year and into next year.

Speaker Change: looking at the driver of growth.

Speaker Change: You really focusing in on the screening there are three things the increasing brand awareness of ColoGuard that it's the Best non-invasive approach to screening it is now at parity with

Speaker Change: Colonoscopy in terms of consumer awareness. Really remarkable and we're pleased to see that our commercial engine is doing great work. We expect even better performance in the back half of the year moving into next year.

Aaron Bloomer: Our deepening relationship with health systems, primary care physicians, payers just across the board, strength there and also we're extending and leveraging our exact next is platform. That platform allows us to reach electronically 350 health systems in the US, making ordering easier. That will continue to grow and deepen over the years, and as we add our portfolio to that platform, that allows us to deliver even greater cost economics as we grow. Aaron, you probably have more in-depth analysis there.

Aaron Bloomer: Our deepening relationship with health systems, primary care physicians, payers just across the board, strength there, and also we're extending and leveraging our ExactNexus platform. That platform allows us to reach electronically 350 health systems in the U.S., making ordering easier. That will continue to grow and deepen over the years.

Speaker Change: Our deepening relationship with health systems, primary care physicians, payers just across the board, strength there, and also we're extending and leveraging our ExactNexus platform.

Speaker Change: That platform allows us to reach electronically 350 health systems in the U.S. making ordering easier.

Speaker Change: That will continue to grow and deepen over the years and as we add our portfolio to that platform.

Speaker Change: That allows us to deliver even greater cost economics.

Speaker Change: As we go, Aaron, you probably have more in-depth analysis there.

Aaron Bloomer: Yeah, great. Thanks, Kevin.

Aaron Bloomer: And as we add our portfolio to that platform, that allows us to deliver even greater cost economics as we grow. Aaron, you probably have more in-depth analysis there. Yeah, great. Thanks, Kevin. First of all, I'm really pleased with the progress that the team delivered in the second quarter.

Aaron Bloomer: First of all, I'm really pleased with the progress that the team delivered in the second quarter. As Kevin mentioned, record levels of adjusted EBITDA both on a dollar basis as well as 16% on a margin basis. And kind of unpacking that a little bit, it starts with growth. Double digit revenue growth, 15% growth from screen, and you couple that with just outstanding strong operational execution, especially within GNA, and that kind of then you know informs you know from a full year guide perspective as well as long term. You know, this allowed us the execution we deliver in the second quarter allowed us to raise our full year adjusted EBITDA guidance, and if you look at that, that implies about a 500 basis point margin expansion in the back half of the year, and a majority of that leverage is going to come from GNA. And the exciting thing for us about this is it creates the capacity for us to reinvest back into our highest ROI areas.

Aaron Bloomer: Yeah. Great. Thanks, Kevin. First of all, really pleased with the progress.

Aaron Bloomer: As Kevin mentioned, record levels of adjusted EBITDA, both on a dollar basis as well as 16 percent on a margin basis. And kind of unpacking that a little bit, it starts with growth, double-digit revenue growth, 15 percent growth from screening. And you couple that with just outstanding, strong operational execution, especially within G&A.

Aaron Bloomer: It's a team delivered.

Aaron Bloomer: In the second quarter, as Kevin mentioned, record levels of adjusted EBITDA, both on a dollar basis as well as, you know, 16%

Aaron Bloomer: on a margin basis. And kind of unpacking that a little bit, it starts with growth, double digit revenue growth, 15% growth from screening, and you couple that with

Speaker Change: Just outstanding, strong operational execution, especially within GNA. And that kind of then, you know, informs, you know, from a full year guide perspective, as well as long term.

Aaron Bloomer: And that kind of informs from a full year guidance perspective as well as long term. You know, this allowed us, the execution we delivered in the second quarter, allowed us to raise our full year adjusted EBITDA guidance. And if you look at that, that implies about a 500 basis point margin expansion in the back half of the year, and a majority of that leverage is going to come from G&A. And the exciting thing for us about this is it creates the capacity for us to reinvest back into our highest ROI areas, notably MRD and marketing, in the back half of 2024. So we feel great.

Speaker Change: You know, this allowed us, the execution we delivered in the second quarter allowed us to raise our full year adjusted EBITDA guidance.

Aaron Bloomer: And if you look at that, that implies about a 500 basis point margin expansion in the back half of the year. And a majority of that leverage is going to come from

Aaron Bloomer: GNA. And the exciting thing for us about this is it creates the capacity.

Aaron Bloomer: Notably, MRD and marketing in the back half of 2024, so we feel great. I think we're in a great position to exceed our 2027. Adjusted EBITDA target of 20 plus percent.

Aaron Bloomer: for us to reinvest back into our highest ROI areas, notably MRD and marketing in the back half of 2024. So we feel great. I think we're in a great position to exceed our 2027 adjusted EBITDA target of 20 plus percent.

Aaron Bloomer: I think we're in a great position to exceed our 2027 adjusted EBITDA target of 20 plus percent. Patrick, I'll also address the CRC blood question where, as you know, our test Colgar Plus sets a whole new standard of care. On top of Colgar, we set a new standard of care. And Colgar Plus, 94 percent CRC sensitivity, 93 percent what we call category six specificity, and 43 percent adenoma sensitivity. So an incredible test.

Kevin Conroy: Peterson, Patrick, I'll also address the CRC blood question, where, as you know, our test Colorgart Plus sets a whole new standard of care. On top of Colorgart, we set a new standard of care. And Colorgart Plus, 94% CRC sensitivity, 93% what we call category six specificity. And 43% adenoma sensitivity. So, incredible test, we think that blood test face some real challenges, namely performance. And to net out the performance sensitivity and specificity, just look at light years gained. And when you take a look at Colorgart compared to blood test performance, and you can see this in one of the publications or poster that was presented at DDW, blood test have 30% fewer light years gained relative to Colorgart or Colorgart Plus.

Aaron Bloomer: Patrick, I'll also address the CRC blood question where...

Patrick Bernard Donnelly: As you know, our TASC Cold Guard Plus sets a whole new standard of care.

Aaron Bloomer: On top of Colgard, we've set a new standard of care. And Colgard Plus, 94% CRC sensitivity, 93% what we call Category 6 specificity.

Kevin T. Conroy: We think that blood tests face some real challenges, namely performance, and that to net out the performance sensitivity and specificity, just look at life years gained when you take a look at a cold guard compared to a blood test performance, and you can see this in one of the publications or posters that were presented at DDW. Blood tests have 30% fewer life years gained relative to Cologuard or Cologuard Plus. That's a huge step down in screening, and it's actually inferior to a $25 fit.

Aaron Bloomer: and 43% adenoma sensitivity. So incredible test. We think that blood tests face some real challenges, namely performance.

Aaron Bloomer: and to net out the performance, sensitivity, and specificity, just look at light-years gained.

Aaron Bloomer: and when you take a look at Couillard compared to blood test performance, and you can see this in one of the publications or poster that was presented at DDW.

Aaron Bloomer: Blood tests have 30% fewer life years gained relative to ColoGuard or ColoGuard Plus. That's a huge step down in screening and it's actually inferior to a $25 FIT test.

Kevin Conroy: That's a huge step down in screening, and it's actually inferior to a $25 fit test. So, we think there are real challenges.

Kevin T. Conroy: So we think there are real challenges. One of the challenges is the challenge of getting into guidelines, which is looking like it's at best late 26, but probably more likely 27, 2027 is when the next guideline update would be, not included in HEDIS measures, etc. There are really limitations here because of that performance difference. And it matters.

Kevin Conroy: One of the challenges is the challenge of getting into guidelines, which is looking like it's at best late 26, but probably more likely 27. 2027 is one the next guideline update would be not included in heat as measures, etc. And there are really limitations here because of that performance difference. And it matters. I mean, you're talking about people's lives and how they're screened.

Aaron Bloomer: So, we think there are real challenges.

Aaron Bloomer: One of the challenges is the challenge of getting into guidelines, which is looking like it's...

Speaker Change: At best, late 26, but probably more likely 2027 is when the next guideline update would be, not included in HEDIS measures, etc.

Aaron Bloomer: There are really limitations here.

Aaron Bloomer: because of that performance difference.

Kevin T. Conroy: I mean, you're talking about people's lives and how they're screened. And the way that Exact Sciences thinks about the appropriate role for a blood test, our own blood, is for people who refuse a colonoscopy or refuse Cologuard, or even, for that matter, refuse a fit. We don't believe an expensive blood test that is basically blind to precancerous polyps is going to be widely adopted by guideline groups, by payers, and ultimately by primary care physicians.

Aaron Bloomer: And the way that Exact Sciences thinks about the appropriate role for a blood test, our own blood test, is for people who refuse colonoscopy or refuse Colorgart, or even for that matter, refuse of fit test. An expensive blood test that is basically blind to pre-cancer is polyps. We don't believe is going to be widely adopted by guideline groups, by payers, and ultimately by primary care physicians. Our blood test is as we referenced in the comments; we ran a 3000 patient study. We really like the performance that we see. That study helped us define the final algorithm that will be used when we process the blue sea samples that will be used to submit to the FDA.

Speaker Change: Unknown Speaker And it matters. I mean, you're talking about people's lives and how they're screened, and the way that exact sciences thinks about the appropriate role for a blood test, our own blood test.

Speaker Change: is for people who refuse colonoscopy or refuse Cologuard, or even for that matter, refuse a fit test.

Speaker Change: An expensive blood test that is basically blind to precancerous polyps, we don't believe is going to be widely adopted by guideline groups, by payers, and ultimately by primary care physicians.

Kevin T. Conroy: Our blood test, as we referenced in the comments, We ran a 3000 patient study. We really like the performance that we see. That study helped us define the final algorithm that will be used when we process the Blue Sea samples that will be used to submit to the FDA. That algorithm is important because you want to run it on as many samples as possible to narrow any fluctuation in performance that you will see in the pivotal study.

Speaker Change: Our blood test is, as we referenced in the comments,

Speaker Change: We ran a 3,000 patient study. We really like the performance that we see. That study helped us define the final algorithm that will be used when we process the Blue Sea samples.

Aaron Bloomer: That algorithm is important because you want to run it on as many samples as possible to narrow any fluctuation and performance that you will see in the pivotal study. Now, we don't know what those results will be. We can't guarantee it science, but this large study gives us a tremendous amount of confidence going into what we expect to see in the quarter is the pivotal study results.

Speaker Change: that will be used to submit to the FDA.

Speaker Change: That algorithm is important because you want to run it on as many samples as possible to narrow any fluctuation in performance that you will see in the pivotal study. Now, we don't know what those results will be. We can't guarantee it. It's science.

Kevin T. Conroy: Now, we don't know what those results will be. We can't guarantee it. It's science.

Kevin T. Conroy: But this large study gives us a tremendous amount of confidence going into what we expect to see in the fourth quarter, the pivotal study. So, more to share. We'll share the results of this study, this more recent study, sometime before we release the results of the pivotal study. Finally, I think you asked the third question, and please, I know somebody else would probably ask this question about twin strand.

Speaker Change: But this large study gives us a tremendous amount of confidence going into what we expect to see in the fourth quarter is the pivotal study results.

Aaron Bloomer: So, more to share the results of this study, this more recent study, sometime before we release the results of the pivotal study results. Study.

Speaker Change: So, more to share. We'll share the results of this study, this more recent study, sometime before we release the results of the pivotal study.

Aaron Bloomer: Finally, I think you asked a third question. And please, I know somebody else would probably ask this question about Twin Strand, Twin Strand IP complement support folio that we have. And it essentially at a high level covers duplex sequencing and reducing error rates and generation sequencing for self-read DNA. It strengthens our portfolio; it's proven intellectual property, and we're excited to be the new owners.

Speaker Change: Finally, I think you asked the third question, and please, I know somebody else would probably ask this question about twin strand.

Operator: TwinStrand IP complements the portfolio that we have, and it essentially covers duplex sequencing and reducing error rates in next-generation sequencing for cell-free DNA. It strengthens our portfolio, it's proven intellectual property, and we're excited to be the new owner. Thanks, Patrick, for the question. And our next question comes from the line of Tycho Peterson with Jeffreys. Tycho, please go ahead.

Speaker Change: TwinStrand IP complements the portfolio that we have, and it essentially, at a high level, covers duplex

Speaker Change: sequencing and reducing error rates and next-generation sequencing for cell-free DNA. It strengthens our portfolio, it's proven intellectual property, and we're excited to be the new owners.

Tycho Peterson: Thanks, Patrick, for the question. And our next question comes from the line of Tycho Peterson with Jeffries. Tycho, please go ahead. Hey, thanks.

Speaker Change: Thanks, Patrick, for the question. And our next question comes from the line of Tycho Peterson with Jeffreys. Tycho, please go ahead.

Operator: Hey, thanks. A couple of Cologuard Plus, Kevin, just thinking about the phase-in process, you know, how you'll handle the transition, when you'll be fully transitioned, and, you know, just practically how does that work? Do doctors offer, you know, patients one test based on coverage and another based on their coverage? And then any feedback on pricing, you know, versus the 25%, you know, ask, as you've been out having more conversations, and are you still thinking crosswalk?

Tycho Peterson: A couple on Colorguard plus Kevin, just thinking about the phase-in process, you know, how you'll handle the transition, when you'll be fully transitioned. And it's practically how does that work? Do doctors offer, you know, patients one test based on coverage and another, you know, based on their coverage? And then any feedback on pricing no versus a 25% you know, ask as you've been out having more conversations, and are you still thinking crosswalk? And then I think you said you only need to add 150 reps for MRD.

Tycho W. Peterson: Hey, thanks. Couple on Cologuard Plus, Kevin, just thinking about the phase-in process, you know, how you'll handle the transition, when you'll be fully transitioned, and, you know, just practically how does that work? Do doctors offer, you know, patients one test based on coverage and another, you know, based on their coverage? And then

Speaker Change: Any feedback on pricing? No versus a 25%. You know, ask as you've been out having more conversations and are you still thinking crosswalk?

Speaker Change: And then I think you said you only need to add 100, 150 reps for an MRD, so switching over to MRD, you know, why is that the case, given that, you know, genomic health was, you know, didn't, it was mostly OB-GYNs, so.

Tycho Peterson: So switching over to MRD. You know, why is that the case given that, you know, Dino McElf was, you know, it was mostly OB guys.

Operator: And then I think you said you only need to add 100, 150 reps for MRD, so switching over to MRD, why is that the case, given that, you know, genomic health was, you know, didn't, it was mostly OB-GYNs, so. And then two other quick ones, just on blood. Why not release the study results now? Why wait until later in the fall?

Tycho Peterson: So, and then two other quick ones just on blood. Why not release the study results now? Why wait till later on the fall? And then can you address the issue of drawbacks of, you know, a PCR-based test versus sequencing? Obviously, there's a view that sequencing, you know, can get better over time with algorithms. Thanks.

Speaker Change: And then two other quick ones just on blood. Why not release the study results now? Why wait until later in the fall? And then can you address the issue of drawbacks of a PCR-based test versus sequencing? Obviously, there's a view that sequencing can get better over time with algorithms. Thanks.

Kevin Conroy: Tycho, it's great to have you on board. Keep in track of all that questions. I can't promise you I'll do that perfectly.

Kevin T. Conroy: And then can you address the issue of drawbacks of, you know, a PCR-based test versus sequencing? Obviously, there's a view that sequencing, you know, can get better over time with algorithms. Thanks. Psycho, it's great to have you on board, keeping track of all these questions. I can't promise you I'll do that perfectly. Let me start with blood.

Speaker Change: Tycho, it's great to have you on board keeping track of all that questions. I can't promise you I'll do that perfectly.

Kevin Conroy: Let me start with blood. We'll release that data. We're looking at the appropriate scientific conference to add that data. And we'll release that, you know, top line data as soon as we can in terms of Cologuard plus. We're still working through exactly what the commercial deployment will be at a high level. What we're trying to achieve is to make sure that the transition in insurance coverage, which will take some time, will map to the transition in utilization. And our lab team and our commercial team are working through plans to do that. It probably takes 12 to 24 months before all of the contracts we have with payers convert from Cologuard to Cologuard Plus.

Speaker Change: Let me start with blood.

Speaker Change: The, we'll release that data. We're looking at the appropriate scientific conference to have that data and we'll release the, you know, top line data as, as soon as we can in terms of ColoGuard Plus.

Speaker Change: We're still working through exactly what the commercial deployment will be at a high level. What we're trying to achieve is to make sure that the transition in insurance coverage, which will take some time, will map to the transition in utilization.

Kevin T. Conroy: We'll release that data. We're looking at the appropriate scientific conference to have that data, and we'll release the top line data as soon as we can. And our lab team and our commercial team are working through plans to do that. It probably takes 12 to 24 months before all of the contracts we have with payers convert from ColoGuard to ColoGuard Plus.

Speaker Change: and our lab team and our commercial team are working through plans to do that. It probably takes 12 to 24 months before all of the contracts we have with payers convert from Colgard to Colgard Plus.

Kevin Conroy: The first part of that journey is setting a new rate with Medicare. There are multiple paths that we can go down to do that. One is the public process that you're seeing, which actually takes a while to play out. So I'd caution against any, you know, public information that either we release or was released by Medicare ultimately towards the end of this year. There's a final decision on that current path. There are other paths to pursue as well.

Kevin T. Conroy: The first part of that journey is setting a new rate with Medicare. There are multiple paths that we can go down to do that. One is the public process that you're seeing, which actually takes a while to play out. So I'd caution against any, you know, public information that either we release or that is released by Medicare.

Speaker Change: The first part of that journey is setting a new rate with Medicare. There are multiple paths that we can go down.

Speaker Change: to do that. One is the public process that you're seeing, which actually takes a while to play out, so I'd caution against any, you know, public information that either we release or was released by Medicare. Ultimately, towards the end of this year, there's a final decision on that current path.

Kevin T. Conroy: Ultimately, towards the end of this year, there's a final decision on that current path. There are other paths to pursue as well. Bottom line, Cologuard Plus delivers real value to people getting screened because of a lower false positive rate and a higher rate of detection of cancer and precancerous polyps. It's better.

Speaker Change: There are other paths to pursue as well. Bottom line is ColoGuard Plus delivers real value to people getting screened because of the lower false positive rate, because of a higher rate of detection of cancer and precancerous polyps. It's a better test.

Kevin Conroy: Bottom line is Cologuard Plus delivers real value to people getting screen because the lower false positive rate because the higher rate of detection of cancer and pre-cancer is positive. It's a better. Test. That leads to better outcomes. It also leads to cost savings. For example, 30% lower false positive rate leads to fewer people going to unnecessary colonoscopies, while keeping sensitivity, we actually slightly higher than with Cologuard. And that's the magic of the technology that this team has worked. And that's our proprietary modification, kind of a super advanced PCR technology. That is helps us deliver those results with just a few DNA methylation markers and an approach.

Kevin T. Conroy: That leads to better outcomes and also leads to cost savings. For example, a 30% lower false positive rate leads to fewer people going to unnecessary colonoscopies, while keeping sensitivity actually slightly higher than with Cologuard, and that's the magic of the technology that this team has worked on, and that's our proprietary modification, kind of a super advanced PCR technology, that helps us deliver those results with just a few DNA methylation markers and a protein. So hopefully, I touched upon that in MRD reps. I'm not sure that I understood that question, but maybe we can come back to that later. Thank you, Tycho.

Speaker Change: That leads to better outcomes. It also leads to cost savings. For example, a 30% lower false positive rate.

Speaker Change: leads to fewer people going to unnecessary colonoscopies while keeping sensitivity.

Speaker Change: actually slightly higher than with Colagard. And that's the magic of.

Speaker Change: The technology that this team...

Speaker Change: has worked, and that's our proprietary modification of kind of a super advanced PCR technology.

Speaker Change: that helps us deliver those results with just a few DNA methylation markers and a protein.

Tycho Peterson: So hopefully touch upon that in terms of MRD reps. I'm not sure that I understood that question, but maybe we can come back to that later. Okay.

Speaker Change: MRD reps? I'm not sure that I understood that question, but maybe we can come back to that later.

Operator: Thank you, Tyco. And our next question comes from the...

Operator: And our next question comes from the, oh, go ahead. And our next question comes on the line between Andrew Brackmann and William Blair. Andrew, please go ahead.

Speaker Change: Okay.

Operator: Oh, go ahead.

Speaker Change: Thank you Tycho, and our next question comes from the, oh go ahead.

Andrew Brackmann: And our next question comes to the line of Andrew Brackman with William Blair. Andrew, please go ahead. Hi guys, good afternoon. Thanks for taking the questions. Maybe just on re-screens. Aaron, you outlined the opportunity here, increasing in the second half and getting some compelling compliance numbers as well. So I guess it sounds like the main hurdle is actually getting those repeat tests ordered. So can you maybe just level set us on the initiatives that you have to get those ordered by docs and anything incremental that we should expect in terms of investment to that in the second half of this year?

Speaker Change: And our next question comes to the line of Andrew Brackmann with William Blair. Andrew, please go ahead.

Operator: Hi guys, good afternoon. Thanks for taking the questions. Maybe just on rescreening, Aaron, you outlined the opportunity here increasing in the second half and gave some compelling compliance numbers as well. So I guess it sounds like the main hurdle is actually getting those repeat tests ordered. So can you maybe just level set us on the initiatives that you have to get those ordered by doctors and anything incremental that we should expect in terms of investment in that in the second half of this year? Hey, Andrew, great to hear from you.

Andrew Frederick Brackmann: Hi guys, good afternoon. Thanks for taking the questions. Maybe just on Ryskin's, Aaron, you outlined the opportunity here increasing in the second half and gave some compelling compliance numbers as well. So

Speaker Change: I guess it sounds like the main hurdle is actually getting those repeat tests ordered. So can you maybe just level set us on the initiatives that you have to get those ordered by docs and anything incremental that we should expect in terms of investment to that in the second half of this year?

Andrew Brackmann: Thanks. Hey, Andrew, great to hear from you. Yeah, so re-screens is an important part of our growth story. You know, the number of patients eligible for re-screen grows this year from 1.2 million to 1.6 million for the full year. And we saw strong growth from re-screens coming in the second quarter. And as we said, the back half of the year is actually up sequentially versus the first half of the year by roughly 10%.

Aaron Bloomer: Yeah, so rescreening is an important part of our growth story. You know, the number of patients eligible for rescreening grows this year from 1.2 million to 1.6 million for the full year. And we saw strong growth from rescreening in the second quarter.

Andrew Harris Cooper: Hey Andrew, great to hear from you. Yeah, so re-screens is an important part of our growth story. You know, the number of patients eligible for re-screen grows this year from 1.2 million to 1.6 million for the full year, and we saw

Marie: Strong growth for Marie screens coming in the second quarter.

Aaron Bloomer: And as we cited, the back half of the year is actually up sequentially versus the first half of the year by roughly 10%. And we're getting better and better at engaging with these patients via MyChart, our advanced ordering portal, bringing them into the ExactNexus platform. And once the patient orders the test, the second time, it's at an 80% adherence rate, and the third time is now north of 90%. So again, we're finding new and creative ways to engage with our patients. All right, thanks, Andrew. And our next question comes from the line of Catherine Schulte with Baird. Catherine, please go ahead.

Marie: And as we cited, the back half of the year is actually up sequentially versus the first half of the year by roughly 10%.

Andrew Brackmann: And we're getting better and better at engaging with these patients via MyChart, our advanced ordering portal bringing them into the exact Nexus platform. And, you know, once the patient orders the test, the second time it's at 80% adherence rate, and the third time is now north of 90%. So again, we're finding new and creative ways to engage with our patients.

Marie: And we're getting better and better at engaging with these patients via MyChart, our advanced ordering portal, bringing them into the exact nexus.

Marie: platform. And, you know, once the patient orders the test, the second time, it's at 80% adherence rate, and the third time is now north of 90%. So again, we're finding new and creative ways to engage with our patients.

Catherine Schulte: All right, thanks, Andrew. And our next question comes from the line of Catherine Schulte with Baird. Catherine, please go ahead. Hey, guys, thanks for the questions. Maybe first you mentioned care gap programs a few times. I guess what are care gap assumptions and guidance? How's that weighted between the third and fourth quarter? And then just going back to your blood program. You see a timeline for when you expect to run this pivotal sample. Walk us through the steps that you need to complete before you run those. Thanks.

Speaker Change: Alright, thanks Andrew. And our next question comes from the line of Catherine Schulte with Baird. Catherine, please go ahead.

Operator: Hey guys, thanks for the questions. Maybe first, you mentioned care gap programs a few times. So what are the care gap assumptions and guidance? How's that weighted between the third and fourth quarters? And then just going back to your blood program, do you have a timeline for when you expect to run those pivotal samples? Now walk us through the steps that you need to complete before you run those.

Catherine Walden Ramsey Schulte: Hey guys, thanks for the questions. Maybe first, you mentioned care gap programs a few times. So what are care gap assumptions and guidance? How's that weighted between the third and fourth quarter? And then just going back to your blood program, do you have a timeline for when you expect to run those pivotal samples?

Speaker Change: Now walk us through the steps that you need to complete before you run those. Thanks.

Catherine Schulte: I'll start the, you know, the Care Gap program is an important program. What you're seeing, and this has been a 10-year decade-long change in the way healthcare is consumed in the US, is that you're seeing a decline in office visits where many wellness visits were wellness. Visits are primarily conducted, and screenings are conducted. And what we're seeing is health systems and payers are coming to us and saying, "Hey, can you help us with this dynamic?" And can we get home cancer screening done remotely in the privacy of people's homes? And that what we call care gap program drives quality measures, which are really important to help large health systems and to payers across the country.

Kevin T. Conroy: Thanks. I'll start the, you know, the Care Gap Program is an important program. What you're seeing, and this has been a 10 year, decade long, a change in the way health care is consumed in the U.S. that you're seeing a decline in office visits, where many wellness visits or wellness visits are primarily conducted and screenings are conducted and what we're seeing is health systems and payers are coming to us and saying hey can you help us with this dynamic and can we get colon cancer screening done remotely in the privacy of people's home and that what we call care gap program drives quality measures which are really important to help large health systems and to payers, across the country.

Speaker Change: I'll start, you know, the Care Gap Program is an important program. What you're seeing, and this has been a 10-year, decade-long

Speaker Change: change in the way healthcare is consumed in the U.S. that you're seeing a decline in office visits.

Speaker Change: where many wellness visits or wellness...

Speaker Change: Visits are primarily conducted and screenings are conducted and what we're seeing is health systems and payers are coming to us and saying, hey, can you help us with this dynamic? And can we get colon cancer screening done remotely in the privacy of people's home?

Speaker Change: And that, what we call Care Gap Program, drives quality measures, which are really important to help large health systems and to payers.

Kevin T. Conroy: What we're doing here to help them is to engage with them to deliver directly to their members, to their patients, the Cologuard test in the privacy of their own home so that it can be completed. And so our ExactNexus platform, our customer care capability, and our digital capabilities are allowing us to serve these patients as they consume health care in a very different way, and we're seeing strong growth.

Kevin Conroy: What we're doing here to help them is to engage with them to deliver directly to their members, to their patients. Williams, Collegar test, and the privacy of their own home so that can be completed. And so our Exact Nexus platform, our customer care capability, our digital capabilities are allowing us to serve these patients as they consume healthcare in a very different way. And we're seeing strong growth. An interesting dynamic here is that the growth tends to occur in a significant way from the early part of the year to the towards the end of the year.

Speaker Change: across the country. What we're doing here to help them is to engage with them to deliver directly to their members, to their patients.

Speaker Change: the Cologuard test in the privacy of their own home so that can be completed. And so our ExactNexus platform, our customer care capability, our digital capabilities are allowing us to serve these patients as

Speaker Change: They consume health care in a very different way, and we're seeing strong growth.

Kevin T. Conroy: An interesting dynamic here is that growth tends to occur in a significant way from the early part of the year towards the end of the year. One of the drivers is that health systems and payers see a sneak preview of their quality measure scores in the middle of the year, driving a lot of activity to improve their scores by the end of the year, and that's an awfully busy time for us in Care Gap programs. So we expect the step up to be Q3, a real step up from Q2, and Q4, the biggest step up. That's what we saw last year. Aaron said, Yeah, no, you're hitting on it.

Speaker Change: An interesting dynamic here is that the growth tends to occur

Speaker Change: in a significant way.

Speaker Change: From the early part of the year to the towards the end of the year. One of the drivers is that health systems and payers see a sneak preview of their quality measure scores in the middle of the year.

Aaron Bloomer: One of the drivers is that health systems and payers see a sneak preview of their quality measure scores in the middle of the year, driving to a lot of activity to improve their scores by the end of the year. And that's an awfully busy time for us in care gap programs. So we expect the step up to be Q3, a real step up from Q2, and Q4, the biggest step up. That's what we saw last year, Aaron. Yeah, no, you hit on it. It's going to be more for QAID consistent with what we saw in 2023.

Speaker Change: driving to a lot of activity.

Aaron Bloomer: to improve their scores by the end of the year. And that's an awfully busy time for us in Care Gap program. So we expect the step up to be Q3 a real step up from Q2 and Q4 the biggest step up. That's what we saw last year, Aaron.

Aaron Bloomer: It's going to be more 4Q-weighted, consistent with what we saw in 2023. I would just reiterate that we have a lot of confidence and visibility into the pipeline. We've already made more revenue in the first half of 2024 than we did in all of 2020. Then you asked a question about what we need to do before running the pivotal samples. You do have to do a lot of software work to validate all the algorithms so that they work perfectly.

Aaron Bloomer: Yeah, no, you hit on it. It's going to be more 4Q-weighted consistent with what we saw in 2023. I would just reiterate, we have a lot of confidence and visibility into the pipeline. We've already done more revenue in the first half of 2024 than we did in all of 2023.

Aaron Bloomer: Just reiterate, we have a lot of confidence and visibility into the pipeline. We've already done more revenue in the first half of 2024 than we did in all of 2023.

Aaron Bloomer: Then you asked a question about what do we need to do before running the pivotal samples? You have to do a lot of software work to validate all the algorithms so that they work perfectly. You have to process the between 10 and 20,000 samples that are frozen in bank, the automation, all of the lab, reagent QC, kind of the list goes on and on. You have one shot at doing this, and you want to do it perfectly. So the team is so proud of the team and what they have done here and developing the task, the clinical affairs team that has run the clinical trial.

Speaker Change: Then you asked a question about what do we need to do before running the pivotal samples. You have to do a lot of software work to validate all the algorithms so that they work perfectly. You have to process between 10,000 and 20,000 samples that are frozen and banked.

Aaron Bloomer: You have to process between 10,000 and 20,000 samples that are frozen and banked, the automation, all of the lab, reagent QC, kind of the list goes on and on. You have one shot at doing this, and you want to do it perfectly.

Speaker Change: The automation, all of the lab, reagent QC, kind of the list goes on and on.

Kevin T. Conroy: So the team is so proud of the team and what they have done here and developing the test, the clinical affairs team that has run the clinical trial, and it's the largest and, we think, broadest clinical trial in this field, both stool and blood, compared to the fifth test, which is one thing that we insisted on doing. So we're really looking forward to doing that and announcing the results in the fourth quarter.

Speaker Change: You have one shot at doing this and you want to do it perfectly. So the team, so proud of the team and what they have done here in developing the test.

Speaker Change: The clinical affairs team that has run the clinical trial and it's the largest and we think broadest clinical trial in this field both stool and blood comparing to the FIT test which is

Aaron Bloomer: And if the largest and we think brought a clinical trial in this field, both stool and blood comparing to the fifth test, which is one thing that we insisted on doing. So we're really looking forward to doing that and announcing the results in the fourth quarter. And just to be clear, we have not processed those samples yet. When we process the samples, we will, and we see the data, it'll be a quick turnaround to announcing top-line results and then presenting the data at a scientific conference and giving them into a publication. All right.

Speaker Change: One thing that we insisted on doing. So we're really looking forward to doing that and announcing the results in the fourth quarter. And just to be clear, we have not processed those samples yet. When we process the samples,

Kevin T. Conroy: And just to be clear, we have not processed those samples yet. When we process the samples, we will, and we see the data. It'll be a quick turnaround to announcing the top line results and then presenting the data at a scientific conference and getting them into a publication. All right.

Speaker Change: We will, and we see the data, it'll be a quick turnaround to announcing top line results and then presenting the data at a scientific conference and getting them into a publication.

Operator: Thanks, Catherine. And our next question comes from the line of Matt Sykes. Matt, please go ahead. Good afternoon.

Mat Sykes: Thanks, Catherine. And our next question comes from the line of Mat Sykes with Golden Sacks. Mat, please go ahead. Thank you. Good afternoon. Thanks for taking my questions. Congrats on the quarter. I just wanted to ask on the key three guide. Aaron just came in a little bit below our expectations.

Speaker Change: Alright, thanks Catherine. And our next question comes from the line of Matt Sykes with Goldman Sachs. Matt, please go ahead.

Operator: Thanks for taking my questions. Congratulations on the quarter. I just wanted to ask about the Q3 guide, Aaron. It just came in a little bit below our expectations. Is that sort of reflecting some of the seasonality plus care gap in Q4 and that's where that revenue goes in terms of making that full year guide? And then, just secondly, on modeling, is there any way you can break out the prevention genetics from the overall screening revenue in the quarter? Thanks.

Matthew Carlisle Sykes: Hey, good afternoon. Thanks for taking my questions. Congrats on the quarter. I just wanted to ask on the Q3 guide, Aaron, it just came in a little bit below our expectations. Is that sort of...

Mat Sykes: Is that sort of reflecting some of the seasonality plus care gap in Q4, and that's where that revenue goes in terms of making that full year guide? And then just secondly on modeling, is there any way you can break out the prevention genetics from the overall screening revenue in the quarter? Thanks. Yeah, so again, re-screens is going to drive more growth in Q3 and Q4. That's going to be more Q4 weighted care gap programs, as we just talked about, will be more Q4 weighted, although is a sequential step up from Q2 to Q3. And the other thing I would just say is we know this market very well.

Speaker Change: Reflecting some of the seasonality plus care gap in Q4, and that's where that revenue goes in terms of making that full year guide. And then just secondly on modeling, is there any way you can break out the prevention genetics from the overall screening revenue in the quarter? Thanks.

Aaron Bloomer: Yeah, so again, re-screens are going to drive more growth in Q3 and Q4. That's going to be more Q4 weighted. Care gap programs, as we just talked about, will be more Q4 weighted, although it is a sequential step up from Q2 to Q3. And the other thing I would just say is that we know this market very well. We've consistently seen that the steepest part of the growth curve really occurs from mid-August through November as wellness visits accelerate coming out of the summer.

Speaker Change: Yeah, so...

Speaker Change: Again, re-screens is going to drive more growth in Q3 and Q4. That's going to be more Q4-weighted. Care gap programs, as we just talked about, will be more Q4-weighted, although it is a sequential step up from Q2

Speaker Change: 2Q3. And the other thing I would just say is, we know this market very well. We've seen consistently the steepest part of the growth curve really occurs from mid-August

Aaron Bloomer: We've seen consistently the steepest part of the growth curve really occurs from mid-August through November, as well as this visits accelerate coming out of the summer. And that kind of informed than what we put into our back half of the year guide as well as our sequential step up Q2 to Q3 and then into Q4 consistent with prior averages.

Aaron Bloomer: And that kind of informed what we put into our back half of the year guide, as well as our sequential step up from Q2 to Q3, and then into Q4, consistent with the prior year average. All right. Thank you, Matt. And our next question comes from the line of Dan Arias. Dan, please go ahead.

Speaker Change: through November as wellness visits accelerate coming out of the summer. And that kind of informed then what we put into our back half of the year guide as well as our sequential step up Q2 to Q3 and then into Q4, consistent with prior year averages.

Dan Arias: All right, thank you, Matt. And our next question comes from the line of Dan Arias with Steeple. Dan, please go ahead. Thanks for the questions. Kevin, I just wanted to go back to the USPSTF process, if I could. When those guys updated guidelines in 2021, how far before that, I believe, was May of that year? How far, how much before that did you hear from them first in terms of their data collection efforts? And do you think that it's any sooner or later than that this time around? Essentially, what are you expecting to first hear them reach out to you on this process?

Speaker Change: Alright, thank you Matt. And our next question comes from the line of Dan Arias with Stiebel. Dan, please go ahead.

Operator: And guys, thanks for the questions. Kevin, I just wanted to go back to the USPSTF process, if I could. When those guys updated the guidelines in 2021, how far before that, I believe it was May of that year, how far, how much before that did you hear from them first? In terms of their data collection efforts, do you think that it's any sooner or later than that this time around? Essentially, when are you expecting to first hear from them reach out to you in this process? Here's how the USPSTF process basically works.

Daniel Anthony Arias: Afternoon, guys. Thanks for the questions. Kevin, I just wanted to go back to the USPSTF process if I could. When those guys updated the guidelines in 2021, how far before that, I believe it was May of that year, how much before that did you hear from them first?

Speaker Change: In terms of their data collection efforts, do you think that it's any sooner or later than that this time around? Essentially, when are you expecting to first hear them reach out to you on this process?

Kevin Conroy: Here's how the USPSTF process basically works. And let me tell you what USPSTF is first. So USPSTF, the United States Preventive Services Task Force, is a group of volunteer primary care physician nurses, preeminent leaders who think about prevention and ultimately opine on dozens and dozens of different topics from vaccines to screening. And what they typically do is start with a research plan that gets published. They look at the research plan. Two things are generated: a modeling report and a literature review. So a deep survey of studies and the literature, the evidence that has been generated since the last update, that they then issue a draft guidance.

Kevin T. Conroy: And let me tell you what USPSTF is first. USPSTF, the United States Preventive Services Task Force, is a group of volunteer primary care physician nurses, preeminent leaders who think about prevention and ultimately advise on dozens and dozens of different topics from vaccines to screening. And what they typically do is start with a research plan that gets published. They look at the research plan. Two things are generated; a modeling report and a literature review.

Speaker Change: Here's how the USPSTF process basically works, and let me tell you what USPSTF is first. USPSTF, the United States Preventive Services Task Force.

Kevin T. Conroy: So a deep survey of studies and the literature, the evidence that has been generated since the last update, that they then issue a draft guidance, and then usually within about six months after that, they issue final guidance. That whole process is about a two and a half to three year process.

Kevin T. Conroy: They meet on any of the individual topics about every every five years for colon cancer screening. It has ranged between five years and eight years. So it's not like clockwork every five years. It varies based upon how busy the task force is, the resources they have, and the extent of that research plan. So what you would expect next is to see the research plan. We were kind of expecting that to be in the first quarter of this year. It looks like it's going to be a little bit later.

Speaker Change: is a group of volunteer primary care physician nurses preeminent leaders who think about prevention and ultimately opine on dozens and dozens of different topics from vaccines to screening.

Kevin T. Conroy: So the whole process gets shifted, and it will be approximately two and a half to three years from the time that the research plan gets initiated or published until the final guide, so it's looking more like 2027 based upon that timeline. We've obviously been through two of these cycles, so we're awfully familiar.

Speaker Change: And what they typically do is start with a research plan that gets published.

Speaker Change: They look at the research plan. Two things are generated, a modeling report and a literature review, so a deep survey of studies and the literature, the evidence that has been generated since the last update.

Kevin Conroy: And then, usually within about six months after that, they issue final guidance. That whole process is about a two-and-a-half to three-year process. They meet on any of the individual topics about every; they shoot for every five years with colon cancer screening. It has ranged up between five years and eight years. So the, if not quite clockwork every five years, it varies based upon how busy the test courses, the resources they have, and the extent of that research plan. So what you would expect next is to see the research plan. We were kind of expecting that to be in the first quarter of this year.

Speaker Change: They then issue a draft guidance and then usually within about six months after that they issue final guidance. That whole process is about a two and a half to three year process.

Speaker Change: They meet on any of the individual topics about every, they shoot for every five years with colon cancer screening. It has ranged between five years and eight years.

Speaker Change: So the, it's not like clockwork every five years. It varies based upon how busy the task force is, the resources they have, and the extent of that research plan. So what you would expect next is to see the research plan

Kevin Conroy: It looks like it's going to be a little bit later. So the whole process gets shifted, and that will be approximately two and a half to three years from the time that research plan gets initiated or published until the final guide. So it's looking more like 2027 based upon that timeline. We've obviously been through two of these cycles, so we're awfully familiar with it. Great.

Speaker Change: We were kind of expecting that to be in the first quarter of this year. It looks like it's going to be a little bit later, so the whole process gets shifted.

Speaker Change: and it will be approximately two and a half to three years from the time that research plan gets initiated or published until the final guidance.

Speaker Change: So that it's looking more like 2027 based upon that timeline. We've obviously been through two of these cycles. So we're, we're awfully familiar with it.

Operator: Great, thanks for the question. And our next question comes from the line of Doug Schenkel with Wolf Research. Doug, please go ahead. Hey guys, I want to talk about two things: Kologuard momentum, and then I want to take another angle on Kologuard blood.

Kevin Conroy: Thanks for the question.

Doug Schenkel: And our next question comes from the line of Doug Schenkel with Wolf Research. Doug, please go ahead. Hey guys. So I want to talk about two things. Collegarde momentum, and then I want to take another angle on Collegarde blood. So on Collegarde momentum, it seems like first time orders group double digits sequentially assuming I'm doing the math right. That's impressive. I'm just wondering how much of that seasonality versus new hires and, you know, maybe some of it's streamlining of commercial leadership.

Speaker Change: Great, thanks for the question. And our next question comes from the line of Doug Schenkel with Wolf Research. Doug, please go ahead.

Douglas Anthony Schenkel: Hey guys, so I want to talk about two things, Kologuard momentum and then I want to take another angle on Kologuard blood. So on Kologuard momentum, it seems like first time orders grew double digits sequentially, assuming I'm doing the math right.

Operator: So on Kologuard momentum, it seems like first-time orders grew double digits sequentially, assuming I'm doing the math right. That's impressive. I'm just wondering how much of that is seasonality versus new hires and, you know, maybe some of it's streamlining commercial leadership. So that's the first topic. The second topic is Koligard blood.

Speaker Change: That's impressive. I'm just wondering how much of that seasonality versus new hires and, you know, maybe some of its streamlining of commercial leadership. So that's the first topic. The second topic is on Koligard blood. So

Doug Schenkel: So that's the first topic.

Doug Schenkel: The second topic is on Collegarde blood. So you've talked about the clear cost advantages of using PCR versus sequencing. What's unclear is if there are structural disadvantages from a performance standpoint, either because of, you know, things like limitations in terms of number of markers or CPG islands, you can query a detail or GC bias, just to name a couple of things. Last quarter, you talked about processing 3000 samples, but I bring that up because you said specifically we're doing that to collect more data on specificity. I just want to give you an opportunity to address the question of NGS versus PCR trade-offs.

Kevin T. Conroy: You've talked about the clear cost advantages of using PCR versus sequencing. What's unclear is if there are structural disadvantages from a performance standpoint. Either because of, you know, things like limitations in terms of the number of markers or CPG islands you can query detail or GC bias, just to name a couple of things.

Speaker Change: You've talked about the clear cost advantages of using PCR versus sequencing. What's unclear is if there are structural disadvantages from a performance standpoint.

Speaker Change: either because of you know things like limitations in terms of number of markers or CPG islands you can query a detail or GC bias just to name a couple of things

Kevin T. Conroy: Last quarter you talked about processing 3,000 samples, and I bring that up because you said specifically that you were doing that to collect more data on specificity. I just want to give you an opportunity to address the question of NGS versus PCR trade-offs. Specifically, are there any structural disadvantages such as lower specificity?

Speaker Change #104: Last quarter you talked about processing 3,000 samples, and I bring that up because you said specifically you were doing that to collect more data on specificity.

Speaker Change: I just want to give you an opportunity to address the question of NGS versus PCR trade-offs, you know, specifically are there any structural disadvantages such as lower specificity and then

Doug Schenkel: You know, specifically are there any structural disadvantages such as lower specificity, and then related to that, Kevin, there's a long history of attenuation in this industry when companies lock down their assays and actually run them for the first time on samples in a large randomized, prospectively collected sample study. You saw this with Collegarde. We saw it with Garden. We've seen it almost every time. Why is this not a concern?

Kevin T. Conroy: Amen. Related to that, Kevin, there's a long history of attenuation in this industry when companies lock down their assets and actually run them for the first time on samples in a large, randomized, prospectively collected sample study. You saw this with Colagard. We saw it with Garden.

Kevin T. Conroy: Related to that, Kevin, there's a long history of attenuation in this industry when companies lock down their assets.

Speaker Change: and actually run them for the first time on samples in a large, randomized, prospectively collected sample study. You saw this with Colagard. We saw it with Garden. We've seen it almost every time. Why is this not a concern? Thank you.

Kevin T. Conroy: We've seen it almost every time. Why is this not a concern? Thank you. Hey Doug, can you answer? There was a piece that I missed after the structural differences between PCR and X-generation sequencing. I missed that part of your question. It's really the attenuation, Kevin.

Kevin Conroy: Thank you. Hey, Doug. Can you answer you? There was a piece that I missed after the structural question differences between PCR and X generation sequencing. I missed that part of your question. It's really the attenuation, Kevin. As you know, and I've talked about a bunch of times over the years, attenuation occurs almost every time you take an assay, lock it down, and run it on prospectively randomized collected samples. Why is that not a concern here? You know, it's interesting. And the last study we did, there wasn't an attenuation. And the reason was we have gotten a lot better at algorithm setting studies.

Kevin T. Conroy: Hey Doug, can you answer, there was a piece that I missed after the structural differences between PCR and X-generation sequencing. I missed that part of your question.

Kevin T. Conroy: As you know, and we've talked about a bunch of times over the years, attenuation occurs almost every time you take an assay, lock it down, and run it on prospectively randomized collected samples. Why is that not a concern here? You know, it's interesting. In the last study we did, there wasn't any attenuation.

Doug: It's really the attenuation, Kevin. As you know, and you and I have talked about a bunch of times over the years, attenuation occurs almost every time you take a

Kevin T. Conroy: an assay, lock it down and run it on prospectively randomized collected samples. Why is that not a concern here?

Speaker Change: You know, it's interesting, in the last study we did, there wasn't an attenuation, and the reason was we have gotten a lot better at algorithm-setting studies.

Kevin T. Conroy: And the reason was that we have gotten a lot better at algorithm setting study. The more samples that you study, and especially normal, Actually, I shouldn't be giving away any inside knowledge here. So what I will say is we have gotten better at setting the algorithm. And by getting better at the study, the algorithms setting study. From the algorithm setting study for Colgard Plus to the final readout, we saw performance improve, which was very different from the algorithm setting study for the original COLAGuard to the release of the deep sea data. Why?

Kevin Conroy: The more samples that you study and especially normals, actually, I shouldn't be giving away inside knowledge here. So what I will say is we have gotten better at setting the algorithm. And by getting better in the study, the algorithms setting study from the algorithm set setting study for Collegarde Plus to the final readout, we saw performance improvement, which was very different than the algorithms setting study for the original Collegarde to the release of the DC data. That's why we have gotten better at doing those studies. And I just, the team is world class. S.

Kevin T. Conroy: The more samples that you study, and especially normals,

Kevin T. Conroy: Actually, I shouldn't be giving away inside knowledge here. So what I will say is we have gotten better at setting the algorithm.

Kevin T. Conroy: And by getting better in the study, the algorithms setting study.

Kevin T. Conroy: From the algorithm setting study for Colgard Plus to the final readout, we saw performance improvement.

Speaker Change: which was very different than the algorithms setting study for the original COLAGuard to the release of the deep sea data. Why? We have gotten better at doing those studies and I just, the team is world-class.

Kevin T. Conroy: We have gotten better at doing those studies, and the team is world class. But there are pros and cons of PCR versus sequencing. I would say that, remember, we used sequencing to discover the markers that we use in both Colgard Plus and also our blood-based colon cancer screening test. And think of it this way: the fewer markers you use, there's less noise. The more markers you use, there can be more noise. Now, that's not a rule because there's also noise generated from PCR. There's noise generated from the sequence.

Kevin Conroy: So, there are pros and cons of PCR versus sequencing. I would say that, remember, we used sequencing to discover the markers that we use in both Colguard Plus and also our blood-based co-incancers screening test. And think of it this way: the fewer markers you use, there's less noise; the more markers you use. There can be more noise. Now, that's not a rule because there's also noise generated from PCR. There's noise generated from sequencing. And so these things tend to balance themselves out with the Exact Sciences R&D team is world class at figuring out a way to make that trade-off between sensitivity and specificity.

Speaker Change: So, there are pros and cons of PCR versus sequencing. I would say that, remember, we used sequencing to discover the markers

Speaker Change: that we use in both Colgard Plus and also our blood-based colon cancer screening test. And think of it this way, the fewer markers you use, there's less noise. The more markers you use, there can be more noise.

Speaker Change: Now, that's not a rule because there's also noise generated from PCR, there's noise generated from sequencing.

Kevin T. Conroy: And so these things tend to balance themselves out. The Exact Sciences R&D team is world-class at figuring out a way to make that tradeoff between sensitivity and specificity. I think we're the only ones who have figured out how to do it with PCR. And it's a huge advantage. People often say, well, yeah, but you're not using next-generation sequencing. It's not state of the art.

Speaker Change: And so these things tend to balance themselves out, but the Exact Sciences R&D team is world-class at figuring out a way to

Kevin T. Conroy: It's actually the opposite is true. It's scientifically harder to do what we have done, which is to focus on cost of goods and performance and to deliver on both. And so the data is going to show the results, right? And so in the fourth quarter, we'll know. Again, we don't know what the results are. It's science; anything can happen.

Speaker Change: make that trade-off between sensitivity and specificity, I think we're the only ones who have figured out how to do it with PCR.

Kevin Conroy: I think we're the only ones who have figured out how to do it with PCR. And it's a huge advantage. People often say, "Well, yeah, but you're not using next generation sequencing." It's not state of the art. It's actually the opposite is true. It's scientifically harder to do what we have done, which is to focus on cost of goods and performance and to deliver on both. And so the data is going to show the results, right? And so in the fourth quarter, we'll know; again, we don't know what the results are. It's science. Anything can happen.

Speaker Change: And it's a huge advantage. People often say, well, yeah, but you're not using next-generation sequencing. It's not state-of-the-art. It's actually the opposite is true.

Speaker Change: Scientifically harder to do what we have done which is to focus on cost of goods and performance and to deliver on both.

Speaker Change: and so the data is going to show the results, right? And so in the fourth quarter, we'll know.

Speaker Change: Again, we don't know what the results are, it's science, anything can happen, I'm not

Kevin Conroy: I'm not. We're confident, but we don't have a crystal ball as to what will result. But the beautiful part of our advanced proprietary PCR platform coupled with our deep knowledge of DNA methylation biomarkers and the regions within the best biomarkers is a unit cost advantage. So that if we deliver comparable data with our platform, with our cost advantage, we can deliver an appropriately priced test to patients who may benefit. And then, with our system and data and knowledge and relationships with payers and providers, we can actually get the blood test to the right people. And so that's why we think we win.

Kevin T. Conroy: I'm not, we're confident, but we don't have a crystal ball as to what will result. But the beautiful part of our advanced proprietary PCR platform, coupled with our deep knowledge of DNA methylation biomarkers and the regions within the best biomarkers, is a unit cost. So if we deliver comparable data with our platform, with our cost advantage, we can deliver an appropriately priced test to patients who may benefit. And then, with our system and data and knowledge and relationships with payers and providers, we can actually get a blood test to the right people. And so that's why we think we will win. This will obviously take time. I would bet on the exact same.

Speaker Change: We're confident, but we we don't have a crystal ball as to what will result. But the beautiful part of our advanced proprietary PCR platform coupled with our deep knowledge of DNA methylation biomarkers and the regions within the best biomarkers

Speaker Change: is a unit cost advantage.

Speaker Change: so that

Speaker Change: If we deliver comparable data, with our platform, with our cost advantage, we can deliver an appropriately priced product.

Speaker Change: Test to patients who may benefit and then with our system and data and knowledge and relationships with payers and providers We can actually get a blood test to the right people

Kevin Conroy: This will obviously take time. I would bet on the Exact Sciences team.

Speaker Change: And so that's why we think we win. This will obviously take time. I would bet on the exact sciences team.

Doug Schenkel: And Doug, then just on the call of our momentum. Yeah, 15% growth for screening in the quarter. We saw growth actually across all three segments. So re screen 45 to 49 and 50 plus. Maybe highlighted re screens last year were roughly 20% of total revenue, and we're on track to grow that by at least a couple of percentage points this year. But also just call out in the 45 to 49 solid growth from that this remains one of our leading growth opportunities. Recall there's still 19 million Americans in this cohort, and there's less than 20% of those that have been screened.

Aaron Bloomer: And Doug, then just on the COLAGARD momentum, yeah, 15% growth for screening in the quarter. We saw growth actually across all three segments. So re-screen 45 to 49 and 50 plus, we highlighted re-screens last year were roughly 20% of total revenue, and we're on track to grow that by at least a couple of percentage points this year. I'd also just call out the 45 to 49, solid growth from that.

Speaker Change: And Doug, then, just on the COLAGARD momentum...

Douglas Anthony Schenkel: Yeah, 15% growth for screening in the quarter. We saw growth actually across all three segments. So re-screened 45 to 49 and 50 plus. We highlighted re-screened last year were roughly 20%.

Speaker Change: of total revenue, and we're on track to grow that by at least a couple of percentage points this year.

Speaker Change: I'd also just call out in the 45-49, solid growth from that. This remains one of our leading growth opportunities. Recall there's still 19 million Americans in this cohort and there's less than 20% of those that have been screened.

Aaron Bloomer: This remains one of our leading growth opportunities. Recall there are still 19 million Americans in this cohort, and there are less than 20% of those that have been screened. If we're able to keep them screened for 30-plus years, this is an even bigger recurring revenue opportunity for us. And we're really excited about all the new ways that we can reach this patient population. They don't see their primary care provider as often as some of the other age groups, and so we're leveraging digital, our social marketing, and unique ways to target them, as part of our Care Gap programs. We've seen a nice uptick in 45 to 49 coming through the Care Gap program. Thanks, Doug. And our next question comes from the line of Vijay Kumar with Evercore ISI. Vijay, please go ahead.

Kevin Conroy: If we're able to keep them screened for 30 plus years, this is an even bigger recurring revenue opportunity for us. And we're really excited about all the new ways that we can reach this patient population. You know, they don't see their primary care provider as often as some of the other age groups. And so we're leveraging digital or social marketing unique ways to target them as well as part of our care gap programs. And we've seen a nice uptick in 45 to 49 coming through the care gap program. as well.

Speaker Change: If we're able to keep them screened for 30-plus years, this is an even bigger recurring revenue opportunity for us. And we're really excited about all the new ways that we can reach...

Speaker Change: This patient population, you know, they don't see, you know, their primary care provider as often as some of the other age groups. And so we're leveraging digital, our social marketing, unique ways to target them, as well as part of our Care Gap program.

Speaker Change: We've seen a nice uptick in 45 to 49 coming through the CARE-BAT programs as well.

Vijay Kumar: Next up, and our next question comes from the line of Vijay Kumar with Evercore ISI. Vijay, please go ahead. Hey guys, thanks for taking my question, and congrats on a good frontier. Kevin, I had a two-parter, one on topics here, down sequentially seven percent.

Speaker Change: Thanks Doug. And our next question comes from the line of Vijay Kumar with Evercore ISI. Vijay, please go ahead.

Operator: Hey guys, thanks for taking my question, and congrats on a good frontier. Kevin, I had a two-parter, one on OPEX here, down sequentially 7%. Were there any one-offs in the quarter from a timing perspective?

Vijay Muniyappa Kumar: Hey guys, thanks for taking my question and congrats on a good frontier. Kevin, I had a coup order, one on OPEX here, down sequentially 7%.

Aaron Bloomer: Were there any one-offs in the quarter from a timing perspective, and should OPEX be consistent at current levels, or how should we think about OPEX ramp in the back half? And the second part was how are you thinking about, you mentioned the price advantage on your blood-based test. I'm curious how a pair is going to look at if there are two blood-based tests at different price points. How do you think they are sort of react to different tests? Thank you. Hey Vijay, good afternoon. I'll take this there, and I'll take the first part of the question just as it relates to OPEX.

Vijay Muniyappa Kumar: Were there any one-offs in the quarter from a timing perspective?

Speaker Change: Should OPEX be consistent at current levels or how should we think about OPEX ramp in the back half?

Speaker Change: And the second part was how are you thinking about, you know, you mentioned the price advantage on your blood-based test.

Speaker Change: I'm curious, how will payers want to look at, if there are two blood-based tests at different price points?

Operator: And should OPEX be consistent at current levels, or how should we think about OPEX ramping up in the back half? And the second parter was, how are you thinking about, you know? You mentioned the price advantage of your blood-based test. I'm curious, how are payers going to look at, if there are two blood-based tests at different price points? How do you think payers will react to different tests? Thank you. Hey Vijay, good afternoon.

Speaker Change: How do you think they are sort of react to different tests? Thank you.

Aaron Bloomer: I'll take this there, and I'll take the first part of the question just as it relates to OPEX. So no specific one-timers, especially, you know, we broke out GAP versus adjusted OPEX. And so on an adjusted OPEX basis, obviously, all the one-timers would be excluded.

Speaker Change: Hey Vijay, good afternoon. I'll take the first part of the question, just as it relates to OPEX. So no specific one-timers, especially, you know, we broke out GAP versus adjusted OPEX. And so on an adjusted OPEX basis, obviously all the one-timers would be excluded. On a GAP basis,

Aaron Bloomer: So no specific one-timers, especially, you know, we broke out gap versus adjusted OPEX, and so on. The adjusted OPEX basis, obviously all the one-timers would be excluded. On a gap basis, there was one item that sat within the GNA line, but on a adjusted basis, you can expect kind of consistency on the GNA line, Q2 into the back half of the year. I would expect sequential step-up implied in both sales and marketing as well as in R&D. As we move into the back half of the year, R&D largely tied to our MRD program and then marketing just typically tied to higher viewership in the back half of the year.

Aaron Bloomer: On a GAP basis, there was one item that sat within the G&A line. But on an adjusted basis, you can expect a kind of consistency on the G&A line, Q2 into the back half of the year. I would expect a sequential step-up implied in both sales and marketing, as well as in R&D. As we move into the back half of the year, R&D will be largely tied to our MRD program, and then marketing, just typically tied to higher viewership in the back. And in terms of how the payers are going to look at a lower price test. I think that the way that payers tend to look at, you know, any type of service is that they are adept at finding a way to deliver the best performance at the best cost to the plan.

Speaker Change: Q2 into the back half of the year. I would expect a sequential step up implied in both sales and marketing as well as in R&D. As we move into the back half of the year, R&D largely tied to our MRD.

Speaker Change: Program, and then marketing, just typically tied to higher viewership in the back half of the year.

Kevin Conroy: And in terms of how the payers are going to look at a lower price test, I think that the way that payers tend to look at any type of service is they are adept at finding a way to deliver best performance at the best cost to the plan. And, you know, that means they have a range of tools from prior authorization to step at its due, you know, tools that allow them to make sure that the right test is performed. One key opinion leader yesterday said, you know, she was excited, and this is public, Dr. Fulla May, and she said, look, I'm excited about the blood test FDA approval.

Speaker Change: And in terms of how the payers are going to look at a lower-priced test...

Speaker Change: I think that the way that payers tend to look at, you know, any type of service is they are adept at finding a way to deliver best performance at the best cost to the plan.

Kevin T. Conroy: And you know, that means they have a range of tools from prior authorization to step edits to tools that allow them to make sure that the right test is performed. One key opinion leader yesterday said, you know, she was excited, and this is public, Dr. Fole-LeMay, and she said, look, I'm excited about the blood test FDA approval. There is a highly resistant population that will always refuse colonoscopy and stool tests.

Speaker Change #109: And, you know, that means they have a range of tools from prior authorization to step edits to, you know, tools that allow them to make sure that the right test is performed. One key opinion leader yesterday said,

Speaker Change: You know, she was excited, and this is public, Dr. Fola May.

Speaker Change: and she said, look, I'm excited about the blood test FDA approval. There is a highly resistant population that will always refuse colonoscopy and stool tests. It gives them another option.

Kevin Conroy: There is a highly resistant population that will always refuse colonoscopy and stool tests. It gives them another option. Here's the important part, but I hope to God that everyone understands that these are not the same thing. And I think payers understand that a test that is not part of quality measures, a test whose performance is, you know, not as good in terms of like yours gained as a fit test, is there's going to be an appropriate role that is going to be determined likely by USPSTF, payers, and then health systems and primary care physicians.

Kevin T. Conroy: It gives them another option. Here's the important part, but I hope to God that everyone understands that these are not the same things. And I think payers understand that a test that is not part of the quality measures, a test whose performance is not, you know, not as good in terms of life years gained as a fit test, is there's going to be an appropriate role that is going to be determined likely by USPSTF payers and then health systems and primary care physicians, and you know that's going to be a long road. Okay, thank you for the question. And our next question comes from Dan Brennan with TD Cowen. Dan, please go ahead.

Speaker Change: Here's the important part, but I hope to God that everyone understands that these are not the same thing.

Speaker Change: And I think payers understand that a test that is not part of the quality measures, a test whose performance is, you know, not as good in terms of life years gained as a fit test.

Speaker Change: is there's going to be an appropriate role that is going to be determined likely by USPSTF payers and then health systems and primary care physicians. And, you know, that's going to be a long road.

Kevin Conroy: And, you know, that's going to be a long road.

Dan Brennan: Okay, thank you for the question, and our next question comes from Dan Brennan with TD Callum. Dan, please go ahead. Great, thanks, guys. Thanks for taking the questions. Maybe first one would, I know there's been a few questions on Caregap. Could you just potentially quantify how big Caregap is in the second half, since there's a lot of consternation about the expected cold of our grand second half first half. And, you know, is there any sales force expansion baked in the second half?

Operator: Great, thanks, guys. Thanks for taking the questions. Um, maybe first one, which I know there's been a few questions on Care Gap, could you just, This is for all of the folks that are listening in this is a great way for us to potentially quantify how big Care Gap is in the second half since there's a lot of consternation about the expected Coal to Guard ramp second half, first half, and you know, is there any sales force expansion baked into second half, and then Kevin on blood, I know previously you talked about getting the data in October, now it seems like we'll get the case control data at some point.

Speaker Change #101: Great, thanks guys. Thanks for taking the questions. Um, maybe first one, which I know there's been a few questions on Care Gap. Could you just...

Operator: And then the pivotal data after that, can you just speak to kind of maybe when we might see the case, Cologuard Plus, and their clinical FV schedule? Can you just discuss the rationale for the 1.25 times crosswalk? Is that just based upon cost of goods sold or maybe lab costs? Any more color on that?

Speaker Change: potentially quantify how big care gap is in the second half since there's a lot of consternation about

Speaker Change: The expected Coligard ramp, second half, first half, and you know, is there any sales force?

Dan Brennan: And then Kevin unblood. I know previously you talked about getting the data in October. Now it seems like we'll get the case control data at some point. And then the pivotal data after that. Can you just speak to kind of maybe when we might see the case control data.

Speaker Change: Expansion baked in the second half, and then...

Dan Brennan: And then finally on. Colorguard plus and the clinical at fee schedule. Can you just discuss the rationale for the 1.25 times cross rock? Is that just based upon cost of the told, or maybe lab costs? Any color on that? Thank you. Yeah, Dan, so I'll take the Caregap piece first. So no, we haven't sized it other than just to say again that we did more in the first half of this year than all of 2023. We're excited about what Caregap is and new ways to help close the screening gap. And just based in looking at our pipeline.

Speaker Change: Unknown Speaker Maybe when we might see the case control data. And then finally on... Transcribed by https://otter.ai

Operator: Thank you. Yeah, Dan, so I'll take the care gap piece first. So no, we haven't sized it.

Speaker Change: Yeah, Dan, so I'll take the care gap piece first. So, no, we haven't sized it, other than just to say again that we did more

Aaron Bloomer: Other than just to say, again, that we did more, in the first half of this year, then all of 2023, we're excited about what Care Gap is and new ways to help close the screening gap. And just based on looking at our pipeline and what we saw play out in Q2, we know there'll be a sequential step up from Q2 to Q3, Q3 to Q4, with respect to the Salesforce expansion. So there's not an embedded, like, increased cost baked into that.

Speaker Change: In the first half of this year, then all of 2023, we're excited about

Speaker Change: What Care Gap is, and new ways to help close the screening gap. And just based on looking at our pipeline and what we saw play out in Q2, we know there will be a sequential step up Q2 to Q3, Q3 to Q4.

Dan Brennan: And what we saw plowed in Q2, we know there'll be a sequential step up Q2 to Q3, Q3 to Q4 with respect to the sales force expansion. So there's not an embedded, like, increased costs baked into that we brought the reps on in May. And so we'll see a little bit just a full quarter impact of that in Q3. And Q4 and then the total impact from sales and marketing investments from a revenue perspective. We would expect to see some impact, and that would be more or Q waited. Typically, it takes the average rep about six months to get up to productivity.

Aaron Bloomer: We brought in the reps in May, and so we'll see a little bit of the full quarter impact of that in Q3 and Q4. And then the total impact from sales and marketing investments from a revenue perspective, we would expect to see some impact. And that would be more 4Q weighted; it typically takes the average rep about six months to get up to speed. Dan, in terms of the release of the prospective algorithm setting study and that data, we're looking for the best conference to share that data at. We do not want to do it on an earnings call.

Speaker Change #117: 2Q4. With respect to the Salesforce expansion, so there's not an embedded, like, increased cost baked into that. We brought the reps on in May, and so we'll see a little bit just

Speaker Change: The full quarter impact of that in Q3 and Q4, and then the total impact from sales and marketing investments from a revenue perspective, we would expect to see some impact, and that would be more 4Q weighted. It typically takes the average rep about six months to get up to productivity.

Dan Brennan: Dan, in terms of the release of the prospective algorithm setting study and that data, we're looking for the best conference to share that data at. We do not want to do it on an earnings call. So we're looking sometime in the fall to present that data in advance of the pivotal study data. In terms of the question about the 1.25x price. Again, you know, there is this the process for getting a price from Medicare is relatively complex. We're not going to go into the details of that process. That is going to take some time to play out.

Speaker Change #108: Uh, Dan, in terms of the release of the, um...

Speaker Change: Prospective Algorithm Setting Study and that data. We're looking for the best conference to share that data at. We don't do not want to do it on an earnings call, so we're looking sometime in the in the fall to present that data in advance of the pivotal study date.

Kevin T. Conroy: So we're looking sometime in the fall to present that data in advance of the pivotal study. In terms of the question about the 1.25x price, again, you know, the process for getting a price from Medicare is relatively complex. We're not going to go into the details of that process. That is going to take some time to play out.

Kevin T. Conroy: And we have multiple different options there, so we're just not going to get into all of those details. Other than to say an increase in price is predicated on an increase in value that is delivered to the people who are going to get this test and to the health care system and, overall. All right, thanks, Dan. And our next question comes from Jack Meehan with Nephron Research. Jack, please go ahead. Good afternoon,

Speaker Change: In terms of the question about the 1.25x price, again, you know, there is the process for getting a price

Speaker Change: from Medicare is relatively complex. We're not going to go into the details of that process. That is going to take some time to play out.

Dan Brennan: And we have multiple different options there. So we're just not going to get into all of those details in other than to say an increase in price is predicated on an increase of value that is delivered to the people who are going to get this test into the health care system and overall costs. All right.

Speaker Change: and we have multiple different options there. So we're just not going to get into all of those details, other than to say an increase in price is predicated on an increase of value that is delivered to the people who are going to get this test and to the healthcare system and overall costs.

Jack Man: Thanks, Dan. And our next question comes from Jack Man with nephron research. Jack, please go ahead. Thank you. Good afternoon.

Speaker Change #105: Alright, thanks Dan. And our next question comes from Jack Meehan with Nephron Research. Jack, please go ahead.

Operator: So I wanted to ask about what your expectations are around marketing and screening when Shield comes to market. So in fairness to Garden, they got a primary screening label from the FDA, which was better than I was expecting.

Kevin Conroy: So wanted to ask about what your expectation is around marketing and screening when she'll comes to market. So in furnace to garden, they got a primary screening label from the FDA that was better than I was expecting. There's obviously some precautionary language in there. So it was just sure what your plan is the counter detail. And how do you see that playing out with peace. C.P. You know, we built deep relationships with healthcare providers. Over 300,000 have ordered Cologuard with health systems, virtually every health system in the U.S. utilizes Cologuard on a regular basis to drive increase in screen as we mentioned.

Jack Meehan: Thank you. Good afternoon.

Jack Meehan: So, I wanted to ask about what your expectation is around

Jack Meehan: marketing and screening when shield comes to market. So in fairness to garden, they got a primary screening label from the FDA. That was better than I was expecting. There's obviously some precautionary language in there. So I was just sure what your plan is to counter detail and how do you see that playing out with PCPs?

Operator: There's obviously some precautionary language in there, so I was just sure what your plan is to counter detail. And how do you see that playing out with PC?

Kevin T. Conroy: You know, we've built deep relationships with health care providers. Over 300,000 have ordered ColoGuard through health systems. Virtually every health system in the U.S. utilizes ColoGuard on a regular basis to drive an increase in screenings. We mentioned, according to the CDC, the main reason for over a 10 percentage point increase in colon cancer screening is Cologuard. These are deep relationships.

Speaker Change: You know, we've built deep relationships with health care providers, over 300,000 have ordered ColoGuard.

Speaker Change: with Health Systems. Virtually every health system in the U.S. utilizes Cologuard on a regular basis to drive increase in screening, as we mentioned.

Kevin Conroy: According to CDC, the main reason for over a 10 percentage point increase in colon cancer screening is Cologuard. These are deep relationships. We have a, we think the best commercial team, sales and marketing team in the country. Part of that leadership team is here in the offices today. It's an amazing group. The Exact Nexus platform making electronic ordering easy, the ability to work with payers and large health systems to meet the patient where they want to be screened in the privacy of their own home. It's really, really a rich and deep infrastructure that we built.

Speaker Change: According to the CDC, the main reason for over a 10 percentage point increase in colon cancer screening is Cologuard. These are deep relationships. We have a, we think the best commercial team, sales and marketing team.

Kevin T. Conroy: We have, we think, the best commercial team, sales, and marketing team in the country. A part of that leadership team is here in the offices today. It's an amazing group.

Speaker Change: In the country, a part of that leadership team is here in the offices today. It's an amazing group.

Kevin T. Conroy: The ExactNexus platform makes electronic ordering easy, and the ability to work with payers and large health systems to meet the patient where they want to be screened and in the privacy of their own home. It's really a rich and deep infrastructure that we've built. And, you know, that is why we look, we actually look forward to competition. I really believe that competition makes people better. It makes them better individually. It makes them, and you better as a team. It makes you sharper. It makes you hungrier.

Speaker Change: The ExactNexus platform making electronic ordering easy, the ability to work with payers and large health systems to

Jack Meehan: Meet the patient where they want to be screened in the privacy of their own home. It's really a rich and deep infrastructure that we built and

Kevin Conroy: And, you know, that is, is we, we look, we actually look forward to competition. We really believe that competition makes people better and makes them better individually. It makes them, makes you better as a team. It makes you sharper. It makes you hungrier. And here we start from the point that the data, the difference between Coleguard plus the difference between Coleguard and any of the blood data is night and day. And so there's a passion behind what we do, getting the best test to the people who need to get screened. And, you know, I think, I think we're going to compete.

Jack Meehan: We actually look forward to competition, really believe that competition makes

Speaker Change: People better, it makes them better individually, it makes you better as a team, it makes you sharper, it makes you hungrier, and here we start from the point that the data, the difference between Colgard Plus

Kevin T. Conroy: And here we start from the point that the data, the difference between ColoGuard Plus and any blood data, it's night and day. And so there's a passion behind what we do, getting the best test to the people who need to be screened. And, you know, I think we're going to compete. And I happen to think that the competition is going to make us better. It's going to actually drive growth.

Speaker Change: The difference between ColoGuard and any of the blood data is night and day.

Speaker Change: And so there's a passion behind what we do, getting the best test.

Speaker Change: to the people who need to get screened.

Kevin Conroy: And I happen to think that the competition is going to make us better. It's going to actually drive growth. There's, it's, we're a trusted source of information to providers. And they're going to ask us. And we are going to strive to be truthful and accurate. And we're able to do that because of the data.

Speaker Change: and you know I think I think we're going to compete and I happen to think that the competition is going to make us

Kevin T. Conroy: There is it is that we're a trusted source of information for providers. And they're going to ask us, and we are going to strive to be truthful and accurate, and we're able to do that because of the data. All right, thank you for that question. And our next question comes from the line of Michael Ryskin with Bank of America. Michael, please go ahead.

Speaker Change: better, it's going to actually drive growth. We're a trusted source of information to providers, and they're going to ask us, and we are going to strive to be truthful and accurate, and we're able to do that because of the data.

Michael Ryskin: All right. Thank you for that question. And our next question comes from the line of Michael Riskin with Bank of America. Michael, please go ahead. Hey, just one quick one from me: an interesting time. From on up on an earlier point, some of you said a number of times Kevin is that when it comes to CG plus, you think it's going to be comparable or we comparable to other blood tests. Just what do you mean by comparable? Are you talking about them to the specificity? Are you, you know, what specific metrics are you talking about AA or stage one sort of how do we assess that?

Speaker Change: Alright, thank you for that question. And our next question comes from the line of Michael Ryskin with Bank of America. Michael, please go ahead.

Operator: Hey, just one quick one for me, in addition to time. Following up on an earlier point, something you've said a number of times, Kevin, is that when it comes to CG+, you think it's going to be comparable or at least comparable to other blood tests. Just, what do you mean by comparable? Are you talking about sensitivity or specificity? Are you, you know, what specific metrics? Are you talking about AA or Stage 1? Yeah, sure.

Michael Leonidovich Ryskin: Hey, just one quick one for me. In the interest of time, following up on an earlier point, something you've said a number of times, Kevin, is that

Michael Leonidovich Ryskin: When it comes to CG+, do you think it's going to be comparable?

Michael Leonidovich Ryskin: or at least comparable to other blood tests.

Speaker Change #106: What do you mean by comparable? Are you talking about sensitivity, specificity, what specific metrics? Are you talking about AA or Stage 1? How do we assess that? Because there are a number of different ways you can look at these tests, obviously.

Kevin Conroy: Because there are a number of different ways you can even look at these tests, obviously. Thanks. Yeah, sure.

Kevin Conroy: So the specificity that we are targeting is 90%, which is the Medicare minimum. To get paid, the Medicare minimum for sensitivity is 74%. What we have seen from others is in the 80 to very low 80% sensitivity. And what we have seen from others is in the 11 to 13% I think precancer detection. Now, remember that precancer detection, you get 10 points of precancer detection just because of the 10% false positive. Debrain. So with tests in the blood, liquid biopsy, test for colon cancer screening, they're essentially blind to pre-cancer as polyps above the pre-cancer, above the false positive rate.

Kevin T. Conroy: So the specificity that we are targeting is 90%, which is the Medicare minimum to get paid. The Medicare minimum for sensitivity is 74%, and what we have seen from others is in the 80 to very low 80%.

Speaker Change #103: Yeah, sure. So the specificity that we are targeting is 90%, which is the Medicare minimum to get paid. The Medicare minimum for sensitivity is 74%.

Speaker Change: What we have seen from others is in the 80 to very low 80% sensitivity.

Kevin T. Conroy: And what we have seen from others is in the 11 to 13%, I think, pre-cancer detection. Now, remember that pre-cancer detection, you get 10 points of pre-cancer detection just because of the 10% false positive. So with tests in the blood and the liquid biopsy test for colon cancer screening, they're essentially blind to precancerous polyps above the pre-cancer, above the false positive rate. That's, you have to take that into account.

Speaker Change: and what we have seen from others is in the 11 to 13 percent, I think, of pre-cancer detection. Now remember, that pre-cancer detection, you get 10 points of pre-cancer detection just because of the 10 percent false positive rate.

Speaker Change: So, with tests in the blood, in the liquid biopsy test for colon cancer screening, they're essentially blind to precancerous polyps above the pre-cancerous, above the false positive rate. That's, you have to take that into account.

Kevin Conroy: You have to take that into account. You know what we're seeing is a very similar cancer detection, better pre-cancer detection. And again, we don't know how that is going to play out in the blue sea study, but we have a scientific team that has done an amazing job of. I think all together, we've done seven, eight, or nine case control studies leading up to where we are now heading into the pivotal. So this wasn't just a couple of case-control studies. This is rigorous science. We, but that's how we're looking at it. The 90% specificity minimum, we're shooting for in that, you know, low 80 range. What the key is Medicare minimum is 74% and the pre cancer.

Kevin T. Conroy: You know, what we're seeing is a similar, a very similar cancer detection, better pre-cancer, And again, we don't know how that is going to play out in the Blue Sea study, but we have a scientific team that has done an amazing job of. I think, altogether, we've done seven, eight, or nine case control studies leading up to where we are now heading into the pivotal. So this wasn't just a couple of case-control studies; this was rigorous science. We, but that's how we're looking at it.

Speaker Change: You know, what we're seeing is a similar, a very similar cancer detection, better pre-cancer detection.

Speaker Change: And again, we don't know how that is going to play out in the Blue Sea study, but we have a scientific team that has done an amazing job of, I think all together we've done

Speaker Change: 7, 8, or 9 case control studies leading up to where we are now heading into the pivotal. So this wasn't just a couple of case control studies, this was rigorous science.

Speaker Change: We, but that's how we're looking at it, the 90% specificity minimum.

Kevin T. Conroy: The 90% specificity minimum we're shooting for in that, you know, low 80 range, but the key is Medicare's minimum is 74% and pre-cancer. Now remember, this nets out in terms of modeling of life years gained, and the greater the pre-cancer sensitivity detection, the more life years gained you'd get. So probably, a key indicator would be a comparison of life years gained.

Speaker Change: We're shooting for in that low 80 range, but the key is Medicare minimum is 74% and the pre-cancer. Now remember, this nets out in terms of modeling of life years gained.

Kevin Conroy: Now remember this nets out in terms of modeling of white years gained, and the greater the pre-cancer sensitivity detection, the more life years gained you get.

Speaker Change: and the greater the pre-cancer sensitivity detection, the more life years gained you get. So probably a key indicator would be a comparison of life years gained.

Kevin Conroy: So probably a key indicator would be a comparison of life years gained.

Puneet Souda: All right. Thanks, Michael. And our next question comes from the line of Puneet Sado with Lee Rink Partners. Puneet, please go ahead. Yeah. Hi, Kevin.

Kevin T. Conroy: All right, thanks, Michael. And our next question comes from the line of Puneet Souda with Lerink Partners. Puneet, please go ahead. Yeah, hi, Kevin.

Speaker Change #102: Alright, thanks Michael. And our next question comes from the line of Puneet Souda with Lerink Partners. Puneet, please go ahead.

Operator: Just following up on that question, another question that we've been getting is, do you think FDA would be open to approving an assay if it is slightly lower, or maybe a bit lower than the current performing test, the current test that's in the market that was just recently approved? And then a broader question on ColoGuard Plus: could you refresh us on your thinking about the type of or the extent of pickup that you would see from primary care physicians when ColoGuard Plus does launch into the market next year? Repeat the first question.

Puneet Souda: Just following up on that question, and another question that we've been getting is: do you think FDA would be open to approving an assay if it is slightly lower or maybe a bit more lower than the current performing death? The current test that's in the market that was just recently approved.

Puneet Souda: Yeah, hi, Kevin. Just following up on that question, another question that we've been getting is, do you think FDA would be open to approving an assay if it is

Puneet Souda: Slightly lower or maybe a bit more lower than the current test that's in the market that was just recently approved.

Kevin Conroy: And then a broader question on Cologuard plus. Could you refresh us on your thinking about the type of or the extent of pickup that you would see from the primary care physicians when Cologuard plus does launch into the market next year. Repeat the first question. Yeah, the first question is simply that what in your thinking would FDA be willing to approve a test if it is lower than the competitor blood-based test that was recently just approved in terms of performance. And by that, I mean sensitivity or specific and/or specificity. So when you run a study, you run that study based upon endpoints that are set in the study, and our endpoints have already been established.

Speaker Change #100: And then a broader question on ColoGuard Plus. Could you refresh us on your thinking about the type of, or the extent of pickup that you would see from the primary care physicians when ColoGuard Plus does launch into the market next year?

Kevin T. Conroy: Yeah, the first question is simply, would FDA be willing to approve a test if it is lower than the competitor blood test that was recently just approved in terms of performance? And by that, I mean, sensitivity, or specificity, or any other endpoint. So when you run a study, you run that study based upon endpoints that are set in the study, and our endpoints have already been established.

Speaker Change #100: Repeat the first question.

Speaker Change: Yeah, the first question is simply that would, in your thinking, would FDA be willing to approve a test

Speaker Change: If it is lower than the competitor blood-based test that was recently just approved in terms of performance, and by that I mean sensitivity and or specificity.

Speaker Change: So when you run a study, you run that study based upon endpoints that are set in the study, and our endpoints have already been established.

Kevin Conroy: So we we are confident that the any test not just ours that achieves the certainly the Medicare minimum of 74% is likely to get FDA approval from a precancer detection standpoint. And I think that's probably less likely given the limited label that the blood tests are seeking in terms of Cologuard plus adoption over launch after launch. Two out of three docks, they will order more frequently because of the lower falls positive. Great.

Kevin T. Conroy: So we are confident that any test, not just ours, that achieves the Medicare minimum of 74 percent is likely to get FDA approval. But from a pre-cancer detection standpoint, I think that's probably less likely given the limited label that the blood tests are seeking in terms of ColoGuard plus adoption after launch. Two out of three doctors say they will order more frequently because of the lower false positive rate. One of the, we've said this in the past, one of the challenges with COLOGuard was a 10% false positive rate; the false positive rate is now 7% with Colgard Plus, and that is very important because when you look at it at a population level,

Speaker Change: so

Speaker Change: We are confident that the...

Speaker Change: Any test, not just ours, that achieves the...

Speaker Change: Certainly, the Medicare minimum of 74% is likely to get

Speaker Change: FDA approval. From a pre-cancer detection standpoint, I think that's probably less likely given the limited label that the blood tests are seeking.

Speaker Change: In terms of ColoGuard plus adoption after launch, two out of three docs say they will order more frequently because of the lower false positive rate.

Kevin Conroy: One of the, we've said this in the past, one of the challenges with ColoGuard was a 10% false positive rate. The false positive rate is now 7% with ColoGuard Plus, and that is very important because when you look at it at a population level, if you screen a, let's say, a million people, you're talking about tens of thousands of fewer people going to colonoscopy because ColoGuard Plus is available. And again, that goes back to the science, the science that lowered the false positive rate, fewer markers, lower false positive rate, same essential PCR platform that we're using in CRC blood.

Speaker Change: One of the, we've said this in the past, one of the challenges with COLOGuard was a

Speaker Change: 10% false positive rate, the false positive rate is now 7% with Colgard Plus, and that is very important because when you look at it at a population level.

Kevin T. Conroy: If you screen, let's say a million people, you're talking about tens of thousands of fewer people going to colonoscopy because Cologuard Plus is available. And again, that goes back to the science. The science that lowers the false positive rate. Fewer markers, lower false positive rate, same essential PCR platform that we're using in CRC blood.

Speaker Change: If you screen, let's say, a million people, you're talking about tens of thousands of fewer people going to colonoscopy because Cologuard Plus is available.

Speaker Change: And again, that goes back to the science.

Speaker Change: The science that lowered the false positive rate. Fewer markers, lower false positive rate.

Speaker Change: Same essential PCR platform that we're using in CRC blood.

Kevin Conroy: All right.

Kevin T. Conroy: Thanks, Puneet. And our final question today comes from the line of Subhu Nambi with Guggenheim. Subhu, please go ahead. Hey.

Subhalaxmi Nambi: Thanks, Puneet.

Subhalaxmi Nambi: And our final question today comes from the line of Subaru Nambi with Guggenheim. Subaru, please go ahead. Hey, thank you guys. Thank you for taking my question. Two questions. What, what, what does the DGN discontinuation mean for MRD? And second, regarding oncotype and MRD, it seems like there could be an opportunity and also a threat on one hand with oncotype. You have the tumor tissue, which would seemingly give you an advantage in that you can create a bespoke assay, but on the other hand, bespoke MRD assays could conceivably cannibalize Oncotype or even lead to some share loss.

Speaker Change #110: Alright, thanks Puneet. And our final question today comes from the line of Subhu Nambi with Guggenheim. Subhu, please go ahead.

Operator: Thank you, guys. Thank you for taking my question. Two questions.

Subhalaxmi T. Nambi: Hey, thank you guys. Thank you for taking my question. Two questions. What does the TGen discontinuation mean for MRD?

Operator: One, what does the T-gen discontinuation mean for MRD? And second, regarding oncotype and MRD, it seems like there could be an opportunity and also a threat. On the one hand, with oncotype, you have the tumor tissue, which would seemingly give you an advantage in that you can create a bespoke assay. But on the other hand, bespoke MRD assays could conceivably cannibalize oncotype or even lead to some share loss. Am I thinking about this the right way?

Speaker Change #111: And second, regarding Oncotype and MRD,

Subhalaxmi T. Nambi: It seems like there could be an opportunity and also a threat.

Speaker Change #113: On one hand, with oncotype, you have the tumor tissue which would seemingly give you an advantage

Kevin T. Conroy: Or can you share your thoughts on opportunity versus? Yeah, so in terms of the TGen question, no, we attempted to develop an MRT and MRD test with that technology. And then we opted for our own internally developed technology, coupled with technology that we licensed from the Broad. And then, in terms of the advantage that we have because of our Oncotype DX is, you know, we see an enormous percentage of all US breast cancer tissue samples, and having that tissue sample at the starting point for breast MRD is a huge advantage.

Subhalaxmi T. Nambi: and that you can create a bespoke assay, but on the other hand bespoke MRD assays could conceivably cannibalize oncotype or even lead to some share loss. Am I thinking about this the right way or can you share your thoughts on opportunity versus risk?

Kevin Conroy: Am I thinking about this the right way, or can you share your thoughts on opportunity versus risk? Yeah. So, in terms of TGN question, no, we attempted to develop an MRD test with that technology. And then we opted for our own internally developed technology coupled with technology that we licensed from the Broad. And then, in terms of the advantage that we have because of our Oncotype DX, is, you know, we see enormous percentage of all US breast cancer tissue samples, and having that tissue sample, the starting point for breast MRD, is a huge advantage. It's on effect DX as about 90% share.

Speaker Change #115: Yeah, so in terms of the TGen question, no, we attempted to develop an MRT, MRD test with that technology and then we opted for our own internally developed technology coupled with technology that we licensed.

Subhalaxmi T. Nambi: from the Broad. And then in terms of the advantage that we have because of our Oncotype DX is

Subhalaxmi T. Nambi: You know, we see an enormous percentage of all U.S. breast cancer tissue samples, and having that tissue sample at the starting point for breast

Kevin T. Conroy: Its Oncotech DX has about 90% share, and as a result, we have a deep relationship with almost every health system in the U.S., and we think that is going to confer a real advantage for us over time. So, you know, these tests are really complementary, the Oncotech DX test and the MRD test OncoDetect that we're developing. We're looking forward to sharing the OncoDetect data later this year, and we look forward to our next earnings call and having future conversations with you all in between.

Speaker Change #112: MRD is a huge advantage. It sounds like DX.

Kevin Conroy: And as a result, we have a deep relationship with almost every health system in the US. And we think that is going to confer a real advantage for us over time.

Speaker Change #112: As a result, we have a deep relationship with almost every health system in the U.S. and we think that is going to confer a real advantage for us over time.

Kevin Conroy: So, you know, these tests are really complimentary: the on-site DX test and the MRD test. On Code Detect that we're developing, we're looking forward to sharing the On Code Detect data later this year. And we look forward to our next earnings call and having future conversations with you all in between. Thank you all.

Subhalaxmi T. Nambi: So, you know, these tests are really complementary, the Oncotype DX test and the MRD test OncoDetect that we're developing. We're looking forward to sharing the OncoDetect data.

Speaker Change: Later this year and we look forward to our next earnings call and having future conversations with you all in between. Thank you all and just one more shout out to the Exact Sciences team.

Kevin T. Conroy: Thank you all, and just one more shout out to the Exact Sciences team, so dedicated to the mission, so dedicated to delivering on our goals for the year. Thank you very much. And ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now, Please wait; the conference will begin shortly.

Kevin Conroy: And just one more shout out to the Exact Sciences team. So dedicated to the mission, so dedicated to delivering on our goals for the year. Thank you very much.

Speaker Change: So dedicated to the mission, so dedicated to delivering on our goals for the year. Thank you very much.

Operator: And ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now.

Speaker Change #116: And ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.

Operator: and Disconnect.

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Speaker Change #114: Please wait, the conference will begin shortly. Please wait, the conference will begin shortly.