- Cologuard manufacturer Exact Sciences posted third-quarter revenues Tuesday of $218.8 million, growing 85% year over year, driven by 89% growth in test volume over the same period.
- Despite screening about 456,000 patients with the home colon cancer screening tool during the quarter, the company's stock was down more than 6% in morning trading Wednesday due in part to Wall Street expectations the company would tally more Cologuard orders per physician practice.
- On Monday, Exact Sciences announced its new senior leadership team and operating model it plans to employ as it integrates recently acquired Genomic Health. Genomic Health CEO Kim Popovits, COO Fred Pla and other executives will not be included in the combined company and will transition out of the organization over the next few months, according to a Securities and Exchange Commission filing.
The focus on Cologuard underpins its importance for Exact as it works to develop a liquid biopsy test for the same purpose. CEO Kevin Conroy told investors Tuesday such a product will likely be brought to market as an annual test at a third of the price of Cologuard.
"That doesn't leave a lot of room for all the cost associated with the sequencing, which is why we are focused on a lower-cost approach, so that we can bring the test to market for people who refuse both Cologuard and colonoscopy, which we think will be a small fraction of the overall opportunity," Conroy said.
Analysts at Cowen said Exact's fourth-quarter guidance "assumes that completed [Cologuard] orders/physician will decline [quarter over quarter]," noting they expected more orders per physician. But the analysts added the issue is "transitory," saying the opportunity to expand "remains intact." They also said the development of the second generation of Cologuard and the company's liquid biopsy efforts "should not be overlooked."
In September, the company won an earlier than expected label expansion from FDA for Cologuard to include average-risk people between the ages of 45 and 49, increasing the eligible American population for the test by 19 million people.
CFO Jeff Elliott told investors the label expansion did not have material impacts on the company's results because Exact does not promote products off label and the approval came late in the quarter.
"19 million people is a huge opportunity long term. However, keep in mind that we're just now out there training the reps, laying the foundation for marketing perspective," Elliott said. "So, I wouldn't expect a material impact in the fourth quarter either."
The company plans to focus on growing payer coverage of Cologuard and communicating the label expansion to doctors before rolling out television commercials including information on the label change starting early next year, according to Mark Stenhouse, president of Cologuard. Currently, 74% of Cologuard patients in the 45 to 49 age group have no out-of-pocket costs for screening.
"The 74% number is a reflection of some of the positive moves we've seen from Aetna, CareFirst and Blue Shield California," Stenhouse told investors. "We're in active conversations with all the other national payers. We have confidence that those conversations are progressing."