Exact Sciences Corporation Q3 FY2024 earnings call

Management Statement and Operational Highlights:

• Patients: Delivered test results to 1.2 million patients, including record numbers with Cologuard and Oncotype DX.
• Financials: Total revenue grew 13% year-over-year; operating expenses flat; adjusted EBITDA expanded 75% year-over-year to $99 million; record free cash flow of $113 million.
• Product Advances: FDA approval for Cologuard Plus; data showcased at ESMO Congress; Oncodetect publication in peer-reviewed journal.
• Customer Satisfaction: Cologuard customer satisfaction and brand awareness at all-time highs.
• Platform: ExactNexus platform fueling growth in care gap screening programs and rescreens.

Segment Performance:

• Screening revenue grew 15% year-over-year to $545 million, driven by Cologuard volume, contributing a significant portion to total revenue.
• Precision Oncology revenue grew 5% year-over-year to $164 million, led by 28% international expansion of Oncotype DX.

Guidance:

• Full Year 2024: Expected revenue between $2.73 billion and $2.75 billion, with screening revenue $2.08 billion - $2.095 billion and Precision Oncology revenue $650 million - $655 million. Adjusted EBITDA revised to $310 million - $320 million.
• Impact Factors: Shortfall in Cologuard testing frequency growth, hurricane disruptions, slower ramp of new sales reps, transition challenges with Precision Oncology portfolio.
• 2025 Outlook: Anticipates growth acceleration from rescreens, care gap programs, Cologuard Plus launch, and improved commercial execution.

Risks:

• Execution: Disappointing growth in Cologuard testing frequency among providers; slower ramp of new sales reps.
• External: Impact from hurricanes Helene and Milton on Cologuard orders and results.
• Transition: Impact of moving Precision Oncology portfolio onto ExactNexus platform on revenue in the second half of 2024.

Q: Walk through what changed in the second half outlook relative to where you stood 90 days ago?

A: Kevin and Aaron discuss factors like seasonality, care gaps, hurricanes, and rep ramp issues impacting guidance.

Q: Are you not willing to quantify each of the impacts, and then how long do you expect care gap and the rep productivity issues to linger? And then fourth quarter guidance, you’re down sequentially. I’m just curious, as to why that would be the case. And then lastly, anything you’re willing to say about 2025 at this point?

A: Aaron talks about the biggest impact in Q4 being hurricanes, care gap pacing, and rep ramp; 2025 expected growth from rescreens, care gaps, Cologuard Plus, and commercial execution.

Q: Can you do that over the next one year to two years, unless you get the ASP increases or get help from other products like MRD or Cologuard Plus?

A: Kevin and Aaron discuss reliance on rescreens, care gaps, Cologuard Plus, and commercial execution to drive growth.

Q: Can you talk about the Cologuard Plus pricing and launch?

A: Kevin explains Cologuard Plus launch in Q2 2025, pricing plans involving Medicare and commercial channels.

Q: Talk about commercial rep breakdown and productivity?

A: Kevin and Aaron talk about rep ramp, field force efforts, and productivity improvements through ExactNexus platform.