Exact Sciences Corporation (NASDAQ:EXAS) Q2 2023 Earnings Call Transcript

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And I’ll turn it over to Everett for a second to talk about that. The care get business does carry a slightly lower gross margin. However, it does contribute nicely to EBITDA dollars. And it is an important business for us to be in. So we do expect that business to be a bit bigger in the second half versus the first and weigh a little bit on gross margins all else equal. Just to your second question on cost of goods for Cologuard 2, there — what we think now is that the cost per test of Cologuard 2 will be at least 5% lower than what it is today for Cologuard 1. It’s because of the 10-plus years of work that this team put in to identify more accurate markers in automation and efficiencies that we can build right into Cologuard 2. So it does help bring down the cost of goods.

And importantly here, it helps improve, as Kevin said, it helps reduce that false positive rate by 30%. So it does provide a lot of value for patients. Maybe Everett could talk more about the care gap program, why that’s so important to us.

Everett Cunningham: Yeah. Thanks, Jeff. And there’s a reason why we’re doing the care gap program first and foremost. We’re getting at really hard-to-screen patients. These are the patients that have been stubborn to get screening. And as I talked about the phenomenon around health systems, payers and health systems are coming to us for help. So it really strengthens our relationships with the payers and the health systems. And then lastly, because these patients are stubborn and hard to screen, it’s usually in that 50-plus cohort, and that’s really helping us lift our share with the 50 plus. And then lastly, our customers are coming back to us saying, we are a better — much better option than them. They like the three-year interval. They like our wraparound services. and this is a way that we’re again improving their screening rates in a very efficient and effective way.

Operator: We’ll take our next question from Andrew Brackmann with William Blair.

Andrew Brackmann: Hi, guys. Good afternoon, and thanks for taking the questions. Jeff, I think you called out a total of 300 systems who have implemented some form of electronic connections with you guys. How are you sort of thinking about the runway left there for more connections? And can you just sort of talk about the utilization difference that you see amongst that group versus those who have not implemented those connections? Thanks.

Jeff Elliott: Hey, Andrew. This is Jeff. I’ll start and then Everett can talk more about some of the commercial initiatives we have to drive that rate higher. When you look at the overall electronic ordering rate for Cologuard, today, it’s about 65%, maybe 65% of Cologuard orders come in electronically. Why that’s important? When you can make Cologuard easy to order, easy to get the result back to both the physician and the patient, not only is it a better experience, but also physicians order more. They order over 30% more — and over time, that’s a really strong foundation for us then to layer other tests in. So you can imagine a world where the same electronic foundation supports multiple billion-dollar franchises, whether it’s multi-cancer or MRD or Cologuard you name it.

Those same pipes that are being placed between our lab and the health systems can be leveraged for other tests. So — that’s a big win for us. There’s still ways to go on how far that — on driving that rate higher. Everett can you talk about how we’re getting there.

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