Exact Sciences Corporation (NASDAQ:EXAS) Q3 2023 Earnings Call Transcript

Everett Cunningham: And Jeff, I’ll just add something commercial. It’s a great example of our commercial organization from a re-screen execution standpoint. Our field force, it’s one of their major messages to our providers that are out there. From a marketing standpoint, we have specific marketing materials for the re-screen population. And then from a customer experience standpoint, we’re actually reaching out to those patients that are super overdue for a re-screen population through text messaging, through phone calls, through emails, and making sure that we remind them that they are up for their date. So that focus has been really, really solid in ‘23, and we’re looking to continue that in ‘24.

Operator: Thank you. We go next now to Dan Brennan at TD Cowen.

Dan Brennan : Great. Thanks. Thanks for taking the question. Congrats, Megan. So maybe a two-parter. First would just be on Cologuard. You’ve had 30%, I think, plus growth the last couple of years. You just talked about the re-screen opportunity being even greater next year, given the headwinds. So just wondering if there are any factors that you would see today that would slow down the 30% type growth rate as we look ahead. And then (B) could you just provide an update on MRD? I know with Q2, you gave some color in terms of the launch timing and then the time it would take to get coverage and things of that nature. But just wondering if you can just update us on how we should be thinking about the breast launch and then the colorectal launch. Thank you.

Kevin Conroy : Why don’t I start with this? Dan, thanks. MRD will, as we mentioned in the earlier comments, will be available for colon cancer at the end of this year and breast cancer next year in terms of a MALDI-X [ph] submission that will occur next year for colon cancer screening and most likely breast cancer the year after. Jeff, why don’t you take the other question?

Jeff Elliott: Sure. Yeah, I’ll take the one on Cologuard. Kevin and Everett have talked about some of the things we’re doing commercially to keep that growth going. And look, we have very broad-based momentum. There are 60 million people on screen. And our goal, as you well know, is to get through at least $7 billion of revenue long-term. So we expect many years of robust growth ahead. Back in June, we guided to total company revenue growth of 15% about from the period of 2022 through 2027. What that really implied was Cologuard growth a bit faster than that. And then some of the other non-Cologuard areas growing a bit slower. So obviously over time, with the large numbers kicking in, from a growth rate standpoint, yeah, we expect it to slow down. But over time, we expect very sustainable double-digit growth, which is what we guided to back in June.

Operator: Thank you. We’ll go next now to Andrew Brackmann at William Blair.

Andrew Brackmann : Hi guys. Good afternoon. Thanks for taking the questions and congrats to Megan. I wanted to ask on Resolution Bio, it seems like a nice tuck in business for you guys. Can you maybe just sort of talk about the rationale there broadly? And then also just as it relates to M&A and capital allocation, anything that you would call out with respect to changes in your philosophy there as we look to 2024? Thanks.

Kevin Conroy : No change to our perspective on capital allocation in terms of our acquisition of Resolution Bio. It’s a very strong company with a culture of innovation and they have an amazing liquid biopsy test. We believe it’s going to be a home run of an acquisition for us over the long haul. The quality of their therapies selection test complements OncoExTra, which is our solid tumor tissue test for therapy selection. Liquid is a preferred solution in many situations, enabling faster turnaround times. And it also helps us expand our biopharma opportunity as a CDX for non-small cell lung cancer. So the next steps here are to generate evidence and submit to MALDI-X [ph] for reimbursement, make this available through our Oncotype DX or Precision Oncology commercial organization and continue to deliver additional new tests to the oncologists that are such strong customers.

So we’re thrilled about this acquisition. It’s a great team in the Seattle, Washington area, high quality people that add to the culture and capabilities of Exact Sciences.

Operator: Thank you. We go next now to Vijay Kumar at Evercore ISI.

Vijay Kumar: Hey guys, thanks for taking my question. Kevin, actually I had a two-parter Kevin, one on MRD here. Can you just compare and contrast with screening. When you think about the launch curve, what’s the level of evidence? How should we think about the launch curve? Screening you need USPSTF recommendation, etcetera. How does it work in MRD? And Jeff, on the guidance here, did the guide rates include resolution biosciences and if you don’t mind quantifying, if it did include, thank you.

Jeff Elliott: So Vijay, why don’t I start with the second one and then Kevin.

Kevin Conroy : Let me just jump in and clarify the first question Vijay. When you’re talking about screening and MRD, do you mean screening and multi-cancer early detection or do you mean screening and MRD? I think you probably meant screening and MCED.

Vijay Kumar: Yeah, yes. What I meant was when you compare and contrast those two different end markets, it seems like in screening, MCED, a lot of evidence data, how does that work in MRD? Do you need some data sets to make this commercially successful? What drives success in MRD?

Kevin Conroy : Okay, I understand that better. Jeff, do you want to take your piece and I’ll take the other?

Jeff Elliott: Sure, I’ll take the guidance question. So Res-Bio from a revenue standpoint, not material. So there’s no contribution into the guide. So the guide raised was based on the strengths of the core business.