Kevin Conroy : In terms of M&A, our view hasn’t changed there. We have a disciplined approach to the way we think about this that falls around our capital allocation processes. We look at number one, core growth. We take a look at our pipeline. We look at retaining cash flow. That’s in terms of capital allocation. We’re highly focused on continuing to grow Cologuard, investing in Cologuard and Cologuard growth, and Oncotype DX growth internationally, both provide significant returns on investments. In terms of our process around M&A, we look at what can help us accelerate our mission. What is the right culture fit? What creates value? And we just don’t comment on any particular regions. We think it’s probably irresponsible for those to guess at what we may do or not do.
And because we have a disciplined approach to the way we look at these things. And in terms of Res Bio, that’s a great example. We had a need for a liquid biopsy therapy selection test. We had an internal program that eventually we were going to get around to, and a test was available through Res Bio that met those needs, that accelerated our mission in our core solid tumor business. It was a great fit culturally, amazing innovators, scientists, bioinformaticians and we believe it’s going to create value over the long haul. So I think that’s kind of right up the alley of the way that we think about things.
Operator: Thank you. We go next now to Kyle Mikson at Canaccord.
Kyle Mikson : Thanks, guys. Thanks for taking the questions. Congrats on the quarter. Congrats to Megan. Great to hear on the new role. So in the updated ‘23 revenue guidance, its implied annual screening growth is about 30%. That’s Seven Streets modeling 16% year-over-year for screening next year. I know you’re going to talk about that more early next year, but is that too far of a step down in growth rate considering it looks like the jumping off point in 4Q is going to be over 20% if you account for that retrain headwind. Thanks.
Jeff Elliott: Look Kyle, this is Jeff. There was a question earlier about, is there anything changing on the landscape? And the answer to that is, no. In fact is, as you heard today, we’re very confident in not only next year, but the growth opportunity for many years to come. And part of why is we’ve got the best team in diagnosis. We’ve got the highest quality of evidence, and there’s a massive, massive unmet need that won’t be met in one year. It won’t be met in five years. There’s 60 million people out there with more entering every day, about 10,000 new people age into this market every day. So, we’re very optimistic on the growth. From a growth rate standpoint, though, the large numbers is going to kick in and we’ll have that growth rate come down.
But as you can see this year, we’re guiding to over $420 million of incremental revenue, the best yet, and Exact Sciences has been around for a while. So I think from a growth incremental dollar standpoint, very optimistic here. From a percentage standpoint, it is going to come down as it would with any company as they grow.
Operator: Thank you. We go next now to Eve Burstein at Burstein.
Eve Burstein : Hi there. Thanks so much for taking the question. Two part. The first is, you’d called out capacity constraints on colonoscopies when you talked about your health system partnerships. Obviously, these have always existed in some geographies, but the problem is definitely exacerbated by this influx of 45 to 49 year old patients that are suddenly eligible for screening. So can you talk about how that dynamic is evolving? And is this something that’s giving you like a one-time bump in growth, but isn’t sort of a durable driver of growth going forward? And then second question, just a clarification. You talked about, you’ve been telegraphing, re-screened headwinds in the quarter. You’d also said some of the business you expected to fall in Q4 came in Q3. So can you just help us understand, help us quantify the headwinds and tailwinds on the quarter and what you see as sort of the base rate of sales?
Kevin Conroy : Let me start with the capacity constraints around colonoscopies. You basically have very little growth in the number of gastroenterologists in the U.S. There’s a fixed capacity for those residency programs, and what you saw was a significant number of retirements coming out of COVID. And so there is overall flat or reduction in the total number of people scoping. What we’re saying is about 6 million screening colonoscopies this year, next year. And as far as the eye can see, it’s about – that’s about the capacity that we see now. But you added 19 million Americans who need to be screened, and that’s in the 45 to 49 year old age group. So it’s a permanent shift in the way that these health systems are thinking about getting their patients screened and they are highly incentive and pushed to get their quality measures up.
And one important quality measure is colon cancer screening. And so Everett, maybe you can touch it upon again, the way that the commercial organization is addressing this important need.
Everett Cunningham: Yeah, and I love it when we say commercial, because in addition to sales having to be a focus of ours, we have a specific value proposition that we lay out to our customers around the 45 to 49 year. It’s a different patient type. It’s a patient type that they are busy parents. They are racing around, dealing with kids. Cologuard is the perfect product for that 45 to 49 year old. Plus we know commercially when we get them at 49 to 45, 45 to 49 year old, we have them for multiple years moving forward. So that’s one. Marketing, we’re marketing different to this cohort. It’s important that we have a different marketing message that really like plays out the different lifestyles that 45 to 49 year olds have, and our marketing mix is different.
In addition to TV, we’re finding out that they go through social media and digital more. So we’ve changed our mix more to market towards that cohort. So we’re clearly explaining this to our health system customers. Our health system customers are coming to us because of the scenario that Kevin mentioned and this will continue to be a growth lever for us this year and years to come.
