Exact Sciences Corporation (NASDAQ:EXAS) Q4 2022 Earnings Call Transcript

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Operator: Your final question comes from the line of Dan Leonard from Credit Suisse. Your line is open.

Dan Leonard: Hello. Thank you for taking the question. So, I have a question on your Precision Oncology guide. It doesn’t seem like you are expecting much from OncoExTra. Is that accurate? And could you walk through the past for some of these new products like OncoExTra and MRD to contribute to the sales ramp in Precision Oncology? Thank you.

Kevin Conroy: I can start and maybe Everett can jump in. So, what’s baked in the PO guide globally, U.S. and we have been talking about this for a long time, given the strong current market position, as a class, that the penetration rate there is over 70%. We do a nice job within that given the strong position, the growth in the U.S. for the Oncotype DX business, I think of low-single digits. This is prevalent plus maybe a point. Now, the strength of that foundation will allow us to launch other programs like OncoExTra, like MRD, like the Riskguard, which is the hereditary cancer product. Internationally, the growth there is that business think of kind of $150 million a year right now. Growth there over time should be double digits for many years to come.

Year-to-year, it can be a little different depending on which markets opened up that year. This year, the big new market that we expect to come online is Japan midyear. So, what’s baked in is stronger growth in the U.S., but it’s not that we won’t get the full year impact from Japan. So, it’s not strong double-digit growth this year. It’s probably high single or low-double digit base in. OncoExTra, there I think it’s considered north of $10 million of revenue this year. It is the first year of launch. I know that ever the team are excited about the launch, but it’s early. So, we will come back to you and look forward to providing an update as the year unfolds there. Everett, will you take that?

Everett Cunningham: Yes. I will just add. We often talk about the productivity of our Cologuard sales and marketing team. My hats off to our Precision Oncology sales and marketing team. We had the launch of OncoExTra a couple of weeks ago. The training team and marketing team did a great job of preparing our sales organization to launch it day one. And again, the granularity of who we are focused on, on who we need to drive OncoExTra was really evident at our sales and market €“ at our launch of OncoExTra. And we are already generating orders. So, as Jeff said, we are going to look to hit feed our target for OncoExTra in 2023.

Kevin Conroy: Yes. And just to understand the differentiation of OncoExTra. This is an enhanced version of a therapy selection test, which is an ultra comprehensive panel. It includes DNA and RNA, it detects the clinically actionable mutations infusions, including whole transcript on sequencing. It also includes patient matched tumor normal sequencing, and it has an incredibly easy to interpret result reports for FDA-approved therapies, immunooncology signatures, etcetera. And then one thing, Dan, you didn’t ask this question, but I don’t think we touched upon was around the follow-up colonoscopy changes. Everett, maybe you want to just touch on that?

Everett Cunningham: Absolutely. Thanks Kevin. One of the biggest objections from our customers around Cologuard was hey, if they get a positive Cologuard test, that patient is burdened with paying for the follow-up colonoscopy. CMS and commercial last year made the positive development that there will be no co-pay, zero co-pay for colonoscopy. Our organization is now focused on getting that message out. It takes time. We had to educate over 300,000 primary care physicians and health systems on that new ruling. But we are really excited about that new development legislation, and we are out every day talking about the positive development.

Operator: And this does conclude today’s conference call. Thank you for your participation. You may now disconnect.

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