EXAS - Earnings call transcript Q4 2018 | Exact Sciences Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. My name is Jeffy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Exact Sciences Corp. Fourth Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After may Investor conference. [Operator Jones, you begin Instructions] Megan Relations, your

Megan Jones

Thank you, full Jeffy, joining Call. us and thank all Exact fourth of Sciences’ quarter and year Conference for XXXX you for

fourth the news CEO; Elliott, Stenhouse, release afternoon and President earlier On company’s Cologuard. Exact and our Financial Jeff today this Conroy, our are the quarter call Sciences Chairman Officer; of Chief financial Mark results. Kevin issued detailing a

website seen If please it, at you our exactsciences.com. to not have go

call, today’s forward-looking based During will we statements on make current expectations.

to the from filings, Our CEO, and Sciences associated and may now accessed are introduce differ Conroy. actual website. Kevin pleasure Exact can which results such the materially statements. with company’s our SEC Descriptions of is through risks Chairman included be our in It uncertainties my

Kevin Conroy

The team and of priorities. and discuss financial performance by health colon revenue, create for each The results you for Sciences EXACT our company’s and we’re Thank bring we’ll today was XXXX new Sciences our and the of The millions us delivered a people of against guidance our set Cologuard with in grow to to priorities. Pfizer afternoon. team XX%, confidence, detection. year standard delivering $XXX to from impact we’ll with share is XXXX cancer reviewing to conclude fully long-term to life our joining a continue about We changing for and X% achieved XXXX will of goal landmark which patients. XXXX in we intend Cologuard built market for incredibly momentum partnership long-term we’ll helped the XXXX potential. Then screen priorities. excited prospects then XXX,XXX more start cancer launched innovations and in and our us people. this our early care million Today, significantly gives EXACT greater a

business. to key XXXX team efforts progress high We core was care EXACT top two and sales The to on expanded our adoption. command with priority force Cologuard targeted barriers made tremendous Cologuard the primary providers. its sales potential a address group of contracting first for focused Sciences’ Our helping payers

higher will to on sales show increase the know calls out-of-pocket Cologuard We frequency help who Cologuard have of our XX% estimate team. of core costs. group test, to that no adoption. this access market data Thanks Our completed a efforts of will people, that

agreements nearly in-network We signed with total and in million contracted have insurers XX lives major added XXXX. most

broadly sales to We marketing increase expect teams and coverage our deliver as over that and the of patients. benefit time widespread message to physicians

on to first partnership partnership. Our start. objectives concentrated few with is the Pfizer our We months efforts of two strong off the a during

Cologuard a XXXX, marketing to efforts increasing expand Pfizer’s In developing within to adoption and launching will U.S. plan. medicine First detailed and executing team health internal second, large our systems.

Moving labs XXXX, We more per introducing to capacity Cologuard Cologuard of efficiently and million XXXX. our This increased we achieved We ensures manufacture, tests the X We’ve goods. lowering lower capacity automation footprint lab’s throughout goods scale current the preparing lab. for future by meet demand. of cost than from test X.X second during priority size that and our expanding reagent the to can in growing increased increased resulting we demand. to for annual of X% by while this million costs lab our

significant pipeline, in opportunities progress Moving pipeline on our incremental potential. U.S. third multiple dollars billions of priority, we advancing market made XXXX to the representing in

to ages update population. Cancer colorectal cancer Following people a this use to in we Society’s include XX; XX trial for the initiated prospective guideline American Cologuard’s

liver cancer high further of liver a biomarkers cancer risk individuals. support development on We also published promising in test data to

from Biomatrica. results after incorporating We’re DNA pipeline our one of enhanced technology the opportunities in preservation pleased with

best approach. overall the Our development – work showed sample that to stabilization provides the LBgard

expect superior technology tests. biopsy a as develop liquid critical advantage this additional will We preservation be we

team proud what XXXX. Exact Sciences achieved in the We’re of

review and Elliott, financial quarter Jeff updated CFO, now Our full our will guidance. fourth year results and

Jeff Elliott

Thank to compared stated. quarter unless XX% fourth and up everyone. Fourth the refer results, quarter revenue changes Good discussing of completed test XXXX you, volume I’ll to $XXX financial afternoon Kevin. increased XX%. Cologuard was to XXX,XXX million otherwise When

the our For $XXX of strong the test, due recognized efficiencies revenue test $X increase better expected average Fourth $XXX XX% $XX. test test completed collections. at per lab. by in of which expected lagged Fourth full-year improved Cologuard average completed On per than and $XXX revenue grew was a Cologuard the better slightly on scale an quarter end was our per respectively. quarter, and time was XX% revenue to than sales in fourth quarter basis, recognized of cost to

expect to at per XX%. capacity lab We a test to steady to margin range, this mid-$XXX we million cost rise X expand quarter the our as gross increase year. Fourth temporary quarter was our total first tests

increase operating to points increased compliance was to XXX increased to year. expense Cologuard R&D the XX, $XXX Cologuards points including expense initiatives which At an due increased lower to full $XXX the above the support end margin slightly revenue than the Pfizer result X.X expense operating expectations marketing for multiple expense our across of the was Company third full full of pipeline to growth. gross the hiring prior our and due the cancer our liver basis quarter growing support XX% Cologuard XX%, was due year year, at business. G&A during Cologuard was impact advertising. owed hires and the For a from year, of Fourth the increasing increased previewed. as eight rates tests. million quarter XX% quarter of to new the as of expense fees and some additional revenue. sales Selling million

to CapEx, to expand Fourth educate the $XX Most capacity. insurance used second compliance quarter first of XXXX lab and for including we million Fourth the as expect as million Cologuard. XX% quarter, in was used cash and coverage We individuals the cash worked to Biomatrica the our quarter the rates in quarter $XX total of totaled million. XX% physicians we acquisition. our increase broad for CapEx was $XX on in

As we in About of expansion IT site million CapEx expect major relates And $XXX of rest million. is our total projects million that our and the $XXX lab with capacity CapEx. upgrades. complete XXXX to to new $XXX maintenance associated we

of most and expect related our expansion in to beginning projects out We current XXXX. phase CapEx

$X.X on we XXXX We with explore that We up with the alternatives is to have cash have expansion intend capital largely of tied been marketable and we Over time capacity help ended lab financing financing free-up to facilities. currently capital our in hand. billion. securities

expense sales that sequential million. About $XXX expect selling the of and is Cologuard Classic. and to from fee quarter with half first we promotion of Pfizer the operating the national meeting expected about our payable step-up For marketing

selling for marketing at year. Looking full the and

much to We run paid and expect thirds growth about due GI to the the two to of rate Pfizer be the of hiring fourth fee remainder force. the quarter of above sales

For service. due increasing our maintain growth initial and the business care new first the the for is to our customer staffing team high grow Throughout will lab customer our to G&A quarter. standards continue our at of XXXX, initiatives. to broader we IT

including on the rate business XXXX. for attractive show to in making IT customer we’re that will the return allow efficiently scale investment. in course doubled Cologuard and The Epic us nearly our data a more over offer the investments efforts Our compliance starting care year, very of

first Cologuard increasing our quarter, efforts. For and enhancements primarily pipeline the is R&D to development support

During medical XXXX, growth. our to to continue additional we’ll in evidence and generate invest team affairs Cologuard support

and The be XX% expect full pipeline as our year, the including Cologuard-related. use liver initiatives our We major pipeline investments to Cologuard test. we efficient of remaining X.X see about a XX, highly R&D capital. cancer will be For XX% of our Cologuard

addressable least the total the can adjustable $X potential market planned billion. investments XX FIT three for Further, such of reduced would costs of people to could be the believe to and goods. for U.S. X% is increase XX% increase and programs. and made liver leveraged in us Cologuard for market our Cologuard alone. For total We nearly Cologuard than example, liquid many expansion we’ve by as The our in the investments infrastructure cancer revenue commercial million more X.X our for age estimated label test a biopsy by at Cologuard

the three growing rates Cologuard growth profit the progress made operating have years, efficiently. great growth significantly expense Revenue we’ve and gross outpaced Over rate. past

and We’re share XX% billion making $X billion XX% a investments now path Cologuard at to margin. operating At revenue. at least nearly reach least our market $X long-term for to of margin least goal we and revenue at see XX% gross Cologuard of in

tests. $XXX guidance, our of volume million $XXX million to full of X.XX to to million in expect revenue for Turning we X.XX year, Cologuard completed the

to due slowest seasonality Cologuard is For quarter, the Historically fourth and we quarter holidays to XXX,XXX tests. of growth first first completed on to the quarter the XXX,XXX from the impact our business. regular expect sequential

are in growth, turn because goals revenue. on and securing revenue don’t focused to disclosing the plan business back of now And volumes due tremendous and and And run per to the it’s XXXX. on Cologuard for reimbursement this, based more Our made progress our we’ve for revenue stable Kevin. test, we the we expectations internal on I’ll Cologuard starting call

Kevin Conroy

Jeff. Thanks

coverage adoption and under priorities: Exact systems Working We’ll employed one this primary than Sciences our all generate this Pfizer; sales the adoption pipeline significant increase on broad Pfizer three, and affiliated or by aggressively with opportunity health customer us penetrated size, three partnership of with large area take and segment another complexity, liquid health Cologuard and system. has greater month, in we’re are measures, biopsy focused longer is to in launched health products, its two, to and seeking guidelines within major is enhance uptake in care in health from to more Pfizer’s important therefore Pfizer Last to Cologuard; allowing existing time look tests. due team Cologuard power, Today, women’s U.S. complements providers to Cologuard this included we the coming women’s of represents quality the our As years, XXXX cycles. team. advance growth. for a market. with their half

internal U.S. gastroenterologists Approximately XX,XXX an There area this date it XX We in in setting, grow through of are XX% contact only and an And a There our OB/Gyn about screening, potential team promotions build educate years so XX,XXX ordered haven’t making are called and X,XXX Cologuard’s ideal physician about and historically U.S. and patients older. often OB/Gyns. to GIs sales this in ordered specialty without more To Cologuard, from to Cologuard. screening plan important are discussed group. have optimistic the use. within influencers are is X,XXX OB/Gyns than cancer approximately the hip hires. the cancer external we GIs salesforce. colorectal about some in frequent to we’re

Cologuard grow multiple to expansion. channels, laying for we’re work foundation we strong As in a

annual capacity tests. initial to four expect second an million later lab of Cologuard this We open our with year

We are patients scale enable install also our greater system EHR laying us connectivity with and as our will the This world-class and record electronic core Epic’s system health infrastructure. to the to of groundwork IT physicians. allow efficiently

path Americans want met Moving according According Society, for to to label cancer. colon at people ages to represents risk FDA to than XX. Americans risk XX increasing colorectal priority, an modeling the Cologuard, our for an work are XX. be performed and We in the age the second billion by to younger Cancer That available We should January XX screened Cancer are there’s the make with there greater to in XX age American Cologuard XX the expansion the total discuss who Society’s the to of to $X a screening ages benefit Cologuard million market people guidelines. enhancing potential XX for forward average of between Cologuard. over cancer American who additional to for

application Cologuard are half and we test. our of label to which submit and to biomarkers half return investment lab, excited increase economic the our X.X goal the for program the the promising this of increase strong. first XXXX. of with hope have discovered on in Mayo potential an about expect to this cost first make further also We is improve health Cologuard very for case to Cologuard Working in better a year The even expansion attractive. and Clinic, overall Cologuard, goods, making throughput therefore, performance, especially of would reduce Cologuard could already is the at specificity. This X.X

provide to validate will we additional updates these as We work markers. further

of top focused biopsy collaboration diagnosis is our for the advancing Moving XX Mayo third recurrence cancers. our early the our with priority, Through test detection, pipeline liquid programs. our Clinic, XX-year on top developing accurate and to The identified XX we team XX of have XX form experts to on nearly cancers. our biomarkers working Mayo of and discovery, Mayo Clinic Clinic With protocols, early the research has XX helping for the foundation contributing pipeline.

our teams we perform technology platform. off collaboration next these specific validate patients, success decade. Cologuard over and then productive multiple believe our the be to Our Building sensitive this will to using studies bringing markers highly

to meet cancer launch for two-thirds testing tests We The are recommended care of is plan liver of testing. high-risk needs. not that more multiple than avoid and standard patients and inconvenient developing and significant current accurate clinical enough,

Our of with XX%. for accurate ultrasound, goal a stage the Early false-positive more ultrasound is alone a high to alpha-fetoprotein. with than is or standard increases combined AFP with test sensitivity provide is sensitivity which XX% care, current rate, to that without

to power these cancer in We of We’ve strengthen liver test. to have platform markers, continue a for this levels finalize published begin head-to-head panel in development plan the from and of with to the the prospective study data of enroll months our demonstrated supporting that show a tests. the improvement to Cologuard. enrollment evidence We coming we patients

We team, we’ll to cancer scale regulatory expertise leader have resources, there. confident be and technology, we’re in experienced commercial and the get the diagnostics

happy questions. we’re your Now answer to

Operator

[Operator question Couillard first Instructions] comes Your from with Jefferies. Brandon

line open. Your is

Brandon Couillard

Hey, by $XX about thanks. I million. in the mean, guide, XXXX Jeff, of Good quarter you fourth terms beat revenues afternoon.

suggest had about where the where changed year? Is that case XXXX it were for that your about five talked $XXX months initial That’s really that all. of talk kind about four, the You midpoint hasn’t to Even the thinking in though for at formed us – ago, view, of is sort to million. factors view the an relative outlook today. you your of assumptions about –

Jeff Elliott

Sure.

it’s There’s sales midpoint So the is year. million, mind place about that our we’re very it’s today in and so initiatives keep the terms out the putting team there of February, the in team. of that let’s productivity $XXX still in lot today early the Pfizer a of and unknowns in

is think right we million to year, $XXX place the the in to early range million for be. $XXX So that the

with far issued the As very we’ve we out off seen the good changed guidance million. versus has is teams, both to around million partnership as preliminary months, a great was we’ve the the had doing the job, are prior progress teams And brought nice $XXX sales in a to what last very start. few internal mid-point our Pfizer $XXX

are things better than had the little partnership. So Pfizer bit we first when we back announced issued a

Brandon Couillard

of for come that about then think over the and to be of to And think next you the then, Jeff XXXX? rate half the kind or engine compliance What lift beyond ticking to whereas programs That first facing. up facing, Kevin, several compliance rate spoke opportunity is you more sort doc about quarters. are sort to compliance patient expectations more seemed should we the doing differently of program was how of that in terms of a that

Jeff Elliott

Sure.

come of to keep We in out back. we So we how ship rate. the mind XX and compliance back what look XX measure percent report kits months we the

the half that second XXXX. at back So the of end in was XXXX of looking

XXX that that about now out-of-pocket. last get patients sent to that XX% message in remove and year. today We is we that when place. was about period our that who have of had Cologuard, message no that message talked is, During We

the commercial we rate on on in high side XX%s. used that XX% the compliance change the of seen range. been Today incremental in is in to rate. a nice to important we’re Getting compliance about top last Medicare we’ve in mid Kevin significantly the that actually in XX% low that rate the his contracted rate. has to hover we’ve lift towards driving remarks that, the So compliance incremental million low business, trend year. commercial side. On our about talked compliance of seen XX talk signing coverage And the lives seeing the message about What

initiatives compliance So by direction rates in the more place. some compliance of are we the and Maybe large, right have about trending could talk in the now. Mark other

Mark Stenhouse

physicians not I back to add only offices your portal more think that Cologuard. is those is order compliment the and that electronically, We getting selling Cologuard, order of also their I focus to office. organization would but our our use more provider educating know thing write that the message that

organization press ordering. the our is drive Cologuard sell holistically So from electronic really to and selling

Brandon Couillard

Very you. good. Thank

Operator

comes from William Brian next Weinstein Your with Blair. question

is open. line Your

Brian Weinstein

guys, I appreciate Hey, it. the thanks question. for taking

towards you attribute that trend think guidance sustainable there? or just the talk guys that of saw of was Thanks. trend jump do in more you of line, the can to? the it doc about, a the going we anticipate And what’s adds just you back that if recent into you quarter. baked is Obviously, So first, sustainability that you Can what the level above line, type about the kind your XX,XXX. talk

Kevin Conroy

Sure.

fourth jumped of had like was been quarter. XXXX We the since from second quarter. a So about which the in quarter really up XX,XXX to XX,XXX, run the strong rates out quarter

time efforts added, network Pfizer a TV more also quarter, we significant think spending. has as went getting As out coverage having that today Cologuard promotional force, the covered that, In early XXX what different several to year. our and factors. talked well we then for little together XX% have been that’s resonates there’s of middle fourth major last gains Pfizer, Those One, joins added out-of-pocket, helpful TV no field insurance a message well we On on efforts think far in of to October. And the we nationally I patients And to additional drove we payers. in all the that, I physicians. strong with of bit sales with in reps helped. contributed the the all very first top with

factors those increase. So I led think the to probably

these Today Cologuard. only Cologuard. as physicians As providers possible about goal drive XX% is our sustainability, I to think ordered all to have of far relevant as many as

I that’s of us number a XX,XXX run but go. the above At to as the though, XX,XXX rate more would XX,XXX sustainable we number, range really at, somewhere strong So think there’s ideally been have for a a likely below long ways pace. a

Brian Weinstein

of a on talk performance at Mark, you my I guys of response are about with the hundred the same couple for would guys And yours. that given calling think this curves point year docs it. Pfizer, last not then rate if Got now question on before. had And so, a estimate, typically were what those that this be you and of that hoping people course,

seem some You’re going be utilization that a It would would good by be combined increases. thousand to opportunity there well math. therefore, over my pretty

to can if response Thanks. thinking I’m right. the just curves about So you performance that and talk

Jeff Elliott

Thanks, Brian.

physician I clear to driving to overall trying driving rate reorder. think course of it is We at previous you’re definitely of is key We as to by share rep in similar that share. move rate responsiveness ambition reorder do speaking in is that a terms watch the And look the quarters. in that’s were closely that distinctive we’re they curves the today it reorder X% to and response cohorts. about in are XX% Cologuard data from the the very

where we doctors between doctors. have So between relationships and individual Exact Exact overlapping doctor Pfizer have reps we Pfizer reps and and and where relationships and

that tells in as and go a us of which forward basis, a those modeling cohorts. distinctive We’re message lot frequency about of each message

Brian Weinstein

okay. you, Thank

Operator

America. Bruin question next Bank Your Derik comes with from De of

Your line is open.

Derik De Bruin

afternoon. good Hi,

Jeff Elliott

Derik. Hi,

Derik De Bruin

to a bit opportunity guess. have a I what a bit for more there that’s Hey, Can and contracts health couple you think when and you’re you mean the little there. going about been, visibility questions so for obviously into more winning how barriers the have to of we once about just opportunity huge more should little some system like that the plan of a sort I talk

Jeff Elliott

great a is think question. I Derik, Hey

it system. our first health are healthcare about of to is So practitioners to XX% U.S. affiliated thing think

us. So it’s important a of driver very for obviously value

the underlying positive extended quality officer, and you’re to have the seeing physician many population Cologuard active the really motivate our that think decision. good And brings right neighborhoods seeing this health a health because But sales working the time, by productivity team. the on typically the the affiliated have significant also electronic year are in already are a physicians, And health product. but The we’re of are system progress that as systems. already systems key programs, time. message it affected get officer around better over investment that why, in system over by will or the then you ordering screening lot important revenue the to in but expertise I of think pickup embedded the right news system health messages, systems that to Pfizer cohort today you’re that include get of which we here already. I XX% selling and value is revenue a The to really influence seeing systems does cycle see medical you’re cancer is numbers, these and contained have most Exact You’re that driving the health in health number system going only doctors advancement of the

Derik De Bruin

And metrics there one Great. Can year. the little on just revenue Is in a embedded any talk bit this about the you for acquisition. on Biomatrica that the guidance one?

Jeff Elliott

is is There you’re what seeing though, Cologuard. it largely is revenue some immaterial Sure.

Derik De Bruin

thank Great, you.

Operator

next with Your from Doug comes Cowen. question Schenkel

open. line is Your

Adam Wieschhaus

this on to additions questions. the Hi about terms Thanks Doug. practice Can your to of for my the provide how detail as per new year QX you number levels? any think how complete for there, in I taking of levels. provider XXXX on Adam QX Jeff, Wieschhaus versus detail guidance and appreciate assumes on this with what compared or provide you is ASPs

Jeff Elliott

Sure.

go. trend X% we think revenue a over here And XX% is share range of test market up long-term I with data and In to to the keep expect in is to off long around or go XXX there’s today big get time. the ways that into provider terms mind that right XXX, per per as as range XXX, tests with of for far in something

you orbiting the rate is X% range. physician to the penetration average in today at does look our XX% If Cologuard,

we on over metric to expect continued progress time. make So that

Adam Wieschhaus

USPSTF XX indicated would not ongoing trial? in your you that FDA for you the I be the And require next believe submit this result mean year. you. does from Does application considered first prospective of Thank plan in Cologuard the you decision to cycle? FDA half your

Kevin Conroy

plan We don’t a have FDA the the agreement on final with forward.

an needed that support data the prospective will submission. to there indication However, is not be

committed to have we the study will laying we evidence the what will is nevertheless are a that we required. understanding of final exactly to FDA out submit once We FDA what be of what

pleased to and outcome that very is met particularly one the are of and the the thing the shutdown. note came meeting government with We in we’re us appreciated team with during agency

Adam Wieschhaus

Great. Thanks, Kevin.

Kevin Conroy

Thank you.

Operator

next comes Schulte with question Baird. Your from Catherine

line open. Your is

Catherine Schulte

question. Hi, thanks for the

cap the the Pfizer quarterly, their related, how performance? is then there rep, really And For is upside quotas is to upper Cologuard, annually, the it unlimited frequently weighted is that bonus or on their that monthly. based

Kevin Conroy

that The are within I’m Pfizer of utilization a off general and with portion the Cologuard salary bonus of speaking base and reps their very territories. comped that A both target in is a – bonus. terms, driven

goes or their out is PX, a we fraction it’s when is the bag, that as to PX bonus there positioned PX PX. rep’s announced whether we of that So – on in this laid where as it overall is agreement, from – depending Cologuard increases

or So I fraction at that’s of don’t off and a and our Cologuard. wouldn’t capped agreement least in of the the purview. bonuses the have focused their have – incentive with reps information are What not we comp Pfizer terms is in minimum whether of uncapped driven we

Jeff Elliott

the tell the the whether the you marketing shared as the is, deal. team, this the OBGYN reprehensive evidenced enthusiasm to looking team is systems, reps, of field feedback I management Pfizer I’ve is from qualitative what’s strong, I really Pfizer would I would health I you’re the the representative way down addition Women’s the question your the underpinning to top think is Cologuard extraordinarily for at of committed to Cologuard. health think add their by thing before And the structure the all of

Catherine Schulte

just walk And bit those through you $XXX helpful. Jeff, would Can us you saw ASPs. then down dynamics Very going be what to XXXX. in a back versus slightly more? just

want puts understand the to and just takes So there.

Jeff Elliott

to thing that underway. in biggest mix the mind is is The shift keep

from see XXXX volumes continued in quarter shift quarter that mix – of went XX% our we’ve look If And at fourth XXXX. far so you that of mix at of XX% in XXXX. the in happened Medicare to to fourth

some downward revenue temporarily that test. mix So per put the overall on pressure

side on to more we stability the about today, the revenue expect we continue make Medicare to improvements And we’ve on expect businesses and as as We of here our commercial the of sign contracts. talked business. side more

provides mix out to our temporary a it’s There’s it’s drag overall still And it’s a ASP. of the on network. date, really So blend small percent are commercial that still all here because still in not are a shift of really, network. factors that insurers

Catherine Schulte

Okay. Thank you.

Operator

comes question with next UBS. from Daniel Your Brennan

is open. line Your

Daniel Brennan

retest us opportunity? know those patients you’ve for to questions. there’s Great. you through first almost have assumed Thanks retest guess waterfall the ask baked taking which walk XXX,XXX in what’s kind eligible, I Thank I be of the I for are a for that Jeff, you. what’s on just I wanted of of actually the and could opportunity eligible. possibly, guidance, XXXX what you guess Can

Jeff Elliott

Sure.

us want but made to the to you’ve be where talk rescreen opportunity, we’ve before, As we’re we not heard progress quite on some yet.

huge a opportunity. So the long-term, there’s

ahead about a that opportunity. If $XXX years, tested revenue that’s you look back you at and year million last look we three the volume

a So opportunity. this huge is

it. gradual where We the compared population baked years be. we’ve to in progress relatively to not What look opportunity today, on that’s progress small continue guidance It’s onscreen still there. you back make But need broader is it’s ago the mind we keep on when out in from continual three it. to

Daniel Brennan

I great. And maybe back question, just guess. follow-up, as utilization a then the on Okay,

and of given docs usage salesperson faster the familiarity with has board. that doc the as frequency Pfizer a visits see of at kind Pfizer with Pfizer, the that the and likely was presumption probably Our on came ramp you would

if but kind know continue. you. I seeing practice belt kind from you under and under call in you’re you And So in is almost the the four of Thank QX early, five months Mark, month that right could that saw got you’ve don’t sequentially know it it’s increase now. QX what I comment maybe belt. can on of possible or it utilization

Mark Stenhouse

visit of their because One to and experience that part to the product multiple that is Yes. single has relative They is a than Couple portfolio most the a fact productivity per it has third is, That more in promotion rep, Pfizer. here. sell representative Sciences level the points position. of or products because with Cologuard make Pfizer is Exact the in rep. Cologuard’s second the Pfizer the and

being think the do of value have that promotion value That Pfizer I creation. in Pfizer’s judge Exact Sciences on doctor, the where contribution So single you incremental to overlap you see and way. said,

time understanding that we’re again, a vast alone, the majority Pfizer meaning on of their specific they’re targets. that’s to target And Exact. number selection So with because of lot spending sales targets right a a calling their them target force, were not physician that –

have they low use historical of So Cologuard’s.

So low of a they’re from starting experience. position

within the that’s relative the uptake and focus companies. the shared Pfizer So the of between Exact two alone to influencing contribution curves

Daniel Brennan

Great. you. Thank

Operator

Donnelly Your next with Sachs. Patrick Goldman question from comes

Your line is open.

Patrick Donnelly

Thanks Great. just for of out Kevin, to the level, you kind talk on a through that how was you quarter much advertising, you can last parsing questions much the was to that reps the that Pfizer can’t force but then guidance sometimes quarter? increased additions, impact? how Pfizer the underlying Maybe granularity, guys. sales feel raise, taking by high during just trying do momentum did leading summer in the strength layered the level being of driven the compared guys of and XXX to get high I much know, for the

Kevin Conroy

Well.

year. much provided with the and be really in if Jeff early mix of things I granularity wouldn’t of it’s here. all, It’s First a those happy me, very

lot execute. We and of Pfizer complicated. a of aspirations have reps. to there Exact It’s are are Sciences’ lot significant a There reps

months common when who to repeat theme behaviors changing the physicians four are to screening into colon and we a to launch their need We reached. continue drive to messaging very receptive are cancer about clear and

of to I Jeff, to, So saying, way want long as you to that I’ll over the out. want you. it don’t may break pass so

Jeff Elliott

Patrick, things that those very very So track closely made. progress have the pleased we each all and of we’re with

not out break to We’re here. going it

working is strengthened say, I reps, this important think the Pfizer ads our more had are broad reps, a the it’s from to TV strengthened wonderfully. We quarter.

that had access talked also We the market about. when to we

broad very So based quarter. this is a

though. specifically break to going one not We’re out each

Patrick Donnelly

but what you, can next process of in of that on your just then sense variables timeline, get And things the are thank talk you you to over a so? that the helpful. there to don’t the X.X I year timeline, at steps early over XXXX, in the Cologuard market that’s biggest through or just Okay. trying hands level the have get control the versus out confidence to getting

Kevin Conroy

Yes.

So I we XX, haven’t a to for Yes. assume, asking on you’re given about Cologuard guidance X.X. XX Cologuard

real data year, terms the reasonably half that will And can by of So be the the confident. agency. Cologuard this FDA. review first upon we’re Anything in data next a thorough XX, have to in based happen – submitting, time, we of

there of understanding We a been are that reasonably confident an that age of and we large is that be for of now. embedded, than will will timeline. to real couple the And challenge couple number the XX has our decades, here a meet opportunity And decades address. a people more

the so changing understanding also some payers time. take consumers will And and of physicians and

take year the and than that and to made life great back if for XX. the then Cancer on this And a group. see age go American Society this And to age – committed cohort. you materials out at impact gained each not greater the out it they a is the cohort age take they when presentation, PowerPoint XX can the change look a put XX there XX to put you only really We’re years

depend jobs who on upon an and that them. the impact big are kind having in of activity life middle who economic their You’re and people circles with kids of people and of

as we’re why sure we really that’s a company, this so And about get making right. passionate

Patrick Donnelly

Great. Thank you.

Operator

with comes question from Puneet Souda next Leerink. SVB Your

Your open. line is

Puneet Souda

taking Thanks Yes. thanks. question. my Hi, for

to controls asking measures you place metrics. precision. early So the have read you on to in the in elaborate and with Kevin, trying on understand could track that if bit was I’m excellent orders just a are terms of the you in I because able

upgrading the a here, upgrading were capabilities performance. you of You you software, lot the of driving number were are

implemented, wasn’t trying but the So XXXX that visible sort to pricing of quarters year quarters that I’m and and I transparency just understand, was September, last two for we after. think, had patients two

your controls in having be wanted sales larger now that how things channel impact is much any in you So have those and So of measures impact or able have sales or channel fluids a quickly an if a having sense you on impact place usually the of marketing to because view get of you to just to two just wanted the get and sales things that the that? an force see will great organizations?

Kevin Conroy

I’d all, of first up into – million. million to Well, guidance say the $XX end that, just point we took the mid high $XX

obviously be year. over significant So growth. And a have solid into for expect really visibility we growth last that’s will year we what

embedded see That our terms see we data we deep reps Mark the able analysis. IT us at as reps have ability alone to on. as that look infrastructure comfort, that extensive positions then physician mentioned, between can are Pfizer basis daily call day have or times and infrastructure gives both In that call teams of on, trends, to within a a we our alone reps and that of capabilities that differences call reps, and on that multiple are groups do and performance the on

our data gives on. just confidence early in year. us going great It’s kind And predict that really the ability so to is what in of

any draw upon line Mark? so, And depends we that execution.

Mark Stenhouse

third where with The only question the go a Kevin syndicated tests the add and to quarter would successful cable And informed distinct us controls opportunity and into then have pilot was historically TV is been pilot versus of learned and strategy can five to to spend answer our that into in media recall afforded ran, thing in And lot makes spend strategy, all about mix to kind way in our six spots helping efficient. in test media more overall XXnd quickly also into And relative months. we to last of the relative reallocate our the operationalize the spend of our that TV digital is how we’ve media think and social, which network very It strategy, we manage XX. we you’ll match go and and and markets us in I both a then XXXX. in fourth a the that incrementally we TV. quarter responsiveness the we

I a the in time. that’s using to strategy it’s real learnings very So organization think learned inform

Puneet Souda

helpful. That’s you’re liquid my biopsy that for And at. the on then second is looking the opportunities Okay. blood details. very and Cologuard Thanks question

of it are are or XX sub then also these seems trials So collecting number nine-year-old, part to blood biopsy the XX, and as are liquid we be noticed your to of XX-year-old of that trials XX-year-old that populations there approach.

data R&D it, So just being is is this as looking at it friendly blood collected to of liquid the the wanted data a you be submit largely to and potentially longer-term when down go CRC part and just screening any of studies or for potential for to set FDA, road. going future tests biopsy, understand Cologuard the

Kevin Conroy

any be different the other Mayo test a separate is Cologuard see to XX XX test if These internally, current Puneet. that cancer then know of research submitted specificity to blood test. with Thanks, our will screening the that colon Cologuard Cologuard so programs, based programs; the technologies and can so work in samples, world around the – a the part level and that U.S. submission. we’re two different bring blood is needed is of two we to and And Clinic markers are can doing blood to we different continue institutions collect Cologuard sensitivity and achieve we feel to mark as not data

Puneet Souda

helpful. Thank you. very That’s Okay.

Operator

comes next from Your Capital. with question Per Ostlund Craig-Hallum

open. is line Your

Per Ostlund

there’s it even if the you any to generation to give that anything the timelines from drive was you an that, I at but going Cologuard afternoon higher When on look broadly, to there’s X% prepared there’s greater revenue that, think remarks, first questions I ASP the given and heard Two very, attached correctly, is – X.X, you maybe that, of made there? that do an can to said growth that you Kevin, articulated What Good that Thanks. next be now, if XX% it that everybody. to a test. I superior up going chance back that? might that test? comment adoption Is it you we to guess on me. be a hadn’t is if before very could – assumption U.S. the about expectation on that speak wanted to thinking that

Kevin Conroy

measured in said We a we’ve around be not timeline quarters. are would this X.X years, providing other Cologuard than

that limit costs there their are fifth new days, of three-day goods that or a there later, down and a I is sensitivity compliance. think purpose we’re that shipping beyond came overall it test four that’s XX,XXX extends three potentially benefits while and specificity less is lose we’re task the through a We’ve test, drives to different also Cologuard, Also, a markers presently three-year with a the embedded improve of identified so another compliance, sample overnight trial does at brings and added to to of Cologuard, improve because that the both total when there cost number patients yet bring product today days likely UPS development. patient. because it of least program doing has which the testing to patient five clinical one, of within you number stability lost that which screen wastage is return up and the so in with a on back opportunity we days return, – the sample, the because are a

And I if Jeff, you fit real, You’re to benefit unnecessarily patients know, specificity. those? to of to want quantify the losing improved you colonoscopy fewer try is any have if test don’t

Jeff Elliott

how Those can of factors the you that the low get XX% of add reduction to XX% get X% by incremental revenue. spoilage you the then that and fast percent rid you compliance at have to that’s rate fit test three rate the up, to easily on Kevin you X% just rate. of worth to of of increase due say positive are least you in And ran points, goods. improve we’ll then a through When cost the single-digit stability, top you

value billion. that math, of present over this is easily $X when you net the do So program

highly a in capital use of to it’s efficient invest think we So, Cologuard X.X.

Per Ostlund

unprompted. you And the you Fantastic. less about your or terms just that of you’re of kind the guess GI in I lot turning the plans of there? X,XXX color. number then to within hiring, for That’s market. – more already ordering, what that. thinking about practitioners discipline I’m And quantified Thank you staffs to and for XX,XXX Have a of curious, quickly talked

in in Is get to in have You’ve that colonoscopy differently with does? de OB/GYN market sort facto do that there women. primary hurdle already of order that or anything market any competitive almost you that somehow the is to being GI talked about terms over something practitioner with messaging Cologuard a care of

Mark Stenhouse

great question. It’s a Yes.

of think we yes, a need the to message. It’s to So that are XX number neighborhood we on have we prescriber population of call reps those calculated most XX to receptive GI, in in the the reps.

GIs We’re that coverage the because use, gives we to adequate you that on still finalizing had their support pointed need population. – us call as X,XXX of written. the We into out to kind know but it’s number,

they’re capacity. a of that supportive know relationship a segment on the you’re don’t actively we customer So, limited if you with product in likely calling not them. build But a

with network only to because physicians. kind relationship to call exact compliance – they’re right know messaging GIs and influence strategy prescribing, can receptive we that then of offered that Medicine do partner Sciences a GI. but going from of know that when them, think a clearly, not think working we’ll up. ultimately, and there is message. choice people their our have goes that that to their people we our which Internal a you’re a need we unlock we’re figure strategy know build out And referral on that So, different But ambition, I their the choice, they’re we that and that relationship affects we message. message and – same and with is Exact be to need the more will get screened testing

going fundamental we’re carrying that’s the forward. So message be to that

Per Ostlund

mark. Thank you, Very good.

Mark Stenhouse

Yes.

Operator

Instructions] [Operator Canaccord Mark comes with Massaro question Genuity. Your from next

open. is line Your

Mark Massaro

it reps, Pfizer’s impact? the can large on Pfizer speak lessons just you in or to going And are to any the with first that also Can surprises as any you’ve with relates four reps you Can be guys. Exact working might you there? the progress the to speak learned Thanks share health early the systems months? how collaboration

Kevin Conroy

Yes. a great question. It’s

that handle physician how that as to organization. experiences first experiences selling be general in do influence strategy, we how receptivity a the messages together. how to the of So, is work the our physician and where a by have do reps the we products. tactical it could may physician sequence comfort how share we is we doctors do can training a overlap doctor to share It as the as targets, with be our physician efficiency and objections message improve

reps that’s cycle systems, work expertise kind Pfizer in it’s sales So terms certainly is those significant of way the of health The weeds, in together. one but mentioned here. as long. brings

know in pathway. that influenced systems, also we’ve embedded seeing already we’ve systems, is long, focused happening, doing sales we’re a utilization first we but we’re coordinating cycle there’s by of a we we’re also and fair The growth, thing on is cure quarters, where know what years seen because is revenue pathways pathway because these spent efforts, our about of number team cure has seen them cure as Cologuard part that

brings to table business. understanding the Pfizer advance and them relationships what is leveraging So, our we’re to an and

over another X% share is organization the people one today common about what a we to terms we have XX%. core voice of terms and what both of do, to that’s to shouting more need from partnership think our is it a Is Pfizer frankly, companies? effective encouraging? lends I similar lessons, surprises Exact there’s are of the then not of kind and there and our grow and most in values, and screened get mission which very to In

Mark Massaro

one-fourth and a then go spent Cologuard be year. maybe lot R&D balance question go talked will to of products, new ongoing the And the suggest me will going you is Jeff, that that Great. for throughout to to that the would on of about Jeff. another

over the of had QX. couple last years OpEx you higher So the scale after

curious should of years. million baseline think last of I’m operating we as of So a sort couple with if the of $XXX expenses the consistent just

Jeff Elliott

other was X.X, specifically XX% The liver, Cologuard like on the Cologuard call comment on OpEx that or XX% be X.X, XX. R&D will Cologuard let’s on programs Cologuard,

attractive we’re with majority carry investments. the the products, we So very why making which those think is is vast done which ROI, new

be OpEx the year the for we in As broadly, step of will more the OpEx. far believe up in up QX as biggest step

first of significant terms uptake. is talked about total investments that which portion we’ve in the a some Pfizer, to of So there in the the paid quarter fee of

our have also sales meeting. We

hiring Cologuard We have some and classic additional we’re doing. events the

So we up step those the are biggest QX be but the the by far year. will main factors, of think

Mark Massaro

guys. Thanks That’s helpful.

Operator

no call time. presenters There further I any closing this at turn for are remarks. the to the back questions

Kevin Conroy

Thank a you detection. XXXX leader to early priorities. our positioned our for Exact performance year preview in the joining is us and today cancer landmark review of Sciences during to become

healthcare goals outstanding capabilities ever entire the for and XXXX. front energy earlier. of We’re than at and A special bringing life in biopsy help providers cancers to to focus more liquid and of detect people before changing for team the getting they’re other our our Cologuard advancing Exact Thank in you. XXXX an and the to achieve thanks Sciences capabilities

Operator

conference today’s call. concludes This

You may now disconnect.

Exact Sciences (EXAS) 21 Feb 192018 Q4 Earnings call transcript