Exact Sciences (EXAS) 29 Jul 192019 Q2 Earnings call transcript

Company Profile

Participants

Megan Jones	Manager, Investor Relations
Kevin Conroy	Chairman and Chief Executive Officer
Jeff Elliott	Chief Financial Officer
Mark Stenhouse	President of Cologuard
Kim Popovits	Chairman and Chief Executive Officer, Genomic Health, Inc.
Brad Cole	Chief Financial Officer, Genomic Health, Inc.
Brian Weinstein	William Blair
Doug Schenkel	Cowen & Company
Derik de Bruin	Bank of America Merrill Lynch
Brandon Couillard	Jefferies
Patrick Donnelly	Goldman Sachs
Tycho Peterson	JPMorgan
Dan Brennan	UBS
Catherine Schulte	Baird
Puneet Souda	SVB Leerink
Mark Massaro	Canaccord Genuity
Bill Quirk	Piper Jaffray

Call transcript

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Operator

Good morning. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Exact Sciences and Genomic Health Combination Second Quarter 2019 Earnings Results Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator

Investor may Manager, your Relations, Jones, begin you conference. Megan

Megan Jones

we Welcome Chris, can combination our conference which Genomic In Health and results Sciences you, releases issued the announcement, to with with this websites. today’s conjunction respective good Health, each Sciences Thank Those and Exact second on morning. our quarter be Exact XXXX. morning. found discuss call Genomic their also announced for to of

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

may Sciences Our from filings, statements. in results through different actual be uncertainties such accessed SEC Descriptions materially and our risks associated our website. which be of are the can with Exact included

of Slides and our These of and you I a uncertainties events that performance presentation encourage or or results X the impact forward-looking take slide the results differ risks with forward-looking discuss guarantees and and look events. a and of materially. statements statements actual to are X at future for SEC or not filings actual events could could the

prepared the follow-up, Brad for one we’ll today question call one call hour. Financial Chairman so the Jeff to Financial Chief the Chief our President Genomic is, Health. and Mark CEO; Genomic our we Chairman limit Stenhouse, Elliott, yourself Officer of of After open up one Please it Health; Cologuard; remarks, Q&A. to can CEO keep Officer; Kim Kevin and of Popovits, and Conroy, Cole, On

will I that, the over CEO. With turn Sciences’ call Conroy, Kevin now Exact

Kevin Conroy

combination Health how growing as leader Oncotype Exact brands joining fastest tell Genomic industry diagnostics. and more I’m in to Sciences us Welcome the and Megan. you Genomic a teams us DX. you built everyone and pivotal this this cancer strongest you, have and two our morning. positions Health in global The for Cologuard of Thank thank and it about excited with

pipeline. will growth product the continued our have of stronger platform an and The development combined leading our of company even for the

of the the commercial, innovative some diagnostics together with form the bringing a in development, to infrastructure test cancer availability new global to accelerate greatest We’re organization minds research, to clinical patients. best-in-class and of

than] opportunities. and we and to growth organization together a our on Exact Long-term new continue financial of Together, Health us today. bringing invest with to stronger will create in capabilities Sciences have doesn’t allowing breadth Genomic a that an exist [profile own

capabilities unique this and Cologuard reimbursement from the diagnostic industry so organization. cancer create that a reach well complementary commercial bringing in more with to company product seen Oncotype see continues growth second from size the core, and and DX. never company research and is leading together a is The to a has diagnostics impact of positioned combination strong with development our respective to people’s team the quarter its to Each about At regulatory abilities lives. to company products

least market XX% In the we These than our XX% the is Sciences capturing cancer growth delivered share and year-over-year. our and quarter, Cologuard more closer in X% from achievements team at which screen the to IT us people colorectal second with Exact today. revenue, capacity about XXX,XXX move infrastructure. XXX We U.S. lab screening of strengthened million

also which upon quarter, second touch shortly. Health results Genomic will for strong Kim announced the

of innovations the today. cancer male Our deliver with to is early to in detection prevented biggest at cancer. changing We is collaboration clinical cancer as recognized most often preventable, in to life the yet developed mission Sciences and Colorectal one cancer Exact Cologuard lease problems early the detection. solve

update screening not with are U.S. the current in people guidelines. of XX% Nearly

of cancers cancer. convenient screening detects accurate test option. for there It screening only Before convenient stool-based providing XX% was stage early accurate and an Cologuard Cologuard option for at-home non-invasive getting the not screened. is colorectal DNA an

XX XX Cologuard estimate million billion There of opportunity. pre-cancerous U.S. Cologuard average the in people between ago, cancers be and years has colorectal detected early and $XX XX are Americans Since ages nearly XX,XXX risk X X.X million polyps. people than who more the XX,XXX been than That with almost a for more launching should cancer. we and have represents stage screened screening

year, billion. Society to market XX screening label recently X group, increase billion total American total We lowered of for to submitted years XX a Last old. the recommended which a would or for Cancer Americans million the the by FDA opportunity age $XX expansion the age addressable this

at X Our in market least reach this more representing long-term revenue. billion XX% of goal is than to

Genomic than providers Nearly XXX,XXX sales More XXX,XXX efforts total Cologuard Cologuard are increasing creating in with Health the and care success for builds XXX force stronger Cologuard, growth well care they week Health portfolio. combination as an The reordering health providers on primary health Oncotype Genomic including our marketing each our have ordering for are care. patients, new their even as Cologuard. ordered DX rate platform that and

discuss perspective. transaction Genomic the the Health's now over to Kim I’ll from call turn to

Kim Popovits

of excited We too start, of stakeholders. Health Exact Sciences and believe Health is with value Genomic Thanks, the Exact time this Sciences the transaction the for Kevin. am for right the I is believe creates and about To all our Exact believe combination significant and Genomic Sciences right to we partner. combine the

combination to provides the and This company. for this our opportunity value and reviewed for the opportunity potential combination this concluded the thoroughly and represents of component and significant participate benefits stock combined carefully unique cash in the unanimously immediate transaction board upside creates strategic and financial a shareholders Health. Genomic Our of with

for our are as Exact benefits Together for and team people of to with significant and the them collective to improve priority to will We Sciences we a Sciences, around have great see we products expertise believe care. have leading a bring and well. our Exact Patients we found more respect even we our advance have partner cancer is talent the diagnostic mission. platform help Genomic that world. Health the tests provider tremendous

a has achieved pioneer have in Health cancer nearly tests over two become Genomic Our diagnostics. decades significant success as

the an tissue that a in tumor Our cancer breast biology genes XX DX, activity patient’s flagship is product on based treatments Oncotype guide innovative individualized of and examines to patient’s test breast disease. a

cancer from treatment than portfolio patients decisions IQ million X Oncotype has more personalized guided worldwide. Our

DX invasive but early-stage just with benefit In one the delivered for text breast world, established we around do breast This DX overall XX% results The DX showing the of the growth uniquely who patients from of is revenue the growth that impact new landmark year-over-year not cancer and delivered. identifies women quarter cancer. Oncotype trial as Oncotype test XXXX, of TAILORx for chemotherapy. Oncotype majority second the the more XX% recent of year-over-year of care on DX standard patients than tentatively Oncotype example

Sciences organization, innovative and highly partners capabilities outcomes and develop opportunities strong our complementary grow significant to be believe new shared will be Genomic part products professionally. will Health And their to mission to Health an model. due of believe for improve Genomic there combined we operating We as and enhance the Exact and are employees

like for I'd our of to dedication all the thank Genomic their Health. and contributions employees and continued to focus

can We our together a additional Exact and more Sciences patients on impact we are that positive have confident for stakeholders. with create value

call With back that. I'll turn over to Kevin. the

Kevin Conroy

will suite of U.S. about represent available and and total opportunities for pivotal Oncotype is and accelerate incidents DX, across markets. product with leading continue detect Thanks which breast, represents brands breast, Exact to XX% sources tumor prostate colorectal, new DX market Kim. solid to International This treat Through Cologuard help and growth. cancer, of a X of Sciences U.S. The step products all a other growth in billion our breast, significant all of the U.S. prostate, Oncotype combination

share market. The total Cologuard addressable DX and this billion us a platform these of position strength scale Oncotype and combined a The strong $XX significant represents of create with capture a growth. markets. continued Together, capabilities proven company's for Cologuard to

with scale R&D and scope. have combined clinical and a Our unmatched company organization will best-in-class

of the oncologist to on process clinical resources early and Together, coupled bring products provides success prudent a innovative extensive advanced robust with patients. engine. building has evidence we the current capabilities, relationships exciting generation to Cologuard. growth have Exact test technology Sciences this already key and team our expertise platforms, with of regulatory made support to new and necessary in This with

across unrivalled biomarkers DeeP-C the led our Oncotype for DX. and teams TAILORx by – identified Cologuard combined for studies. We’ve cancers landmark two deadliest deadliest partnership long-standing XX Clinic. in proprietary The and clinical industry the is experience with Mayo unique through trial

and new have more global products, we’ll combined leader to team the The a Health company to members, X,XXX together of reimbursement will in bring Not drive marketing including Genomic than R&D will develop Exact scale Sciences we and breakthroughs physicians as will successfully sales cancer scientific only patients. the to and them teams. organization combined have The capabilities commercial capabilities diagnostics. the positioning and growth have

journey. patient important is team touches Exact of cancer care Sciences the largest aspects care This has sales many in the because primary different primary diagnostics.

and We a sales sales support lab to complemented an and that also for capabilities neurology extensive force marketing launched oncology, our a reached new this expands IT infrastructure month, team establishes Sciences growth. presence the Exact OBGYN, our GI and and to team. by international and This combination robust

countries well products. help accelerate spans XX more Genomic of infrastructure and than launch will Health pipeline global the established

U.S., where future participates help base of administrative Genomic including Within in adding of the operations cancer a we’re the Health’s Medicare will a the strong facilitate in in This [MolDex] contractor program. state the infrastructure diagnostics. lab blood-based Bay Area, reimbursement

and and to broad and scale more engaged We’ll set able infrastructure will our have a a provider new deeply in for offering customers [pay-out] with holistic their combined teams bar with Our cancer reach diagnostics. and be members.

I you I’ll example we exciting an see. of to call the give the Before turn forward Jeff, over path

hepatitis test We’re B. developing high-risk cancer and with liver a individuals sclerosis for

will test access patients test. generate We combined commercial broader our globally. with lab have more can clinical capabilities market products capabilities support the to guideline liver expanded to portfolio also The experience of leverage reimbursement to have bring cancer and to Health’s relationships liver or deeper for enabling company and leading infrastructure industry evidence Genomic and payors clinicians extensive trial support to inclusion a and

details turn I'll and the to talk over transaction for now, the call quarter. the the results Jeff to And about

Jeff Elliott

terms will Sciences by caller]. benefits $XX.XX our through weighted XX-day stock in results. and Kevin, and This good represents and price. value morning [fixed subject to followed a receive in $XX.XX stockholders transaction to Genomic volume second of first quarter Thanks, XX% cash the I'll financial average walk premium Exact shares everyone. the a Health's

X%. The are Sciences Sciences Exact Health of or Upon own in approximately Health combined combined have financial company the a only the shareholders remaining Exact with than to independently. profile company will Genomic Genomic closing, strong shareholders XX% expected

to and profit company expected purchasing in revenue through approximately following optimization. of public of reducing billion annualized $X.X synergies the approximately gross approximately of billion cost million generate within $X.X primarily is We in forma costs close, $XX XXXX. combination generate The expect pro third full-year to

The transaction balance stockholders. We our approvals, closing flow transaction XXXX, Genomic million including company of positive on expect the subject regulatory expected and close and the combined XXXX. customary sheet be is to cash $XXX approval cash a have to of be upon to of end Health's to during as by completed about conditions

to turning results. our Now,

million market quarter access in and productivity XX% marketing completed growth increased XX% tests. test sales Second from from Cologuard contributions our Pfizer, volume to to was salesforce, revenue XXX,XXX $XXX driven increased and initiatives. by Cologuard improvements new grew

Cologuard cost $X quarter per to improved sales test. of Second completed $XXX

We work test quarter expect operating kits per to be the incremental volume range. efficiencies. with third new this of processing find and [indiscernible] our leverage cost test $X at cost. We in per are We’ll expecting to during the quarter and about third offset high lab $XXX

to increase gross quarter per was margin point cost XX of basis XX%, the Second test. an slightly

to $XXX million, our guidance. included $X operating and which had assumed totaled in below service our $XX we expense than operating efficiencies fee million, due of and Pfizer Selling marketing million favorable guidance about was more quarter the timing. Second

to pipeline growth. investments G&A cancer support support label personnel collection age support in expanding liver Cologuard to and our included to sample including included XX. clinical IT and our to R&D studies additional test initiatives initiative,

million to initiative. $XX program our expense force our and Excluding primarily quarter, driven peer-to-peer the and third marketing in cost, expanded operating expect efforts, new IT including I by transaction-related we selling increase sales about GI

CapEx million. quarter second was Total $XX

CapEx approximately of million. we For the expect $XXX full-year,

pipeline adjusted basis, quarter and million used cash an quarter R&D generated on cash million]. products ended $X.X with [$XX billion. We excluding the totaled and of of non-cash expenses. $XX Cologuard Second securities on cash

prior rest our of guidance completed million. of to the based This million from raising for our our we’re tests. first assumes million revenue guidance, on half X.XX to $XXX our million full-year $XXX to and to Turning results $XXX X.XX XXXX, million to range $XXX Cologuard million our expectations

revenue expect [indiscernible] of XXX,XXX million quarter, third $XXX the Cologuard For to tests. $XXX volume completed to million XXX,XXX of in

I'll Brad, now call pass of to for financial review the Genomic over a results. Health

Brad Cole

the profit, lease. across delivered top quarter second a half the XX% revenue Genomic and results twice financial Health's growth, Thanks, second the we Jeff. I’ll of In business invasive XX% now driven and compared with to highlights review States. XXXX, and from line results few growth of the for first quarter last outside revenue early United first our strength year. These half breast prostate U.S. XX% cancer, by were of U.S. cancer, the record stage in XX% of entire in

first raising Germany are and revenue we for guidance. of our With expect invasive a million of our between this coverage months and the to XX% now recommendation the in six for both strong public full-year performance a revenue profit tests, of year, million. between and We full-year and full-year in deliver our XXXX $XX income test $XX both XX% growth and prostate breast cancer private reimbursement cancer increasing of

I'll now to Kevin back a for turn remarks. closing things few

Kevin Conroy

Thanks Brad.

the combined With partners, opportunities for come. forward detected broad of sustainable and positioned company teams extensive the Sciences Genomic proven diagnostic for Special benefits well cancer and ever teams, progress create for will together believe how fastest patients, we tremendous our growing tests, that thanks a the is combination growth. this and treated. changing capabilities for long-term pipeline physicians, to and We Exact look shareholders for QX. two years Health excited for cancer in is and their We’re to

we're questions. And now to happy take your

Operator

Instructions] [Operator question Weinstein from of William comes Blair. first Brian The

Your line open. is

Brian Weinstein

the is Kim, got Thanks reported very just are had quarter, Hi, your for a morning. guys. Cologuard very questions. you taking capabilities you very building, for why the products well, Kevin going as guys combining. that well. side obviously guys question and you’re new strong really out, quarter are for another for right expanding; tremendous be this Kim. that Good from you��ve Kevin, to strong a time coming Same and pipeline things

of You good guys momentum businesses. both have in a seem your to individual very lot

for rationale the the what’s here? So, timing

Kevin Conroy

in of a and both teams think to position from do better wind there’s full where time strength that no tremendous I this we have than are backs our at stride.

this our and guided patient is an Kim? to perspective, from treatment that what So, change is of that combination delivers. to our detection from early opportunity power this is journey the really how

Kim Popovits

the both future, of just of we just the complementary coming I’ll echo think strengths growth all think Genomic optimism do this and I organizations, a from when with, record about the just this, exciting forward, and better. say, Health to have it visions doing is Yes. we that a all this time quarter our that the just you know, for and really going for makes

plus we about three I we’re excited think really believe we have equals one one a here, it. very so

Brian Weinstein

can the Cologuard kind or up kind Okay. And the for what was the the with you don’t know, sales not you core that talk to getting, I bit that the wayside from wonder I know, fall speed whether here, the in kind is and we’re to by you, know, know “inflection about point” of little seeing that of gains know, finally this with transaction their strengths think the your you. Pfizer then, you quarter you you you're business, a force, you the how about sales for Kevin, transformative at here? of you reps, full force, of showing Pfizer muscle saw productivity out the productivity

Kevin Conroy

Thanks, Brain.

let Mark of pleased XX%. a go go Stenhouse, have X% a We obviously goal market to this. to from I’ll still to with on We’re Cologuard, long the of touch quarter. share way President

Mark Stenhouse

commercial fantastic productivity August, that grow marketing each a of driven sequentially had organizations, strengthening and reimbursement also the combined success, quarter between reps add from quarter. the very productivity the Clearly the we I talent relationship to strong Brian. would and marketing the the Kevin of driver Thanks, Pfizer. continues by last only but is two is and not additional at another key the –

So, partnership we Pfizer. very, do with our feel very about positive

Operator

Company. Your comes Doug & next from question Cowen Schenkel of

line Your is open.

Doug Schenkel

and rigorous to have good when on congratulations been The improving morning $XX are and only cancer companies and clearly with is regulatory the quite sense, benefits, I said, the mission comes target the care guess development makes that both synergy Hi, especially provided million. and what of year-three With outcomes clinical I’m it guys given and struggling here shared deal. you advancement. that operational

we million Exact Genomic just X% combined Health $XX frame for of know, expenses to for translates and what You that’s were than less operating forecasting into combined.

you more seem you as your just recognizing or have for least clear one look models. can getting three. synergies even it have at teams, of much at just not plus two financial when couple Financially, one it plus doesn't representing actually you there found is are be like and than spell equals great that one of looking it ago the Again, one to products kind synergies positioning out if minutes great equals you you described of though as where both

Jeff Elliott

Doug. is Thanks, Jeff. This

$XX fundamentally, cost that combination So, is combining incremental driven obviously And a here. clearly these this compelling growth to synergies a hope we the two number companies. by are provided but million exceed, by the is

we be any clear, in can area infrastructure the assumed the synergies our revenue clear international hope exist. test. One model, some brings. we are remarks. but long-term that they on launch haven’t his in to Internationally, these touched is Genomic Kevin that of confident we pipeline we Health Now,

have we foundation which build a to very that. Well, now strong from

oncologists, the sources industry. Genomic the known evidence there also surgeons, to revenue are Within with their Health on abilities breast based clears of in synergies well are commercially relationships the U.S., and very that generate with has

So, cost addition to there here meaningful synergies. the clear, in very are revenue synergies

Doug Schenkel

Okay.

channel that, is in know, there. sales the of Exact because U.S., don’t commercial that's a PCP through at out commercial I Cologuard build where sense, you any on pretty so pretty made funnel be does that make to in synergies and big now to see terms So, right real going of investment strong and products, just commitment least you’ve Cologuard, a that Jeff, is most to clear but recognizing

So, recognizing into that sales is aren’t is sure way standpoint to the built to clear, going largely a with the financial about just these correct? pipeline, fit I’m the the you from make here described, synergy to this be targets,

Jeff Elliott

Doug. correct, is That

bring on the patients Health does of Although to bring the to journey that international just they evidence; Cologuard the allow deep relationship cancer. generate they across side, Genomic us follow not infrastructure; to bring whole ability

So, companies. compelling fits across these there a both transaction. very of broad It are is

Doug Schenkel

you cash the just then, anticipated there have And the standpoint, math big the financing but deal may on I hand, portion Okay. morning, your pretty bit missed requires structure this, that's of from through deploy a running structure a deal little step another to here? is

Kevin Conroy

Thank, Doug.

So, we opening balance cash. the expect equation. brings of we cash projected Note about are part very which comfortable of with Health include that sheet, about Genomic of $XXX $XXX million to this as million

do any additional combination. to part this we of not raise So, need as capital

Doug Schenkel

target, that you’d the more XX% just I off going higher? the you XX%, Why of one know, Street your looking moderate we forma just forecast pro if guess is then, you XX%, And I above ahead get Okay. ask if be add according could thing, the arguably Genomic that guess target recognizing higher one to and growth was for think know, guidance, in And XXXX bumped XXXX coming consensus, standalone revenue a revenue Health I your Exact quarter. revenue up for I strong number and down to as look XXXX we should you Genomics’ again, to $X.X billion.

Kevin Conroy

question the Yes. Thanks Doug. for

greater significantly margin, a gross as stronger cash with comes together. creates it would commentary provide clearly scope, say, combination this better is on combination financially operating I and We’ll as more flow. as margins, this far higher company scale XXXX, that early. So, higher

Doug Schenkel

Okay. Thank you.

Operator

question Merrill of Derik of de comes Bruin next from Bank America Your Lynch.

line open. Your is

Derik de Bruin

morning. good Hi,

Kevin Conroy

Derik. morning, Good

Derik de Bruin

based I’m talk be – intriguing the of transaction. I opportunities. just the opportunities obviously progressing R&D here. process, producing potential of working with on just broadly curious if a that the will that's R&D there curious [indiscernible] like, – of pipeline you doing talk bit you couple I I the know, you’re potentials know, Biocartis both see you biopsies the Genomic way, some more on sort guess the Kevin, could I’m about just guess is little first sort on what one A I’m cancer liver in synergies liquid these expand – of and, the R&D also, about technology, more just and in Health companies, questions, think of test Congratulations one is do and as broadly, the assays more the see obviously about you you or you’re

Kevin Conroy

killer Our proven is liver you to a great accurate capability. the across has lacks accelerates having a which globally. Clinic, Mayo to our U.S. those also we cancer time. cancer Health deep We’ll tests tests relationship have the patient to the biomarkers to expand test view, many a devoid combination infrastructure of globally. Top liver globally. physician as ability our here able example, Derik. accelerates, presently and Sciences those this test It Genomic Liver XX be the in know, a underpinning cancer is And biomarkers commercial strategy has a of our cancer with Number Exact ability been that cancers, over the And bring deliver the to the pipeline identified – and in X

unquestionably along cancer pipeline Genomic oncology longest we’re Today, relationships, and and sales combining capabilities sales to we capabilities we evidence oncology as with force, oncology why moving with the our force, a company most we have of we’re an and oncologists diagnostic forward combined generation the second that's with only of the for best the basis. those combining with a excited are an company not Health relationships force, with are none, admired all those sales compelling a on company, with lack that that and years

be if platform that there and future be tests in see for will exciting us As report commercialize look the it the suitable there. many at is that would of we more intend platform, the for to relates to to Biocartis that an to opportunity to globally,

Derik de Bruin

markets you this follow-up, soon do based the U.S. for combination? think Cologuard one into sort how there’s And you just can on expand of

Kevin Conroy

opportunity. We think an that would be around that color very markets. version international We of Cologuard alternative the for there through the amendable bringing haven't global be may Cologuard provided any

the think and to and is to of globally I to it cancer underpenetrated U.S. to it a offering. where for a screening colon real cost vastly of of need colorectal upside lower screening different combination this at an our we make relative is international That a bring think basis itself scale product capabilities size goods to cancer amendable is more the

Derik de Bruin

Great, thank you.

Kevin Conroy

Thanks.

Operator

Your next question comes Jefferies. from of Brandon Couillard

Your open. is line

Brandon Couillard

Thanks, question, good guess these mix? for sort out in of Could of Two-part muscle first and to and Kevin. alternative yourself why under this maybe of how morning. would sort internally consideration in this some then, And potential to I Jeff, the other you rather you be of considered the terms it? stock long speak than speak that’s of some avenues of building capabilities, you perhaps optimal could buying and mix just cash

Kevin Conroy

I’ll They in Kim the Health say years, off approach have and Health, our not known specialty that in they longer, at but U.S. XX of the and have patients innovator I lab only Genomic clinicians least we the central having model. maybe for innovated; to modeled model really a Genomic were admired diagnostics

forever. people a time test may total of X,XXX of a and diagnostics fit think, we we our is huge to And test a partner bringing organization to achieve impact be this know commercial we other in changing think so, for that and this will, each other have goal the we’ve cancer to combined able pipeline through optimal that long

Jeff Elliott

Jeff. is this Bran, So,

billion us maintain leverage. to billion transaction as to out appropriate stock this What and well in from companies of does as chosen combination long-term shareholders. growth are value works for This stock. flexibility is cash cash and allows strong to that really sustainable the we’ve be which finance an up both of and operating, $X.X about maintain the and using position and about creation leverage So, this this sets flexibility to the $X.X for

Brandon Couillard

you. thank Super,

Operator

Your Donnelly comes of from Sachs. Goldman next Patrick question

open. line Your is

Patrick Donnelly

Maybe the Genomic, Great, we thank you one things deal? something [indiscernible] talk any you rates impact, see on the know, know, through like from able maybe leverage Pfizer talk for the when that? marketing like you can things you partnership, guys. Are through in just impacts from to you acquired, are just this can just

Kevin Conroy

partnership, Obviously, oncology, impact we all setting, will, focused you the at but opportunities Cologuard relates with very certainly in only our not think Pfizer on screening. has direct which our and we the on no There's care the a it colorectal to to is on know, There cancer Pfizer in deep talk and long about primary no that Pfizer exist term. is as Cologuard. partner the of partnership some over impact reach,

Patrick Donnelly

to Okay. maybe on board, for we Mark as in Stenhouse, one synergies talk your just just be potential maybe products know, spillover you'll bring these team to know, And look synergy, here you then any, of you how through, would approach structure team, on sales your again, sales see great the perspective? the terms

Mark Stenhouse

going really Certainly, Yes. I forces forward. think sales the a premature to talk about structure of

has company offering clear I they the the the best-in-class combined channel that for independent that think is manage. what each is

same you really strong Pfizer, by you both and bring and think say cancer team previously Kevin across Sciences, been best-in-class, and Oncotype know, its that, I channels. partnership care As could would the we Kim submit in diagnostics mentioned our very with primary Exact about capabilities is the

what Cologuard is with you our sales think partnership real see drive quarter we’re capabilities benefit synergies the you I within with out. marketing and see of really Pfizer value, of the play the the starting combination and the to

Patrick Donnelly

you. Thank

Operator

Peterson of from Tycho Your next JPMorgan. comes question

line is open. Your

Tycho Peterson

Congrats on the want to thanks. Hi, question on earlier Derik’s I pipeline. back the go to deal.

at Health know, to you kind bringing well Kim here and front? what, Just and from table of [net liquid you perspective know, curious, point we it. as one pulled the your the Genomic in from worth] on could hear maybe They on is biopsy back Kevin, obviously had

your from you liquid around particular? perspective curious, biopsy just bringing know, in what So, look, they’re

Kevin Conroy

something attractive that has cancer and need is work that for Health focus liquid to of recurrence the the test understanding Genomic and is in us. deep done biopsy Certainly, breast

believer a initially, only in, As their of cancer. cancer not deep know, their detection we’re early you also but detection recurrent early

excited. we Kim? the we have uniquely are detection as a of cancer positioned early an impact makes so, to And that recurrent us together think on company, that

Kim Popovits

really already that Yes. like that, know, development some doing. us we to would this you of I just the accelerate to we’re think add allows

interested I you been we’ve think, as residual in of the know, while area for minimal a disease.

work in stage work, continuing cancer know, in all breast space and additional you recurrence, late which, some to renal in of you doing both the bladder. and We’re would liquid do know, be

this number continue there's come on, will to much working and us, a things been work think, in bigger let way allow we So, of to that fruition. have that a to I on, will

Tycho Peterson

– we go as then, ahead, the of some think And about Kevin.

Kevin Conroy

about things MRD that think of ability and and with Tycho, companies one participants as Yes. to is great oncology are one to the recurrence we things of we with really stability and the look test reach. developing those folks the is partner important global top

we so, decade, next partner over be we’ll oncology to the with advance a as cancer. of in leading companies position to combined And company, early a detection recurrent the think

Tycho Peterson

And the in know, the you in here AR-VX, kind you know, in like here? then, those non-Oncotype how of as we things think products collaboration are interesting about, of scheme

Kim Popovits

to perspective urology growth interesting from I think certainly of entire the in be chime potential should for franchise. can it I the Well, say, the

that rate we’ve nice a you this know, remained So, expect say we growth very forward. quarter going committed; and you

a a significant So, – make I it contribution. think it’s will

Tycho Peterson

stays and as you think Okay. about in guess, the how you And Kim, about then, collaboration think that envision out? or playing do Biocartis you lastly, tact I that do

Kim Popovits

for the excited global Very It us. markets that about certainly opens opportunity. Absolutely. up

of the a the in bring could in see You expand and markets really incredible starting how platform we’ll of but implications know, also the can to Germany, point from have there, it major just decision here. future it’s Western Europe that the pipeline announcement we with to combination for that reimbursement

Tycho Peterson

you. thank Okay,

Kim Popovits

You’re welcome.

Operator

Your Dan of Brennan from next question UBS. comes

open. is line Your

Dan Brennan

thanks. Great,

quick question, quarter compliance trying Just one number was into say was on did been in multi-part test to that’s utilization of you a a us. quarter? guys just Sort the the for what what rate first, focus back the since key the

Jeff Elliott

Dan, It about quarter the in third Jeff. XX% expect it the range we this that during same is be was quarter. to and

Dan Brennan

basis guess you obviously for trailing, many well Kim, company for but the years. XX% for a than less the then, And thanks. done – obviously around you, one-month I a a just Great, are Maybe, stocks been question out on many, that’s premium possibly you can TAILORx, plus on post selling know, a decision tangible one sell of, think know Exact, about you out of and we kind this give are what us with you generate those? here, kind synergies that then, could combining earlier as I to the three, perspective a one you you equals discussed think but your for

Kim Popovits

view Well, a and let we we from perspective. comment me the organized has going shareholder how been, this just know, forward transaction the you you know, love way on,

think, we in the we the in while future ability combination a upside, both then stock of So, and I believe to have growth. share the here

penetrated you $XX you XX% We’re that potential of opportunity know, little today. billion looking market less at, combined of, total, a – less than know, you know, than of which,

together think we the shareholders, is it. this and we’re time for very brings think growth about I our the ideal excited So, that opportunity the do to

clearly side. a We’re the with with into on significant momentum on size building we’ve urology coming TAILORx of breast the got it momentum position and got We’ve strength.

Dan Brennan

sorry, yes, go ahead. - then, And

Kim Popovits

go. fine No, ahead. Go

Dan Brennan

a near-term on does talk Kevin, just questions just and topic, to is I pretty like going wondering, know, this though of just that just sort that I was number a synergies sound as there’s been, I follow-up the you’re Jeff, largely Jeff, little final and then, opportunities pipeline bit related. to And know you of there. so emphatic it there even some but envisioning, know Kevin

out, bigger really really the terms of [indiscernible] there in is be really the more plus years won’t just something that, congrats. pipeline we you and call look that the are see you thank five things this three about to is wanted it when not I Genomic Health years, term, to benefits from but clear frankly related. near benefits real transaction accruing tangible So,

Jeff Elliott

almost clear starting see base shareholder for benefits combined immediately. the we Dan, So,

On year the million really we of the longer term, expect next NOLs, kick including incremental revenue EBITDA, synergies. adjusted of $XXX over $XX we expect top million when to related of that's tax in. benefits So, benefits that, about and

said, significant a there contributed, the So, are benefits we again but expect the this accrue together. is really based growth brining combination on That incremental primarily from these can start. that be companies to

Dan Brennan

Great. Thanks, Jeff.

Operator

Baird. Schulte question from Catherine next Your comes of

open. is line Your

Catherine Schulte

this Hi, any potential launches quarter studies? nice and international a the fact on nice for that infrastructure, and congrats of mentioned guys. timeline international Kevin, a your several questions Thanks for test plans for you’ve the international gives the times you liver next August deal.

Kevin Conroy

this at timelines point. No

test. future to will liver We certainly those cancer present more have our about on talk in calls data will and

We clinically. there the underway the are studies are test about progress the the performance really that for making validate in excited of clinical to

Catherine Schulte

does on Okay. on Genomic incremental And then accelerate then, Cologuard you any this for think separately, are Kevin but following priorities you future made and this investment or side? investment Jeff, pipeline should programs, impact expansions, can what any Health change to have your sales the deal be force that, and on It your like transaction? some thoughts any sounds

Kevin Conroy

the this those that I’ll first we’re sales that force the adding or it from the month expanded XX take were part Cologuard within. really people promoted that team in team question. GI our that of about take excited half first We just setting majority members answering

sales doing conversations the about setting. that setting began in GI adding is bring We team primary care excited to over The tremendous and really We’re people remain the a they the additional experiences open time. job will presently. in the

Jeff Elliott

So, believe We drive for right value is continue investing topline, is long-term the Jeff. shareholders growth. to Catherine, in to the on sustainable to way focus this

investments the of about changed talked investments. the the priorities prepared we the Kevin, So, that about not talked right is we that sales plan In set We year. make remarks, has R&D next to us. think for force

to So, growth. we will invest continue in

Kevin Conroy

eye heading ball. U.S. won’t a that off add take is $X opportunity our the assure one XX% X% that billion share market market guess, in I about a thing leaves of share, at you, to the alone I that that would we Cologuard with goal and I is

Catherine Schulte

Okay, you. great. Thank

Operator

Souda from comes question Puneet next SVB of Your Leerink.

is line Your open.

Puneet Souda

transaction. and Kevin, Thank you. hi. the the Yes, on quarter Kim, congrats

and and have care there. So, the the Kim has oncology fairly product Oncotype oncology that’s question you my screening and here CRC and metastatic is in focused around a settings. driven and the Kevin, first oncology position [indiscernible] screening really acutely on really leadership a practice mature been under and now, you’re but same the here obviously of standard in growth changing at time remarkable

that at ahead list? pipeline, the could And combined to priorities So, the some of as on part second more elaborate you us I in my maybe do in of in and what beyond list, your relationships mean things to partnership, liver broadly are do partnerships you you term biopharma combined the look the with near-term question plan longer revenue the think, is, is or strength have trial closer it around oncology? drive or you this biopharma biopharma

Kevin Conroy

awfully an a was at to liquid DDW our cancer four a the leveraging pancreatic ability Conference biopsy the cancer, I specificity the cancer Puneet, time one been cancer platform our also underpins then XX spending presented so that has including Esophageal across come example. at of very highlighting we pancreatic Clinic XX% technology detect are that’s cancers, that teams dive doing deep this year. we presented be Mayo together, by will earlier breast the on top data That’s explore. basis and the think of excited about to Cologuard. teams XX% cancer, as R&D all together start across Data area technology stages our

How can impact the journey. patient we have on biggest the

other the of strength, with believe the individual strength, abilities scientific the biopharma and of evidence strength, partner of our strength, terms financial we relationships, proven – because In each again is an organizations. the generation opportunity our to this

any we color Of this provide time, potential there. at and partnerships projections course, wouldn’t

Puneet Souda

on having now XX-year-old hoping here, you. this great, XX potentially both FDA if [indiscernible] would I could significant thanks. some the or if that. And I accelerate maybe of on Thank changes your and the appreciate Okay, Cologuard in was ask with view to ask companies thoughts briefly anything X.X, with then experience expansion things

Kevin Conroy

recommended are guided about FDA only in And first excited Cologuard changes XX half this Americans because for this society who XX the approval are for at people incidents XX-year-old is group who the label we but age need in XX fit awfully we than population million rate be need to the screen, all, screened. doubled. to aged to nothing to the screening of XX believe best screened. has recently We’ve the do really change next American for amendable in cancer year busy not other to get

excited up we’re so, those about individuals. And bring and to Cologuard that to gearing

Operator

Your comes next from Massaro Canaccord question Genuity. Mark of

open. Your line is

Mark Massaro

familiar is, not probably are Genomic transaction. most is and very on Congratulations relationship I’m nice Health guys. guess I I my question investors this Biocartis Hi Biocartis, ascertain transaction. on line trying this with this particular this important how first with with to think

Genomic So, I Genomic collaboration to its test there an in oncology. expand is additional to the option know include XX-K Health Health in for

the Genomic be on someday are that Biocartis perhaps as decentralized and could to prostate breast So, thinking can about this the world. Health’s not, test run you just speak deal to to whether coming you system to or addition fruition Cologuard across in be that

Kevin Conroy

it one-test, is office that in physician’s one-patient about presently deployed sample The applicability that some test the has outside both presently and is of U.S. its Genomic more assess enables Mark. a Is an be technology time we Biocartis for breast even for a a to that a that Health a Thanks that our and have platform technology lot applicability a is pipeline urology at and opportunity to offers. proven test the platform will is of tested. run and and

to So, come. more quarters continue to that’s talk at about we in look that and will opportunity an

Mark Massaro

of I it’s XX%, you’ve can believe they a you’ll execute, sort the XX% able combined, comments maybe your I XX% I guess Health question. comments as I has you margin gross target And then Health profitable you been know, Great. continue financial Genomic achieve profitable profitability? best-in-class Jeff, margins. profitability, your talked elite about clearly more when know just Genomic clarify XXXX. gross for clarify think can around and has on but to to is increasingly be you a

Jeff Elliott

least XX% generate targets. level This targets margin and to our long-term gross at path So, combination to flow, XX% accelerates operating a have those profitability, positive at us free next of year, margin. expect cash nice least the always longer-term been I

Mark Massaro

Excellent. Congrats guys.

Kim Popovits

Mark. Thanks,

Operator

Your next from question Piper comes of Bill Jaffray. Quirk

Your line is open.

Bill Quirk

in alternatives, did at Kim on the on deal. off Couple you, gone morning starting ago, disclosure details together? In line few approach approached good to guess, deal show out from the looking the regarding and given the Kevin other words, congratulations some just and Thanks, everyone years strategic others? you us how questions terms or came you can I had of Great. of a

Kim Popovits

and I regard. will in bit been reiterate, this this back discussions about not comment excited team together our I’m has we’re Bill been by a working that our on go we’ve just reviewed It and and very opportunity. past now. for board to Well, on

and today announce and for time to together this bigger just an bringing compelling future. our So, visions it’s exciting a more

Bill Quirk

a be about maybe kind you’ve I Got campaigns, that both platforms? Thanks. and of some targeted talk the just potential could Kim, question interesting bit lessons the take applied leverage both guess both it. of learned to can you I know [indiscernible] then a out marketing in some and for those little Kevin a, And future rolled

Kevin Conroy

the to and campaigns the and Well very our know innovated has a going from we’re started. we wait campaigns Health get and Genomic admire educational Genomic we learn targeted at from successful Health Bill speaking lot I really perspective, team can’t to

Bill Quirk

Thank it. you. Got

Operator

time. further call questions There now presenters. our at are this I the to no will return

Kevin Conroy

having teams, look to all. just both we Exact conversations and we future. the want and with to look more forward much. Thank Health you all and forward to conversations by very the I work to Thanks in reiterate Genomic having Sciences tremendous

Operator

This concludes conference today’s call.

You may now disconnect.

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