EXAS - Earnings call transcript Q1 2020 | Exact Sciences Corporation

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Exact Sciences First Quarter 2020 Webcast and Conference Call. [Operator Instructions].

I would now like to hand the conference over to your host for today, Megan Jones.

Megan Jones

Thank you, Operator, and thank all of you for joining us for Exact Sciences First Quarter 2020 Conference Call.

On the call today are Kevin Conroy, the company's Chairman and CEO; and Jeff Elliott, our Chief Financial Officer. news results. this a first detailing issued financial quarter Sciences release afternoon earlier our Exact release today's news exactsciences.com. This and website on at our presentation are available

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

GAAP of filings. may are results website. included Exact through earnings from Reconciliations in materially Our Both and accessed figures and uncertainties our actual available descriptions be are release, Sciences SEC can risks such be in different statements. our to the press with our associated

to the company's pleasure CEO, my Conroy. and now Kevin is It introduce Chairman

Kevin Conroy

Megan. cancer Thanks, the doesn't The coronavirus it to Even novel screen detect treatment. for guide increases and stop. early in unprecedented and cancer, for times, pandemic need ways highlights

avoid DX meet now invasive Paradigm and tests visits, play guiding therapy Oncotype tests a procedures pandemic in that and Cologuard after greater treatments, world coronavirus We screening deep ever. and an valuable physician trying abates. more unnecessary even pipeline are role the our office In Our to to plan and than need. that decisions is cancer

providers and details steps to long on and challenges the value by solutions near-term presented X provide respond; patients topics: term. continuum; taking over positioning key coronavirus smarter to and provide taking cancer to team the our answers is our we're we'll to the across deliver Today,

Elliott, highlight CFO, our now will Our Jeff financial results.

Jeffrey Elliott

have million, health launch. during which was and Approximately driven Thanks, preannouncement In XX%, Total business, first volume ordered Kevin, care growth. everyone. and million screening since consistent XXX,XXX providers Cologuard Cologuard, includes primarily X,XXX with our $XXX revenue afternoon, test quarter nearly revenue quarter, first month. our of by ordered increased new the good last $XXX

as been actions, in decreased COVID-XX and has by such ways X revenue key measures impacted visits. wellness and related negatively stay-at-home Cologuard

fewer tests being Cologuard are ordered. First,

a at completing rate. patients are tests lower Second,

of XX April, year-over-year XX% have recovery. the days May. last declined a during trends positive seen XX% Orders first with test in in continued a April recently orders in Cologuard decline days of the we year-over-year After slight XX

kit to colon and contacting customer care test. is world-class of of Our support them team completing screening remind a collection them the in the Cologuard importance people with cancer

primarily all with includes and first a products business, Health geographies. was across million, growth record which the former Oncology, major $XXX quarter Precision In Genomic revenue

from First DX U.S. in benefited the timing quarter test volumes Oncotype breast of the

are patients completed whether fears Some them to testing to inform a continued surgery April. because use neoadjuvant business on chemotherapy delaying in of Growth and COVID-XX help basis. U.S. Oncotype breast in the earlier

widespread mammograms the an to test. to lag decrease expect volumes between typical We screening in a the coming months due mammogram through in COVID-XX the impact and test negatively DX Oncotype

In test the created to in certain underlying a April. international volume resulting decline weaker business, geographies, in conditions from March COVID-XX

during While office as strong, first declined. U.S. contributed volume COVID-XX quarter visits was April, year-over-year physician prostate decrease XX% a to growth

XX%. initiatives million. expectations COVID-XX-related gross amortization was $XXX quarter and the was timing a by the first intangibles, of Total was and million, service intangibles, original Spending of higher sales $XX gross margin, expense acquired helped XX%, certain margin, our Pfizer amortization Non-GAAP Precision was fee which excludes to of including revenue. Total marketing of due acquired Pfizer fee. savings, Oncology service lower below mix of including

COVID-XX expense of our costs. Genomic slightly certain million, integration G&A and above expected expense was we savings Health delay expectations related due to clinical million, to than was trials. due $XXX R&D lower additional $XX the

$X.X and securities $X first $XXX negative proceeds of offering. was was net EBITDA loss million, ended the February the quarter quarter including adjusted with million. We from and debt million. cash quarter CapEx billion, our was $XX First Total convertible

the business flexibility us and withstand balance We strong have to a sheet in uncertainty. provides that invest

our savings $XXX and faster-than-expected from we be disruption immediately The critical original relative support COVID-XX, identified not to with patient more XXXX a growth. minimize to reduce than to budget, steps majority If taking recovery company expense. to coming spending from operating will care. reduced of invest areas as are for see would lower We that COVID-XX in the savings million we

environment uncertainties COVID-XX providing and surrounding evolving, rapidly we is this are not are impact, continued there its at time. the financial Since guidance

will back Kevin. I call now turn the to

Kevin Conroy

Jeff. response team rewrote Exact our Thanks, The the XXXX Sciences pandemic. coronavirus in priorities to

work. continued to new the labs and those cancer disease. critical even critical that patients of the Exact in to and protect taking financial in face care answers and are priorities our customers and perform Madison, taking Our on-site the We health our we've getting Redwood COVID-XX. our people who Sciences relentless, exposure of steps limit to members know To of to employees, tested, is We're preserving patient City team strength. of Phoenix minimized deliver transmission

team with reach and face-to-face virtually. health sales until providers providers field. return working to care serve using sales is online them interactions to to telephone field health Our via it's to inside the our marketing suspended care and tools technologies safe and We're

the telehealth of our telehealth for the of tools request Cologuard to telehealth ability with has Americans. their access The provider. resources, site screening now and care of way introduced importance XX highlighting improved advertisements. cancer believe, into, the a COVID-XX health TV We education easy-to-use online, highlighted social, can the with raise environment. investments, consult telehealth To unscreened a colorectal up-to-date million accelerated their launch change importance accessible, to health Cologuard interact screening to new with providers. specific seamlessly coronavirus permanently and we've people at-home awareness opportunity And People and request digital care to online order we the these a with through Cologuard home. from fits screening will Cologuard patient changed staying of the

backlog in prioritizing those more of elective screening to on and to Cologuard lead societies significantly poor. will screened. health continue off focus outcomes important the send who as those with number is at alleviating are which including building can colonoscopy stages have role of We performed. remains positive a is patients backlog Putting Cologuard first. colonoscopies grow and be diagnostic a procedures, risk, significant can GI this to essential screened. the highest procedures where need solution more backlog delaying colonoscopies. providers while people getting A diagnoses can urgent services This Cologuard, reduces play to being help this prioritize screening here. in recommended later an care

answers can surgery also breast to diagnosed can In have provide and Sciences recommended to as such COVID-XX, mastectomies, invasive expose Exact breast the societies with critical cancer delaying procedures, to patients prostate physicians cancer. consider patients coronavirus. response because

biopsy patients on Oncotype during chemotherapy run before typically basis of DX neoadjuvant surgery. is breast a taken increasingly be on a using can the to performed lumpectomy DX also tumor, a of and score potentially therapy Oncotype from instead using from the removed surgery, it a use a Physicians be tissue needle are the biopsy. recurrence neoadjuvant mastectomy. performed If tissue needle While shrinks evaluate can

The intermediate-risk Oncotype active and DX ever. safely whether prostate changes decide patient than prostate patient more versus of with recommendations out Genomic a patients. surveillance surgery for avoid undergo it low- prostate It provides to the Giving X valuable, now X helps treatment score is he highly and aggressive the also information to cancer. valuable men radical can treatment, confidence

who continuum. this to the Oncology test test the smarter portfolio. and This our -- late-stage We not answers treatment. company valid an it testing determine helps selection advanced forward for foundation a may therapy Exact team and in precise obtain has cancer allows needed cancer exceptionally This Paradigm times patients more rate sample input to selection. provide to the patients specialized cancer tests. because less a best across to added turnaround fast enough sample access long us Sciences high important Paradigm, or acquisition not test Precision to to The completion a a therapy in therapy takes require allows too to of We designed recently is test than path there's test helps have has other closed patients and the high-quality built DNA selection for result. the

to team. expand by plan later In to this next team's followed to launch plan the test Precision the Oncology sales force make product future, the adding tissue-based year, full We year. enhanced of a also portfolio we by it an tissue-based Paradigm the and rollout advanced especially these blood-based to to testing version available Paradigm oncologists of Precision need through tests, to disease and equipped the in Sciences minimum recurrence residual other well bring patients our them. Oncology Exact broader who and a and cancer test oncologists is

for people Exact rapidly testing roll Sciences the the virus. decided CoV-X We week. per capacity out XX,XXX now have SARS than develop to and test more to

us in ready It capacity. to do overall Our to goal part increase our our helping is allows also team country's healthy to our own keep our through access testing to testing.

manufacturing and us be our nimbleness. as volumes. more long-term and scaled sites to that These couldn't achieve research authorization emergency secured entire use our in significant will developed, team the help lab our highlights as This well diagnostics. Madison cancer development, qualities goals up and FDA laboratory handle of I our proud abilities

diagnostics leading globally. the are company cancer We

field. Our people people, and positioned changed strength, Sciences increasingly experience number the which diagnostics is for Cologuard environment, limit treatments. exposed important invasive doesn't unnecessary with health growth. COVID-XX stop value cancer combined of anything, care highlights Oncotype our Cancer provide to can a the and and great a and procedures advanced In the DX, to Exact lead foundation infrastructure, financial of for

DX growth continuum. and We allows the the women's oncology, We're urology opportunities answers us in like in cancer This primary Paradigm's care, and breadth provide in successfully have Cologuard in smarter bringing and tests unmatched to health. for to need. diagnostics, long-term patients Oncotype covering gastroenterology, across additional confident

to We're your take questions. now happy

Operator

from your Blair. first the line with Instructions]. Weinstein Brian comes And William question [Operator of

Brian Weinstein

have you little you I'm bit country? where is that in if across off areas telehealth the starting efforts you about other that that you're to on some you're positive the the Maybe the the of maybe Or things some them from Can you're Or there? is are in small a believing you bit And trends those just pockets? some more had be this seeing seeing shutdown guys of seeing a doing? those starting specific curious of more. and comments in abate? are the Are

Jeffrey Elliott

Yes. Thanks, Brian.

broad-based. around comments So really Cologuard the were

of the are trends recoveries. still pandemic, board, across areas the seeing The City, We Northeast, even in the are have outbreaks impacted, we York country. broadly are New the that COVID-XX across seeing we're seeing but improving larger obviously,

So broad-based. the recovery is

this market. the as Telehealth telehealth. broader investment part years for is I is taken, It marketing. made us really in to a it we've such leverage up of we've opens consumer a really the due that for helps us think, investments actions in foundational part,

Cologuard home way really value speaks the Now own from patients of the have tests. to of our safety their another to access

during the quarantining So when and gone of that investments there's couldn't colon days really screening the we've have a very think pandemic cancer early I were we said, on happen people taken That also lives actions hit, are of helping. pause. making, the large are backlog the their

to time big and long So a the solution Cologuard is of clear, here. a immense, this backlog is will take part

Brian Weinstein

Yes. that to bit you push the what's not little And want colonoscopies I happening. a and on comment about

that I screening think XXX,XXX colonoscopies right XXX,XXX there's, roughly month what, happening now. are not a to

on talk specifically the team a had you begin that with GIs about to see How really is GI-specific growing I seeing? and So that and you that some focus can force. there you? can of more you you your backlog? interactions now? How some of into success of sales you're go Is for having sales and actually more dig know any materialize do force kind try that guys

Kevin Conroy

challenge is elective procedures, gastroenterology against The visits in there particular. practices ASGE in and it's actually that office Kevin. the exists Brian, recommended out that

And come to down. you've shut so to and starting many starting with first that they're diagnostic back have seen And colonoscopies. now simply back, come practices they're just

yet the in field. not is team Our

colonoscopies. we anywhere So with that value not the we're near as -- is did good fall is feel fast about Cologuard, it screening as here what seeing

can first the that think, things challenging return real reach obviously, noninvasive is one now detection we was that. to of screened, in and we we how afford Cologuard, conversation screened with because, And people and happening, is believe, partner are with start at-home don't, to being during if earlier-stage And of have times. these to going to engage we simply GI can't these later-stage did shift, to the GIs we detection, And I about out test. who a we a are to highlighted screening get the the value from societies incredibly first to

but road, around the are down addressing to their with partner large working societies country be in their and gastroenterologists this problem come to more we and opportunity. much that know the So

Brian Weinstein

saliva-based doing for master I just sneak some on Biomatrica? they that's capabilities in Can quick I mix components COVID-XX? that, point. if Wonderful. one continuing. there you're were a product Great. with or has anything there don't Are there the for think option, is know one But Biomatrica at I that opportunity one selling there?

Kevin Conroy

brought in No. of test Biomatrica without that the was any here using COVID-XX up we components. The have developed Madison

Operator

Brandon with question next Jefferies. the your comes And line Couillard from of

Unidentified Analyst

volume for This rolled bit seeing more wondering it's wanted I Brandon days, is the going higher telehealth online little you're provide be mix whether and a if rescreening ordering provide population. functionality people ordering you be if on months, early you're from the tests? color directing on of Matt color Cologuard on we And to afternoon. additional of this there, touch curious to trends if how far, Understanding you're it so the early docs, can opportunities out. new mix people or then you trends look over total any much ordering on to out the XX next could of XX the think docs, patients this new there? Any

Jeffrey Elliott

Jeff. is Matt, this

quick that brought telehealth in very a capability very quick First, thank time Sciences in the the I want out frame. Exact at -- team to

What's telehealth we future. of the the example of it Cologuard we now can serve. up really significant other see capability. could is partners channels driven website. with can. is and test by a to Historically, opportunities traffic not in But are active website. historically payer Telehealth market had here conversations our request the what before, that parts amount employer Today, not the website. about we've for they patients enabled telehealth our mean the One opens did exciting We've are that the that through channel. the through Other channel

this at-home is convenient highlights into that underlying Cologuard. far, the and world. and we excited COVID very a and especially Again, growth see seen really value Cologuard that COVID, with the early opportunity about telehealth, of a nature long-term impacts we're the with lasting the towards shift So of we've telehealth, We're very the we're the so fits with pleased pleased market well. in one launch.

it We're going a So It up of early, or the provide about part big us. is to numbers we're does excited mean. can what guidance specific but on yet. not opportunity it the to market open

Unidentified Analyst

to rollout either another And functionality end theirs? quick changes or or of the then platform just previous fourth the Epic's in slowdown across quarter, ordering from on one. Any the your electronic anticipated

Jeffrey Elliott

them ordering, track there, they Matt. is easier and plans discussed not at electronic exciting for on physicians No, is the higher for rate. still when are The easier thing we've us, a order order as electronically, that about only before, it much

Cologuard and ordering, So year, providers we are ordering. seeing majority to the on percent orders, XX% Epic providers, And later Well, year, which later significant a of steady this a care XX% this shift functionality release are test is electronically. to that care enable between electronic of through new order all still country platform. from our in of primary fact this will our Epic partnership, them will Epic today, primary the

Now happen towards it significant we'll will all year. first time to half take shift out of that have a some roll electronic capability doesn't in the overnight, ordering next but

mean. plans track. can what about are Those excited that we're on So still

Operator

Cowen. next from of the your with comes Doug line Schenkel question And

Doug Schenkel

if people going elective. that given viewed spread? to It any order as across did as add procedure way back in point least of at current freeze you that's in that pandemic of are environment practices adding you in How putting you be decline would could up used kind to pivot where that little the the what going started As as a you're then be to do a resembles probably -- kind you as that happens it freeze And to to it? pressured initially orders in to new in a of way a going the does and more anything could that new be the quarter? effective Does board normally practices? e-detailing, makes what's or that sense get get can guys remotely on, one

Jeffrey Elliott

is Jeff. size the care XXX,XXX This out market. there's back there. Doug. Thanks, of over Obviously, to go primary I providers this

who never And have of so providers pool significant still ordered. there's a

ahead. runway long a still there's So

And providers request that a or Cologuard provider leading highly campaign recall as result a of our into provider so that, marketing their that their historically, the most come test. new to try Cologuard patients campaign, effective marketing did of is

And so continue. still those efforts

are providers. from continued We adoption seeing new

added X,XXX there, did were pool down new a providers have you're market, slightly new QX, providers. Things are but come of they can is in rates viewership pre-COVID. In their We a slowed this see lot TV massive there's now still in we March. in. a than softer that COVID what world, And seeing higher a

rolled into out new pool during campaign test. is Cologuard backlog of I out to again, used the that help us massive, are there. TV pandemic. This help and doctors ad clear backlog can So recently We that still large And tap go think who our I backlog. back this a this will haven't COVID the heads providers

Doug Schenkel

Yes.

of couple follow-ups a on that. So

weren't a at and they an per there colonoscopy going be, month? Exact. to being to be then the their even able able order for about there as detail built for actually the a the volumes patients point do many docs, more just mathematics more. actually that get if up a of down on helps to sense could detailing screening, have well? catch push may which you they many do actually with it I'm the that would Is to because Cologuard actually But a I and lot role them inclined with in to how position into necessary, frankly, a done is colonoscopies to the other where terms to, just there I for catch-up to in play do be doctors opportunity to from cancer what that Is ability again, colorectal at as referenced just PCPs In trying home standpoint, capacity or And to know folks, talked more? e-detailing years, to question. order last are the helping get you're really is necessary system something a times over you you've

Kevin Conroy

question. with But offices It's our effective day. electronic that. Kevin, for other again is is tools Thanks of engaged It's It's e-detailing effect They office, sales with have. happening not Initially, patients. shut. that seeing force occurring. with were being phone. clearly opening the are the It's of partner, physicians. physicians engaging happening actively over and we're up with Doug. waking to the many and clearly as in It's as talking the happening we the Pfizer. our And every

back Jeff And to we're very maybe go at add see ordering level even physician. I'll even say, many is right pleased and the now, and there, to to activity surprised primary occurring what said though people their going really aren't actually of pleasantly there that care

that and -- that do open So is we've offices They that's again, question is colonoscopy colonoscopy really Cologuard positive that purpose. is going capacity would been -- colonoscopy. And -- is screening test. an it's back, at up who coming to offices And capacity. next have are they're prioritizing still frequently, doctor, because one need are but of to see back their or not a a just like about for where ever people addressing not Cologuard are starting diagnostic we a the capacity, colonoscopy we a patients about your at XX% what coming we into this And leads maybe XX% shut the to that to then seen aren't experiment bottom able when choice.

seen Cologuard option. as per XXX,XXX want if increasingly environment, to as have in So people numbers getting get high this -- month an behind colonoscopies There if important becomes -- lagging. screened you're you we

cautiously future. So about we're optimistic the

the team, rebound Pfizer we're -- have move the to our with pleased they're We hungry the -- and team, forward. team

Operator

America. question Bruin of next from Derik line of comes with Bank And the your

Derik Bruin

I'm job to wondering, instead that. on screening, delay like in would this. And the unemployment we So the obviously, more? sort business? for follow question colonoscopy, just I'm follows I you impact in the on that bit the around still question How recession the significant Would Doug's of the going that of, sort people of spike average potentially little of potential a are mean, people age to market, is XX, have doing believe, just it just up maybe rate. really impacting catch-up seeing I of a delay

Kevin Conroy

obviously, colon we to In the terms on screening, have yet. don't cancer know recession, going impact unemployment high some just impacting it's impact, and of

at we're Americans impact Keep who focused so been -- are unscreened is economic so need. are on we first the have future XX mind, million to to care and always to assess We though, assess. be health going this the is on about there today, priorities, least trying there the X what present, hard optimistic future in at holds. are the the And not

Jeffrey Elliott

Yes.

to of to with could mind in Just extremely what which obviously, cost, add today be has higher Derik. impacted. Kevin coverage unemployment insurance, broad Cologuard said, Keep commercial that the rates,

and coverage coverage in Medicare in the We ago. wasn't X also Medicaid. say, X case, have high increasing years to That

that. the would that value and will coverage of good there we So broad lessen some to coverage some be offers, impact. But impact of think, very rising for help a the unemployment. offset helps that test price Obviously, a broad

Derik Bruin

because as not this little sort And talk are any either Can you're delayed being be of cost going this. whether trials? impacts projects and liver to about a follow-up savings this bit on your clinical to to the do and or a test reprioritization sort initial just the pipeline, question, to moving like of of you doing in able

Kevin Conroy

Thanks, Yes. Derik.

we happening number a the we have, is BLUE-C So are do trials screening continue. talked major underway major work decline that the go example, said, given R&D some into lot colonoscopy. that programs temporarily before, of the temporarily trials about a outside of for given of that people of paused, continue. -- can in the That paused had There's we've the

-- to liver, from product as year blood really broader And this likely But that, help leverage opposed the of will infrastructure. and is impact later we capabilities We're major So R&D that the the continue. broader that this pipeline continue. marketing whole still the efforts, does have. really sales given that continues; The continues; Cologuard have, of colon capabilities, us launch IT, X.X initial initiatives year, about timing program across infrastructure excited COVID. this big we our lab, next platform

the allow we've largely continue. been major to products made put spending temporarily. relate to R&D our left to the the we adjustments So studies lot that A of on reductions untouched. in the hold major -- the spending will We have initiatives

Operator

question of the with line Citi. next Patrick from your Donnelly comes And

Patrick Donnelly

there? of Maybe a think frame get kind it diving I Great. timely help assume over a just percent a here. we to over maybe it's shift just again, shift you given Certainly Again, of way you forward, time? could pandemic deep even out us think sales any telehealth heavy what get volume profitability into Maybe on deeper little there angle. what the you think the rate. I percentage think volume less over of about, during about force. go guess, much the higher But could that very compliance When improved, in terms of little you the

Kevin Conroy

Thanks, Patrick.

I the is larger telehealth with opportunity generally. think

XX old haven't they person years get colonoscopy. occurring They old, their and Or XX a years a who need to We often. is So who screened. with over more Facetime physician a now think is application. that like person see had of engaging they're

the major physician check-the-box trend. underlying long person's show And people care to perform over it do just at occurrence send want get of years, Cologuard don't care get over go in this, rather primary don't home really couple get Cologuardtest.com And that's a lot love cajole is that that to a of more a to seeing to Cologuard the over up doctor becomes everybody that where of and seen and the we who haven't have ordering heard and somebody we years can can or a test a again box a for As and that back. I easily, think Cologuard have over as they of physician. even And that I have ease than the colonoscopy. but appreciates a primary I test, trying physician a order but a screened. I'd this a

of to here Jeff Cologuard that, out is care gets of telehealth. Cologuard is physicians. year, what that in may of all really was with be a ease part of that that the think and opportunity The we we small one overall test to this instances be about big time primary this XX% electronically, the ordering rolled So next back highlighting the is Epic, addition which of expect a through

So the know with we We're cologuardtest.com excited broadly. opportunity. don't holds future really what the about

Patrick Donnelly

maybe pushed one permanent profitability a of little leaner being we maybe in side. just Jeff, now for see is maybe and to you nice you're expense versus greater what a much what these of out, some levers, is here. able see like should expense the of again, should pull clearer? platform a those Again, guys feel expenses bit to percent Or fully big to pull then do out uptick XXXX? How and, little a be is and disappear pathway you or the And about number just I on expenses bunch be Okay. we the a guess, coming? costs thinking how

Jeffrey Elliott

Patrick. Thanks, Yes.

So our million of the CapEx, kind operating that $XXX across across again, we expense, cost all areas. is out, of took sales, spending

up, then business the back reinvest to picks growth. Cologuard, that with see business like the in start starting when support and to we we'll to As are

we of the expect to One of this out be a that, more would benefits of company profitable as come is have we than COVID, been we otherwise.

So come a some to us that will expect of of drop revenue we through will do most there allow but back online, and taken rate out investments higher profitability. we've these be at

Operator

next Stifel. Your with of comes Arias line the question Dan from

Daniel Arias

volumes? think since preannounce. rate have that the on you materially the noted volume from way Has you're or would it's weeks us press Kevin, the mid-May XX% about I trending decline the so in three you into been moved guess that about level there the release? How

Jeffrey Elliott

is this Dan, Jeff.

last or did days May. As I said April improving the trends and week of in so in we first XX the of the see through remarks,

get telehealth, to in actions measures said that I as started of stay-at-home the such adjust the we've in some to the Also So some and, work. to to to I areas think that part, driving continue back in before, of business. to the I part due the that's taken, started -- think have people country,

offices are getting we see, back and back in up cases, starting people some to business. to So opening

related all to to pleased think We're factors improving So very trends. those that. see

Kevin Conroy

And is Kevin. this

they of in we is telehealth. As busier things than some that converted primary some the they patients the and, to all one with done day last of And have engaging talked were care to they're our cases, are long their even few customers, before. rapidly, weeks, over

of about. something is appearing screening of result this excited on back that, colon that the cancer that things, list is As we're a it coming important to is and

Daniel Arias

it. Got

the Okay. workforce, have savings than done permanent much full had where will I been a you've just And bit lower reductions? then, And $XXX the from then talk volumes? the you rather do the And in what come Jeff, total to just conversely, in million on head think about to COGS you decisions, put make little actually if the furloughs count in of head savings, some cost place think you've lower how just can then count where on decisions?

Jeffrey Elliott

Yes.

in If magnitude within area year, that that was start of you the at expense biggest the think items spend P&L about line operating the of existed item. the the line

changed. considering savings. the get capital biggest The of pretty change to was modest $XXX outlook to going the chunk our long-term that's has that not So million expenditures of

and COVID fact, we underscores of In really amplifies benefit test the as offer. that the we said before,

are modest. changes so largely are of capital investments said guided So that the for capital relatively the million to the previously had before, had to $XXX We about expenditures year, unchanged. we

for some, going now. in to specifics the break commensurate one. not we're biggest to I'm really with are year out right guidance be expenses going revenue. rest of the sale, Cost directionally, not expected there because But there the of will decline the operating provide

just the as these kind these all COVID it's personnel up, back testing, to ways to volumes This team how on raised start as changes the contribute. we look, the see excited Whether to exciting -- really has hands really the been see has team team rapidly. it's responded. of been the far And changes. for or the we're how responded adjust telehealth help some most of has We're their As unwinding has out to business business the are side, going made, picks the reps getting we're and personnel field of seeing. back on the to in

back So get for and we're back excited pick business work. to people the to up

Operator

the Baird. And your Catherine line Schulte of next from from comes question

Catherine Schulte

I plans to lifted? Or sales your guess, up it orders your your bit local until will? you see force? out opening wait more think you how should in Are a it are regions first, stay-at-home redeploy about longer certain plans just we are to patients as

Kevin Conroy

The serve and Catherine. we the force. priority safety Thanks, number patients one of of offices our -- sales our course, and, the is

the we do So testing. have to ability

as sure to our we on on We make are a are tested a right stay-at-home all respond place as various so safe ability And changes are to they're regular in the working basis, to plan now in possible. putting orders. people that of the the

getting and rather We side on out early harm's there than too anybody way. will the err probably conservative putting in

we're there, focused #X is really the safety So and on priority that.

Catherine Schulte

the cost the reduction out second quarter? Jeff, on and color And Okay. items between on much OpEx. could you measures, weren't line any it those in know breaking of fall how I the specifically

Jeffrey Elliott

that into get of modeling that put for to granular consideration think purposes. take these now. into can going you quarter, second some partway I'm in But considering Catherine, not the I measures through we

Catherine Schulte

saw first of terms cost, on at Any XX I nice trends is about no your to group? to in in and mix today comments there. improvement of success And a you XX so XX younger patients website, updated to the stand out-of-pocket that XX% on due volume Medicare show you XX that Okay. to that the in in Cologuard age potential where saw the quarter we

Jeffrey Elliott

opportunity, a group, working. is, very often are that They typically in Cologuard vast exciting age and the people really, in majority XX lifestyles. And XX kids and there that fits schedules. about unscreened. really to group have XX age considering busy well the into are Yes. million People again, are

at-home So fit age test, Cologuard, that an as can very into well group.

We from XX and volume above, trends continuing standpoint, sales excited a to Medicare first It are in force I patients pleased seeing know group the mix, is positive quarter And outgrowing about that. so the we're is with the about this very was opportunity these XX%. reach market. there. age

Operator

question your Dan Brennan from with And UBS. line next comes the of

Daniel Brennan

one first you -- is just guys understand wanted upon I a few the Maybe touched to on just Great. it. times. this

from this your own patients of that and, And want in of you we is to early kind bump diligence seeing over colonoscopy switching about from give terms In feedback some volumes to the you in some docs look out? invasive as of colonoscopy, post Cologuard these as much maybe something doctors suggests Cologuard done of some us kind impactful in obviously, as how procedures think when you're of over a your be cases. or indication maybe benefits are who on of could So early avoid this that COVID front? see this feedback from we've the can any calls of you XX% could as

Jeffrey Elliott

I continuing. COVID-XX. down at month Dan, this piece XX% some screening that are XX% that just start down One We April seen because and of Jeff. XX% and showing the feedback of to with we've seen of colonoscopies just the down shared numbers over Cologuard data is the exited is numbers. get We've around for over positive trends looking

backlog now to colonoscopy. what acceleration business, is this And So Kevin to before is GI talked to the clear for seeing play back COVID societies that is role. gotten really some people by speaks that colonoscopies. Cologuard, bigger wanting Cologuard even a of wanting screening the diagnostic the And how we're to get impacted can we've for as as feedback speaks it it bigger to on colonoscopies to the from than start backlog. And about not

as forward. we to going move role bigger is even think, an we play Cologuard, So

play of COVID. I will think even here this think changes at-home is market. from one to an bigger We in is role test stay that this the

Daniel Brennan

I What late. Great. that, number was you minutes the a Sorry, joined Jeff? mentioned, few XX. The down

April you at, is down said? So what you XX exited

Jeffrey Elliott

April. in last Yes. just XX% Down about over days XX of the

Daniel Brennan

Got it.

channel patients, GPs and you getting are are this test are there? at trying how patients. process it's into PCPs but opportunity getting Cologuard of telehealth, on in great now no It's the trying -- you longer and Obviously, their the in to seamless weave then that seeing PCPs they're And GPs the there. to time, to a How office, the extent these Okay. for screening the kind you? or avoid conflict are the all same

Kevin Conroy

with force, is being positive, where or so to gastroenterologist follow-up Well, -- that to a then we'll them results us And the we're of large care opportunity, And -- tested a primary that the is do their an patient test local remind a one course, communities press value if of that is relationships work physician. doing, physician partner things the the their again, sales our -- to where of they diagnostic to that. GIs get to the patient go with through colonoscopy. them through we that with the Cologuard. Dan, engage the on with to local continue can results patient the can in requests opportunity then, community societies. of working our And that's that and an for also And the

our see channel a with being really GIs. we anything, PCPs both as So don't and conflict. this If it enhances relationship

Daniel Brennan

assuming forecast in would what reaching from we greater a potentially, trying if patient Great. for maybe catch-up this or Maybe they think big I so were had factors ball which this different crystal look 'XX you one. our 'XX the own is is, companies year, could lot next that question what don't your there's the prevent think be a we of than because about year XXXX. rebound, one before about for we to really probably final But if I guess, probably happened, into we about great like patients before. internal assume We're some visits, would that a beyond have the it's in as impact

have from colonoscopy. to share going gains You're

You benefit had from telehealth. some

Obviously, or that So up hurt X to to terms your think there the motivating the I of doc either could force as are am we about of it reaching think about for could you to that help that where pre-COVID in be kind Or kind forecast, of catch kind or isn't thinking right? it one, you there, the weeks that factors hard of not use last one, doctors these I other utilization X is sales Cologuard. factors?

So maybe pre on comment if just in of and you post 'XX. can kind COVID

Kevin Conroy

Yes. when post Well, question is is COVID. the

the we be So where it's to will too -- right XXXX. now early what tell by

screening, the the to tick just think is at-home reimbursement of the coverage and of that. the of value awareness trends broad for colonoscopy, I Cologuard the off, backlog increasing

knows mentioned, X that always things the environment care there likely the forward, think to in X next data solution the positive direction. what is view for nobody as and less next caution The move primary you physicians hold. patients the indicating As reason for we month, are to all GIs Cologuard the in moving both reason this much months more is

overall team really team we've I that hands, excited forget get to Cologuard. pain the has at the team. as their And asked DX, very, both can't And and right, very selection urology PCDX Paradigm Look, value together. occurring. the that's in committed company is that, both level, if the test, oncology that breast thing this Oncotype the cause. the the created, along are both the stronger wait company this People throughout I'm their the energized. So high come test, Dan, anything, to this test with brought that now financial team prostate brands, the out stronger have people share to is that about seems team to and values -- we call the in is in And think of they underlying a don't with tissue and

And that so a like there this. out are positives come can even storm of a lot of

Operator

And your with Luke last of line Evercore ISI. the question comes from Sergott

Luke Sergott

the Just the the Have real that quick, per tests last given out month? on testing. guess, been I COVID week number of you've you running over

Jeffrey Elliott

Jeff. This Luke. Thanks, is

part if are demand there. we've And this country, is lot not of We today of so we're have lab XX,XXX, that the here. room be capacity is capacity in and a that there. least demand solution there's what at given seeing Clearly, further lack there's we is to is our testing said the number. that ramp out of to What pleased a

path as as quickly. this contributor this test team, going it will guidance get never soon we something and be and here, it of to we say, very, to Kevin be a rallied contribute. talk will going It's forward. hope how COVID business as much have we we scale out bring up again. can possible, very it The I'm on to nice safe -- said forward really before, That to is provide about expect said, not the to has it

Luke Sergott

from just That Oh, nice. a that. follow-on man. would be And

Cologuard of let's today, overall back given expected, diagnostic online in be supply is has say in telehealth that could better everything types issues digging to and chain and COVID things back than come that on all you volumes chance as that there the shifts been industrial testing? their a complex the everybody half, So little a there the

Kevin Conroy

Well, one of the -- this is Kevin.

bring and nimbleness scale that people One handling daily good we to COVID PCR that of the clock readily of at own feel large working our more validation testing to attention states through supply our that like of to testing than able since lot COVID It And is brought really be given COVID then adapted others. and will instrument. instruments to to country. around labs of critical capability some access the and in And to testing, a items, nights something a this testing And key chain. supply that the testing. COVID this the that proud said. preference basis. the those about reiterate We there when reconfigure, team deliver rewrite be workflow a the instruments in those to code chain up we're to we on up we a instruments, all on just values liquid was good and to feat on weekends shape. we is is this Cologuard do of the to going create It instruments We're think of about these didn't our want Jeff of we pay components what I

make to are no time, we chain too are grow we're likely our expect, capacity supply that being promise. all there cautious on And to to on sure of us. and calls on utilize we to to issues the coming it taking that deliver that So want much over here about because based

Operator

All right. your back over I host. would call now like turn the to to

Kevin Conroy

our of mission. mostly, team the this the volume extending developed test first demand help to fight They joining more telehealth, increasing through met past the the cancer our to Cologuard couple commitment important thanks to leadership unwavering made in coronavirus, for team COVID review Precision our advanced Thanks diagnostics. And quarter their accessible employees our acquisition, us our In Oncology has months, against all for results. just in has an closed to lab. and

decisions to positioned ways for we treat to screening therapy are and for in cancer in detect plan precise providers the patients guiding and even and to provide looking answers you. we to cancer, So more role and post-COVID accessible an and greater world. play Thank

Operator

call. All Ladies today's does conclude this conference right. and gentlemen,

all You may now disconnect.

Exact Sciences (EXAS) 6 May 202020 Q1 Earnings call transcript