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Exact Sciences Idea Proposal (EXAS)

Exact Sciences Idea Proposal (EXAS)
 

What effect will Exact Sciences’ telehealth efforts have on Cologuard test numbers during and after COVID-19 quarantines?

Report Available: May 1, 2020

 

Prior to the COVID-19 pandemic, Blueshift’s ongoing research found EXAS turning in strong Q4 2019 results with continued growth, acquisitions, and preparing for a strong 2020. Since the coronavirus outbreak, EXAS, like many other companies, has taken steps to protect its employees by offering work-from-home opportunities, but it is maintaining its cancer testing services and encouraging patients and physicians to take advantage of Cologuard’s in-home colorectal cancer (CRC) screening and telehealth capabilities. The company has also partnered with state agencies and hospitals to offer COVID-19 testing.

 

Observations

  1. EXAS reported continued growth in Q4 but missed both earnings and revenue expectations. Cologuard test volume was 477,000, an increase of 63%, and the average Cologuard-recognized revenue per test was $481 vs. the average test cost of $123, an improvement of $6. Combined revenue for both EXAS and Genomic Health, the California company EXAS acquired last year in a $2.8 billion deal, was up 60% YY. EXAS posted earnings of $77.9 million, or $0.54 per diluted share, which also beat projections of a quarterly loss of $0.34 per share.
  1. Highlights from Q4 and early Q1 2020 include:
  • EXAS’s significantly expanded TAM to $20 billion due to the acquisition of Genomic Health and the expanded Cologuard label for screening 45- to 49-year-olds for CRC.
  • The creation of a 1,000-person sales team, which includes PFE’s sales team working to promote Cologuard and a specialized group of 60 professionals focused on selling to gastroenterologists.
  • EXAS has made progress on its next-gen Cologuard test showing new markers with improved specificity while maintaining a high level of sensitivity in comparison to the current version. It has initiated a 10,000-patient prospective trial to validate the new test’s performance.
  • EXAS presented positive data on its liver cancer test which it expects to launch in the second half of 2020.
  • EXAS has recently signed agreements to acquire Paradigm and Viomics. These companies have deep DNA sequencing capabilities. Paradigm provides a therapy selection test for late stage cancer patients. Viomics provides critical sequencing and biomarker discovery capabilities.
  1. On March 15, EXAS published a letter addressing the coronavirus. Employees that could work from home were asked to do so and patient-critical work teams were expected to continue to operate normally, following all safety procedures and practices. One March 19, EXAS suspended field-based, face-to-face interactions by its sales force and said the sales team will serve healthcare providers via telephone and online technologies. The company highlighted that it was well positioned to continue to deliver Cologuard tests via telehealth technology and its at-home sample collection. EXAS also withdrew is Q1 and full year 2020 guidance. On March 30, it was announced that EXAS had joined a public-private partnership to double the COVID-19 testing capability in Wisconsin.
  1. On April 2, EXAS highlighted that, through a telehealth provider, its Cologuard test is available without a visit to a doctor for a prescription. Kevin Conroy, EXAS chairman and CEO, said, “Cancer doesn’t stop for anything. As the country faces a pandemic, we are letting people know they can request Cologuard online from a health care provider, without an office visit. While Americans are at home trying to prevent the spread of COVID-19 in their communities, they can address another pressing public health issue and get screened for colorectal cancer.
  1. Blueshift Research’s Oct. 16, 2019 and Feb. 15, 2019 EXAS reports were overwhelmingly positive regarding the company’s continued growth. Sources said Cologuard has a significant runway for growth among the one-third (about 20 million people) of 50-year-old patients who refuse or cannot tolerate a colonoscopy. Sources also expected the expanded indication of Cologuard for screening 45- to 49-year-olds to drive additional sales.

 

How is the COVID-19 pandemic impacting EXAS? Will EXAS’ telehealth program drive significant use of the Cologuard test? How do doctors feel about EXAS’ test ordering and telehealth processes? Will test volumes suffer declines following the reopening of physicians’ offices? How will EXAS’ involvement in COVID-19 testing affect the company? How is the pandemic affecting EXAS’ goal of achieving 40% share of CRC screenings?  To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Medical professionals prescribing Cologuard, Medical sales professionals and Industry specialists.  

 

Companies: Exact Sciences (EXAS), Boston Scientific (BSX), Pfizer (PFE)

 

 

Research Begins: April 20, 2020

 

To see other ideas Blueshift Research is currently working on, please click here.

 

 

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