Cologuard® plans to capture 40% market share. 21 takeaways from Exact Sciences Q3 Earnings Call


Cologuard® plans to capture 40% market share. 21 takeaways from Exact Sciences Q3 Earnings Call

Did you listen to the latest quarterly earnings call of Exact Sciences on October 29th? It was insightful.
In Q3 2019, Exact Sciences screened 456,000 people with Cologuard® with over $290 million in revenues. In the last five years, the company screened more than 3 million people.
They are now ready to capture at least 40% of the US colorectal cancer screening market (currently they are at 5%).
These notes are based on remarks by Exact Sciences Chairman and CEO, Kevin Conroy, the Chief Financial Officer, Jeff Elliott and President of Cologuard®, Mark Stenhouse.
21 Takeaways from Exact Sciences Q3 Earnings Call
1. Three priorities for 2019:

Powering Pfizer partnership

Enhancing Cologuard®

Blood based cancer diagnostic test

2. Over 180,000 physicians have ordered the Cologuard® test thus far. Over 3 million patients (456,000 people in Q3 alone) have been screened. New facility has capacity to screen 7 million patients per year.
3. Together with Genomic Health (acquisition in 2019), the company’s addressable market is $20 billion.
4. $35 million invested in R&D for pipeline projects:

Cologuard for age 45 and above

Cologuard 2.0

Liver cancer test

5. Exact Sciences sees “a clear path to Cologuard® cost per test of $100 or better.”
6. Last month, the FDA approved their label expansion providing access to Cologuard® for 19 million average risk unscreened Americans from ages 45 to 49.
7. Several national and regional payors lowered their coverage screening age for Cologuard® to 45 years, following the American Cancer Society guidelines update last year, including Aetna, CareFirst and Blue Shield of California.
8. Exact Sciences implemented Epic’s health IT platform. They hope to enable electronic ordering for a greater share of customers.
9. At ACG 2019, the company presented data on Cologuard® to show a five-point increase in specificity with new markers (92%), while maintaining similar level of sensitivity.
10. To validate the performance of an enhanced version of Cologuard®, the company initiated BLUE-C, a prospective trial.
11. Along with Mayo Clinic, the company initiated a 7-year, 150,000 patients prospective study called Voyage to evaluate Cologuard®’s impact on screening.
12.  The company will be presenting data at the Americans Association for the study of Liver Diseases, demonstrating superior performance of their liver test compared to the alpha-fetoprotein test.
13.  The company gave in a broad comparison among colonoscopy, Cologuard® and the FIT test:

> Colonoscopy –  highly accurate but low patient-friendly test

> Cologuard® – high accuracy and high patient friendliness

> FIT test –  lower performance yet high ease of use of the patient’s part

14. The first time a blood-based cancer test would potentially be in the US Preventative Services Task Force guidelines would be in the 2026 to 2027 time-frame.
15. According to the company, 96% of Cologuard®’s patient population is able to receive Cologuard® without any cost share (i.e., a $0 co-pay).
16. The company said the re-screening business is a growing opportunity and would be a sizable business next year.
17. According to the company, 50% of people who get a Cologuard® test have never been screened before. With 19 million Americans in the 45 to 49 age group and about 35 million Americans in the older age group that have never been screened, this market is going to grow and it’s going to continue to grow at a steep pace.
18. To date, the company only captured about 5% of the addressable market (total available patients per physician). According to the company, there are about 300 patients on average per physician that could use Cologuard® today.
19. With electronic ordering, a physician orders an average at least 20% more than those on traditional fax orders.
20. A blood-based test is likely to model as an annual test and is likely to be priced at one-third of the cost of a Cologuard® test today.
21. The company is focused on bringing a lower-cost approach to market for people who refuse both Cologuard® and colonoscopy.
References: 
1) Exact Sciences Corp (EXAS) Q3 2019 Earnings Call Transcript (The Motley Fool)
2) Exact Sciences Investor Relations – Quarterly Results
3) Exact Sciences Third-Quarter 2019 Earnings Call Presentation

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By Praveen Suthrum, President & Co-Founder, NextServices. 

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
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