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Exact Sciences Posts $12.6M in Q3 Revenues

This article has been updated to include FY 2016 guidance from the firm and analysts' comments.

NEW YORK (GenomeWeb) – Exact Sciences today reported third quarter revenues of $12.6 million, in line with Wall Street's consensus estimate.

All of the revenues in the quarter were derived from laboratory service revenue tied to its Cologuard colorectal screening test. The Madison, Wisconsin-based molecular diagnostics firm said that it completed 34,000 Cologuard tests during the quarter, an increase of 60 percent over the second quarter. It also said the number of orering physicians grew to 21,000 in the quarter, up 42 percent from Q2.

Exact Sciences had no revenues in the comparable period in 2014. The Cologuard test was approved by the US Food and Drug Administration in August 2014, and two months later received a final national coverage decision from the Centers for Medicare and Medicaid Services.

Exact Sciences posted a net loss of $42.9 million, or $.45 per share, for Q3 compared to a net loss of $32.1 million, or $.39 per share, for the third quarter of 2014. It narrowly missed the consensus Wall Street estimate for a loss of $.44 per share.

The firm reported R&D expenses of $9.9 million, a 9 percent increase from $9.1 million in Q3 2014. Its SG&A spending jumped 73 percent to $38.5 million from $22.2 million.

Exact Sciences finished the quarter with $31.5 million in cash and cash equivalents, and $312 million in marketable securities.

Company officials said that the firm expects to report FY 2016 revenues of $90 million to $100 million, below analysts' consensus estimate of $115.2 million. The firm expects to complete approximately 240,000 tests next year.

The cautious guidance caused Exact Sciences' shares to drop around 16 percent on Thursday, falling to $6.96 in afternoon trade. It was the second time in a month that the firm's shares took a hit. Earlier this month the US Preventative Services Task Force issued a draft update to its colorectal cancer screening guidelines in which it included fecal DNA testing in an alternative category of strategies to be used in "select clinical circumstances." The recommendation was viewed as a negative for Exact Sciences, and the firm's shares fell that day, though it said that it would work with the USPSTF to "modify its draft guidance to include Cologuard as one of the recommended screening strategies."

Though investors reacted negatively to the forecast, analysts were upbeat on the forecast and the firm's prospects in adding commercial payors for Cologuard.

"We believe Cologuard will continue to win physician, patient, and payor adoption," Canaccord Genuity analyst Mark Massaro said in a note. He reiterated the bank's Buy rating on Exact Sciences' stock and a $13 price target.

"We think a low bar was set [for the guidance], with sentiment negative and management knowing their credibility took a big hit on the USPSTF guidelines," Mizuho Securities USA analyst Eric Criscuolo added in a note today. "Guideline changes may or may not happen, but we think significant private payers could still come on board regardless, which would improve sentiment and provide a significant catalyst for the stock."