NEW YORK – Exact Sciences reported after the close of the market on Tuesday that its fourth quarter revenues were up 17 percent year over year as the company pushes forward with a recently launched product for advanced cancer genomic profiling as well as other oncology test development.
For the three months ended Dec. 31, Madison, Wisconsin-based Exact reported revenues of $553.0 million compared to $473.8 million a year earlier, in line with preliminary results announced last month and beating the average Wall Street estimate of $528.2 million.
Rising revenues from the firm's screening and precision oncology businesses have continued to counter diminishing revenues from COVID-19 testing. Excluding COVID-19 revenues, which decreased 87 percent to $6.0 million, Exact's Q4 revenues were up 28 percent year over year.
Screening revenues, which include laboratory service revenue from Cologuard tests, rose 45 percent to $403.5 million in Q4. Precision oncology revenues dropped 4 percent to $143.4 million, though they increased 1 percent excluding the divested Oncotype DX Genomic Prostate Score test and a $1.8 million foreign exchange impact, Exact said.
Exact launched a new precision oncology test earlier this month, called OncoExtra, which will compete in the broad market of sequencing tests that direct biomarker-targeted therapies for advanced cancer.
The comprehensive genomic profiling assay includes whole-exome and transcriptome sequencing, from which clinically actionable alterations are reported, with easy-to-interpret reports highlighting findings linked to US Food and Drug Administration-approved therapies.
During a call with investors, Exact CEO Kevin Conroy said that the company's strong position in the market with its early breast cancer assay Oncotype DX will be important as it seeks to grow its presence in precision oncology with OncoExtra and other planned assays for minimal residual disease detection and inherited cancer risk testing.
Advanced cancer sequencing is already a crowded market with established tests from companies like Foundation Medicine, Caris Life Sciences, Tempus, Strata Oncology, and others. Nevertheless, the company's training and marketing team has been aggressive in promoting the test from "day one," and its sales team is already generating orders, Exact Chief Commercial Officer Everett Cunningham said during the call.
Conroy added that ramping up will take time and the company expects comprehensive genomic profiling to bring in around $10 million in revenue during 2023. "It is the first year of launch, and I know that the team [is] excited about the launch, but it's early," he said.
Exact also intends to launch another precision oncology product this year — tumor tissue-informed, personalized MRD testing for colorectal cancer, where it will compete with Natera's Signatera, among others. Cunningham said Exact plans to publish new data on MRD at an upcoming scientific conference and follow that up with a launch of a laboratory-developed test.
In 2024, the company should be ready to submit data to Medicare's MolDX program, hoping to secure a positive assessment for coverage under the payors existing local coverage determination.
"Behind the scenes, we have been working on pivotal studies for both colon and breast," he added.
Before the year is out, Exact also expects to submit data to the FDA for the improved version of its stool-based colorectal cancer screening test Cologuard.
This timeline puts the launch of Cologuard 2.0 into next year, but "a lot of prelaunch activity" will be going on, Conroy said during the call.
"Some of the long, mundane aspects include the billing code for the new version of Cologuard — does it change? Does it change payor relationships, [with] Medicare, et cetera?" Conroy said. "You need to do a lot of work there before you switch over to a new test … so that will be a very thoughtful transition. The nice thing is we have a great test in Cologuard today, and it's all upside for patients, health systems, and Exact Sciences shareholders when we bring this new innovation to patients."
The same BLUE-C study that is the backbone of Exact's bid to the FDA for Cologuard 2.0 has also been used to generate data for a blood-based version of the test, but Conroy said that Exact won't start developing a validation and verification data package for that assay until after it has finished the submission for Cologuard 2.0.
Exact reported a Q4 net loss of $127.7 million, or $.72 per share, compared to $220.6 million, or $1.28 per share, in the year-ago period. Analysts on average had expected a loss of $.84 per share.
The company's R&D costs for the quarter rose about 7 percent to $94.3 million from $88.5 million in Q4 2021. Its SG&A expenses dropped 13 percent to $404.1 million from $463.7 million.
For full-year 2022, the company's revenues rose 18 percent to $2.08 billion from $1.77 billion in 2021, beating the Wall Street estimate of $2.06 billion. Excluding COVID-19 testing, revenues rose 25 percent year over year.
Exact's net loss for the year rose to $623.5 million, or $3.54 per share, from $595.6 million, or $3.48 per share, in 2021. Analysts on average had expected a loss of $3.53 per share for the year.
The company's full-year R&D costs bumped up 2 percent to $393.4 million from 385.6 million in the same period last year, while its SG&A expenses dropped 5 percent to $1.58 billion from $1.66 billion.
Exact ended the year with $242.5 million in cash and cash equivalents and $389.6 million in marketable securities.
Providing an outlook for 2023, the company said it anticipates full-year revenues of $2.27 billion to $2.32 billion, assuming screening revenue of $1.66 billion to $1.69 billion and precision oncology revenue between $600 million and $620 million. On average, analysts are expecting 2023 revenues of $2.30 billion.
Exact's shares were up 2 percent at $62.49 in Wednesday morning trading on the Nasdaq.