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Exact Sciences Suspends Face-to-Face Sales Meetings During COVID-19 Pandemic; Withdraws Q1 Guidance

NEW YORK – Exact Sciences announced on Thursday that in light of the COVID-19 pandemic, it is suspending field-based, face-to-face interactions by its sales force, and it is allowing the majority of its workforce to work from home.

Effective March 13, Exact said it reduced staff in company offices only to those who perform patient-critical work, and the sales team will serve healthcare providers by phone or online until it's safe for them to return to the field.

The company also said that its testing labs remain operational, and that it has instituted business continuity plans at all of its sites to help sustain operations and ensure continuity of service for patients.

"We know that cancer is relentless, and Exact Sciences remains committed to delivering critical answers to patients, even in the face of unprecedented challenges such as COVID-19. At the same time, we are prioritizing patient care and the health of our employees," Exact Chairman and CEO Kevin Conroy said in a statement. "We have acted quickly to minimize business disruption and reduce spending in areas not critical to patient care to ensure we have the financial flexibility to meet patient needs."

However, because of the continued uncertainties from the impact of the pandemic, the company also withdrew its previously announced first quarter and annual guidance for 2020, and said it would provide an updated outlook in its Q1 earnings announcement and conference call based on information available at the time.

During its recent fourth quarter earnings call, Exact had guided for full-year 2020 revenues of $1.61 billion to $1.65 billion, including screening revenues of $1.13 billion to $1.15 billion and precision oncology revenues of $485 million to $495 million. In the first quarter, Exact said it was expecting revenues of $349 million to $359 million, with screening revenues of $230 million to $235 million and precision oncology revenues of about $119 million to $124 million.

In a note to investors on Thursday, SVB Leerink analyst Puneet Souda said that the news from Exact was somewhat expected, given the mandatory work-from-home and shelter-in-place orders that have been rising around the US. Souda further noted that the number of primary care visits are down due to the outbreak, as people look to avoid hospitals and physician offices, and that this limits the opportunities for primary care physicians to prescribe Cologuard tests.

Ultimately, however, the COVID-19 impact will be behind the company and Cologuard remains an attractive product for patients and providers attempting to complete their colorectal cancer screening from home even during this crisis, Souda said.

"Though the length of COVID-19 uncertainty remains unclear, we believe that [Exact Sciences] remains an attractive opportunity for buyers today for the longer-term given the -63 percent impact the stock has seen since its last peak," he added.

Oppenheimer analyst Kevin DeGeeter concurred. In his own note to investors, he wrote that his Outperform rating for Exact's stock remained unchanged, and that the company is "well-position for a potential post-COVID-19 rebound."

Exact's shares rose nearly 12 percent to $42.32 in Thursday morning trading on the Nasdaq. The broader Nasdaq rose nearly 3 percent on Thursday morning, after closing down nearly 5 percent on Wednesday amid continuing volatility caused by the COVID-19 pandemic.

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