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Exact Sciences' Q4 Revenues Flat, Loss Widens

NEW YORK (GenomeWeb News) – Exact Sciences today said that revenues in the fourth quarter were flat year over year, while its net loss widened.

The Madison, Wis.-based firm recorded $1.0 million in revenues for the three months ended Dec. 31, 2012, the same as a year ago and even with the average Wall Street estimate. All revenues came from licensing fees in the recently completed quarter, and the company had no product royalty fees, compared to $6,000 a year ago.

Its net loss for the period increased to $14.0 million, or $.22 per share, from a net loss of $9.9 million, or $.18 per share, a year ago, exceeding the consensus Wall Street estimate of a loss of $.18 per share.

Exact Sciences bumped up its R&D spending to $10.4 million, a 35 percent increase from $7.7 million a year ago. Its SG&A spending was up 39 percent to $4.6 million from $3.3 million a year ago.

"We continue to make good progress towards completing the FDA submission for our non-invasive, stool-DNA-based colorectal cancer screening test," Exact Sciences President and CEO Kevin Conroy said in a statement. "We remain confident that the clinical trial will deliver strong results, and continue to actively and systematically prepare for the test's commercialization."

Earlier this week, the firm said that it had submitted the second of three modules to the US Food and Drug Administration for premarket approval of its Cologuard colorectal cancer screening test. Conroy said on a conference call today following the release of Exact Sciences' earnings results that it anticipates submitting the third module, which will contain clinical data from the company's DeeP-C trial, in May.

Patient enrollment for the trial closed in November with more than 12,700 patients. The first module was submitted to FDA in December.

For full-year 2012, the firm posted $4.1 million in revenues, down 2 percent from $4.2 million a year ago, but even with consensus Wall Street expectations. Licensing fees came in at $4.1 million, the same as the year-ago period. Exact Sciences had no product royalty fees in 2012, compared to $20,000 in 2011.

The firm's net loss for 2012 shot up to $52.4 million, or $.88 per share, compared to a net loss of $28.7 million, or $.54 per share, in 2011. Analysts had estimated a net loss of $.85.

Its R&D spending increased 91 percent year over year to $42.1 million from $22.0 million, while its SG&A costs climbed 34 percent year over year to $14.7 million from $11.0 million.

Exact Sciences ended 2012 with $13.3 million in cash and cash equivalents and $94.8 million in marketable securities.

On the call Conroy said that it has three main priorities for 2013: preparing to launch Cologuard if and when FDA approves it; "ensuring operational excellence"; and continuing innovation.

Exact Sciences will complete is application for coverage by Medicare this year, he said, while it continues discussions with private payors for coverage of Cologuard.

The firm is establishing its own CLIA laboratory to run the test, but also plans to partner with "an established lab" to implement the test. During the past six months, Exact Sciences has evaluated "a number of established, experienced high-complexity CLIA labs" as potential partners, Conroy said, though he declined to identify the labs.

Additionally, the company is progressing on the development of a pancreatic and esophageal cancer test for the inflammatory bowel disease cancer population, and expects to complete the clinical trial for the screening test in the second quarter, he said.

In Wednesday morning trading on the Nasdaq, Exact Sciences' shares were down 4 percent to $10.90.