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Awaiting FDA Decision on Cologuard, Exact Sciences Reports No Revenues in Q2

The story has been updated to include comments from Exact Sciences' conference call this morning.

NEW YORK (GenomeWeb) – Exact Sciences today reported no revenues for the second quarter as it awaits a decision from the US Food and Drug Administration on its Cologuard premarket approval submission.

The firm had reported $1 million in revenues for the second quarter of 2013, and analysts had expected Exact Sciences to generate $120,000 in revenues for the most recent quarter. Year-ago revenues came from upfront licensing fee payments received from Genzyme, which amortized over a five-year collaboration period that ended in January, Exact said.

The company is currently preparing for a launch of the Cologuard colorectal cancer screening test while the FDA makes a decision on its PMA submission for the test. In March, an FDA panel unanimously recommended approval for Cologuard. While the agency does not have to follow the panel's suggestion, it is widely expected that FDA will approve the test.

Simultaneously, the Centers for Medicare and Medicaid Services is conducting a coverage review of Cologuard as part of a parallel review process. In a statement today, Exact Chairman and CEO Kevin Conroy said the firm has hired an 80-person direct sales force in anticipation of Cologuard's launch.

On the company's conference call today, Conroy said that on July 11 the FDA completed its inspection of Exact's manufacturing facility and found no deficiencies or observations. A final decision by FDA on the Cologuard PMA is anticipated in the next 30 to 45 days, Conroy said. He added that a final Medicare coverage decision from CMS is anticipated in the fourth quarter.

"We also are continuing to build the resources we need to actively pursue reimbursement from private payors after FDA approval," Conroy said.

"We are pleased with our launch readiness and look forward to working with physicians and patients, pending FDA approval, to improve colon cancer screening," he added in a statement.

In a report accompanying Goldman Sach's initiation of coverage of Exact with a Buy rating last month, analyst Isaac Ro said that he anticipates FDA will approve Cologuard by mid-September and that CMS will issue a positive coverage decision for the test.

For the second quarter, Exact posted a net loss of $19.4 million, or $.24 per share, compared to a net loss of $12.3 million, or $.19 per share, a year ago. On average, Wall Street had expected a net loss of $.25 per share.

Exact's R&D costs were up 11 percent year over year to $7.2 million from $6.5 million. Its SG&A expenses rose 80 percent to $12.4 million from $6.9 million.

The Madison, Wis.-based firm finished the quarter with $20.7 million in cash and cash equivalents.

On the call, Conroy also outlined Exact's product pipeline. In collaboration with the Mayo Clinic, the firm is developing two types of screening tests for gastrointestinal tract cancers. One test will be a screen for the general asymptomatic population for precancerous indications and cancer across the entire GI tract.

Additionally, Exact and Mayo are developing applied diagnostic tests for specific cancers aimed at patients at high risk for cancer and those already with symptoms. Both types of tests, Conroy said, will focus on colorectal, pancreatic, esophageal, and stomach cancer.