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Exact Sciences Reports No Revenues for Q3 as Firm Begins Commercialization of Cologuard Test

NEW YORK (GenomeWeb) – Exact Sciences today announced zero revenues for the third quarter as it begins commercialization of its Cologuard screening test for colorectal cancer.

Revenues for the three months ended Sept. 30 were down from $1.0 million a year ago and short of the consensus Wall Street estimate of $170,000. Its revenues in the year-ago period comprised non-cash amortization of upfront license fee payments from Genzyme that ended in January 2014.

The big news for Exact during the quarter was approval by the US Food and Drug Administration of the company's Cologuard molecular screening test, setting up the company to generate product revenues. Subsequent to the quarter, the Centers for Medicare and Medicaid Services issued a final National Coverage Determination for the test earlier this month and set preliminary reimbursement for Cologuard at $502. Final pricing is anticipated by the end of the year.

Also, last week physicians network MDVIP said that it would make the test available to its affiliated network of primary care physicians. In September health plan Group Health Cooperative began covering the test, and in August the Mayo Clinic became the first health system to offer the test.

On the company's conference call following the release of the financial results, Exact Chairman and CEO Kevin Conroy said the firm has launched the test with a 120-person sales staff that started meeting with physicians "immediately after FDA approval."

Chief Operating Officer Maneesh Arora added that Exact expects to add another 20 people to its sales staff by the end of the year.

Exact has also begun a digital advertising campaign to raise awareness of the test among clinicians and consumers, Conroy said, adding that the company has a program in place to attract coverage from top health plans for the test. Conroy said the firm has "realistic" expectations for insurer coverage in the near-term, but provided no details.

Exact's net loss for Q3 2014 increased to $32.1 million, or $.39 per share, compared to a net loss of $11.2 million, or $.16 per share, a year ago, missing the average Wall Street estimate of $.32 per share.

Its R&D expenses increased 30 percent to $9.1 million during the quarter from $7.0 million, while its SG&A expenses shot up to $22.2 million from $5.3 million.

Exact finished the quarter with $27.8 million in cash and cash equivalents, and $183.3 million in marketable securities.

"We are very pleased with the significant demand from physicians and patients, and the early uptake of Cologuard since Medicare's final national coverage decision," Conroy said in a statement. "We are focused on educating physicians and ensuring that patients across the country know that Cologuard is a new highly sensitive, non-invasive screening option."

Shares of Exact on the Nasdaq were down almost 3 percent Monday morning at $22.92.