First quarter highlights
- Delivered total first quarter revenue of $638 million, an
increase of 6% on a reported and core revenue basis, including
Screening revenue of $475 million and Precision Oncology revenue of
$163 million
- Published Cologuard Plus™ test results from pivotal BLUE-C
study in The New England Journal of Medicine
- Maintains full-year 2024 revenue and adjusted EBITDA
guidance
Exact Sciences Corp. (Nasdaq: EXAS), a leading provider of
cancer screening and diagnostic tests, today announced that the
company generated revenue of $638 million for the first quarter
ended March 31, 2024, compared to $602 million for the same period
of 2023.
“The Exact Sciences team is off to a strong start again in 2024.
Our team delivered more than a million Cologuard® and Oncotype DX®
test results to patients and advanced our deep pipeline of
life-changing cancer diagnostics,” said Kevin Conroy, chairman and
CEO. “As we expand our portfolio globally, our seamless customer
experience, powerful commercial engine, and high-quality lab and
technology foundation will continue to gain momentum, supporting
our mission to help eradicate cancer.”
First-quarter 2024 financial results
For the three-month period ended March 31, 2024, as compared to
the same period of 2023 (where applicable):
- Total revenue was $638 million, an increase of 6 percent on a
reported and core revenue basis
- Screening revenue was $475 million, an increase of 7
percent
- Precision Oncology revenue was $163 million, an increase of 5
percent, or 4 percent on a core revenue basis
- Gross margin including amortization of acquired intangible
assets was 70 percent, and non-GAAP gross margin excluding
amortization of acquired intangible assets was 73 percent
- Net loss was $110 million, or $0.60 per share, compared to a
net loss of $74 million, or $0.42 per share
- EBITDA was $(47) million and adjusted EBITDA was $39
million
- Cash used in operating activities was $82 million and free cash
flow was $(120) million,
- Cash, cash equivalents, and marketable securities were $652
million at the end of the quarter
Screening primarily includes laboratory service revenue from
Cologuard tests and PreventionGenetics. Precision Oncology includes
laboratory service revenue from global Oncotype DX and therapy
selection tests.
2024 outlook
The company has maintained its revenue guidance of $2.810-$2.850
billion during 2024, assuming:
- Screening revenue of $2.155-$2.175 billion, and
- Precision Oncology revenue of $655-$675 million.
First-quarter 2024 conference call & webcast
Company management will host a conference call and webcast on
Wednesday, May 8, 2024, at 5 p.m. ET to discuss first-quarter 2024
results. The webcast will be available at exactsciences.com.
Domestic callers should dial 888-330-2384 and international callers
should dial +1-240-789-2701. The access code for both domestic and
international callers is 4437608. A replay of the webcast will be
available at exactsciences.com. The webcast, conference call, and
replay are open to all interested parties.
Non-GAAP disclosure
In addition to the company’s financial results determined in
accordance with U.S. GAAP, the company provides non-GAAP measures
that it determines to be useful in evaluating its operating
performance and liquidity. The company presents EBITDA, adjusted
EBITDA, non-GAAP gross margin, non-GAAP gross profit, core revenue,
and free cash flow. EBITDA and adjusted EBITDA consist of net loss
after adjustment for those items shown in the table below. The
company defines non-GAAP gross profit and non-GAAP gross margin as
GAAP gross profit and GAAP gross margin, respectively, excluding
amortization of acquired intangible assets. The amortization of
acquisition-related intangible assets used in the calculation of
non-GAAP gross profit and non-GAAP gross margin pertain only to the
amortization associated with developed technology acquired and
recorded through purchase accounting transactions. The amortization
of these intangible assets will recur in future periods until such
intangible assets have been fully amortized. Core revenue is
calculated to adjust for recent acquisitions and divestitures,
COVID-19 testing revenue and foreign currency exchange rate
fluctuations. To exclude the impact of change in foreign currency
exchange rates from the prior period under comparison, the Company
converts the current period non-U.S. dollar denominated revenue
using the prior year comparative period exchange rates. The company
considers free cash flow to be a liquidity measure and is
calculated as net cash used in or provided by operating activities,
reduced by purchases of property, plant and equipment. Management
believes that presentation of non-GAAP financial measures provides
useful supplemental information to investors and facilitates the
analysis of the company’s core operating results and comparison of
operating results across reporting periods. The company uses this
non-GAAP financial information to establish budgets, manage the
company’s business, and set incentive and compensation
arrangements. The company believes free cash flow provides useful
information to management and investors since it measures our
ability to generate cash from business operations. Non-GAAP
financial information, when taken collectively, may be helpful to
investors because it provides consistency and comparability with
past financial performance. However, non-GAAP financial information
is presented for supplemental information purposes only, has
limitations as an analytical tool and should not be considered in
isolation or as a substitute for financial information presented in
accordance with U.S. GAAP. For example, non-GAAP gross margin and
non-GAAP gross profit exclude the amortization of acquired
intangible assets although such measures include the revenue
associated with the acquisitions. Additionally, adjusted EBITDA
excludes a number of expense items that are included in net loss.
As a result, positive adjusted EBITDA may be achieved while a
significant net loss persists. For a reconciliation of these
non-GAAP measures to GAAP, see below “EBITDA and Adjusted EBITDA
Reconciliations”, “Non-GAAP Gross Profit and Non-GAAP Gross Margin
Reconciliations”, “Reconciliation of Core Revenue” and “Condensed
Consolidated Statements of Cash Flows and Reconciliation of Free
Cash Flow”. The company presents certain forward-looking statements
about the company’s future financial performance that include
non-GAAP measures. These non-GAAP measures include adjustments like
stock-based compensation, acquisition and integration costs
including gains and losses on contingent consideration, and other
significant charges or gains that are difficult to predict for
future periods because the nature of the adjustments pertain to
events that have not yet occurred. Additionally management does not
forecast many of the excluded items for internal use. Information
reconciling forward-looking non-GAAP measures to U.S. GAAP measures
is therefore not available without unreasonable effort, and is not
provided. The occurrence, timing, and amount of any of the items
excluded from GAAP to calculate non-GAAP could significantly impact
the company’s GAAP results.
About Cologuard
The Cologuard test was approved by the FDA in August 2014, and
results from Exact Sciences’ prospective 90-site, point-in-time,
10,000-patient pivotal trial were published in the New England
Journal of Medicine in March 2014. The Cologuard test is included
in the American Cancer Society’s (2018) colorectal cancer screening
guidelines and the recommendations of the U.S. Preventive Services
Task Force (2021) and National Comprehensive Cancer Network (2016).
The Cologuard test is indicated to screen adults 45 years of age
and older who are at average risk for colorectal cancer by
detecting certain DNA markers and blood in the stool. Do not use
the Cologuard test if you have had precancer, have inflammatory
bowel disease and certain hereditary syndromes, or have a personal
or family history of colorectal cancer. The Cologuard test is not a
replacement for colonoscopy in high risk patients. The Cologuard
test performance in adults ages 45-49 is estimated based on a large
clinical study of patients 50 and older. The Cologuard test
performance in repeat testing has not been evaluated.
The Cologuard test result should be interpreted with caution. A
positive test result does not confirm the presence of cancer.
Patients with a positive test result should be referred for
colonoscopy. A negative test result does not confirm the absence of
cancer. Patients with a negative test result should discuss with
their doctor when they need to be tested again. Medicare and most
major insurers cover the Cologuard test. For more information about
the Cologuard test, visit cologuardtest.com. Rx only.
About Cologuard Plus
Developed in collaboration with Mayo Clinic, Cologuard Plus
features novel biomarkers and improved laboratory processes. It
also incorporates enhanced sample stability components to provide
patients more time to return their sample to Exact Sciences’ lab
and increase the valid result rate. Exact Sciences is preparing for
FDA approval and the commercialization of Cologuard Plus.
About Exact Sciences’ Precision Oncology portfolio
Exact Sciences’ Precision Oncology portfolio delivers actionable
genomic insights to inform prognosis and cancer treatment after a
diagnosis. In breast cancer, the Oncotype DX Breast Recurrence
Score® test is the only test shown to predict the likelihood of
chemotherapy benefit as well as recurrence in invasive breast
cancer. The Oncotype DX test is recognized as the standard of care
and is included in all major breast cancer treatment guidelines.
The OncoExTra® test applies comprehensive tumor profiling,
utilizing whole exome and whole transcriptome sequencing, to aid in
therapy selection for patients with advanced, metastatic,
refractory, relapsed, or recurrent cancer. With an extensive panel
of approximately 20,000 genes and 169 introns, the OncoExTra test
is one of the most comprehensive genomic (DNA) and transcriptomic
(RNA) panels available today. Exact Sciences enables patients to
take a more active role in their cancer care and makes it easy for
providers to order tests, interpret results, and personalize
medicine. To learn more, visit
precisiononcology.exactsciences.com.
About PreventionGenetics
Founded in 2004 and located in Marshfield, Wisconsin,
PreventionGenetics is a CLIA and ISO 15189:2012 accredited
laboratory. PreventionGenetics delivers clinical genetic testing of
the highest quality at fair prices with exemplary service to people
around the world. PreventionGenetics has 25 PhD geneticists on
staff and provides tests for nearly all clinically relevant genes
including the powerful and comprehensive germline whole genome
sequencing test, PGnome® and whole exome sequencing test, PGxome®.
PreventionGenetics was acquired by Exact Sciences in December
2021.
About Exact Sciences Corp.
A leading provider of cancer screening and diagnostic tests,
Exact Sciences gives patients and health care professionals the
clarity needed to take life-changing action earlier. Building on
the success of the Cologuard and Oncotype DX tests, Exact Sciences
is investing in its pipeline to develop innovative solutions for
use before, during, and after a cancer diagnosis. For more
information, visit ExactSciences.com, follow Exact Sciences on X
(formerly known as Twitter) @ExactSciences, or find Exact Sciences
on LinkedIn and Facebook.
Forward-Looking Statements
This news release contains forward-looking statements concerning
our expectations, anticipations, intentions, beliefs or strategies
regarding the future. These forward-looking statements are based on
assumptions that we have made as of the date hereof and are subject
to known and unknown risks and uncertainties that could cause
actual results, conditions and events to differ materially from
those anticipated. Therefore, you should not place undue reliance
on forward-looking statements. Examples of forward-looking
statements include, among others, statements we make regarding
expected future operating results; expectations for development of
new or improved products and services and their impacts on
patients; our strategies, positioning, resources, capabilities and
expectations for future events or performance; and the anticipated
benefits of our acquisitions, including estimated synergies and
other financial impacts.
Important factors that could cause actual results, conditions
and events to differ materially from those indicated in the
forward-looking statements include, among others, the following:
our ability to successfully and profitably market our products and
services; the acceptance of our products and services by patients
and healthcare providers; our ability to meet demand for our
products and services; our reliance upon certain suppliers,
including suppliers that are the sole source of certain supplies
and products used in our tests and operations; approval and
maintenance of adequate reimbursement rates for our products and
services within and outside of the U.S.; the amount and nature of
competition for our products and services; the effects of any
judicial, executive or legislative action affecting us or the
healthcare system; recommendations, guidelines and quality metrics
issued by various organizations regarding cancer screening or our
products and services; our ability to successfully develop and
commercialize new products and services and assess potential market
opportunities; our ability to effectively enter into and utilize
strategic partnerships and acquisitions; our success establishing
and maintaining collaborative, licensing and supplier arrangements;
our ability to obtain and maintain regulatory approvals and comply
with applicable regulations; our ability to protect and enforce our
intellectual property; the results of our validation studies and
clinical trials, including the risks that the results of future
studies and trials may differ materially from the results of
previously completed studies and trials; our ability to manage an
international business and our expectations regarding our
international expansion and opportunities; our ability to raise the
capital necessary to support our operations or meet our payment
obligations under our indebtedness; the potential effects of
changing macroeconomic conditions, including the effects of
inflation, interest rate and foreign currency exchange rate
fluctuations, and geopolitical conflict; the possibility that the
anticipated benefits from our business acquisitions will not be
realized in full or at all or may take longer to realize than
expected; the possibility that costs or difficulties related to the
integration of acquired businesses’ operations or the divestiture
of business operations will be greater than expected and the
possibility that integration or divestiture efforts will disrupt
our business and strain management time and resources; the outcome
of any litigation, government investigations, enforcement actions
or other legal proceedings; and our ability to retain and hire key
personnel. The risks included above are not exhaustive. Other
important risks and uncertainties are described in the Risk Factors
sections of our most recent Annual Report on Form 10-K and any
subsequent Quarterly Reports on Form 10-Q, and in our other reports
filed with the Securities and Exchange Commission. We undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Condensed Consolidated
Statements of Operations
(Amounts in thousands, except
per share data)
Three Months Ended March
31,
2024
2023
Revenue
$
637,524
$
602,450
Operating expenses
Cost of sales (exclusive of amortization
of acquired intangible assets)
170,101
156,866
Research and development
110,608
95,419
Sales and marketing
192,365
186,964
General and administrative
243,117
217,295
Amortization of acquired intangible
assets
23,311
22,928
Impairment of long-lived assets
4,446
69
Total operating expenses
743,948
679,541
Other operating loss
(268
)
—
Loss from operations
(106,692
)
(77,091
)
Other income (expense)
Investment income, net
6,213
490
Interest income (expense), net
(7,943
)
4,107
Total other income (expense)
(1,730
)
4,597
Net loss before tax
(108,422
)
(72,494
)
Income tax expense
(1,806
)
(1,657
)
Net loss
$
(110,228
)
$
(74,151
)
Net loss per share—basic and diluted
$
(0.60
)
$
(0.42
)
Weighted average common shares
outstanding—basic and diluted
182,350
178,574
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Condensed Consolidated Balance
Sheets
(Amounts in thousands)
March 31, 2024
December 31, 2023
Assets
Cash and cash equivalents
$
347,487
$
605,378
Marketable securities
304,606
172,266
Accounts receivable, net
240,584
203,623
Inventory
128,534
127,475
Prepaid expenses and other current
assets
99,059
85,627
Property, plant and equipment, net
702,041
698,354
Operating lease right-of-use assets
142,017
143,708
Goodwill
2,367,052
2,367,120
Intangible assets, net
1,866,856
1,890,396
Other long-term assets, net
178,085
177,387
Total assets
$
6,376,321
$
6,471,334
Liabilities and stockholders’
equity
Convertible notes, net, current
portion
$
248,810
$
—
Current liabilities
436,299
514,701
Convertible notes, net, less current
portion
2,066,805
2,314,276
Other long-term liabilities
329,384
335,982
Operating lease liabilities, less current
portion
162,405
161,070
Total stockholders’ equity
3,132,618
3,145,305
Total liabilities and stockholders’
equity
$
6,376,321
$
6,471,334
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Reconciliation of Core
Revenue
(Amounts in thousands)
GAAP
Three Months Ended March
31,
2024
2023
% Change
Screening
$
474,798
$
443,195
7
%
Precision Oncology
162,726
155,432
5
%
COVID-19 Testing
—
3,823
(100
)%
Total
$
637,524
$
602,450
6
%
Non-GAAP
Three Months Ended March
31,
2024 (1)
2023 (1)
% Change
Foreign Currency Impact
(2)
Core Revenue (3)
% Change (3)
Screening
$
474,798
$
443,195
7
%
$
—
$
474,798
7
%
Precision Oncology
159,440
153,391
4
%
(108
)
159,332
4
%
Total
$
634,238
$
596,586
6
%
$
(108
)
$
634,130
6
%
_________________________
(1) Excludes revenue from
COVID-19 testing, the divested Oncotype DX Genomic Prostate Score
test, and the Resolution Bioscience acquisition.
(2) Foreign currency impact is
calculating the change in current period non-U.S. dollar
denominated revenue using the prior year comparative period
exchange rates.
(3) Excludes revenue from
COVID-19 testing, the divested Oncotype DX Genomic Prostate Score
test, the impact of foreign currency exchange rate fluctuations,
and the Resolution Bioscience acquisition.
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Non-GAAP Gross Profit and
Non-GAAP Gross Margin Reconciliations
(Amounts in thousands)
Three Months Ended March
31,
2024
2023
Revenue
$
637,524
$
602,450
Cost of sales (exclusive of amortization
of acquired intangible assets)
170,101
156,866
Amortization of acquired intangible assets
(1)
21,100
20,718
Gross profit
$
446,323
$
424,866
Gross margin
70
%
71
%
Amortization of acquired intangible assets
(1)
21,100
20,718
Non-GAAP gross profit
$
467,423
$
445,584
Non-GAAP gross margin
73
%
74
%
_________________________
(1) Includes only amortization of
intangible assets identified as developed technology assets through
purchase accounting transactions, which otherwise would have been
allocated to cost of sales.
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
EBITDA and Adjusted EBITDA
Reconciliations
(Amounts in thousands)
Three Months Ended March
31,
2024
2023
Net loss
$
(110,228
)
$
(74,151
)
Interest expense (income) (1)
7,943
(4,107
)
Depreciation and amortization
53,943
49,743
Income tax expense
1,806
1,657
EBITDA
$
(46,536
)
$
(26,858
)
Stock-based compensation (2)
73,538
61,897
Investment income
(6,213
)
(490
)
Acquisition and integration costs (3)
10,765
(8,547
)
Impairment of long-lived assets (4)
4,446
69
Loss on sale of asset and divestiture
related costs (5)
268
—
Restructuring (6)
2,936
—
Legal settlement (7)
—
18,936
Reduction-in-force severance (8)
—
907
Adjusted EBITDA
$
39,204
$
45,914
_________________________
(1) Interest expense (income) for the
three months ended March 31, 2023, includes a $10.3 million net
gain recorded on the settlement of convertible notes. This gain
represents the difference between (i) the fair value of the
consideration transferred and (ii) the sum of the carrying value of
the debt at the time of the exchange.
(2) Represents stock-based compensation
expense and 401(k) match expense. The Company matches a portion of
Exact Sciences employees’ contributions annually in the form of the
Company’s common stock.
(3) Represents acquisition and related
integration costs incurred as a result of the Company’s business
combinations. Acquisition costs represent legal and professional
fees incurred to execute the transaction. There were no acquisition
costs incurred for the three months ended March 31, 2024 and 2023.
Integration related costs represent expenses incurred outside
regular business operations, specifically relating to the
integration of businesses acquired through a business combination.
This includes any gain or loss on contingent consideration
liabilities, severance and accelerated vesting of stock awards, and
professional services. The remeasurement of the contingent
consideration liabilities resulted in a loss of $5.6 million and a
gain of $8.9 million for the three months ended March 31, 2024 and
2023, respectively. The Company also incurred severance costs and
professional service fees which were not significant for the three
months ended March 31, 2024 and 2023. The majority of the
professional service fees relate to the integration of information
technology systems.
(4) Represents impairment charges on the
Company’s long-lived assets. For the three months ended March 31,
2024, the Company recorded impairment charges related to certain of
our domestic facilities. For the three months ended March 31, 2023,
the Company recorded an insignificant impairment to a building
lease that was vacated during the first quarter of 2023.
(5) Relates to the sale of the
intellectual property and know-how related to the Company’s
Oncotype DX Genomic Prostate Score® (“GPS”) test to MDxHealth SA
(“MDxHealth”) in August 2022 and the subsequent Second Amendment to
the Asset Purchase Agreement related to the sale in August 2023.
For the three and nine months ended March 31, 2024, this represents
a contingent consideration loss.
(6) Includes costs associated with the
consolidation of operations related to the closure of one of the
Company’s domestic laboratory facilities, which was announced in
October 2023. For the three months ended March 31, 2024, this
primarily includes accelerated stock-based compensation expense and
severance costs.
(7) The Company reached settlements with
the counterparties related to the Medicare Date of Service Rule
Investigation (“DOS Rule Matter”) and the Federal Anti-Kickback
Statute and False Claims Act qui tam lawsuit during the third
quarter of 2023. The Company previously accrued $10 million in the
third quarter of 2021 related to the DOS Rule Matter, and made an
incremental accrual of $18.9 million in the first quarter of 2023
based on the Company’s best estimate of the probable loss on this
matter.
(8) The Company took proactive measures to
address the impact of inflation and market volatility, and also
simplify the organizational structure and prioritize programs that
will have the greatest impact on improving cancer care. This
resulted in a reduction of the Company’s international workforce in
the first quarter of 2023. The adjustment to EBITDA represents
personnel expenses incurred as a result of these proactive
measures, a majority of which includes severance and accelerated
stock-based compensation.
EXACT SCIENCES
CORPORATION
Selected Unaudited Financial
Information
Condensed Consolidated
Statements of Cash Flows and Reconciliation of Free Cash
Flow
(Amounts in thousands)
Three Months Ended March
31,
2024
2023
Net cash used in operating activities
$
(82,311
)
$
(38,215
)
Net cash provided by (used in) investing
activities
(171,438
)
82,941
Net cash provided by (used in) financing
activities
(3,002
)
133,596
Effects of exchange rate changes on cash
and cash equivalents
(1,140
)
550
Net increase (decrease) in cash, cash
equivalents and restricted cash
(257,891
)
178,872
Cash, cash equivalents and restricted
cash, beginning of period
609,675
242,790
Cash, cash equivalents and restricted
cash, end of period
$
351,784
$
421,662
Reconciliation of free cash flow:
Net cash used in operating activities
$
(82,311
)
$
(38,215
)
Purchases of property, plant and
equipment
(37,649
)
(29,360
)
Free cash flow
$
(119,960
)
$
(67,575
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508681304/en/
Investor Contact: Nathan Harrill Exact Sciences Corp.
investorrelations@exactsciences.com 608-535-8659
Media Contact: Morry Smulevitz Exact Sciences Corp.
msmulevitz@exactsciences.com 608-345-8010
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