Exact Sciences announced third-quarter revenues of $118.3 million after it screened about 241,000 people with its Cologuard at-home test for colorectal cancer—a 49% increase in screenings compared to the same quarter the year before, driven by new insurance contracts and a marketing push.
The revenue gains represented a 63% increase compared to 2017’s $72.6 million. More than 11,000 healthcare providers ordered their first Cologuard tests during the this quarter, the company said in a statement, with nearly 132,000 physicians ordering the test since its 2014 FDA approval. Exact Sciences' stock was trading up 14% on the news.
In addition, this year the company inked contracts for Cologuard with nearly 30 health plans covering about 72 million people, including the insurers Cigna and Anthem, Exact Sciences CEO Kevin Conroy said on a conference call with investors, estimating that 92% of Cologuard patients were able to access the test with no out-of-pocket cost.
Based on these results—which it chalked up to increased physician demand and the hiring of about 100 new sales reps, as well as its TV advertisements and messaging around insurance coverage—the Madison, Wisconsin-based company raised its total revenue guidance for the year, to between $435 million and $440 million, up from $420 million to $430 million.
Its average revenue per test was $492, up 9%, while each test’s average cost improved 3% to $125, resulting in a gross margin of 75%. At the end of the quarter, Exact Sciences’ cash-on-hand totaled $1.2 billion.
Last quarter also saw Exact Sciences sign a three-year co-promotion deal with Pfizer, where it trained the Big Pharma’s sales reps to help sell its Cologuard test.
Pfizer committed to spend about $70 million on marketing expenses through December 2021, which Exact Sciences pledged to meet dollar-for-dollar, plus a baseline of $80 million per year on promoting the test, as well as sponsorships and related activities.
After the companies’ first training meeting in October, the Pfizer reps planned to lend their expertise and reach by contacting their network of physicians and health systems, as well as provide help developing Cologuard’s marketing campaigns.
Meanwhile, Exact Sciences is increasing its annual capacity—currently 2.5 million tests—to meet projected future demand, including completing recent building renovations. The company expects new equipment to scale-up its capacity to 3 million tests by the end of the year, with a new lab pushing total capacity to 5 million tests by the end of 2019.
In addition, the company also announced it would replace its IT infrastructure with Epic’s healthcare software suite and electronic medical record system. The platform will handle order entries through delivery of customer care, as the company plans for deeper links with providers and their systems, including with future test offerings. This move makes Exact Sciences the first diagnostic company on Epic’s platform, Conroy told investors.