Here is an analysis of Exact Sciences EXAS 0.00%↑ First Quarter results for 2024. The excerpts in italics are taken from the transcript of the conference call.
Transcript
Kevin Conroy: “Highlights from the first quarter include testing more than 1 million people globally for cancer and rare diseases. […], increasing Cologuard adoption in large health systems, organized screening programs among payers and in federally qualified health clinics. Expanding the number of Oncotype DX international ordering providers by more than 20% year-over-year, […].
Launching our hereditary cancer test risk guard to our oncology channel. Announcing the New England Journal of Medicine published results of our pivotal BLUE-C study, which will support FDA approval of Cologuard Plus and generating evidence to support future including OncoDetect, our molecular residual disease test. These achievements reflect our commitment to solving the needs of patients and health care providers, and we're well positioned to achieve our goals for the year. Jeff will now review our financial results for the quarter.”
The first comment on reading these highlights by Kevin Conroy is that they are putting a lot of emphasis in Cologuard and Cologuard v2, which presumably will have the commercial name of Cologuard Plus when it is approved. The first paragraph is an obligatory statement about the magnitude of the testing already taking place at EXAS, highlighting Oncotype DX as one of those tests.
I have said this in the past, and it is still my belief: the money is in cancer screening, and although MRD and other cancer testing assays, like hereditary cancer test risk are important, I don’t think any company is going to grow large unless they have a credible plan for Cancer Screening assays, which for EXAS, it means Cologuard.
Jeff Elliott: Thanks, Kevin. First quarter revenue of $638 million grew 6% on a reported and core revenue basis. Screening revenue of $475 million increased 7%. Recall, screening revenue in the first quarter of last year was very strong and benefited from enhancements to our billing and patient compliance systems and a weak flu season. Growth was 24% on a two-year compounded basis. We expect year-over-year growth to be faster than Q1 for the rest of the year. Precision Oncology revenue grew 5% to $163 million, or 4% on a core basis, excluding FX and M&A. Group was led by Oncotype DX, which expanded 7% globally. Reference Lab agreements were a headwind of $3 million or 2 points of Precision Oncology growth, as we discussed on our last call.
First quarter GAAP gross margin was 70%. Non-GAAP gross margin, excluding amortization of acquired intangibles, was 73%. Margins were slightly lower year-over-year. The added fixed cost of automation brought online temporarily weight in Q1. We expect gross margins will improve over time as we realize the benefits from lab automation, leverage investments in a lab infrastructure and see an increased mix of rescreened patients. Net loss was $110 million. Adjusted EBITDA was $39 million. Of note, G&A included $4 million of unique onetime items related to facilities consolidation and a $6 million of noncash expense related to acquisition earnouts. In the first quarter last year, G&A was reduced by $9 million from a noncash gain related to earn-outs.