MADISON, Wis., July 30, 2020 /PRNewswire/ -- Exact Sciences
Corp. (Nasdaq: EXAS) today announced that the company generated
revenue of $268.9 million for the
second quarter ended June 30, 2020, compared to $199.9 million for the same period of 2019.
"Cologuard helps solve the problem of COVID-related missed
cancer screenings because it's a convenient, accurate, at-home
test, and we believe this will accelerate adoption," said
Kevin Conroy, Chairman and CEO.
"COVID-19 is elevating the importance of our Precision Oncology
tests, as patients and physicians look for smarter, faster answers
to guide their cancer treatment decisions. As diagnostic testing
continues to play a larger, more important role in cancer care,
Exact Sciences is in a unique position to create value at every
step along the way."
Second Quarter 2020 Financial Results
For the three-month period ended June
30, 2020, as compared to the same period of 2019 (where
applicable):
- Total revenue was $268.9 million,
compared to $199.9 million
- Screening revenue was $131.3
million, a decrease of 34 percent
- Precision Oncology revenue was $103.0
million
- COVID-19 testing revenue was $34.6
million
- Gross margin including amortization of acquired intangible
assets was 63 percent, and non-GAAP gross margin excluding
amortization of acquired intangible assets was 71 percent
- Other operating income consisted of a one-time payment of
$23.7 million from the Coronavirus
Aid, Relief, and Economic Security (CARES) Act Provider Relief
Fund
- Net loss was $86.1 million, or
$0.58 per share, compared to a net
loss of $38.5 million, or
$0.30 per share
- EBITDA was $(26.0) million and
adjusted EBITDA was $(4.9)
million
- Non-cash interest expense related to convertible debt was
$20.1 million, compared to
$10.7 million
- Cash, cash equivalents, and marketable securities were
$1.2 billion at the end of the
quarter
Screening includes laboratory service revenue from Cologuard and
revenue from Biomatrica products. Precision Oncology includes
laboratory service revenue from global Oncotype DX products and the
recent Paradigm acquisition.
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. The company presents
EBITDA, adjusted EBITDA, as well as non-GAAP gross margin and
non-GAAP gross profit. 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. The company believes
that these non-GAAP measures are useful in evaluating the company's
operating performance. The company uses this non-GAAP financial
information to evaluate ongoing operations and for internal
planning and forecasting purposes. 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. For a reconciliation of these non-GAAP measures to
GAAP, see below "EBITDA and Adjusted EBITDA Reconciliations" and
"Non-GAAP Gross Profit and Non-GAAP Gross Margin
Reconciliations."
Second Quarter Conference Call & Webcast
Company
management will host a conference call and webcast on Thursday, July 30, 2020, at 5 p.m. ET to discuss second quarter 2020 results.
The webcast will be available at www.exactsciences.com. Domestic
callers should dial 833-235-7650 and international callers should
dial +1-647-689-4171. The access code for both domestic and
international callers is 8183605.
An archive of the webcast will be available at
www.exactsciences.com. A replay of the conference call will be
available by calling 800-585-8367 domestically or 416-621-4642
internationally. The access code for the replay of the call is
8183605. The webcast, conference call and replay are open to all
interested parties.
About Cologuard
Cologuard 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.
Cologuard is included in the American Cancer Society's (2018)
colorectal cancer screening guidelines and the recommendations of
the U.S. Preventive Services Task Force (2016) and National
Comprehensive Cancer Network (2016). Cologuard 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 Cologuard if you have had precancer, have
inflammatory bowel disease and certain hereditary syndromes, or
have a personal or family history of colorectal cancer. Cologuard
is not a replacement for colonoscopy in high risk patients.
Cologuard performance in adults ages 45-49 is estimated based on a
large clinical study of patients 50 and older. Cologuard
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
diagnostic 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 Cologuard. For more
information about Cologuard, visit www.cologuardtest.com. Rx
only.
About Oncotype DX
The Oncotype DX® portfolio of
breast, colon and prostate cancer tests applies advanced genomic
science to reveal the unique biology of a tumor in order to
optimize cancer treatment decisions. In breast cancer, the Oncotype
DX Breast Recurrence Score® test is the only test that has been
shown to predict the likelihood of chemotherapy benefit as well as
recurrence in invasive breast cancer. Additionally, the Oncotype DX
Breast DCIS Score test predicts the likelihood of recurrence in a
pre-invasive form of breast cancer called DCIS. In prostate cancer,
the Oncotype DX Genomic Prostate Score® test predicts disease
aggressiveness and further clarifies the current and future risk of
the cancer prior to treatment intervention, and the Oncotype DX
AR-V7 Nucleus Detect™ test helps determine which patients with
metastatic castration-resistant prostate cancer (mCRPC) are
resistant to androgen receptor (AR)-targeted therapies. The
Oncotype DX AR-V7 Nucleus Detect test is performed by Epic Sciences
at its centralized, CLIA-certified laboratory in San Diego and offered exclusively by Exact
Sciences. With more than 1 million patients tested in more than 90
countries, the Oncotype DX tests have redefined personalized
medicine by making genomics a critical part of cancer diagnosis and
treatment. To learn more about Oncotype DX tests, visit
www.OncotypeIQ.com, www.MyBreastCancerTreatment.org or
www.MyProstateCancerTreatment.org.
About Exact Sciences Corp.
A leading provider of
cancer screening and diagnostic tests, Exact Sciences relentlessly
pursues smarter solutions providing the clarity to take
life-changing action, earlier. Building on the success of Cologuard
and Oncotype DX, Exact Sciences is investing in its product
pipeline to take on some of the deadliest cancers and improve
patient care. Exact Sciences unites visionary collaborators to help
advance the fight against cancer. For more information, please
visit the company's website at www.exactsciences.com, follow Exact
Sciences on Twitter @ExactSciences, or find Exact Sciences on
Facebook.
Forward-Looking Statements
This news release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that are intended to
be covered by the "safe harbor" created by those sections.
Forward-looking statements, which are based on certain assumptions
and describe our future plans, strategies and expectations, can
generally be identified by the use of forward-looking terms such as
"believe," "expect," "may," "will," "should," "would," "could,"
"seek," "intend," "plan," "goal," "project," "estimate,"
"anticipate" or other comparable terms. All statements other
than statements of historical facts included in this news release
regarding our strategies, prospects, expectations, financial
condition, operations, costs, plans and objectives are
forward-looking statements. Examples of forward-looking statements
include, among others, statements we make regarding expected future
operating results, anticipated results of our sales, marketing and
patient adherence efforts, expectations concerning payer
reimbursement, and the anticipated results of our product
development efforts. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on our current beliefs, expectations and
assumptions regarding the future of our business, future plans and
strategies, projections, anticipated events and trends, the economy
and other future conditions. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict
and many of which are outside of our control. Actual results,
conditions and events may differ materially from those indicated in
the forward-looking statements. Therefore, you should not rely on
any of these forward-looking statements. Important factors that
could cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the following: uncertainties associated with
the coronavirus (COVID-19) pandemic, including its possible effects
on our operations and the demand for our products and services; our
ability to efficiently and flexibly manage our business amid
uncertainties related to COVID-19; 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; the success
of our efforts to facilitate patient access to Cologuard via
telehealth; the willingness of health insurance companies and other
payers to cover our products and services and adequately reimburse
us for such products and services; the amount and nature of
competition for our products and services; the effects of the
adoption, modification or repeal of any law, rule, order,
interpretation or policy relating to the healthcare system,
including without limitation as a result of any judicial, executive
or legislative action; the effects of changes in pricing, coverage
and reimbursement for our products and services, including without
limitation as a result of the Protecting Access to Medicare Act of
2014; recommendations, guidelines and quality metrics issued by
various organizations such as the U.S. Preventive Services Task
Force, the American Society of Clinical Oncology, the American
Cancer Society, and the National Committee for Quality Assurance
regarding cancer screening or our products and services; our
ability to successfully develop new products and services and
assess potential market opportunities; our ability to effectively
enter into and utilize strategic partnerships, such as through our
Promotion Agreement with Pfizer, Inc., and acquisitions; our
success establishing and maintaining collaborative, licensing and
supplier arrangements; our ability to maintain regulatory approvals
and comply with applicable regulations; our ability to manage an
international business and our expectations regarding our
international expansion and opportunities; the potential effects of
foreign currency exchange rate fluctuations and our efforts to
hedge such effects; the possibility that the anticipated benefits
from our business acquisitions cannot 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 will be greater than expected and the possibility of
disruptions to our business during integration efforts and strain
on management time and resources; the outcome of any litigation,
government investigations, enforcement actions or other legal
proceedings; and the other risks and uncertainties described in the
Risk Factors and in Management's Discussion and Analysis of
Financial Condition and Results of Operations sections of our most
recently filed Annual Report on Form 10-K and our subsequently
filed Quarterly Reports on Form 10-Q. 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.
Investor Contact:
Megan
Jones
Exact Sciences Corp.
meganjones@exactsciences.com
608-535-8815
Media Contact:
Cara
Connelly
Exact Sciences Corp.
cconnelly@exactsciences.com
608-284-5735
EXACT SCIENCES
CORPORATION Selected Unaudited Financial
Information Condensed Consolidated Statements of
Operations (Amounts in thousands, except per share
data)
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
$
|
268,868
|
|
|
$
|
199,870
|
|
|
$
|
616,689
|
|
|
$
|
361,913
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Cost of sales
(exclusive of amortization of acquired intangible
assets)
|
77,892
|
|
|
51,139
|
|
|
159,498
|
|
|
93,966
|
|
Research and
development
|
32,673
|
|
|
29,972
|
|
|
76,182
|
|
|
61,757
|
|
Sales and
marketing
|
118,862
|
|
|
88,190
|
|
|
286,611
|
|
|
179,129
|
|
General and
administrative
|
106,685
|
|
|
63,723
|
|
|
220,676
|
|
|
127,529
|
|
Amortization of
acquired intangible assets
|
23,430
|
|
|
748
|
|
|
46,769
|
|
|
1,508
|
|
Total operating
expenses
|
359,542
|
|
|
233,772
|
|
|
789,736
|
|
|
463,889
|
|
|
|
|
|
|
|
|
|
Other operating
income
|
23,665
|
|
|
—
|
|
|
23,665
|
|
|
—
|
|
Loss from
operations
|
(67,009)
|
|
|
(33,902)
|
|
|
(149,382)
|
|
|
(101,976)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Investment income,
net
|
2,912
|
|
|
7,669
|
|
|
3,009
|
|
|
14,324
|
|
Interest
expense
|
(22,912)
|
|
|
(12,712)
|
|
|
(48,065)
|
|
|
(34,702)
|
|
Total other income
(expense)
|
(20,000)
|
|
|
(5,043)
|
|
|
(45,056)
|
|
|
(20,378)
|
|
|
|
|
|
|
|
|
|
Net loss before
tax
|
(87,009)
|
|
|
(38,945)
|
|
|
(194,438)
|
|
|
(122,354)
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
867
|
|
|
443
|
|
|
2,599
|
|
|
913
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(86,142)
|
|
|
$
|
(38,502)
|
|
|
$
|
(191,839)
|
|
|
$
|
(121,441)
|
|
|
|
|
|
|
|
|
|
Net loss per
share—basic and diluted
|
$
|
(0.58)
|
|
|
$
|
(0.30)
|
|
|
$
|
(1.29)
|
|
|
$
|
(0.95)
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding—basic and diluted
|
149,727
|
|
129,182
|
|
148,938
|
|
127,723
|
EXACT SCIENCES
CORPORATION Selected Unaudited Financial
Information Condensed Consolidated Balance
Sheets (Amounts in thousands)
|
|
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
703,926
|
|
|
$
|
177,254
|
|
Marketable
securities
|
518,731
|
|
|
146,401
|
|
Accounts receivable,
net
|
163,608
|
|
|
130,667
|
|
Inventory,
net
|
82,215
|
|
|
61,724
|
|
Prepaid expenses and
other current assets
|
36,378
|
|
|
40,913
|
|
Property, plant and
equipment, net
|
463,437
|
|
|
455,325
|
|
Operating lease
right-of-use assets
|
132,751
|
|
|
126,444
|
|
Goodwill
|
1,237,672
|
|
|
1,203,197
|
|
Intangible assets,
net
|
1,105,115
|
|
|
1,143,550
|
|
Other long-term
assets, net
|
23,902
|
|
|
20,293
|
|
Total
assets
|
$
|
4,467,735
|
|
|
$
|
3,505,768
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
Total current
liabilities
|
$
|
222,274
|
|
|
$
|
236,494
|
|
Convertible notes,
net
|
1,534,383
|
|
|
803,605
|
|
Long-term debt, less
current portion
|
22,944
|
|
|
24,032
|
|
Other long-term
liabilities
|
50,311
|
|
|
34,911
|
|
Operating lease
liabilities, less current portion
|
126,630
|
|
|
118,665
|
|
Total stockholders'
equity
|
2,511,193
|
|
|
2,288,061
|
|
Total liabilities and
stockholders' equity
|
$
|
4,467,735
|
|
|
$
|
3,505,768
|
|
EXACT SCIENCES
CORPORATION Selected Unaudited Financial
Information EBITDA and Adjusted EBITDA
Reconciliations (Amounts in thousands)
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net loss
|
$
|
(86,142)
|
|
|
$
|
(38,502)
|
|
|
$
|
(191,839)
|
|
|
$
|
(121,441)
|
|
Interest
expense
|
22,912
|
|
|
12,712
|
|
|
40,111
|
|
|
24,144
|
|
Investment
income
|
(2,912)
|
|
|
(7,669)
|
|
|
(3,009)
|
|
|
(14,324)
|
|
Depreciation and
amortization
|
41,056
|
|
|
7,880
|
|
|
80,401
|
|
|
15,015
|
|
Income tax
benefit
|
(867)
|
|
|
(443)
|
|
|
(2,599)
|
|
|
(913)
|
|
EBITDA
|
$
|
(25,953)
|
|
|
$
|
(26,022)
|
|
|
$
|
(76,935)
|
|
|
$
|
(97,519)
|
|
Stock-based
compensation
|
38,780
|
|
|
20,143
|
|
|
65,522
|
|
|
36,309
|
|
Loss on settlement of
convertible notes
|
—
|
|
|
—
|
|
|
7,954
|
|
|
10,558
|
|
Acquisition and
integration costs (1)
|
3,719
|
|
|
—
|
|
|
11,768
|
|
|
—
|
|
Reduction-in-force
severance (2)
|
2,198
|
|
|
—
|
|
|
2,198
|
|
|
—
|
|
CARES Act Funding
(3)
|
(23,665)
|
|
|
—
|
|
|
(23,665)
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
(4,921)
|
|
|
$
|
(5,879)
|
|
|
$
|
(13,158)
|
|
|
$
|
(50,652)
|
|
|
|
|
|
|
|
|
(1) Represents
acquisition and related integration costs incurred as a result of
the company's combination with Genomic Health. Acquisition and
integration costs were $3.7 million and $11.8 million for the three
months and six months ended June 30, 2020. The costs primarily
consist of legal and other professional service fees and
incremental stock-based compensation including the fair value of
stock awards assumed by the company in connection with the Genomic
Health combination. Legal, severance, and other professional
service fees were $2.4 million and $7.7 million for the three
months and six months ended June 30, 2020. Incremental stock-based
compensation including the fair value of assumed stock awards was
$1.3 million and $4.1 million for the three months and six months
ended June 30, 2020, respectively.
|
|
|
|
|
|
(2) Represents
severance costs as a result of proactive measures the Company put
in place to address the impact of the COVID-19 pandemic. The
severance cost resulting from this workforce reduction was $2.2
million for the three months and six months ended June 30,
2020.
|
|
|
|
|
|
(3) As part of the
Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"),
the Company received $23.7 million from the United States
Department of Health and Human Services Provider Relief Fund
provided to eligible healthcare providers. The CARES Act funds are
meant to offset the implications of the COVID-19 pandemic which
include increases in the Company's costs and lost
revenues.
|
|
EXACT SCIENCES
CORPORATION Selected Unaudited Financial
Information Non-GAAP Gross Profit and Non-GAAP Gross
Margin Reconciliations (Amounts in
thousands)
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
$
|
268,868
|
|
|
$
|
199,870
|
|
|
$
|
616,689
|
|
|
$
|
361,913
|
|
Cost of sales
(exclusive of amortization of acquired intangible
assets)
|
77,892
|
|
|
51,139
|
|
|
159,498
|
|
|
93,966
|
|
Amortization of
acquired intangible assets (1)
|
20,555
|
|
|
424
|
|
|
41,018
|
|
|
849
|
|
Gross
profit
|
$
|
170,421
|
|
|
$
|
148,307
|
|
|
$
|
416,173
|
|
|
$
|
267,098
|
|
Gross
margin
|
63
|
%
|
|
74
|
%
|
|
67
|
%
|
|
74
|
%
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangible assets (1)
|
20,555
|
|
|
424
|
|
|
41,018
|
|
|
849
|
|
Non-GAAP gross
profit
|
$
|
190,976
|
|
|
$
|
148,731
|
|
|
$
|
457,191
|
|
|
$
|
267,947
|
|
Non-GAAP gross
margin
|
71
|
%
|
|
74
|
%
|
|
74
|
%
|
|
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.
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SOURCE EXACT SCIENCES CORP