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spk13: Good day and thank you for standing by. Welcome to the Exact Sciences Corporation second quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 1 on your telephone. Please be advised that today's call is being recorded. If you require any further assistance during the call, please press star zero. I would now like to hand the conference over to your speaker today, Ms. Megan Jones. Please go ahead, ma'am.
spk12: Thank you, Leah, and thank all of you for joining us for Exact Science's second quarter 2021 conference call. On the call today are Kevin Conroy, the company's chairman and CEO, Jeff Elliott, our chief financial and chief operating officer, and Jake Orville, general manager of our pipeline. Exact Sciences issued a news release earlier this afternoon detailing our second quarter financial results. This skin's release and today's presentation are available on our website at exactsciences.com. During today's call, we will make forward-looking statements based on current expectations. Our actual results may be materially different from such statements. Reconciliations to gap figures are available in our earnings press release, and descriptions of the risks and uncertainties associated with Exact Sciences are included in our SEC filings. Folks can be accessed through our website. It is now my pleasure to introduce the company's chairman and CEO, Kevin Conroy.
spk07: Thanks, Megan, and thanks to everyone for joining us this afternoon. We tested 850,000 people in the second quarter with Cologuard Oncotype DX in our COVID test. The Exact Sciences team remained unwavering in their dedication to our mission and delivered record results for Cologuard and Oncotype. The team delivered in spite of limited sales force and in-person wellness visits due to COVID. Exact Sciences is a leader in advanced cancer diagnostics because of our people, our capabilities, our scientific platform, and our powerful brands. We will transform cancer care with our strong foundation in screening and precision oncology and our pipeline of innovative tests. We have a relentless focus on creating a great company culture with the best team. We are inspired to achieve our mission of cancer eradication. Because of this passion and engagement, Exact Sciences was recently certified as a great place to work for the third year in a row. Today, we will review our second quarter performance, third quarter and full year guidance, and our progress for 2021 priorities. Our CFO and COO, Jeff Elliott, will now review our financial results. Thanks, Kevin.
spk03: Good afternoon. Second quarter revenue was $435 million, an increase of 62%. Screening revenue was $264 million, an increase of 101%. Screening revenue would have been $276 million, but for a one-time downward adjustment of $12 million. The downward adjustment was taken because we missed the contractual deadline for submitting insurance claims on a small percentage of previously completed Cologare tests. The adjustment represents 2% of screening revenue during the relevant time period. We're addressing this by improving our billing systems and processes, and we're confident these enhancements will support our rapid growth in new product launches. Highlights for the second quarter include the highest number of people tested for Cologuard by more than 60,000 tests, a significant increase in the number of lives covered for Cologuard in the 45 to 49 age group, solid contributions from three-year rescreening, a two-point improvement in the Cologuard electronic ordering rate to 45%, 8,000 new healthcare providers ordered Cologuard during the quarter, and nearly 244,000 have ordered since launch. Turning to precision oncology, second quarter revenue was $138 million, an increase of 34%. Growth was primarily driven by AlkaType DX breast in the U.S. and internationally. COVID testing revenue was $33 million. Second quarter gap gross margin was 69%. Non-gap gross margin, which excludes amortization of acquired intangibles, was 74%. Sales and marketing expense was $195 million. The increase was due to investments in our sales and marketing campaigns to support growth. G&A expense was $168 million, including $13 million of acquisition integration costs. R&D expense was $106 million and included $33 million for the acquisition of PFS Genomics. Aside from PFS, growth was driven by our multi-cancer screening test. Adjusted EBITDA with a loss of $27 million, and we ended the quarter with cash insecurities of $1.3 billion. Turning to our 2021 outlook, we now expect revenue between $1.705 and $1.745 billion, an increase of $10 to $15 million for the year. We've slightly lowered our screening revenue assumption and now expect between $1.1 and $1.125 billion. We've increased our precision oncology revenue assumption and now expect between $530 and $540 million. We've also increased our COVID testing revenue assumption and now expect between $75 and $85 million. For the third quarter, we expect revenue between $420 and $435 million. The system screening revenue of between $285 and $290 million. precision oncology revenue between $130 and $135 million, and COVID testing revenue between $5 and $10 million. There are two main pandemic-related dynamics impacting the screening business, reduced physician office access for our field teams, and fewer in-person wellness visits. Since our last earnings call, we have not seen as much improvement in these two factors as previously expected. This is in part due to the recent uptick in COVID cases from the highly contagious Delta variant. Starting with field team access, Cologuard is very promotionally sensitive. The more times we talk to a physician about Cologuard, the more tests they order. In-person sales calls have been gradually improving, but they are still well below pre-COVID levels. Fifty-five percent of primary care physicians are not allowing sales representatives into their office, according to a recent survey we conducted. In offices where we have physician access, we're seeing faster sales than Cologuard orders. Secondly, in-person wellness visits are limited. Cancer screening conversations and Cologuard orders typically occur during a routine wellness visit. That's different from most advanced diagnostics, which are ordered outside of wellness visits. Our survey showed 44% of primary care doctors are doing fewer in-person wellness visits when compared to pre-COVID levels. Turning to operating expense, for the full year, we expect... of $800 to $850 million. For GMA, we are raising our guidance to $600 to $625 million, excluding integration costs. The increase is mainly due to investments in our IT and customer service teams to support our continued growth. For R&D, we expect $410 to $435 million, The acquisition of PFS Genomics was expensed during the second quarter, adding $33 million in R&D costs not contemplated in prior guidance. We continue to expect around $95 million for intangible immunization and CapEx of around $125 million. I will now turn the call back to Kevin. Thanks, Jeff.
spk07: Exact Sciences is focused on three priorities this year, getting more people tested, enhancing our customer experience, in advancing new solutions, starting with our first priority. Cologuard was designed to help screen more people for colorectal cancer and find it earlier when it is curable. According to recent CDC data between 2015 and 2018, Cologuard helped improve screening rates for Americans 50 and older by four percentage points. Our survey data show nearly half of Cologuard users have never been screened for colorectal cancer. Since Cologuard was made available, we estimate that it has helped treat cancerous polyps in more than 200,000 people and early-stage treatable cancer in more than 30,000 people. Cologuard is especially well-positioned to help screen the 19 million Americans ages 45 to 49. The final USPSTF recommendations expanded the screening population by lowering the starting age from 50 to 45. Colon cancer incidence in this age group has increased more than 50% since the mid-1990s. People in their late 40s typically lead busy lives, and Cold Guard's accuracy and convenience make it an ideal option to keep them screened for decades. A recent study published in Cancer Prevention Research showed that Cologuard's specificity is greater than 95% in this age group. This means that fewer than one people will receive an unnecessary colonoscopy following Cologuard, helping screen many people without pressuring colonoscopy capacity. Since the guidelines were finalized, We've seen a significant increase in Cologuard coverage for 45 to 49-year-olds. We recently launched a national Cologuard television, digital, and social media advertising campaign aimed at educating 45 to 49-year-olds about the importance of screening and the benefits of Cologuard. We're making it easier for people to stay up to date with screening after an initial Cologuard test. The number of re-screened eligible patients is growing. This year, more than 600,000 people will become eligible for another Cologuard test. Next year, more than 1 million people become eligible. We're investing in technology to stay connected with our customers and make ordering easier. This gives us confidence we can help keep people screened with Cologuard for years to come. Our precision oncology team is providing better information to guide patients in their cancer treatment decisions. We have established deep relationships with oncologists, pathologists, and surgeons. Nearly half of our oncology sales representatives have been educating physicians about our oncotype tests for at least nine years, creating strong brand recognitions. Following our acquisitions of Paradigm and Ashayan, we're now offering therapy selection tests for patients with advanced cancer, providing even more value to oncologists, researchers, and pharma partners. Our international team and the powerful evidence backing our Oncotype DX breast test are enabling new areas of growth around the globe. Supported by the Taylor-Raxson Responder Studies, Our Oncotype DX breast test was recently approved for national reimbursement in Italy. This makes Oncotype accessible to nearly 25,000 breast cancer patients in Italy. Our international presence will accelerate the availability of future advanced cancer tests all around the world. Moving to our next priority. Exact Sciences plans to transform cancer care by providing patients valuable insights at every step of their diagnosis and treatment. We are working to build the best digital infrastructure and diagnostics. Our vision has two main elements. First, enabling patients to take a more proactive role in their care. Second, making it easy for physicians to order tests interpret results, and personalize medicine by applying real-world evidence and guideline recommendations. Imagine a world where a patient uses an interface on their phone to interact with a physician for cancer prevention, diagnosis, and follow-up. They complete an exact science as multi-cancer screening testing can monitor the status of their results virtually. If the test result is positive, a support system can help schedule a PET-CT to confirm their diagnosis. If cancer is found, an oncotype test may be offered to help determine disease aggressiveness and treatment options. In the coming years, we'll remind the patient to complete testing periodically through that same interface, monitoring for residual disease and cancer recurrence. If the cancer returns after initial treatment, OncotypeMap can be ordered to help quickly guide them to potential treatments. Our powerful IT systems will make working with XactSciences an easy decision. The information collected across a patient's health record will automatically translate into actionable options for physicians. will help provide the right test at the right time, partnering with providers to help bring guideline recommendations to life within their native electronic medical record system. Turning to our next priority, over the next 24 months, we're planning several key milestones to bring six innovative cancer diagnostics from our pipeline to patients in need. This is a culmination of more than a decade of work by the exact sciences team and our partners, including the Mayo Clinic, Johns Hopkins, and now City of Hope. Starting with multi-cancer, next year we expect to share case-controlled data demonstrating the power of combining methylation, mutation, and protein marker classes. We also plan to initiate a prospective interventional randomized trial for FDA registration. Moving to Cologuard 2.0, we plan to share additional case control data, supporting our goal to improve specificity of Cologuard while maintaining sensitivity. For colon cancer blood testing, we plan to share case control data, providing an initial look at test performance. For Cologuard 2.0 and colon cancer blood, we plan to announce top-line results from our prospective Blue Sea study to support FDA approval of both tests and help cement our leadership in colon cancer screening. In the area of minimum residual disease testing, we expect to generate clinical validation data for tumor-informed liquid biopsy tests. In therapy selection, we plan to release clinical validation data supporting a blood-based first test oncotype map. Finally, we expect our Oncoguard liver manuscript to be published in a peer-reviewed journal. This publication will support a Medicare reimbursement submission and future guideline inclusion. We're excited about the depth and breadth of our pipelines. Our scientific capabilities combined with our commercial scale will help us provide several new life-changing cancer solutions to patients in need. The Exact Sciences team is energized to continue growing Cologuard and Oncotype and bring new innovative tests to patients throughout their diagnosis and treatments. Our capabilities, relationships, and foundation will help us achieve our mission of eradicating cancer through the power of advanced diagnostics. We're now happy to take your questions.
spk13: And as a reminder, to ask a question, you will need to press star 1 on your telephone keypad. To withdraw your question, press the pound key. Please be advised that you are only allowed to ask one question. And please stand by now while we compile the Q&A roster. And your first question comes from the line of Brandon Collard from Jefferies. Please go ahead, sir.
spk02: Thanks. Good afternoon. Jeff, in terms of the screening guidance for the back half of the year, it would imply that 4Q growth sequentially steps up to something like 11% despite what is typically weaker seasonality. Can you talk about what went into your assumptions for 3Q and 4Q and your level of comfort with that scenario and what it contemplates in terms of access and maybe an uptick in wellness visits?
spk03: So first, just starting on the guidance adjustment for the second half of the year, this is an overall $25 million adjustment for screening. About half that relates to the $12 million one-time adjustment we took during the quarter, and the other half really relates to some pandemic-related factors that we believe are temporary, namely physician office access and wellness visits. So to your question, Brandon, on assumptions, for the back half of the year, what we're assuming is that we see continued modest improvement to physician offices and overall wellness visits. And we know that when our reps get into a doctor's office, they're very good at educating a doctor. And the more times we call in a doctor, the more they order. That correlation is true today. It has been historically. Again, it is true today where we can see a physician. um what we're seeing right now though is that 55 of physicians we surveyed aren't allowing reps in so again i assume modest continued improvement in these trends i also assumed that the strong momentum we had in the second quarter again this was a record quarter by more than 60 000 people over any other prior quarter I assume that underlying momentum continues. So things like three-year re-screening, we're making very good progress there. Things are on track for the guidance we outlined previously with re-screening. Color barrier 45, we've got very good momentum there. I expect that to continue through the rest of the year. And overall, there's a lot of reasons to be excited in the back half. I think the implied growth rate for Q4 is fairly similar to the rates we've seen in other years. So I am confident that we will achieve these numbers. are implied in guidance.
spk13: And your next question comes from the line of Derek DeBrouse. Please go ahead, sir, for Bank of America.
spk05: Hi. Good afternoon. Hey, Derek. Hey. So just can you talk a little bit about the Precision Medicine franchise? How much of that was Oncotype and how much of that contributed to some of the acquired products you've had. Can you also talk a little about the competitive landscape there? There's been some chatter from some private companies about some potential shareships in that market. Can you sort of highlight and update us on what's going on in the Oncotype business? Thanks.
spk03: The Oncotype business globally had a very, very strong quarter. Again, a record quarter for the organic business. There was a small contribution, not material, but there was a small contribution from acquisitions. Overall, though, constant currency growth of north of 30%. I feel very good about the state of this business. What it really boils down to, Derek, is the strong evidence, the unmatched evidence out there, from both the TAILORx study and the RESPONDER studies. This gives the teams in the field robust evidence to talk to physicians about, and Oncotype DX is really the standard of care. So no change to that. I feel very good about the state of this business. And it provides a very robust foundation for us to grow from. whether it's the aqua type map uh business that we we launched uh just in in may that is now launched out to the entire sales force or the the gem extra product that we acquired uh last quarter the gym extra product is off to a very good start but most of the growth here was organic and that that franchise is in very good shape and your next question comes from the line of brian weinstein from william blair please go ahead sir
spk11: Hey, guys. Thanks for taking the question. You know, with Jake on the call here, I think it's a good opportunity to at least ask him for his thoughts about, you know, that long list of things that, Kevin, that you highlighted as far as what that pipeline really looks like and really starting to round into shape here. So the question for you, Jake, is, you know, what are you most excited about here in the pipeline and why? And then I'm also curious your view about sort of challenges that you guys face from a technology standpoint as you look to develop these products? Thanks.
spk06: Sure, Brian. I mean, what excites me is really the themes you've already heard from Kevin and Jeff. We're just so unique in both the breadth and the depth of our pipeline now. We have a full portfolio of high-impact tests across the entire cancer care continuum and screening, prognosis, minimal residual disease, recurrence, therapy selection. You know, it just really means a lot that we're going to continue to be the trusted source for innovation to both patients and providers across that care continuum. Brian, in addition to the portfolio, we now have the team, the talent, and the scientific expertise that gets us. We're not just going to have a portfolio, but we're going to have a portfolio of the best tests. And we know in the long run, the best test always wins. We're going to continue to bring these tests to market the right way with the right evidence. So, you know, strong portfolio, strong talent, wonderful expertise gives us confidence we're going to have the best test, and we're going to support the evidence to make sure that we demonstrate their utility. What really excites me at this stage is the fact that now we can also innovate at scale. So all of these solutions are now completely turnkey and seamless as they transition into our lab infrastructure, as we leverage our IT connectivity, and as we bring these to our industry-leading commercial team. And that's not just the United States, Brian. That's globally. We already operate in 90 countries. So, you know, I feel great about how the pipeline can now truly make a huge impact into patient care.
spk13: And your next question comes from the line of Doug Schenkel from Cohen. Please go ahead, sir. Mr. Dogshankle, your line is open. Please ask your question.
spk16: Okay. Hi, everybody. Sorry, problems with the mute button. I just want to talk a little bit more about ColaGuard. So first question, screening revenue grew, I think it was around 10% sequentially, based on your commentary and just doing some quick math. Jeff, it seems like volume growth sequentially was 15 to 20 percent. I just want to make sure I have that right. And then higher level, but bigger, you know, maybe more in question. I think we all appreciate the dynamic associated with lack of access to physician offices, especially given, fortunately, you know, the reality that things seem to be trending in the wrong direction in the United States when it comes to COVID. That being said, one might think that things like increased COLA guard, earnest efforts, the repeat testing opportunity, a backed-up colonoscopy infrastructure, amongst other things, some of which you cited in your prepared remarks, would all be positive offsets, you know, especially given the need for more screening and low-market penetration. So, really, my questions are, are you fully confident there's nothing hindering the transition practice access? And, you know, if we don't hear similar commentary from peers over the course of earnings season, would it And do you have any concern that some of your efforts to make Cologuard less dependent longer term on physician detailing may not be proceeding as quickly as you hoped? Thank you.
spk07: Why don't I take that, Doug? The reason that we're tremendously excited about Cologuard and where we are in delivering this record quarter is that driven by the fact that there are so many primary care physicians and nurses, and when you look at the base of who's ordering, and Jeff can give more details on this, Healthcare providers who typically have ordered the least are ordering at a higher rate than previously, especially compared to historically our most frequently ordering physicians. And what this tells you is that, yes, Cologuard is always going to be sensitive to patients to visits by our field force, and that's because of the nature of the patient. The patient here is a patient who comes in who isn't sick. And in a time like this, there's a triage occurring in the primary care setting focusing on problems with diabetes and obesity and high blood pressure and other serious conditions that physicians and nurses are triaging. And so they get around to prevention and screening after all of that. And what this tells you, the net of this is that there's tremendous strength in Cologuard and that strength is broadening and deepening. And we know as these offices start to reopen, and as we see more of the appropriate wellness visit patients into the offices, that we will see even stronger growth because, again, it's the best customers are the ones who aren't growing at the pace that you would expect, and maybe Jeff could add to that.
spk03: Just to add to that, the data Kevin referred to is we look at different quintiles of doctors, and what we see is very, very encouraging. The bottom 60% of doctors, based on pre-COVID ordering levels, when you look back, at them over time, they continued to ramp throughout the COVID pandemic. In fact, in second quarter, their order rates are at the highest season over event. So that group is driving the growth. And these are the physicians who had not previously fully adopted Cologuard. Where we see a slightly different dynamic is the top 40%. These are the true believers. They are some of the strongest ordered physicians. Their orders are down on average about 15%. And why that is, is because their wellness visit volumes are down probably somewhere in that range. And recall, Cologuard is ordered primarily during a wellness visit. One difference between Cologuard and most other diagnostics out there is that Cologuard is ordered for the asymptomatic average risk. These are people who think they're healthy. We're trying to help them find cancer early. Typically in diagnostics, you order and it asks for somebody who's already sick or they've already been diagnosed with something. So Cologuard is unique. The top 40% of doctors, they will come back. This is a temporary dynamic. They'll come back as wellness visits return and office access improves. So I am confident that will happen. Where it is happening, where our reps can get back in there, this correlation we've talked about for many years, the more times you call a doctor, the more they order, that is returning. So we're very optimistic that as things open up, Cologuard robust growth will continue.
spk13: And your next question comes from the line of Katherine Schultz from Bayer. Please go ahead, ma'am.
spk01: Hey, guys. Thanks for the questions. Towards the beginning of the year, you talked about expecting at least $40 million from 45 to 49 and over $100 million from rescreens. How are those two drivers progressing relatively? be getting the technical update for next year's HEDIS measures pretty soon. What are your expectations around 45 to 49 getting included in those following the USPSPF update, and how big of an impact could that have next year?
spk03: So, again, this is Jeff. On rescreening, this is a very exciting opportunity. There's a lot of good news there. I am very confident that we will achieve at least $100 million of revenue this year for Cologuard. And next year, that number will continue to grow. As you know, next year, over 1 million more people become eligible for rescreening. On top of that, why rescreens are so exciting is that those patients – that get a rescreen order comply at a much higher rate, over 10 points higher than the first-time screening. And the team we have dedicated to this is doing a fantastic job at going out and getting more people retested. Cologuard 45, off to another very good start. And why this is so exciting, there are 19 million people ages 45 to 49. Essentially, they're all on screens, and we believe Cologuard is the ideal test for that age group. Things are off to a very good start there. In fact, if you compare the initial trajectory of the adoption for that age group, it is pacing above the trajectory that Cologuard had in the 15-over age group when it was first launched. So things are off to a very good start there, and I am hoping to achieve at least $40 million for that age group.
spk13: And your next question comes from the line of Dan Arias from Stifel. Please go ahead, sir.
spk18: Good afternoon, guys. Thanks for the questions. Kevin or Jeff, I know the situation is fluid, and so confidence around a number is certainly not 100%. But can you just give us a sense of how, in your mind, you're thinking about Salesforce activity and the rebound there just through the end of the year when it comes to the screening outlook? I mean, are you assuming that you're back to three-quarter strength by 3Q or by year-end? I mean, what's the base case right now?
spk07: Oh, I don't think it's going to be at that level before the end of the year. It's taking a step back. With the uptick in COVID over the last month, and we expect that to accelerate just like we've seen it previously, we expect that offices are going to continue to be conservative. We don't have greater visibility into this than probably what you have, which is this is an important driver long-term, and also long-term keep in mind that we There are 45 million Americans that remained unscreened. Cologuard is a perfect solution to catch up on the backlog to capture the 45 to 49 population. And when things do start to open up, we believe that we will – that will ramp up our growth beyond even what it is today. So, you know, we don't have – visibility into how these offices are going to open up. We just told people go out and get vaccinated, and that's our message, and it's our message to our employees and to their families. That is the solution, and once that starts to occur, we'll all be in a better place.
spk13: And your next question comes from the line of Vijay Kumar from Evercore ISI. Please go ahead, sir.
spk06: Hey, guys. Thanks for taking my question. Jeff, I want one on the guidance here. If I understood you correctly, the $12 million reduction in the quarter, that was just on the reimbursement side, right? One off. X, which revenues would have been, basically, it implies your volumes were pretty strong in the quarter. um so i don't understand the uh the uh i guess the back half when you're saying there's another 30 million reduction is that a reimbursement issue or you're just being cautious on the volume side of the equation
spk03: Thanks, Vijay. The overall guidance adjustment of $25 million, half that is related to the $12 million one-time adjustment in Q2. The other half, call it $12 million, $13 million, is based on our updated look at the back half of the year. So, what Kevin just talked about, Salesforce access out in the field and wellness visits, given the recent spike in COVID cases, things are not improving at the pace we had previously expected so we continue to expect growth in the back half um just we don't expect as much growth as previously based on this recent spike in culprit understand and your next question comes from the line of andrew cooper from raymond james please go ahead sir hi everyone thanks for the question uh maybe just to take a little bit different angle on on some of the same topics
spk09: you know, the precision oncology space was strong. You talked about Oncotype DX breast, and a lot of that volume comes from screenings that needed to occur kind of flowing through the pipeline. So maybe just walk us through, you know, why is it that business is coming back stronger versus you're getting more cautious on the screening side? Is there a timing dynamic we should be thinking about in terms of just flowing through that funnel or anything else we should think about in terms of why One working through the backlog might be happening a little bit faster and one maybe a little bit slower in terms of getting back into the wellness swing of things.
spk03: This is Jeff. There are different businesses. The precision oncology business is more heavily dependent on mammograms. which are largely back to normal, did return to normal earlier in the year. So that's a different dynamic. Also, you have the fact that around 40% of breast cancer diagnoses in this country start at home through a self-exam or pain, which is different than colon cancer. Colon cancer overall is still muted in this country and has been, so the backlog Kevin referenced continues to grow. solution here. Cologuard has been growing year and year since June of a year ago, so Cologuard is helping address this problem, but it is a different animal. The headwinds that we are up against in Cologuard are wellness visit decline and Salesforce access decline, again, both temporary, and it seems they're doing a nice job in overcoming those.
spk07: And I think it, this is Kevin, I think it really highlights the strength of the Ancathet DX brand for somebody who's been diagnosed with uh early stage uh breast cancer a friend of mine was recently diagnosed with uh in early stage breast cancer and archetype was just automatically uh ordered in that case uh by the surgeon um and it's um it it is different because uh that patient who uh was uh diagnosed versus uh uh an unscreened uh healthy patient many of whom aren't going back in into a physician's office and we think that we are being appropriately realistic about those two dynamics offices opening and patients willingness to go back into a primary care setting especially older patients which comprises significant percentage of our screening populations
spk13: Any next question comes from the line of Matt Sykes from Goldman Sachs. Please go ahead, sir.
spk17: Thanks very much for the question. Just on the Pfizer Salesforce, they've been a little bit more conservative in the past about returning back to the field. Are they still back deployed? And if we get a resurgence, may they pull back? And then Secondly, are you seeing any correlation? I know regionally there's been a lot of differences in terms of vaccination rates. Are you seeing any correlation between access to doctor's offices and wellness visits in areas that have higher rates of vaccination so we can kind of extrapolate that as we see vaccination rates rise?
spk07: Our partner Pfizer has been a great partner. They have an amazing field force with an average of like 14 years of experience in a primary care setting. They've been an amazing partner. They did come back to the field in late May. Truthfully, that's later than we would have hoped. But we understand every company has to make their own decisions. That certainly is a dynamic because it takes time for them to then have an impact on people whose tests get completed. There's obviously a lag between the time a test is ordered and the time that a test is completed. Pfizer helps us reach more physicians, and we're always evaluating ways to make that partnership better and stronger. And we think that their team will deliver good results this year.
spk03: Matt, this is Jeff. I'll take the other part of the question, which I believe was on vaccination rates and the impact. Yes, the correlation really comes down to where you have higher vaccination rates, you have lower or I'll say fewer new cases being diagnosed. And when you see hotspots form, and we've seen this over the whole course of the pandemic, where hotspots arise, that's behavior change, both behavior in terms of physicians being more cautious in terms of letting Salesforce representatives into their office. are also more cautious than going out and getting wellness visits. If you think you're healthy, you're not worried about anything right now, and there's a COVID spike, you're less likely to go out there and then get a physical. So, yeah, there is a strong correlation between vaccination rates and COVID and our ability to go out and educate doctors.
spk13: And your next question comes from the line of Patrick Donnelly from Citi. Please go ahead, sir.
spk04: Thanks, guys. Maybe just following up on an early one, Jeff, on the rescreening opportunity, can you just talk about how momentum is building there, how you've refined your message to increase kind of the capture compliance rate there and keep it as close to the three-year mark as possible? And then secondarily, just on electronic ordering, how you're progressing there and, again, trying to push volumes that direction.
spk03: Patrick, I've never been more excited about rescreening. This is a hugely important part of our business. Our goal is to get more people screened and keep them screened over the course of their lives. We are getting more successful really by the week at doing just that. As you know, over 600,000 more people become eligible this year. It's something we've invested in and we're seeing improvement in. What it boils down to is that when a patient gets that rescreen order, they comply at a very, very high rate. Our communication with patients has been exceptional. Where we've seen even more improvement as of late is our communication to physicians. The goal here is to make rescreening or reordering, if you will, automatic. We want to make it exceptionally easy for a physician to identify who needs to be tested again and for them to place that repeat order. So that's where the efforts have been, and I'm really proud of what this team has accomplished. There's even more in store. With next year over a million more people becoming eligible, this team is going to get it right. We're also seen the time after they become eligible, the time to them actually completing the test is improving. So there's a lot of good news to report on re-screening.
spk13: And your next question comes from the line of Dan Leonard from Wells Fargo. Please go ahead, sir.
spk06: Great. Thank you. Just two quick ones for me. One, Jeff, would you say that your guidance is de-risked at this point if we were to have a real flu season in the fourth quarter, as it looks like we might, or is that still something which could impact access? And then secondarily, how sensitive do you think your clinical trial and clinical research timelines would be to the current case rate? Are you able to manage with the current infection rates, or do you envision that... you know, there's some correlation between case rates and your ability to enroll in your studies. Thank you.
spk03: Dan, on the first one, you know, guidance based on everything we know as of today, clearly in the middle of a pandemic with more headaches than we could probably count right now, there's a lot of uncertainty out there. So we've based on everything we know now. I can't predict what's going to happen with flu or COVID months from now. So we've based on everything that's out there in the news that you and I can both see. On the case rates, those can impact enrollment. You recall last year, as we were trying to enroll our blue C study, which, again, is for coli 2.0 and our colon blood product, we did pause blue C for about five months last year because of this massive spike in cases. So it can impact, and if we do see a big spike, it will continue to impact enrollment in some of our case studies.
spk13: And your next question comes from the line of Mark Mazzaro from BTIG. Please go ahead, sir.
spk10: Hey, guys. Thanks for taking the question. I wanted to ask maybe a two-parter, I guess. The first is, you know, obviously there's a lot of investor interest in the MRD space. You know, you acquired the Ashayan Jim Extra test. I'm curious how that integration is going. I believe you're trying to merge that into the TARDIS technology. And so I guess can you maybe comment about timing of data or potential submission to Moldex? And then another question. Another question I had is, can you just, you know, over the years, you've been certainly looking at a lot of assets. You know, last two years, you've been pretty highly acquisitive. Can you just give us a sense for, you know, biz dev and just looking at other assets would be super helpful. Thanks.
spk07: Sure. Thanks, Mark. So with minimum residual disease testing, we are focused on delivering the very best tests for patients, and we love how we're positioned from a scientific expertise and technology standpoint, the combination of a Cheyenne and the TARDIS technology with the proven evidence generation capability and the deep commercial relationships that we exist with. So the next steps then would be to optimize the test, generate validation data, prepare to make that test available to patients. It's a natural fit with our breast cancer capabilities, Oncotype DX. We're seeing about half of all breast cancer patients' tissue samples. The tumor-informed approach starts with that tissue sample. the deep relationships we have with oncologists. And then TARDIS. So TARDIS is a really powerful targeted sequencing chemistry, and we believe it will allow us to achieve the highest level of sensitivity without sacrificing specificity. And then a Cheyenne has this proven ability to do this difficult sequencing. It's not just the sequencing capabilities, it's the bioinformatics. And this is a well-oiled machine. Our partnership with City of Hope and other teams around the country are important, and we have already signed partnerships relating to multiple studies to prove out the capability that we have with TARDIS and Ashayan. It's important. It's about a $15 billion total available market, and today the class is less than 1% penetrated. It's going to change the way that cancer is treated, is after treatment, and we plan to play a very important role in how this technology is adopted, both in the U.S. and globally.
spk13: And your next question comes from the line of Jack Meehan from Nefron Research. Please go ahead.
spk14: Thank you. Good afternoon. Good afternoon. I was hoping you could give us some updates on Oncotype math, whether covered lives, how much revenue it might have contributed after the May launch. And then also, I know it's going through the code pricing process now at CMS. Any sort of bogey you're thinking about where that could shake out in terms of pricing?
spk03: Jack, this is Jeff. I'll take that one. Oncotype MAP is off to a very, very good start. You recall that the two key differentiators for that product are, one, the turnaround time. The majority of our tests are reported result within three to five working days, so a very quick turnaround time. And the sample import requirement for the test is very low, which allows us to report a result out on a very high percent of patients. you think about the average person who uses this test they have late stage cancer they need an accurate result quickly and we can help play a very important role in that decision coverage off to a very good start here we've had multiple large payers start covering the test it is also covered by medicare already this really speaks to the power of the exact sciences platform here we've got deep relationships with payers when you think about the colo guard business architect dx and breast prostate, and now MAP. The broad and deep relationships we have allow us to achieve a high level of coverage as we bring new products to market. So things are off to a very good start with MAP. In the May timeframe, that test has now been launched to the entire precision oncology sales force. So about 100 reps, as Kevin talked in his remarks, these are very experienced reps, and they are hungry for new products. So I know this team is going to do a very good job in launching that test.
spk13: And your next question comes from the line of Puneet Sudha from SVB Learing. Please go ahead.
spk05: Great. Thanks, Kevin and Jeff. Two-part question here. I think you're saying that, you know, there are obviously a number of drivers, and we all recognize that. I mean, the first 45-year-olds coming into the mix, the three-years reorders, there is electronic ordering, there is greater recognition for Cologuard. So, you know, but despite all that, the rep access is low, and I appreciate your details on the lowering of the guide in the second half for Cologuard. But we're seeing that, sure, there is some hesitancy for the oncology reps to enter clinics because these patients are immunocompromised. But primary care practices are just trying to open more broadly. They're trying to get back to normal. Jeff, I think you talked about maybe, I think it's the last call, that you were heading closer to, you know, sort of 50% sales reps sort of doing in-person visits. So just trying to understand, you know, if you play that out, maybe second half doesn't recover 100 percent. Maybe it gets to 70 to 80 percent. But and I appreciate your survey and I appreciate the Delta variant is still out there. But why access to primary care practices would continue to sort of decline in the second half? And then just a quick clarification on the clinical data for the blood-based CRC.
spk07: Let's take these one at a time. So we are, to make it clear, we are not projecting that access declines in the second half. It's not increasing at the rate that we would have expected to, largely because of the current situation with the pandemic.
spk03: Correct. And, Twinita, I think to put some numbers behind it, The data we had cited on prior calls was the total number of face-to-face details in primary care. That did improve modestly during the second quarter. To Kevin's point, I expect it to improve in the back half of the year. It's just with the rise in Delta and this huge spike in case counts, and for what we're seeing just with our own data, I don't expect it to improve as much as we previously thought.
spk07: I wanted to make sure we got that question, Puneet, before we took the second one. To the person who is, would you let Puneet finish his second question since I rudely interrupted?
spk13: Sure, sir. And Mr. Puneet, please press star 1 again for you to be placed on cue.
spk07: Well, we hope the next person asks the same question. So whoever is up next, why don't we go?
spk13: And I'm not seeing his line. Press star 1 again for a second question, sir. Should we proceed? Oh, I'm sorry. He's now back in the queue.
spk03: Let's keep moving forward here.
spk13: Okay. Mr. Soda from SVV Learing, please go ahead, sir.
spk05: Yeah. Hey, guys. Sorry. And thank you, Kevin, for setting me back in. Just a quick clarification on the data for the blood-based CRC screening study in the second half. Is that – just wanted to get sort of the timing on that, and is that something you can present at a venue like ACG or a conference like that? Just wanted to get the timing on that. And thank you again for squeezing my questions. Thank you.
spk07: No, which – the blood-based colon or multi-cancer?
spk03: Puneet, the likely timing, again, this is dependent on publication and acceptance and conference, but the likely timing for our CRC blood product is sometime in the next year, the first half of next year. This is case control data. Multi-cancer case control data also likely to be published at a scientific conference in the first half of next year.
spk05: Okay. Appreciate it, guys. Thank you. Thanks, Puneet.
spk13: And your next question comes from the line of Alex Nolox. I'm Craig Howland. Please go ahead.
spk15: Hey, good afternoon, everyone. Just a follow-up to Penny's question there. Just on the case control data for CRC blood, Kevin, you said in the prepared remarks it's going to be an initial look. That label initial seems to be new around the case control data. So am I right there? And if not, do you still expect the data to support ultimately the FDA approval and reimbursement of that test? Or do you need more data, do you think?
spk07: So with CRC blood, we're excited about the opportunity. As we've said in the past, we believe that the test that we've developed with the curated methylation panel and potentially other marker classes that we haven't disclosed will generate sensitivity and specificity equal to or better than others that have shown their data publicly. We've had the luxury of not having to show our data. And when I say initial, I don't mean initial to us. I mean initial to the public. And that data, we think, will support continued progress as we move forward with our Blue Sea study and ultimately FDA approval and making that test available. It also makes sense to comment on where we think a blood test fits into the overall schema of colon cancer screening modalities. Today, clearly, the two best tests or the two best ways to get screened for colon cancer are colonoscopy and Cologuard. Why? Early detection is what matters the most. And with colonoscopy and Cologuard, the guideline groups point to 95% sensitivity for colonoscopy, 94% sensitivity for a Cologuard for stage 1 and 2. That's a high bar for a blood test, and nobody's been able to show anything close to that. If you or your loved one wants to get screened for colon cancer, opt for the most sensitive test. And we believe that a Cologuard, in particular Cologuard 2.0, is going to set yet a new bar for noninvasive colon cancer screening, and the ease of use is actually easier than a blood draw. So there's been a thesis out there that blood kind of reinvents the game. The data aren't there to show that either from a sensitivity specificity standpoint or from an ease of use standpoint. It's why we believe we'll have a range of tests available. We continue to believe that if you're going to get screened, it's either with Cologuard or colonoscopy and don't opt for the FIT test or blood test that is present today. Hopefully that answers not only the question you asked, but also a question you didn't ask.
spk13: And your last question comes from the line of Kyle Mixon from Canaccord Genuity. Please go ahead, sir.
spk08: Thanks. Hi, guys. Thanks for taking the questions. So on this $13 million headwind in the second half, in your opinion, does that weigh more towards the wellness visits or the, I guess, self-service access? I just wanted to know how you kind of perceive those factors going forward. And if you could also, like, similarly rank the order, maybe some of the drivers are upside, that gives you some more optimism, whether that's epic or rescreening, et cetera, that'd be helpful. And then just one timing question on the MRD clinical validation data. Is there any, you know, time you could kind of tell us to better understand how to think about that as well? Thank you.
spk03: This is Jeff. On the $13 million, if you think of the two pandemic-related factors, Salesforce access, both are very important here. I want to make that clear. If you look at where we are relative to pre-pandemic levels, Salesforce access is far more impacted. Still, 55% of primary care doctors we surveyed say they are not allowing primary care reps into their offices so that one's much farther from where it would have been wellness users are back to call it um eighty percent ninety percent of pre-pandemic levels um as far as mrd data type The timing of that, at some point next year, we haven't been more specific than that, but next year, very good progress being made in MRD. As far as growth drivers, the beauty of this model for screening, there are many growth drivers out there. There are 45 million people today who need to be screened. That's a big opportunity. Salesforce is always one of the top drivers in healthcare for us. I think it certainly is. That's why getting the reps back out there in front of physicians is so important. For three-year rescreening, this year I've guided to at least $100 million, so that's another really big one. Longer-term rescreens become, I would think, at least half of our revenue, so that one will be a big driver for many years to come. Electronic ordering, we're up five points year-to-date. That's a nice tailwind, and And we continue to expect at least 50% of co-located orders to be electronic by year-end. So, these factors are all very important, and they actually work together. So, it's hard to say which one is the most important, but they're all important together. I do want to clear up one thing I said in my remarks. Guidance for COVID testing for the year is $75 million to $80 million. I think in my remarks, I said $75 million to $85 million. We're looking for $75 million to $80 million.
spk13: And this concludes today's conference call. Thank you all for participating.
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