For Exact Sciences, could a long journey to reach profitability—21 years and counting—be nearing a close?
Madison-based Exact (NASDAQ: EXAS), which received regulatory approval for its flagship stool-based DNA screening test for colorectal cancer in 2014, posted better-than-expected results in the fourth quarter of 2016, according to preliminary numbers released Sunday. The company said it completed 82,000 of the tests, known as Cologuard, in the three-month period that ended Dec. 31, eclipsing the company’s previous forecast that it would complete a minimum of 78,000 tests in the fourth quarter.
The results received plaudits from analysts and investors. The company’s shares closed Monday at $17.98 apiece, the highest mark since October and up about 19.1 percent from Friday closing price of $15.10 a share.
Analysts at Robert W. Baird & Co. wrote in a research note published Monday that they expect Exact “will reach initial profitability” in 2019. The company has recorded a net loss every year since 1996, the year after Exact was incorporated, according to regulatory filings. (See the company’s annual reports for 2000, 2003, 2007, 2011, and 2015, which collectively show revenue and expense information each year from 1996 to 2015.)
If Exact were to turn a profit in the next couple years, it would be a long time coming for the company, which was originally headquartered in Marlborough, MA, before moving to Wisconsin in 2009.
Exact announced the preliminary fourth-quarter and 2016 totals, which the company said have not been reviewed by auditors, just before the start of the J.P. Morgan Healthcare Conference. Exact said earlier this month that it will present at the conference on Jan. 12. In advance of the session, the company posted the slides it plans to show.
According to a press release Exact put out on Sunday, the company completed 244,000 tests of Cologuard last year. That beat the company’s projection of 240,000 completed tests in 2016 when it reported third-quarter earnings in October.
The company said it expects 2016 revenues to be at least $99 million, up from about $39.4 million in 2015. In October, Exact forecasted that its total sales for 2016 would be between $93 million and $95 million. For the fourth quarter, revenues are expected to be at least $34.9 million, ahead of the company’s previous projection of at least $28.9 million.
The company said that nearly 60,000 healthcare providers have ordered Cologuard for patients. Nearly 16 percent of them ordered the test for the first time during the fourth quarter, Exact said.
“Strong demand for Cologuard from both patients and healthcare providers reflects the great need for this innovative, easy-to-use colon cancer screening test,” Kevin Conroy, Exact Sciences’ CEO, said in a prepared statement.
As of last week, Cologuard was covered by health plans in the U.S. that have more than 163 million members, the company said. That is in part the result of Exact adding several large insurers in recent months, including Humana (NYSE: HUM) and TRICARE.
Exact did not disclose profit-and-loss information for the fourth quarter or 2016 in the release. The company is scheduled to officially report fourth-quarter earnings in February, at which time Exact will also likely share projections for 2017.
Conroy appeared on a Fox Business segment taped early Monday morning in San Francisco, where the J.P. Morgan conference is being held. He brought along a screening kit for Cologuard, which is designed in part to help determine whether a patient should follow up on a test by getting a colonoscopy. Conroy said that colorectal cancer is known as the “most preventable, but least prevented,” of all cancers.
“Only about half of people that should get a colonoscopy actually do,” he told host Maria Bartiromo. “Too much of the focus has been on [cancer] therapies, and not enough on early detection.”