Exact Sciences nearly quadrupled its advertising spending in 2016 as it sought to build a customer base for its flagship product. The television ad blitz seemed to work, said leaders at the company earlier this week, when Exact reported fourth-quarter earnings. The company’s profit-and-loss results came in above many analysts’ estimates, sending its stock to a 52-week high.
Madison, WI-based Exact (NASDAQ: EXAS), which is developing screening tests for a variety of cancers, had previously disclosed several figures related to financial and business performance for the three-month period ending Dec. 31. However, Tuesday was the first time the company reported net losses of $37.2 million ($0.34 per share) and $167.2 million ($1.63 per share) for the fourth quarter and 2016, respectively. Analysts at Robert W. Baird & Co. had projected Exact’s fourth-quarter loss would be $0.36 per share.
Exact’s stock price was $22.41 a share when the closing bell rang on Tuesday, up 12.6 percent from Friday’s closing price of $19.91 per share. Following the earnings announcement, shares hit a 52-week high of $23.68 apiece before giving back some of those gains. (For reference, the lowest Exact’s stock price has been in the past year is $4.67 a share.) Wednesday marked another positive day for the company’s stock, with shares in Exact climbing another 28 cents each, or 1.2 percent, to $22.69 per share.
A press release the company put out on Tuesday mentions several of the same figures Exact first made public last month. The company completed 244,000 of its flagship stool-based DNA screening tests for colorectal cancer, known as Cologuard, in 2016. Just over one-third of that total—about 82,000 tests—were completed in the year’s final three months. Exact also said revenues for 2016 were $99.4 million, which is in line with the forecast the company provided in January.
Kevin Conroy, CEO of Exact Sciences, said in a conference call with analysts that his company’s national television campaign for Cologuard has been successful and Exact plans to continue it throughout 2017.
According to a report filed with federal securities regulators, the company spent $38.1 million on media advertising in 2016, up from $10.8 million in 2015.
During the conference call, Conroy said the television ads are specifically targeted at doctors, who are typically the ones helping patients to understand the risks of colorectal cancer.
“Our goals for the national television campaign are to grow the number of physicians who order Cologuard for the first time and to increase the reorder rate of existing prescribers,” Conroy said, according to a transcript of the call on the stock market website Seeking Alpha.
As Exact announced last month, nearly 60,000 healthcare providers have ordered Cologuard for patients. More than 9,500 of them ordered the test for the first time during the fourth quarter.
Conroy said there are more than 200,000 primary care physicians in the U.S., which he believes gives his company “a long runway for growth.”
During the call, Maneesh Arora, Exact’s chief operating officer, said simplifying the process of ordering Cologuard using an electronic patient records system would help further boost the number of ordering physicians. It’s a strategy the company has talked about before.
“One of the key headwinds that we have seen is physicians would rather order electronically,” Arora said. “It’s one of our key priorities for our entire organization to get more orders electronically.”