Exact Sciences Corp (EXAS) 2021 Q2 法說會逐字稿

Good day, and thank you for standing by.

Welcome to the Exact Sciences Corporation Second Quarter 2021 Earnings Call.

(Operator Instructions) Please be advised that today's call is being recorded.

(Operator Instructions)

I would now like to hand the conference over to your speaker today, Ms. Megan Jones.

Please go ahead, ma'am.

Thank you, Leah, and thanks all of you for joining us for Exact Sciences 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 news 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 GAAP 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.

Both can be accessed through our website.

It is now my pleasure to introduce the company's Chairman and CEO, Kevin Conroy.

Thanks, Megan, and thanks to everyone for joining us this afternoon.

We tested 850,000 people in the second quarter with Cologuard, Oncotype DX and 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 access 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.

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 onetime 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 Cologuard 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 3-year rescreening; a 2-point improvement in the Cologuard electronic ordering rate to 45%; 8,000 new health care 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 Oncotype DX breast in the U.S. and internationally.

COVID testing revenue was $33 million.

Second quarter GAAP gross margin was 69%.

Non-GAAP 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 screen test.

Adjusted EBITDA was a loss of $27 million, and we ended the quarter with cash and securities of $1.3 billion.

Turning to our 2021 outlook.

We now expect revenue between $1.705 billion and $1.745 billion, an increase of $10 million to $15 million for the year.

We slightly lowered our screening revenue assumption and now expect between $1.1 billion and $1.125 billion.

We've increased our Precision Oncology revenue assumption and now expect between $530 million and $540 million.

We've also increased our COVID testing revenue assumption and now expect between $75 million and $85 million.

For the third quarter, we expect revenue between $420 million and $435 million.

This assumes screening revenue of $285 million -- of between $285 million to $290 million.

Precision Oncology revenue between $130 million and $135 million, and COVID testing revenue between $5 million and $10 million.

There are 2 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 2 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 costs have been gradually improving, but they are still well below pre-COVID levels.

55% 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 growth in Cologuard orders.

Secondly, in-person wellness visits are limited.

Cancer screening conversations and Cologuard orders typically occur during the 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 sales and marketing expense of $800 million to $850 million.

For G&A, we are raising our guidance to $600 million 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 million 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 to run $95 million for intangible amortization, and CapEx of around $125 million.

I will now turn the call back to Kevin.

Thanks, Jeff.

Exact Sciences is focused on 3 priorities this year, getting more people tested, enhancing our customer experience and 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 4 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 detect precancerous 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 Cologuard's accuracy and convenience make it an ideal option to keep them screened for decades.

A recent study published in Cancer Prevention Research show that Cologuard's specificity is greater than 95% in this age group.

This means that fewer than 1 out of 20 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 rescreen-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 test for at least 9 years, creating strong brand recognition.

Following our acquisitions of Paradigm and Ashion, 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 TAILORx and RxPONDER 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 2 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 the physician for cancer prevention, diagnosis and follow-up.

They complete an Exact Sciences multi-cancer screening test and can monitor the status of their results virtually.

If the test result is positive, our 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, Oncotype MAP can be ordered to help quickly guide them to potential treatments.

Our powerful IT systems will make working with Exact Sciences an easy decision.

The information collected across the patient's health record will automatically translate into actionable options for physicians.

We'll 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 6 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-control 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 in colon cancer blood, we plan to announce top line results from our prospective BLUE-C 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 a tumor-informed liquid biopsy test.

In therapy selection, we plan to release clinical validation data supporting a blood-based version of our tissue 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 pipeline.

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 treatment.

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.

(Operator Instructions) And your first question comes from the line of Brandon Couillard from Jefferies.

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 just talk about kind of what went into your assumptions for 3Q and 4Q and your level of comfort with that scenario?

Kind of what it contemplates in terms of access and maybe an uptick in wellness visits?

First, starting on the guidance adjustment for the second half of the year.

This is an overall $25 million adjustment for screening.

About half of that relates to the $12 million onetime 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 in both access 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 the doctor.

And the more times we call on 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.

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 assume 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 3-year rescreening, we're making very good progress there.

Things are on track for the guidance we outlined previously with rescreen.

Cologuard 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 can -- we will achieve these numbers that are implied in guidance.

And your next question comes from the line of Derik De Bruin for Bank of America.

So just -- can you talk a little bit about the precision medicine franchise?

How much of that was Oncotype and how much of that is sort of like some contributed to some of the acquired products you've had?

And can you also talk a little bit about the competitive landscape there?

There's been some chatter from some private companies about some potential share shifts in that market.

Can you sort of highlight and update us on what's going on in the Oncotype business?

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.

I mean, overall, though, constant currency growth is north of 30%.

I feel very good about the state of this business.

And what it really boils down to, Derik, is the strong evidence, the unmatched evidence out there from both the TAILORx study and the RxPONDER 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 Oncotype MAP business that we launched just in May, that is now launched out to the entire sales force, or the GEM ExTra product that we acquired last quarter.

The GEM ExTra product is off to a very good start.

But most of the growth here was organic, and that franchise is in very good shape.

And your next question comes from the line of Brian Weinstein from William Blair.

With Jake on the call here, I think it's a good opportunity to at least ask him for his thoughts about 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 a question for you, Jake, is what are you most excited about here in the pipeline and why?

And then I'm also curious your view about sort of the biggest challenges that you guys face from a technology standpoint as you look to develop these products.

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, screening, prognosis, minimal residual disease, recurrence therapy selection.

This 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 gives us the confidence 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 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 I feel great about how the pipeline can now truly make a huge impact in the patient care, and that's...

And your next question comes from the line of Doug Schenkel from Cowen.

Okay.

Sorry, problems with the mute button.

I just want to talk a little bit more about Cologuard.

So first [half] 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%.

I just want to make sure I have that right.

And then higher level, but bigger, maybe more important question.

I think we all appreciate the dynamic associated with lack of access to physician offices, especially given, unfortunately, 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 Cologuard awareness 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.

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 physician practice access, and if we don't hear similar commentary from your peers over the course of earnings season, would your outlook change?

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?

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 given 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, the health care 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 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 of 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.

Yes.

So 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 they've ever been.

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.

And they are some of the strongest ordering 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 person.

These are people who think they're healthy.

We're trying to help them find cancer early.

Typically, in diagnostics, you're ordering a test for somebody who's already sick or they've already been diagnosed with something.

The 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 on a doctor, the more they order, that is returning.

So we're very optimistic that as things open up, Cologuard robust growth will continue.

And your next question comes from the line of Catherine Schulte from Baird.

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 2 drivers progressing relative to your expectations?

And related to that, I believe we should be getting a technical update for next year's HEDIS measures pretty soon.

What are your expectations around 45 to 49 getting included in those, following the USPSTF update?

And how big of an impact could that have next year?

Sure, Catherine, this is Jeff.

On rescreening, it's 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 and 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.

Why this is so exciting is there are 19 million people ages 45 to 49.

Essentially, they're all unscreened, 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 50 and over age group when it was first launched.

So things are off to a very good start there.

And I am confident to achieve at least $40 million for that age group.

And your next question comes from the line of Dan Arias from Stifel.

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 sales force 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 3/4 strength by 3Q or by year-end?

I mean what's the base case right now?

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 remain 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 we'll ramp up our growth beyond even what it is today.

So we don't have visibility into how these offices are going to open up.

We just hope people go out and get vaccinated.

And that's our message, and it's our message to our employees and to their families.

It's -- that is the solution.

And once that starts to occur, we'll all be in a better place.

And your next question comes from the line of Vijay Kumar from Evercore ISI.

Jeff, one on the guidance here.

If I understood you correctly, the $12 million reduction in the quarter, that was just on the reimbursements, right, one-off ex which revenues would have been.

Basically it implies your volumes were pretty strong in the quarter.

So I don't understand the -- I guess the back half when you're saying there's another $13 million reduction.

Is that a reimbursement issue or you're just being cautious on the volume side of the equation?

Thanks, Vijay.

The overall guidance adjusted is $25 million, half that is related to the $12 million onetime 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, sales force 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, just we don't expect as much growth as previously based on this recent spike in COVID.

And your next question comes from the line of Andrew Cooper from Raymond James.

Maybe just to take a little bit different angle on some of the same topics.

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 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?

Yes.

This is Jeff.

They're different businesses.

The Precision Oncology business is more heavily dependent on mammograms, which are largely back to normal, did return to normal early 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 thus the backlog Kevin referenced continues to grow.

Cologuard is a solution here.

Cologuard has been growing year-on-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 sales force access decline, again, both temporary, and the teams are doing a nice job in overcoming those.

And I think -- this is Kevin.

I think it really highlights the strength of the Oncotype DX brand for somebody who's been diagnosed with early-stage breast cancer.

A friend of mine was recently diagnosed with -- in early-stage breast cancer, and Oncotype was just automatically ordered in that case by the surgeon.

And it is different because that patient who was diagnosed versus an unscreened healthy patient, many of whom aren't going back into a physician's office.

And we think that we are being appropriately realistic about those 2 dynamics, offices opening and patients' willingness to go back into a primary care setting, especially older patients, which comprise a significant percentage of our screening population.

And your next question comes from the line of Matt Sykes from Goldman Sachs.

Just on the Pfizer sales force.

They've been a little bit more conservative in the past about returning back to the field.

Is the -- 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 doctors' 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?

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.

And -- that certainly is a dynamic because it takes time for them to then -- that to 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 help us deliver good results this year and well in the future.

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 when you see behavior change, both behavior in terms of physicians being more cautious in terms of letting sales force representatives into their office, also patients are also, are more cautious on going out and getting wellness visit.

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 get a physical.

So yes, there is a strong correlation between vaccination rates and COVID and our ability to go out and educate doctors.

And your next question comes from the line of Patrick Donnelly from Citi.

Maybe just following up on an earlier one, Jeff, on the rescreening opportunity.

Can you just talk about how momentum's building there?

How you've refined your message to increase kind of the capture of compliance rate there and keep it as close to the 3-year mark as possible?

And then secondarily, just on electronic ordering, how you're progressing there and again, trying to push volume in that direction?

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, and 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.

So 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.

You 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 1 million more people becoming eligible.

This team is going to get it right.

And we're also seeing 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 rescreening.

And your next question comes from the line of Dan Leonard from Wells Fargo.

Just 2 quick ones for me.

One, Jeff, would you say that your guidance is derisked 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 rates?

Are you able to manage with the current infection rates?

Or do you envision that there's some correlation between case rates and your ability to enroll in your studies?

Dan, on the first one, guidance bakes in everything we know as of today, clearly in the middle of a pandemic with more head fakes than we could probably count right now.

There's a lot of uncertainty out there.

So we've baked in everything we know now.

I can't predict what's going to happen with flu or COVID months from now.

So we're baking 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 Cologuard 2.0 and our colon blood product, we did pause BLUE-C for about 5 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.

And your next question comes from the line of Mark Massaro from BTIG.

I wanted to ask maybe a 2-parter.

I guess, the first is, obviously, there's a lot of investor interest in the MRD space.

You've acquired the Ashion GEM ExTra test.

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 MolDX.

And then another question I had is, can you just -- over the years, you've been certainly looking at a lot of assets.

Last 2 years, you've been pretty highly acquisitive.

Can you just give us a sense for bids dev and just looking at other assets would be super helpful.

Sure.

Thanks, Mark.

So with minimum residual disease testing, we are focused on delivering the very best test for patients, and we love how we're positioned from a scientific expertise and technology standpoint, the combination of Ashion and the TARDIS technology with the proven evidence-generation capability and the deep commercial relationships that we exist.

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, it starts with that tissue.

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 Ashion 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 Ashion.

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 monitored after treatment and we plan to play a very important role in how this technology is adopted, both in the U.S. and globally.

And your next question comes from the line of Jack Meehan from Nephron Research.

Was hoping you could give us some updates on Oncotype MAP, 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?

Jack, this is Jeff.

I'll take that one.

Oncotype MAP is off to a very, very good start.

You'll recall that the 2 key differentiators for that product are, one, the turnaround time.

The majority of our tests are -- report a result within 3 to 5 working days.

So a very quick turnaround time.

And the sample input 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 started covering the test.

It is also covered on 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 Cologuard business, Oncotype DX in 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 time frame, 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.

And your next question comes from the line of Puneet Souda from SVB Leerink.

And Kevin and Jeff, a 2-part question here.

I think you're saying that there are obviously a number of drivers, and we all recognize that.

I mean the first, the 45-year-olds coming into the mix, the 3 years reorders.

There is electronic ordering.

There is greater recognition for Cologuard.

So -- 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 the 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, in the last call that you were heading closer to sort of 50% sales reps sort of doing in-person.

So just trying to understand, if you play that out, maybe second half doesn't recover 100%, maybe it gets to 70% to 80%.

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...

Puneet, 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.

Correct.

And Puneet, 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 rising Delta and the 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.

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.

Sure, sir.

(Operator Instructions)

Well, we hope the next person asks the same question.

So whoever is up next, why don't we go.

(Operator Instructions)

Let's keep moving forward here.

Mr. Souda from SVB Leerink.

Yes.

Sorry.

Just a quick clarification on the data for the blood-based CRC screening study in the second half -- is that -- I just wanted to get the sort of the timing on that?

And is that something you can present at a venue like ACG or a conference like that?

I just want to get the timing on that.

No, which -- the blood-based colon or multi-cancer?

I think, Puneet, the likely timing.

Again, this is dependent on publication and acceptance and conference, but the likely timing for our CRC blood product is in the -- 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 forum in the first half of next year.

And your next question comes from the line of Alex Nowak from Craig-Hallum.

Just a follow-up to Puneet'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.

The 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 the -- ultimately, the FDA approval and reimbursement of that test?

Or do you need more data, do you think?

So with CRC blood, we're excited about the opportunity.

As we've said in the past, we believe that we -- 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 been -- 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-C study and ultimately, FDA approval and making that test available.

Now 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 2 best tests or the 2 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 Cologuard for Stage 1 and 2. That's a high bar for a blood test.

And nobody has been able to show anything close to that.

If you or your loved ones wants to get screened for colon cancer, opt for the most sensitive test.

And we believe that Cologuard, in particular, Cologuard 2.0 is going to set 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 and 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.

So hopefully, that answers, not only the question you asked, but also a question you didn't ask.

And your last question comes from the line of Kyle Mikson from Canaccord Genuity.

So on this $13 million headwind in the second half, in your opinion, is that weighted more towards the wellness visits or the, I guess, sales force access?

I just wanted to know how we should kind of perceive those factors going forward?

And if you could also like similarly rank order maybe some of the drivers of upside that give you some more optimism whether that's Epic or rescreening, et cetera, that would be helpful.

And then just one timing question on the MRD clinical validation data.

Is there any timing you could kind of tell us to better understand how to think about that as well?

This is Jeff.

On the $13 million, if you think of the 2 pandemic-related factors, sales force access and wellness visits, both are very important here.

I want to make that clear.

The -- if you look at the -- where we are relative to prepandemic levels, sales force access is far more impacted.

Still 55% of primary care doctors we've 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 visits are back to, call it, 80%, 90% of prepandemic levels.

As far as MRD data timing, I think was one of them, 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, I mean, look, the beauty of this model is that for screening, there's many growth drivers out there.

There are 45 million people today who need to be screened.

That's a big opportunity.

Sales force is always one of the top drivers in health care for us.

I think it certainly is, and that's why getting the reps back out there in front of physicians is so important.

For 3-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 5 points year-to-date.

That's a nice tailwind.

And we continue to expect at least 50% of Cologuard 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.

And this concludes today's conference call.

Thank you all for participating.

You may now all disconnect.