[Updated 4/27/17 5:29 pm. See below.] A year ago, Exact Sciences’s stock was in a slump, languishing below $10 per share. But since then, its stock price has climbed back to more than $20 per share.
That rally continued Thursday, after the medical diagnostics company released first quarter financial results that handily beat analyst expectations. The news bumped Madison, WI-based Exact’s (NASDAQ: [[ticker:EXAS]]) stock price up more than 26 percent on the day.
The company’s flagship product is Cologuard, a stool-based DNA test for colorectal cancer. The company said it completed about 100,000 of the tests during the three-month period ending March 31. That was ahead of Exact’s projection in February that it would complete at least 88,000 Cologuard tests in the first quarter.
Shares in Exact closed the trading day at $30.14 apiece, up 26.6 percent from Wednesday’s close of $23.80 a share. [This paragraph has been updated to include Exact Sciences’s closing stock price.]
Exact’s revenues for the quarter were $48.4 million, which eclipsed analysts’ average estimate by more than $11 million. The company reported a net loss of 32 cents a share, beating projections by 9 cents a share.
Exact still has yet to turn a profit in the 22 years the company has been in business. However, Kevin Conroy, the company’s CEO and chairman, said in a conference call with analysts Thursday that, “when we look out over the next five years, we do see a very clear path to profitability with Cologuard and the balance sheet that we have today,” according to a transcript of the call on the stock market website Seeking Alpha. [This paragraph has been updated with information from Exact Sciences.]
Cologuard earned FDA approval and Medicare coverage in 2014, and the company began selling the test later that year. To date, about 70,000 clinicians have ordered the test, up from about 60,000 at the end of 2016, Exact said in a press release. About 56,000 primary care providers in the U.S. have ordered the test, Exact said. According to the Agency for Healthcare Research and Quality, there were 208,807 practicing primary care physicians in the U.S. as of 2010. The reason for the discrepancy between the total number of providers who have ordered Cologuard to date (70,000) and primary care providers who have done so (56,000) is that specialty clinicians are counted in the first figure, but not the second, according to an e-mail from JP Fielder, the company’s senior director of corporate communications. Those specialists include gastroenterologists, obstetricians, and gynecologists, Conroy said during the conference call. [This paragraph has been updated with information from Exact Sciences.]
More than 450,000 patients have been screened using Cologuard, Conroy said.
“We believe that increasing patient demand and physician awareness, and Cologuard’s recent inclusion in the [Medicare Advantage] Star Ratings, position our test well for long-term, sustainable growth,” said Conroy, referring to a set of ratings the Centers for Medicare & Medicaid Services publishes each year.
Cologuard is covered by health insurers in the U.S. that have more than 197 million members, the company said, up from 163 million at the start of 2017. One major reason for the increase was Hartford, CT-based Aetna’s (NYSE: [[ticker:AET]]) announcement last month that it had updated its policy to include Cologuard in its list of covered colorectal cancer screening tests.
Exact raised its forecast for total sales in 2017 to between $195 million and $205 million. Previously, the company had projected revenues for the current year would come in between
