EXACT Sciences (EXAS 28.87, +5.07 +21.30%) makes nearly 22-month highs today after this morning’s stellar report and guidance. Further, the advance is being aided today by the company’s five-year agreement with MDxHealth SA for collaboration in the fields of epigenetics and molecular diagnostics.
Now, the Q1 report offered a rather nice beat on market expectations. Earnings per share (EPS) and revenues both came in ahead of expectations at a loss of $0.32 per share and $48.36 million, respectively.
The strong performance was due in large part to EXAS completing about 100,000 Cologuard tests during the quarter ended March 31, 2017. Q1 revenues and completed Cologuard test volume grew 226% and 150% from the same period of 2016, respectively.
Further, EXAS noted that about 10,000 health care providers have ordered their initial Cologuard test during Q1. Since Cologuard was launched, about 70,000 providers have ordered the test through Q1, including about 56,000 of the estimated 200,000 active primary care providers in the United States.
Average cost per test for Q1 was $170, compared to $227 a year ago. EXAS’s gross margin improved from 39% to 65% on a year-over-year basis. The change in revenue recognition contributed about 3 percentage points to Q1 gross margin.
Guidance was also strong as EXAS now anticipates revenue of $195-205 million and completed Cologuard test volume of at least 470,000 tests during 2017. Previous guidance was $170-180 million in revenue and at least 415,000 completed Cologuard tests. For Q2, the company anticipates at least 115,000 completed Cologuard tests.
Changing lanes to the agreement with MDxHealth, the two parties will enter a collaboration in the fields of epigenetics and molecular diagnostics. The agreement builds on a long-standing relationship spanning more than a decade, but the new agreement will allow MDxHealth and EXAS to share proprietary technologies arising from their respective ground-breaking discovery and development efforts in the fields of epigenetics and molecular diagnostics. During the course of the collaboration, the parties may identify opportunities to share technologies in a range of indications, including urologic and lung cancers.
At the same time, with the execution of the collaboration agreement, EXAS is also acquiring MDxHealth patents directed toward colorectal cancer, including its DNA methylation biomarker, NDRG4, as well as technology covering the use of FIT (fecal immunochemical test) in combination with methylation. These acquisitions include one-time fees totaling $15 million, including payments accrued since July 2016.