Exact Sciences Corp at Robert W Baird Global Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tycho Peterson - Jefferies & Company - Analyst : Thanks, Kevin, for that presentation and overview. I wanted to start on the core Cologuard business. So you reiterated the 2024 guide that assumes about 16% year-over-year screening growth. And embedded in that outlook are a couple of drivers to accelerate the second half growth profile. So I wanted to kind of take each of those in turn. . Let's start with rescreening. So you've mentioned that the rescreening pool is about 10% higher in the back half of 24 versus the first half. I wanted to get a sense for how you would characterize your performance overall in successfully capturing the rescreening opportunity, where is rescreening compliance today? And what kind of investments and initiatives are you undertaking to get that higher?

Question: Tycho Peterson - Jefferies & Company - Analyst : Great. Maybe on the care gap orders and the programs that you're seeing here is this something you've been talking about a little bit more as we gotten into 2024, what's your level of visibility on the sequential increases in the back half, on the 2Q call, you mentioned over 100 opportunities with payers and health systems for potential care gap orders. So I guess, as you think about it holistically, what's driving the increased interest and proactive outreach to Exact to kind of fill these care gap orders.

Question: Tycho Peterson - Jefferies & Company - Analyst : Got it. And final driver in the back half would be impact from some of the sales and marketing investments you made earlier this year, Kevin, and I think you kind of characterize the sales force investments is bringing things more in line with 2022. Can you just talk through your level of confidence that this is the right size for Cologuard today.

Question: Tycho Peterson - Jefferies & Company - Analyst : Great. Let's flip over to Cologuard Plus. So you expect FDA approval here in the back half of this year. What additional steps do you need from a lab perspective ahead of the launch? And do you expect this to be a multiyear transition period for both patients and physicians? How do you expect that dynamic to play out with original Cologuard versus Cologuard?

Question: Tycho Peterson - Jefferies & Company - Analyst : Got it. You covered my next question on pricing. We get a lot of questions on that. Can you just remind us the potential for the ADLT pathway for Cologuard Plus and just the elevated value proposition that you see for the product?

Question: Tycho Peterson - Jefferies & Company - Analyst : Got it. Let's flip over to the blood-based program. You mentioned that we're going to get some data next Monday. I guess I know now what I'm going to be doing next Monday morning. But gives you confidence that your assay can demonstrate similar sensitivity and specificity performance with the improved precancer performance that you alluded to in the past. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 2:15PM, EXAS.OQ - Exact Sciences Corp at Robert W Baird Global Healthcare Conference

Question: Tycho Peterson - Jefferies & Company - Analyst : Yes, we're looking forward to it as well in our end.

Question: Tycho Peterson - Jefferies & Company - Analyst : Fair enough. Broadly speaking on blood-based testing, I guess, can you remind us how you see a blood-based test fitting into the exact ecosystem? And how do you envision this test as an opportunity to bring these unscreened patients into your system and potentially bring them on to Cologuard down the road?

Question: Tycho Peterson - Jefferies & Company - Analyst : Yes. We've got about five minutes left. Let's flip over to MRD and the opportunities here. So you mentioned you expect to publish OncoDetect data in CRC patients later this year. I think one of the initial challenges for investors and analysts for MRD is making comparisons across data sets just given patient mix. So I guess how would you frame expectations for performance here? What does success look like? And what do you think is important for an MRD test here as you prepare for launch in '25?

Question: Tycho Peterson - Jefferies & Company - Analyst : Got it. The profitability profile continues to evolve. Yes, I'm going to loop Aaron here on this. So you raised the 2024 adjusted EBITDA guide on the 2Q call, saw a nice acceleration in 2Q. Where are you seeing the most leverage on operating expenses? And just give us a sense for how comfortable you are on that 2027 target of 20% plus.

Question: Tycho Peterson - Jefferies & Company - Analyst : Great. We've got about 15 seconds left. I'm going to sneak in a quick one. You've got a little under $1 billion of cash and equivalents on the balance sheet. At least we're modeling positive free cash flow going forward. So how would you think about capital allocation priorities? Do you think M&A becomes more attractive here going forward? And any particular areas you would look at?

Question: Tycho Peterson - Jefferies & Company - Analyst : Great. Well, I think we're out of time. So we're out there. Kevin, Aaron, thank you so much for your time.