Exact Sciences at Raymond James Conference: Strategic Growth and Innovation

On Tuesday, 04 March 2025, Exact Sciences (NASDAQ: EXAS) presented at Raymond James & Associates’ 46th Annual Institutional Investors Conference. CEO Kevin Conroy outlined the company’s ambitious plans to revolutionize cancer diagnostics through new product launches and technological advancements. While highlighting the potential for strong growth and profitability, the company also acknowledged the challenges in developing new tests and expanding market share.

Key Takeaways

• Exact Sciences plans to launch three new cancer diagnostic tests in 2025, including Cologuard Plus, Onco Detect, and CancerGuard.
• The company aims for a 40% market share in colon cancer screening, targeting 14 million screenings annually.
• Financial projections include 48% EBITDA growth this year and over 30% next year, with a 15% compounded top-line growth from 2022 to 2027.
• The Exact Nexus platform, a $1 billion investment, enhances electronic test ordering and patient engagement.
• Collaborations with Mayo Clinic and a focus on DNA, RNA, and proteomics drive innovation.

Financial Results

• 48% EBITDA growth anticipated this year
• Over 30% EBITDA growth guided for next year
• 15% compounded top-line growth projected from 2022 to 2027
• EBITDA margins expected to exceed 20% in the same period
• Gross margins projected to be over 70%
• Electronic billing and collection completed in under 30 days

Operational Updates

• Launching Cologuard Plus in Q2 2025, Onco Detect, and CancerGuard in H2 2025
• 390 health systems are electronically connected, with plans to add 100 more annually
• 75% of test orders are made electronically
• Rescreening automation and digital tools like texts and emails are being implemented to improve patient adherence
• The commercial organization is expanding, with enhanced tools and analytics

Future Outlook

• Aiming to screen 14 million people annually with Cologuard, capturing a 40% market share
• Targeting 19 million Americans aged 45-49 for colon cancer screening
• Exploring international commercialization opportunities for Cologuard
• Continued innovation in cancer diagnostics through DNA, RNA, and proteomics research
• Expecting sustained double-digit growth over the next 15-20 years

Q&A Highlights

• CEO Kevin Conroy emphasized the goal of screening more people with Cologuard than traditional colonoscopies.
• Cologuard Plus boasts a 95% cancer detection rate with fewer false positives.
• Onco Detect offers significant insights, with positive tests indicating a 50-fold increase in recurrence likelihood.

In conclusion, Exact Sciences’ strategic initiatives and technological advancements position it for robust growth in the cancer diagnostics field. For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025:

Andrew Cooper, Analyst, Raymond James: I was gonna do a quick intro and then we can

Kevin Conroy, CEO, Exact Sciences: That’d be great.

Andrew Cooper, Analyst, Raymond James: Perfect. Welcome everybody to, the first post lunch session. I’m Andrew Cooper. I cover diagnostics here at Raymond James. Happy to be joined by the Exact Sciences team.

We do have the full team. CEO, Kevin Conroy, CFO, Aaron Bloomer. We’ve got IR in the audience as well. We’re gonna do a presentation here in this session, and then we’ll head downstairs to Amarante 1 for the breakout session. So I will pass it to Kevin.

Kevin Conroy, CEO, Exact Sciences: Thank you, Andrew. So, one out of two people will be diagnosed with cancer in their lifetime. It’s the number one cause of death of people 85, which in this room, I suspect everybody is 85. There is an a massive transformation going on in the way that cancer is diagnosed, how it’s screened for, and how it’s, treated. And it’s because there’s this now deep understanding that DNA and changes in DNA and alterations in DNA are the drivers of cancer.

So bad DNA causes cancer, changes in DNA causes cancer, causes cancer to evolve. And our deep scientific understanding of the DNA and RNA and proteins associated with cancer are also driving to innovations in diagnostics, and ultimately treatment. That is the underpinning. At Exact Sciences, we are a cancer diagnostics company. We are totally focused on helping helping to eradicate cancer through prevention, early detection, and guiding treatment.

That’s all we are, and and, we’re in the early innings of a massive growth in this field powered by this deep understanding of the disease. So that’s the starting point. This is our safe harbor statement and we’ll be making forward looking statements during the presentation. You can go to our website. What’s unique about Exact Sciences?

We have an incredible team of scientists, a deep understanding of the science. We’ll talk about this a little bit more, which has led to a portfolio of tests. And this year alone, we plan to do something that hasn’t been done in in our field, which is to launch three new advanced tests in major areas of impact in cancer diagnostics. We have the largest and we believe most impactful commercial organization that goes out there, educates health systems, payers, health care providers who order tests, and patients. And this education process is so critical in terms of expanding uptake and ultimately having an impact on this disease.

We also have an incredible technology platform that helps accelerate the growth and adoption of these tests. Why is the technology platform so important? Because being able to electronically order a test, get results for a test, get prior authorizations for a test, bill for a test, remind a patient when when they’re due for their next test is critical to really unlocking patient and clinical value. And we have built on top of Epic. So we’re the only diagnostic company that built the company on top of Epic, which is the industry leading electronic medical record platform with about a hundred apps that surround us.

We’ve invested a billion dollars. We are years ahead of others in the field because of these long term investments, which create efficiencies, greater customer satisfaction, and ultimately, an advantage in the, fast adoption of our test. These this is the underpinning of who Exact Sciences is. This ultimately leads to acceleration in the number of people tested. It also helps us with our industry leading 70 plus percent gross margins, our accelerating operating margins, and ultimately, free cash flow generation.

This is exact sciences. And what’s next is now. We’ve been talking about new product launches in impactful areas for many years, and we’re so proud this year to announce three. Cologuard Plus, which is the next generation of non invasive colon cancer screening, there is no test that performs like this. No other screening test has the same performance as Cologuard Plus.

It sets a brand new standard. Onco Detect is in a space called minimum residual disease testing, helping patients who’ve already been diagnosed with cancer. And Cancer Guard may be the test that will have the biggest impact in in cancer overall, which is a screening test to detect most, if not all cancers. These three tests are in the biggest areas, the biggest fields, the biggest TAMs in diagnostics, and we believe we’ll have the biggest patient impact. We’ll go through each of these in a minute.

Let’s start though with, the two, businesses that we have, our screening business and our precision oncology business. They’re driven by the two strongest and best brands in cancer diagnostics. Cologuard for colon cancer screening and Oncotype DX, which is an essential test to help guide early breast cancer patients to answer the question, should should they get chemotherapy or not? Most of the patients HR positive, HER2 negative, a large subclass of breast breast cancers, the largest subclass of breast cancer patients, get, only about twenty percent benefit from chemotherapy. Oncotype DX definitively answers the question, which twenty percent?

Allowing over the last twenty years patients to move away from chemotherapy, about eighty percent don’t need chemotherapy and twenty percent, so many who thought maybe they didn’t need chemotherapy actually do. So it’s a really transformational test. We have a suite of of products. If there’s a check mark there, that means that product is on market today. And what you see here is Cologuard Plus, CancerGuard, Onco Detect, and also a colon cancer blood test that we’ll talk about.

So 2025 is a huge year. We’re really excited about it. It’s fueled by our science and our scientists. Our Exact Nexus platform, it’s an incredible platform which connects patients with with health care providers, with health systems, and with payers. And what it does is allows a physician to very easy in the workflow that they work in every day, been to a primary care doc.

They spend more time now looking sometimes at a computer screen than they do you. And if your test is not deeply embedded in the EMR, they don’t always see it or have access to it or order it. We made the investment over the last seven years to move on to EPIC, which allows physicians, which is the industry leading EMR, allows physicians to easily order electronically a Cologuard test and now our other tests. Why is this so impactful? Because it’s also the place that they go to see their, the results of a Cologuard test or an Oncotype test.

It’s also the tool that allows you to manage the population level at a health system to run a campaign to get people screened automatically. And only in in a way, only that Cologuard can do that because a patient doesn’t even have to come in to see their doctor get a Cologuard test. It’s done in the privacy of your own home. Really powerful. There we have 390 health systems who are electronically connected.

There are about 700 health systems in The US of size, and we expect to add about a hundred new health systems a year into the exact Nexus ecosystem. 75% of all of our orders come electronically, believe it or not, in the industry. It’s kind of the inverse. Maybe 25% come in electronically, and most it’s still fax orders, believe it or not. Last place fax machines are are still used is in healthcare.

The power of this is that it it allows better patient engagement. When it’s time to be reminded now, you get reminded by your cell phone. That’s that you’re due for a Cologuard test or or that your Oncotype DX results are are ready. You can close what are called care gaps. This is a fast growing part of Exact Sciences, which is payers coming to us and saying, look, we have a hundred thousand of our members who are persistently refusing to get screened for colon cancer.

Can we work with you to ship them Cologuard kits? Yes. We can work with you to appropriately get the right patients a Cologuard kit that need that need a Cologuard kit so that you can get your patient screened. And why do they want their patient screened? Because they actually do care about their patient’s health, and they also care about their quality scores.

Their quality scores drive significant Medicare Advantage bonuses and also bonuses from the commercial plans, that they provide. They also if you’re a CEO of a health plan, you never want it’s a it’s a zero to five star system. You don’t wanna be below four stars. That’s a black mark. And by automating screening, coming to us and saying, please get our patient screened without the patient ever having to go into a doctor’s office, don’t have to go in to get a blood draw, they just have to do the test at home, which we’re becoming really proficient at, it unlocks an enormous amount of value for them.

Improving test adherence and adoption. One of the things we’ve seen over time is an increase in the percentage of people who actually return the Cologuard kit. Yeah. You still have to chase patients down. You do.

They don’t people don’t always, you know, prioritize prevention and early detection. We have a a 21 contact with patients, texts, letters, emails, telephone calls, reminders for them to complete a Cologuard test. We’ve become very proficient and efficient at this over time. And then one of the great things about the Exact Nexus platform, we used to spend an enormous sum of money and effort in in billing payers and getting paid. That has been transformed in the seven years that we’ve been on the Exact Nexus platform because now we can electronically bill and collect in under thirty days.

Industry leading percent recovery, industry leading time frame. It’s it’s a powerful tool for us to be able to unlock capital to invest back into these incredible tests and and back into patients. Cologuard. Okay. So colon cancer is the number two cause of cancer death in The US.

Fifty Thousand people a year die from colon cancer. It’s entirely preventable through screening. With early detection stage one colon cancer, stage one and two, ninety percent survive. Stage one, ninety eight percent survive. Late stage colon cancer, stage four, one in ten people survive.

Screening changes everything. If you haven’t been screened, and I know there are people in this room that are 45 and older who are not up to date with colon cancer screening, go to cologuard.com, answer the questions, order a test. You can do it through a telehealth service. Get screened with a negative test result. Here’s one reason to get a Cologuard test.

If you have a negative Cologuard test, you know that you have a hundredfold less risk of colon cancer. Those are the data. With Cologuard Plus, even better performance, which which is, being launched in the second quarter. So get screened. Encourage, your friends and family to get screened.

Last year, we screened over four million people. Screening colonoscopy screened six million people. I remember sixteen years ago, when I started with Exact Sciences, people said to me, Kevin, if you’ve taken leave of your senses, nobody will do a stool, home based stool test. They’re not gonna do it. They’re not gonna ship us a stool sample home.

Last year, over four million people. Within a few years, we will screen more people with Cologuard than colonoscopy does. And colonoscopy capacity is fixed. It’s known that it’s fixed. They’re just not making more gastroenterologists, not at a fast enough clip to cover all the ones that are retiring.

Cologuard has a potentially nearly infinite number of people that we can screen. And there are fifty million or more people in The US who are not up to date with colon cancer screening. We’re gonna go get those people screened. And doing it with an at home patient friendly test is is the way to do it. The new performance of co of Cologuard Plus is remarkable.

We will get to that. So in the future, we believe that we will achieve about fourteen million people a year getting screened with Cologuard. That equates to about forty percent market share. Cologuard is due every three years. Colonoscopy is ten years, so you have to normalize for that.

But over time, we think we can get north of of forty percent and maybe more than that. So there could be upside to the, to the to the total impact, and that’s US only. We have yet to commercialize Cologuard outside The US. We think that’s a huge opportunity. That has led to strong growth.

Getting people tested every three years is a growth driver. We call that rescreening. So if you’d see that in our presentations, that’s what we’re talking about. Getting people screened every three years. Care gap programs, we’ve talked talked about.

We expect this year to to see an enhanced effort from our commercial organization. We’ve increased the size. We’ve given better tools, analytic tools, and we’ve really increased the rigor, of that commercial team. So we expect to cease lift there. And also, several years ago, the screening age dropped from age 50 to age 45.

So some people still think I am not 50. I don’t need to be screened. Why did they lower it to 45? They lowered it to 45 because the incidence rate among younger Americans with colon cancer is skyrocketing. So there is a huge opportunity here.

Only twenty percent of people age 45 to 49 are screened, and there are nineteen million Americans in that age group. We’re going to go do everything in our power to go get those people screened. We’re also focused on making sure that people stay screened every three years. The problem with, say, a colonoscopy every ten years is that what happens when you somebody develops colon cancer in between ten years? You miss it.

That’s called an interval cancer. The idea with Cologuard every three years, you know, it’s a less expensive way to screen so you can do it more frequently and have that kind of impact to work towards disease eradication. It that’s really important. And if you look at this, the total number there at the top of the of the bar charts, one point two million people were due for their second or third rescreen in 02/2023. One point ’6 million last year.

This year, there will be 2,000,000. And by 2027, there will be three million people due for their rescreen. Today, we’re getting fifty five percent of people screened within twelve months that are due. We’re in the process of automating that. We’re in the process of bringing tools that make it really easy for patients so they don’t have to go back into their doc’s office, because we know people don’t go to their doc’s office every year.

They just don’t do it. Many people go every three years. Some people never go back after a primary care appointment. And this is a way that we can have a lifetime relationship with a with a patient to get 10 or more Cologuard tests over their lifetime. You wanna really work towards disease eradication.

This is how you do it. And this is obviously a significant driver of growth. What are some of the tools we’re using to get people to automatically get rescreened? We’re texting them two simple questions that they answer. If yes to both, that, that information goes to a doctor.

A doctor decides whether, to prescribe a Cologuard test. These are emails doing the same thing. This is a powerful tool for us to digitally activate a patient to remind them to do something that is a once every three years. You know, it’s not like people are great at putting this on their calendar. We can automate this.

Again, without having to go into a doctor’s office, without having to go get a blood draw right in the privacy of your own home. Very, very powerful, tool. How do you do this? I mean, because this it sounds kind of magical. Well, it it is.

Every time I I my favorite part of the work that I do is to work with our scientists. They have such a deep understanding of DNA, of RNA, of proteomics. And the performance of our test has been nobody’s been able to replicate that. And that’s because of the deep scientific connections we have, our deep relationship with the Mayo Clinic, which we’re on our sixteenth year of a collaboration which led to Cologuard and now is leading to other tests like CancerGuard. And it is the deep understanding of this science that allows us to develop tests that are accurate, that are powerful, and that change practice.

Cologuard Plus is one of them. So, Cologuard, the original version, detected ninety two percent of cancers versus ninety five percent with Cologuard Plus. The false negative rate is a hundred minus that number, so it went from the false positive rate went from eight percent to five percent. That’s a significant improvement. The specificity, hundred minus that number is the, false positive rate.

With Cologuard, it was ninety percent specificity. So the false positive rate has gone from ten percent to to six percent. That’s a forty percent reduction. Meaning, forty percent fewer people need to go on to a $2,500 colonoscopy. So there’s a health economic value of this.

And let’s ask the question, has there ever been a screening test with this level of performance? No. Mammography isn’t close. Mammography is maybe eighty percent sensitive for breast cancer. The PSA test, probably ninety percent sensitive, but, you know, what?

A twenty five percent false positive rate? Huge false positive rate. Low dose CT for lung cancer screening, twenty five percent false positive rate. Pretty sensitive, but crazy high false positive rate. Nobody’s ever developed a test with the 95, 90 four.

And so it really changes the game leading to the ability to to lead to recommending to health systems and to health care providers Cologuard first. Go screen your population. You have fifty million people who are not up to date with colon cancer screening. Why are you pushing colonoscopy first when there’s only a capacity of 6,000,000 people a year? We can confidently go to health systems, health care providers with this message.

It’s it’s a powerful tool, and we think it’s going to lead to, accelerated growth into the future. Double digit growth for years to come. And if we do our job, you know, that could be fifteen years. Could it be twenty years? With the growth externally outside The US, we believe it could be.

Now there’s another important area of cancer diagnostics that, there’s been a ton of innovation. So here we are a follower. There, Natera is a company that has done an incredible job of building a market and, meeting a need for patients who have been diagnosed with cancers. Think stage two, three, or four cancer. And the question for those patients after their initial surgery and treatment is did the surgeon and the oncologist get it all?

Is the cancer gone? The MRD test answers that. Onco detect answers that question. There’s also a second question that’s really important, which is, okay, is that cancer coming back? And you can do blood draws to see on a regular basis, is that cancer coming back?

What the data from our first major study showed is that a patient that has a positive Onco Detect test is 50 times more likely to recur than somebody who has a negative test. That prognostic failure is, you know, it’s unheard of in diagnostics. So why do you wanna know that? You could well, because the blood test can see the recurrence ten months before a pet’s PET scan can. And it’s a simple blood draw rather than, a PET scan.

So over time, that allows you the ability to aggressively treat the recurrence before you can even see it on the most sensitive imaging. If it stays negative for a long time I have a friend who was diagnosed with kidney cancer with, two mets, and she has been on Keytruda that that whole time, surgery. There’s those mets disappeared, and there’s no evidence of disease in her blood. MRD test is negative. That’s a powerful indication that at some point, can you go off Keytruda?

She’s unlikely to recur based on the evidence. So this is really a powerful class. Onco Detect, we’re launching into that same customer base of Onco Type DX, which is the industry leading unquestioned global leader in advanced cancer, therapy guidance, and we’re going into the same customer base. And it’s a huge market. It’s expanding rapidly.

There’s lots of room for new ways to test these patients, and we think Onco Detect is gonna provide additional ways to test these these patients. We’re excited about this launch. Our CancerGuard test. So one of the problems with cancer screening is there’s only a handful of ways to screen for cancer. There’s mammography for breast cancer and the PSA test and colon cancer screening and lung cancer screening.

The challenge is that only fourteen percent of all diagnoses are because of screening cancer diagnoses. Eighty six percent are found symptomatically. Well, guess what? By the time you have symptoms, it’s almost by definition stage three or even stage four. And that’s really, it’s a heck of a lot harder to treat late stage cancer, symptomatic cancer than it is, asymptomatic cancer.

And the idea with CancerGuard is to screen a population, ultimately, a hundred million people in The US, billions of people globally, with a blood draw that looks for most cancers. Because cancers have a certain set of DNA abnormalities that our test is exquisite at finding. And if, let’s say, about two percent of people over age 50 are walking around with cancer and they don’t know it. It’s just growing and potentially metastasizing. A blood test can screen a population.

Even if it even a test that only detects fifty percent of cancers, by doing so when it’s asymptomatic, you’re shifting the stage to earlier. And there’s no therapy quite as effective as earlier detection. There’s just no therapy that exists that is effective as finding one stage sooner when maybe surgery or surgery and conventional chemo can treat the disease. So it’s a a powerful tour tool. We’re launching it in the second half of twenty twenty five as a lab developed test.

We don’t ex we expect this initially not to be covered by insurers, and so people will pay out of pocket, out of their health savings account. We we believe we can access about a third of that hundred million patients with this approach, a reasonably priced test that’s highly effective. Our colon cancer blood test. There have been a lot of people who have tried to innovate in this field, and unfortunately, performance just doesn’t meet colonoscopy or Cologuard. And the reason is biology.

There is a biological barrier, between a stage one colon cancer and the blood supply. And there’s a really solid barrier between a precancerous polyp. If you find find and remove a precancerous polyp, you’ve effectively prevented the disease. But the DNA from a precancer, even an early stage one cancer, typically doesn’t make its way back into the blood. So they’re hard to find.

And we have worked on a test. Our our case control data show cancer sensitivity of eighty eight percent, specificity of ninety percent, both not as good as Cologuard Plus. And thirty one percent precancer detection, also not as good as, Cologuard Plus. Being what’s called case controlled studies, this is likely to to be worse in a prospective study, the cancer detection and the pre cancer detection. We expect to complete our, our large 15 plus thousand patient prospective study, run those samples in the middle of this summer with our test, which we hope will provide an additional way to test for people.

But I’ll caution. It’s a long, long road before a blood test gets into the guidelines, gets into those quality measures where that’s really important for payers to consider pain and for patients to to adopt. And we still believe colonoscopy and Cologuard are the two main ways that people will get screened well into, into the future. What are we doing right now with our tests? It’s there’s a hundred work streams going on from manufacturing lots of reagents to, quality control measures to automation to software QC all the way to then testing, 15,000 samples.

So we’re working hard at that. We’ll keep the investor community apprised of this as we move forward. Strong, growth and strong profitability. We generated 48% EBITDA growth this year. We’ve guided to over 30% next year.

And our long term guide, we’ve we’ve guided to a a nice increase this year in 2025 top line, also bottom line. And, between 2022 and 2027, our guidance is 15% compounded over that time frame and over 20% EBITDA margins. We’re well on pace to be able to achieve these targets. We’re We’re excited about 2025, the year ahead. What’s next really is now.

We have lots of new technologies coming to patients, and we can’t wait for that to happen. These are the three key things to take away. We’re accelerating core growth this year. We’re launching three new advanced tests, really impactful tests, and we intend to extend and leverage our platform. This is our vision.

We look forward to taking your questions in in the q and a session downstairs. Thank you very much. Appreciate it, Andrew.

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