MADISON, Wis., Feb. 16,
2021 /PRNewswire/ -- Exact Sciences Corp. (Nasdaq: EXAS) today
announced that the company generated revenue of $466.3 million for the fourth quarter ended
Dec. 31, 2020 and $1,491.4
million for the full year ended Dec.
31, 2020.
"Exact Sciences finished another transformative year by
delivering strong fourth quarter results against a challenging
backdrop because of the pandemic," said Kevin Conroy, chairman and CEO of Exact
Sciences. "We are a leader in cancer diagnostics because of our
people, scientific platform, and market-leading Cologuard and
Oncotype tests. We aim to extend this leadership throughout the
cancer continuum and bring additional tests to patients to help
improve cancer outcomes."
Fourth Quarter 2020 Financial Results
For the three-month period ended December 31, 2020, as compared to the same period
of 2019 (where applicable):
- Total revenue was $466.3
million
- Screening revenue was $249.7
million, an increase of 9 percent
- Precision Oncology revenue was $117.6
million
- COVID-19 testing revenue was $99.1
million
- Gross margin including amortization of acquired intangible
assets was 74 percent, and non-GAAP gross margin excluding
amortization of acquired intangible assets was 79 percent
- During the fourth quarter of 2020, the Company acquired Base
Genomics, which was treated as an asset acquisition under U.S. GAAP
and resulted in a $412.6 million
charge to research and development expense
- Net loss was $(436.8) million, or
$(2.79) per share, compared to net
income of $78.0 million, or
$0.56 and $0.54 per basic and diluted share.
- EBITDA was $(375.5) million and
adjusted EBITDA was $87.9
million
- Non-cash interest expense related to convertible debt was
$21.3 million, compared to
$11.5 million
- Cash, cash equivalents and marketable securities were
$1,840.0 million at the end of the
quarter
Screening includes laboratory service revenue from Cologuard and
revenue from Biomatrica products. Precision Oncology includes
laboratory service revenue from global Oncotype products.
Non-GAAP Disclosure
In addition to the company's
financial results determined in accordance with U.S. GAAP, the
company provides non-GAAP measures that it determines to be useful
in evaluating its operating performance. The company presents
EBITDA, adjusted EBITDA, as well as non-GAAP gross margin and
non-GAAP gross profit. EBITDA and adjusted EBITDA consist of
net loss after adjustment for those items shown in the table below.
The company defines non-GAAP gross profit and non-GAAP gross margin
as GAAP gross profit and GAAP gross margin, respectively, excluding
amortization of acquired intangible assets. The amortization of
acquisition-related intangible assets used in the calculation of
non-GAAP gross profit and non-GAAP gross margin pertain only to the
amortization associated with developed technology acquired and
recorded through purchase accounting transactions. The amortization
of these intangible assets will recur in future periods until such
intangible assets have been fully amortized. The company believes
that these non-GAAP measures are useful in evaluating the company's
operating performance. The company uses this non-GAAP financial
information to evaluate ongoing operations and for internal
planning and forecasting purposes. Non-GAAP financial information,
when taken collectively, may be helpful to investors because it
provides consistency and comparability with past financial
performance. However, non-GAAP financial information is presented
for supplemental information purposes only, has limitations as an
analytical tool and should not be considered in isolation or as a
substitute for financial information presented in accordance with
U.S. GAAP. For example, non-GAAP gross margin and non-GAAP gross
profit exclude the amortization of acquired intangible assets
although such measures include the revenue associated with the
acquisitions. For a reconciliation of these non-GAAP measures to
GAAP, see below "EBITDA and Adjusted EBITDA Reconciliations" and
"Non-GAAP Gross Profit and Non-GAAP Gross Margin
Reconciliations."
Fourth Quarter Conference Call & Webcast
Company
management will host a conference call and webcast on Tuesday, February 16, 2021, at 5 p.m. ET to discuss fourth quarter and full-year
2020 results. The webcast will be available at
www.exactsciences.com. Domestic callers should dial 833-235-7650
and international callers should dial +1-647-689-4171. The access
code for both domestic and international callers is 2892148.
An archive of the webcast will be available at
www.exactsciences.com. A replay of the conference call will be
available by calling 800-585-8367 domestically or +1-416-621-4642
internationally. The access code for the replay of the call is
2892148. The webcast, conference call and replay are open to all
interested parties.
About Cologuard
Cologuard was approved by the FDA in
August 2014, and results from Exact Sciences' prospective
90-site, point-in-time, 10,000-patient pivotal trial were published
in the New England Journal of Medicine in March 2014.
Cologuard is included in the American Cancer Society's (2018)
colorectal cancer screening guidelines and the recommendations of
the U.S. Preventive Services Task Force (2016) and National
Comprehensive Cancer Network (2016). Cologuard is indicated to
screen adults 45 years of age and older who are at average risk for
colorectal cancer by detecting certain DNA markers and blood in the
stool. Do not use Cologuard if you have had precancer, have
inflammatory bowel disease and certain hereditary syndromes, or
have a personal or family history of colorectal cancer. Cologuard
is not a replacement for colonoscopy in high risk patients.
Cologuard performance in adults ages 45-49 is estimated based on a
large clinical study of patients 50 and older. Cologuard
performance in repeat testing has not been evaluated.
The Cologuard test result should be interpreted with caution. A
positive test result does not confirm the presence of cancer.
Patients with a positive test result should be referred for
diagnostic colonoscopy. A negative test result does not confirm the
absence of cancer. Patients with a negative test result should
discuss with their doctor when they need to be tested again.
Medicare and most major insurers cover Cologuard. For more
information about Cologuard, visit www.cologuardtest.com. Rx
Only.
About Oncotype DX
The Oncotype DX® portfolio of
breast, colon and prostate cancer tests applies advanced genomic
science to reveal the unique biology of a tumor in order to
optimize cancer treatment decisions. In breast cancer, the Oncotype
DX Breast Recurrence Score® test is the only test that has been
shown to predict the likelihood of chemotherapy benefit as well as
recurrence in invasive breast cancer. Additionally, the Oncotype DX
Breast DCIS Score test predicts the likelihood of recurrence in a
pre-invasive form of breast cancer called DCIS. In prostate cancer,
the Oncotype DX Genomic Prostate Score® test predicts disease
aggressiveness and further clarifies the current and future risk of
the cancer prior to treatment intervention, and the Oncotype DX
AR-V7 Nucleus Detect™ test helps determine which patients with
metastatic castration-resistant prostate cancer (mCRPC) are
resistant to androgen receptor (AR)-targeted therapies. The
Oncotype DX AR-V7 Nucleus Detect test is performed by Epic Sciences
at its centralized, CLIA-certified laboratory in San Diego and offered exclusively by Exact
Sciences. With more than 1 million patients tested in more than 90
countries, the Oncotype DX tests have redefined personalized
medicine by making genomics a critical part of cancer diagnosis and
treatment. To learn more about Oncotype DX tests, visit
www.OncotypeIQ.com, www.MyBreastCancerTreatment.org or
www.MyProstateCancerTreatment.org.
About Exact Sciences Corp.
A leading provider of
cancer screening and diagnostic tests, Exact Sciences relentlessly
pursues smarter solutions providing the clarity to take
life-changing action, earlier. Building on the success of Cologuard
and Oncotype DX, Exact Sciences is investing in its product
pipeline to take on some of the deadliest cancers and improve
patient care. Exact Sciences unites visionary collaborators to help
advance the fight against cancer. For more information, please
visit the company's website at www.exactsciences.com, follow Exact
Sciences on Twitter @ExactSciences, or find Exact Sciences on
Facebook.
Forward-Looking Statements
This news release contains
forward-looking statements concerning our expectations,
anticipations, intentions, beliefs or strategies regarding the
future. These forward-looking statements are based on assumptions
that we have made as of the date hereof and are subject to known
and unknown risks and uncertainties that could cause actual
results, conditions and events to differ materially from those
anticipated. Therefore, you should not place undue reliance on
forward-looking statements. Examples of forward-looking statements
include, among others, statements we make regarding expected future
operating results; our strategies, positioning, resources,
capabilities and expectations for future events or performance; and
the anticipated benefits of our acquisitions, including estimated
synergies and other financial impacts.
Important factors that could cause actual results, conditions
and events to differ materially from those indicated in the
forward-looking statements include, among others, the following:
uncertainties associated with the coronavirus (COVID-19) pandemic,
including its possible effects on our operations, including our
supply chain and clinical studies, and the demand for our products
and services; our ability to efficiently and flexibly manage our
business amid uncertainties related to COVID-19; our ability to
successfully and profitably market our products and services; the
acceptance of our products and services by patients and healthcare
providers; our ability to meet demand for our products and
services; the willingness of health insurance companies and other
payers to cover our products and services and adequately reimburse
us for such products and services; the amount and nature of
competition for our products and services; the effects of any
judicial, executive or legislative action affecting us or the
healthcare system; recommendations, guidelines and quality metrics
issued by various organizations regarding cancer screening or our
products and services; our ability to successfully develop new
products and services and assess potential market opportunities;
our ability to effectively enter into and utilize strategic
partnerships and acquisitions; our success establishing and
maintaining collaborative, licensing and supplier arrangements; our
ability to maintain regulatory approvals and comply with applicable
regulations; our ability to manage an international business and
our expectations regarding our international expansion and
opportunities; the potential effects of foreign currency exchange
rate fluctuations and our efforts to hedge such effects; the
possibility that the anticipated benefits from our business
acquisitions will not be realized in full or at all or may take
longer to realize than expected; the possibility that costs or
difficulties related to the integration of acquired businesses'
operations will be greater than expected and the possibility that
integration efforts will disrupt our business and strain management
time and resources; the outcome of any litigation, government
investigations, enforcement actions or other legal proceedings,
including in connection with acquisitions; our ability to retain
and hire key personnel including employees at businesses we
acquire. The risks included above are not exhaustive. Other
important risks and uncertainties are described in the Risk Factors
sections of our most recent Annual Report on Form 10-K and any
subsequent Quarterly Reports on Form 10-Q, and in our other reports
filed with the Securities and Exchange Commission. We undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
EXACT SCIENCES
CORPORATION
|
Selected Unaudited
Financial Information
|
Condensed
Consolidated Statements of Operations
|
(Amounts in
thousands, except share data)
|
|
|
Three Months Ended
December
31,
|
|
Twelve Months
Ended December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
$
|
466,339
|
|
|
$
|
295,575
|
|
|
$
|
1,491,391
|
|
|
$
|
876,293
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of sales
(exclusive of amortization of acquired intangible
assets)
|
99,765
|
|
|
70,416
|
|
|
354,324
|
|
|
216,717
|
|
Research and
development
|
446,399
|
|
|
43,223
|
|
|
554,052
|
|
|
139,694
|
|
Sales and
marketing
|
166,827
|
|
|
119,851
|
|
|
589,919
|
|
|
385,176
|
|
General and
administrative
|
145,451
|
|
|
144,386
|
|
|
481,716
|
|
|
352,453
|
|
Amortization of
acquired intangible assets
|
23,199
|
|
|
13,779
|
|
|
93,398
|
|
|
16,035
|
|
Intangible asset
impairment charge
|
—
|
|
|
—
|
|
|
209,666
|
|
|
—
|
|
Total operating
expenses
|
881,641
|
|
|
391,655
|
|
|
2,283,075
|
|
|
1,110,075
|
|
|
|
|
|
|
|
|
|
Other operating
income
|
—
|
|
|
—
|
|
|
23,665
|
|
|
—
|
|
Loss from
operations
|
(415,302)
|
|
|
(96,080)
|
|
|
(768,019)
|
|
|
(233,782)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Investment income,
net
|
1,365
|
|
|
3,113
|
|
|
6,897
|
|
|
26,530
|
|
Interest
expense
|
(24,336)
|
|
|
(13,688)
|
|
|
(95,983)
|
|
|
(61,599)
|
|
Total other income
(expense)
|
(22,971)
|
|
|
(10,575)
|
|
|
(89,086)
|
|
|
(35,069)
|
|
|
|
|
|
|
|
|
|
Net loss before
tax
|
(438,273)
|
|
|
(106,655)
|
|
|
(857,105)
|
|
|
(268,851)
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
1,463
|
|
|
184,628
|
|
|
8,572
|
|
|
184,858
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(436,810)
|
|
|
$
|
77,973
|
|
|
$
|
(848,533)
|
|
|
$
|
(83,993)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share—basic
|
$
|
(2.79)
|
|
|
$
|
0.56
|
|
|
$
|
(5.61)
|
|
|
$
|
(0.64)
|
|
Net income (loss) per
share—diluted
|
$
|
(2.79)
|
|
|
$
|
0.54
|
|
|
$
|
(5.61)
|
|
|
$
|
(0.64)
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding—basic
|
156,470
|
|
|
139,901
|
|
|
151,137
|
|
|
131,257
|
|
Weighted average
common shares outstanding—diluted
|
156,470
|
|
|
143,200
|
|
|
151,137
|
|
|
131,257
|
|
EXACT SCIENCES
CORPORATION
|
Selected Unaudited
Financial Information
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
thousands)
|
|
|
December
31,
2020
|
|
December
31,
2019
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,491,288
|
|
|
$
|
177,254
|
|
Marketable
securities
|
348,699
|
|
|
146,401
|
|
Accounts receivable,
net
|
233,185
|
|
|
130,362
|
|
Inventory
|
92,265
|
|
|
61,724
|
|
Prepaid expenses and
other current assets
|
33,157
|
|
|
38,195
|
|
Property, plant and
equipment, net
|
450,683
|
|
|
455,325
|
|
Operating lease
right-of-use assets
|
125,947
|
|
|
126,444
|
|
Goodwill
|
1,237,672
|
|
|
1,203,197
|
|
Intangible assets,
net
|
848,426
|
|
|
1,143,550
|
|
Other long-term
assets, net
|
63,770
|
|
|
23,316
|
|
Total
assets
|
$
|
4,925,092
|
|
|
$
|
3,505,768
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Total current
liabilities
|
$
|
575,844
|
|
|
$
|
236,494
|
|
Convertible notes,
net, less current portion
|
1,320,760
|
|
|
803,605
|
|
Long-term debt, less
current portion
|
22,342
|
|
|
24,032
|
|
Other long-term
liabilities
|
61,582
|
|
|
34,911
|
|
Operating lease
liabilities, less current portion
|
121,075
|
|
|
118,665
|
|
Total stockholders'
equity
|
2,823,489
|
|
|
2,288,061
|
|
Total liabilities and
stockholders' equity
|
$
|
4,925,092
|
|
|
$
|
3,505,768
|
|
EXACT SCIENCES
CORPORATION
|
Selected Unaudited
Financial Information
|
EBITDA and
Adjusted EBITDA Reconciliations
|
(Amounts in
thousands)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
(loss)
|
$
|
(436,810)
|
|
$
|
77,973
|
|
$
|
(848,533)
|
|
$
|
(83,993)
|
Interest
expense
|
24,336
|
|
13,688
|
|
88,029
|
|
51,041
|
Investment
income
|
(1,365)
|
|
(3,113)
|
|
(6,897)
|
|
(26,530)
|
Depreciation and
amortization
|
39,818
|
|
26,071
|
|
163,362
|
|
50,247
|
Income tax expense
(benefit)
|
(1,463)
|
|
(184,628)
|
|
(8,572)
|
|
(184,858)
|
EBITDA
|
$
|
(375,484)
|
|
$
|
(70,009)
|
|
$
|
(612,611)
|
|
$
|
(194,093)
|
Stock-based
compensation
|
40,437
|
|
26,051
|
|
143,276
|
|
86,708
|
Loss on settlement of
convertible notes
|
—
|
|
—
|
|
7,954
|
|
10,558
|
Acquisition and
integration costs (1)
|
10,387
|
|
53,663
|
|
29,967
|
|
62,836
|
Reduction-in-force
severance (2)
|
—
|
|
—
|
|
2,198
|
|
—
|
CARES Act Funding
(3)
|
—
|
|
—
|
|
(23,665)
|
|
—
|
Intangible asset
impairment charge (4)
|
—
|
|
—
|
|
209,666
|
|
—
|
Asset acquisition
(5)
|
412,568
|
|
—
|
|
412,568
|
|
—
|
Adjusted
EBITDA
|
$
|
87,908
|
|
$
|
9,705
|
|
$
|
169,353
|
|
$
|
(33,991)
|
____________________
|
(1) Represents
acquisition and related integration costs incurred as a result of
the company's business combinations and asset acquisition, a
majority of which relate to our combination with Genomic Health.
The costs primarily consist of legal and other professional service
fees and incremental stock-based compensation including the fair
value of stock awards assumed by the company in connection with the
Genomic Health combination. Legal and other professional service
fees were $9.0 million and $20.4 million for the three and twelve
months ended December 31, 2020, respectively, and $31.9 million and
$41.0 million for the three months and twelve months ended December
31, 2019, respectively. Incremental stock-based compensation
including the fair value of assumed stock awards was
$1.4 million and $9.6 million for the three and twelve months
ended December 31, 2020, respectively, and $21.8 million for the
three months and twelve months ended December 31, 2019.
|
|
(2) Represents
severance costs as a result of proactive measures the Company put
in place to address the impact of the COVID-19 pandemic.
|
|
(3) As part of the
Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"),
the Company received $23.7 million from the United States
Department of Health and Human Services Provider Relief Fund
provided to eligible healthcare providers. The CARES Act funds are
meant to offset the implications of the COVID-19 pandemic which
include increases in the Company's costs and lost
revenues.
|
|
(4) During the third
quarter of 2020, the Company began discussions with Biocartis
regarding the termination of its agreements related to the
development of an in vitro diagnostic version of the Oncotype DX
Breast Recurrence Score test. As a result, and in connection with
the preparation of the financial statements, the Company recorded a
non-cash, pre-tax impairment loss of $200.0 million related to the
in-process research and development intangible asset that was
initially recorded as part of the combination with Genomic
Health.
|
|
During the third
quarter of 2020, the Company abandoned certain research and
development assets acquired through an asset purchase agreement
with Armune Biosciences, Inc. in 2017. These assets were expected
to complement the Company's product pipeline and were expected to
have alternative future uses at the time of acquisition; however,
due to changes in strategic priorities and efforts during the third
quarter of 2020, these assets are no longer expected to be utilized
to advance the Company's product pipeline. As a result, and in
connection with the preparation of the financial statements, the
Company concluded that the intangible asset would need to be
written off as of September 30, 2020 which resulted in a non-cash,
pre-tax impairment loss of $9.7 million.
|
|
(5) During the fourth
quarter of 2020, the Company acquired Base Genomics. The
acquisition was treated as an asset acquisition which was recorded
to research and development expense.
|
EXACT SCIENCES
CORPORATION
|
Selected Unaudited
Financial Information
|
Non-GAAP Gross
Profit and Non-GAAP Gross Margin
|
(Amounts in
thousands)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
$466,339
|
|
|
$295,575
|
|
|
$1,491,391
|
|
|
$876,293
|
|
Cost of sales
(exclusive of amortization of acquired intangible
assets)
|
99,765
|
|
|
70,416
|
|
|
354,324
|
|
|
216,717
|
|
Amortization of
acquired intangible assets (1)
|
20,553
|
|
|
11,981
|
|
|
82,127
|
|
|
13,254
|
|
Gross profit
|
$346,021
|
|
|
$213,178
|
|
|
$1,054,940
|
|
|
$646,322
|
|
Gross margin
|
74
|
%
|
|
72
|
%
|
|
71
|
%
|
|
74
|
%
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangible assets (1)
|
20,553
|
|
|
11,981
|
|
|
82,127
|
|
|
13,254
|
|
Non-GAAP gross
profit
|
$366,574
|
|
|
$225,159
|
|
|
$1,137,067
|
|
|
$659,576
|
|
Non-GAAP gross
margin
|
79
|
%
|
|
76
|
%
|
|
76
|
%
|
|
75
|
%
|
____________________
|
(1) Includes only
amortization of intangible assets identified as developed
technology assets through purchase accounting transactions, which
otherwise would have been allocated to cost of sales.
|
Investor Contact:
Megan
Jones
Exact Sciences Corp.
meganjones@exactsciences.com
608-535-8815
Media Contact:
Katie
Boyce
Exact Sciences Corp.
kboyce@exactsciences.com
608-710-3903
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SOURCE EXACT SCIENCES CORP