Cancer testing company Exact Sciences did not expect to report the results until the September quarter. But test seller Cologuard said sales growth in the December quarter helped boost profits earlier than expected.
Sunday in Madison, Wisconsin. Revenue rose 28% to more than $550 million in the last quarter of 2022, according to preliminary data released by the company. Sales of colorectal cancer screening products, such as the Cologuard stool test, have increased by more than 40%.
Shares of Exact Sciences (ticker: EXAS) rose nearly 19% to $56.12.
Since the end of the Covid pandemic, investors have become impatient with biotech companies like Exact, which are growing strongly in turnover but are not yet profitable. The company got the message and is targeting profitability by September 2023, at least on the basis of "adjusted" earnings before interest, taxes, depreciation, amortization and non-cash expenses such as stock compensation.
Based on a preliminary estimate, Exact expects to show Adjusted EBITDA for the quarter ending in 2023 and for each quarter.
"Exact Sciences' fourth quarter results demonstrate the strength of our business and the momentum of our leading brands in cancer diagnostics," said CEO Kevin Conroy.
The December results are expected to bring in more than $2 billion in revenue by 2022, the company said. This means an 18% increase year over year. A cancer tester increases his activity by 25% in 2022, offsetting the windfall of Covid tests in 2021.
Earnings in the December quarter beat Wall Street estimates by about 9%, according to Raymond James analyst Andrew Cooper. In conversations with management, Cooper learned that Cologuard was the biggest contributor to sales success. But profits also exceeded expectations from the cancer genomics test from Exact, which is part of a company developing blood cancer screening tests to compete with rivals such as the Guardant Health (GH) division and Illumina's Grail. (ILMN).
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Email Bill Alpert at [email protected]