UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  July 25, 2017
 
EXACT SCIENCES CORPORATION
(Exact Name of Registrant as Specified in Charter)

Delaware	 	001-35092	 	02-0478229	
(State or Other Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification No.)	
 
441 Charmany Drive
Madison, WI  53719
(Address of Principal Executive Offices)(Zip Code)
 
Registrant’s telephone number, including area code:   (608) 284-5700
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 
2.02.                      Results of Operations and Financial Condition.
 
On July 25, 2017, Exact Sciences Corporation announced its financial results for the quarter ended June 30, 2017.  A copy of the press release is being furnished as Exhibit 99 to this Current Report on Form 8-K.
 
The information in this Current Report on Form 8-K and Exhibit 99 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
 
9.01.                      Financial Statements and Exhibits.
 
Exhibits
 
The exhibits required to be filed as a part of this Current Report on Form 8-K are listed in the Exhibit Index attached hereto and incorporated herein by reference.
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	EXACT SCIENCES CORPORATION	
 	 	
Date: July 25, 2017	By:	/s/ Jeffrey T. Elliott	
 	 	Jeffrey T. Elliott	
 	 	Chief Financial Officer	
 
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EXHIBIT INDEX

Exhibit No.	 	Exhibit Description	
 	 	 	
99	 	Press release, dated July 25, 2017, issued by Exact Sciences Corporation, furnished herewith.	
 
4 

Exhibit 99
 
Contact:
Megan Reiss
Exact Sciences Corp.
meganreiss@exactsciences.com
608-535-8815
For Immediate Release
 
Cologuard® revenue increased to $57.6 million during second quarter
Test volume grew 149 percent from second quarter of 2016 to 135,000 completed tests
 
·                   Revenue guidance raised to $230-240 million for 2017, from $195-205 million
·                   Guidance for Cologuard tests to be completed during 2017 increased to at least 550,000 tests, from at least 470,000
·                   11,000 additional providers ordered Cologuard for the first time during the second quarter, and insurance coverage expanded to 86 percent of target population
 
MADISON, Wis., July 25, 2017 - Exact Sciences Corp. (Nasdaq: EXAS) today announced that the company generated revenue of $57.6 million and completed approximately 135,000 Cologuard tests during the quarter ended June 30, 2017. Second-quarter 2017 revenue and completed Cologuard test volume grew 172 percent and 149 percent from the same period of 2016, respectively.
 
“As patient and physician demand for Cologuard continues to grow, momentum is increasing toward Cologuard becoming part of the standard of care in colon cancer screening,” said Kevin Conroy, chairman and CEO of Exact Sciences. “We will continue investing in the long-term and sustainable growth of Cologuard to ensure the millions of people who need to be screened for colon cancer have access to our non-invasive test.”
 
Second-Quarter 2017 Financial Results
 
For the three-month period ended June 30, 2017, as compared to the same period of 2016 (where applicable):
 
·                   Average recognized revenue per test was $428, an increase of 9 percent
·                   Average cost per test was $133, an improvement of 28 percent
·                   Gross margin was 69 percent, an increase of 1,650 basis points
·                   Operating expenses were $71.1 million, an increase of 26 percent
·                   Net loss was $30.8 million or $0.27 per share, compared to $44.8 million or $0.46 per share during the same period of 2016
·                   Cash utilization was $43.9 million, including $15 million paid to MDx Health as previously disclosed for the acquisition of certain patent rights
·                   Cash, cash equivalents and marketable securities were $484.3 million at the end of the quarter

 
Second-Quarter 2017 and Recent Business Highlights
 
Provider growth
 
·                   Roughly 11,000 healthcare providers ordered their first Cologuard test during the second quarter of 2017.
·                   Since Cologuard was launched, approximately 81,000 providers have ordered the test through the end of the second quarter of 2017.
 
Coverage progress
 
·                   As of July 24, 2017, approximately 235 million Americans are members of health plans that cover Cologuard.
·                   86 percent of those who should be screened for colorectal cancer are covered.
 
Updated 2017 Outlook
 
·                   The company anticipates revenue of $230-240 million and completed Cologuard test volume of at least 550,000 tests during 2017.
·                   The company’s previous guidance was $195-205 million in revenue and at least 470,000 completed Cologuard tests.
·                   The company anticipates completing at least 150,000 Cologuard tests during the third quarter of 2017.
 
The company’s guidance for revenue and completed tests are forward-looking statements. They are subject to various risks and uncertainties that could cause the company’s actual results to differ materially from the anticipated targets. The anticipated targets are not predictions of the company’s actual performance. See the cautionary information about forward-looking statements in the “Safe Harbor Statement” section of this press release.
 
Second-Quarter Conference Call & Webcast
 
Company management will host a conference call and webcast on Tuesday, July 25, 2017, at 5 p.m. ET to discuss second-quarter 2017 results. The webcast will be available at www.exactsciences.com. Domestic callers should dial 877-201-0168 and international callers should dial +1-647-788-4901.
 
An archive of the webcast and a replay of the conference call will be available at www.exactsciences.com or by calling 800-585-8367 domestically or +1-416-621-4642 internationally. The access code for the conference call and replay is 51121804. The conference call, webcast 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 (2014) 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 of either sex, 50 years or older, who are at average risk for colorectal cancer. Cologuard is not for everyone and is not a replacement for diagnostic colonoscopy or surveillance colonoscopy in high-risk individuals. False positives and false negatives do occur. Any positive test result should be followed by a diagnostic colonoscopy. Following a negative result, patients should continue participating in a screening program at an interval and with a method appropriate for the individual patient. Cologuard performance when used for repeat testing has not been evaluated or established. For more information about Cologuard, visit www.cologuardtest.com. Rx Only.
 
About Exact Sciences Corp.
 
Exact Sciences Corp. is a molecular diagnostics company focused on the early detection and prevention of the deadliest forms of cancer. The company has exclusive intellectual property protecting its non-invasive, molecular screening technology for the detection of colorectal 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.
 
Safe Harbor Statement
 
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “could,” “seek,” “intend,” “plan,” “goal,” “estimate,” “anticipate” or other comparable terms. All statements other than statements of historical facts included in this news release regarding our strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding expected future operating results, anticipated results of our sales and marketing efforts, expectations concerning payer reimbursement and the anticipated results of our product development efforts. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in

 
circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: 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 Cologuard and reimburse us for our performance of the Cologuard test; the amount and nature of competition from other cancer screening products and services; the effects of the adoption, modification or repeal of any healthcare reform law, rule, order, interpretation or policy; the effects of changes in healthcare pricing, coverage and reimbursement; recommendations, guidelines and quality metrics issued by various organizations such as the U.S. Preventive Services Task Force, the American Cancer Society, and the National Committee for Quality Assurance regarding cancer screening or our products and services; our ability to successfully develop new products and services; our success establishing and maintaining collaborative, licensing and supplier arrangements; our ability to maintain regulatory approvals and comply with applicable regulations; and the other risks and uncertainties described in the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our most recently filed Annual Report on Form 10-K and our subsequently filed Quarterly Report(s) on Form 10-Q. 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 per share data)

 	 	Three Months Ended	 	Six Months Ended	 	
 	 	June 30,	 	June 30,	 	
 	 	2017	 	2016	 	2017	 	2016	 	
 	 	 	 	 	 	 	 	 	 	
Laboratory service revenue	 	$	57,646	 	$	21,185	 	$	106,009	 	$	36,020	 	
 	 	57,646	 	21,185	 	106,009	 	36,020	 	
 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	17,991	 	10,097	 	34,972	 	19,156	 	
Gross margin	 	39,655	 	11,088	 	71,037	 	16,864	 	
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Research and development	 	9,737	 	8,640	 	17,739	 	18,766	 	
General and administrative	 	24,609	 	17,284	 	44,679	 	35,108	 	
Sales and marketing	 	36,728	 	30,301	 	75,529	 	56,012	 	
Total operating expenses	 	71,074	 	56,225	 	137,947	 	109,886	 	
 	 	 	 	 	 	 	 	 	 	
Loss from operations	 	(31,419	)	(45,137	)	(66,910	)	(93,022	)	
 	 	 	 	 	 	 	 	 	 	
Investment income	 	683	 	425	 	1,278	 	891	 	
Interest expense	 	(54	)	(53	)	(104	)	(107	)	
 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(30,790	)	$	(44,765	)	$	(65,736	)	$	(92,238	)	
 	 	 	 	 	 	 	 	 	 	
Net loss per share - basic and diluted	 	$	(0.27	)	$	(0.46	)	$	(0.59	)	$	(0.95	)	
 	 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding - basic and diluted	 	112,847	 	97,902	 	111,721	 	97,578	 	

 
EXACT SCIENCES CORPORATION
Selected Unaudited Financial Information
Condensed Consolidated Balance Sheets
(Amounts in thousands)

 	 	June 30,	 	December 31,	 	
 	 	2017	 	2016	 	
Assets	 	 	 	 	 	
Cash and cash equivalents	 	$	180,407	 	$	48,921	 	
Marketable securities	 	303,853	 	262,179	 	
Accounts receivable, net	 	22,591	 	8,526	 	
Inventory, net	 	12,410	 	6,833	 	
Prepaid expenses and other current assets	 	6,872	 	7,114	 	
Property and equipment, net	 	42,048	 	38,142	 	
Other long-term assets	 	14,420	 	5,325	 	
Total assets	 	$	582,601	 	$	377,040	 	
 	 	 	 	 	 	
Liabilities and stockholders’ equity	 	 	 	 	 	
Total current liabilities	 	$	31,293	 	$	30,692	 	
Long term debt	 	4,552	 	4,633	 	
Long term other liabilities	 	5,684	 	5,734	 	
Lease incentive obligation, less current portion	 	378	 	686	 	
Total stockholders’ equity	 	540,694	 	335,295	 	
Total liabilities and stockholders’ equity	 	$	582,601	 	$	377,040