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):  February 21, 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))

 

 
2.02.                      Results of Operations and Financial Condition.
 
On February 21, 2017, Exact Sciences Corporation announced its financial results for the quarter and full year ended December 31, 2016.  A copy of the press release is being furnished as Exhibit 99 to this Report on Form 8-K.
 
The information in this 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: February 21, 2017	By:	/s/ Jeff Elliott	
 	 	Jeff Elliott	
 	 	Chief Financial Officer	
 
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EXHIBIT INDEX

Exhibit No.	 	Exhibit Description	
 	 	 	
99	 	Press release, dated February 21, 2017, issued by Exact Sciences Corporation, furnished herewith.	
 
4 

Exhibit 99
 
Contact:
J.P. Fielder
Exact Sciences Corp.
jpfielder@exactsciences.com
608-210-5220
For Immediate Release
 
Exact Sciences generated $99.4 million in revenues during 2016, a 152-percent increase
Cologuard gross margin reached 61 percent in fourth quarter
 
MADISON, Wis. , Feb. 21, 2017 — Exact Sciences Corp. (Nasdaq: EXAS) today announced that the company generated revenues of $99.4 million and completed approximately 244,000 Cologuard tests during the year ended Dec. 31, 2016. Full-year 2016 revenues and Cologuard test volume grew 152 percent and 135 percent from 2015, respectively.
 
During the fourth quarter of 2016, the company generated revenues of $35.2 million and completed approximately 82,000 Cologuard tests. Fourth-quarter 2016 revenues and test volume grew 144 percent and 114 percent from the same period of 2015, respectively.
 
“Cologuard’s strong performance during 2016 reflects the accelerating demand for our non-invasive colon cancer screening test and positions us well for long-term, sustainable growth,” said Kevin Conroy, chairman and CEO of Exact Sciences. “Our annual revenue met the high end of our original expectations for 2016.”
 
More than 9,500 health care providers ordered Cologuard for the first time during the fourth quarter of 2016.  The number of providers who have ordered Cologuard since it was launched grew to nearly 60,000 during 2016, an increase of 123 percent from the end of 2015.
 
As of Feb. 20, 2017, approximately 171 million people participate in health plans that cover Cologuard and 72 percent of the addressable population is covered for the company’s non-invasive screening option.
 
2017 Outlook
 
“We intend to build on last year’s success by contracting with additional payers, increasing awareness about Cologuard’s inclusion in health care quality measures, and making it easier for physicians to order our test,” Conroy said.  “Based on the financial strength of Exact Sciences and the power of the Cologuard technology platform, we will continue investing prudently to support our growth and bring new cancer diagnostics to patients.”
 
The company anticipates revenue of $170-$180 million and Cologuard volume of at least 415,000 completed tests during 2017. During the first quarter of 2017, the company expects Cologuard volume of at least 88,000 completed tests.
 
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 these anticipated results. There can be no assurances that the Company will be able to meet the projections. See the cautionary information about forward-looking statements in the “Safe Harbor Statement” section of this news release.
 
Fourth-Quarter Financial Results
 
Exact Sciences reported total revenues of $35.2 million for the fourth quarter of 2016, compared to $14.4 million for the same period of 2015. Average recognized revenue per test during the fourth quarter of 2016 was $432.
 
Average cost per test for the fourth quarter of 2016 was $170, compared to $201 for the same period of 2015. Gross margin improved from 47 percent to 61 percent from the fourth quarter of 2015 to the fourth quarter of 2016.
 
Operating expenses for the fourth quarter of 2016 were $59.1 million, compared to $47.2 million for the same period in 2015.
 
For the fourth quarter of 2016, Exact Sciences reported a net loss of $37.2 million, or $0.34 per share. The company reported a net loss of $40.0 million, or $0.41 per share, for the same period of 2015.
 
Cash utilization during the fourth quarter of 2016 was $26.7 million. Exact Sciences ended 2016 with cash, cash equivalents and marketable securities of $311.1 million, compared to $306.9 million at Dec. 31, 2015.
 
Fourth-Quarter Conference Call & Webcast
 
Company management will host a conference call and webcast on Tuesday, Feb. 21, 2017, at 10 a.m. ET to discuss fourth-quarter and full-year 2016 results. The webcast will be available at www.exactsciences.com. Domestic callers should dial 877-201-0168 and international callers should dial 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 855-859-2056 domestically or 404-537-3406 internationally. The access code for the conference call and replay is 51061456. 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 recommendations of the U.S. Preventive Services Task Force (2016) and the American Cancer Society’s (2014) colorectal cancer screening guidelines. Stool DNA is included in the combined screening guidelines of the American Cancer Society / U.S. Multi-Society Task Force/American College of Radiology (2008), the American College of Gastroenterology guidelines (2009) and the 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,” “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 payor 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 payors 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 Operation Data
(Amounts in thousands, except per share data)

 	 	Three Months Ended	 	Twelve Months Ended	 	
 	 	December 31,	 	December 31,	 	
 	 	2016	 	2015	 	2016	 	2015	 	
 	 	 	 	 	 	 	 	 	 	
Laboratory service revenue	 	$	35,241	 	$	14,420	 	$	99,376	 	$	39,437	 	
 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	13,865	 	7,667	 	45,195	 	24,501	 	
Gross margin	 	21,376	 	6,753	 	54,181	 	14,936	 	
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Research and development	 	7,082	 	9,365	 	33,473	 	33,914	 	
General and administrative	 	21,498	 	15,864	 	76,898	 	57,950	 	
Sales and marketing	 	30,506	 	21,944	 	112,826	 	82,140	 	
 	 	59,086	 	47,173	 	223,197	 	174,004	 	
 	 	 	 	 	 	 	 	 	 	
Loss from operations	 	(37,710	)	(40,420	)	(169,016	)	(159,068	)	
 	 	 	 	 	 	 	 	 	 	
Investment income	 	592	 	491	 	2,018	 	1,271	 	
Interest expense	 	(52	)	(62	)	(213	)	(6	)	
 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(37,170	)	$	(39,991	)	$	(167,211	)	$	(157,803	)	
 	 	 	 	 	 	 	 	 	 	
Net loss per share - basic and diluted	 	$	(0.34	)	$	(0.41	)	$	(1.63	)	$	(1.71	)	
 	 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding - basic and diluted	 	109,274	 	96,404	 	102,335	 	92,135	 	
 
EXACT SCIENCES CORPORATION
Selected Unaudited Financial Information
Condensed Consolidated Balance Sheet Data
(Amounts in thousands)

 	 	December 31,	 	December 31,	 	 	 	 	 	
 	 	2016	 	2015	 	 	 	 	 	
Assets	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	48,921	 	$	41,135	 	 	 	 	 	
Marketable securities	 	262,179	 	265,744	 	 	 	 	 	
Accounts receivable, net	 	8,526	 	4,933	 	 	 	 	 	
Inventory, net	 	6,833	 	6,677	 	 	 	 	 	
Prepaid expenses and other current assets	 	7,114	 	7,375	 	 	 	 	 	
Property and equipment, net	 	38,142	 	34,096	 	 	 	 	 	
Other long-term assets	 	5,325	 	4,070	 	 	 	 	 	
Total assets	 	$	377,040	 	$	364,030	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Liabilities and stockholders’ equity	 	 	 	 	 	 	 	 	 	
Total current liabilities	 	$	30,692	 	$	26,723	 	 	 	 	 	
Long-term debt	 	4,633	 	4,789	 	 	 	 	 	
Other long-term liabilities	 	5,734	 	4,601	 	 	 	 	 	
Lease incentive obligation, less current portion	 	686	 	1,061	 	 	 	 	 	
Total stockholders’ equity	 	335,295	 	326,856	 	 	 	 	 	
Total liabilities and stockholders’ equity	 	$	377,040	 	$	364,030