The company, which focuses on the early prevention and detection of colorectal cancer, revealed that screening revenue from its key Cologuard product rose 35% from 1Q19 to $219 million. Meanwhile precision oncology revenue was up 18% to $128 million.
However EXAS also revealed that Cologuard orders decreased 36% year-over-year in the last 16 days of March and 63% for first 20 days of April.
“Due to social distancing, stay-at-home orders, and other actions taken in response to COVID-19, there has been a significant and widespread decline in standard wellness visits and preventive services. That decline has negatively impacted Cologuard test orders in our Screening business” EXAS explained.
Encouragingly, the company added that during April it has seen ‘what appears to be a stabilization’ in the year-over-year decline of Cologuard test orders.
Similarly, management noted April softness in GPS prostate cancer testing but did not provide exact figures.
EXAS is taking multiple measures to deal with the fallout from Covid-19, including salary reductions, a permanent 2% workforce reduction and the furlough of functions tied to Cologuard test volumes. The company estimates that these measures will result in over $400 million of cost savings in 2020.
“While we expect nearly all companies to curtail spending in 2Q20, the magnitude of EXAS’s reduction is larger than anticipated. Our revised forecast calls for net loss roughly in line with prior forecast as aggressive cost cutting should protect balance sheet” Oppenheimer analyst Kevin DeGeeter told investors following the earnings release.
He slashed his price target from $130 to $115 (50% upside potential), but maintained his EXAS buy rating, writing “We expect EXAS to continue outperforming the sector as investors look for high quality stories positioned for a rebound once the US market normalizes for the impact of COVID-19.”
Indeed, all 7 analysts covering EXAS stock rate it a ‘buy’ right now, giving the stock a Strong Buy analyst consensus. Meanwhile the average analyst price target of $102 indicates 33% upside potential lies ahead. (See Exact Sciences stock analysis on TipRanks).
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