Exact Sciences(EXAS) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenue for Q1 2024 was $637.5 million, compared to$ 602.5 million in Q1 2023, marking a 5.8% increase[181]. - Screening revenue increased to $474.8 million in Q1 2024 from$ 443.2 million in Q1 2023, a growth of 7.1%[181]. - Precision Oncology revenue rose to $162.7 million in Q1 2024, up from$ 155.4 million in Q1 2023, reflecting a 4.7% increase[181]. - The company expects continued revenue growth for Cologuard and Oncotype tests, influenced by test volume and patient adherence rates[183]. - The company expects to continue incurring net losses for the near future despite improving operating results[179]. Cash and Investments - As of March 31, 2024, the company had approximately $347.5 million in unrestricted cash and cash equivalents and$ 304.6 million in marketable securities[199]. - Cash used in operating activities for Q1 2024 was primarily to fund a net loss, with increased operating expenses offset by higher revenue from completed Cologuard and Oncotype tests[202]. - Cash used in investing activities increased by $246.1 million in Q1 2024 due to a shift towards fixed income securities and an$ 8.3 million increase in property, plant, and equipment purchases[203]. - Cash provided by financing activities decreased in Q1 2024, primarily due to $138.0 million proceeds from convertible notes issued in Q1 2023[204]. - In April 2024, the company issued$ 620.7 million in new Convertible Notes due in 2031, retiring $359.7 million of 2028 Notes and receiving$ 266.8 million in cash[206]. - The company has access to a $150.0 million revolving line-of-credit, with no funds drawn as of March 31, 2024[197]. - As of March 31, 2024, the company had$ 50.0 million in outstanding variable rate debt, with a potential $0.5 million increase in annual interest expense from a hypothetical 100 basis point increase in market interest rates[214]. Research and Development - The company is committed to investing in clinical trials to enhance existing products and bring new products to market, including the Cologuard Plus test[175]. - Research and development expenses increased to$ 110.6 million in Q1 2024 from $95.4 million in Q1 2023, a rise of 15.9%[187]. Testing and Screening - The Cologuard Plus test demonstrated an overall sensitivity of 94% for colorectal cancer at a specificity of 91%, representing a 30% relative improvement compared to previous tests[171]. - The company tested more than 1 million people globally for cancer and rare diseases[168]. - The Oncotype DX test is now reimbursed in Japan, potentially allowing over 100 women a day to learn about their cancer recurrence risk[178]. - The company plans to develop a multi-cancer screening test, Cancerguard, with a mean sensitivity of 61% and mean specificity of 98.2%[171]. - The company aims to expand screening access to underserved populations, increasing the number of tests conducted in 2024[176]. - The company is focusing on enhancing the performance characteristics of the Cologuard test to reduce false positive rates[171]. - The company has expanded the number of Oncotype DX international ordering providers by over 20% since Q1 2023[168]. Financial Controls and Reporting - There were no significant changes in internal control over financial reporting during Q1 2024 that materially affected the company's internal controls[218]. - The company had no off-balance sheet arrangements as of March 31, 2024[207]. - The company continues to evaluate its critical accounting policies and estimates, with no material changes since the 2023 Form 10-K[210]. - The company reported an increase in cash used for operating activities due to timing of payments on accounts payable and accrued expenses[202]. Other Financial Metrics - As of March 31, 2024, the company had an accumulated deficit of approximately$ 3.58 billion[179]. - Investment income increased significantly to $6.2 million in Q1 2024 from$ 0.5 million in Q1 2023[193]. - Interest expense for Q1 2024 was $7.9 million, compared to net interest income of$ 4.1 million in Q1 2023[194]. - The company had open foreign currency forward contracts with notional amounts of $46.2 million as of March 31, 2024, to mitigate foreign exchange rate exposure[216].