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Exact Sciences Corporation (NASDAQ: EXAS)
Q2 2018 Earnings Conference call
Aug. 1, 2018, 9 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Chris and I'll be your conference operator today. At this time, I would like to welcome everyone to the Exact Sciences Corporation Second-Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the No. 1 on your telephone keypad. If you'd like to withdraw your question, please press the pound key. Thank you. Megan Jones, associate manager of investor relations, you may begin the conference.

Megan Jones -- Associate manager of investor relations

Thank you, Chris, and thank all of you for joining us for Exact Sciences Second-Quarter 2018 Conference Call. On the call today are Kevin Conroy, the company's Chairman and CEO, Jeff Elliott, our chief financial officer, and Mark Stenhouse, president of Cologuard. Exact Sciences issued a news release earlier this afternoon detailing our second-quarter financial results. If you have not seen it, please go to our website @exactsciences.com. During today's call, we will make forward-looking statements based on current expectations. Our actual results may differ materially from such statements. Descriptions of the risks and uncertainties associated with Exact Sciences are included in our SEC filings, which can be accessed through our website. It is now my pleasure to introduce the company's chairman and CEO, Kevin Conroy.

Kevin Conroy -- Chairman and chief executive officer

Thanks Megan. Thank you for joining us this afternoon. The Exact Sciences team delivered strong second-quarter results with record high revenue, Cologuard test volume, and gross profit. Demand accelerated broadly within our existing position, ordering base, and from new customers, with more than 10,000 positions and other healthcare providers ordering their first Cologuard test. Better-than-expected revenue per test largely offset a 2% shortfall compared to the low end of our volume guidance and kept us on track for 2018 revenue goals. We remain confident in our ability to capture the long-term opportunity for Cologuard and are building a solid foundation to support sustainable growth and profitability. Our CFO, Jeff Elliott, will now review our second-quarter financial results.

Jeff Elliott -- Chief financial officer

Thank you Kevin, and good afternoon everyone. Please note that when discussing financial results, I'll refer to changes compared to the second-quarter of 2017 unless otherwise stated. Second-quarter revenue increased 78% to $103 million. Relative to the first quarter, revenue increased $13 million, easily exceeding the trailing four-quarter average. Completed Cologuard test volume grew 59% to 215,000. Sequential growth of 29,000 completed Cologuard tests was the second fastest since launch, as demand from new customers accelerated and the physician reorder rate reached its highest full-quarter level since launch.

There were two main reasons test volume fell short of our guidance. First, we did not see the full increase in Cologuard orders that we had expected during June. Kevin will discuss the steps we're taking to further improve our sales force efficiency and capitalize on recent reimbursement progress. The sales force hiring we announced earlier this year and three-year rescreening should also help us continue to expand order volume. The second reason Cologuard test volumes were better than expected is that we didn't see the expected amount of patient returns late in the quarter. Patient response times for Cologuard contemporarily vary for a variety of factors. We haven't seen any changes to the underlying Cologuard patient compliance trends. At 68%, Cologuard's patient compliance rate easily surpasses rates for other Cologuard screening tests, and we see room to improve that performance over time. Second-quarter average recognized revenue improved 12% to $479 per test on market access gains and strong collections.

After a successful start to the year, we now expect full-year revenue per test about $475. On a time-lagged basis, our average recognized revenue per test was $462 at the end of the second quarter, an increase of $39. Second-quarter cost of sales totaled $125 per completed test, a 6% improvement. The lab and operations teams continue to drive efficiencies, while scaling capacity to meet rapidly growing customer demand.

Investments required to expand our current lab capacity by more than 20% in the second half of the year will likely increase our cost per test to the low $130 range in the third quarter. We continue to see a path to 80% gross margin long-term. Second-quarter gross margin improved 510 basis points to 74% on better-than-expected revenue and cost per test. Second-quarter operating expense totaled $109 million, an increase of $5 million from the first quarter.

Selling and marketing investments included our sales force expansion and additional media and public relations activities. R&D increased primarily for pipeline development and medical affairs. G&A investments included IT and personnel to support our expansion. Total CapEx was $41.5 million, and we continue to expect $150 million to $175 million of CapEx for the full year. Second-quarter cash use totaled $45.3 million. We ended the quarter with cash and securities of $1.2 billion, including $225 million from our recent convertible debt offering.

Turning to our guidance, we reaffirm our full-year revenue outlook of $420 million to $430 million and Cologuard volume of 900,000 to 920,000 completed tests. Based on year-to-date results and our expectation for the second half, we expect to finish the year near the low end of the test volume range. For the third quarter, we expect 227,000 to 237,000 completed Cologuard tests. I now return the call back to Kevin.

Kevin Conroy -- Chairman of the board, president, and chief executive officer

Thanks, Jeff. Our first priority for 2018 is to command the Cologuard business. Today, we estimate that about 90% of patients have access to Cologuard with no out-of-pocket costs. That's a very strong and simple reimbursement message. We are excited to announce that we recently signed an agreement to be in the Anthem Blue Cross and Blue Shield network in the states of Indiana, Ohio, Kentucky, Missouri, and Wisconsin.

We are also working together to complete contracts for additional Anthem states. With this progress and additional contracts in the pipeline, we're approaching an estimated 95% patient access to Cologuard with no out-of-pocket costs. We also added 33 million additional covered lives and more than 270 million total lives that are in-plan, that now have a positive medical policy for Cologuard.

We've already seen the benefits in our revenue per test from the market access progress made since launch. We expect additional benefits to Cologuard adoption for years to come as our sales and marketing teams spread this reimbursement message to physicians and patients. Our approach is to make decisions with the long term in mind. Reaching the current level of in-network insurance coverage took several years of focus and pricing discipline.

To preserve physicians' and patients' trust while we expanded coverage, we were transparent about the potential out-of-pocket cost for Cologuard when insurance companies failed to provide coverage. Survey data show that this transparency temporarily reduced our physician customers' order rate and impacted patient compliance in the second quarter.

Thanks to the impressive progress our market access team is making, we are now able to deliver a simpler, more effective reimbursement message to patients and providers that we believe will help increase Cologuard utilization and patients' compliance. Cologuard is seeing robust physician adoption, with 40,000 new healthcare providers ordering the test in the last year alone.

Changing the standard of care in colon cancer screening does take time. That's especially true when we're trying to change behavior across such a large group with a relatively small sales force. To continue improving our sales force efficiency, we have analyzed our current base of healthcare providers to identify a subset of high-potential physician targets. This focused approach is commonly used by primary care sales teams in healthcare. We're confident that with our recently expanded field sales force of about 350 reps, now is the time for us to adopt that approach.

Frequency matters. Our data show that there is a direct relationship between the frequency of calls on a healthcare provider, and the frequency with which they order Cologuard. We look forward to improved productivity from this updated targeting strategy, and from the previously announced sales force expansion. Health systems are one of the biggest opportunities for Cologuard growth during the next three to five years. Getting more systems to fully adopt Cologuard, will improve the efficiency and leverage of our sales force.

More than half of primary care physicians in the U.S. are employed by or affiliated with health systems where Cologuard is currently underpenetrated. We continue to lay the foundation and put the pieces in place to execute on this opportunity. During the second quarter, we achieved an annualized revenue run rate of more than $400 million, and Cologuard is only 3% penetrated in 85-million-person market. The investments we're making in sales and marketing are aimed toward achieving our 40% long-term market-share goal.

We are refreshing and enhancing our television ads to extend the effectiveness of our successful direct-to-consumer campaign. Our new 60-second television ad launched in late June, highlighting reasons why healthy people are reluctant to get screened with invasive procedures while emphasizing the convenience and accuracy of Cologuard. We plan to unveil additional ads this fall to reinforce this message. We see opportunities to reach an even greater number of consumers and increase awareness of Cologuard through digital and social media, and other marketing channels to healthcare providers.

The talented team at Exact Sciences is helping to achieve our second priority of meeting future demand. We recently conducted our annual employee engagement survey and are happy to report that Exact Sciences is ranked in the 81st percentile of life sciences companies for overall employee engagement. Overall satisfaction with Exact Sciences as a place to work increased from 2017, which is gratifying especially considering our rapid growth during that time.

We are proud of the culture this team has built, and their dedication to our mission. We are confident that we have people in place to meet our 2018 goals. Thanks to the capabilities of our team, we are prepared to meet the rapidly growing demand for Cologuard. The construction projects in our current and new labs continue to progress on schedule, and we have successfully implemented additional automation and efficiency enhancements at our lab.

We continue to expect annual lab capacity of 3 million tests by the end of this year, and5 million tests with the addition of our new lab next year. Moving to our third priority, advancing the pipeline. The recent American Cancer Society guidelines update represents a 40% increase in the unscreened population, and a significant increase in the addressable opportunity for Cologuard. Moving the screening to age 45 means that an additional 21 million American should be screened for colorectal cancer.

Among adults younger than 55 years old, the incidence of colorectal cancer increased 51% between 1994 and 2014. Our team is working to expand Cologuard's label to include people in the 45- to 49-year-old age group, who are at average risk for colorectal cancer. Respondents to a survey we conducted of 500 individuals in this age group indicated that they are three times more comfortable taking an at-home stool tests than they are in having a colonoscopy.

We are working to ensure the millions of Americans in this age group have access to Cologuard and that we are prepared to meet their demand for an easy, convenient, and accurate screening option. Among surveyed cancer screening tests including mammography, pap smear, and prostate exams, patients are most comfortable with an at-home stool test. This gives us further confidence that individuals between 45 and 49 will prefer Cologuard to other colorectal cancer screening methods. We also see a significant unmet need in liver cancer testing for more than 3 million eligible Americans.

Our liver cancer research and development program has produced very promising data for a test to potentially address that need, which presents a $1.5 billion market opportunity. We have two case control studies each showing 95% sensitivity, one at 97% specificity and one at 93% specificity. More than half of people with liver cancer are diagnosed late-stage because the current testing options are less than 65% sensitive for early-stage cancers and compliance rates are persistently low.

The data we presented at the Digestive Disease Week Conference in June and at a previous conference demonstrate substantial improvement over the current options of ultrasound and the AFP protein test. Building from these promising results, we have begun to enroll patients in a third, larger case-control study to further validate and finalize the liver cancer test design. We are excited about the progress we're making with the liver test and look forward to providing further updates later this year. We're now happy to answer your questions.

Questions and Answers:

Operator

At this time if you'd like to ask a question, please press star, then the No. 1 on your telephone keypad. I'll pause for just a moment to compile the Q&A roster. Our first question comes from Brian Weinstein with William Blair, your line is open.

Brian Weinstein -- William Blair -- Analyst

Hey guys. Thanks for taking the question. Kevin, I'm still not sure that I totally understand the rationale or the reasons for the mishear. Did the things fall off in particular in June or were they like sort of all quarter? And you mentioned that you guys were more transparent, or transparent with out-of-pocket costs, and that reduced the order rate and impacted Q2 a little bit, but why would that impact something in Q2? Was there something in particular that changed there, and how you are presenting that in the quarter? And then just going back to the first question on sort of the trending through the quarter, was it more late in the quarter or not?

Kevin Conroy -- Chairman and Chief Executive Officer

Yeah Brian, typically we don't address intra-quarter results. We were tracking at the upper end of our range until the beginning of June, the middle to the upper end of the range, and then we didn't see the increase that we would typically see in June in terms of test orders. And then additionally, we saw a decrease in June in the kit return rate, which obviously affects the compliance rate, or is the main driver of the compliance rate. So, it's really those two things that caused us to miss our volume, and we're very confident in the full-year guidance based upon two things. One, adding more sales reps. Two, focusing all of our reps on a more concentrated number of healthcare providers that we have identified as higher potential. Mark will -- Stenhouse will talk more about that.

Additionally, on the question around reimbursement, late last year we started delivering a really specific message to patients and physicians that patients would be responsible for up to $649 in response to people who were complaining about getting a bill. As we've made progress over the last nine months, in terms of bringing large plans, United and now Anthem and others in network, and we've seen the in-network contracting percentage increase pretty dramatically, we're able to start to deliver another message.

The impact that that has is largely on patient compliance. Because when the patient gets that message, again, it was the first thing -- message that we started to deliver late last year on our compliance calls just to be transparent with the patient, to make sure that we preserved our long-term reputation. That did have an impact on compliance, and we tease that out as we really looked into what was going on with the compliance rate and have a plan now to, as we approach 95% of patients who get a Cologuard test, will get $0 co-pay, we have a wonderful message to deliver. So, there is -- no doubt this is a challenge. We're not happy with it. We have very clear kind of two-pronged plan to address this.

Brian Weinstein -- William Blair -- Analyst

I'm sorry. Go ahead.

Kevin Conroy -- Chairman and Chief Executive Officer

More efficiency with our sales force, one; two, a really wonderful message around reimbursement.

Brian Weinstein -- William Blair -- Analyst

On the more efficiency side, does this make you more likely to potentially consider bringing in some other product to increase the frequency with which you are seeing primary care physicians?

Kevin Conroy -- Chairman and chief executive officer

No, I don't think so, because the key thing we want to make sure the team is focused on here as we're making the shift is that they are calling on the highest potential prescribers of Cologuard, and making sure that they're delivering the right messages, and the right sequence.

Again, Mark, will talk about this. Mark has been here and had a significant impact in a very short period of time about the best way to increase the efficiency and help our current sales force to become even better at what they do. That requires a discipline that has been -- has worked in many other areas, not only primary care, but in specialty areas as well.

Brian Weinstein -- William Blair -- Analyst

Okay, last one for me. Have you had specific discussions with the FDA on the expansion to the 45- to 49-year-old at this point? Are you confident that you have what you need sort of in-house, or any thoughts on what you guys might need to do in order to formally extend the label? Thanks.

Kevin Conroy -- Chairman and CEO

Brian, we are putting our plans together for label expansion, and obviously, we want to have a really buttoned-up plan before we sit down with the FDA. We haven't spoken with the FDA yet. After we do and have a clear plan in place, we'll share that with investors.

Operator

Your next question comes from Derik De Bruin with Bank of America, Merrill Lynch, your line is open.

Derik De Bruin -- Bank of America, Merrill Lynch -- Analyst

Hi, good afternoon.

Kevin Conroy -- Chairman and Chief Executive Officer

Hi, Derik.

Derik De Bruin -- Bank of America Merrill Lynch -- Analyst

Hello. Hi, I'm just wondering if you go back and you look at the Blue Cross -- the BCBS decision back in January, and how quickly do you expect that volume to snap back now that potential region's on board? I guess, when do you expect some the other Anthem Blues to come on board as well?

Kevin Conroy -- Chairman and CEO

There is no doubt that going out of network with Anthem had an impact on ordering volumes and also compliance rates. The right thing to do long-term -- and we are really happy with the news that we announced today that we are in-network with five states. As you remember previously, going into network with Anthem occurs in stages as you work across the 14 states where they have plans. We are working toward contracts with the remaining Anthem plans. We haven't provided guidance. We hope that occurs as soon as possible.

Derik De Bruin -- Bank of America Merrill Lynch -- Analyst

Great.

I'm still a little bit confused as to why the compliance rate dropped by patients. Just that one still makes a little bit -- that just doesn't make any sense to me. Just simply why suddenly at the end of June, was this off. Can you give a little bit more color?

Kevin Conroy -- Chairman and CEO

Well, some of that is just variability that you see month-to-month. The overall compliance, though, during this period of time post us delivering message to patients -- there are many patients, wh,o when they heard they may get stuck with a $649 bill, they simply won't return the test, and despite extensive compliance efforts. So, there are really two things they there -- the broader issue that delivering that message, which again we think was the right thing to do reputationally, had an overall impact, and then in June, we saw variability that sometimes you see on a month-to-month basis.

Jeff Elliott -- Chief financial officer

Yes. It seems like the holidays and summer vacations can affect that. In the short term it's very difficult to predict the patient compliance behavior yourself.

Derik De Bruin -- Bank of America, Merrill Lynch -- Analyst

Okay. Thank you.

Operator

Your next question comes from Doug Schenkel with Cowen and Company, your line is open.

Doug Schenkel -- Cowen and Company -- Analyst

Hey guys. Good afternoon. We are going back to the third quarter of last year. Orders per physician have been stuck between roughly 2.9 to three per quarter. Your volume guidance for Q3 assumes this continues, and this annualized too well, something that's well below 10% of a typical physician CRC screening volumes. It just doesn't seem like you should be anywhere close to hitting a wall, especially as you're in the midst of spending a lot on advertising and essentially doubling your sales force.

So, recognizing this isn't a one-quarter thing at this point, it's not even a one-month thing. Why is this not improving? Is it just taking longer for new reps to ramp versus your expectations? Our territory recuts possibly being more disruptive than anticipated. What do you think's going on? Because it doesn't seem like you should be hitting a wall, but by this metric it kind of looks like you are.

Jeff Elliott -- CFO

Yes, Doug. Thanks for the question. I would say, we are absolutely not hitting the wall. In fact, if you'd looked at the remarks here, we saw the highest full-quarter reorder rate we've ever seen during the quarter. This is the reorder rate as we look at it, which is number of orders per week per provider. So, that reached the highest that we've ever seen during the quarter. We saw an acceleration in new physicians back to over 10,000, and you're correct to point out that we just started penetrating these offices. There is a huge opportunity in the existing base of 121,000 providers, and there's a bigger opportunity out there to grow the pie further.

Kevin talked before about some of the approaches we're putting in place to improve that reorder rate, I think Mark can chime in here. But there's a long ways to go, you hit the nail on the head. Keep in mind that that reorder rate is always diluted somewhat by the rapidly growing base of new physicians. So, when you're adding 10,000 new physicians, new providers in a quarter, that temporarily puts some downward pressure on the number until the sales force has a chance to get in and educate the provider and the practice, and make sure they understand the message. So, maybe Mark will try to add here.

Mark Stenhouse -- President of Cologuard

I think your insight here is smart. As we were scaling the sales force and cutting territories, that can have a detrimental effect on reorder rate. The other, more I think important, salient point relative to reorder is that we really drove home this concept in the June sales meeting we had in our organization this year. Both in the identification of the segments themselves in terms of who is most likely to prescribe, based on past ordering history, and likelihood to prescribe on a go-forward basis on their patient demographic.

Once that was set by the selling organization, then is really about operationalizing their effort against that segmented group and really focusing both where they spend their time and the message delivery that they give their physicians. We're really starting to see, as has been mentioned by Jeff and Kevin, a really strong second-quarter and reorder rate on a historical basis in growth and new prescribers.

Doug Schenkel -- Cowen and Company -- Analyst

Okay. Yeah, I certainly think for what it's worth that the stage of the roll-out every quarter should be a record, Jeff, but I appreciate the color and I think most folks on the line would agree they're happy to some extent iwth the progress, but you've been stuck in the range here for a little bit. So, that's why I make the point, but your color and your answers are somewhat helpful in trying to get a better handle on what's going on here.

So, maybe building off of that, your guidance implies that Q3 orders per physician are essentially right around three. But in the fourth quarter, essentially, what you're telling us is you expect that to increase to 3.2 per practice. That's in a quarter where at least last year you told us things tend to come under pressure due to typical seasonality. So, can you help us make sense of what's seems to be an end-of-June abnormality. No assumption for an improvement in Q3, but a material improvement in Q4.

Kevin Conroy -- Chairman and CEO

Before you comment Jeff, let me first say, remember that during this time frame, Doug, just in the last 12 months we've added 40,000 new healthcare provider customers. While during that time frame, our sales force stayed relatively flat. That means that the frequency that you can call on those positions during that time frame, by definition, decreases. We are proactive in that we have added 150 additional sales reps, about 150 inside and 100 in the field, that may cause a little disruption. It's the right thing to do long-term. To Jeff's point, we hit an all-time high in terms of the physician reorder rate despite the fact that we're not calling on the physicians as frequently as we know we can.

Mark will talk more about how focusing on those high-potential physicians we expect to see a greater efficiency coupled with the addition to our sales force. So, I think that patience is required to see the impact of those investments, while we continue to grow and the underlying business fundamentals remain strong. Jeff?

Jeff Elliott -- Chief Financial Officer

The only thing to add to that, Doug, is remember the three-year rescreen opportunity is very significant. If you look back to 2015, there's about 70,000 patients that we can go out and capture for rescreening. Some of the early data is very promising in terms of seeing these patients comply; we're seeing them comply at a much higher rate than the first-time users.

I think there's some room for us to improve the execution in terms of going out and getting these patients back in the door. But when they do get the order, they comply at a really high rate. So, this is a huge opportunity for us in the rest of this year. It's an even bigger opportunity when you look ahead to 2019 and beyond.

Doug Schenkel -- Cowen and Company -- Analyst

So, just to wrap up on understanding the opportunity and all the tailwinds that that should afford you over the next several quarters and into next year, just thinking about your guidance for the next couple of quarters. What is it in Q4 that you expect to kick in that gets you out of this range we've been in for a little while in terms of orders per practice? Is it the sales force? Is it reorder rate? What helps you in Q4 to get this ramp?

Kevin Conroy -- Chairman and Chief Executive Officer

It's both of those things, coupled with what Jeff said, is you basically have about 70,000 patients from 2015 who we have an opportunity to get rescreened yet this year.

Now, obviously, you're not going to get all of them rescreened, but the key thing here is to get the physician to reorder a test and make the patient aware of that reorder. We're able directly to engage with both of those parties. The bulk of those parties are people who got screened in the back half of 2015. So, that larger opportunity is in the back half of this year, and you can trust and be assured that there will be intense focus on making sure that we get to those patients who need to be rescreened now three years after their last test.

Doug Schenkel -- Cowen and Company -- Analyst

Okay. Thank you.

Jeff Elliott -- CFO

The only thing I would add, Doug, is through the back half of the year, we should start to see the benefit of these significant market access wins. We talked through some of the contracts, the additional covered lives; these are significant. When you combine that with the new messaging that we're communicating, we expect that to have a big benefit in the coming quarters.

Operator

Your next question comes from Brandon Couillard with Jefferies, your line is open.

Brandon Couillard -- Jefferies -- Analyst

Thanks, good afternoon. Here this question for Mark. In terms of how you're recalibrating the sales targets, would you describe how that process is different in terms of identifying the highest-value doctors relative to how you were sending the sales force out into the field?

Mark Stenhouse -- President of Cologuard

Happy to do that. Thanks for the question. I think it's relatively straightforward. We look at the historical prescribing of our physician population on Cologuard, and then we look at their patient demographics. What's their volume of Medicare Advantage in in-network access lives that allow[s] to address go-forward opportunity.

The intersect of those two things puts physicians, 110,000 or so, that have ordered Cologuard into buckets of opportunity -- and we're narrowly focused on those that have high-potential, high-growth opportunity or currently are high prescribers and really directing our effort against that.

Through these questions that we've had so far in the call, I would just again refocus your thinking on two core points. One is focusing our effort with our current sales force is going to drive incremental lift, especially when you have a growing access base. You can't underestimate the impact of a low-access environment when a representative is trying to convince a doctor to prescribe Cologuard. The fear of a bill or a patient noncompliance is a reason to not prescribe. What we've learned in our messaging strategy is that the messages that matter to physicians starts with sensitivity and specificity, then goes to compliance and then goes to market access.

So, if you're not able to deliver an assured message across those three points to have a core prescribing base with strong market access, you don't get the lift you need. The ability to do that, which frankly is just happening now, gives us the confidence in the back half of the year that can drive the performance we need.

Brandon Couillard -- Jefferies -- Analyst

Thanks, and then one for Jeff. Give us any color on your OpEx expectations and gross margin for maybe 3Q in the back half?

Jeff Elliott -- CFO

Sure. Happy to say for the third quarter, I mentioned in the remarks that we expect cost per test in the low $130 range. Remember that we keep seeing more and more efficiencies in the lab and operating functions. At the same time, we're scaling the lab significantly by over 20% in the second half. So as that new capacity starts to come online, you see some upward movement in the Cologuards per test. I do expect that upward movement to continue into next year and beyond as we bring the new lab on. Long-term though, very clear path to 80% gross margin.

From an OpEx perspective, we expect to step up in the $20 million range in the third quarter. Remember that in the first half of the year we've been trending slightly behind our forecast, and I think we expect some catch-up in the third quarter. The primary driver of that is the increased sales force spending. There's also some additional marketing investments in the third quarter. To a lesser extent there is a bit more R&D on both the Cologuard side as well as the pipeline, and some G&A primarily there, some IT and personnel to support the growth.

Brandon Couillard -- Jefferies -- Analyst

Okay, thank you.

Operator

Your next question comes from Catherine Schulte with Baird, your line is open.

Catherine Schulte -- Baird -- Analyst

Hey guys. Thanks for the questions. First, could you just give us an update on electronic ordering progress and any discussions you may be having with health systems for broader adoption?

Jeff Elliott -- CFO

Happy to, Catherine. So, last quarter we had broken out that number,it was around 30% at the time. We do continue to make progress in terms of educating doctors on the portal and other electronic connections that are available, as well as integrated with health systems. That's not a number we plan to break out every quarter; we'll probably give it once a year or so. But we have a team focused on electronic adoption, we are making progress, and we look forward to updating that number in the future.

Catherine Schulte -- Baird -- Analyst

Okay. Now that you've checked the boxes on reimbursement coverage, going in-network, quality measures, and the like, what do you view as the main limiting factor in uptake at this point in the launch? What do you think the most important driver will be in reaccelerating growth in the completed tests for doc metric?

Mark Stenhouse -- President of Cologuard

I think that the answer is very straightforward. It's frequency of effort against the corporate prescribing base. It's driving representative messaging against the core opportunity that will influence reorder on a go-forward basis.

Catherine Schulte -- Baird -- Analyst

Great. Thank you.

Operator

Your next question comes from Patrick Donnelly with Goldman Sachs, your line is open.

Patrick Donnelly -- Goldman Sachs -- Analyst

Great. Thanks. Maybe one for Kevin. I mean, I certainly understand the need for more sales reps in that more sales reps drive more revenue. But as you have more data now on how much docs need to be called, how much that impacts tests ordered, how are you thinking about the size of sales force medium- to longer-term, and then how do you balance the sales force adds with a focus on profitability as well?

Kevin Conroy -- Chairman and CEO

Nothing changes in our view in terms of the number of sales reps that we are adding this year. We said that we would add about 200 -- about 100 inside reps and about 100 in the field. So far we've added about 150. So, I think we'll continue to make progress there. Long-term, we would grow our commercial effort as the business justifies doing so, as we have done in the past. The opportunity is a huge one, I think that's the thing that can't be overstated. There are 85 million Americans today; with the American Cancer Society, update that is now well over 100 million.

So, with a great opportunity like this in most primary care settings, you would have much larger sales force than we have today. We have added in what we thought is a prudent way. We're, obviously, from a core cash perspective, approaching profitability when you net out the CapEx investments that we're making. So you can see the fundamental cash-generating potential of Cologuard well before we reach a $1 billion in revenue, which we think is north of that is eminently attainable.

Patrick Donnelly -- Goldman Sachs -- Analyst

Okay. Jeff, I know you mentioned the cash balance, $1.2 billion now after the most recent raise. Can you just give us updated thoughts on cash use, the rationale behind the most recent raise given? You guys had a pretty good amount already. Just general thinking on the cash.

Jeff Elliott -- Chief Financial Officer

Sure. Yeah. So, our philosophy has always been to raise capital when you're in a position of strength, when you don't necessarily need it, to allow us to make the right investments to derive value for the long term, and right now we see a significant number of ways to make investments that will, long-term, set us up for sustainable growth and profitability. So, we've gone through the investments in things like the sales force, and the pipeline, the facilities. We see a really attractive ROI on all those investments.

As far as other opportunities beyond that, we continue to take a look at whether it's M&A activities, but right now the focus is on Cologuard, and we're feeling very good about the balance sheet we have to allow to stay nimble.

Patrick Donnelly -- Goldman Sachs -- Analyst

Thank you.

Operator

Your next question comes from Puneet Souda with Leerink Partners. Your line is open.

Puneet Souda -- Leerink Partners -- Analyst

Yeah. Hi, Kevin and team. Thanks for taking my question. Just wanted to understand on June, specifically, is this something that extended beyond June into July. And as you have taken the steps of the messaging around 90%, 95% coverage contracting. How was that -- can you give us any color on how is that resonating with the sales reps and how is that translating into tests?

Kevin Conroy -- Chairman and CEO

Again, we are reaffirming our full-year guidance, both in terms of volume and in terms of revenue. So, I think that speaks to our confidence in the full year. I think that's still the way that you should think about it. Yes, Q2 was lighter than expected. We don't want to provide color, specifically on Q3. I'm sorry. What was the second piece of that question, Puneet?

Puneet Souda -- Leerink Partners -- Analyst

Yes, just wanted to understand, as the new message is going out to the sales force about more contracting, more covered lives of the patients. I just want to make sure, is that resonating well?

Kevin Conroy -- Chairman and CEO

We can't really overstate our positive messages. Mark, why don't you touch upon that?

Mark Stenhouse -- President of Cologuard

Yeah, I mean, you can imagine, put yourself in the shoes of a representative last to go in an office, who may historically had a patient with an out-of-pocket exposure of bill. Now, walk in today and be able to constantly stand in front of that customer and declare we're 90% out-of-pocket with no exposure. It's just a very, very lean-forward, positive message.

That, coupled again, I'd go back to -- it is about coverage in terms of inspiring confidence, but the brand itself in terms of its sensitivity and specificity, and its compliance engine coupled with compliance -- excuse me, with coverage -- is what drives, really, reorder rate. But, I would say they're very enthusiastic about where we sit today.

Puneet Souda -- Leerink Partners -- Analyst

Okay. Thanks for that. Sorry, go ahead, Kevin.

Kevin Conroy -- Chairman and CEO

Just to put that in perspective, since December of '16 when we added Humana, and then July of '17 we added Aetna and UnitedHealth. And then March of this year, the Blues of Illinois, Tennessee; Alabama, CareFirst; Horizon, Texas recently; and Anthem. This has been an accelerating environment in terms of coverage and in-network contracting, which we haven't yet seen the pull-through on in full.

You can quantify the pull-through from the earlier ones, UnitedHealth, Aetna, and Humana. We expect to see similar progress, not only in terms of physician ordering if that message gets through, also in terms of patient compliance. There are a lot of folks out there who are sitting with a kit that we can reach out to now and deliver a message, "Hey look, you have a $0 co-pay, let's get screened." That's a really positive place to be from an entire business perspective.

Puneet Souda -- Leerink Partners -- Analyst

Okay, thanks for the color there. I wanted to understand, Mark, I have abroader question, more longer-term, you obviously have a significant experience with large sales forces in the drug world. And as we look at the rep productivity and the recent changes that have been made here, tell us how should we in the longer run think about rep productivity versus in Cologuard specifically, which is more of a monoindication versus Humira, which was a multi-indication.

Help us understand the longer term, how you're looking at the rep productivity overall. Thank you.

Mark Stenhouse -- President of Cologuard

Great question. Thank you for asking. So, first, it's very clear that frequency matters, and the data is compelling. So compelling that we have a linear relationship between the calls delivered and the reorder rate, and that's unusual. You'd normally see a law of diminishing returns, which would suggest we have significant opportunity to drive volume of calls to this core population. That's No. 1. No. 2, what I've also been impressed with, is that each subsequent launch of it, a cohort of sales representatives in the market has gotten effective and a faster basis. They're able to demonstrate ability to drive message profitability, in part because our customer base is more mature with the product. So, I think there's always opportunities for us to find efficiencies in the sales force with other products or other opportunities. But what I would say right now is I'm absolutely focused on driving this sales force effort at this core prescribing population and trying to maximize our effort there, which helps Cologuard in the long term.

Puneet Souda -- Leerink Partners -- Analyst

Okay, thank you. I'll jump back in the queue.

Kevin Conroy -- Chairman and CEO

Okay.

Operator

Your next question comes from Per Ostlund with Craig-Hallum Group. Your line is open.

Per Ostlund -- Craig-Hallum Group -- Analyst

Great, thanks. Good afternoon everybody. I wanted to ask a question about the evolution of the television campaign as we're looking ahead to fall. I know there has been a good amount of discussion on the changing messaging to physicians over the course of the last quarter and forthcoming quarters. But wondering how you're sort of looking at changing the messaging to the patient, to the consumer? And is there a way that you harmonize that messaging with the messaging that goes to the physicians so that it's really augmented in putting the two sides together to really drive that reacceleration that you're looking for? Thanks.

Kevin Conroy -- Chairman and Chief Executive Officer

A great question. I would think the answer is yes. The first thing we've done with the most recent launch of our commercial is juxtapose, a Cologuard against colonoscopy, and making sure that in the narrative of the commercial, it's clear to the consumer that Cologuard is a primary choice for colorectal cancer screening with very high sensitivity and very broad coverage. So that message is consistent with the message we're delivering to you today.

The other thing we're looking at is how do we drive a share of voice, right? So, we mentioned on previous calls that we're doing an in-market test. We've spent all of our money today in syndicated cable, because that's where our patient spend the most of their time watching TV. But we're also going into open market to double our share of voice -- to understand if we double our share of market in our spend, do we see the expected return? So I think it's a two-part answer. One is the messaging alignment, to your point, is there, as well as the incremental spend is being tested to determine long-term benefit.

Per Ostlund -- Craig-Hallum Group -- Analyst

Okay, thank you.

Kevin Conroy -- Chairman and Chief Executive Officer

Yeah.

Operator

Your next question comes from Mark Massaro with Canaccord Genuity. Your line is open.

Mark Massaro -- Canaccord Genuity -- Analyst

Hey, thank you for the questions. Kevin, you indicated that there are 70,000 patients that ordered dating back to Sept. 30, 2015 in that early initial launch. But looking -- 36,000 patients ordered through June 30, 2015, so it looks like you have maybe 36,000 patients that you've already been reaching out to. Could you maybe provide some clarity as to how that's going in terms of the response you're getting when you reach out to physicians? Maybe what percentage are coming back and reordering? Because hypothetically, 20% of the opportunity would net you an incremental 15,000 orders or so in the back half. Just looking for any clarity there.

Kevin Conroy -- Chairman and CEO

Yeah, sure. Now, take a look at full-year 2015. There were a 104,000 completed tests, and then you want to back out the positive Cologuard tests, because, presumably, they go on to colonoscopy and are indicated for another Cologuard test, and back off some patients whose addresses have changed. Then, we look at the full-year opportunity has been around 70,000. Execution and focus on this in the first half of the year has been suboptimal.

In the back half of the year, there will be an intense focus starting now to make sure that we reach out to the physician, not just the patient, but also the physician to get to the physician initiating that reorder, which is what has to occur. When I refer to the 70,000, that wasn't through September; that is a full-year availability. Many of those patients aren't yet ready for their three-year rescreen, and remember that the bulk of people still were in Q3 and Q4 of '15 that got screened in the first instance. So, the real opportunities in the back half and that's where the real focus will be.

Mark Massaro -- Canaccord Genuity -- Analyst

Okay, and for clarity, the focus you've reached out to today have largely been directly to the patient and not the physician?

Kevin Conroy -- Chairman and CEO

It has been largely to the patient encouraging them to call the physician, and with some effort to the physician. It just needs to be more robust and coordinated with our sales force and our customer contact team. So, there are areas that we execute well. This is not one of the areas that we have, I think, lived up to what we expect. The good news, I guess, coming from that is trust -- rest assured that we will execute really well on this, very discrete, very achievable opportunity in the back half of the year.

Mark Massaro -- Canaccord Genuity -- Analyst

That's great, and then Jeff, you indicated that you may be making some tweaks to marketing initiatives. I was wondering if you could maybe walk us through how the Harry Connick Jr. campaign is going. How many live events do you expect in the back half of the year, and have you seen much ordering from the initial events?

Mark Stenhouse -- President of Cologuard

So, this is, Mark, I think, the way I would answer your question first is, we think that Harry and Jill are doing a great job of really raising awareness, and we know that not only because of the traffic in the media at the live events, but also the website traffic that surrounds an event.

While we don't get into very specific details about each channel, what I would say is that I'm convinced that the new 50 campaign Cologuard Classic, and the TV spend have done a great job of raising the awareness of Cologuard, which is over 90% to our patients and our physicians. The awareness is strong. Now, it's really about driving reorder and sometimes get the investment in different channels. One of those channels could be, as an example, we know that about a quarter of the population doesn't have a primary care physician. So, how do we reach that opportunity? So, we're going to be looking at our mix of investments over time, discretely looking at each channel, and then determining what's the impact, and then making different go-forward investments as we wanted.

Mark Massaro -- Canaccord Genuity -- Analyst

Great. Thank you.

Operator

This concludes the Q and A session for the conference. I now like to turn it back to Kevin Conroy, Chairman and CEO, for any closing remarks.

Kevin Conroy -- Chairman and CEO

Thank you for joining us today as we reviewed our second-quarter financial results and discussed progress toward our 2018 priorities. The Exact Sciences team delivered a strong second quarter with strong volumes, revenue, and gross profit. We're confident that Cologuard will reach our long-term market-share goal of at least 40% and that we can help play a role in the eradication of colon cancer.

We have the right product and team in place to execute, and a solid foundation that will help future growth and profitability. We look forward to providing you with updates as we work to get more people screened and advance our pipeline. Thank you.

Operator

This concludes today's conference call. You may now disconnect.

Duration: 52 minutes

Call participants:

Megan Jones -- Associate Manager of Investor Relations

Kevin Conroy -- Chairman and Chief Executive Officer

Jeff Elliott -- Chief Financial Officer

Brian Weinstein -- William Blair -- Analyst

Derik De Bruin -- Bank of America Merrill Lynch -- Analyst

Doug Schenkel -- Cowen and Company -- Analyst

Mark Stenhouse -- President of Cologuard

Brandon Couillard -- Jefferies -- Analyst

Catherine Schulte -- Baird -- Analyst

Patrick Donnelly -- Goldman Sachs -- Analyst

Puneet Souda -- Ohler Inc. Partners -- Analyst

Per Ostlund -- Craig-Hallum Group -- Analyst

Mark Massaro -- Canaccord Genuity -- Analyst

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