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Exact Sciences Corp (NASDAQ:EXAS)
Q3 2019 Earnings Call
Oct 29, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Exact Sciences Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would like to hand the conference over to your speaker today, Megan Jones. Thank you. Please go ahead, Madam.

Megan Jones -- Associate Manager of Investore Relations

Thank you, Bonita and thanks, all of you for joining us for Exact Sciences' third quarter 2019 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 third quarter financial results. This news release and today's presentation are available on our website at exactsciences.com. During today's call, we will make forward-looking statements based on current expectations.Our actual results may be materially different 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. 3

It is now my pleasure to introduce the company's Chairman and CEO, Kevin Conroy.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Thank you for joining us this afternoon. The Exact Sciences team delivered another strong quarter and made significant progress, enhancing our internal infrastructure, positioning us for long-term sustainable growth. We screened 456,000 people with Cologuard in the third quarter and more than 3 million people over the last 5 years.During the quarter, the team delivered $290 million in revenue. We also implemented Epic's best-in-class electronic health record system as the foundation of our IT infrastructure, began processing Cologuard samples at our lab and prepared for the Genomic Health combination. We made meaningful progress on our pipeline with an expanded label for Cologuard to include people aged 45 through 49 and new data for Cologuard 2.0 and our liver cancer test.Exact Sciences is positioned to be the cancer diagnostics leader for years to come. The strong foundation we've built for Cologuard and the capabilities being added by the Genomic Health team will help us capture a significant portion of our combined $20 billion total addressable market and deliver more innovative diagnostic test to people in need.Today, we will review our third quarter financial performance and full year guidance and discuss progress on our 2019 priorities. Our Chief Financial Officer, Jeff Elliott, will now review our financial results.

Thanks, Kevin, and good afternoon, everyone. Third quarter revenue increased 85% to $219 million on strong Cologuard volume growth. Average Cologuard revenue per test was $479, in line with the second quarter. We expect revenue per test in the $480 range during the fourth quarter.Third quarter Cologuard cost of sales improved $10 to $114 per completed test. Lab and operational efficiencies helped offset additional cost from the opening of our new lab. We expect fourth quarter cost per test to be in the low to mid $120 range, as we'll have a full quarter impact of the new lab.Over time, we'll work to offset the new lab cost through volume leverage and operational efficiencies, and we continue to see a clear path to Cologuard cost per test of $100 or better. Third quarter gross margin was 76%, an increase of 130 basis points. Third quarter operating expense totaled $202 million, up 56%, which was 29 points lower than revenue growth.Total selling and marketing expense of $86 million was better than expected due to the timing of certain marketing programs. Selling and marketing included the Pfizer service fee of $16 million, which was about $2 million more than we had assumed in guidance.G&A expense of $81 million included $7 million in transaction-related costs for the planned Genomic Health combination, as well as $2 million in integration-related costs, neither of which were factored into guidance. We also invested in our IT infrastructure with the launch of Epic and an upgrade to our SAP ERP system.R&D expense was $35 million, invested in sample collection activities and studies to support our pipeline, including expanding Cologuard label to age 45, Cologuard 2.0 and our liver cancer test. In the fourth quarter, we expect operating expense to increase about $10 million sequentially due primarily to additional selling and marketing efforts.

We expect G&A to be relatively flat, excluding any fourth quarter Genomic Health cost. We expect R&D to be relatively flat for the third quarter.Total third quarter capex was $41 million. For the full year, we expect capex of approximately $185 million. Third quarter cash use totaled $79 million, including $43 million paid to Pfizer for service fees incurred from the beginning of the partnership through the end of June. We ended the quarter with cash and securities of $1.2 billion.Turning to our guidance. We expect revenue of $802 million to $810 million and Cologuard volume of 1.67 to 1.68 million tests. With just two months left in the year and a major holiday still in front of us, you should focus on the guidance range as the most likely view of how we see results playing out. For the fourth quarter, we expect revenue of $221 million to $229 million.

I will now turn the call back to Kevin.

Thanks, Jeff. The Exact Sciences team is focused on three priorities in 2019: one, powering our partnership with Pfizer, two, enhancing Cologuard; and three, advancing our pipeline of blood-based cancer diagnostic tests.Starting with our first priority, we're confident that we can capture at least 40% of the U.S. colorectal cancer screening market from about 5% today. Our talented sales teams, partnership with Pfizer, innovative marketing campaign and deep payer relationships provide a powerful commercial organization to support Cologuard's growth. The Pfizer partnership has been valuable in driving Cologuard's adoption, and the teams are working well together.Partnering with gastroenterologist will help Cologuard reach more people. In July, we launched a new GI sales team to call on these important influencers in colon cancer screening. During the third quarter, we accomplished two major milestones in building a robust infrastructure to support Cologuard's growth. We began processing test at our new lab in Madison, increasing our total lab capacity to 7 million tests per year. We also successfully implemented Epic's powerful health IT platform.Epic's EHR system will provide an enhanced experience for Cologuard users, physicians and our employees. In the future, Epic will enable electronic ordering for a greater share of our customers it will also allow powerful analysis and enhance our understanding of the entire Cologuard experience, improving our patient compliance and rescreening efforts.

Our second priority is enhancing Cologuard. There are two main components of this goal for 2019: expanding Cologuard's label to include ages 45 to 49, and laying the foundation for an improved version of Cologuard.Expanding Cologuard's label is an important opportunity for growth and for detecting colorectal cancer earlier. Last month, the FDA approved our label expansion providing access to Cologuard for the $19 million average risk unscreened Americans ages 45 to 49 and increasing its total addressable market by $3 billion to $18 billion. Over the last 25 years, colorectal cancer incidents has increased more than 50% in people under the age of 50. It's incredibly important to screen younger people earlier. I mean Cologuard is a convenient effective option that fits well into this younger age group's busy lifestyle.Insurance coverage is essential to broad adoption in healthcare. Several national and regional payers have lowered their coverage screening age for Cologuard to 45, following the American Cancer Society guidelines update last year, including Aetna, CareFirst and Blue Shield of California. This is encouraging progress and our team is engaging with other payers educating their sales force and developing new marketing plans to help increase awareness for the importance of screening in this age group.Cologuard 2.0 has a potential to lift Cologuard's clinical and economic value proposition even higher and further differentiate it as a frontline screening test. Our primary goal is to increase Cologuard's specificity while maintaining a high level of sensitivity. Higher specificity further enhances the overall health economic performance of Cologuard in the screening setting.

Today, we presented data at the American College of Gastroenterology Scientific meeting demonstrating that we have identified markers with a potential to achieve our performance goals. At 92% specificity, the new markers were 92% sensitive for cancers and 65% sensitive for pre-cancerous polyps. We are pleased with these strong results as we saw a five-point increase in specificity, while maintaining a similar level of sensitivity. It's important to note, the pre-cancerous polyps tested in this study were typically larger in size than we saw in our large prospective trial for Cologuard, and therefore, likely easier to detect.We may see some pre-cancerous sensitivity improvement with Cologuard 2.0 from the current markers. However, the size of the pre-cancerous polyps, stage of cancer, timing of sample collection relative to colonoscopy, and many other factors, can enhance performance in case control studies.

Based on these strong results, we're initiating BLUE-C a perspective pivotal trial to validate the performance of this new enhanced version of Cologuard and prepare for an FDA submission. We plan to enroll our first patient in BLUE-C next month this is an exciting step toward setting an even higher bar in the early accurate detection of colorectal cancer.Real-world evidence is critical to supporting continued Cologuard adoption over time. Working with Mayo Clinic, we recently initiated Voyage, a 150,000-patient prospective observational study of individuals using Cologuard for routine screening. The seven-year study will follow individuals to evaluate the real-world impact of Cologuard on screening, incidents and mortality rates.Our third priority is advancing our blood-based cancer diagnostics program. We are uniquely positioned to be the leading cancer diagnostics company for years to come. Our collaboration with Mayo Clinic and the success of Cologuard provide a platform for future advancement.

The combination with Genomic Health will build on our success, creating an even stronger growth platform for Cologuard, Oncotype DX and our pipeline. We're bringing together some of the greatest minds in cancer diagnostics to form a best-in-class research, development, clinical and commercial organization. Together, we'll have a global infrastructure and a stronger financial profile to accelerate the availability of -- and growth of new innovative tests to patients in need.Liver cancer is the number two cancer killer globally, and patients with advanced liver disease need more accurate and convenient testing options. We're presenting data at the Americans Association for the study of Liver Diseases, meeting next month, demonstrating superior performance of our liver test compared to the alpha-fetoprotein test.We'll provide more details about these data after they are presented at AASLD and no longer under embargo. We're also enrolling additional patients to finalize test development and plan to make the test available in the second half of next year.

Our goal is to generate real-world evidence to support guideline inclusion, broad reimbursement and adoption over time. We believe test that can accurately detect pre-cancer and early stage colorectal cancer, like Cologuard and colonoscopy, will lead the U.S. screening market while a blood based-test could provide another option for some people.To support validation of our blood-based colorectal cancer screening test and create significant cost and time efficiencies, we plan to collect blood and stool in our BLUE-C study beginning in the coming weeks. Our years of work with Mayo Clinic, combined with our low cost of accurate testing platform, an extensive clinical trial regulatory and commercial capabilities, position us as the leader in this space.

We're now happy to take your questions. We really are happy to take your question.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Your first question comes from the line of Brian Weinstein with William Blair.

Brian Weinstein -- William Blair & Company L.L.C. -- Analyst

Hey, guys. Thanks for taking the questions. Wanted to start out just on a broad question on the Cologuard franchise right now. Sounds like things are going OK relative to your expectations, but I mean you do have a lot of things going on with Epic and GI sales force and some other things that you guys mentioned. Kevin, can you just talk a little bit about any kind of impact that those things might have right now relative to the Cologuard franchise in total? And then as part of that, also -- just how you're seeing the sales force working with Pfizer? Are we seeing the kind of full efficiency between the sales force as of this time, or is there more to go as those two groups get together?

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Thanks, Brian. What we see is a continued strong progress toward our goal of reaching 40% penetration or market share of what today's stands at about 106 million-person market opportunity. And all of the signals that we see and the work that we're doing is preparing for that long-term. There are always some minor disruptions at any time. We did implement Epic during the quarter, really proud of the work that the team did there to make a major IT transformation during the middle of the quarter and still achieve record results. We also saw some of our very best reps move into new roles with -- in the GI sales force. And as it relates to Pfizer, the partnership there is stronger than ever. The teams are really jelling, the marketing, the sales, the health system sales. Our -- we're seeing significant progress and we have high expectations for next year.

Jeff Elliott -- Chief Financial Officer

And Brian, this is Jeff. Just add Kevin said when you look across the key leading indicators in the business, I see very strong momentum. So for example, when you look at our sales force, I can look at the productivity of each cohort of rep that we've had over them recall recently hired a new cohort every year. Every cohort of reps continues to get most productive. So even the reps from 5 years ago, continue to get most more productive each year. On top of that, when I look at the physicians that have ordered Cologuard, right, so over 180,000 total providers that have ordered, every cohort providers based on when they first ordered, when you look at different quarters of first order, they continue to get more productive. So we're seeing very good incremental productivity across our reps and across our physician base; or is reverse I see very the momentum across the business.

Brian Weinstein -- William Blair & Company L.L.C. -- Analyst

Okay. Thank you for that. And all that follow-up some of that, but just on the blood stuff, can you give us an update where you guys are as far as collection of data internally, you've doubled the number of blood samples, I think, you're getting out of one clinical trial versus or just one clinical trial versus just an enrollment of trying to get samples not that you're collecting in 2.0 some blood samples. So can you give us an idea just where you think you are in development tier and when we can get an update on something more formal as far as time frames to see some data from you guys? Thank you.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Brian, we recently completed a case control data or case control study demonstrating strong performance with the blood-based colorectal cancer test. Let me take a step back here. The way that we see the opportunity is that colonoscopy penetration had leveled off for about the 10-year period prior to Cologuard being FDA approved. And with colonoscopy, you have a highly accurate but low patient-friendly test. And with Cologuard, you have high accuracy and high patient friendliness

And what you've seen is significant adoption among people who've never been a screen before with Cologuard. The fit test you see the opposite. You see lower performance yet high ease of use of the patients part. And what we're seeing now overall is Cologuard taking share from colonoscopy in the screening setting and the fit test, and importantly, expanding the overall population.A blood test has -- any of the data that we have seen, has lower performance than even the fit test in terms of pre-cancer detection, which is really important as models -- as the data then feeds these models and similar performance for cancer detection at a similar specificity. So we believe as a result of that, that a blood test has to be priced appropriately and that it has more of an niche because of its performance characteristics is likely to model out as an annual test. It's unlikely to model as an every 3-year test, putting pretty significant pressure on pricing.

The other thing to know about a blood-based program is, we don't anticipate having this study done completed until after, it's too late to be in the next USPSTF guidelines. That's true. We think of any other entrants in the space. So the first time a blood-based test would potentially be in the USPSTF guidelines would be in the 2026 to 2027 timeframe. During that time, we intend to continue to grow the market penetration of Cologuard and to continue to enhance like -- we referenced with the Voyager study and Cologuard 2.0 to continue to raise the standard -- the bar and the standard -- enhance our standard of care position in the guidelines. So that's how we see the overall opportunity with the blood-based test. We're pleased with our performance and we have not yet decided when we will make that performance available publicly.

Brian Weinstein -- William Blair & Company L.L.C. -- Analyst

Okay. Thank you guys.

Operator

Your next question comes the line of Brandon Couillard with Jefferies.

Brandon Couillard -- Jefferies LLC -- Analyst

Thanks. Good afternoon. Kevin, just come back to the third quarter. To what extent do you think Genomic Health was a distraction at all in the period? I know you also pulled the reps out for some period of time to go through training for Cologuard 45. You think either those 2 dynamics had an impact on the third quarter? And then Jeff, as we look at the fourth quarter guide, seems to imply about sequential increase of about 15,000 test which would suggest that utilization per doc might actually decline sequentially. Can help us think through some of the moving parts and factors that kind of inform your guidance on the fourth quarter?

Jeff Elliott -- Chief Financial Officer

Brandon, this is Jeff. First question on the third quarter Genomic Health and the GI transition, the team has done a very good job of working through all those things. Like I said before, we have a very good momentum throughout the Cologuard business. I always go back to the size of this market, 106 million people long-term -- were headed to at least 40% share. We have 5% today, nothing has changed about this business. It is very strong. You had a comment about the fourth quarter guide. I would say, for the fourth quarter, keep in mind when you look over there 5 years now of history, in all those years but 1, we did see a small downtick in the fourth quarter in terms of test per doctor. The simple reason is seasonality. When you head into the fourth quarter, you have a seasonal headwinds from the holidays. Patients don't go out to see their doctors as much around the holidays and that impacts our business temporarily. Over the long term, we expect continued momentum, when we look ahead to next year, so the significant number of drivers in marketing but we have a light of new drivers coming on next year and the following year, so we are very optimistic about the state of Cologuard.

Mark Stenhouse -- President of Cologuard

Jeff, this is Mark. There are so many positive drivers, the first that Jeff highlighted, I think is the size of the market, over 100 million Americans in our share position, which gives you a sense of the possibility going forward. A big part of that is Cologuard's 45 in 19 million Americans that need to be screened. It's our moral obligation to screen that population. The incidence rate of increase is over 50%. And we've seen obviously, the label change and very good training. That training was done quickly in an expedited format. We're now communicating to doctors about that. The other piece about the business, I am really excited about is the fact that 96% of our patient population is able to receive Cologuard without any cost share, a $0 co-pay for almost the entire available market. You take that, you add on the rescreen business, the three year regular interval and all the patients that start come back to us next year, you add the fact that health systems we're starting to see an increase in electronic ordering out of our health systems, which is a by-product a strong collaboration with Pfizer. I really think it gives you a sense that what's in front of us is a really, really strong business model.

Brandon Couillard -- Jefferies LLC -- Analyst

That's helpful. Then Mark maybe sticking with you, one follow-up. Do you still planned for the Veeva CRM rollout in the fourth quarter? And what impact do you think that has on productivity? And how quickly that can begin to sort of boost the productivity of the Salesforce? So that's something that can happen fairly soon or does it more measured over a period of time as they get more familiar with the platform?

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Yes. We are launching Veeva the first week in December. Yes, I think it makes us more productive over time. I don't think you see immediate productivity in part because of the timing of the year, we're launching the tool. It enables the representatives to better manage their business, their doctor engagements. We will also be putting our marketing content on the Veeva platform through their iPad, which will enable them to have a better conversation with their physicians. So I think you really see the productivity in next year.

Brandon Couillard -- Jefferies LLC -- Analyst

Very good. Thanks.

Operator

Your next question comes the line of Derik De Bruin with Bank of America.

Derik De Bruin -- Bank of America. -- Analyst

Hi, good afternoon.

Mark Stenhouse -- President of Cologuard

Hi, Derik.

Derik De Bruin -- Bank of America. -- Analyst

Hello.Hey. Hi, hi. So I'm just curious, the pro forma deal model that you put out there basically implies stand-alone growth to the stand-alone Exact on year-over-year basis about 40%. Are you comfortable with that number as it's out there right now, you get help me with that?

Jeff Elliott -- Chief Financial Officer

Derik, this is Jeff. We plan to issue 2020 guidance on our fourth quarter call, which is when we typically give it. I'm not sure which model you're referring to, but always said about next year is what we said in the last call of $1.6 billion of revenue at $1.2 billion of gross profit. We haven't commented beyond that.

Derik De Bruin -- Bank of America. -- Analyst

I specifically we're doing the math on the pro forma numbers for the company and stand-alone number charts in terms of the filing sort of backing into a 40% growth rates on Exact that way. That's where we're getting too. Just can you talk about progress in getting rescreening? Given that there is number of people are looking at the retesting?

Mark Stenhouse -- President of Cologuard

Yeah, Derik, this is Mark. The rescreening business is obviously a growing opportunity for us and a sizable next year. We've continued to outreach to patients and see not only a better compliance when a patient actually has the rescreen tests ordered, they return it at a higher compliance rate than our rest of patients, the new screen patients.

We continue to look for productivity gains. I would say, we've not completely solved this yet, but we have made measured performance, we continue to try ways to better engage patients both digitally and through written communication to get them to activate to come back to us. I will say that once we get more embedded electronically, both with ethic and into the electronic medical record, we'll continue to see leverage in this opportunity.

Derik De Bruin -- Bank of America. -- Analyst

Great. And what was the compliance there for the quarter?

Mark Stenhouse -- President of Cologuard

67% and when I look ahead to next quarter, I expect it to be at least 66%. There's always a bit of a seasonal impact, again, similar to what we said about the holidays from a completed test standpoint. Around the holidays, patients comply to study slower rate so expect it to be down a little bit in the fourth quarter.

Derik De Bruin -- Bank of America. -- Analyst

Great. Thanks.

Operator

Your next question is from the line of Doug Schenkel with Cowen.

Doug Schenkel -- Cowen and Company -- Analyst

Hey, everybody. So both Brian and Brandon asked about Q3 performance and what's implied in guidance for Q4. I apologize, but I don't think we got out of you what we're looking for, so I'm going take another shot. I think almost all of us on this call know about the market opportunity. It's huge and we're excited about your positioning to get more people screened for what's a very treatable cancer.

That said, what we appreciate that I know you appreciate part of our job is also understand -- to understand how well you're executing your plan and underlying trends in the business. So again, maybe to take another angle on this, in the third quarter, while orders per doc improved 0.07 in Q3 relative to Q2, this was actually a moderation relative to the average we've seen in terms of sequential growth in that metric over the past six quarters. Were there transitory dynamics in the quarter, several of them have been listed already? Were there are transitory dynamics in the quarter that impacted the productivity as measured by that metric that you don't expect to continue in the long-term? That's the first question.

The second question, again going to guidance, is you talked about a seasonal moderation, Jeff. But I don't think that, that was true last year. And if we think about things like the fact that the Pfizer reps, as well as the reps that you hired in the back half of last year are just hitting their stride, spending on advertising is not only increasing, but increasingly going through Pfizer, which is supposed to actually increase the efficiency of spend. Why wouldn't those things, especially given, as you said, how early the stage of market penetration is, why wouldn't those things overpower any seasonality in the business?

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Thanks, Doug. I'll first take this and pass it to Jeff. We appreciate the fact that you have a job to do, and I think what we're trying to say is over time, you have seen fluctuations in the performance. What you're looking at here is a record quarter of 90% order growth.And you have to put all of this in the context that there are always puts and takes at any given time when you are moving reps around, when you're putting in a new IT platform, when you have a large partner with dynamics on their own.

And what we're trying to say is, put all of that noise aside and look at the track record of continued growth, and that growth is driven by this underlying growth in the overall number of people who are willing to get screened. And we have seen this not change much since we launched Cologuard, that 50% of people get a Cologuard test have never been screened before.With 19 million Americans in the 45 to 49 age group and about 35 million Americans in the older age group that have never been screened, this market is going to grow and it's going to continue to grow at a steep pace. So we're not going to get into all of the dynamics of quarter that was a really strong quarter. What we will say is, we're very confident as we look at next year, Jeff, if you want to provide an additional color.

Jeff Elliott -- Chief Financial Officer

This is Jeff. Just to comment on Q4. So when I look back over every year since launch. Q4, the completed tests per physician have been down sequentially relative to Q3. The only year where that was not the case was 2018. In 2018, keep in mind that we had just added some reps during the middle of the third quarter.And in September, we had some new coverage wins with Cigna and Anthem. And then, in the start of the fourth quarter, our Pfizer partnership began. So there is a lot of unique tailwind to the fourth quarter. The more normal trend though, and one that you should expect going forward, is to have a slight down tick in the completed tests per physician in the fourth quarter. That's not to say that the longer-term trends aren't clear, which Kevin talked about. Longer term, the number of completed tests per physician should go up significantly. To date, we've only captured just about 5% of the available patient per physician. There's about 300 patients on average out there today per physician that could today use Cologuard. So it's a huge market and we're just getting started.

Doug Schenkel -- Cowen and Company -- Analyst

Okay, thank you guys for that. I appreciate you indulging on those topics again. Just a couple on BLUE-C it looks like you reduced the age cutoff to 40. Could you just walk us through why you did that and what the broader implications are? And then just from a performance standpoint, if I remember correctly, there was a drop-off in sensitivity when you moved from the case-control study to DeeP-C. Are there reasons you wouldn't expect the same type of drop off this time? Thank you.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Sure. Thanks, Doug. While the reason that we included age 40-plus is to make sure that we have data should there ever be a further lowering of the age in the colon cancer screening guidelines. Most likely, we see that the guidelines staying at age 45 for some time. It's an opportunity though for us to evaluate performance in that even lower age group.The other key differences here between BLUE-C and DeeP-C, is we're including patients with the second -- with more than two first-degree relatives with CRC or one first-degree relative with CRC before the age of 60, so people with the family history, or patients with a family history of a genetically pre-disposition to colorectal cancer like FAP or Lynch syndrome. We also have 120 sites versus 90 sites in the DeeP-C study. And we're also doing optional blood collection. We expect to get blood -- collect blood from most patients in this study. Obviously, people are a lot more familiar with Cologuard now than they were when we initiated the DeeP-C study, so we're confident that we can meet our enrollment goals in the time frame we're looking at.

And in terms of the performance, do we expect the performance drop off as we look from a case control study to a prospective study? That has -- is almost always the case that you see that performance drop off. The key thing here though is specificity. The specificity of 92%, we -- those -- we're fairly confident that we will be north of 90% specificity given that that's where we will set the cut off in the large number of patients that we have studied many in that perspective environment. But yes, you will always see whether it's a blood-based test or stool-based test, you'd expect to see some performance degradation.

Doug Schenkel -- Cowen and Company -- Analyst

Okay. Thank you very much.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

And one thing to note there Doug, is we put out the data comparing Cologuard, the current version to Cologuard 2.0 to show the relative performance difference because that's -- that can give you some indication of our confidence level that Cologuard 2.0 is actually a better test.

Operator

Your next question comes from the line of Catherine Schulte with Baird.

Catherine Schulte -- Robert W. Baird & Co. -- Analyst

Hey guys, thanks for the question. First for blue see. How long do you expect that trial to take and when you think the all-in cost of the study will be?

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

We have not provided clarity on the former. I'll let Jeff decide whether he wants to provide clarity. Here's what I'll say in the former, Cologuard DeeP-C study took I think between 18 and 21 months, thereabouts. And we shouldn't be longer than that. That's for sure.

Jeff Elliott -- Chief Financial Officer

This is Jeff. DeeP-C took about 18 months to enroll and we've said before, it cost around $50 million all-in. This one over time and Exact has gotten even more efficient at running these big studies. We've got a lot of experience on running these studies. So it's a core competency. So as Kevin mentioned, our goal would be to get this done as quickly and efficiently as possible.

Catherine Schulte -- Robert W. Baird & Co. -- Analyst

And then just on clear on the blood test piece of that. If the test performs well, is your intention to use blue see as FDA pivotal trial for the blood test as well? And get off of that, I know you aren't talking about performance of that blood test, but can you just say how many patients is included in that case control study you mentioned, Kevin?

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

In terms of the blood case control study?

Catherine Schulte -- Robert W. Baird & Co. -- Analyst

Yes.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

We haven't disclosed that, but it was sufficiently powered to give us confidence in terms of the number of cancers.

Jeff Elliott -- Chief Financial Officer

And then yes, Kevin, this is Jeff, we do intend to use these blood specimens collected as part of blue see as toward an FDA submission.

Catherine Schulte -- Robert W. Baird & Co. -- Analyst

Okay. Great. And then last one for me. On 45 to 49, on your website, it says that 74% of Cologuard patients in that age group have had no out-of-pocket cost for screening, which seems pretty high for this early on. For that $1.6 billion revenue number you've talked about for 2020, how much of an impact do you think that age group could have on results next year?

Mark Stenhouse -- President of Cologuard

Kevin, its Mark Stenhouse. So the 74% number is a reflection of some of the positive moves we've seen from Aetna, CareFirst and Blue Shield California that Kevin mentioned. We're in active conversations and all the other national payers. We have confidence that those conversations are progressing. I would signal that a lot of them are anchored to USPSTF evidence review of this age cohort, which will likely believe will happen in 2021.So I think, we'll have to wait and see on the payer coverage, but a portion of the 45 to 49, I think will be graded by the access that's available for that patient population. As it grows, I think that business will grow with it.

Jeff Elliott -- Chief Financial Officer

Kevin, this is Jeff. Just to add to what Mark said part of why we're so excited about 45 to 49 is this 19 million person addition toward our current market includes patients that are most all unscreened. So, when you look at the number of people who are available, it's about a 50% growth in people who can today use Cologuard. On top of that, in the 45 to 49-year-old patient population, Cologuard fits very well into these patients' lifestyles. So, we're very optimistic it's going to have a very strong start. As far as what's baked into the prevalence guidance for next year, we'll give more color on that on the fourth quarter call.

Catherine Schulte -- Robert W. Baird & Co. -- Analyst

All right, great. Thank you.

Operator

Your next question comes from the line of Dan Brennan with UBS.

Dan Brennan -- UBS. -- Analyst

Great. Thanks for taking the questions. I wanted -- first question just on Pfizer, maybe Kevin, Mark or Jeff, in terms of the relationship, maybe post-Lyrica going all patent has that kind of impacted may be the salesforce, kind of, where they're carrying, where they're pushing Cologuard?

And then maybe, Mark, could you speak to kind of where we are in the productivity curve. I know typically, there's a number of visit where doctors will begin to -- or sell to get more productive with Pfizer coming on board last October. Kind of have we hit that point yet? Are we part of lay, just kind of walk us through that productivity on reps? Thanks. And then have a couple of follow-ups.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Dan, it's Kevin. Pfizer really has been an incredible partner and there have been some moving pieces there. They are fully committed to Cologuard. Their commercial efforts have been remarkable and we've learned a lot from them.We're obviously getting a lot of intention because -- and that was really a driving force behind partnering with Pfizer and Pfizer wanting to partner with us. We're getting a lot of their attention, their health systems team is really kicking-in. We're seeing the results of that and we expect that to continue into next year. Mark?

Mark Stenhouse -- President of Cologuard

Yes, Dan what I would say is, as you know, we're about a year remove from the start of the collaboration with Pfizer and this is about the time six to 12 months post-remove from promoting Cologuard that you start to see the productivity curve ramp-up.Let's also remember that Pfizer's delivering most of their calls in a second or third physician, so where we see the greatest strength in the co-promotion between Pfizer and Exact Sciences is when we share focus on a single doctor. When that happens is where we see the most lift. I would echo what Kevin just said, this is a very productive partnership. The teams are working collaboratively very well together; the qualitative feedback continues to be positive. And we continue to believe with the large market that we're operating in and a share position, that we got a great future ahead of us.

Dan Brennan -- UBS. -- Analyst

So maybe one quick follow-up related to that, so is it fair to say that possibly the productivity impact that you expect to see, kind of, that's largely ahead of us here?

Mark Stenhouse -- President of Cologuard

I think that's a fair statement. We're right at the point where you would see the productivity picking up and this is the time that we're the organization between Pfizer and Exact of where we're focusing our call effort, we've had a year of behavior to observe, where Pfizer has made calls, where Exact has made calls, where we've made them together. That allows us to optimize where we go next, it is also the time that wraps nationally start to be become more productive.

Jeff Elliott -- Chief Financial Officer

This is Jeff. Want to add what Mark said, I would expect that Pfizer reps and the Exact reps to continue to get more productive every year for the foreseeable future. I mentioned earlier that the reps that we had from the time of launch, so about five years ago, continue to get more productive. So, it's not that you get say six to 12 months and you peak out, no you keep getting better and better at your job.

Dan Brennan -- UBS. -- Analyst

And then maybe just on some of these other big opportunities that are ahead of you and you've alluded to maybe 2020 and beyond, obviously, given a 5% penetrated. But between the IDN and the reorder and electronic order, those are three big opportunities. Could maybe just briefly touch upon where we are with traction on those three? Thanks.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

IDN, reorder and...?

Dan Brennan -- UBS. -- Analyst

And electronic order.

Mark Stenhouse -- President of Cologuard

This is Mark. I think you framed it correctly. Where we see an electronic ordering, we know that anytime we have a system or a physician that's using electronic means to order, they order an average at least 20% more than those on traditional fax order.So we know that when that happens, we see growth. What we see in health systems in general is movement. So as we focus with Pfizer on accounts, one of the measures of productivity of that partnered effort against the account is increase electronic ordering and bidirectional interface.=We see growth in that number. Number of systems using a bidirectional interface growing every quarter. We see that starting to pickup traction.I answered the rescreen question earlier, but it is an opportunity that grows over time. We're seeing performance both in the compliance rate in terms of number of kits that come back to us in the second order of the eligible patient population. We saw tactics we're deploying to drive incremental growth of the rescreen population and a number of patients to come back to us. There's still room for improvement there. And then the last one was on...

Dan Brennan -- UBS. -- Analyst

I think you hit on IBM reorder and electronic order, yeah.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Kind of it is up.

Dan Brennan -- UBS. -- Analyst

Kevin, I know I'm kind of asking the third question, but since you talked a lot about liquid biopsy kind of during your prepared remarks. I thank you mentioned in the prepared remarks that your expectations are for your test and for other tests that are working through different levels of development that you think the best case of the someone to FIT. So basically, can you just remind us of FIT, as I recall 95% specificity, 74% sensitivity? Is that kind of what you think the best case is kind of your test and/or any of the other tests that are working their way to development? Thanks.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

In 24% specificity for -- I'm sorry, sensitivity for advanced adenomas. And we have built a model, a very sophisticated, enhanced version of the models that exist in colorectal cancer screening. So we have the advantage to be able to scenario play with those models in terms of, if you increase the advanced adenomas, sensitivity bring down the Stage I cancer sensitivity and play with the specificity, then does that meet the USPSTF criteria for inclusion. And the challenge that you see with most of the data for those who are aspiring entrance into colorectal cancer screening with the blood-based test is low early stage cancer sensitivity, poor specificity, relatively poor specificity relative to the FIT test.And no data on advanced adenomas. And to get advanced adenoma data, you need to run a prospective study, because they had animals are typically cut out before -- they're typically cut out by the time you have an opportunity to get a blood drop. So, if you collect the blood drop before the colonoscopy, that works and you can collect those samples. What is you saw on the data that we just presented with 65% advanced adenomas detection, we do not expect the ultimate Cologuard 2.0 test to deliver 65%. Those advanced adenomas were larger because they were left in, and that's how we're able to get a blood draw before colonoscopy.So, when you take a look at what is required, you need to have some measure of advanced adenoma sensitivity, that's the part of this thing to do, because there's one layer of the cells that are starting to progress toward cancer, and they're being shade into the colon, not in the blood supply, which is what it's really hard to find signal. That's the context here. As a result of all of that, there's one big take away. A blood-based test is likely to model as an annual test. There is another take away from that. Is that the price is probably in the area of a third of what Cologuard is priced today.

That doesn't leave a lot of room for all the cost associated with the sequencing, which is why we are focused on a lower-cost approach, so that we can bring the test to market for people who refuse both Cologuard and colonoscopy, which we think will be a small fraction of the overall opportunity. So we have spent 10 years really digging in here. We've looked at every way that we could get to 100% screened. This is one of those ways we don't think it's going to take share in a major way from either colonoscopy or Cologuard, especially as you project where colonoscopy and Cologuard end up a decade from now where we think we have had 85% penetration between those two approaches and probably roughly split.

Dan Brennan -- UBS. -- Analyst

Okay. Thanks, Kevin.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

I know that's a long-winded -- that maybe a long-winded explanation, but that's the context with which we are -- we plan to launch a blood-based test.

Dan Brennan -- UBS. -- Analyst

Great. Thank you.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Thank you.

Operator

Your next question is from the line of Puneet Souda with SVB Leerink.

Puneet Souda -- SVB Leerink -- Analyst

Hi, Kevin, Mark, thank you, Jeff. Mark, if I could ask on the reps as they go out there and get feedback from these new physicians and new docs and as well as the multiyear Cologuard prescribers, had the feedback changed from either of those two groups in the near term here? Just trying to get a sense of what the exact reps themselves and the Pfizer reps are hearing? Is that changed at all and is there any difference in Exact versus the Pfizer reps if you elaborate there will be really helpful.

Mark Stenhouse -- President of Cologuard

So there is no qualitative feedback difference between the cohort of doctors or the reps and how they call and doctors. Certainly, we're very associate elaborative effort on a single doctor. So a doctor has a large opportunity to screen patients, we see their greatest lift.So and that doctor, they've been convinced to use Cologuard is a more front-line option than those that have lower value or current lower writing. So the only qualitative difference there is that they're stronger believers in Cologuard is a frontline screening test by way of the frequency of the effort and their acceptance of the message. But it's the underlying story is still true, which is doctors are responsive to promotion and we don't see a degrade in the -- when we make more calls and their willingness and use of this product.

Puneet Souda -- SVB Leerink -- Analyst

Okay. Thanks, and if I could ask on DeeP-C, a number of questions have been asked here. So I mean, appreciate that your starting DeeP-C, sub study here. I just wonder to confirm, your confidence appears to be coming from this case-control study or internal study that you can conducted here.Given the investment into this and your confidence behind this, I mean when can we see this data? And the second part of that question is as you start enrolling here, just I was just curious if you have among the 120 sites that you have, you have any enrollments concerns obviously, a number of colonoscopies are conducted every day.But we have few other trials that are ramping now in the next year three that I can see, 10,000 patient trials. I just wanted to get a sense of is there any competitive concerns in these trials?

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

We have no plans in the near term to publish our internal data. There are 120 sites that are enrolling. We have tremendous confidence that we will be first to complete studies. We have the scale, we have the relationship with physicians in the commercial organization and the brand awareness and focus. So we're confident that we'll be first.

Jeff Elliott -- Chief Financial Officer

Puneet, this is Jeff, I'll just add to what Kevin said. We have multiple prospective studies under way now many of these temples are being used for price development. Many of these sites in these studies, we expect to convert over to the Blue Sea study. So I think we are in good position to enroll the 10,000 patients that we need and move very quickly with Blue Sea.

Puneet Souda -- SVB Leerink -- Analyst

Okay. And last one if I could appreciate I could squeeze in just the 45 to 49 contribution in the quarter, Jeff, and what was expectation for the contribution in the fourth quarter for the 45 to 49 year old? Thank you.

Jeff Elliott -- Chief Financial Officer

So the revenue impact of 45 to 49, given when the FDA approval happens, was that material to the quarter, we will not promote a product off label and that approval came so late in the quarter that it wasn't material. And what was the second question, Puneet?

Puneet Souda -- SVB Leerink -- Analyst

Just in the fourth quarter, if you could, this is September 23, I believe when it came through, so I just want to get a sense of what would be potentially here in the fourth quarter because it was marketed I believe on the first day, I mean it could have been marketed on the first day. Thank you.

Jeff Elliott -- Chief Financial Officer

We're very excited about the opportunity here. Again, 19 million people is a huge opportunity long term. However, came in mind that we're just now out there training the reps, laying the foundation for marketing perspective. So I wouldn't expect a material impact in the fourth quarter either.

Puneet Souda -- SVB Leerink -- Analyst

Okay. Thank you.

Operator

This question is from the Mark -- of the line of Mark Massaro with Canaccord Genuity.

Mark Massaro -- Canaccord Genuity -- Analyst

Hey, guys. Thanks. So my first question is I guess, a two-part on marketing. First, is do you expect to initiate the consumer-initiated pilot in Q4 or have you started that? And then the second one is when should we expect to see the age 45 change to some of these direct-to-consumer commercials on TV?

Mark Stenhouse -- President of Cologuard

So, this is Mark. I'll take the second question first. So, one of the things we know to be true is that, as we talked about, this is a big opportunity. We know the 19 million the 50% increase, the American Cancer Society's recommendation really triggered our FDA labelling effort. And you've heard that we've got 74% coverage. And that coverage needs to grow over time to really get leverage in this screening population that vastly remains unscreened.

So we believe the most important thing to do is communicate to doctors first. So that's why our training is started. And we've communicating to doctors, and frankly, the payers. We expect to converts our TV commercial to say eligible for a 45, starting early next year. So that and I think that triggers appropriate because then we would talk to our physician population first. I've also mentioned previously that we were looking at the consumer-initiated pilot, this year. And we're still on track to do a small pilot on capabilities this year.

Mark Massaro -- Canaccord Genuity -- Analyst

Got it and then, I did want to ask a question about the blood test initiative. Can you just clarify that this is expected to roll out in Europe or outside the U.S? I just want to clarify that, I don't believe we have plans to launch a blood-based test in the U.S. and if you do, can you please comment on that?

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

We -- this will -- the study that we're doing, I would say, would support an FDA submission in the U.S. yeah its in our comments right so far on this call have been aimed at the U.S. market, not the European market. The European market is an opportunity. We'll look at. We'll do that, in combination with the Genomic Health international team, which is about 100-people strong. And they'll help us evaluate the opportunity outside the U.S.

Mark Massaro -- Canaccord Genuity -- Analyst

Excellent, and then, one last quick one, on the Epic health record system that was implemented in the third quarter. I could be wrong, but I think there may be another piece this sometime next year. And I think it's related to capabilities surrounding text messages or emailing to drive for orderings. It's something we can expect later next year or was that also implemented in Q3?

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Mark, I think what you're recalling is that, in -- toward the end of next year, we expect Epic to enable electronic ordering for virtually all physicians who use the or any instance of Epic. And that is an important long-term driver of adoption because it enables are tremendously easy ordering for physicians. And as you know, Epic has about 70% market share. So that, I think is the question or is the thing that you're remembering.

Jeff Elliott -- Chief Financial Officer

Mark, this Jeff to add what Kevin said, today, when we look at all the proprietors that order electronically, compared to providers that order via fax, the ones that are currently over order over 60% more, than ones that order via fax. And as Mark said, when you see that conversion to electronic ordering, you see a pretty quick bump up in their order rates. So we are very excited about the opportunity over time, that I think they can help us with.

Mark Massaro -- Canaccord Genuity -- Analyst

Great, thank you.

Operator

And we have waste our lot of time for Q&A. I will now turn the call back over to Kevin Conroy for final remarks.

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Well, thank you for joining us today to review our third quarter results and the progress we made toward our 2019 priorities. The Exact Sciences team delivered another strong quarter, and made significant progress, enhancing our internal infrastructure and advancing our pipeline, positioning us for long-term sustainable growth. Thank you to the entire team at Exact Sciences for your hard work and continued commitment to our mission.

Operator

[Operator Closing Remarks]

Duration: 60 minutes

Call participants:

Megan Jones -- Associate Manager of Investore Relations

Kevin Conroy -- Chairman of the Board and Chief Executive Officer

Jeff Elliott -- Chief Financial Officer

Mark Stenhouse -- President of Cologuard

Brian Weinstein -- William Blair & Company L.L.C. -- Analyst

Brandon Couillard -- Jefferies LLC -- Analyst

Derik De Bruin -- Bank of America. -- Analyst

Doug Schenkel -- Cowen and Company -- Analyst

Catherine Schulte -- Robert W. Baird & Co. -- Analyst

Dan Brennan -- UBS. -- Analyst

Puneet Souda -- SVB Leerink -- Analyst

Mark Massaro -- Canaccord Genuity -- Analyst

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