Exact Sciences (NASDAQ:EXAS) hasn't fired up investors so far in 2020 like it did last year. But the COVID-19 pandemic has weighed heavily on the cancer screening and diagnostics provider's business. The good news is that Exact Sciences' management team said that there were signs of improvement in the quarterly conference call in May.
The company announced its second-quarter results after the market closed on Thursday. Did those early signs of improvement pan out? Here are the highlights from Exact Sciences' Q2 update.
By the numbers
Exact Sciences reported revenue in the second quarter of $268.9 million. This reflected a 35% jump from the prior-year period revenue total of $199.9 million. It also handily beat the Wall Street consensus revenue estimate of $228.4 million.
The company announced a net loss of $86.1 million, or $0.58 per share, in Q2, based on generally accepted accounting principles (GAAP). This was much worse than the $38.5 million, or $0.30 per share, net loss reported in the same quarter of 2019. However, it was still better than the average analyst estimate of a net loss of $0.63 per share.
Exact Sciences ended the second quarter with cash, cash equivalents, and marketable securities totaling $1.2 billion. The company's cash stockpile was much greater than the $323.7 million on hand at the end of 2019.
Behind the numbers
Don't get too enthused about Exact Sciences' revenue increase. The company's Q2 revenue total included $103 million of precision oncology revenue, all of which stemmed from acquisitions. Exact Sciences closed on its acquisition of Genomic Health in November 2019. It also completed the acquisition of Paradigm Diagnostics earlier this year.
If you back out the precision oncology revenue, Exact Sciences' total revenue fell 17% year over year. The company's screening revenue from DNA colon cancer screening test Cologuard and its Biomatrica sample preservation products sank 34% year over year to $131.3 million. This decline stemmed from the disruption caused by the COVID-19 pandemic.
However, COVID-19 also helped Exact Sciences somewhat in Q2. The company reported COVID-19 testing revenue of $34.6 million. In addition, Exact Sciences received a one-time payment of $23.7 million from the Coronavirus Aid, Relief, and Economic Security (CARES) Act Provider Relief Fund.
Exact Sciences chose not to provide any guidance for the full year. It took the same stance in Q1 due to the uncertainties created by the COVID-19 pandemic.
The healthcare stock isn't likely to repeat its sizzling performance from 2019 this year because of the pandemic. The coronavirus outbreak could continue to cause problems for Exact Sciences' Cologuard sales.
Over the long run, however, CEO Kevin Conroy expects adoption of the DNA test will accelerate because of its convenience and accuracy. Conroy also noted that "COVID-19 is elevating the importance of our Precision Oncology tests, as patients and physicians look for smarter, faster answers to guide their cancer treatment decisions."