Exact Sciences Corp. stock took a hit Thursday, in heavy trading, even though the Madison cancer diagnostic test company reported a 78 percent jump in revenue for the second quarter.
The problem was that Exact Sciences' results didn’t quite meet the expectations of financial analysts who follow the company.
Exact Sciences reported $102.9 million in revenue for the three months that ended June 30, up from $57.6 million for the same period, last year. The company had a net loss of $36.4 million for the quarter, or 30 cents a share, compared with a net loss of $30.8 million, or 27 cents a share, for the 2017 second quarter.
Exact labs processed 215,000 Cologuard tests in the second quarter, up from 135,000 for the 2017 second quarter, and more than 10,000 new health care providers prescribed the DNA stool test for colorectal cancer for their patients.
“We are excited about the continued growth of our physician ordering base as well as their increasing Cologuard utilization, which led to a record quarter for revenue, volume and gross profit,” said chairman and CEO Kevin Conroy.
But Exact officials had projected processing 220,000 to 230,000 of the tests, said analyst Brian Weinstein, of the William Blair investment firm, in a research note Thursday. Weinstein, who had expected Exact to hit the 225,000 test mark for the quarter, said the company’s explanations for the shortfall were confusing.
Weinstein called the test volume “disappointing” and “frustrating.” But, he said, “This is not a broken growth story. The opportunity remains vast and remains barely penetrated.”
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Weinstein said he still expects the company’s long-term outlook is still strong.
“We view the shortfall as growing pains for a still young organization looking to continually adapt its approach to the market,” Weinstein wrote.
Exact stock dropped as much as 19 percent in trading Thursday before closing at $51.63, down $7.49, or 12.7 percent. More than 15 million shares were traded compared to the average daily trading volume of just under 2 million shares.
Exact Sciences stock has ranged from $36.10 to $71.60 over the past 52 weeks.
CEO Conroy said Exact is following through on projections it would add about 200 salespeople this year; so far, about 150 have been added, he said.
He also said a third, larger study on a blood test to screen for liver cancer has started enrolling patients. Earlier studies have correctly identified liver cancer cases 95 percent of the time. The test is being developed in collaboration with Mayo Clinic.