Exact Sciences Corporation (EXAS) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Tejas Savant, and I work in the life sciences team here at JPMorgan. It's my pleasure this afternoon to introduce Kevin Conroy, CEO of Exact Sciences. After Kevin's presentation and after lunch at 1:30 p.m., there will be a breakout with the management team in the Olympic Room. And with that, I'd like to hand it over to Kevin.

Last month, I attended the San Antonio Breast Cancer Symposium, which is the leading gathering of breast cancer oncologists and researchers in the world. And I left that meeting with a really important insight that we'll talk about later. Thanks to Tejas, Tycho and JPMorgan, and welcome all of you and to those who are listening on the webcast. We have a safe harbor statement. We will be making forward-looking statements. Oncology is rapidly changing, and cancer diagnostics is fueling that change. At Exact Sciences, we are the leading cancer diagnostics company focused on the early detection of cancer and helping to guide the appropriate treatment. And we have teams and infrastructures and capabilities second to none in our ability to continue to lead in this field. We lead through, in part, our financial strength. And 2019 was a tremendous year. In screening, our Cologuard business grew 78% year-over-year. And importantly, we serve 1.7 million people. Think about that. That is more than the number of people we served in 2017 and 2018 combined, tremendous growth. We also added 50,000 new health care providers, that's a 34% increase. And that's 150,000 health care providers in the primary care setting. We have a lot of room to grow there. Our precision oncology team, this is the Genomic Health team. And I want to take a moment and say Kim Popovits and the entire team at Genomic Health have built an incredible culture around innovation, around great science and mountains of evidence to help patients, a focus on the patient. And as a testament to Kim's leadership, her team had one of the best years they've had, 16% growth, fueled by the TAILORx study published in 2018. We'll touch upon that study. That growth continues in the U.S., and it -- there is tremendous growth outside of the U.S., no -- giving us deep relationships, both in the U.S. and ex-U.S., in the field of oncology. We're able to achieve these priorities as a company because historically, ever since I joined the company 11 years ago, every January, we put 3 priorities on a piece of paper, and we drive those priorities through the company. So we firmly believe that if you have more than 3 big priorities, you really have none. It's how we have been able to create a culture of delivering on our results. And last year was like previous years. We continued to grow, 80% more people served with Cologuard than the prior year. Again, 34% increase in the number of health care providers ordering the test. While we did this, we've doubled our Cologuard lab -- more than doubled our Cologuard lab capacity to 7 million tests per year. We also changed our entire IT infrastructure, installing Epic as our foundational IT system and SAP and Veeva. The team was able to execute on all fronts. And we did this, too, while scientifically changing colon cancer screening, lowering the screening age in our label to age 45 to make that in alignment with the American Cancer Society new guideline recommendation. That's 19 million more people. And we released data on the next-generation version of Cologuard, Cologuard 2.0. That is a version of Cologuard we aim to improve the specificity, decreasing the false positive rate. And we initiated our second 10,000-patient study in colorectal cancer. This is to fuel our next-generation versions of colon cancer screening. We also announced data around our liquid biopsy program for liver cancer. Congratulations to the team that made these priorities a reality. And as we stood on this stage a year ago, we announced $454 million in revenue for 2018. On a pro forma basis today, we're at $1.3 billion in revenue. We're a very different company than we were 12 months ago. We have 1,000 people in our combined sales and marketing organization. That is unmatched in cancer diagnostics, and this will allow us to bring new innovations to physicians and patients who need these innovations for years to come. On a combined basis, we've guided to over $1.6 billion in revenue in 2020. And it's that financial strength that can lead us to long-term success. After we closed with Genomic Health, we realigned the business into 4 teams: the screening team, the precision oncology team, the international team and the pipeline team. These teams have commercial organizations in the -- with a field force in screening, in urology, in gastroenterology, in oncology, a health systems team, a managed care team. These are teams that are unmatched in our field and give us strength in the ability to bring new tests to physicians and patients and grow in the decade and beyond. And our pipeline team is organized to fuel this growth and expedite it and get new tests into the hands of this tremendous commercial organization. And we do this by focusing on our key priorities. Our key priorities for 2020 is, number one, delivering more answers from our current core products, our current tests; secondly, to enhance our customer experience. We know that we can grow the number of people ordering Cologuard tests and the frequency that they order Cologuard if we can make that ordering process easier. So it's really important for us to make screening inevitable and to make the use of Oncotype DX inevitable in prostate cancer patients and breast cancer patients. Also, we -- our third priority is to focus on powering new growth, and we can do this through a combined research and development team that is unmatched in our field. We do this through teamwork, and our screening team is focused on Cologuard. And this year, we'll also make a liver cancer test available. Colon cancer kills over 50,000 people a year in the U.S. I've had this slide in every deck for going on 11 years, and that number hasn't changed. 75% of the people who die from colon cancer in the U.S. are not in compliance with screening. Show of hands, please, if you are up-to-date in your colon cancer screening. Okay. I see too many of you that didn't raise your hands. Now if you're 45 or younger, you're safe. But if you're 45 and older, I encourage you to go talk to your doctor and get screened. There are more options, and there are 50 million Americans, 5-0, who are not in compliance with screening. This isn't a debate about Cologuard or colonoscopy, it's how do we get everybody screened. And there is a huge opportunity to impact mortality and incidence if you do get more people screened. If detected early, 9 out of 10 people survive 5 years -- well, actually, it's more than 9 out of 10 now survive 5 years or more versus only about 1 in 10 people survive 5 years or more detected late stage. Remember, colon cancer is typically diagnosed symptomatically because not enough people are willing to get screened. And by screening, both with Cologuard and with colonoscopy, you can actually detect precancerous polyps, and it has been shown scientifically that detecting and removing precancerous polyps actually prevents the disease. Screening is powerful, and it has the ability to eradicate this disease. Along with the Mayo Clinic, we designed Cologuard very intentionally to make screening inevitable and accurate. Cologuard detects 94% of Stage I and II treatable-stage colon cancer, 94%. And it's easy to use. You do it in the privacy of your own home with no sedation, none of the icky prep. The -- there's a 24/7 customer support team that we will actually be able to use to help other early cancer detection test come to patients in an easy-to-use way. That's a really powerful part of our story and our team. And we're -- we are tremendously proud of the fact that we have screened 3.5 million people today. That's 4x as many people in the city of San Francisco. And what does that mean in terms of an impact? If you'll take a look at our pivotal study, the DeeP-C study, that means that there are about 17,000 people who have been diagnosed with Stage I or II colon cancer, 17,000 with treatable-stage colon cancer because they got a Cologuard test. Now half the people who get a Cologuard test have never been screened. So we know we're growing the overall screening population, and that's a good thing. Also at about 100,000 people, and this is, again, based on the performance data in the DeeP-C study, about 100,000 people have been diagnosed with precancerous polyps. That gives you an opportunity to find and remove that polyp, hopefully, preventing the cancer. With 50 million people unscreened, we have a long way to go. Today, we're only about 5.4% adoption with Cologuard in the U.S. population. We think that we can reasonably get to more than 40%, and that represents about a $7 billion opportunity. And we're investing in this for growth. We're confident in our ability to get there. And there are -- these are just a few of the near-, medium-, long-term drivers that we know can help us get to that 40%. In the near term, in 2020, through our deep partnership with Pfizer and our 500 people in the field now, we increased by 150 people in the field on our side, will help optimize the reach and frequency that we can achieve calling on primary care offices. In the midterm, Cologuard 45- to 49-year-olds. This is a brand-new opportunity with 19 million Americans. I see some people in that age group here in this room. We know it's hard to take 1.5 days off of work to get screened. We also know Cologuard is a 10-minute test. You get the test delivered to the privacy of your own home, and you can return it. 19 million Americans, we want to get them started on Cologuard and to get tested every 3 years. Long term, advancing and improving Cologuard. It's already a tremendously accurate test, setting a whole new standard of care, which is our goal with Cologuard 2.0. And we believe we can achieve that, improving the specificity of Cologuard. We announced data in 2019. We started a study late last year. We expect to enroll that study and complete it in 2021. Our precision oncology team. This is the Genomic Health team with tremendous tests, breast cancer, prostate cancer. We'll touch upon those 2, starting with breast cancer. Breast cancer, we all know, is a leading cancer killer. It's one -- it's second most common cancer in the U.S. And we know that treatment decisions are pretty challenging. Well, Oncotype DX Breast Recurrence Score has changed everything for patients with early-stage breast cancer. It's a test that was first offered about 16 years ago, and it has had an enormous impact. Because previously, about 70% of women underwent chemo -- toxic chemotherapy even though there -- it wasn't clear which women would benefit from chemotherapy, and Oncotype DX press has changed that. It's changed it with powerful evidence, and it's the only test in its field that gives 2 important answers. Number one, it predicts and really answers this question definitively whether a woman will benefit from chemotherapy. It also provides a percent likelihood of recurrence. And this is based on a tremendous amount of evidence this test has been subjected to and been published. So women -- there are 85% of patients who are -- have a low score or 85% of patients who get this test can choose safely not to undergo toxic chemotherapy. That's a big change in the standard of care, one of the biggest changes in breast cancer treatment in the last couple of decades. And Oncotype DX Breast is in every major guideline: ASCO, NCCN, ESMO, St. Gallen, NICE. It is the leading test. 9 out of 10 people who get tested choose the Oncotype DX test. And there's a reason, it's because of the powerful evidence. Over 1 million patients have been tested, and there are -- there's a mountain of evidence, 150 publications. The leading publication was in the New England Journal of Medicine based on a 10,000-patient prospective study that followed patients for 9 years. And what that study did is definitively answer the question of the benefit of chemotherapy in a particular patient tested. If you have a low score, 25 or below, you can safely avoid chemotherapy. There is no benefit. If you have a higher score, you know your risk of recurrence, and you know that you are likely to benefit from chemotherapy. And there is another study now that will read out in 20 -- approximately 2022 with 4,000 patients in the node-positive setting. So this is Oncotype DX in patients with early-stage breast cancer that are -- that have limited nodal involvement. This study will help fuel growth in globally about 100,000 women every year who are node-positive and will help definitively answer this question about chemo benefit. And the TAILORx study has helped fuel growth both in the U.S. and globally. Globally, there's a really incredible opportunity to bring Oncotype DX Breast to the patients who need to be tested. And we believe this will fuel growth now and into the future. It also drives incredible financial performance with about $100 million of adjusted EBITDA in this precision oncology team. This will help us invest in other fields, including urology. The Oncotype DX prostate test is a really important test for men who are diagnosed with low- or intermediate-grade prostate cancer. It's a lot of men. And it's a really important question: do you undergo surgery or can you do watchful waiting? And given the impact, the negative impacts of surgery and the side effects of surgery, we know that getting information on tumor biology is critical. And it's the biology that really should dictate that treatment. And in fact, in 1 out of 4 cases, 1 out of 4 times the Oncotype DX GPS test will change the recommended course of treatment. If you're one of those men and can avoid surgery, you're a pretty happy patient. And there's also tremendous room to grow here with only 15% adoption in the U.S. and a global opportunity as well. Our pipeline team. Our pipeline team is a critical part of our plans for the next decade and beyond, and it is fueled by our collaboration with the Mayo Clinic. A decade ago, we collaborated with Mayo Clinic around colon cancer. And over the last 10 years, we've expanded to 15 cancers, the top cancer killers in the U.S. From this collaboration, we'll be able to make tests available in liver cancer later this year, also pancreatic cancer, esophageal cancer, bladder cancer. This collaboration will continue to fuel our growth in the next decade and beyond. And it's unique because we are able to identify DNA biomarkers and RNA biomarkers, which distinguish between cancer and no cancer, helping us to develop liquid biopsy tests and other tests to help detect cancer earlier and to guide treatment. And we do this with the leading research and development team in our field with 250 people and a $200 million R&D budget. There is no other company with the resources that we have, scientific, financial, clinical trial capabilities to be able to innovate and bring new tests to physicians and patients who can benefit from them. Our lab infrastructure, our proprietary DNA chemistry. These are some of the things that really separate us and will help us to continue our leadership position for years to come. Our liver cancer test is one proof point. Liver cancer is the fastest-growing cancer. It's the second leading cause of death globally, and it's growing in part because of the obesity epidemic. 90% of people who are diagnosed with liver cancer had cirrhosis, and cirrhosis comes from hepatitis infection, it comes from fatty liver disease and NASH. And we know that in alcoholism, and we know there's a population that we can test. And we also know that even though there are 2 current tests: ultrasound, which detects about 45% -- only 45% of our early stage liver cancers; and the alpha-fetoprotein test, the AFP test, which also detects fewer than half of liver cancers. Even with those inferior approaches, testing people ends up doubling the likelihood of survival 3 years or more. This is our goal here is to bring an accurate molecular test, looking at the genetic makeup to answer that question with a liquid biopsy test. So a simple blood draw. And there are 3 million Americans. It's about a $1.5 billion opportunity. This is the year that will start to make an impact here. And when we do that, we bring liver -- a liver cancer test as another proof point of the technology capabilities we have. That means that we'll be addressing 4 of the top 6 cancer killers as a company. Now think about this. A year ago, we were a 1-test company, addressing one cancer in one country. And today, we are a 6-test company addressing 3 different cancers with employees in 8 countries, serving people in 90 countries. We're a transformed company. And we're doing this and we're able to invest in the future with financial strength. This financial strength is pretty remarkable. We're the largest cancer diagnostics company by revenue. We're also one of the fastest-growing companies, and that growth will continue into the future. And we make this promise to you: we will continue to serve patients with innovation in a way that positively impacts lives. [Break]

Welcome, everybody. And to those listening on the webcast, this is the Exact Sciences' management team, and it's the 2020 JPMorgan presentation breakout session. If we could just first introduce each member of the management team present.

I'm Jeff Elliott, CFO.

Brad Cole, General Manager of Precision Oncology.

Mark Stenhouse, General Manager Screening Business Unit.

Sit down and maybe I'll kick it off. Can you help us think through sort of the quarter? I mean, obviously, the numbers look good. Somehow the Street was disappointed. I mean we don't sort of follow the stock [indiscernible] in the loop on that [ when it comes ] [indiscernible] number out there where you fell short. The Genomic Health numbers look great. So can you just help us sort of like frame the performance in terms of perhaps where the expectation's in ahead of where the performance came in? Or you don't really think that there was any sort of major area where there was room for like a little bit of disappointment?

So for those listening, the question was the quarter looked great and what happened earlier. I will answer it by saying it was a great quarter. I know it was the end of a great year. When we looked at the -- before we announced our partnership with Pfizer back in middle to late 2018, Street guidance was $610 million. And we finished last year at $810 million. It was a tremendous year, screening 1.7 million people. And we -- it sets us up for a very strong 2020. What we have said is we have added 150 new salespeople or field people on the Exact side, and the Pfizer team is raring and ready to go with Cologuard. Without Lyrica in their bag, they -- there's a greater opportunity to emphasize Cologuard. So we expect 2020 to be another year of robust growth.

Can you talk a little bit about sort of the increased payout coverage for that 45- to 49-year-old segment? What are your expectations around how that sort of volume begins to flow through for Cologuard?

Mark?

Cologuard 45- to 49-payer coverage currently as observed by the claims that have come through our lab are 74% of patients are receiving Cologuard without any associated cost share. That's by like of Aetna, CareFirst, Centene, Blue Cross -- Blue Shield, excuse me, of California that have made positive coverage decisions. There are a few national payers that are anchored to USPSTF, and we are hopeful that USPSTF will review colorectal cancer screening next year, but it's really good coverage.

In terms of the 2 companies, are we going to see sort of a cross-fertilization, cross-pollinization of these 2 business in 2020? Or is it really '21, '22, '23 where we're going to see, say, Cologuard, they'll be brought international or something like that?

So for those listening, the question is, will we see cross-pollination between the 2 companies, Exact Sciences and Genomic Health. And we're really happy to state that one proof point of us coming together, validating the reasons why is we're bringing up our liver cancer test in California with incredible laboratory facilities and capabilities and team in the Palmetto district. So that's one of the things that we were looking at for several years is how could we bring up a new lab in a MolDX state, and that's one point. Oncologists should be -- our oncology sales force should be able to carry the Cologuard test and bring that to the physician -- or to the patients who need it. Here's one example. Breast cancer -- early-stage breast cancer patients per the TAILORx data are more likely to recur with another cancer that is not breast cancer than they are breast cancer. Those people need to be screened. They've had a lot of medical procedures. Why not introduce Cologuard as a screening opportunity if they're out of date or out of compliance with colon cancer screening? Over the long term, the pipeline team, the research and development capabilities in Redwood City will certainly help us bring some of the capabilities. For example, we're looking at a bladder cancer test. We think our work with the Mayo Clinic can help us there and help deliver a new test to the urology team that has about 50 people in the field. That's part of the synergy that we see is a positive revenue synergy and impacting patients over time. Yes?

Can I just ask, if there were to be [ a surprise for the guys ] you put out there like this year, like the one last year, where is that most likely to come from? Is it the liver test over [indiscernible] or maybe like a private contribution? Are you [indiscernible]?

So for those in the webcast, the question is on 2020 revenue guidance. If there's upside to the numbers, then where would that likely to come from? So at Exact, we're fortunate to have a broad base of growth drivers. The list is long, we could spend all day talking about it. Key drivers are sales force productivity. So Mark Stenhouse and team have brought in a whole new set of capabilities and tools to help to improve productivity from our sales force. A prime example of that is the Veeva platform that we went live on last month. So sales force productivity, there's a long ways for us to grow that. The incremental sales reps that we are adding this month, the 150 new sales reps, you typically expect productivity in the first 6 to 12 months. So it's another big growth driver. A 3-year rescreening. There's over 200,000 more people eligible for 3-year rescreening in 2020 than there were last year. So that -- those are some of the big drivers on the Cologuard side. On the precision oncology side of the business, there's 3 major growth drivers: U.S. breast, which has very good momentum continuing really from the TAILORx data that came out in 2018. The U.S. prostate business has good momentum and improving reimbursement. And internationally, the market there is still relatively underpenetrated. A lot of the international markets are starting to open up, thanks in large part to the TAILORx data. So at Exact, we have a lot of broad-based growth drivers, and we look forward to delivering on our goals for 2020.

Jeff, just talk a little bit about electronic ordering and just what to expect this year from HL7 [ and FX ] integration.

So the question is on electronic ordering and what to expect in 2020 from HL7 integration. So we are really excited about the possibilities that lie ahead for electronic ordering. And why it's so important today is on the Cologuard side of our business, 70% of our orders come in via fax, 7-0. You think about what that means, over 50,000 faxes per week. Anybody here gets 50,000 faxes per week? I don't think so, right? On the electronics side, about 30% of our orders come in electronically. When a doctor orders electronically, she orders over 65% more frequently. So converting doctors toward electronically is a big priority. We've started to lay the foundation to get more and more providers toward electronically. Later this year, in the fourth quarter, the Epic platform will be updated that will allow the functionality for any doctor on Epic to order electronically through the click of a button. Now today, about 45% of all primary care providers are on Epic. So it's a huge opportunity. Again, this rolls out later this year. It will take a couple of quarters for providers to install that new version of the software. We're very excited about what that means for the future, though.

Yes?

Maybe just expand a little bit on the Pfizer relationship at this point, just the level of commitment to continue to push Cologuard. Just any additional color you can...

So the question is to provide more color on the Pfizer relationship moving forward. We entered into a 3-year and 1/4 co-promote with Pfizer, 1.25 a year ago. It has been a tremendous partnership. Our relationship continues to deepen. Their team is a broad and highly capable, experienced, tenured field force throughout the U.S., focusing on primary care. I hope that Pfizer is a partner for years to come. They have shown to be very passionate about reaching physicians and patients who need to get screened, and they've helped move the needle. It's still -- we're the lead field force in terms of this -- our key responsibility, and we have continued to grow it. Now clearly, Pfizer has made an impact and they'll continue to make an impact. It's an agreement that currently ends at -- in 2020 -- at the end of 2021 with an option to renew for a year. There's also an option for us to renew for a longer period of time. And there's certainly -- the truth is, regardless how big our sales force becomes, there's always a role for additional people to talk to physician's office. And it's driven by the fact -- and you have to remember, in primary care, we're talking about 350,000 ordering health care providers in total that could be called on. So that just is you can have more people than we do today calling and you'd see a positive ROI. So there's a reason that we have partnered with Pfizer. We think it's a terrific relationship in all respects, including economically. And we'll continue to talk to Pfizer about what the world looks like after 2021. We get this question all the time. And then people sometimes wonder why are you talking about Pfizer post 2021, and it's because people are asking about that. So we'll provide updates as we move along in our relationship with Pfizer. Yes?

Can you talk about the keys to productivity, rep productivity? What are the keys that you're focused on to drive that? And as you look at the top decile and bottom decile reps, what accounts for the difference? Is it frequency of visit? Is it education? Is it messaging? What of that?

The question is on rep productivity and what are the drivers that influence it. The #1 relationship we see in our sales force and Pfizer sales force is that sales force visits to a practicing doctor. The frequency of touches linearly drives orders. So we know that we first had to identify the right cohort of physicians that were -- had a propensity and are biased to write Cologuard, and we had to visit them frequently. And that is the #1 insight. Yes, there is a relationship between time and territory, quality of the rep in terms of ability to deliver a scientific message about the reasons to use Cologuard. But after we train the rep, put them in the field and hold them accountable relative to the performance, the #1 thing we communicate is frequency of touch to the doctor.

Yes?

So you mentioned Epic now a number of times. Can you tell us a little bit about what you've been using Epic for, how far it's helping into your organization? And is it just in [ the space ] to the outside world? Just a little bit of clarity on that.

Yes. So the question is really what is our relationship and the importance of Epic. And Epic is the #1 health system IT platform. It's an enormous EMR platform. We are a health system in a sense that we're a lab with 200,000 ordering physicians, huge number of physicians and now 3.5 million people who have been tested with Cologuard. So you have this enormous need for a high-quality IT infrastructure. And before Epic, we were building our own version of Epic, which is not optimal. Moving on to the Epic platform this year powers our growth for a -- long term because the reality is, we're as much of an IT company as we are a lab and cancer diagnostics company. And one of the benefits of Epic is that, by this time next year, they will have turned on a capability for physicians who are on the Epic platform. It's about 45% of physicians in the U.S. to order Cologuard through the EMR without us having to do that extra work with implementing an interface between our system and the customer system. That will be turned on through a network called Care Everywhere that's embedded in every instance of Epic. So we're excited about that. That also will give us the ability to put Oncotype DX and other tests, new tests that we bring up into this electronic ordering. When you talk to other companies in the space, electronic ordering is critical, and it's something that as independent labs we're all challenged with. Epic helps answer that question. Yes?

Just following on that. Can you do electronic -- or are you considering developing the ability to do electronic ordering as the Cerner system?

So the question is, are we also working with Cerner and other EMR systems to be able to order electronically. Our goal is to take all 6, 7 of the major EMR systems and to embed Cologuard ordering within those software systems so that doctors around the country can order Cologuard electronically. Today, they do that through either a portal or through an HL7 interface. And that, as Jeff mentioned, leads to about 65% greater ordering rates among those cohorts of physicians. So it's important. We need to -- it's our second priority as a company, as we talked about in the presentation, is to make -- working with Exact Sciences even easier than it is now. Yes?

On the health system side, it seems to me like there's a tremendous opportunity to get some large systems to clinical evidence and kind of establish more stringent protocols for the doctors to use a test. I'm curious of the progress you're making there.

The question is on the progress of Cologuard embedded within health systems through a Care pathway. I think the most meaningful evidence that we can cite is the number of bidirectional ordering interfaces. So after you establish interest in the Care pathway, then you want to make ordering easy. We've over doubled the number of health systems that have a bidirectional interface. We have over 50 scheduled in the first half of this year. So relative to the 350 health systems we call on, we've seen meaningful growth in the number of ordering interfaces. And I think that gives you some sense of the penetration of our sales team into those accounts.

Yes?

Just a question on the pacing of the growth. On the one hand, 150 reps [ on the 350 a day ] kicking in really in the back half, that sounds like a very strong driver for growth. You also have these 50 health systems coming on the program. Overall, [ stretching of the growth theme like relatively even throughout next year ] [indiscernible] [ stronger effect now ?]

So the question is on growth phasing through 2020. We'll give more color on the quarterly breakdown on our next earnings call. I would say that you mentioned several growth drivers in terms of the new reps and the health system adoption that Mark talked about. Those are not the only drivers. As I mentioned before, our existing base of reps continues to get more productive. I expect more productivity from Pfizer this year than last year. So there's a broad-based set of drivers. So I expect strong growth throughout the year.

A question on drivers. You touched on how the Cologuard has been on the market for a number of years. You're starting to see your early patients come up for a rescreen. What can you talk about what you're finding there?

The question is on the 3-year repeat testing for Cologuard. This is a huge opportunity. As Kevin mentioned before, we've tested 3.5 million patients to date. When you look out long term, probably over half of our revenue will come from 3-year repeat testing. So we have to get this right. We are seeing increasing capture of the patients due from 3 years ago. In 2020 alone, over 370,000 new patients become eligible for 3-year retesting. So it's a huge opportunity. Mark and team are putting in more efforts and more capabilities to make sure we're capturing those patients. The attractive part of this, it creates a recurring revenue engine for us. And the margin profile on these patients is even better than the first-time users because the compliance rate is higher. So it's a better gross margin. And the operating expense needed to get these patients onto our systems and get them to comply is a lot more efficient. So it's a better margin profile in addition to better growth over time.

Any questions about Oncotype DX? I have one. Brad?

I thought you knew it all after 3 months.

How was the fourth quarter?

The fourth quarter was terrific, broadly based growth across both the oncology products and the urology products and our international markets. The -- maybe the people are surprised the fastest-growing product from a revenue standpoint was a urology franchise. It's off a smaller base, but we're continuing to see growth there. So much like Jeff has recounted multiple growth drivers in the screening space, we've got multiple growth drivers in precision oncology and expect to see double-digit growth again next year.

Brad, can you give us an update on sort of OUS, where things stand outside of U.K. and Germany? How far along is France and [indiscernible]? And perhaps, is Japan still sort of on the cards for this year? Or...

Okay. The question was around international progress and give some highlights. I know you asked not to talk about the U.K. and Germany, just to remind the room though that U.K. as was stated in Kevin's presentation, NICE is covered, and we've had strong coverage and repeat coverage in place there. And just recently, German national covers went into effect. So we haven't seen the effects of that yet on revenue, either an uptake in the biggest market outside the U.S. or the pricing that's to come that we haven't had in Germany. So the important growth driver next year will be Germany. We're in the process of going through regulatory steps in Japan to get full coverage over the next couple of years to be included in the basket. We expect that to happen in the next couple of years. In France, a decision is probably a year behind Germany. So good progress across the board. In the meantime, these 90 countries who order from us pretty regularly, we continue to see growth outside these key markets.

And is the Biocartis sort of IBD collaboration still impacted in the works and the plan to deploy at some point? Or...

Yes. So the question is about is the collaboration with Biocartis still on track. To remind you there, it's a distributed platform that we started working on a couple of years ago. We expect to finish a large clinical validation study here in 2020 with the Western European launch in 2021 on that platform of the Oncotype DX Recurrence Score for breast, only for breast.

I'd like to just drive home the point that the team at Genomic Health really had a tremendous quarter in the quarter that we closed the combination. And we saw -- have seen incredible employee retention rates and engagement since the July announcement of the combination. And I think that's a testament to the leadership broadly into the culture of this team that is so focused on patients and innovation. There seems to be a lot of energy every time a team from Madison shows up in Redwood City or vice versa. And we want to keep that going because that is going to fuel a lot of new tests and positive impacts on patients for years to come.

I had a question about the 45- to 50-year-old patient cohort. I'm just wondering, could you talk us through the role that the USPSTF is going to play in driving adoption there and different constituencies that are looking to them to decide kind of what moves to make next?

Yes. So there are 2 main guide -- the question is about the Cologuard or the 45- to 49-year-old group and really what is going to drive adoption in that group, what's the importance of USPSTF. The USPSTF is the guideline group that focuses on prevention. And American Cancer Society 1.5 years ago announced that they were updating their screening guidelines to lower the age to 45. They did this based upon new evidence that came to bear, showing that there is a doubling of the rate of growth of colon cancer over that -- over the last 20 years in the under 50 population. We don't know why that's the case. But as a result of that, screening the 45- to 49-year-old population is important because the life you just gained from saving one person's life in that cohort is obviously a large number of years. And it -- actually, the data shows that it's more impactful than screening the population over age 70. So it's an important cohort. USPSTF will look at this. They only update their guidelines every 5-or-so years, and they're in a cycle now, where probably later this year, they will update their guidelines. I don't know what they'll do, we're watching that carefully. It's important to note that they do rely on the same exact models, colon cancer screening models that the American Cancer Society relies on in coming up with its conclusion as well as the same data. So it's -- but putting that aside, as Mark noted, about 3 out of 4 people who are getting tested today are seeing $0 co-pay. So there seems to be pretty widespread acceptance of colorectal cancer screening in this age cohort because cancer screening makes sense, and payers aren't pushing back very hard with the ACS guidelines firmly in place.

[Indiscernible] potential competitors like [indiscernible]?

The question is about other aspiring entrants into colon cancer screening. Let's start with a background here. There are 50 million Americans who are unscreened. And 3 out of 4 people who don't get screened, or 3 out of 4 of those people were out of compliance with screening. A blood-based test is going to be challenging. So far, the data out by the number of different scientific endeavors in this field are not more impressive than the FIT test. And that's a $25 test. So there's a lot of work that needs to be done by Exact Sciences and by others to really innovate. The thing that you -- to look for is Stage I detection and precancer detection. If those are at or below the FIT test, it's really going to be hard to drive growth. We appreciate everybody coming here today, and we look forward to seeing you again next year.

Thank you.