Exact Sciences Corporation (EXAS) Earnings Call Transcript & Summary

Welcome back to the 2023 Stifel Healthcare Conferences. We are on the life sciences and diagnostics track here, and we are happy to have Exact Sciences with us as our next session. CFO, Jeff Elliott, has agreed to stop by and spend some time with us. Jeff, thanks a bunch for agreeing to do it.

Thank you, and thanks to the entire Stifel team.

Yes. Our pleasure. Maybe we can just start, Jeff, with A bit of a 3Q review maybe perhaps above consensus for the quarter, 31% growth in screening, 3% growth for precision oncology and EBITDA was above the street as well, which I think has been a focus for you guys for a couple of quarters now. Maybe just sum up, given that level of performance and the consistency that you've had truthfully over the course of the year, how you feel going into year-end?

Well, the team put together what I thought was a very good quarter. We're pleased with the results. That allowed us to raise guidance for the third time this year, and we're really fortunate to have a broad set of growth drivers today and into the future. When you dig into the business, which I know we will, Cologuard is a flagship product. Obviously, it's a colon cancer screening product. It's a huge market, say there's 60 million people who still need to be screened. So there's a long runway ahead. So when I look ahead, whether it's '24 or way down the line, there's a long runway ahead for these growth drivers. Again, we feel really good about the state of the business. We're not affected by a lot of the things out there that I'm sure on in of your minds, whether it's a slowdown in China, [ GLP-1s ] affecting the business. Even inflation for that matter, we're relatively insulated from that. So the team has done a really nice job of executing. We're pleased to have a broad set of growth drivers for this year and beyond.

To the incremental populations for you guys, it has really been helpful have been the rescreening population and then the 45349 group. You had mentioned 1.6 million rescreen eligibles in '23. How are you finding penetration of that group to be, do you think that there's an acceleration that we see going forward and then I do think we have a bit of a residual headwind next year just from the COVID era. Can you talk through that dynamic and maybe the shorter term?

Yes. So take a back first. What rescreens ours. The guidelines recommend you repeat colon cancer screening throughout the course of your life because colon cancer can form spontaneously. So for Cologuard, what that means is every 3 years, you should repeat the test. Today, that's about 20% of our revenue. About 20% of Cologuard revenue comes again from people who did Cologuard 3, 4 or 5 years ago and are coming back. So it's a recurring source of revenue. It's also a higher gross margin source of revenue. So as CFO, I love the source of revenue. And this is really why Cologuard was designed to get more people screened and keep them screened over the course of their lives. Again, it's about 20% of Cologuard revenue today, and it is one of our biggest growth drivers. What Dan is referring to is 3 years ago when the COVID pandemic first hit, fewer people get screened temporarily because of the pandemic. Now as we cycle against that, we have a bit of a blip this year. That's about a 50 million rescreen headwind. The teams had a nice job executing through that. So Rescreens are still growing for this -- growing for us this year, but it's a 50 million headwind. Next year, that headwind by and large, goes away. When you look at the pool of patients who become newly eligible for rescreens, this year, it's about 1.2 million people. That's the same as last year. Next year, that jumps to about 1.6 million. So there's a growing pool of patients and our success rate at getting those people to come back to Cologuard is increasing over time. So rescreen is a huge driver for us today. Eventually, this probably becomes about half of our revenue. About half of our revenue will be recurring over time. Again, it is higher-margin business.

And just to be clear, the higher margin comes from fewer people not sending in their kids, correct?

Yes, there's really -- there's 2 sources of it. One is on the gross margin side. So the way Cologuard works today is about 2 out of 3 of every kids we ship out come back. We call that a patient compliance rate, which is actually a really good rate. It's the best that's out there. Colonoscopy for reference, only about 4 out of 10 people will do a colonoscopy within 12 months of a doctor recommended it. So getting 2 to 3 is actually a really good rate. Our goal is to get that higher over time. But for rescreens, the rate is about 20 points higher. So about 20 points higher, about 80% of people. Again, when we ship that kit out, the collection can't out to a patient about 80% return in. So the rate is higher, which means fewer wasted kits -- a lower -- better gross margin experience for us. On the operating expense side, it's also more efficient to do a rescreen because these patients are captive, we know who they are because we have their e-mail, we have their address. We can reengage them through our digital tools. So imagine I'll send you a text message. So look, Dan, it's been 3 years, come back to Cologuard, we can reengage that person a lot easier than on the first time. The first time often requires the sales rep talking to the doctor, educating them, getting that patient in. So it's more efficient, both from a gross margin standpoint and an operating expense standpoint on the rescreen business.

At the Analyst Day, you had talked about some of the things that you're doing to that point, which is sort of proactively targeting some of these rescreeners. There were some pilot programs that were in place. Has there been any incremental thought on expanding that idea?

So we have a lot of programs underway to increase the rescreen. One of the big efforts we have is what we call an advanced order or preorder. So imagine the typical way that a patient would get recommended colon cancer screening is through a physical. You're sitting now with your doctor, you go through the options, they order it. Well, unless you're doing that physical at the same time every year, you may come back in 3 years and you're not typically do yet. We now allow a doctor to order up to a year in advance of that do Dan, we can hold that order for that year. And then once you actually do, then we can ship the kit out. So it's an advanced order. Think of it as now order now for later. This is fairly common in other parts of healthcare. So we can do that as a way to increase that success rate. We also have a lot of -- we're constantly experimenting, hundreds of experiments per year ways to reengage patients. So this feeds an engine, we have an AI engine that allows us to increase that success rate of getting that patient back to Cologuard.

What about the 45 to 49 population? I mean there's a different mentality that goes along. I say that as someone who's in that cohort. So there is a different thought process there. How do you reach those folks? And where do you think compliance rates go within that group?

Dan, I'm in the age group 2. I've done Cologuard 6 times, which is probably more than many of you. But if you haven't been screened, please get screened. The reason why 2 years ago, the guidelines changed to now recommend screening at age 45 for decades that have been 50. The reason to change because you're seeing a rapidly growing incidence in the under 50 population. So again, if you haven't been screened, many of you are probably in that age group, please go on and get screened. So with that lower guideline, that added 20 million more people to the screening pool. Today, there's about 110 million people in total, 60 of which are unscreened. And in that younger age group, almost everybody is unscreened. So this has been a really big growth driver for us. The younger age group, again, 45 to 49 today is almost 20% of Cologuard revenue. So it's been a rocket ship of a growth driver and expect that to continue. A younger person, you can imagine, if you're 45, like Dan and I you're typically busy with work, doing all the research that you have got to do in your role with kids, you're busy with life. Compare that to somebody say who's 70 at that point, typically the person retired and has more time on their hands. So busier person, probably more digitally savvy, doesn't have time to say 2 days off of work for colonoscopy. So Cologuard is resonated. The convenience of Cologuard can be done at home. While a physician has to order it, you actually don't have to see a physician live. On this day and age, there's more telehealth, more digital health that's coming on. So that at-home convenience is a huge advantage for Cologuard over other modalities like a colonoscopy. And the accuracy. Cologuard is the only option that really can offer high accuracy and at home convenience. So that's resonating. So we've adapted our some of our outreach to this younger age group. For an example here is many people in the younger get used to more digital tools. whether it's streaming media, online tools. So our advertising is following suit, and we've done a nice job there converting those patients.

Okay. Let's talk maybe about Cologuard 2.0, which is obviously an important progression of what you offer to your patients or to the population. I would argue that the most significant attribute of that readout was the lower false positive rate. It seems pretty clear that, that would resonate with the PC peak route, the lower fewer times that you think that you have cancer would naturally be a good thing for docs to understand. Within the KOL community, you've gotten more pushback on Cologuard. It is just a fact. Do you think that, that is a data point that starts to filter into the, I guess, you could call it the ivory tower crowd, which then filters down more to the PCPs and allows you to increase the overall penetration for Cologuard. There's a lot in there, but can you just talk about how that messaging might be received by the 2 groups of docs that you're going to be targeting?

So what Cologuard 2.0 to is an enhanced version of a really good test. The reason why we invested in Cologuard 2.0, which is not yet FDA approved, is because the #1 area, to the extent there's any clinical pushback, the #1 area on Cologuard 1.0 was the false positive rate. Per the FDA, it was a 13% false positive rate. With Cologuard 2.0, now we have improved that by 4 percentage points, which means we'll send 30% of people unnecessarily -- 30% fewer people unnecessarily to colonoscopy that's a huge outcome. That's a huge win for patients. And from a health economic standpoint, it's a huge win, too. From a rescreen business, that means 30% more patients that we keep for rescreens every 3 years. So it's a big, it will help even accelerate the rescreen business even further. So again, we're addressing the biggest area of clinical pushback on Cologuard. We know now the primary care doctors who historically had said, "I don't believe in Cologuard because of this false positive rate." And now once Cologuard 2.0 is approved, we can target those doctors directly to make sure they know what the evidence. We have seen a change in the market over the past year or so, what you're referring to, Dan, there have been other resistors, whether it's health systems or certain KOLs out there, we've seen a change. I think the change came off for many different reasons, but we've seen a change. For now, you're seeing GIs, payers, even big health systems who had previously resisted not really embracing and inviting Cologuard. I think some of the factors that drove this one was the pandemic. The pandemic led a lot fewer people to get screened temporarily. So it increased -- there was a backlog of sorts of people waiting to get screened that built up. Another was the guideline change, lowering the guidelines to say, started age 45 instead of 50, added 20 million more people essentially all on screen to this backlog. So the backlog is big and growing. And lastly, I would say every year, about 4 million people more turn 45, and they're basically on screen. So there's a pool of patients who need to be screened is growing. The GI community is not. There may be 50 more GIs graduated and enter the workforce a year. It's not enough. In this country, our capacity for screening colonoscopies each year is relatively fixed at $6 million. There's 60 million people on screen now. So Cologuard is the answer here. Cologuard is helping get more people screened. In fact, about 50% of all the people that we test have never screened before. So we're expanding the pool of patients, Cologuard 2.0 will help that again by addressing the #1 clinical pushback.

Okay. Are healthcare systems doing the math around what it would mean to send fewer people to colonoscopy appointments? Or does it take commercialization use case in the market in order to really kind of drive that home?

So what health systems are doing today, Cologuard who is not in the market yet. So they were not advertising that to them. But what they are doing is that they can look at their own weight list. In fact, they see, hey, there's a huge wait list. There's a health system near us in Wisconsin that had a waitlist of 13,000 people. It was like a 6-month wait for colonoscopy, which is preventative care folks, you shouldn't have to wait that long for it. Cologuard, you get an order today, tomorrow, the kids on the way in, in 2 days you get it. So this health system came to us, and this is one that we've known well for a long time. They had historically resisted. They thought, well, we can make money on the colonoscopies, which is true. But if you've got a waitlist of 13,000 people, you're doing them into service. So at least invite Cologuard in, let get these patients screened and help save their lives. So we -- 13,000, we could observe that in a day. We get more orders than that every day every workday at least. So we can absorb that and get those patients screened. So health systems around the country are doing this and payers, too. payers, what payers see is a big gap in care. The big payers of the world. They actually want to get people screened because it helps their quality measures, HEDIS and stars, if the big Medicare Advantage plans follow Stars. And what that is, they look at how well they are, how successful they are getting people preventative care. One of the hardest metrics to move historically has been colon cancer screening. You think about it, nobody really wants the 6-foot sake, right? So you can't keep pushing that and expect somebody to get it. Cologuard, again, it's convenient, at home, it's very accurate, and it is FDA approved. We can scale it quickly. So if you're a health system or a payer looking to close one of these care gaps. And these care gaps can be significant. We can take these bigger orders and go out and screen these bigger groups of people all at once and to help close these gaps. So this is a shift in the market. Payers increasingly coming to us, health systems also coming to us.

Okay. Maybe just looking to the adenoma detection rate that came out of the Cologuard 2.0 data. Blue-C showed a modest improvement over deep-seabout 100 basis points, if I'm remembering correctly. The study from ASCO GI, which is a different study, different population, did have that jumping up to 57%. And it generate a lot of enthusiasm for you guys because of the way that the life year gains calculation looked on that number. Is there anything about being at 43 that changes the math for you guys relative to the way that you were?

So you're right that advanced adenomas or free cancers are extremely important. They're extremely important because about 85% of the clinical benefit from Cologuard is our ability to attack pre-cancer. You find a precancer and say, if somebody who's 45, you help over time, you help prevent cancer from actually happening, and it's you help impact more life years. So precancer detection is far more important than cancer detection -- especially precancer is far more common. I think of 10x to 12x more common than somebody would have free cancer than they would actual cancer. So it is very important. The #1 goal of Cologuard 2.0 was to reduce the false positive rate, which we did. Again, we'll send 30% fewer people unnecessarily to a colonoscopy. The #2 goal was to improve the pre-cancer detection rate, as Dan mentioned, it improved by 1 point. One way that you can look at the pre-cancer detection rate is relative to the false positive rate because you're always going to find some precancer through a false positive. The false positive rate of Cologuard 1.0 is 13%. The precancer sensitivity of Cologuard 1.0 was 42%. That means that we're finding 29% -- 29 points of cancer above and beyond the background false positive rate. Cologuard 2.0 can find 43% of precancers above and beyond a background positive rate of 9%. So it's 34 incremental points. And when you look at it that way, it was a 17% improvement in precancer sensitivity. It's actually clinically speaking, that's a really good outcome. Would we have love for it to be 50% overall -- we would. So we'll keep on finding ways to drive that rate higher. But the precancer sensitivity improvement of Cologuard 2.0, clinically speaking, is a big improvement.

Okay. And when you think about this march towards a higher penetration rate. Do you have a sense for those that are -- the population that represents those that you have not touched, what percentage of those are nonusers because of adenomas versus the false positive rate. I don't know if that's a number that's handy, but it is conceptually interesting for us to think about what makes -- what matters most?

I think the biggest impact on revenue in our business is going to be from the incremental orders that we expect to get down the road through improved performance. Quantifying that, I'd say, is impossible. We do know which physicians are out there historically would or to Cologuard because of the higher false positive rate. My belief is that those physicians order a variety of other tests, colonoscopy and fit. So I don't think you can say it's just the big fit users or the big Colonoscopy users. I think it's more broad-based -- which is a good thing. But again, we know who these doctors are and we can make sure the data that Cologuard's FDA. Cologuard 2.0 is approved, and we can target them.

Who are the big fit users? Where are those populations? I think 1 thing that a lot of companies can probably agree on in the colorectal cancer screening market is that fit is not an optimal test. So where do you -- and write for share gains within that population? Where are those users? And what do you see as the outlook for grabbing some of them?.

So there's about -- there's probably 3 main categories of fit, let's call them super users. And just for background here, fits it detects blood in the stool. It doesn't mean you have colon cancer, just can't find blood in the stool. This type of test has been in the market for 50 years. And today, it's about 10% of the market uses these fecal blood test. Cologuard is superior from a sensitivity standpoint, we think it's a better overall test and we are taking share from the FIT test. However, there's still somewhere 8 million to 10 million of these done per year. Again, 3 main categories. One is from -- unfortunately, it's in the medically underserved communities. Think of intercity, Medicaid, Federally Qualified Health Systems, we're giving in this country, unfortunately, inferior care to the people who need it the most. So we have an active program underway to make sure we do everything we can to get more of these people tested with a more sensitive task. So unfortunately, that's one of the big areas, we get, heavy Medicaid population. Another is in -- there's a few health systems out there. Kaiser is one of them, that are big believers in the FIT test. Now Kaiser is unique for many reasons. Kaiser is integrated. It's a delivery network. It's a payer, all kind of in one. And you've got some of the leading fit KOLs in the world at Kaiser. So Kaiser is probably 15%, 20% of the overall fit market. And the third is some of the big payers. Some of the big payers, I mentioned earlier, have these big gaps in care, where they're trying to screen masses of people at once. And they'll send out big bulk orders of a fit test at once. So it could be 100,000 here, 1 million there. And with the FIT test, the biggest issue with the FIT test is the adherence rate. Because the sensitivity is lower, the guidelines that say you've got to do it every year. Well, [indiscernible], In fact, a published evidence audio United health shows that only 3 out of 1,000 people will do the FIT test every year as the guideline says. So essentially, it doesn't work if you don't repeat it every year. Cologuard is different, again, because it's a 3-year interval, we keep people screened for longer and with a higher overall adherence rate over time. So those are 3 buckets. We are seeing inroads in each of those. I think Cologuard 2.0 will help further.

Okay. And maybe on Cologuard 2.0 and just talking about this path to commercialization and what happens after you do commercialize. So you've committed to having the test be in the market in 2025, you'll submit right around now, I guess, at the end of the year at some point. Do you see that time line as somewhat conservative given the time line for 1.0? And then I guess the follow-on question would just be, once it is in the market, what kind of shift do you think we should expect there 1.0 and 2.0?

So we expect to finish the FDA submission for Cologuard 2.0 still this year. We're assuming about a year time line. It could be faster, but Cologuard 1.0 was just over a year. So we're assuming that's our base assumption about a year. The FDA is a really good partner for us. We've worked very closely with them on not only on Cologuard but other products as well. So pending that outcome, we're assuming we launch Cologuard 2.0 in early '25. This is a big launch. When you think out in 2 years were Cologuard, it will be over a 2 -- we hope, over a $2 billion product at that point. There had never been a $1 billion in diagnostic until Cologuard 1.0. Cologuard 2.0 will be the first $2 billion diagnostic. So this is a major launch. We've got a spot team focused on this day in day out to get ready for it. But this is a big launch. And it won't happen all at once. We will kind of one day stop selling Cologuard 1.0, start selling Cologuard 2.0. But then the background. There's millions of kids that we had shipped out for Cologuard 1.0. The patient is up to a year to return them. Well obviously, we'll keep accepting those for a year. And then we, over time, we'll shift over to more Cologuard 2.0. So the benefits will start from a commercial standpoint, but the lab benefits will take a little bit of time as we process the long tail of Cologuard 1.0 kids that are in the market.

You've been asked about price and what might be expected there a couple of times. It doesn't sound like you're ready to talk too specifically, but it also does sound like there's good reason that it could be higher. I mean at this point, is it fair to say that it will be some number above what Cologuard 1.0 is?

It's clear that Cologuard 2.0 provides more value. sending fewer people to a colonoscopy unnecessarily is not only is it good for patients and for us, it's good for the payers. Let's be clear, 30% reduction. When a colonoscopy could cost a commercial payer $3,000 a pop, you're talking to significant benefits. We believe we should be able to capture some of those benefits, not ready to talk about pricing yet. But because we're adding value to the system, we think we should capture some. We have not raised Cologuard prices over time, the way we could spend all day talking about the way Medicare pricing works. We've had basically one price the whole 9 years Cologuard has been on the market. We've absorbed inflation. We absorbed other headwinds. But as we provide more value, we think we should be rewarded for it.

Okay but the pricing scheme probably does involve a similar path, which is that you set a price and it stays the same for a while. It's not maybe I don't want to put words in your mouth. Could it be something that then changes sooner than Cologuard 1.0 has, which is really not at all.

We'll see. We'll see. Again, it does provide more value. Now if you look at the economics of Cologuard 2.0, even without a price increase, they do get much better. They get better because not only is the gross margin better, the cost per test of Cologuard 2.0 is at least 5% better than Cologuard 1.0 but revenue is higher because we send -- again, we send fewer patients to a colonoscopy unnecessarily. That means we have a bigger rescreen business over time. The rescreen business, again 30% fewer people means 30% more rescreen eligible patients. So that will help the rescreen business. When you look at rescreens over time, again, this is a huge part of revenue. If you look at the 25, rescreens at 45, that's probably approaching half of our revenue at that point. So we've got -- and those 2 words together, if you've got a 45-year-old that you screen, that's somebody you could screen repeat for 30-plus years. So that's a really exciting part of our business. And Cologuard 2.0 help accelerate that part of it.

Okay. No good CRC screening conversation would be best served if there wasn't at least one question on blood, just given the activity that's in the space. You're developing a test. Others are developing a test. The USPSTF is going to look at these tests in the '25 to '26 time frame is a simplified way to look at it to say that by the time that the USPSTF does that, you will be alongside your competitors with a competing product that allows them to assess it the same way that they do these other ones?

Yes. We've had an active program for years. We have our pivotal study fully enrolled for colon blood. The team that had been working on that, a lot of those resources were shifted over to Cologuard 2.0 given how significant of improvement that is versus Cologuard 1.0. We want to make sure that gets to market as soon as possible. But over the next 6 months or so, we'll start shifting some of those resources back to colon blood because we do see that there is room in the market for a colon blood test. Now I think it's more of a niche test, but even a 10% market opportunity on a market of 110 million people, it's a good market. And we expect to be there alongside others who are looking to get into this market.

And the readout for that data is, you've said mid-'24. There's a very large cancer conference that takes place in June of 2024. Would some of us be best served thinking about taking a trip to Chicago and maybe getting a look? Or is that...?

Well, we'll see. There's always things you can see at ASCO Dan. There's also DDW as well, but we'll see you, I'm not sure what conference it will be yet.

Okay. Let's maybe talk about MRD because it is not all colorectal cancer screening in exact these days. You're entering this market much like others. Can you talk a little bit about -- and you're focusing on colorectal unsurprisingly as the first data set. Can you talk about when we might see data there? And then the follow-on question would be, can you talk about the studies that you have site -- line of sight on that prove clinical utility because it's obviously about much more than just -- hey, we can see a signal faster than the image can. You now need to prove out patients live longer. This is the difference between this population and this population.

So we think this is a very attractive market. About 6 months ago, we decided to accelerate our investment because we see it unfolding even faster. Now we think we're still probably in the early innings, but -- we see this a $15 billion U.S. market opportunity. We think it's 1 of the top 3 markets in all of diagnostics, and we intend to be a leader there. We expect to launch a soft launch, our colon cancer MRD product, version 1 of it this year, with data and reimbursement coming on next year. Breast we expect to bring to market next year as well. I think those are probably 2 of the biggest opportunities within MRD. And then both of those 2 breast and colon we have pivotal studies underway with the first readout expected in '25. You're right, Dan, that to really accelerate the space, we need more utility data. However, the -- what you're seeing is the KOLs and reimbursement adoption is progressing very quickly. You're seeing -- I think the evidence bar is probably little lower than we had thought before. At some point, we expect this market to go from indication by indication to all solid tissue going quickly. So we plan to be ready for that. We love how we're positioned. We think we'll have a great test out there. If you look at breast cancer, today, about 50% of all breast cancer tissue in this country already comes to our lab. Today, we run Oncotype DX in that test to inform the decision around chemotherapy, really chemo prediction and also prognosis. Well, in the future, mention taking that same block of tissue, first run oncotype, second run MRD. So we left for a position there in colon cancer. I mean we have the single largest colon cancer screening database in the country that will continue to grow. By the end of '27, we expect to have tested 35 million people for colon cancer. So that data basis is growing. If colon cancer positive, well, now you're ripe for a possible MRD test. So we've got 2 big inroads into probably 2 of the biggest markets in MRD and we think evidence will be essential is helping unlock that market more broadly.

Okay. And just to sort of hit on that one more time. Just because we don't know about it, it doesn't mean it's not going on. You do have studies that you'll either talk about or announce that are designed to do exactly what we're talking about?

We haven't spent a lot of time talking about that. We did issue press releases probably over a year ago on these 2 studies. But look, they're in the background. We've generated a handful of kind of earlier case-control studies in each of breast and colon relative to our broader business, though, we've got Cologuard and oncotype, the 2 biggest products in all diagnostics, they get more attention than our pipeline do today. But over time, I think MRD will eventually -- that's $1 billion product for us eventually.

Okay. You are a CFO, so I should ask something about gross margins. At the Analyst Day, you did talk -- you guys spent some time on some things that you can do to essentially take the COGs of the assay of the Cologuard assay from 114, I believe, to 100. Walking through the lab and doing the LabTOR, it seemed like there were obvious areas where those things could happen. I don't know if it's in the near term, but certainly in the medium term. Can you talk about the pace of progress there on some of those things? Could they be 2024 factors?

Yes, they will. Gross margin should improve. Our goal long-term growth for Cologuard is 80% from mid-70s now. Three ways we get there. One is just leveraging scaling that fixed cost we have. Back in '19, we brought on, I do lab capacity before COVID hit. We didn't see COVID coming, but that added about $15 of cost per test. Now over time, as we grow the business, we'll scale that fixed cost, and that is happening now. Second is automation. The lab is already very automated. The biggest step forward in automation we've ever had is actually starting now what you saw this summer is being implemented as we speak. It will take a couple of quarters to implement. The benefits will start next year and carry on over time. By the end of the decade, expect the automation benefits to help reduce our total cost of goods by over $200 million. So it is -- there's a big advantage there. And third is on when you look at things like rescreens and our patient compliance rate, rescreens, I mentioned before, actually helped drive gross margin. As rescreen shift towards 50% of our revenue, that alone could help lift overall gross margins for the company by over a point. So there's a lot of ways we can drive gross margin higher. And the team that does this, our ops team, our lab team are very good at finding efficiencies.

Okay. One final one on next year since you kind of went there, we went there. You're on track to do 30% growth on the screening side. The Street has you at 17% for next year or thereabouts, at least for a couple of weeks ago. Fewer headwinds next year, bigger rescreening population. I know we're a quarter away from the guide. But can you kind of just talk to how we would get from one year to the next and your assumptions behind what next year might bring?

Yes. You're right. We have 8 seconds left. We are a quarter away from the guide. But look, the positive underlying trends, they don't go away next year. They don't go away in '25 or '26. They're here for a long time. Again, there's 60 million people who need to be screened right now. So we feel good about it. We're very fortunate to have a broad set of drivers. I would say that the base is bigger of a year. I think it's bigger. So as the law of large numbers kicks in, that growth rate, all of equal comes down. the 27% guidance we put out there requires us to grow by about 400 million a year. Now some years, we'll have new products, maybe it's faster, summers you won't, but that's the pace that we're on. This year, we'll grow by over 400 million. We've got to keep that up. So yes, the growth rate will come down, but we expect it will have growth over the next few years.

Okay. Very good. Always a pleasure, Jeff. Thanks.