Shares of Cancer Researchers Exact Sciences and Invitae Are Sliding. Here’s Why.

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*** ONE-TIME USE *** Exact Sciences Laboratories, Madison, WI

Courtesy of Exact Sciences

Expectations crescendoed early this year, for companies working on blood screens for early detection of cancer. It’s been downhill since, for the stocks of


Exact Sciences,



as they buckle down to the hard development work. The earnings they’re now reporting for the March quarter are merely good, and their stocks continue to slide.

After Tuesday’s close, Exact Sciences (ticker: EXAS) reported 16% revenue growth for the March period, and a smaller loss than the year-ago quarter. The stock closed down 8% for the day, at $116, then slipped another 2% after hours to $113.40. Invitae (NVTA) also reported late Tuesday, saying that March quarter revenue rose 61%, while reporting a loss; its stock closed down 4%, at $31.50, then fell another 2% after hours, to $31.

Exact Sciences revenue in the latest quarter came to $402 million, compared with $348 million a year earlier. While colon-cancer-screening revenue rose 10%, to $240 million, Exact Sciences is losing some of the tailwind it enjoyed from Covid-19 testing. March revenue from Covid-19 testing was $32 million, down sequentially from $99 million in the December quarter. In its 2021 guidance today, Exact Sciences said it expects just $50 million-$60 million in Covid-19 testing revenue for the whole year.

The net loss in Exact’s March quarter was $31 million, or 18 cents a share, compared with a $135 million loss in the year-ago quarter, or 91 cents a share. Earnings before interest, taxes, depreciation, and amortization in the latest quarter were negative $226 million, but adjusted for things such as stock compensation and acquisitions, Ebitda was negative $25 million, compared with negative $8 million in the year-ago quarter.

Exact Sciences’ March results were better than the FactSet analyst consensus estimate for about $390 million in revenue and net losses of close to $1 a share. Looking ahead, Exact Sciences is guiding for total revenue in 2021 of between $1.69 billion and $1.735 billion.

Invitae’s March quarter revenue was $104 million, compared with the year-earlier quarter’s $64 million. The net loss was $110 million, or 56 cents a share, compared with the year-ago loss of $99 million, or 99 cents a share. Acquisitions and financings have greatly increased the gene-tester’s share count. Excluding noncash charges and acquisitions, Invitae says its latest quarter’s net loss would have been $122 million, or 63 cents a share.

The genetic-sequencing technologies used by these companies to provide their precision medicine services is mostly supplied by Illumina (ILMN), which reported its March quarter results last week. The company had preannounced a good quarter, and the $1.1 billion in revenue it reported was nicely ahead of the $1 billion expected. Earnings of $1.89 a share were far above the $1.40 consensus.

Illumina is battling with federal antitrust regulators in court to complete its deal to acquire Grail, a startup that holds the lead in the race to develop a blood test that could screen for many kinds of cancer. Not counting Grail’s expected losses, Illumina is guiding to 2021 earnings per share of $5.80 to $6.05—nearly 40% above the previous consensus estimate. Closing Tuesday at $378, Illumina’s stock is well below its February peak of $555, and most analysts rate it at Hold, and have price targets that average below $410.

Write to Bill Alpert at

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