[PPT] - Corporate Presentation Fourth Quarter 2017 November 2017 1 Safe PowerPoint Presentation

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Corporate Presentation

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Fourth Quarter 2017

November 2017

SLIDE 2 This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended that are intended to be covered by the "safe harbor" created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," “goal,” "estimate," "anticipate" or other comparable terms. All statements other than statements of historical facts included in this presentation regarding our strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding expected future operating results, anticipated results of our sales and marketing efforts, expectations concerning payor reimbursement and the anticipated results of our product development efforts. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our

control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not

rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our ability to successfully and profitably market our products and services; the acceptance of our products and services by patients and healthcare providers; the willingness of health insurance companies and other payors to cover Cologuard and reimburse us for our performance of the Cologuard test; the amount and nature of competition from other cancer screening products and services; the effects of any healthcare reforms, including the Affordable Care Act, or changes in healthcare pricing, coverage and reimbursement; recommendations, guidelines and/or quality metrics issued by various organizations such as the U.S. Preventive Services Task Force, the American Cancer Society and the National Committee for Quality Assurance regarding cancer screening or our products and services; our ability to successfully develop new products and services; our success establishing and maintaining collaborative licensing and supplier arrangements;

ur ability to maintain regulatory approvals and comply with applicable regulations; and the other risks and uncertainties described in the Risk Factors

and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our most recently filed Annual Report on Form 10-K and our subsequently filed Quarterly Report(s) on Form 10-Q. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. 2

Safe harbor statement

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Our Mission To partner with patients, healthcare providers, payers & advocacy groups to help eradicate colon cancer

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SLIDE 4 4 Source: American Cancer Society, Cancer Facts & Figures 2017; all figures annual

Colon cancer: America’s second deadliest cancer

Source: American Cancer Society, Cancer Facts & Figures 2017; all figures annual

15,690 26,730 41,070 43,090 50,260 155,870

Esophageal Prostate Breast Pancreas Colorectal Lung

new diagnoses

135,430

deaths

50,260

Annual Cancer Deaths

SLIDE 5 Sources: J Natl Cancer Inst. 2009; 101:1225-1227 (Itzkowitz) Gastro 1997;112:594-692 (Winawer) 5

“The most preventable, yet least prevented form of cancer”

– Journal of the National Cancer Institute

10+ years

Pre-cancerous polyp Cancer

SLIDE 6 6 Sources: SEER 18 2004-2010 American Cancer Society, Cancer Facts & Figures 2017; all figures annual

Detecting colorectal cancer early is critical

Diagnosed in Stages I or II

survive 5 years

9 of 10

Diagnosed in Stage IV

survive 5 years

1 of 10

SLIDE 7 7 Sources: CDC NHIS survey results as published in the CDC’s MMWR between 2006 and 2017

America’s stagnant colon cancer screening rate

50% 52% 59% 58% 62% 80% goal

Actual colon cancer screening rates

2005 2008 2010 2013 2015 2018

SLIDE 8 8 Source: Imperiale TF et al., N Engl J Med (2014)

Cologuard: Addressing the colon cancer challenge

94% early stage cancer sensitivity

developed with

f addressable population with insurance

coverage (80M+ people), including Medicare

87%

Easy-to-do & non-invasive with no preparation, sedation, or time off FDA approved & included in major guidelines

SLIDE 9 Source: Mayo Clinic poster presentation Su1044, Digestive Disease Week 2016 9

Knowledge of positive Cologuard improves colonoscopy performance

Mayo clinic study compares results of unblinded, blinded colonoscopies

46%

more time spent

n colonoscopy

2x 32% 4x

Polyps discovered Increase in pre-cancer detection Higher flat right sided lesion detection

SLIDE 10 10 Cologuard’s compliance rate is derived from the number of completed tests reported divided by the number of collection kits shipped to patients during the 12-month period ending 60 days prior to Sep. 30, 2017, excluding program orders

Driving patient compliance with colon cancer screening

66%

Patient compliance

Welcome call 24/7 patient support line Cologuard delivered to home Reminder calls Reminder letter

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Impact of patient navigation service on compliance

FOBT* colonoscopy**

14% 38%

66%

***

Sources: *Patient adherence over 3 years’ Liang PS., et al., Am J Gastroenterol. 2016, **Patient compliance within 1 year; Arch Intern Med 2012; 172(7):575-582 (Inadomi), ***Cologuard’s compliance rate is derived from the number of completed tests reported divided by the number of collection kits shipped to patients during the 12-month period ending 60 days prior to Sep. 30, 2017, excluding program orders

SLIDE 12 American Association of Cancer Research Annual meeting 2016, New Orleans LA USA, LB-296, Proceedings of the American Association of Cancer Research, in press 12

Cologuard increases patient compliance

USMD study highlights opportunity to expand screening & detect curable-stage cancer Non-compliant Medicare patients

393

Cologuard compliance

88%

Cancers detected in curable stage

4

Advanced adenoma detected

21

SLIDE 13 13 Sources: ZS survey conducted for Exact Sciences Oct-Dec 2016, n=300 Exact Sciences Laboratories patient satisfaction survey Jan-Sep 2017; n = 4,328

Strong customer satisfaction with Cologuard Physicians’ expectations met or exceeded Patients rated Cologuard experience very positive

88% 96%

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Commercial strategy engages key audiences

Market access team and clinical & health publications

Payers

Primary care sales force and collateral materials

Providers & Systems

National TV campaign and digital marketing

Patients

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National TV campaign increasing ordering & adoption

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Exact Sciences nationwide sales force

Establishing a new standard for colon cancer screening

Primary care sales force

Focus on top potential physician offices
Educate physicians & office staff
Improve repeat ordering of Cologuard
Extend reach of sales force coverage
Support field in education efforts
New physician outreach and pull through

Inside sales force

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$1.5 $4.3 $8.1 $12.6 $14.4 $14.8 $21.2 $28.1 $35.2 $48.4 $57.6 $72.6

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Cologuard revenue growth increasing

2015 2016

Quarterly Cologuard revenue ($ Millions)

Launch of national TV campaign 2017

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$383 $386 $393 $405 $418 $423 $428

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Time-lagged average revenue per test improving

2016 2017 Note: average Cologuard reimbursement from all sources on a trailing 12 month basis for tests that were completed at least 6 months ago

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A multi-billion dollar U.S. market opportunity

*80 million average-risk, asymptomatic people ages 50-85, **Assumes ASP of $500-525 and 3-year interval for Cologuard, ***(161,000 completed tests * 4 to annualize * 3 to account for interval) / 80M

80M+

2%

Potential U.S. screening market for Cologuard*

$14B

Total Addressable Market** market share***

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4,000 8,000 15,000 21,000 27,000 32,000 41,000 50,000 60,000 70,000 81,000 91,000

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Cologuard’s growing provider penetration

2015 2017

Cumulative Cologuard ordering providers

Launch of national TV campaign 2016

SLIDE 21 21 Source: US Census data, AIS Directory of Health Plans: 2016, Exact Sciences Analysis

Coverage accelerated following Cologuard inclusion in USPSTF recommendations

2015 2016 2017

239M USPSTF

87%

f Cologuard addressable

market covered Total covered lives

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Cologuard becoming standard of care

Additional coverage driven by data, guidelines, and quality measures

>85% insurance coverage 2009-2013 2014 2015 2017 10,000 patient DeeP-C trial guidelines HEDIS quality measures Medicare Star Ratings coverage approval & 2016 guidelines reconfirmed performance recommended by USPSTF trial results published developed with Mayo Clinic

SLIDE 23 23 Source: NCQA Health Insurance Plan Ratings 2017

Improving HEDIS scores through colorectal cancer screening

<1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

50%

Screening rate

73%

Screening rate

HEDIS Score

SLIDE 24 Exact Sciences Laboratories data, Patient Satisfaction Survey, May-Sep 2017; n = 2,405 24

Cologuard: Increasing America’s screening population

Screening history of Cologuard users

39% screened with colonoscopy 12% screened only with FIT/FOBT

49%

never screened before

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Exact Sciences is a data-driven company

Improve quality measures and

utcomes

Payers

Improve quality measures and reporting capabilities

Providers

Increase compliance and repeat screening

Patients

>750,000

Health care providers

>91,000

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Building a pipeline on Cologuard platform

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SLIDE 27 Source: World Health Organization and Centers for Disease Control and Prevention 27

Cancer’s annual impact globally, nationally

Expected 70% increase in new cases within 20 years

1.6M

new cancer cases

600k

deaths

14M

new cancer cases

8.8M

deaths

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Exact Sciences’ advantages provide a unique position in liquid biopsy

Collaboration with Mayo Clinic Exact Sciences’ proven experience Proprietary technology & platform Multi-marker approach Cost advantages

ver sequencing

5+ years of development

SLIDE 29 Source: Analyst estimates 29

Liquid biopsy: A growth area for cancer diagnostics

Exact Sciences focusing on early detection & recurrence

Projected liquid biopsy market

>$13B

$200M

Screening Minimum residual disease Recurrence monitoring Response monitoring Targeted therapy selection

Clinical applications

Diagnostic aid Response profiling

2015 2030

SLIDE 30 30 *Gould et al., Am J Respir Crit Care Med (2015), **Total Addressable Market assumes ASP of $500

A need and opportunity in diagnosing lung cancer

1.5-3M lung nodules discovered annually* Invasive, expensive, and harmful

Biopsy Surgery CT scans

The Problem Current Options

$750M-$1.5B

Blood-based biomarker test

Potential Opportunity

**

SLIDE 31 31 Source: Allawi et al., abstract presented at AACR (2017)

Blood validation results for lung cancer

High accuracy achieved with four methylation markers in blood

>90%

Sensitivity & Specificity

87

cancers

311

controls

398

sample size

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Third-quarter 2017 financials

Q3 2017

Revenue

$72.6 million $57.6 million

Gross margin

71% 69%

Operating expense

$80.3 million $71.1 million

Cash utilization

$21.7 million $43.9 million

Ending cash balance

$462.5 million $484.3 million

Q2 2017

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