Corporate Presentation v December 2016
Safe harbor statement 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," "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; our 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
OUR MISSION To partner with healthcare providers, payers, patients & advocacy groups to help eradicate colon cancer 3
Eradicating Colon Cancer: Challenges & Opportunity 4
Colon cancer: America’s second deadliest cancer 158,080 132,700 134,490 new diagnoses in 2015 new diagnoses 49,190 49,700 41,780 40,890 49,190 26,120 15,690 deaths in 2015 deaths Esophageal Prostate Breast Pancreas Colorectal Lung Annual cancer deaths 5 Source: American Cancer Society, Cancer Facts & Figures 2016 ; all figures annual
Why is colon cancer the “Most preventable, yet least prevented form of cancer”? 10+ years Four stages of Pre-cancerous polyp colon cancer 6 Sources: J Natl Cancer Inst. 2009; 101:1225-1227 (Itzkowitz) Gastro 1997;112:594-692 (Winawer)
Detecting colorectal cancer early is critical 60% of patients are diagnosed in stages III-IV Diagnosed in Stage IV Diagnosed in Stages I or II 9 out of 10 1 out of 10 survive 5 years survive 5 years Sources: SEER 18 2004-2010 7 American Cancer Society, Cancer Facts & Figures 2016 ; all figures annual
America’s stagnant colon cancer screening rate 80% 80% Care Gap cervical (81%) & breast cancer (73%) achieve higher 59% 58% screening rates 1 52% 50% 95% of screened patients underwent colonoscopy 2 2005 2008 2010 2013 2018 2020 Goal screening rate Actual colon cancer screening rate 8 Rx Only Sources: 1. CDC NHIS survey results as published in the CDC’s MMWR between 2006 and 2015 2. CDC BFRSS survey as published in MMWR (2013)
Cologuard addresses the colon cancer challenge Stool DNA test: 11 biomarkers (10 DNA & 1 protein) FDA-approved & covered by Medicare List price - $649; Medicare rate - $509 Results of 10,000-patient prospective trial published in New England Journal of Medicine Included in leading cancer screening guidelines at 3 year interval: • U.S. Preventive Services Task Force (2016) Developed with • National Comprehensive Cancer Network (2016) Mayo Clinic • American Cancer Society (2014) 9 Source: Imperiale TF et al., N Engl J Med (2014)
Cologuard’s performance confirmed in multiple studies March 2014 October 2015 Cancer 92% 100% detection (60/65) (10/10) Precancer 42% 41% detection (321/757) (31/76) 90% 93% Specificity (4002/4457) (clean colon*) (296/318) *Clean colons have no need for a biopsy 10 Sources: Imperiale TF et al., N Engl J Med (2014) Redwood DG, Asay ED, Blake ID, et al . Stool DNA Testing for Screening Detection of Colorectal Neoplasia in Alaska Native People. Mayo Clin Proc 2016; 91: 61-70.
Cologuard: Becoming Standard of Care 11
A multi-billion dollar U.S. market opportunity Potential 80M-patient U.S. market opportunity U.S. screening market* for Cologuard $4B *** ***** **** *80 million average-risk, asymptomatic people ages 50-85 **Assumes unscreened decreases from 42% to 30% ***Assumes 24M people screened with Cologuard every three years with ASP of $500 ****Assumes 30% market share for Cologuard 12 *****Assumes 40% market share for colonoscopy & FOBT
Cologuard becoming standard of care Patient & physician demand increases with coverage & guideline inclusion Regulatory & coverage Guideline inclusion Quality measures Medicare Star Ratings * 13 * CMS Star Ratings are guided by HEDIS quality measures. Cologuard's inclusion in the Star Ratings is expected in 2017.
Cologuard included in USPSTF recommendations Screening Method Frequency Stool-Based Tests gFOBT Every year FIT Every year FIT-DNA Every 1 or 3 y Direct Visualization Tests Colonoscopy Every 10 y CT colonography Every 5 y Flexible sigmoidoscopy Every 5 y Flexible sigmoidoscopy Flexible sigmoidoscopy every 10 y with FIT plus FIT every year 14 Rx Only Sources: USPSTF, “Final Recommendation Statement, Colorectal Cancer: Screening (June 2016 )” JAMA (2016)
Cologuard drives quality credit HEDIS 2017 measure for colon cancer screening HEDIS Fecal occult blood test during the measurement year. Flexible sigmoidoscopy during the measurement year or four years prior. Colonoscopy during the measurement year or nine years prior. CT colonography during the measurement year or the four years prior FIT-DNA test (FIT-DNA Value Set) during the measurement year or the two years prior to the measurement year 2016 HEDIS performance audit will use HEDIS 2017 rules. Screening credit given for patients screened using Cologuard in 2014, 2015 or 2016. 15 Rx Only Source: NCQA, HEDIS 2017 Volume 2 Technical Update. Published October 3, 2016
Quality measures increase colon cancer screening >50% increase in screening after physicians were compensated on quality measures 16 Source: Dale, CR et al., N Engl J Med (2016)
Quality measures impacting Medicare Advantage plans Health plans aiming for ≥ 4 Star Rating to earn 5% bonus payments Key thresholds in Star Ratings: 2017 Medicare Advantage Plans Ratings by Star Level 5 Star Ratings : year-round open enrollment 107 97 ≥ 4.0 Star Rating : ~$500 per member and top member 67 67 rebate payments 14 12 2.5 3 3.5 4 4.5 5 Star Rating 17 Sources: CMS 2017 Star Ratings Fact Sheet Kaiser Health News, March 1, 2016
Strong customer satisfaction with Cologuard Physicians’ met or exceeded 98 % expectations 90 % Patients rated Cologuard experience very positive 18 Sources: ZS survey conducted for Exact Sciences, n=300 Exact Sciences Laboratories patient satisfaction survey data is cumulative; n = 2,799
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