Corporate Presentation v October 2016 Safe harbor statement This - - PowerPoint PPT Presentation

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Corporate Presentation v October 2016 Safe harbor statement This - - PowerPoint PPT Presentation

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Corporate Presentation v October 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

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Corporate Presentation

October 2016

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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,
  • perations, 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.

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OUR MISSION

To partner with healthcare providers, payers, patients & advocacy groups to

help eradicate colon cancer

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Eradicating Colon Cancer: Challenges & Opportunity

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SLIDE 5 Source: American Cancer Society, Cancer Facts & Figures 2016; all figures annual

Colon cancer: America’s second deadliest cancer

new diagnoses in 2015

15,690 26,120 41,780 40,890

49,190

158,080 Esophageal Prostate Breast Pancreas Colorectal Lung

Annual cancer deaths

132,700

deaths in 2015

49,700

134,490

new diagnoses

49,190

deaths

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10+ years

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

Why is colon cancer the “Most preventable, yet least prevented form of cancer”?

Pre-cancerous polyp Four stages of colon cancer

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SLIDE 7 Sources: SEER 18 2004-2010 American Cancer Society, Cancer Facts & Figures 2016; all figures annual

Detecting colorectal cancer early is critical

9 out of 10 survive 5 years Diagnosed in Stages I or II Diagnosed in Stage IV 1 out of 10 survive 5 years

60% of patients are diagnosed in stages III-IV

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50% 52% 59% 58% 80% 80% 2005 2008 2010 2013 2018 2020

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95% of screened patients underwent colonoscopy2

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)

Care Gap

cervical (81%) & breast cancer (73%) achieve higher screening rates1

Actual colon cancer screening rate Goal screening rate

America’s stagnant colon cancer screening rate

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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)
  • National Comprehensive Cancer Network (2016)
  • American Cancer Society (2014)
Source: Imperiale TF et al., N Engl J Med (2014)

Developed with Mayo Clinic

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Cancer detection

92%

(60/65)

Precancer detection

42%

(321/757)

Specificity

(clean colon*)

90%

(4002/4457)

*Clean colons have no need for a biopsy 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’s performance confirmed in multiple studies

March 2014 October 2015

41%

(31/76)

100%

(10/10)

93%

(296/318)

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Three easy steps to using Cologuard: Get, Go, Gone

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Cologuard: Becoming Standard of Care

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A multi-billion dollar U.S. market opportunity

U.S. market opportunity for Cologuard

$4B

Potential 80M-patient U.S. screening market*

***

*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 *****Assumes 40% market share for colonoscopy & FOBT

***** ****

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Cologuard becoming standard of care

Patient & physician demand increases with coverage & guideline inclusion

Medicare Star Ratings*

* Medicare Advantage Star Ratings are guided by NCQA’s HEDIS quality measures

Regulatory & coverage Guideline inclusion Quality measures

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Sources: USPSTF, “Final Recommendation Statement, Colorectal Cancer: Screening (June 2016)” JAMA (2016) 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 with FIT Flexible sigmoidoscopy every 10 y plus FIT every year

Cologuard is “A” graded in USPSTF recommendations

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2016 HEDIS performance audit will use HEDIS 2017 rules. Screening credit given for patients screened using Cologuard in 2014, 2015 or 2016.

HEDIS

HEDIS 2017 measure for colon cancer screening

 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

Source: NCQA, HEDIS 2017 Volume 2 Technical Update. Published October 3, 2016

Cologuard drives quality credit

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Strong customer satisfaction with Cologuard

Physicians expectations met or exceeded 98% Patients rated Cologuard experience very positive

88%

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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Cologuard: Increasing America’s screening population

Source: Colorectal Cancer Screening with Multi-target stool DNA-based Testing Previous Screening History of the Initial Patient Cohort, poster presented at American College of Gastroenterology's Annual Scientific Meeting (ACG 2015), Oct. 16-21, 2015; ages 50-74

49% screened with colonoscopy

42% never screened before

9% screened only with FIT/FOBT

Screening history of Cologuard users

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SLIDE 19 Source: Dale, CR et al., N Engl J Med (2016)

Quality measures increase colon cancer screening

>50% increase in screening after physicians were compensated on quality measures

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Patients and physicians supported by proactive outreach and 24/7 care center

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Order Cologuard delivered

Welcome call & letter Audit of patient’s age & interval Compliance call 1 Compliance call 2 Compliance letter

Cologuard returned

Week 1 Week 4

Proactive outreach from Exact Sciences

Week 2

Increasing compliance with a screening program

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Exact Sciences’ compliance program increases screening

Cologuard’s patient compliance rate is derived from the number of valid tests reported divided by the number of collection kits shipped to patients during the trailing 12-month period. Sources: 1. Exact Sciences Q2 2016 Earnings Call
  • 2. Exact Sciences internal calculation based on call center data

29% 29% 10%

68%

Returned with no compliance calls Returned with 1 compliance call Returned with 2 compliance calls Overall compliance rate

Percentage of compliant patients

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Offering Cologuard increases patient compliance

USMD study highlights opportunity to expand screening & detect curable-stage cancer

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

Non-compliant Medicare patients

393

Cancers in curable stage; 21 advanced adenoma

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Cologuard compliance

88%

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Sources: CMS 2016 Star Ratings Fact Sheet Kaiser Health News, March 1, 2016

Quality measures impacting Medicare Advantage plans

Health plans aiming for ≥ 4 Star Rating to earn 5% bonus payments

12 66 112

102 65 12

Star Rating 5 4.5 4 3.5 3 2.5 2016 Medicare Advantage Plans Ratings by Star Level Key thresholds in Star Ratings: 5 Star Ratings: year-round open enrollment ≥ 4.0 Star Rating: ~$500 per member and top member rebate payments

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A Strategy to Drive Cologuard’s Adoption

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Three-pronged commercial strategy

Physicians Primary care sales force National TV campaign Digital marketing Payers Clinical & health publications Market access team Guideline inclusion Patients Public relations Digital direct to consumer National TV campaign

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Cologuard’s growing physician penetration

*IMS data based on heart drug prescriptions

4,100 8,300 14,700 21,000 27,000 200,000 potential Cologuard prescribers* 32,000 Q1 Q2 Q3 Q4 Q1 41,000 August 2014 June 2016 Q2

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National TV campaign increasing ordering & adoption

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Digital advertising complements national TV campaign

Website visits Patient guide downloads Order form downloads

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46% 46% 8%

Source: US Census 2013 and AIS Directory of Health Plans: 2015; ages 50-85

Medicare Commercial Military & Medicaid

Breakdown of current U.S. insurance market

~80M average-risk people age 50-85

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Medical coverage accelerating following Cologuard’s inclusion in USPSTF recommendations

  • 20

40 60 80 100 120 140

Millions of covered lives

128M total USPSTF

Medicare Anthem HCSC BCBS MA CareFirst BCBS LA Health Net

Source: Kaiser Family Foundation 2015, AIS Directory of Health Plans: 2015
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Strategy to advance insurance coverage

Value proposition for payers

Sources: Imperiale TF et al., N Engl J Med (2014) Cologuard’s patient compliance rate is derived from the number of valid tests reported divided by the number of collection kits shipped to patients during the 12-month period ending 60 days prior to June 30, 2016.

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Quality

  • f care

Economic value Member satisfaction

Close the care gap with a colon cancer screening test that’s 92% sensitive and 87% specific Patient compliance service ensures high user satisfaction with an easy-to-use, non-invasive test Cologuard can increase quality rating while saving on colonoscopy with no additional investment

$

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Cologuard growth accelerating in 2016

4,000 11,000 21,000 34,000 38,000 40,000 54,000

Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016

65,000

guidance

Q3

Cologuard tests completed

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Guidance

2015 2016

Projecting $90-100M revenue in 2016

104,000 $39.4M >240,000 $90-100M

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SLIDE 34 Source: Company data; Wells Fargo Securities, LLC

Cologuard’s strong launch trajectory

BRACAnalysis (MYGN) Prolaris (MYGN) Oncotype Dx Prostate (GHDX) Oncotype Dx Breast/Colon (GHDX) FoundationOne (FMI) MaterniT21 (SQNM) Panorama (NTRA) Afirma (VCYT) VectraDA (MYGN)

Exact Sciences (EXAS)

Assurex (MYGN)

0K 10K 20K 30K 40K 50K 60K 70K 80K 90K 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Launch Year

Exact Sciences (EXAS) 202,000 Panorama (NTRA) 201,000 MaterniT21 (SQNM) 133,900 Assurex (MYGN) 11,750 FoundationOne (FMI) 10,845

First 7 Quarter Test Volume (Top 5 Shown)

Quarterly Test Volume

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Second-quarter financial results

Revenues Operating expenses Cash utilization Cash balance $21.2 million $56.2 million $38.5 million $224.1 million, as reported $368.6 million, pro forma* Second Quarter 2016

*Pro forma cash balance reflects inclusion of proceeds from the company’s July 2016 follow-
  • n equity offering (net proceeds of approximately $144.5 million) as if completed during Q2

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