Corporate Presentation v May 2016 Safe harbor statement Certain - - PowerPoint PPT Presentation

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Corporate Presentation v May 2016 Safe harbor statement Certain - - PowerPoint PPT Presentation

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Corporate Presentation v May 2016 Safe harbor statement Certain statements made in this presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the

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v

Corporate Presentation

May 2016

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Safe harbor statement

Certain statements made in this presentation contain 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 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 2016 guidance, expected numbers of completed and reported Cologuard tests, anticipated patient compliance rates, 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 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 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 and licensing arrangements; our ability to maintain regulatory approvals and comply with applicable regulations; the impact of our nationwide television advertising campaign; anticipated contracts with Anthem and
  • ther health insurance companies; 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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SLIDE 4 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 Pancreas Breast Colorectal Lung

Annual cancer deaths

132,700

deaths in 2015

49,700

134,490

new diagnoses

49,190

deaths

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SLIDE 5

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 6 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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SLIDE 7

America’s stagnant colon cancer screening rate

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

Source: CDC NHIS survey results as published in the CDC’s MMWR between 2006 and 2015

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Goals

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SLIDE 8

Cologuard: Addressing 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 American Cancer Society guidelines &

USPSTF’s draft guidelines as an alternative test

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

Developed with Mayo Clinic

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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

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SLIDE 10 Sources: 1 Imperiale TF, Ransohoff DF, Itzkowitz SH, et al. Multitarget stool DNA testing for colorectal-cancer screening. N Engl J Med 2014; 370: 1287-1297. 2 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. 3 Berger BM, Schroy PC, 3rd, Dinh TA. Screening for Colorectal Cancer Using a Multitarget Stool DNA Test: Modeling the Effect of the Inter-test Interval on Clinical Effectiveness. Clin Colorectal Cancer 2015.Epub ahead of print. 4 Berger BM, Parton M, Levin B, USPSTF Colorectal Cancer Screening Guidelines: An Extended Look at Multi-Year Interval Testing, Am J Managed Care 2016 22(2):e77 – e81. 5 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 March 31, 2016.. 6 Abola MV, Fennimore TF, Chen MM, et al. DNA-based versus colonoscopy-based colorectal cancer screening: patient perceptions and preferences. Fam Med Commun H 2015; 3: 2-8.

Comprehensive case for Cologuard

Cancer detection >90% in two studies

1, 2

Superior performance Versus other screening methods

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Cost-effective Analysis of independent modeling

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3-year interval 69% compliance with Cologuard kits shipped

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Compliance program 75% of patients consider more suitable than colonoscopy 84% of patients would repeat Cologuard, if recommended

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Patient satisfaction

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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 recent study

March 2014 October 2015

41%

(31/76)

100%

(10/10)

93%

(296/318)

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SLIDE 12 1FDA Advisory Panel material, Epigenomics AG PMA P130001, March 26, 2014 2Company website 3Company news release dated Feb. 17, 2016 4Stages I-II; does not report Stage I only 55-assay panel

Blood-based colon cancer tests not currently viable

(clean colon)

Low sensitivity for early-stage cancer & high false positive rate

*Not prospective,

not average risk & not peer-reviewed

Interval Sensitivity

All stages

Sensitivity

Stage I

Specificity Lifetime False+ 3 years 92% 90% 90% 1.2 Epigenomics

Epi proColon (Septin 9)1

1 year 68% 41% 79% 7.4 Applied Proteomics*

SimpliPro2

1 year 81% 75%4 78% 7.7 VolitionRx*

NuQ3

1 year 81% 75%5 78% 7.7

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SLIDE 13 Source: American Journal of Managed Care, February 2016

Virtually no adherence to annual colon cancer screening

3 of 1,000 continuously-insured people adhere to FIT / FOBT recommendations

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SLIDE 14

$11,313 per QALYs $15,500 per QALYs $30,000 per QALYs

Modeling supports Cologuard as cost-effective

3 years

cervical cancer

3 years 2 years

breast cancer

QALYs: Quality adjusted life years saved Source: Berger BM, Schroy PC, 3rd, Dinh TA. Screening for Colorectal Cancer Using a Multitarget Stool DNA Test: Modeling the Effect of the Intertest Interval on Clinical Effectiveness. Clin Colorectal Cancer 2015.Epub ahead of print.

Cologuard compares favorably with established screening strategies

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SLIDE 15 Zauber A, et. al. “Evaluating the Benefits and Harms of Colorectal Cancer Screening Strategies: A Collaborative Modeling Approach.” AHRQ (2015). See Appendix Tables 3(a) – 10(c).

CISNET modeling highlights Cologuard 3-year has superior benefits-to-harms ratio

Complications per thousand Life years gained per thousand Deaths averted per thousand

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Cologuard increases patient compliance

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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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SLIDE 17

Increasing America’s screening population

49% screened with colonoscopy Screening history of Cologuard users

42% never screened before

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

9% screened only with FIT/FOBT

4 in 10 Cologuard users never previously screened

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Only 24/7/365 nationwide colon cancer screening network drives compliance

69%

Patient compliance*

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 March 31, 2016.

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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 Guidelines Patients Public relations Multi-channel direct to consumer National TV campaign

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Cologuard’s growing physician penetration

*IMS data based on heart drug prescriptions

August 2014 March 2016 4,100 8,300 14,700 21,000 27,000 200,000 potential Cologuard prescribers*

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32,000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

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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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SLIDE 22 Source: Imperiale TF et al., N Engl J Med (2014) Exact Sciences internal estimates based upon prevalence and detection rates from DeeP-C study

2015 results demonstrate Cologuard’s impact

Cancers potentially detected

104,000

completed Cologuard tests

600

cancers

500

early-stage cancers

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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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Three easy steps to using Cologuard

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Targeted TV ads impacting ordering & adoption

Cologuard

  • rders

+50%

New physician adoption

+100%

Average boost in test vs. control markets

Ad available at CologuardTest.com Percentage point growth compares 9-week average between TV test and control markets. Tested in 5 markets between January – March 2016: Atlanta, Baltimore, Milwaukee/Madison, Sacramento & Tampa Bay
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Quality

  • f care

Strategy to advance coverage to contracting

Cost savings Member satisfaction Value proposition for payers

NEJM publication shows 92% sensitivity Easy, non-invasive test; 69% patient compliance Cologuard delivering positive budget impact

$

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SLIDE 27

46% 46% 8%

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

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Medicare Commercial Military & Medicaid

Breakdown of current U.S. insurance market

~80M average-risk people age 50-85

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Cologuard covered by Medicare

69% 31% Medicare Advantage Traditional fee-for-service Medicare

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

More than 37M average-risk Medicare patients ages 50-85

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Medicare Advantage plans are required to treat Cologuard as an in-network benefit for cost-sharing purposes

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75% 25% Pursuing Coverage Covered

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

Achieving 25% commercial coverage for Cologuard

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58 million lives covered by commercial plans, including:

  • Anthem
  • Horizon BCBS
  • BCBS Massachusetts
  • CareFirst BCBS
  • Independence Blue Cross
  • BCBS Louisiana
  • Excellus BCBS
  • Harvard Pilgrim Healthcare
  • Tufts Health Plan
  • Government Employees

Health Association

  • Priority Health
  • Johns Hopkins Health Plan
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  • Insures 37.6 million people nationwide
  • Second largest insurer in U.S.
  • Anthem enters into agreements by network/region
  • Currently contracted: CA, VA and GA
  • Anticipating contract completion by June 1: IN, KY, MO, OH and WI
  • ~70% of Anthem’s members live in these regions
Sources: Estimate based on US Census data and enrollees AIS Directory of Health Plans: 2015

Anthem contracting progressing quickly

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100%

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Insurance coverage drives order growth

Growth rates measured from March 29, 2015 to March 26, 2016

Percentage-point increase in

  • rder growth in 10 states with

highest insurance coverage, compared to rest of country

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80M-person addressable market

Low satisfaction, compliance with historically-available options

Strong intellectual property protection

Costly 5-10 year product development, FDA and CMS pathway to approval

Compliance engine

3-year adherence drives recurring revenue

Cost and satisfaction

Near-term savings; increasing screening rates

High product satisfaction Patients and physicians want Cologuard

Met or exceeded expectations of 98% of physicians; 88% of patients rated experience very positive

Value to payers Only national network for CRC screening High barrier to entry Large market

  • pportunity

Cologuard: An opportunity for long-term growth

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First-Quarter 2016 financial results

Revenues Operating expenses Cash utilization Cash balance

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First Quarter 2016 $14.8 million $53.7 million $44.3 million $262.6 million

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