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Exact Sciences Company Presentation Baird Healthcare Conference


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Exact Sciences Company Presentation Baird Healthcare Conference

  1. 1. Diagnostics for the early detection and prevention of colon cancer Corporate Presentation September 2014
  2. 2. Safe Harbor Statement Certain statements made in this news release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and 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. Forward-looking statements in this news release may address the following subjects among others: statements regarding the sufficiency of our capital resources, expectations concerning our ability to secure and the timing of reimbursement for our Cologuard test, our estimated reimbursement amounts, our estimates of the available market size and our potential penetration, expected research and development expenses, expected general and administrative expenses and our expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those 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 Reports on Form 10-Q. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 1
  3. 3. OUR MISSION To partner with healthcare providers, payers, patients and advocacy groups to help eradicate colorectal cancer 2
  4. 4. Exact Sciences Overview Executing on the Mission • Cologuard® is an FDA-approved, breakthrough, non-invasive colorectal cancer screening test developed with Mayo Clinic • Uses a combination of DNA markers – Detects 92% of cancers • First time in history FDA approved a technology, CMS proposed national coverage on the same day – FDA approved on August 11, 2014 – CMS proposes 3-year interval in preliminary coverage decision • Multibillion-dollar global opportunity • 120-person sales force and growing 3
  5. 5. Cologuard® FDA-approved, non-invasive screening test FPO 4
  6. 6. 5 Cologuard FIT Improvement P Value Cancer detection 92% (60/65) 73% (48/65) 25% 0.002 Advanced Adenoma detection 42% (321/757) 24% (180/757) 78% <0.001 N Engl J Med 2014;370:1287-97. DOI: 10.1056/NEJMoa1311194 (Imperiale)
  7. 7. Cologuard Indications for Use Cologuard is intended for the qualitative detection of colorectal neoplasia associated DNA markers and for the presence of occult hemoglobin human in stool. A positive result may indicate the presence of colorectal cancer (CRC) or advanced adenoma (AA) and should be followed by diagnostic colonoscopy. Cologuard is indicated to screen adults of either sex, 50 years or older, who are at typical average-risk for CRC. Cologuard is not a replacement for diagnostic colonoscopy or surveillance colonoscopy in high risk individuals. 6
  8. 8. Center for Medicare & Medicaid Services Update 7 • 3-year interval proposed by CMS • Preliminary pricing expected late Aug or Sept • Final national coverage, pricing expected Q4 CMS
  9. 9. Proposed Cologuard reimbursement crosswalk CologuardTM Crosswalk Proposed Payment 2 DNA methylation markers 8 81315 ML/RARalpha $282.83 7 DNA mutation markers 81275 KRAS $197.48 Fecal hemoglobin 82274 FIT $21.70 Total $502.01
  10. 10. Mayo Clinic first system to adopt Cologuard • ~600 primary care physicians • 1.2 patients seen annually “…A critical step in beating this prevalent and preventable cancer.” - Vijay Shah, M.D., chair, gastroenterology & hepatology 9
  11. 11. Stool DNA presently included in key cancer screening guidelines sDNA testing included in American Cancer Society screening guidelines in 2008 • Recommended for use by average-risk patients  Included in American College of Gastroenterology guidelines • 3-year interval for stool DNA  U.S. Preventative Services Task Force • 2015 update expected • If A/B rating, then all commercial payers must cover test 10
  12. 12. Major opportunity to improve colorectal cancer screening The most preventable, yet least prevented cancer. – Journal of the National Cancer Institute Source: J Natl Cancer Inst. 2009; 101:1225-1227 (Itzkowitz) 11
  13. 13. Detection and removal of polyps prevents cancer1 Pre-cancerous polyp Stages of colon cancer 10-15 years2 12 1Source: N Engl J Med 2012;366:687-96 (Zauber) 2Source Gastro 1997;112:594-692. (Winawer)
  14. 14. Colorectal cancer: the second-leading U.S. cancer killer 136,830 Annual U.S. cancer mortality 14,270 29,480 39,590 40,430 50,310 159,260 4,020 Cervix Ovary Prostate Pancreas Breast Lung Source: ACS Cancer Facts & Figures 2014; all figures annual new U.S. cases 50,310 U.S. deaths Colorectal 13
  15. 15. Late-stage detection leads to poor outcomes 60% of cancers are detected late stage Sources: CA Cancer J Clin 2008; 58:130-160 (Levin, B); ACS Colorectal Cancer Facts & Figures 2011-13; 14
  16. 16. Colorectal cancer costs significant and rising $14B annual treatment costs Source: J 15 Natl Cancer Inst. 2011; 103:1-12 (Mariotto)
  17. 17. Low screening rate contributes to colorectal cancer deaths ~50% of Americans are current for recommended colonoscopy screening Source: 16 ACS Cancer Prevention & Early Detection Facts & Figures 2013
  18. 18. American Cancer Society Goal: 80% by 2018 Colorectal Cervical 83% 65% Cancer screening rates 17 ACS Cancer Prevention & Early Detection Facts & Figures 2013; Company estimates
  19. 19. Current U.S. screening of average-risk patients 10.2M fecal blood tests Source: CPT/HCPCS/ICD-9 Codes by Aileron Solutions; Company estimates 4.3M screening colonoscopies 14.5 million tests per year 55% FOBT FIT 45% 18
  20. 20. Cologuard U.S. market opportunity 80M eligible for screening (>50 years old) Source: Company estimates >$2B Potential U.S. market 30% penetration 19
  21. 21. Despite inadequacies, FIT rapidly gained market share over FOBT • Strategy of converting systems and high-volume users • Insignificant sales & marketing investment • Sensitivity advantages over FOBT • Without compliance engine 2% 45% 2004 2008 2012 20 Sources: Company estimates and CMS, Medicare Part B, Colorectal Cancer Screening
  22. 22. Cologuard commercial strategy 21 Drive demand Provider • Physician & system outreach • Medical education • Publications Promote compliance Patient • Direct advertising • Public relations • Compliance engine Secure payment Payer • CMS parallel review • Managed care team
  23. 23. Cologuard launch underway 22 Large sales team • 120 experienced sales leaders • Training complete Cutting-edge lab & support Targeted marketing • Strong program of PR, print, digital • Motivate patients to talk with physician • Successful end-to-end study • 1 million test per year capacity
  24. 24. Highest prescribing primary care physicians Large networks employing large number of primary care physicians Source: Company estimates Target segmentation 23
  25. 25. Who represents our initial target physician? 98% Ob-Gyns 94% Internists • Orders 400 FIT or FOBT tests per year • Practices in a group setting without a GI • Female physicians, 15% more likely to recommend Cologuard 24 Family 92% Practitioners Receptive to recommending Cologuard Source: Medspan research 2013; ZS Associates 2013 physician survey
  26. 26. Cologuard market research Physicians percent of FOBT/FIT tests that would be replaced with Cologuard by surveyed physicians 74% Source: Medspan research 2013; ZS Associates 2013 physician survey 25 percent of physicians likely to order Cologuard (67% very likely; 29% moderately likely) 96%
  27. 27. Cologuard market research Patients 92% of patients likely to use Cologuard more patients likely to get screened through compliance program 2x 26 Sources: Medspan research; Epidemiol Rev 2011; 33(1):101-110 (Levin, T); Compliance in commercially insured Kaiser patients increased from 34% to 69% from 2004 to 2010.
  28. 28. Cologuard Sales team • 3 regions • 10 large system /hospital reps • 80 PCP reps • 10 area managers • 6 clinical 27 liaisons ~10 years average health care sales experience
  29. 29. Cologuard Medical Education 2014 Speakers Bureau • 100 opportunities through end of year • ~30 trained speakers, including GIs and PCPs Medical Conferences • Cleveland Clinic Digestive Diseases Nursing Symposium (Sept) • American College of Gastroenterologists (Oct) • American Association of Family Physicians (Oct) • Pri-Med Live & Online CME Meetings (Oct, Dec) 28
  30. 30. 29
  31. 31. Downloadable PDF can be brought to doctor’s office 30
  32. 32. Cologuard Direct advertising • Full-page ad in Sunday New York Times after approval • 1.2 million impressions • Dramatic increase in clicks to through paid search 31 TALK TO YOUR DOCTOR ABOUT COLOGUARD. The breakthrough test for colon cancer screening that ’s as easy as going t o the bathroom, Cologuard is ef fect ive and easy to use in t he pr ivacy of your ow n ho m e—no sp ec ial preparat ion or t ime off w ork required. Only Cologuard uses innovat ive stool DNA technology t o fi nd 92%* of all colon cancers, and is completely noninvasive. Cologuard keeps screening between yo u—and your colon. Visit CologuardTest .com to learn more. Cologuard is int ended for the qualitat ive detect ion of colorectal neoplasia associated DNA markers and for the presence of occult hemoglobin in human stool. A posit ive result may indicate the presence of colorectal cancer (CRC) or advanced adenoma (AA) and should be followed by a diagnost ic colonoscopy. Cologuard is indicated to screen adult s of either sex, 50 years or older, who are at t ypical average risk
  33. 33. Cologuard Direct advertising • Consumer news, heath care sites: New York Times, WebMD • Customized ad networks to reach target patient and physician profiles • Paid search to maximize consumer ability to find Cologuard 32 Digital campaign 8 million impressions in first week
  34. 34. Cologuard Public relations Active effort to raise awareness of Cologuard • Cologuard featured in more than 360 unique news outlets • Outlets and sites reach more than 104 million unique readers 33
  35. 35. Exact Sciences’ clinical laboratory Capacity: 1 million tests/year Customer service center 24/7 30,000 square feet Highly automated 34
  36. 36. 35 Exact Sciences Lab
  37. 37. Cologuard workflow Physician orders test Kit shipped to patient Patient returns kit Exact lab processes sample Results sent to physician 36
  38. 38. Digestive/GI cancers account for 25% of 580,000 U.S. cancer deaths 2013 Estimated U.S. Cancer Deaths Other Lymphoma Leukemia Urinary Breast Genital GI 145K Respiratory Source: American Cancer Society 2013, Surveillance Research 37
  39. 39. GI cancer pipeline advancing in broad collaboration with Mayo Clinic Test Types Organ Focus Source: American Cancer Society 2013, Surveillance Research Screening Applied Diagnostics 38 Pancreas Esophagus Colorectal Stomach
  40. 40. Exact Sciences’ people: our most valuable asset Percent of engaged employees compared to benchmarks 30% 63% 92% U.S. Average World-Class Organizations EXAS 2014 39
  41. 41. Exact Sciences Summary • Cologuard® FDA-approved and launched with focused plan • 120-person sales force and growing • CMS proposes national coverage with 3-year testing interval • Mayo Clinic is first system to adopt Cologuard • Multibillion-dollar global opportunity • Cash balance of $235 million at 6/30/14 40
  42. 42. Thank You

Editor's Notes

  • Cologuard – here it is.
  • The point sensitivity of Cologuard for the detection of colorectal cancer was 92.3 percent compared with 73.8 percent for FIT. This is a difference of 18.5 percentage points and is statistically significant. The point sensitivity of Cologuard for advanced adenomas was 42.4 compared with 23.8 percent for FIT. This is a difference of 18.6 percentage points and is again statistically significant.

    The isolated performance of the hemoglobin immunoassay component of Cologuard was similar to that of FIT, with sensitivities of 72.3 percent and 73.8 percent, respectively, for the detection of colorectal cancer, and 22.7 percent and 23.8 percent, respectively, for the detection of advanced pre-cancerous lesions. The specificities were 94.8 percent and 94.9 percent, respectively.

    Cologuard also outperformed FIT in hypothetical screening of 10,000 patients.

    (Next slide…)

  • Most diagnostic tests have a code that corresponds to a reimbursement rate. When a code doesn’t exist for a new test like Cologuard, a new code can be crosswalked or linked to existing codes to establish payment for the new test. We were asked by CMS to use the crosswalk approach.

    We were invited to present our crosswalk reimbursement proposal to CMS’ Hospital & Ambulatory Policy Group or HAPG at its annual reimbursement review last week. Our crosswalk proposal is based on codes in the 2014 Clinical Laboratory Fee Schedule. Shown here are the three Tier 1 codes that we presented in our crosswalk. These include a code that corresponds directly to our KRAS mutation markers and another that corresponds directly to our fecal hemoglobin test. Our DNA methylation markers are crosswalked to an RNA assay with a workflow similar to ours. These codes total to a proposed reimbursement for Cologuard of 502 dollars.

    CMS does not provide feedback on proposals at these meetings. The next step is a preliminary pricing decision from HAPG by early September, followed by a public comment period and a final decision in November.

    Taken together, the reimbursement and regulatory timeline looks like this…

    (Next slide…)
  • Annual
  • So imagine what we can do with Cologuard
  • This is the first time we’re publicly sharing these survey data publicly.
  • Where does 3.5x figure come from
  • We have developed a technology platform that is applicable to the screening and diagnosis of other cancers. We intend to develop novel, clinically important diagnostic screening tests for GI tract cancers.

    We have a broad, exclusive collaboration with Mayo Clinic on GI tract cancers. The collaboration is unique and, together, we’re developing two new kinds of tests.

    As a reminder, GI cancers comprise 25 percent of all cancer deaths in the United States. First, we’re working together on tests that can screen general, asymptomatic populations for pre-cancers and cancer across the entire GI tract. Second, we’re developing new applied diagnostic tests for specific gastrointestinal cancers that would potentially be used with high-risk and symptomatic patients.

    Within those two general kinds of tests, we’re focusing on colorectal, pancreatic, esophageal and stomach cancers.

    At Digestive Disease Week in May, some very interesting data was presented that resulted from our collaboration. Our technology platform demonstrated 88percent sensitivity for pancreatic cancer by testing pancreatic juice for certain DNA mutations and methylations. The technology also demonstrated 100% sensitivity for detecting Barrett’s esophagus, the precursor to the vast majority of esophageal cancer.

    We are continuing to make progress with our pipeline and look forward to updating you by early next year.

    In conclusion…

    (Next slide…)