Corporate Presentation Fourth Quarter 2017 November 2017 1
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," 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; 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 patients, healthcare providers, payers & advocacy groups to help eradicate colon cancer 3
Colon cancer: America s second deadliest cancer Source: American Cancer Society, Cancer Facts & Figures 2017; all figures annual 155,870 135,430 new diagnoses 50,260 deaths 15,690 26,730 41,070 43,090 50,260 Esophageal Prostate Breast Pancreas Colorectal Lung Annual Cancer Deaths Source: American Cancer Society, Cancer Facts & Figures 2017; all figures annual 4
The most preventable, yet least prevented form of cancer Journal of the National Cancer Institute Pre-cancerous polyp Cancer 10+ years Sources: J Natl Cancer Inst. 2009; 101:1225-1227 (Itzkowitz) Gastro 1997;112:594-692 (Winawer) 5
Detecting colorectal cancer early is critical Diagnosed in Stages I or II Diagnosed in Stage IV 9 of 10 survive 5 years 1 of 10 survive 5 years Sources: SEER 18 2004-2010 American Cancer Society, Cancer Facts & Figures 2017; all figures annual 6
America s stagnant colon cancer screening rate 80% goal 50% 52% 59% 58% 62% 2005 2008 2010 2013 2015 2018 Actual colon cancer screening rates Sources: CDC NHIS survey results as published in the CDC s MMWR between 2006 and 2017 7
Cologuard: Addressing the colon cancer challenge 94% early stage cancer sensitivity of addressable population with insurance 87% coverage (80M+ people), including Medicare FDA approved & included in major guidelines developed with Easy-to-do & non-invasive with no preparation, sedation, or time off Source: Imperiale TF et al., N Engl J Med (2014) 8
Knowledge of positive Cologuard improves colonoscopy performance Mayo clinic study compares results of unblinded, blinded colonoscopies 46% more time spent on colonoscopy 2x 32% 4x Polyps discovered Increase in pre-cancer detection Higher flat right sided lesion detection Source: Mayo Clinic poster presentation Su1044, Digestive Disease Week 2016 9
Driving patient compliance with colon cancer screening Welcome call Cologuard delivered to home Reminder calls Reminder letter 24/7 patient support line 66% Patient compliance 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 10
Impact of patient navigation service on compliance 66% 38% 14% FOBT* colonoscopy** *** 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 11
Cologuard increases patient compliance USMD study highlights opportunity to expand screening & detect curable-stage cancer 88% Cologuard compliance 393 Non-compliant Medicare patients 4 21 Cancers detected in curable stage Advanced adenoma detected 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
Strong customer satisfaction with Cologuard 96% Physicians expectations met or exceeded 88% Patients rated Cologuard experience very positive Sources: ZS survey conducted for Exact Sciences Oct-Dec 2016, n=300 Exact Sciences Laboratories patient satisfaction survey Jan-Sep 2017; n = 4,328 13
Commercial strategy engages key audiences Patients National TV campaign and digital marketing Payers Market access team and clinical & health publications Providers & Systems Primary care sales force and collateral materials 14
National TV campaign increasing ordering & adoption 15
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 Inside sales force Extend reach of sales force coverage Support field in education efforts New physician outreach and pull through 16
Cologuard revenue growth increasing $72.6 $57.6 $48.4 $35.2 $1.5 $4.3 $8.1 $12.6 $14.4 $14.8 $21.2 $28.1 Launch of national TV campaign 2015 2016 2017 Quarterly Cologuard revenue ($ Millions) 17
Time-lagged average revenue per test improving $418 $423 $428 $405 $393 $383 $386 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 18
A multi-billion dollar U.S. market opportunity 80M+ Potential U.S. screening market for Cologuard* $14B Total Addressable Market** 2% market share*** *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 19
Cologuard s growing provider penetration 81,000 91,000 70,000 60,000 50,000 4,000 8,000 27,000 21,000 15,000 41,000 32,000 Launch of national TV campaign 2015 2016 2017 Cumulative Cologuard ordering providers 20
Coverage accelerated following Cologuard inclusion in USPSTF recommendations 239M 87% of Cologuard addressable market covered USPSTF 2015 2016 2017 Total covered lives Source: US Census data, AIS Directory of Health Plans: 2016, Exact Sciences Analysis 21
Cologuard becoming standard of care Additional coverage driven by data, guidelines, and quality measures developed with Mayo Clinic trial results published approval & coverage recommended by USPSTF HEDIS quality measures >85% insurance coverage 10,000 patient DeeP-C trial guidelines reconfirmed performance guidelines Medicare Star Ratings 2009-2013 2014 2015 2016 2017 22
Improving HEDIS scores through colorectal cancer screening HEDIS Score <1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 50% Screening rate 73% Screening rate Source: NCQA Health Insurance Plan Ratings 2017 23
Cologuard: Increasing America s screening population Screening history of Cologuard users 49% never screened before 12% 39% screened only with FIT/FOBT screened with colonoscopy Exact Sciences Laboratories data, Patient Satisfaction Survey, May-Sep 2017; n = 2,405 24
Exact Sciences is a data-driven company >750,000 Patients >91,000 Health care providers Patients Increase compliance and repeat screening Providers Improve quality measures and outcomes Payers Improve quality measures and reporting capabilities 25
Building a pipeline on Cologuard platform 26
Cancer s annual impact globally, nationally Expected 70% increase in new cases within 20 years 14M new cancer cases 8.8M deaths 1.6M new cancer cases 600k deaths Source: World Health Organization and Centers for Disease Control and Prevention 27
Exact Sciences advantages provide a unique position in liquid biopsy Exact Sciences proven experience Proprietary technology & platform Multi-marker approach Cost advantages over sequencing Collaboration with Mayo Clinic 5+ years of development 28
Liquid biopsy: A growth area for cancer diagnostics Exact Sciences focusing on early detection & recurrence Clinical applications Screening Diagnostic aid Minimum residual disease Recurrence monitoring Targeted therapy selection Response monitoring Response profiling $200M 2015 2030 >$13B Projected liquid biopsy market Source: Analyst estimates 29
A need and opportunity in diagnosing lung cancer The Problem Current Options Potential Opportunity CT scans Biopsy Surgery $750M-$1.5B ** 1.5-3M lung nodules discovered annually * Invasive, expensive, and harmful Blood-based biomarker test *Gould et al., Am J Respir Crit Care Med (2015), **Total Addressable Market assumes ASP of $500 30
Blood validation results for lung cancer High accuracy achieved with four methylation markers in blood >90% Sensitivity & Specificity 398 sample size 87 cancers 311 controls Source: Allawi et al., abstract presented at AACR (2017) 31
Third-quarter 2017 financials Q3 2017 Q2 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 32
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