Slide 1: The Right Therapy For Each Patient
December 2013 The Right Therapy For Each Patient Thomas A. Bologna Chairman & Chief Executive Officer NASDAQ : RGDX December 2013
Slide 2: Forward-Looking Statements
December 2013 F ORWARD - L OOKING S TATEMENTS 2 This presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including statements regarding our strategy, future events, fu
Slide 3: Why Response Genetics "Now"
December 2013 W HY R ESPONSE G ENETICS “N OW ” 3 New Team in Place - Expansion and Monetizing of Assets Well Underway: ▪ Several new tests introduced in Q3 2013 and additional tests to be introduced in Q4 2013 and 2014 ▪ Acquired Pathwork Assets and tests in August 2013. Acquired tests expected to b
Slide 4: Why Response Genetics "Now"
December 2013 W HY R ESPONSE G ENETICS “N OW ” 4 ▪ Expect to receive New York State license in early 2014 ▪ Built managed care contract network from essentially 0 in early 2013 to over tens of millions of covered lives today and growing ▪ Expanded sales force from 9 Account Executives in the beginni
Slide 5: Financial Results – Revenue 9 Months 2012 vs. 2013
December 2013 5 F INANCIAL R ESULTS – R EVENUE 9 MONTHS 2012 VS . 9 MONTHS 2013 In Thousands $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 9 Mos - 2012 9 Mos - 2013 $4,411 $6,201 $8,810 $8,830 Pharma Revenue ResponseDX Revenue
Slide 6: Financial Results – Gross Margin 9 Months 2012 vs. 2013
December 2013 6 6 F INANCIAL R ESULTS – G ROSS M ARGIN 9 MONTHS 2012 VS . 9 MONTHS 2013 36% 37% 38% 39% 40% 41% 42% 43% 44% 45% 46% 47% 9 Mos - 2012 9 Mos - 2013 40.3% 46.9%
Slide 7: Financial Results – Operating Loss 9 Months 2012 vs. 2013
December 2013 7 7 F INANCIAL R ESULTS – O PERATING L OSS 9 MONTHS 2012 VS . 9 MONTHS 2013 In Thousands $(8,000) $(7,000) $(6,000) $(5,000) $(4,000) $(3,000) $(2,000) $(1,000) $- 9 Mos - 2012 9 Mos - 2013 $(7,250) $(4,794)
Slide 8: What We Do Today
December 2013 PGx Dx 8 W HAT W E D O T ODAY ResponseDX ® Predictive for Oncologists Pathologists Hospitals Clinical Trial Support & Diagnostics for Pharmaceutical Companies R&D In - H ouse Expertise and Capabilities to Capitalize on G rowing MDx Market Opportunity
Slide 9: ResponseDX Predictive Profiles – Portfolio Growing
December 2013 9 R ESPONSE DX P REDICTIVE P ROFILES – P ORTFOLIO G ROWING Portfolio of Tests Growing Lung Colon Gastric Melanoma Thyroid Breast
Slide 10: ResponseDX Predictive Profiles – New Tests Added in Q3 2013
December 2013 10 R ESPONSE DX P REDICTIVE P ROFILES – P ORTFOLIO G ROWING N EW T ESTS A DDED IN Q3 2013 EGFR ( Mut / Exp ) KRAS BRAF ALK (FISH/PCR) ROS1 (FISH/PCR) RET (FISH) MET (FISH) ERCC1* RRMI TS* cMET PI3Kinase HER2 ( Mut ) Lung 200,000 cases *Issued IP Q3 2013 new tests in black Colon 160,000
Slide 11: Actionable Information for Existing Therapies
December 2013 11 11 A CTIONABLE I NFORMATION FOR E XISTING T HERAPIES Biomar k er Me thodolo g y Gen e tic Al t e r ation Clini c al Signifi c an c e L ung EGFR Sequencing M u t ation P r edi c ts f or a positi v e r esponse t o EGFR - t a r g e t ed TKI the r apies (e.g. erl o tinib and gefitinib )
Slide 12: Actionable Information for Existing Therapies
December 2013 12 12 A CTIONABLE I NFORMATION FOR E XISTING T HERAPIES Biomar k er Me thodolo g y Gen e tic Al t e r ation Clini c al Signifi c an c e M elanoma B R AF PCR M u t ation P r edi c ts f or a positi v e r esponse t o antibody the r apy (e.g. ipilimumab ) and B R AF t a r g e t ed the r ap
Slide 13: Expanding Dx Capabilities for Today's Drugs
December 2013 E XPANDING DX C APABILITIES FOR T ODAY ’ S D RUGS 200+ peer - reviewed studies validating ResponseDX biomarkers Demonstrated ability to develop and market novel diagnostic service programs to provide differentiated services Utilize multiple approaches to determine optimal patient resul
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Slide 15: Acquisition of Pathwork Diagnostics Assets Highlights; Why Purchased
December 2013 A CQUISITION OF P ATHWORK D IAGNOSTICS A SSETS H IGHLIGHTS ; W HY P URCHASED ▪ Purchase Price: Approx. $1,200,000 in cash and stock ▪ Pathwork DX test sales growth: x 2010 sales $1.0M x 2011 sales $ 4.1M x 2012 sales $ 5.8M ▪ CAGR of 45% per year; Two year CAGR of 140% ▪ “Medicare reim
Slide 16: Pathwork Acquisition Differentiated Market Opportunity
December 2013 P ATHWORK A CQUISITION D IFFERENTIATED M ARKET O PPORTUNITY 16 Dx Market Opportunity • Estimated 150,000 newly diagnosed cancer patients annually that may have tumor site of unknown origin • Potential market size of approximately $300 million Current unmet need; Metastatic cancers diff
Slide 17: Clinical Utility: Test Impacts Diagnosis
December 2013 C LINICAL U TILITY : T EST I MPACTS D IAGNOSIS 17 No Site Specified, 41% Site Specified, 59% Working Diagnosis Prior to Tissue of Origin Results New Site Specified, 50% No Site, 16% Site Unchanged, 34% Working Diagnosis After Tissue of Origin Results CHANGE IN TREATMENT Note: JS Nystro
Slide 18: Clinical Utility: Test Results in Change in Treatment
December 2013 C LINICAL U TILITY : T EST R ESULTS IN C HANGE IN T REATMENT Treatment Change, 65% No Treatment Change, 35% Clinical Management After Tissue of Origin Results 18 CHANGE IN TREATMENT N ote: JS Nystrom, et al: Clinical utility of gene - expression profiling for tumor - site origin in pat
Slide 19: Test Highlights
December 2013 T EST H IGHLIGHTS 19 Aid for diagnosis of metastatic, poorly differentiated, and undifferentiated tumors ▪ 1 tissue s pecimen analyzed by proprietary Pathchip (customized Affymetrix microarray) which measures the gene expression of 4,975 genes ▪ 1 primary test read - out / 2 optional c
Slide 20: US Sales and Marketing Infrastructure
December 2013 US S ALES AND M ARKETING I NFRASTRUCTURE 20 Nationwide DX Sales Force – Currently 17 Reps Building to 20 Reps by end of Q1 2014 3 Regional Sales Directors Vice President of Sales and Sr. Director of Marketing in Place Director of Managed Care in Place
Slide 21: Introduction of TCPC Service – September 2013
December 2013 21 • Pathologists are the gate keepers in molecular testing. They control the sample • TCPC (Tech Component; Professional Component) Program allows company to partner directly with Pathologists • Builds “stickiness” with and ability to pursue “larger accounts” for more secure, repeatab
Slide 22: Managed Care Contract Program Well Underway
December 2013 M ANAGED C ARE C ONTRACT P ROGRAM W ELL U NDERWAY 22 Blue Shield of California BCBS of Illinois, CareFirst BlueCross BlueShield Multiplan, Inc. Three Rivers Provider Network, Fortified Provider Network America's Choice Provider Network, LLC FedMed , Inc., Galaxy Health Network Prime He
Slide 23: Provide MDx Services to Select Big Pharma
December 2013 23 Extensive pharma experience in DX testing, servicing and bridging with multi - year partnership with GSK Support pharma development programs including GSK’s MAGE A3 & BRAF Comprehensive understanding of parallel path between therapeutic and diagnostic development P ROVIDE MD X S ERV
Slide 24: Response Genetics Leadership Team
December 2013 R ESPONSE G ENETICS L EADERSHIP T EAM 24 Thomas A. Bologna Chairman & Chief Executive Officer Most recently President & CEO of Orchid Cellmark. Prior positions include President & CEO of Quorex Pharmaceuticals, Chairman & CEO of Ostex International, President & CEO of Scriptgen Pharmac
Slide 25: Key Short-Term Growth Drivers
December 2013 K EY S HORT – T ERM (Q4 2013, Q1 AND Q2 2014) G ROWTH D RIVERS • Ramp - Up of TCPC business that started in late September 2013 • Completion of build - out of sales force • Introduction of Acquired Tissue Of Origin test (TOO) in Q1 2014 • Receipt of New York State license expected in e