Lessons from the Access Genetics Experience - A Case Study on:

Building Clinical Acceptance

Pricing at Patient-Friendly Levels

Identifying the Strongest Opportunities for Growth

We Have Been Helping Small Labs Become Big Labs for Over 16 Years

During This time, Our Industry Has Faced Constant Change and Challenges

To Keep Up, Must-Reads For Lab Execs Now Include Regulatory and Legal News

Navigating Hazards Can Be Easier When We Share What Works and What Doesn’t

Here is Our Story and Lessons Learned

OVERVIEW Diagnostics

Companion Animal Oral Health

Women’s Health

Salivary Diagnostic Testing Services

PartnerLab™ Program

IT / Digital Health

TeleGene™ SAAS Workflow / Remote Review / Order &

Results Portal

™

First, a Little Background on Us 16,000 sf HQ / Lab in Eden Prairie, Minnesota - #2 in U.S. on Money/CNN Best

Places to Live 2016

OralDNA® Tests for Dentists and Physicians

MyPerioPath®

Identify and measure bacteria that cause periodontal disease and are associated with systemic disease

MyPerioID® and Celsus One™

Evaluate gene markers related to inflammatory response, a critical factor in periodontal, diabetes and cardiovascular disease severity

OraRisk® HPV Identify and genotype HPV infections (known to cause oral cancer)

OraRisk™ CT-NG, HSV I and II, and Candida Identify infectious oral markers from saliva for STDs, thrush, etc.

DNA DrugMap™

Personalize prescription and dosing decisions

Our Customers:

•  Over 5,000 Providers Have Established Accounts

•  Over 1,100 New Providers Opened Accounts in 2016

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N1.TOP 100PRODUCTS

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Example Provider Dashboard From our TeleGene™ Cloud-Based System

Total Sales Staff = NONE We Use TeleGene™ IT and Customer Service with Medical Professionals:

Call: 855-ORALDNA

Lesson #1: To Build Clinical Acceptance, Invest in a Highly-Qualified Customer Support Staff and Available Experts

Provide Actionable Recommendations

Antibiotic Optionson MyPerioPath® Result Report

Only Facultative Pathogen(s) Above Threshold (Aa, Ec, Cs)

Only Anaerobic Pathogen(s) Above Threshold (Pg, Tf, Td, En, Fn, Pi, Cr), with Pm low or not detected

Only Anaerobic Pathogens Above Threshold, with Pm Above Threshold and Anaerobic High Risk Pathogens (Pg, Tf, Td) low or not detected

Only Anaerobic Pathogens Above Threshold, with Pm Above Threshold and one or more Anaerobic High Risk Pathogens (Pg, Tf, Td) Above Threshold

Combination Infection (Facultative + Anaerobic)

Amoxicillin500 mg tid for 8-10 days, depending on the severity of the infection (Ref.1-3)

Metronidazole500 mg bid for 8-10 days, depending on the severity of the infection (Ref. 10-12)

Clarithromycin500 mg bid for 8-10 days, depending on the severity of the infection (Ref. 20-26)

Amoxicillin500 mg tid for 8-10 days, depending on the severity of the infection (Ref. 1-3)

AND

Metronidazole500 mg bid for 8-10 days, depending on the severity of the infection (Ref. 16,17)

Ciprofloxacin500 mg bid for 8-10 days, depending on the severity of the infection (Ref. 4,5)

Clindamycin150 or 300 mg tid for 8-10 days, depending on the severity of the infection (Ref. 13-15)

Clindamycin150 or 300 mg tid for 8-10 days, depending on the severity of the infection (Ref. 13-15)

If allergic to Amoxicillin, then Ciprofloxacin 500 mg bid 8-10 days, depending on the severity of the infection (Ref. 18,19)

If allergic to Metronidazole, use Clindamycin 150 or 300 mg tid for 8-10 days, depending on the severity of the infection (Ref. 13-15)

Clindamycin150 or 300 mg tid for 8-10 days, depending on the severity of the infection (Ref. 13-15)

Ciprofloxacin500 mg bid for 8-10 days, depending on the severity of the infection (Ref. 4,5)

Metronidazole500 mg bid for 8-10 days, depending on the severity of the infection (Ref. 10-12)

If allergic to Ciprofloxacin, then use Clindamycin150 or 300 mg tid for 8-10 days, depending on the severity of the infection (Ref. 13-15)

If allergic to Clindamycin, use Doxycycline 100 mg bid for 1 day, followed by 100 mg qd for 8-10 days depending on the severity of the infection (Ref. 6-9)

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© 2013, 2014 OralDNA® Labs. All Rights Reserved. V13_8PL-000202-B

Clindamycin150 or 300 mg tid for 8-10 days, depending on the severity of the infection (Ref. 13-15)

Ciprofloxacin500 mg bid for 8-10 days, depending on the severity of the infection (Ref. 4,5)

Clarithromycin500 mg bid for 8-10 days, depending on the severity of the infection (Ref. 20-26)

Note:

The prescribing doctor is responsible for patient therapy. Consider the patient’s dental and medical history (e.g. pregnancy/nursing, diabetes, immune-suppression, other patient medications) when evaluating the use of antibiotic medications. Many antibiotics may impact/interact with other medications and may produce adverse side effects. Review the manufacturer warnings for any contraindications, or consult with the patient’s physician if there are concerns with the selected antibiotic regimen.

Source of Our Customers:

61% of New Customers Call Us Because of Referrals

They have heard of our tests and know who to call

Lesson #2: To Build Clinical Acceptance, Brand Your Offering!

DNA Test for Canine Oral Health

30 Second Guide to Trademarks

Use a word, symbol or phrase to distinguish your tests to make it easier to identify you as the source

Make sure it is distinctive – Arbitrary and fanciful trademarks are strong and generic (descriptive) is the least protected.

Protect your marks by using them in commerce and consider also filing with the Patent and Trademark office.

The standard for trademark infringement is “likelihood of confusion.” You may be able to use the same trademark as another company.

Do a thorough search or have an attorney do this for you before you invest in marketing materials and make other investments. I usually start with finding a related available internet domain name.

Social media, mobile and all things electronic are important! – We stay in touch via Twitter, Facebook, LinkedIn, Constant Contact and text

Lesson #3 – Patients and Providers Increasingly use the Internet for Health information and Want Immediate Information – You Need to be Visible

Experiment Time! !  Informational Overview

!  Pricing

!  Account Setup Link

!  Request a Call Feature

!  Contact Us

Text “OralDNA”

to

43766

Standard Data and Messaging Rates Apply

The Oral / Systemic Connection •  ≈100 million Americans are infected with periodontal disease. It is

recognized to increase risks for diabetes, heart disease, stroke, and other systemic diseases.

•  Source: http://www.perio.org/resources-products/pdf/48-epidemiology.pdf

Lesson #4 – Novel Tests Need Prominent Publications

We Use a Newsletter and Website Posts With Invited Guest Content

Lesson #5 – Guest Blogs / Testimonials From Peers and White Papers are a Powerful Force for Clinical Acceptance

Use Testimonials from Key Opinion Leaders

Keep Customers Updated

Oral Health is Critically Important – Our Tests Play an Important Role

According to a recent study of over 338,000 patients:

Treating gum disease means lower annual medical costs: Diabetes $2,840 Stroke $5,681 Heart Disease $1,090 Pregnancy $2,433

Treating gum disease reduces hospital admissions: Diabetes 39.4% Stroke 21.2% Heart Disease 28.6% https://www.unitedconcordia.com/dental-insurance/dental/conditions/ucwellness-oral-health-study/results-ucwellness-oral-health-study/

Lesson #6: Show the Cost Savings

Lesson #7: Have a Clear Privacy Policy

Some of the Data We Collect:

What Have We Learned About Reimbursement and Pricing? Disaster #1 – FISH / UroVysion Testing

•  In 2010 we completed or had contracts in process to implement over 16 urology labs to do UroVysion FISH testing for bladder cancer

•  With about 60 days notice, CMS created a code that resulted in an approximately 50% reduction in Medicare reimbursement, essentially making this test unprofitable, even for an in-house lab with no sales staff.

•  This line of business was no longer viable for us.

The Stacked Code Debacle

Remember stacked codes?

Each discrete step of producing a result had its own “Cost”

Stacked Codes Resulted in Abuse •  Some labs created more complex tests or

added steps to justify a higher billed price.

•  Insurers often didn’t know what they were paying for.

•  To fix this, Medicare asked the AMA for discrete codes for the most common molecular tests. The AMA provided 116.

•  After reviewing this for a year, CMS decided to let local Medicare carriers set the price using a process they called “gap filling.”

The Fix Sent the Industry into Chaos •  For over 6 months in 2013 we had no idea

what the rates would be for our molecular testing. And of course we were not paid.

•  Palmetto began setting some rates (and deciding which tests were worthy of coverage) and it appeared that other Medicare contractors just copied them.

•  At this point we decided to stop offering PGx tests for third-party billing until there was some clarity.

How can you plan for something like this?

Rise of the Bad Actors The next 3 years we saw abuses on an wide scale. Honest labs were competing with:

•  Incentives (such as “Handling Charges”) paid, directly or indirectly, to providers for referring testing.

•  Sham clinical studies. •  Misrepresentation by sales staff regarding balance

billing. •  Patient relief plans that were automatically granted. •  The rise of “1099” sales representatives that were

excessively compensated and not well controlled.

Qui tam lawsuits curbed this somewhat

How Did We Respond? We made an important decision:

•  Third party bills for tests with challenged coverage would be priced at our cash price, regardless of published reimbursement. For Medicare, we would only offer individual tests that we believed would both be allowed and paid.

If a claim was denied, the balance bill to the patient would then never exceed the price they would have been charged for paying cash.

This felt like the right way to run a business. We provided a great service and were happy to explain our value pricing.

What is the Effect of This Policy? As we converted to a focus on cash billing, our business got vastly simpler.

We reduced our billing staff by 6 people.

Customer service has received no billing complaints in over 6 months.

What Happened to Prices? Example insurance pricing for PGx panel previously:

$4,165

Our current cash price:

$481 + shipping (or lower based on volume)

As a result of this pricing we are seeing new opportunities such as an ACO system that can use our tests to drive costs down by getting patients on the right meds earlier, while easily justifying our price.

Our New Direction: Published Rates and Credit Card Bill

OralDNA testing is over 95% credit card bill at this point. Almost all orders are entered electronically and received by barcode.

We Advise Providers How THEY or PATIENTS May Bill Insurers For Our Tests

Note: Coding / Billing Decisions are the Biller’s Responsibility

Medical Necessity Support

Areas for Growth: Direct to Consumer 4-6-2017

But, Note:

Growth Through High Impact Panels

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OralDNA Labs, A Service of Access Genetics, LLC, 7400 Flying Cloud Drive , Eden Prairie, MN 55344 Phone: 855-672-5362; Fax: 952-942-0703 www.oraldna.comCLIA#: 24D1033809 CAP#: 7190878

Web enabled system provided by:

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Gene Marker Risk Category

Interleukin 6 High Risk

Reported: 02/13/2017 13:56Specimen: Oral Rinse(P)Received: 02/12/2017 09:21Accession#: 201702-10101Collected: 02/11/2017Specimen#: 3033031051

ALERT 2™FINAL REPORT

Sample, Report

Ordering Provider

Sample InformationDate Of Birth: 02/01/1990 (27 yrs)Gender: Female

Ronald McGlennen MD7400 Flying Cloud Drive Eden Prairie, MN 55344855-672-5362

SUMMARY OF TEST RESULTS

The MyPerioPath test measures 11 types of bacteria known to®

cause periodontitis (gum disease) and increased risk forcardiovascular disease. These bacteria are also associated withdiabetes, adverse pregnancy outcomes, rheumatoid arthritis,and other systemic illnesses.8 of the 11 bacteria types were detected in the submittedsample. 5 of these are above the treatment threshold level.The levels of Aa are of particular concern. This bacterial type isassociated with an earlier age of onset, and an aggressiveclinical course.You are advised to visit your dentist and seek treatment aimedat reducing or eliminating these disease causing bacteria.

MyPerioPath®

Oral Bacteria Profile High Risk Moderate Risk Low Risk

The MyPerioID test determines the nucleotide sequence at one®

region of the Interleukin 6 gene, a key marker of a person'simmune system and inflammation response.Your test result shows a G/G genotype, which is categorized ashigh risk for periodontal inflammation.This result implies a greater lifetime risk of chronic periodontitis,and for other conditions such as heart disease, arthritis, diabetesand some cancers.You are advised to seek consultation for approaches to reduceyour inflammatory burden through changes in personal andprofessional care and lifestyle choices. Your health careprofessional may adivse selective use of medications.

MyPerioID IL-6®

Integrative Summary / Treatment ConsiderationsThe combination of these two test results show the signs of an existing or emerging periodontal infection and the likelihood of aheightened or increased inflammatory response to those high and moderate risk bacteria.Based on these test results, we recommend that you seek dental consultation and treatment.Treatment options generally include removal of plaque above and below the gumline using scaling and root planing or lasers, andthe selective use of tray delivery systems for disinfectants or local and systemic use of antibiotics.A follow-up test is recommended to monitor the effectiveness of current treatments and to determine the type and frequency offuture care.

Discover the Facts...what you may not know about oral bacteria and how it relates to overall health

Fusobacterium nucleatum, or Fn, is associated with risk to infect the mother’sblood and the placenta. The effect of this is a risk to the baby of prematuredelivery, lower birth weight and at the same time problems for the mother such ashigh blood pressure and kidney failure.Reference: Han YK. Fusobacterium: A commensal turned pathogen. Curr Opinion Microbiol2015, 23: 141-147

Learn more by visiting www.oraldna.com

Expanded Markets: Diagnostics Driving Consumer Behavior

We are implementing a direct model in the veterinary space. We believe that early detection will drive product use as consumers learn that lab tests can identify risk, not just diagnose disease

DNA Test for Canine Oral Health

Your dog’s kisses may contain more than just love ™

$79.00

K9 Smiles™ is a DNA Test For Oral Pathogens that Cause Periodontal Disease Porphrymonas gulae (Pg) variants are major factors for periodontitis and systemic illness in dogs

3 types, with different virulence, are identified and quantified by a DNA test from a simple oral swab

•  Provide Early Warning to Allow Home Care, Nutrition and Dental Product Choices

•  Confirm Diagnosis

•  Support Recommendations

•  Personalize Treatment

•  Measure Results and Progress

A Report of Pathogen Levels and Significance to:

FINAL REPORT

Pet Information Ordering Provider Sample InformationName: Red RoverDog Id#: 2415Age: 11 year(s)Owner: Sample, ReportBreed: BeagleGender: Neutered MalePeriodontal Classification: Not Provided

Rex Harrison DVM1234, Test Way Eden Prairie, MN 55344952-942-0671

Specimen#: 3999071930Accession#: 201602-05283Specimen: SwabCollected: 02/20/2016 05:15Received: 02/23/2016 08:27Reported: 02/25/2016 09:17

PetDNA Labs, A Service of Access Genetics, LLC, 7400 Flying Cloud Drive , Eden Prairie, MN 55344 Phone: 855-4DNAPET (436-2738); Fax: 952-942-0703 www.petdnalabs.comCLIA#: 24D1033809 CAP#: 7190878

Result: High Risk - Action NeededHow To Interpret These Results:The combination of types of the bacteria Porphyromonas gulae (Pg) is abnormal and consistent with the profile and amounts ofinfection seen in dogs with moderate to advanced periodontal (gum) disease. Your pet is at risk for disease of other body organsdue to this infection. An evaluation by your animal care professional is recommended. See comments.

SystemicRisk Pg fimA Percentage

(of each Pg type)

Pg Normalized Load(Expected Normal Range)

Clinical Significance

Type A 23.4% 35.5(0 - 128)

The presence of the Pg fimA Type A pathogen is common, and istypically associated with mild oral inflammation and risk forperiodontitis. At very high levels Type A may be linked to severedisease .(1)

Type B 18.5% 28.1(0 - 8)

The presence of Pg fim A Type B pathogen is linked to clinical signsof periodontitis, more serious oral inflammation and the risk ofsystemic illness. This infection can spread to other body sitesthrough the blood .(1)

Type C 58.1% 88.5(0 - 27)

The presence of the Pg fimA Type C pathogen is linked to moresevere and potentially irreversible periodontal changes and chronicsystemic effects than Types A or B. This includes severe symptoms,marked inflammation, tooth loss and bone destruction .(1)

Canine Periodontitis and its Causes:Periodontal disease is the most commonly diagnosed problem in small animal veterinary medicine. By age 3,the majority of dogs have some form of periodontal disease, but in most cases there are few clinical signs .(2, 3)

The early signs are plaque that hardens into tartar. Studies have shown that Pg species are the key pathogensin promoting destructive oral inflammation and growth of other bacteria in dental plaque, contributing to gingivitisand periodontal disease. This may lead to tooth loss, pain, systemic illness and decreased overall health andwell-being. Home care alone is not always effective to prevent this. By compromising the immune system,pathogens causing periodontal disease are linked to heart, kidney and liver disease.What Should I do:The combination of these test results along with signs from your pet, including red gum tissue, tartar (staining)on the teeth and bad breath are reasons to seek a full veterinary dental examination. Further, this test indicatesthat you should have your pet's teeth cleaned, or in advanced cases, receive a treatment course of antibioticsand cleaning. Additionally, ask your veterinarian about tests and X-rays to check for signs of disease in thekidneys, heart and liver associated with these oral bacteria.

1. 2. 3.

t References:Yamasaki Y, et al. Distribution and molecular characterization of Porphyromonas gulae carrying a new fimA genotype. Veterinary Microbioloogy 2012; 161:196-205Niemiec BA. Periodontal Disease. Topics in Companion Animal Medicine 2008; 23(2):72-80.Pet Dental Care. Informational brochure, AMVA, 2015.

Genomic DNA is extracted from the submitted sample and tested for 3 variants of the Porphyromonas gulae associated with periodontal disease. The bacteria are tested byMethodology:polymerase chain reaction (PCR) amplification followed by real-time fluorescence detection. This assay is designed to detect isotypes of Porphyromonas gulae, but has the limitation ofcross-reacting with Porphyromonas gingivalis, another bacteria known to cause periodontitis. PetDNA Labs is a service of Access Genetics, LLC which is a CLIA and CAP accreditedlaboratory.

MOLECULAR DETECTION OF PORPHYROMONAS GULAE PATHOGENS

Ronald McGlennen MD, FCAP, FACMG, ABMGMedical Director

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In January, we entered into a joint development agreement with one of the largest pet product companies in the world to share research, evaluate our K9 Smiles test for dogs, and to develop a novel test for cats.

It is our hope that molecular diagnostics can be used to identify risk early such that professional intervention, nutrition and other consumer products, and lifestyle choices can be used to improve health.

It is in this intersection of testing with health and wellness that we see the strongest opportunities for growth.

Thank you !