Corporate Presentation

October 2016

IDXG

FORWARD-LOOKING STATEMENTS

NON-GAAP FINANCIAL MEASURES

This presentation contains forward-looking statements within the meaning of Section

27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995, relating to our future
financial and operating performance. The company has attempted to identify forward
looking statements by terminology including "believes," "estimates," "anticipates,"
"expects," "plans," "projects," "intends," "potential," "may," "could," "might," "will,"
"should," "approximately" or other words that convey uncertainty of future events or
outcomes to identify these forward-looking statements. These statements are based
on current expectations, assumptions and uncertainties involving judgments about,
among other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond companys control. These statements also involve known
and unknown risks, uncertainties and other factors that may cause companys actual
results to be materially different from those expressed or implied by any forwardlooking statement. Known and unknown risks, uncertainties and other factors include,
but are not limited to, our ability to adequately finance the business, the market's
acceptance of our molecular diagnostic tests; our ability to secure additional business
and generate higher profit margins through sales of our molecular diagnostic tests, inlicensing or other means, projections of future revenues, growth, gross profit and
anticipated internal rate of return on investments. Additionally, all forward-looking
statements are subject to the risk factors detailed from time to time in the companys
periodic filings with the Securities and Exchange Commission (SEC), including
without limitation, the Annual Report on Form 10-K filed with the SEC on March 5,
2015 and in the companys Form 10-Q filed with the SEC on November 12, 2015.
Because of these and other risks, uncertainties and assumptions, undue reliance
should not be placed on these forward-looking statements. In addition, these
statements speak only as of the date of this press release and, except as may be
required by law, the company undertakes no obligation to revise or update publicly
any forward-looking statements for any reason.

In addition to the United States generally accepted accounting principles (GAAP)

results, we disclose certain non-GAAP financial measures. A non-GAAP financial
measure is defined as a numerical measure of a companys historical or future
financial performance, financial position or cash flows that excludes (or includes)
amounts, or is subject to adjustments that have the effect of excluding (or
including) amounts, that are included in (or excluded from) the most directly
comparable measure calculated and presented in accordance with GAAP in a
companys financial statements. Management does not intend the presentation of
non-GAAP financial measures to be considered in isolation or as a substitute for
results prepared in accordance with GAAP.

Management believes that this non-GAAP financial measure, when presented in

conjunction with comparable GAAP financial measure, is useful to both
management and investors in analyzing our ongoing business and operating
performance. Management believes that providing non-GAAP information to
investors, in addition to the GAAP presentation, allows investors to view our
financial results in the way that management views financial results.

In this document, we discuss Adjusted Operating Loss, a non-GAAP financial

measure defined as operating loss from continuing operations excluding
amortization expense of acquisition related intangible assets and other fair value
adjustments. A reconciliation of this non-GAAP financial measure to its most
directly comparable GAAP financial measure is presented in the table attached to
the earnings release issued on November 12, 2015 and posted on the companys
website investor section.

Our Mission

We provide clinically useful molecular

diagnostic tests and pathology
services for evaluating risk of cancer
by leveraging the latest technology in
personalized medicine for better
patient diagnosis and management.

Brief History

PDI founded by Pat Dugan in 1988 who today still owns approximately 30%

Previously a standalone, publically held, CSO business:

attained a market cap of nearly $2 billion in December of 2000 focused on

leveraging its commercial resources on its own Rx products

Acquired the assets of Asuragen for thyroid and endocrine cancer for $9 million and
upgraded to an NGS platform in August 2014

Acquired RedPath for Pancreatic and GI cancers for $24 million in October 2014

Sold the Commercial Services (CSO) business of PDI in December 2015 for $28.5
million; repaid debt and provided working capital

Two state of the art CLIA-certified labs. Largest in Pittsburgh. Headquarters in NJ

Additional pipeline tests include an assay for Barretts esophagus and biliaryboth
launching in Q4 2016

Overview & Key Accomplishments

NASDAQ listed company offering high-margin pre-cancerous diagnosis and

prognosis tests

Rapidly growing revenues (60% y-o-y) and test volumes in proprietary, high-value
space

4 proprietary offerings in two key verticals (Endo & GI)Medicare reimbursement

already secured for 3 products at highly attractive prices

High barriers to entry due to reimbursement, complexity of tests and intellectual

know how

Cash collections expanding$3.3 million in Q2 alone

Achieved New York State approval in Q3 2016should yield an incremental

15%

Corporate restructuring continuing

Our Marketed Molecular Tests

GastrointestionaI

Endocrine

Powered by PathFinderTG

Current U.S. Market Opportunity

Pancreatic Cysts

Thyroid Nodules

$350M

$350M

Source: Company estimates

Pancreatic Cysts
Cancer Risk

Powered by PathFinderTG

Pancreatic Cancer
The Fourth Leading U.S. Cancer Killer
159,260
50,310

45,000

39,590 40,430

new U.S. cases

39,590

U.S. deaths

29,480

14,270
4,020
Cervix

Prostate

Breast

Lung

5-year survival rate 7.2%

Pancreatic cancer 3% of new cancer cases in US, 12% of deaths of common cancers

Source: ACS Cancer Facts & Figures 2014; all figures annual

PancraGEN

(formerly PathfinderTG)

PancraGEN Integrated Molecular Pathology

Cytology

Imaging

Fluid Analysis
(CEA , Amylase)

Pathologist
Review
CEA above 1000 ng/ul with High EUS

Molecular
Diagnostics

DNA quantity & quality

Oncogene point mutations
(KRAS, GNAS)
Loss of heterozygosity (LOH)
25 markers measured

6%

Benign
34%
Statistically Indolent
Statistically Higher Risk
52%

Aggressive
8%

Virtual risk assessment using 13,000+ testing & 492 cyst registry pts

Detailed quantitative
molecular profiling integrated
with first-line clinical findings
leading to risk assessment and
clear, management
recommendations
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120,000 Pancreatic Cysts Annually

The clinical dilemma:
Current guideline tests are unreliable and
poorly predict cancer risk
Cyst fluid tested for CEA, amylase, and
cytology (1st line tests)

The result:
80% of all surgeries are for benign disease
Unnecessary healthcare costs
High morbidity (30%) and mortality (2%)2
associated with these surgeries
Pancreatic cancers go undetected
Source: 1Gastroenterology Research and Practice Volume 2012, Article 147465
2Gastroenterology 2015; 148:819-822

Pancreatic cysts:

2-5%
risk of cancer
increasing with
age1
Pancreatic cysts:

80%
surgeries are
benign

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The
Endocrine
Oncology

11

Thyroid Nodules
Common clinical problem

~10-18 m

Thyroid Cancer Incidence*

US Adults have nodules

Estimated

525,000
thyroid FNA per year in
US and growing

*American Cancer Society

12

 First microRNA gene expression classifier

ThyraMIR measures the expression of 10 microRNAs and,
when used in combination with ThyGenX, yields both high
NPV and high PPV

+
ThyGenX and ThyraMIR combination testing can
accurately Rule in and Rule out the risk of malignancy
ThyGenX and ThyraMIR combination testing addresses
a unmet clinical need for more actionable information in
the management of indeterminate thyroid nodules
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Yield of Molecular Reclassification

Indeterminate diagnosis

Indeterminate diagnosis

Indeterminate diagnosis

Surgery

Afirma

Combination testing

68% benign outcome

Cancer prevalence: 32%

Avoidable surgeries: 68%

38% benign
with 93% NPV

62% suspicious
with 47% PPV

61% benign
with 94% NPV

39% malignant
with 74% PPV

Follow

Surgery

Follow

Surgery

33%

10%

Combination testing provides accurate molecular reclassification without surgery

85% (6.7-fold) decrease in unnecessary surgeries (from 68% to 10%)
69% (3.3-fold) decrease in unnecessary surgeries relative to Afirma (from 33% to 10%)
65% (1.65-fold) increase in true benign yield relative to Afirma (from 35% to 58%)
Pts with benign disease avoid surgery, 75% pts with cancer proceed directly to total thyroidectomy (red)

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ThyGenX / ThyraMIR Summary

Combined test performance results in a 94% likelihood that a negative result is

truly benign and a 74% likelihood that a positive result is malignant (based on a
prevalence of 32%)

The 74% likelihood of a positive result being malignant is a vast improvement

over the 50/50 likelihood of the Afirmas suspicious call

The benign call rate for ThyGenX/ThyraMIR is SUPERIOR to Afirmaallowing

up to 65% more patients to consider a watchful waiting approach

The end result is a 69% decrease in unnecessary surgeries

relative to the Afirma test. (Labourier et al., JCEM 2015)

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Barretts Esophagus
Risk of progression to cancer

Powered by PathFinderTG

16

BarreGen for Barretts Esophagus

~3.3M

$2B

Adults

Potential

~850,000
Endoscopic screens
Annually
Same PathfinderTG platform
BarreGen commercial launch expected in 2016

Source: Company estimates

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How may BarreGEN be useful?

Current surveillance methods based on histology are inadequate at

assessing risk of disease progression to HGD/EAC

BarreGEN may help differentiate patients a low risk of EAC from high
risk of EAC prior to visible HGD/EAC morphology

BarreGEN can allow for more personalize management of Barretts

patients including:

Aid in strategies to prevent cancer (ablation)

Avoid unnecessary ablative therapy

Help monitor patients during surveillance

Reduce healthcare costs

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Eluri et al 2015
Results:

The mean ML in pre-progression biopsies was higher in progressors (2.21) than

nonprogressors (0.42; p<0.0001)

BarreGEN had a high overall accuracy for predicting progression to cancer (ROC
curve AUC = 0.95, 95% CI 0.89-1), with all loci contributing to this performance

Prior to progression, accuracy of BarreGEN was highest (90%) at an ML of 1, where

optimal sensitivity (96%) and specificity (87%) were achieved.

Reprinted from Eluri et al. Am J Gastroenterol 2015; 110:828834; doi: 10.1038/ajg.2015.152

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BarreGen - Multi-stage Introduction

Soft launch initiated in H2 2016

Prognostic value in determining cancer progression risk

BASE study Eluri 20151 (n=69)

Diagnostic value in detecting true dysplasia (HGD) in BE

Ellsworth 2012 study2 (n=271) and Khara 2014 study3 (n=415)

Additional clinical studies underway

Establish collaborations with Barretts Center of Excellence

1 Eluri

et al. Am J Gastroenterology 2015, 110:828-834

et al. BMC Gastroenterology 2012, 12:181
3 Khara et al. J. Gastrointestinal Cancer 2014 DOI 10.1007/s12029-013-9570-y
2 Ellsworth

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Patent Portfolio and Proprietary Attributes

Thyroid: 9 patents pending- Seven patents on microRNAs as biological markers for distinguishing
benign from malignant thyroid neoplasm. One patent on microRNAs as diagnostic biomarkers to
distinguish benign from malignant thyroid nodules. One patent on the combination
ThyGenX/ThyraMIR assay to classify thyroid nodules.
Pancreas: 3 patents- One on the platform for obtaining molecular information from clinical
specimens and integrating with clinical information (Topographic Genotyping, issued 2001). One
on the diagnosis, determination of malignant potential and biological potential of pancreatic
cysts. One on the an improved method for determination of pancreatic cyst fluid CEA levels.
Barretts esophagus: Two patents pending- Use of mutational load to assess likelihood of
progression of Barretts esophagus and corresponding need for treatment.

Proprietary attributes: Extensive experience in managing extremely low quality, fixative treated
clinical specimens. Lab information management system that extracts results from database and
allows efficient integration of molecular and clinical results. Analysis of DNA, mRNA and
microRNA from fresh, cytology and paraffin embedded samples including residual material
contained cell-free nucleic.

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PancraGen and Thryoid Tests - Payor Type Mix

PancraGen*

Thyroid

Others,
6%

Others,
6%

Medicare Medicare
, 3% Advantage,
9%

Client
Billing, 11%
Medicare ,
new U.S. cases
35%

39,590

Commercial,
29%

U.S. deaths

Client
Billing, 30%

Commercial,
52%

Medicare
Advantage,
19%

*Payer mix % based on claim submissions; May vary by month

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Billing & Reimbursement Overview

GI

Endocrine

List Price

$4,000

List Price

$1,675

$4,000

Averaged Realized
Revenue

$2,600

Averaged Realized
Revenue

$1,100

$2,000

Medicare

$3,100

Medicare

$1,057

$2,200

Now Billed Under

Molecular Code

81479

Now Billed Under

Molecular Code

81445

81479

+148 million

+67 million

Covered Lives

+71 million

Covered Lives

23

Billing & Reimbursement Overview

Managed Care Coverage and Contracts
CONFIDENTIAL INFORMATION - DO NOT DISTRIBUTE
Health Plan Name

Number of
Lives

Aetna

22,000,000

Cigna

16,000,000

United

34,000,000

CareFirst BCBS

3,340,000

Choice Care Network (Humana)

6,600,000

Humana Military (TriCare South)

Geisinger Health Plan

PancraGen

ThyGenX

ThyraMIR

Medical Policy
Coverage

Contract

Pricing

$3,101 PancraGen

3,000,000

TMAC

500,000

$3,600 PancraGen

$795 (ThyG)/$2,800 (ThyM)

$3,658 PancraGen

Pending

Pending

Kaiser

9,000,000

Highmark BCBS

5,930,000

ACPN (Network)

NA

$3,200 PancraGen, $1,340

(ThyG), $3,200 (ThyM)

Fed Med (Network)

NA

$3,200 PancraGen

Provider Select Network

NA

$3,798 PancraGen

58,000

$3,800 PancraGen

NA

$3,200 PancraGen

MagnaCare

$3,600 PancraGen

lnterwest Health

$3,400 PancraGen

HealthSmart (Network)

$3,200 PancraGen

Fortified Provider Network (FPN)

$3,798 PancraGen

Ohio State Health Plan

Multi Plan

Emblem Health

3,400,000

Harvard Pilgrim

1,000,000

Medicare (1) (Novitas-Solutions)

55,200,000

187,628,000

71,288,000

148,870,000

67,540,000

Number of Lives Covered

$3,101 PancraGen

(1) Medicare numbers will overlap some health plan populations above, since the total lives in the heatlh plans include some medicare lives
along with commercial lives.

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Guideline Recommendations
2014 American Thyroid Association Revised Guidelines
MDx Tests should be considered for suspicion of malignancy or indeterminate.

2013 NCCN Guidelines

Molecular Diagnostics recommended testing on some indeterminate cytologies to minimize
unnecessary surgeries

Current Pancreatic Cysts Guidelines

Sendai guidelines 2012 and ACG guidelines 2007 strongly favor surgical resection because
of the inability of first-line tests to predict biological behavior and aggressiveness.
PancraGen establishes a new standard for the prognosis and diagnosis of
pancreatic cysts

Source: Cooper DS et al. Thyroid. 2009;19(11):1167-1214; National Comprehensive Cancer Network. NCCN Clinical Practice Guidelines in Oncology: Thyroid
Carcinoma. V.1.2014; ATA Guidelines on Thyroid Nodules and Differentiated Thyroid Cancer Highlights, Consensus, and Controversies. ICE/ENDO conference;
June 21-24, 2014; Chicago, Illinois.

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Operations & Financials

IDXG
26

 New Development
GASTROINTESTIONAL(GI) PRODUCTS

Launched new Biliary product October 3rd, 2016

Launched AccuCEA Insights August 1st, 201

Launched PanDNA September 1st, 2016

Launched BarreGen Clinical Experience Program September 1st, 2016

ENDOCRINE PRODUCTS

Launched Cytopathology Services October 1st, 2016

Launched Cytology Slides as primary specimen October 1st, 2016

New York State approval of ThyGenX September 30th, 2016

Team Bios

Jack E. Stover President & CEO since December 2015. Prior Director of PDI.
Director of Onconova Therapeutics and Viatar CTC. Previously President & CEO
of Antares Pharma and COO of Sicor Inc and CFO/COO of Gynetics Inc. and
Partner at PWC

Sydney Finkelstein MD, CMO and CSO, Founder of RedPath. A board

certified anatomic pathologist with extensive experience and accomplishments in
academic surgical pathology and molecular pathology. Formerly Professor of
Pathology at the Univ. Pittsburgh. Syd has authored over 200 peer review
manuscripts and is a nationally recognized authority in Gastrointestinal Pathology
and Solid Tissue molecular diagnostics.

Greg Richard Sr. VP Commercial Services. Previously at Aetna and moved to

Genentech as Director of managed care. VP of Managed Care for Quest and Sr.
VP of Sales for LabCorp and a frequent speaker at lab industry conferences

Jim Early Chief Financial Officer. Previously CFO at both ABGenomics Intl and
SanGeva BioPharma as well as an interim CFO and BD services consultant to
the medtech industry.

Week 39
YTD GI MDx Orders (actual vs planned)
2016 GI Orders
4000

3500

3000

Orders

2500

2000

GI Actual
GI Planned

1500

1000

500

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
Weeks

29

Week 39
YTD Thyroid Orders (actual vs planned)
2016 Thyroid Orders
8000

7000

6000

Orders

5000

4000

Thyroid Actual
Thyroid Planned

3000

2000

1000

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
Weeks

30

Investment Considerations

Interpace is a NASDAC listed company

Strong management team and over ten years of experience

Good and growing reimbursement in place in high value-added

molecular space

Significant revenue growth in 2016

Expansion product launches underway

Pipeline of products already developed in large market opportunity

Monthly cash collections in excess of $1 million and growing

Lowest trading price in history due to transition overhang from

previous CSO business

Multiples in the MDX space often 2 to 4 X revenues

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THANK YOU!

IDXG
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