PFIZER PROMOTION AGREEMENT	9 Months Ended
Sep. 30, 2020
PFIZER PROMOTION AGREEMENT
PFIZER PROMOTION AGREEMENT	PFIZER PROMOTION AGREEMENTIn August 2018, the Company entered into a Promotion Agreement (the “Original Promotion Agreement”) with Pfizer Inc. (“Pfizer”), which was amended and restated in October 2020 (the “Restated Promotion Agreement”). The Restated Promotion Agreement extends the relationship between the Company and Pfizer and restructures the manner in which the Company compensates Pfizer for promotion of Cologuard through a service fee, and provision of certain other sales and marketing services related to Cologuard. The Restated Promotion Agreement also includes additional fixed and performance-related fees, some of which retroactively go into effect on April 1, 2020. All payments to Pfizer are recorded in sales and marketing in the Company’s condensed consolidated statements of operations. The Company incurred charges of $15.8 million and $15.8 million for promotion, sales and marketing services performed by Pfizer on behalf of the Company during the three months ended September 30, 2020 and 2019, respectively. The Company incurred charges of $57.6 million and $49.8 million for promotion, sales and marketing services performed by Pfizer on behalf of the Company during the nine months ended September 30, 2020 and 2019, respectively. Under the Original Promotion Agreement, the service fee was calculated based on incremental gross profits over specified baselines during the term. The Company incurred charges of $16.0 million and $54.5 million for this service fee during the three and nine months ended September 30, 2019. Under the Restated Promotion Agreement, the service fee was revised to a fee-for-service model, and includes certain fixed fees and performance-related bonuses. The Company incurred charges of $18.0 million and $37.5 million for the service fee during the three and nine months ended September 30, 2020. The Company will also pay Pfizer royalties for Cologuard related revenues over specified thresholds during the last year of the term of the Restated Promotion Agreement. The term of the Restated Promotion Agreement runs through December 31, 2022.

PFIZER PROMOTION AGREEMENT

9 Months Ended

Sep. 30, 2020

PFIZER PROMOTION AGREEMENTIn August 2018, the Company entered into a Promotion Agreement (the “Original Promotion Agreement”) with Pfizer Inc. (“Pfizer”), which was amended and restated in October 2020 (the “Restated Promotion Agreement”). The Restated Promotion Agreement extends the relationship between the Company and Pfizer and restructures the manner in which the Company compensates Pfizer for promotion of Cologuard through a service fee, and provision of certain other sales and marketing services related to Cologuard. The Restated Promotion Agreement also includes additional fixed and performance-related fees, some of which retroactively go into effect on April 1, 2020. All payments to Pfizer are recorded in sales and marketing in the Company’s condensed consolidated statements of operations. The Company incurred charges of $15.8 million and $15.8 million for promotion, sales and marketing services performed by Pfizer on behalf of the Company during the three months ended September 30, 2020 and 2019, respectively. The Company incurred charges of $57.6 million and $49.8 million for promotion, sales and marketing services performed by Pfizer on behalf of the Company during the nine months ended September 30, 2020 and 2019, respectively. Under the Original Promotion Agreement, the service fee was calculated based on incremental gross profits over specified baselines during the term. The Company incurred charges of $16.0 million and $54.5 million for this service fee during the three and nine months ended September 30, 2019. Under the Restated Promotion Agreement, the service fee was revised to a fee-for-service model, and includes certain fixed fees and performance-related bonuses. The Company incurred charges of $18.0 million and $37.5 million for the service fee during the three and nine months ended September 30, 2020. The Company will also pay Pfizer royalties for Cologuard related revenues over specified thresholds during the last year of the term of the Restated Promotion Agreement. The term of the Restated Promotion Agreement runs through December 31, 2022.