Medifocus, Inc. OTCQX: MDFZF TSXV: MFS

Transcription

1 Medifocus, Inc. OTCQX: MDFZF TSXV: MFS Develops and commercializes minimally invasive focused heat thermotherapy systems for the treatment of cancer and other diseases August 2013

2 Safe Harbor Statement Except for historical information, the statements made in this presentation are forward-looking statements involving significant risks and uncertainties. These risks and uncertainties, including those related to the future financial projections and business strategy of the Company, can be found in the Company s filings with the regulatory authorities. 2

3 Medifocus Overview The Smart Bomb Approach in Treating Diseases Medifocus, Inc (the Company or Medifocus ) engages in the development and commercialization of minimally invasive focused heat devices & systems for the treatment of cancer and other disease Unlike conventional thermotherapy, Company s technology can direct focused microwave energy precisely at the tumor site to cause shrinkage or eradication without harming the surrounding healthy tissue Focused heat can be the key to release/activate temperature sensitive cancer drugs at tumor site to enhance efficacy and reduce toxicity Incorporated in Canada with all operations in Maryland, currently listed on TSXV and OTCQX Two fully development technology platforms with 100+ issued and pending U.S. and international patents 3

4 Breakthrough Technology Platforms Foundation for Multiple Product Development Endo-thermotherapy Platform A catheter-based focused heat technology platform Prolieve Thermodilatation System: FDA PMA approved (Benign Prostatic Hyperplasia BPH treatment), revenue-generating with approx. revenue of $2.1 million for the six months ending June 2013 $100+ million spent on R&D and commercialization of Prolieve System Future applications: rectal, cervical, prostate and esophageal cancers Adaptive Phased Array (APA) Microwave Focusing Platform Precise focusing technology invented by MIT for U.S. DOD Based System FDA PMA approved APA 1000 Breast Cancer Treatment System in Phase III trial $25+ million spent on R&D on APA 1000 till date Planned PMA Supplement for Recurrent Chest Wall for early revenue Future applications: lung, liver, and prostate cancers 4

5 Medifocus Investment Highlights Growing Revenue and Huge Potential---Unknown and Undervalued Rapid Prolieve revenue growth in the U.S. Application for China FDA approval of Prolieve in process large Asia Pacific market opportunity Period Quarter Ended 06/30/12: Quarter Ended 09/30/12: Quarter Ended 12/31/12: Quarter Ended 03/31/13: Quarter Ended 06/30/13: Prolieve Revenue CN$0 CN$313,281 CN$630,150 CN$862,538 CN$1,311,251 Breakeven expected In Q-1 or Q Little debt, undervalued market cap of $23 million ($130 million invested in R&D and commercialization of Prolieve and APA 1000 not reflected on balance sheet). High profit margin revenue model with recurring revenue stream. Near term: Prolieve provides rapid revenue growth and profit potential. Medium term: APA 1000 (Phase III) with high probability of receiving FDA approval in three years. Longer term: Utilize focused-heat technology platforms for other disease targeted treatment product pipelines.

6 Prolieve Thermodilatation System FDA PMA Approved A Welcome Change in the Treatment of BPH Symptoms First product developed based on the Endo-thermotherapy Technology Platform FDA approved for the treatment of Benign Prostatic Hyperplasia (BPH), a medical term for enlargement of prostate 50% of men over age 50 and 90% over age 70 will develop symptoms of BPH BPH symptoms Includes urgency, nocturia, hesitancy, weak stream, dysuria, retention and intermittency The quality of life of BPH sufferers are badly compromised Most other treatment options are either less effective, or have many side effects, or both Celsion Corp and Boston Scientific together invested approx. $110 million in the development and commercialization of Prolieve before it was acquired by Medifocus in July 2012 Prolieve therapy: A better alternative to medication and other more invasive surgical based treatments without the complications and the side effects associated with those procedures 6

7 Prolieve Treatment Module and Disposables Treatment Module: minimal or no cost to doctors. 250 installed, 120 in inventory Disposable treatment catheter provides a recurring revenue source 7

8 Prolieve Treatment Procedure Heat + Dilation = Biological Stent Immediate Relief Constricted Urethra BEFORE Prolieve Treatment Placement of Prolieve Proprietary heat/dilation catheter, 45-minute in office treatment, no general anesthesia or incision Anchor Balloon Biological stent formed in the Urethra AFTER Prolieve Treatment Prolieve System Catheter Thermodilatation Balloon 8

9 Prolieve - A Better Option than Drugs Prolieve Drug Therapy Immediate Relief Yes Yes - only if taking daily Comparative Effectiveness Prolieve versus Finasteride Twice as Effective as Proscar Long Term Relief Last two years plus Daily medication Side Effects Minimal Many 2 Year Cost to Patient $155 $870-$1,388 Prolieve is the only microwave therapy randomized against drug therapy and showed superior results over medication in the FDA clinical trials Prolieve is also more effective compared to Flomax and Avodart or Flomax and Avodart combined in improving BPH symptom score Prolieve: Better, safer and cheaper 9

10 Prolieve Treatment Benefits Improving Patients Quality of Life Patient Benefits: Approx. 65,000 patients have been treated since PMA approval Immediate and long term symptom relief Patients resume normal activities after a 45-minute non surgical treatment at doctor s office Quality of life improvement Less invasive and very few side effects reported, topical anesthesia only Does not affect sexual function in 99% of patients studied in clinical trials Eliminates the need for multiple-office visits for BPH medications and the related side effects, costs and inconvenience Doctor s Benefits: Patient satisfaction and easy revenue source Practice-friendly, requires little setup time or office space and limited office recovery time Using our mobile service, no capital investment or operational training is required for doctors 10

11 Marketing Strategy Prolieve To Be the Gold Standard for in-office Treatment for BPH Currently focus on urologist market in the U.S. Application for China FDA approval in process Promote Prolieve treatment as a better alternative to BPH drugs to penetrate the much larger BPH drug therapy market For physicians with no Prolieve system, our Turn-key in-office mobile service brings comprehensive Prolieve treatment capability as they request it on their schedule Mobile service technicians deliver equipment and disposables in mobile vans and operate treatment procedure, with minimal involvement by physicians 11

12 BPH Treatment Options and Market Potential Surgical and Minimally Invasive Treatment Options ($150 million* in U.S.) Traditional Surgery TURP Thermotherapy (Prolieve & others) and Laser Surgery Our goal is to become the market leader in this space due to Prolieve s safety profile and effectiveness Patients on Prescription Drug Alpha-blocker 5 reductase inhibitors Combination BPH drug therapy $4 billion** in major industrialized countries, not including potential from watchful waiting patients Watchful Waiting Patients choosing not to take drugs due to side effects, low success rate and high costs Two large target groups for the more effective, safer and cheaper Prolieve treatment Prolieve = Treatment of Choice *Medtech Insight **Decision Resources Group 12

13 Revenue Model for Prolieve Current Medicare reimbursement for Prolieve treatment $2,200 For Urologists with Installed Prolieve Systems: Revenue (for Medifocus) per disposable kit = $900 Cost of disposable kit =$285 Gross profit per treatment (for Medifocus) =$615 Urologists keep ($2,200-$900) =$1,300 For Treatments Provided by Mobile Service: (Physician Involvement Minutes) Revenue (for Medifocus) per disposable kit = $1,200 For Medifocus: Recurring Revenue Stream For Doctors: Patient Satisfaction and Easy Income Cost of disposable kit =$285 Gross profit per treatment (for Medifocus) =$915 Physicians keep ($2,200-$1,200) =$1,000 Market size: Approx. 50% of all men over the age of 55 and 90% of all men over 75 will have BPH symptoms at various times 13

14 Adaptive Phased Array Technology Platform Adaptive Phased Array (APA) technology originally developed by MIT for the Star War missile defense system, licensed exclusively to Medifocus for medical applications Directs precision-focused microwave energy at tumors to shrink or eradicate them without undue harm to surrounding tissue To detect and destroy an enemy missile, microwave energy is targeted on it, simultaneously nullifying enemy jamming To kill a cancerous tumor, microwave focused heat is targeted on the tumor while simultaneously nullifying any energy that would burn surrounding tissue 14

15 APA 1000 Breast Cancer Treatment System The Frist Cancer Treatment System Developed from APA Platform An RF needle probe inserted at tumor center provides feed-back signal to focused microwave energy at tumor center to induce shrinkage or eradication without harming surrounding tissue Focused microwave energy beam also destroys microscopic tumors along its path throughout the breast. (Selective heating of breast tumors due to higher water content) Focused heat (43-44 C) combined with chemotherapy achieves an average of 88% tumor size reduction, improving surgical outcomes! Value proposition (Same treatment system can be used for most stages of breast cancer, including recurrent chest wall, primary small tumor, DCIS Pre-cancerous and benign lesion) 15

16 Completed Phase II Multi-Center Randomized Study Results Demonstrate Statistical Significant Improvement Evaluation Population 24pts T2, T3 tumors > 2 cm at enrollment Thermochemo:88.4% (Median) Chemo Alone: 58.8% (Median) P=0.048 Vargas et al, Cancer Therapy, Vol 5, Nov With neo-adjuvant chemotherapy, focused heat can significantly improve breast cancer patients chance for survival and breast conservation 16

17 Breast Cancer Treatment Market Opportunity Small 26% Breast Cancer Size Medium 52% Treatment Outcome Chemotherapy Alone Focused Heat + Chemotherapy Tumor Size Reduction (Large Tumors) 50% 88% (1) Treatment Outcome Surgery Alone Focused Heat Alone Large 22% Positive Margins (Small Tumors) 10% 0% (1) (1)as demonstrated in Phase II clinical trials Worldwide -- Approx. 1.6 million new cases each year*, $16 billion direct costs in the U.S. alone** Large Breast Tumors when focused heat is added to Neoadjuvant Chemotherapy, tumor shrinkage is significantly reduced thus can avoid the need for mastectomies. Chemotherapy alone - low conversion success rate 22%*** from mastectomy to breast conservation Small Breast Tumors when focused heat alone is used prior to surgery positive margin rate was 0% compared to 10% which did not receive the heat treatment. potentially reducing recurrent rates Medifocus Breast Cancer System can address majority of the Breast Cancer treatment marketplace * Susan Komen for the Cure **National Cancer Institute ***NSABP Study 17

18 APA 1000 Final Pivotal Phase III Trial Design High Probability of Meeting the End Point 238 Patients with Large Tumors 119 neo-adjuvant chemotherapy 119 neo-adjuvant chemotherapy + heat Primary Clinical Endpoint To demonstrate 40% or more in tumor shrinkage over chemotherapy alone (control arm) 50% increase in tumor shrinkage with chemo + heat over chemo alone already observed in Phase II More heat dose to be used (two heat treatments in Phase II and three in Phase III), thus better results are expected than in Phase II High probability of meeting or exceeding endpoint Early submission for PMA possible if 50% or more tumor shrinkage is attained Time Frame Start: 4 th Quarter 2013 Complete: 2016 Expected Approval: 2017 Midpoint Analysis :

19 Revenue Strategy for APA 1000 Win-Win Revenue Strategy for Both Medifocus and Physicians For Surgeons $5,000*/treatment X 3 treatments =$15,000/patient For Medifocus $1,500/treatment X 3 treatments =$4,500/patient Cost of 3 probes ($150/each) =$450 Gross profit =$4,050/patient Surgeons keep ($15,000-$4,500) = $10,500/patient *$5,000 per treatment reimbursement expected upon approval Market system as a tool for breast surgeons to improve treatment outcome (more BCS, fewer mastectomies) for patients AND increase revenue Target 1,200+ comprehensive breast cancer treatment centers in the U.S.A. Proactively secure appropriate reimbursement for treatment Initial Category III CPT Code granted by AMA Capture recurring revenue stream by selling disposable probes 19

20 Annual Revenue Potential For Medifocus Per APA 1000 System Placed Revenue from Treatment Disposable Probes Number of working days/year 240 Number of treatments/day 2 Revenue from probe/treatment $1,500 Revenue from probes/system/year $720,000 Cost of probes used/system/year $72,000 Medifocus gross margin on disposable probes 90% * Cost of APA 1000 System ($50,000) can be captured by leasing to physicians or sharing treatment revenue. 20

21 Growth Strategy File Form 20-F Registration Statement to become a SEC reporting company and seek listing on a USA national exchange Raise sufficient capital in Q to provide working capital to accelerate the expansion of the Prolieve business by: Adding additional marketing and sales personnel to increase Prolieve revenue Expanding the fleet size of mobile service vans to facilitate sales to primary care providers and urologist without Prolieve installation Achieve breakeven in Q1/Q Jump start and complete pivotal phase III trial for the APA 1000 Breast Cancer System Seek strategic sales and distribution partners worldwide for Prolieve and the APA 1000 Seek strategic R&D partners to collaborate on development of future pipeline products from Company s technology platforms 21

22 Conclusion Medifocus Inc. is a leading developer in minimally invasive focused heat thermotherapy for the treatment of cancer and other diseases with rapidly growing revenue and a product pipeline for near, medium and longer terms High profit margin business model with a recurring revenue stream Plan in place to expand into the growing Asia Pacific market Comprehensive IP portfolio for multiple product development Underlying business and technology assets and potentials are vastly undervalued Plan in place to increase exposure, liquidity, and to uplist to a U.S. exchange and become an American company again Maxim Group engaged to provide advisory services 22