MAKO Surgical Corp. January MAKO Surgical Corp

Transcription

1 MAKO Surgical Corp. January 2012 MAKO Surgical Corp

2 Forward Looking Statement This presentation contains forward-looking statements regarding, among other things, statements related to expectations, goals, plans, objectives and future events. MAKO intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Reform Act of In some cases, forward-looking statements can be identified by the following words: may, will, could, would, should, expect, intend, plan, anticipate, believe, estimate, predict, project, potential, continue, ongoing or the negative of these terms or other comparable terminology, although not all forwardlooking statements contain these words. These statements are based on the current estimates and assumptions of our management as of the date of this presentation and are subject to risks, uncertainties, changes in circumstances, assumptions and other factors that may cause actual results to differ materially from those indicated by forward-looking statements, many of which are beyond MAKO s ability to control or predict. Such factors, among others, may have a material adverse effect on MAKO s business, financial condition and results of operations and may include the potentially significant impact of a continued economic downturn or delayed economic recovery on the ability of MAKO s customers to secure adequate funding, including access to credit, for the purchase of MAKO s products or cause MAKO s customers to delay a purchasing decision, changes in competitive conditions and prices in MAKO s markets, unanticipated issues relating to intended product launches, decreases in sales of MAKO s principal product lines, decreases in utilization of MAKO s principal product line or in procedure volume, increases in expenditures related to increased or changing governmental regulation or taxation of MAKO s business, both nationally and internationally, unanticipated issues in complying with domestic or foreign regulatory requirements related to MAKO s current products or securing regulatory clearance or approvals for new products or upgrades or changes to MAKO s current products, the impact of the recently enacted United States healthcare reform legislation on hospital spending, reimbursement, and the taxing of medical device companies, the potential impact of the informal Securities and Exchange Commission inquiry and the findings of that inquiry, loss of key management and other personnel or inability to attract such management and other personnel and unanticipated intellectual property expenditures required to develop, market, and defend MAKO s products. These and other risks are described in greater detail under Item 1A, Risk Factors in MAKO s periodic filings with the Securities and Exchange Commission, including MAKO s annual report on Form 10-K for the year ended December 31, 2010 and quarterly report on Form 10-Q for the quarter ended September 30, Given these uncertainties, undue reliance should not be placed on these forward-looking statements. MAKO does not undertake any obligation to release any revisions to these forward-looking statements publicly to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events. MAKO Surgical Corp

3 Overview Orthopedics MAKOplasty Large growing market Need for consistent, reproducible precision Enabling orthopedics robotic arm platform Proprietary minimally invasive implant systems Strong adoption trends for RIO systems and RESTORIS implants Demonstrated value propositions for patients, physicians and hospitals Positioned for sustainable growth MAKO Surgical Corp

4 MAKOplasty Experience Through Q RIO system commercial installed base 626 surgeons trained 2,258 procedures in Q ,932 procedures in ,801 procedures to date Commercial launch of MAKOplasty Total Hip Arthroplasty application in September 2011 MAKO Surgical Corp

5 Implant Revenues ($B) Orthopedic Market Overview Arthroscopy / Soft Tissue Repair 9% Orthobiologics 10% Fracture Repair 14% Other Products 13% Spinal Implants / Instrumentation 19% Reconstructive Devices 35% 2009 Global Revenues $37.75B Shoulders 1% Knees 18% Hips 15% Other Joints 1% Demographic trends are driving continued growth Aging Population $10 $8 $6 $4 $2 $0 U.S. Hip and Knee Implant Forecast Increasing Obesity Rates Hips Knees MAKO Surgical Corp Sources: Millennium Research Group(2011); Orthopedic Network News (2008); CDC & US Census

6 Needs in the Orthopedic Marketplace Orthopedic Marketplace Patients Shorter recovery Natural movement Restoring quality of life Less pain Minimal incision Reduced length of stay Bone preserving Surgeons Reproducible precision Optimal implant orientation Practice enhancement Patients Hospitals Competitive differentiator ROI model Attract patients Reduced length of stay Surgeons Robotic technology can address these needs MAKO Surgical Corp

7 The MAKOplasty Solution Robotic Arm Patient Specific Visualization Implants RIO Robotic Arm Interactive Orthopedic System RESTORIS Implant Systems Tissue Sparing, Minimal Incision, Shorter Recovery, Precise, Reproducible MAKO Surgical Corp

8 MAKOplasty: Surgical Workflow MAKO Surgical Corp

9 MAKOplasty Knee Opportunity MAKO Surgical Corp

10 $ in Billions US Knee Market The US knee market is large and growing However, the market is still under-penetrated 6 3 US Knee Implant Market $4.3 $5.1 Over 15 Million US Osteoarthritis Knee Sufferers 700,000 Implants ,000 knee implants sold in % expected annual growth rate due to Aging population Obesity rates are rising MAKO Surgical Corp Sources: Millennium Research Group (2011), CDC & US Census

11 The Progression of OA of the Knee OA Causes Early to Mid Stage OA Late Stage OA Physiology Sports injuries Wear and tear Arthroscopy Reduced quality of life Moderate to substantial pain Reduced mobility Watchful Waiting Further reduced quality of life Substantial pain Further reduced mobility Total Knee Implant MAKO Surgical Corp

12 Current OA Treatments: Tale of Two Procedures Total Knee Arthroplasty (TKA) For late stage OA all 3 compartments Invasive procedure Painful recovery Limited patient adoption Duke University survey (January 2006): ~92% of men and 87% of women say No to TKA or THA Partial Knee Arthroplasty For early stage OA 1 or 2 compartments Technically challenging - alignment Inconsistent results Limited surgeon adoption MAKO Surgical Corp

13 Knee MAKOplasty RESTORIS MCK Multicompartmental Knee System Patellofemoral & Patella Medial Femoral Lateral Femoral MAKO RESTORIS MCK: Medial UKA + PF Configuration Metal-Backed Onlay Poly Inlay MAKO Surgical Corp

14 Volume x 1000 Late stage Mid stage Early stage MAKO Market Opportunity Primary Knee Arthroplasty U.S. Market Therapy Disease Act. Est. Est. Est. Est. Est. MAKO Surgical Corp Source: Millennium Research Group (2010)

15 Volume x 1000 Late stage Mid stage Early stage MAKO Market Opportunity Primary Knee Arthroplasty U.S. Market Therapy Disease Act. Est. Est. Est. Est. Est. TKA UKA Source: Millennium Research Group (2011) MAKO Surgical Corp

16 Volume x 1000 Late stage Mid stage Early stage MAKO Market Opportunity Primary Knee Arthroplasty U.S. Market Therapy Disease Act. Est. Est. Est. Est. Est. TKA UKA UKA Potential Source: Millennium Research Group (2011) MAKO Surgical Corp

17 Volume x 1000 Late stage Mid stage Early stage MAKO Market Opportunity Primary Knee Arthroplasty U.S. Market Therapy Disease bi-compartmental MAKOplasty Act. Est. Est. Est. Est. Est. TKA UKA UKA Potential Source: Millennium Research Group (2011) MAKO Surgical Corp

18 MAKOplasty Hip Opportunity MAKO Surgical Corp

19 $ in Billions US Hip Market US Hip Implant Market 4 $2.9 $ ,000 hip implants sold in % expected annual growth rate due to Aging population Obesity rates are rising The US hip market is large and growing Sources: Millennium Research Group (2011) MAKO Surgical Corp

20 OA of the Hip MAKO Surgical Corp

21 Total Hip Implant MAKO Surgical Corp

22 Impingement Leads to Dislocation Malpositioning of the acetabular component in THA Increased rate of dislocation Liner fracture Increased wear Adverse soft tissue reactions in metal-on-metal bearings. However, precursor to dislocation and initiating event for liner wear (both rim and backside) is impingement MAKO Surgical Corp

23 Liner and Backside Wear Caused by Impingement Acetabular insert displaying both severe backside wear and an impingement scar of moderate severity. MAKO Surgical Corp

24 Cup Version (degrees) MAKOplasty Hip Opportunity Traditional procedure can lead to inaccurate cup placement Inaccurate placement can lead to dislocations and surface wear Challenges compounded with low volume surgeons All Patients, N= % (1.5x) and MIS (2.5x) Cup Abduction (degrees) Source: Dr. Malchau et al (2010) MAKO Surgical Corp

25 Cup Version (degrees) MAKOplasty Hip Opportunity Traditional procedure can lead to inaccurate cup placement Inaccurate placement can lead to dislocations and surface wear Challenges compounded with low volume surgeons (1.5x) and MIS (2.5x) Low Volume Surgeons, N= % Cup Abduction (degrees) Source: Dr. Malchau et al (2010) MAKO Surgical Corp

26 Cup Version (degrees) MAKOplasty Hip Opportunity Traditional procedure can lead to inaccurate cup placement Inaccurate placement can lead to dislocations and surface wear Challenges compounded with low volume surgeons (1.5x) and MIS (2.5x) Worst Approach (MIS), N= % Cup Abduction (degrees) Source: Dr. Malchau et al (2010) MAKO Surgical Corp

27 MAKOplasty Total Hip Arthroplasty Accurate Reaming and Cup Impaction Initial Reaming Tip of Reamer Constrained Trajectory Unconstrained Final Reaming Tip of Reamer Constrained Trajectory Constrained Implant Placement Cup Position Constrained Trajectory Constrained MAKO Surgical Corp

28 Growth Strategy MAKO Surgical Corp

29 Growth Strategy Clinical Build clinical and economic value propositions Sales Expand RIO and MAKOplasty direct sales forces and marketing programs Technology Enhance customer experience through technology Intellectual Property Protect first to market position through strong intellectual property portfolio MAKO Surgical Corp

30 Key Results To Date Clinical and Economic Value Propositions Procedure Value MAKO Focus Value Drivers Clinical accuracy/reproducibility Patient 1. decreased pain 2. return to function/ short hosp stay/rehab 3. implant longevity tissue preservation clinical efficiency Surgeon/Hospital 1. implant longevity 2. procedural ease of use 3. excellent clinical outcomes MAKOplasty Economic procedural efficiency business growth implant/robot cost Surgeon Hospital/Payer 1. marketing value 2. OR Time 3. reimbursement 1. cost effectiveness 2. OR time/number of cases 3. Procedure growth Abstracts 140 accepted Peer-Reviewed Manuscripts 24 published Whitepapers 15 completed Studies 70+ ongoing studies Book Chapters 4 published 3 in press MAKO Surgical Corp

31 Commercialization Strategy: Two Direct Sales Forces RIO Sale Profile surgeons High volume surgeons Knee - Early stage OA focus Target hospitals Technology savvy Leading in orthopedics High volume orthopedic facilities 32 Person RIO Sales Force MAKOplasty Implant Sales Support surgeons MAKO rep in every MAKOplasty Support hospitals Center of Excellence 81 Person MAKOplasty Sales Force 15 Person Marketing Support Team MAKO Surgical Corp

32 Extensive Marketing Programs MAKO Surgical Corp

33 Technology Advancement Future TGS RIO Robotics UNI BICOMP. HIP Applications Additional Applications RESTORIS MCK THA Implant Systems New Implant Systems Customer Focus MAKO Surgical Corp

34 Broad and Deep Intellectual Property Portfolio Modes of Protection: Patents & Applications Copyrights Trademarks Trade Secrets U.S. Foreign Total Pending Granted Total Technical Elements: Instrumentation Navigation Implants + Haptics Imaging Software Robotics Surgical Procedures Employee Know-How MAKO Surgical Corp

35 Employee Know How Broad and Deep Intellectual Property Portfolio Patents & Applications Imaging MAKOplasty Navigation Surgical Procedures Haptics Robotics Software Instruments Implants Copyrights Trademarks Trade Secrets MAKO Surgical Corp

36 Financial Overview MAKO Surgical Corp

37 MAKO Revenue Model RIO Sale MAKO Implant Recurring Revenue Service Revenue UKA Inlay UKA Onlay MCK Bicompartmental Modular Knee ASP $850,000 RIO with PKA ASP $100,000-$200,000 - THA Application 37 Total Hip Arthroplasty ASP $5,000 Approx.10% of sales price MAKO Surgical Corp. 2012

38 Impressive Procedure Ramp 2,258 1,813 1,557 1,304 1, Procedures Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Year-To-Date Procedures ,041 1, ,524 2,339 3,485 1,304 2,861 4,674 6,932 Cumulative Procedures ,047 1,405 1,823 2,384 3,115 3,908 4,723 5,869 7,173 8,730 10,543 12,801 New Sites* Cumulative Sites* Avg. Monthly Utilization* * Not including international demo or research and evaluation sites MAKO Surgical Corp

39 Key Operating Results Years Ended December 31, Nine Months Ended September 30, (in thousands) (unaudited) (1) (unaudited) (2) (audited) (unaudited) Revenue: Procedures $2,457 $7,550 $17,620 $23,251 Systems - RIO 8,172 14,715 24,928 24,153 Service ,748 4,215 Total revenue 11,116 22,911 44,296 51,619 Revenue growth 221% 106% 93% 75% Gross margin 13% 45% 59% 68% Net loss ($35,816) ($36,531) ($38,687) ($30,559) (1) Proforma numbers which include the recognition of the deferred revenue and deferred cost of revenue for twelve TGS unit sales deferred in 2008 and recognized during the year ended December 31, 2009 and the costs of providing RIO system upgrades for the twelve TGS sales in 2008 (2) Proforma numbers which exclude the recognition of the deferred revenue and deferred cost of revenue for seventeen TGS unit sales deferred in prior years and recognized during the year ended December 31, 2009 and the costs of providing RIO system upgrades for the seventeen TGS sales MAKO Surgical Corp

40 Key Balance Sheet Data (in thousands) September 30, 2011 (unaudited) Cash, cash equivalents and investments $ 67,375 Total assets 122,771 Total debt Total stockholders equity 102,504 MAKO Surgical Corp

41 Thank You. MAKO Surgical Corp