Investor Presentation April NYSE American: ISR

Transcription

1 Investor Presentation April 2018 NYSE American: ISR

2 Safe Harbor Statement Statements in this presentation about IsoRay's future expectations, including: the advantages of our products and their delivery systems, whether interest in and use, awareness and adoption of our products will increase or continue, whether opportunities will be available to expand the market for our products, whether changes to IsoRay's management and sales team and strategy will result in growth, whether investments in sales and marketing, production and research and development will result in growth, whether our technical assistance in the brain and gynecological applications will result in a viable commercial product for sale, whether studies and protocols will produce favorable results or lead to publications, whether peer-reviewed publications of treatment results using our products will report favorable results, whether our intellectual property will adequately protect our proprietary technologies, and all other statements in this presentation, other than historical facts, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). This statement is included for the express purpose of availing IsoRay, Inc. of the protections of the safe harbor provisions of the PSLRA. It is important to note that actual results and ultimate corporate actions could differ materially from those in such forward-looking statements based on such factors as physician acceptance, training and use of our products, our ability to successfully manufacture, market and sell our products, our ability to manufacture our products in sufficient quantities to meet demand within required delivery time periods while meeting our quality control standards, our ability to enforce our intellectual property rights, whether additional studies are released and support the conclusions of past studies, whether ongoing patient results with our products are favorable and in line with the conclusions of clinical studies and initial patient results, patient results achieved when our products are used for the treatment of cancers and malignant diseases beyond prostate, successful completion of future research and development activities, whether we, our distributors and our customers will successfully obtain and maintain all required regulatory approvals and licenses to market, sell and use our products in its various forms, continued compliance with ISO standards as audited by BSI, the success of our sales and marketing efforts, changes in reimbursement rates, changes in laws and regulations applicable to our products, and other risks detailed from time to time in IsoRay's reports filed with the SEC. Unless required to do so by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For more information regarding risks and uncertainties that could affect IsoRay s results of operations or financial condition review IsoRay s filings with the Securities and Exchange Commission (in particular, it s most recently filed Form 10-K and Form 10-Qs). IsoRay undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities of IsoRay nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. NYSE American: ISR 2

3 Overview Isoray Medical passionately designs and develops innovative and personalized permanent implant brachytherapy products that effectively treat many forms of cancer. We believe in pioneering solutions for life beyond your cancer. Isoray s Cesium-131 isotope, with a shorter half-life and higher energy than other commonly used radioisotopes for low dose-rate (LDR) brachytherapy, has been shown to be a highly effective cancer treatment with limited side effects and quicker recovery time and as a result, is a potentially disruptive alternative to the global radiation therapy market. Market Data Ticker (NYSE MKT) ISR Price (4/18/2018) $ Week Range $ $0.64 Market Cap $24.0 M Average Daily Trading (3 mos) ~124,000 Common Shares Outstanding 55.0 M Cash, Cash Equivalents & CD s* $5.7 M Trailing 12 Month Revenue** $5.69 M * As of December 31, 2017; **4/1/2017 3/31/2018 NYSE American: ISR 3

4 Experienced Management Team Executing Turnaround Tom LaVoy Chairman of the Board and Chief Executive Officer William A. Cavanagh Chief Operating Officer and Chief Scientific Officer Michael L. Krachon Vice President, Sales and Marketing Director, IsoRay since 2005 before appointment as Chairman and Chief Executive Officer in early Over 35 years experience leading and building successful, publicly traded businesses. Improving operational efficiencies and increasing gross profit Refined organizational structure Appointed Chief Operating Officer, March 2016; previously Vice-President R&D, Over 20 year career in cancer treatment technologies including research and development of brachytherapy for treatment of prostate cancer. Guiding product development and clinical strategy and investment in clinical protocols for prostate, brain, head & neck and other cancers Joined Isoray in March Over 20 years experience of progressive growth in sales and marketing in the medical industry, including as leader of international brachytherapy commercial team. Restructured sales and marketing team and helped set focused sales strategy Relaunched website and refined marketing materials and social awareness programs NYSE American: ISR 4

5 Management Impact Since 2016 Reversed Revenue Trend 5 consecutive quarters of year-over-year revenue increases Invested in R&D and Clinical data development Partnered with GTMedTech to progress innovative brain cancer treatment (GammaTile) through FDA and Reimbursement approval process - 510K and reimbursement determinations expected this summer Provided direction and focus to the commercial team Increased share in established $100M prostate market Targeting increasing opportunities in prostate brachytherapy Filling leadership void in market Multiple recent studies show brachytherapy advantage in higher risk disease Increased Gross Profit Manufacturing and process improvements and tight expense control Plant automation being phased in during

6 The Isoray Advantage: Cesium-131 Product advantages Faster delivery of treatment Higher biological dose Medical advantages Significant improvement in side effect profile Patient convenience Faster resolution of urinary symptoms Payer advantages Shorter term side effects reduces doctor visits Sole Provider of Cesium-131 isotope with high barriers to entry Significant advancement in cancer therapy Proprietary manufacturing process Sole source provider in World Safely used to treat more than 11,000 patients with long term data support Three Generations of Isotopes Iodine s Palladium s Cesium

7 Leveraging the Cesium-131 Strategy Cesium-131 for prostate cancer is gaining momentum Growing market share with more effective and experienced sales force - Targeting new customers and expansion of patient selection Recent research publications support increasing adoption Innovative new products and partnerships to assist clinicians with treatment delivery Developing KOL programs for individual disease states Brain, GYN, Head & Neck Prostate Medical Advisory Board in place Reviewing DRG payment structures for surgical procedures in order to establish set payment pathways Reimbursement in place for all outpatient procedures Reimbursement for Brain treatment anticipated Summer of 2018 Continued process and manufacturing improvements and tight expense control to continue to deliver improved Gross Profit and operating income 7

8 Bottom and Top Line Impact: Five Quarters of Revenue and Gross Profit Improvements Product sales, net Gross profit $ 1,700 $ 700 $ 1,600 $ 600 $ 1,500 $ 1,400 $ 1,300 $ 500 $ 400 $ 1,200 $ 300 $ 1,100 $ 200 $ 1,000 $ 900 $ 800 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3E FY Quarter $ 100 $ 0 $ (100) Q Q Q Q Q Q FY Quarter Q Q Q Q Q3E IsoRay fiscal year ends June 30 th - Q preliminary results were released April 18, 2018; final results will be released in early May 2018 NYSE American: ISR 8

9 Cesium-131 Targeting >$1B Opportunity Disease State Annual Diagnosis* Potential LDR Patients* Prostate cancer 200, ,000 $700M Brain Tumors (new and recurrent) Recurrent Gynecological Tumors 300, ,000 1 $450M 13,000 3,500 $12M Head & Neck Tumors 61,000 15,000 $150M Lung Cancer 180,000 10,000 $50M Total Opportunity 648, ,500 Patients >$1B 2 Potential Revenue with Cesium Metastasis (135K); Glioma (21K); Meningioma (20K) Per NCCN guidelines for surgical candidates (included are 65K with recurrent disease). 2 Potential market is calculated with ASP s in line with historical data of $5,000 for prostate, $2,500 for brain, $3,500 for GYN, $10,000 for Head & Neck and $5,000 for lung cases. * Estimates of cases based on internal assessments from ACS data, market reports. NYSE American: ISR 9

10 Brain Cancer: GammaTile Nearing Commercialization Partnership in place with GT Medical Technologies to commercialize GammaTile, a custom delivery system for treatment of brain cancer - GT Medical Technologies is a physician group affiliated with the Barrows Neurological Institute, Phoenix, AZ - Among the world's largest neurological disease treatment and research institutions - Consistently ranked as one of the best neurosurgical training centers in U.S. - Device is a combination of Cesium-131 seeds embedded into collagen tiles that are placed onto the resection margin during surgery - Process adds less than 10 minutes to brain surgery - Exclusive 10 year Manufacturing Agreement executed January 2018 $450 million annual market potential for recurrent brain tumors Provides a new treatment option for patients without other options FDA and Reimbursement in process - 510(k) application in process final biocompatibility testing expected to be completed in first half of ICD 10 code issued, DRG mapping in place pending FDA clearance - NTAP application in process for new technology payment decision expected second half 2018 NYSE American: ISR 10

11 The GammaTile Solution 1 2 Cesium 131 seeds 9.7 day half life Deliver radiation over ~6 weeks Inert titanium casing stays in place 4 mm thick collagen matrix Predictable spacing of seeds w/ structural offset Dimensional stability Excellent conformability to surface Self-adhesion to the surrounding tissue Bioresorbable Tiles function both as a multi-seed carrier and a 3-dimensional spacer: Even spacing between the adjacent seeds Provides structural offset for 1) reduced brain dose and 2) intraoperative dosing adjustment (can use tiles flipped ) 11

12 Radiation Location and Intensity: External Beam Vs. GammaTile After Surgery Distribution and intensity of External Radiation Distribution and Intensity of GammaTile treatment 12

13 Exciting Surgical Opportunities Success in recurrent Gynecological cancer treatment Strategic collaboration with University of Kentucky to develop training and awareness programs Additional institutions progressing through adoption process Alternative is exenteration of the pelvis, where all pelvic organs are removed Expanding experience in Head and Neck cancers Strategic collaborations with Thomas Jefferson University, Case Western and Weill Cornell Adding sites for expanded protocols Reimbursement review underway Cancers with large unmet medical needs increasingly testing Cs-131 University of Louisville launching clinical study for Retroperitoneal Sarcomas - Recurs in nearly two-thirds of patients, also often metastasizes to lung and liver - Patients currently have limited options after surgery Head and Neck and Gynecological Cancers supported by 5 years of clinical trials in multiple institutions with multiple publications showing excellent local control and improvement in quality of life versus competing therapies. NYSE American: ISR 13

14 IsoRay Positioned to Gain Prostate Market Share Prostate Cancer is largest established brachytherapy market ~20,000 prostate brachytherapy procedures annually ($100M with Cesium-131) at approximately 500 facilities Isoray currently has ~3-5% share No clear industry leader Small number of Brachytherapy competitors left, all with reduced sales forces Consolidation of market is continuing as companies continue to tighten expenses Competition not making significant investments in market development Filling Void in Industry Leadership Increased investment and support of clinical data and research Increased training and education resources for physicians Medical Advisory Board re-established in 2016 *IJROPB Study (Glaser, UPMC) IsoRay is the Only Company Increasing Investment in the Prostate Market NYSE American: ISR 14

15 IsoRay Impacting Prostate Market Clinical evidence continues to grow supporting Cesium-131 Recent publications* demonstrate sustained low toxicity following Cesium- 131 Growing procedures in base accounts Increased the number of consistently active customers >40% >2/3 of centers have increasing order volumes Increasing patient selection criteria (focus on High Risk patients) Re-connecting with historical accounts Working with target institutions and practices through adoption process New accounts have a 6-12 month sales cycle, including approvals Prostate Treatments Account for ~86% of Current Sales and Represents the Largest Established Market Opportunity 15

16 Significant Opportunity in Prostate Market Competing therapies have not performed as well as expected* Growing literature supports brachytherapy component for high risk prostate cancer treatment ASCENDE-RT Randomized Trial comparing External Beam versus External Beam and Brachytherapy boost JAMA Analysis of High Risk prostate cancer patients treated with radical prostatectomy (RP) or combined therapy JCO Review of patients treated with RP and combined radiation therapy Healthcare economics driving interest back to brachytherapy Brachytherapy has economic and patient advantages compared to other treatments Science swinging to favor Cesium-131 for brachytherapy Long term comparative data Combination therapy has been found to work the best for patients Short-Half Life addresses historical urology concerns about prolonged urinary symptoms Expanding patient pool Higher risk patients Salvage / recurrent disease Targeted, or focal, procedures Low risk / Quality of Life focus * NEJM Study (Hamdy) NYSE American: ISR 16

17 Recent Higher Risk Clinical Outcomes Approximately 10-15,000 patients a year diagnosed with high-risk prostate disease Segment growing due to lessened screening recommendations Growing body of supporting literature ASCENDE-RT, first randomized trial, including ~400 high risk patients Recent JAMA publication on national database review of high risk patients, including RP and combination radiation treatments ASCENDE-RT Trial Outcomes Randomized study between combination therapy* and external radiation for high risk localized prostate cancer demonstrate benefits of combination therapy * Combination therapy includes brachytherapy and external beam radiation therapy 17

18 Growing Clinical Support of Cesium-131 Key on-going data collection Recurrent Brain tumor treatments at Barrow Neurological Institute Head & Neck treatment in process at Thomas Jefferson and Case Western Retroperitoneal Sarcoma treatment at University of Louisville Prostate Cancer treatment for high risk, quality of life and targeted treatments Cesium-131 in recent publications and conferences 2018 Cureus: Cs131 Isotope for Brain Brachytherapy (Han, UCSF) 2018 GU/ ASCO / ASTRO: Preliminary Focal Therapy Outcomes with Cs131 (Moran, CPCC) 2017 Red Journal: Long term (5 Years) QOL following Cs131 for Prostate (Glaser, UPMC) 2017 Red Journal: Large Brain Mets (Wernicke, Cornell) 2017 Red Journal: Cs131 for recurrent GYN disease (Feddock, UK) 2017 ASTRO: 9 Year Prostate Outcome Comparison I125 and Cs131 Prostate (Moran, CPCC) 2017 AUA NE: Prostate Focal Therapy; Long Term Outcomes; Large Prostates (Benoit, UPMC) 2016 / 2017 SNO: Preliminary Outcomes for Recurrent Brain Cancer (Youssef, BNI) Ongoing Collaborations with Growing List of Institutions in Expanding Number of Cancers NYSE American: ISR 18

19 Income Statement Highlights $/000 s 3 Months Ended: December 31, 2017 December 31, 2016 Product Sales, Net $1,536 $1,028 Cost of Product Sales 1,005 1,029 Gross Profit/(Loss) 531 (1) R&D Sales and Marketing General and Administrative Total Operating Expenses 1,999 1,478 Operating Loss (1,468) (1,479) Net Loss (1,466) (1,452) Basic & Diluted Loss Per Share $(0.03) $(0.03) Weighted Average Shares Outstanding 55,056 55,017 19

20 Balance Sheet Highlights $/000 s December 31, 2017 (Unaudited) June 30, 2017 Cash, Cash Equivalents & CD s $5,676 $8,971 Total Current Assets 7,417 10,291 Total Current Liabilities 931 1,106 Long Term Debt* Stockholders Equity 7,871 10,602 Total Liabilities and Stockholders Equity $9,378 $12,269 Working Capital $6,486 $9,185 Current Ratio 7.97x 9.30x * Long-term debt excludes amounts that are not related to cash borrowings or operational debt 20

21 Key Takeaways - Management Impact Since 2016 Reversed revenue trend 5 consecutive quarters of year-over-year revenue increases Invested in R&D and clinical data development Partnered with GTMedTech to progress innovative brain cancer treatment (GammaTile) through FDA and Reimbursement approval process - 510K and reimbursement determinations expected in summer Emerging studies in recurrent cancer treatments - Documented success in head and neck and gynecological cancers Growing number of Cesium131 for prostate cancer studies Provided direction and focus to the commercial team Increased share in established, $100M prostate market Invested in training programs, digital platforms and awareness programs Establishing base of surgical customers Targeting increasing opportunities in prostate brachytherapy Filling leadership void in market Multiple recent studies show brachytherapy advantage in higher risk disease Sustainably increased Gross Profit Manufacturing and process improvements and tight expense control Plant automation being phased in during Positioned to capitalize on new and improving markets Right Team, Right Isotope, Right Strategy 21

22 Thank You! For Further Information: Tom LaVoy Chairman and CEO (509)