Itamar Medical December 2017. Investors Presentation.
Disclaimer Itamar Medical Ltd. (the "Company") is furnishing this presentation and any information given during this presentation, solely for the consideration of eligible investors who have the knowledge and experience in financial and business matters and the capability to conduct their own due diligence investigation in connection with the investment outlined herein. Prospective investors are urged to conduct an independent evaluation of the Company. This presentation does not constitute an offer of securities of the Company, or a solicitation to acquire or sell the Company s securities or to participate in any investment in the Company. The statements in this presentation should not be regarded as a basis for an investment decision of any kind, or as recommendation or opinion, or a substitute for investor discretion Statements in this presentation that are not historical facts might be considered as forward-looking statements based on current expectations of future events, in accordance with the Israeli Securities law, 5728-1968 (the Securities Law ). These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements as a result of different factors including, but not limited to, the market demands for the Company's products; changes in general economic and business conditions; inability to maintain market acceptance of the Company's products; inability to timely develop and introduce new technologies and products; rapid changes in the market for the Company's products; loss of market share and pressure on prices resulting from competition; introduction of competing products by other companies; inability to manage growth and expansion; inability to attract and retain qualified personnel; changes in regulatory requirement, changes in scope of reimbursement, and inability to protect the Company's proprietary technology. All forward-looking statements included in this presentation are made only as of the date of this presentation. We assume no obligation to update any written or oral forward-looking statement made by us or on our behalf as a result of new information, future events, regulatory changes, delay or withholding of regulatory approvals, inability to obtain or maintain medical insurance reimbursement fro Company's products, negative results of clinical trials or other factors. The United States and Israeli securities laws prohibit any person who has material non-public information about a company ("Inside Information"), from purchasing or selling securities of such company, or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. Statements in this presentation and in any information given during this presentation might be considered as Inside Information, in accordance with the Securities Law. Therefore, any person aware of this presentation or of any information given during this presentation, may neither use, nor cause any third party to use, any Inside Information or any other information provided in connection with the presentation, in contravention of the Securities Law or any such rules and regulations thereunder. The Company, and its respective affiliates, employees and representatives expressly disclaim any and all liability relating to or resulting from the use of this presentation or any information given during this presentation or such other information by a prospective investor or any of its affiliates or representatives.
Itamar Medical Mission World Leader in Sleep Apnea Management Solutions for the Cardiology Market http://www.itamar-medical.com/ www.cardiosleepsolutions.com
Sleep Apnea - a Significant Comorbidity to Most Cardiac Disease OSA Comorbidity US patients M Drug resistant hypertension 83% 7.2 Congestive heart failure Diabetes typ e 2 76% 72% 5.1 29.0 Stroke Pacemakers Arrhythmias Coronary heart disease Atrial fibrillation Depression 63% 59% 58% 57% 49% 45% 6.4 3.5 14.4 16.2 3.5 40.0 4 Source: Seet & Chung, Anestsiology Clin 2010
The Market The Sleep Market The Cardiology Market 25% of adults worldwide suffer from sleep apnea* About 80% in the US alone are undiagnosed** The diagnostic and treatment market is valued at $ 3.5 billion*** * Source: American Academy of Sleep Medicine, Peppard, et al., American Journal of Epidemiology (2013) ** Seet & Chung, Anestsiology Clin 2010 ** *Fisher & Paykel, FY2016 Half Year results Presentation (Dx & Tx) Source: Heart disease and stroke statistics 2015 update: a report from the American Heart Association 5 85 million cardiology patients in the United States 50% of patients suffer from sleep apnea; most of them (80% or more) are not diagnosed
Introduction into the market of sleep disorders diagnosis in cardiology Treating Sleep Apnea Reduces Risk! 2x 2x 5x 57% Increased risk of stroke Risk of death from sudden cardiac arrest Risk of death from cardiovascular disease Increased risk of recurrence of atrial fibrillation following ablation Sources: 1) Redline et al, The Sleep Heart Health Study. Am J Res and Crit Care Med 2010; 2) Gami et al, J Am Coll Cardiol 2013: 3) Young et al, J Sleep 2008; 4) Li et al, Europace 2014
The Reason for the Market Dysfunction Cardiologists realize Sleep Apnea impact their business Sleep docs want to push to PSG (sleep testing at hospital) Cardiologists don t want to refer to Sleep Physician Cardiologists 33,000 cardiologists 84M patients Limited awareness of impact Worried about referral to Sleep Its not my problem mentality Sleep Specialists About 5,000 sleep specialists Financially motivated to use sleep labs 3-4 months waiting period Poor communication
WatchPAT - The Right Way To Diagnose Sleep Disorders A medical grade prescription device with easy of use design of a consumer smart watch that allows home use with no need for professional assistance The traditional way - a sleep lab
The American Academy of Sleep Medicine officially adopts Itamar Medical s technology for the diagnosis of sleep apnea The leading medical organization in the United States for the treatment of sleep disorders officially recognizes the PAT technology in its guidelines for clinical practice
2017 - A Turning Point in the Cardiology Market Science and Guidelines Num. of Publications on Sleep in Major Cardiology Journals
11 HRS Expert Consensus Statement 2017
2017 - A turning point in the cardiology market Science and Guidelines
2017 - A turning point in the cardiology market Science and Guidelines
2017 - A turning point in the cardiology market Science and Guidelines
Strategy Implementation - a unique comprehensive solution that enables diagnosis and treatment Total Sleep Solution Screening Diagnosing Treatment Reporting Itamar provides cardiologists with a comprehensive sleep solution, combining diagnostics and therapy
Eco System of Solutions Screening Diagnosing Treatment Reporting Systematic Screening with Questionnaire Diagnosis with WatchPAT CPAP treatment Patient Compliance Reporting Patient awareness kits Waiting room video Waiting room posters Informative brochure IDTF WatchPAT Direct Interpretation through CouldPAT collaboration with Sleep Physician Philips CPAP distribution Airway Mng MAD DMEs Networks Waiting list WatchPAT Test result CPAP Patient CPAP compliance rate Sleep Apnea prevalence rate CloudPAT 3.0 Dashboard
2017 Market Maturity Turning Point A Strategic Distribution Agreement A strategic distribution agreement with Philips for CPAP products for the treatment of sleep apnea disorders in cardiology patients Itamar has a successful distribution agreement with Philips in Japan The agreement with Philips in the US adds to the initial agreement with Devilbiss and significantly increases the potential market share Agreement with Airway Management Oral device
Cardiology Centered Marketing and Sales
2017 Maturity Turning Point Expansion of insurance indemnity AIM, which advises insurance companies, decides to include Itamar's solution in most private insurance policies
An additional business model for the sales of test kits Selling kits Installation of multiple devices according to the number of patients Fast access to customers with no need for a preliminary investment The kit s price for customers includes a relative component of the device List price per kit $ 75 A new product - WatchPAT Direct that includes a logistic solution with a list price of $ 180 Sales of equipment and consumables Initial sale requires a large investment on the client s part A long sales process due to the hospital s financial prioritization and the large initial investment Low volume purchase of devices and diminishment of the program
Maximizing value at market maturity Making Total Sleep Solution" available to cardiologists Changing the business model from the sale of capital equipment to the sale of test kits Cardiology centered marketing and sales Adoption of PAT technology by the Organization of Sleep Specialists
Consistent Sales growth
Consistent Growth in Revenue Income in the US and Canada Total income 6 5 $ 5.1M $5.3M 4 3 $4.3M $3.6M $4.0M 2 $2.9M 1 0 Q1 2107 Q2 2017 Q3 2017
A continuing decline in operating loss 2.5 Cash Based Operating Loss Non-IFRS 2 $2.2M 1.5 $1.7M $1.5M $1.5M $1.4M 1 $1.0M 0.5 $0.7M 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Summary A global leader with a unique technology - PAT Comprehensive diagnosis of sleep apnea using WatchPAT and a comprehensive solution for cardiology patients Broad Regulatory Approvals(FDA, CE, MHLW, broad IP basis and insurance coverage) Strong strategic relationships: Medtronic (co-marketing and a shareholder), Philips (both way distribution arrangments) and Drive DeVilbiss A steady growth in WatchPAT sales of over 20%~ annually An experienced management team and board members with proven success
Thank You!
WatchPAT Direct Program A new business model A customizable workflow to enlarge the home sleep test coverage We reach the patients, confirm their availability and schedule the home sleep test with the patient A purified kit is prepared for each patient, with new sensor Kits are shipped to the patients according to the scheduled test day Patients receive call from Patient Support Center on the test day for instructions of use. Also patients can call Patient Support Center 24/7 for any kind of help with the test Patients have the test at comfort of their own bed. The next day, patients ship the device back with prepaid shipping labels. Once the device is back, the study is uploaded to CloudPAT and send it to referring physician