Precision Surgery with Cellvizio Technologies. April 2018

Transcription

1 Precision Surgery with Cellvizio Technologies April 2018

2 Disclaimer This document has been prepared by Mauna Kea Technologies (the "Company") and is provided for information purposes only. The information and opinions contained in this document speak only as of the date of this document and may be updated, supplemented, revised, verified or amended, and such information may be subject to significant changes. Mauna Kea Technologies is not under any obligation to update the information contained herein and any opinion expressed in this document is subject to change without prior notice. The information contained in this document has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to the accuracy, completeness or appropriateness of the information and opinions contained in this document. The Company, its subsidiary, its advisors and representatives accept no responsibility for and shall not be held liable for any loss or damage that may arise from the use of this document or the information or opinions contained herein. This document contains information on the Company s markets and competitive position, and more specifically, on the size of its markets. This information has been drawn from various sources or from the Company s own estimates. Investors should not base their investment decision on this information. This document contains certain forward-looking statements. These statements are not guarantees of the Company's future performance. These forwardlooking statements relate to the Company's future prospects, developments and marketing strategy and are based on analyses of earnings forecasts and estimates of amounts not yet determinable. Forward-looking statements are subject to a variety of risks and uncertainties as they relate to future events and are dependent on circumstances that may or may not materialize in the future. Mauna Kea Technologies draws your attention to the fact that as forward-looking statements cannot under any circumstance be construed as a guarantee of the Company's future performance and that the Company s actual financial position, results and cash flow, as well as the trends in the sector in which the Company operate may differ materially from those proposed or reflected in the forward-looking statements contained in this document. Furthermore, even if Mauna Kea Technologies financial position, results, cashflows and developments in the sector in which the Company operates were to conform to the forward-looking statements contained in this document, such results or developments cannot be construed as a reliable indication of the Company's future results or developments. The Company does not undertake any obligation to update or to confirm projections or estimates made by analysts or to make public any correction to any prospective information in order to reflect an event or circumstance that may occur after the date of this presentation. A description of those events that may have a material adverse effect on the business, financial position or results of Mauna Kea Technologies, or on its ability to meet its targets, appears in the "Risk Factors" section of Mauna Kea Technologies Registration Document registered with the Autorité des marches financiers on June 13, 2016 under number R Certain figures and numbers appearing in this document have been rounded. Consequently, the total amounts and percentages appearing in the tables are therefore not necessarily equal to the sum of the individually rounded figures, amounts or percentages. This document does not constitute or form part of an offer to sell or to purchase securities or the solicitation of an offer to purchase securities in the United States of America or in any other jurisdiction. The securities mentioned in this presentation have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act ) or under any other legislation of any jurisdiction in the United States of America and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act. 2

3 Introducing the technology that found a new organ March 27th,

4 Enabling a paradigm shift in tissue characterization 90% of biopsies taken are negative Many detection procedures are based on random biopsy sampling Even when taken at the right location, biopsies fail to provide key information on LIVE tissue Physical biopsies are a hindrance to more optimized one-stop-shop procedures AGA white paper on Barrett s Esophagus Why should practice change? December 2015 Patients are better served if biopsies can be better targeted. That s where in vivo microscopy comes in. 4

5 Cellvizio uniquely reveals key invisible information Biopsies X 1000 Histology ex vivo microscopic analysis Cellvizio Real time Compatible Video rate Functional imaging 1µm resolution Endoscopy X 30 Macroscopic analysis Probe-based Confocal Laser Endomicroscopy (pcle) provides real time optical sections of tissues 5

6 with real-time digital optical biopsies Cellvizio is a breakthrough imaging platform used routinely in gastroenterology today proven to help physicians secure their decisions, reduce indetermination and improve patient outcomes providing Immediate microscopic information Our mission: eliminate diagnostic and treatment uncertainties 6

7 Smooth user experience with Cellvizio 7

8 A versatile platform for multiple applications Cellvizio platform pcle (probe/catheter) Wide range of confocal miniprobes Single wavelength 2nd generation platform 488 nm / 660 nm / 780 nm ncle (needle) Dual wavelength platform 488 nm nm 488 nm nm LAB pcle (lap / robotics) Protected by over 150 issued patents 8

9 throughout the body GERD/Barrett s Esophagus Early gastric cancer Lung Cancer Peripheral Nodules Biliary strictures Prostatectomy EMR margins Inflammatory Bowel Disease Pancreatic cysts Partial Nephrectomy Bladder Cancer Upper Tract Urothelial Cancer 9

10 A unique regulatory foundation for endomicroscopy Esophagus Bronchi Alveoli Stomach Pancreas (k) Clearances CE mark Approved in China, Japan, Russia, Brazil, Turkey, Bile Duct Small Intestine Colon 10 Bladder / upper tract Rectum + Interventional Radiology + Laparoscopic (standard or robotic-assisted)

11 Clearance for the identification of cells and vessels Cellvizio 100 Series Systems with Confocal Miniprobes are confocal laser systems with fiber optic probes that are intended to allow imaging of the internal microstructure of tissues including, but not limited to, the identification of cells and vessels and their organization or architecture FDA clearance December 2017 From Imaging To Identification The above language applies to all previously cleared indications 11 Above images are not FDA cleared and are shown as illustrative examples

12 Cellvizio is at the core of key trends in medicine and surgery Our technologies are key to the future of imageguided and datadriven interventions Robotic Surgery Data-driven digital surgery Endoluminal therapies Minimally invasive interventions Real time microscopic imaging & characterization 12

13 Taking surgical precision to the ultimate level Locate Multimodal Interventional Platforms Integrate AI assisted tissue characterization Assess Identify Image Guided Surgery Real-time feature identification Raw Image Vascular Network Filter 13

14 Endomicroscopy + AI : a clear roadmap Diagnostic Accuracy of Cellvizio in Bladder 100 % 80 % 87% 79% 79% 77% 90% 82% 60 % 40 % 20 % 0 % Accuracy Sensitivity Specificity Machine Urologists (n=8) Work performed by the Stanford Bioinformatics program on a dataset of 81 subjects (458 Cellvizio videos, 171,000 images, 21 layer CNN) 14 Chang et al. EUS 2017 Szegedy C, et al. Proceedings of the IEEE Conference on Computer Vision and Pattern Recognition, 2015:1-9

15 Seamless integration into robotics systems Applications: - Tumor extension - Resection margins - Nerve sparing Cellvizio now FDA cleared and CE marked for use in conjunction with surgical robotics systems. User experience is easy and seamless. 15 Lopez et al, Intraoperative Optical Biopsy during Robotic Assisted Radical Prostatectomy Using Confocal Endomicroscopy. Journal of Urology, April 2016 * source Intuitive Surgical investor presentation

16 Cellvizio is key for interventional pulmonology applications Unique through-the-scope access to the lungs and alveoli for real time tissue characterisation Immediate assessment of adequate positioning with real time microscopic visualisation through scope or needle Compatible with Electro- Magnetic Navigation systems and novel flexible robotics systems Availability of needle-based Confocal Laser Endomicroscopy for pulmonary applications 0.8 mm Needle probe Target missed On target 16

17 A unique body of clinical evidence 1,000+ references on PubMed for endomicroscopy across multiple applications Number of publications See appendix for references

18 World leaders in endomicroscopy innovation and products Optoelectronics Image Processing Image Processing Machine Learning 220+ issued patents in optics, optronics, image processing on Probe-based Confocal Laser Endomicroscopy (CLE) 18

19 Endomicroscopy is now a booming field Carl Zeiss announced its Convivo Confocal Laser Endomicroscopy system for neurosurgical applications at the latest Neurosurgery shows Olympus announced the launch of its Endocytoscopy system, integrated in vivo microscopy in a high-end endoscope. Caliber ID obtained strong reimbursement for skin optical biopsy with Confocal Microscopy. Cellvizio and its future generations are unparalleled products for in vivo optical biopsy applications Mauna Kea Technologies

20 Cellvizio is reimbursed in the US for upper GI Very positive payment trends in the past 2 years CPT Code Description Setting 2016 Rate 2017 Rate 2017 Change ($) 2017 Change (%) 2018 Rate Upper gastrointestinal endoscopy including esophagus, stomach, and either the duodenum and/or jejunum as appropriate; with optical endomicroscopy Hospital $1, $2, $1, % $ ASC $ $1, $ % $ CMS Covered Services Endomicroscopy in upper GI endoscopy procedures, including GERD, Barrett s Esophagus and pancreatic lesions! Catalyst for Cellvizio adoption and utilization Effective January 1, 2017! Enhances economical model for Cellvizio customers! Positive tailwind for commercial coverage 20

21 Core commercial focus: A significant Cellvizio U.S. gastroenterology market opportunity U.S. Target Hospitals U.S. Procedure volume Key Market Drivers U.S. market opportunity 3,000+* with large GI volume 3.6 million* annual upper GI procedures Society recommendations and increased CMS reimbursement rates $2.8 billion* annual recurring revenue * Millenium research group : Custom Urology report 2014 and 2012; 2013 U.S. laparoscopic proceduresmedtech Insight : U.S. Procedure Volume 2010iData : 2015 EUS Market; U.S. Procedure 21 volume 2012; 2015 ERCP report, M&A acquisition figures : Covidien; Medtronic Advamed presentations : 2013 Advamed presentation; E&Y; Presentations citing other sources

22 Enhanced detection of Barrett s Esophagus Utility of Probe-based Confocal Laser Endomicroscopy in screening work-up for Barrett s esophagus and detection of intestinal metaplasia % 90% Incidence of BE Sensitivity NPV Yield Tissue Sampling 81 pcle (108 Consecutive patients; 2 months; Included Learning Curve) Joseph J. Burnette, MD, Alexandra M Roch, MD, V. John Bagnato, MD Coliseum Northside Hospital, Macon, GA, Indiana University, Bloomington, IN DONT BIOPCE trial 1 (2011) Meta analysis of detection of neoplasia in BE with NBI vs CLE 2 1. Sharma P. et al. Real-time Increased Detection of Neoplastic Tissue in Barrett s Esophagus with probe- based Confocal Laser Endomicroscopy: Final Results of a Multi-center Prospective International Randomized Controlled Trial. GIE Xiong Y-Q, et al. Comparison of narrow-band imaging and confocal laser endomi- croscopy for the detection of neoplasia in Barrett s esophagus: A meta-analysis. Clin Res Hepatol Gastroenterol (2017), 22

23 In vivo microscopic molecular imaging roadmap Fluorescence-guided surgery (open, laparoscopic, robotic) is now the norm with wide-field imaging systems from a dozen players (Stryker+Novadaq, Olympus, Intuitive Surgical, Bracco, Fluoptics, SurgVision ) Mauna Kea is the unique provider of in vivo molecular microscopic dualband imaging* Molecular markers + wide-field fluorescence + in vivo microscopy = precision surgery 23 * Not cleared by FDA for human use

24 A growing installed base worldwide Clinical 160+ units Preclinical 30+ units Clinical 130+ units Preclinical 70+ units Clinical 100+ units Preclinical 60+ units Approx. 600 systems installed worldwide 24

25 Global Partnership Strategy Urology December 2015: Global exclusive partner for urologic endomicroscopy applications with a private label Cellvizio product Global urology surgical instruments market expected to reach $11.48 billion by 2021 (8.2% yoy growth) 2.5 million endo-urological procedures / yr U.S./EU Future potential partnerships Gastroenterology Number of potential partners with 3.6 million* US upper GI procedures Interventional Radiology Ongoing clinical trials 650,000 US interventions /yr Neurosurgery Partnership research ongoing regarding US: 80,000 new cases of primary brains tumours (US Brain tumour assoc.) Pulmonary endoscopy Robotics Demonstrated value of Cellvizio + Da Vinci 2,500+ U.S. installed base 100,000 US prostatectomies /yr Digestive Surgery 25 * Millenium research group : Custom Urology report 2014 and 2012; 2013 U.S. laparoscopic procedures Medtech Insight : U.S. Procedure Volume 2010iData : 2015 EUS Market; U.S. Procedure volume 2012; 2015 ERCP report, M&A acquisition figures : Covidien; Medtronic Advamed presentations : 2013 Advamed presentation; E&Y; Presentations citing other sources

26 Cellvizio inside : key for any interventional platform GI Endoscopy Interventional Radiology Anti-Reflux Surgery Neurosurgery Pulmonology MIS Robotic Surgery Endourology 26 R&D Clinical Validation Early Commercial Efforts Prime Time

27 Corporate information and performance

28 Despite a significant decrease in sales, 2017 Ebitda is stable thanks to a strict control of operating expenses 1 Compared to previous year Stable gross 68% Operating expenses (excluding COGS) significantly reduced thanks to a tight monitoring: R&D expenses slightly below last year despite significant investments in Gen3 Marketing and sales expenses decreased mainly driven by the US Sales force where it has been difficult to retain people G&A expenses decreased by c. 0,5m due mainly deriving from some non recurring costs in 2016 such as Ryan Kay ( 0,2m) and 2016 legal fees for IPF ( 0,1m). Other fees have also been reduced. The fact that Ebitda is very close from last year despite the strong decrease in revenue illustrates the tight expenses monitoring of the company 28

29 Balance sheet 1 ASSETS (in k) 31/12/ /12/2017 Intangible assets Property, plant, and equipment Non-current financial assets Total of non-current assets Inventories & Work in progress Trade receivables Other current assets Current financial assets Cash and cash equivalents Total of current asets TOTAL OF ASSETS PPE increased mainly due to a transfer from inventory to tangible assets and to the roll-out of the PPU model Other current assets include R&D tax credit for 2016 and In February 2018, the company cashed in 0,8m corresponding to 2016 R&D Tax Credit L IABIL IT IES (in k) 31/12/ /12/2017 Equity Long-term loans and borrowings Non-current provisions Total of non-current liabilities Short-term loans and borrowings Trade payables Other current liabilities Total of current liabilities TOTAL OF EQUITY AND LIABIL IT IES Increase in Long term debt fully derives from IPF debt for 4m. Decrease in short term loan corresponds to Coface repayment of the last instalment. Other current liabilities mainly comprise social debt 29

30 Cash Flow statement 1 Cash!Flow!Statement k Ebitda!(*) (8!635) (8!607) Δ in inventories 232 (255) Δ in trade receivables (25) Δ in trade payables 673 (1 176) Δ in other receivables and payables (1 484) 320 Δ in working capital 799 (1 136) Operating!cash!flows (7!836) (9!742) Capex (incl. Loans and grants) (573) (735) Free!cash!Flows (8!409) (10!477) Capital increase Δ in financial debt Net financial interest paid 11 (276) Other Cash flow from financing activies Net FX differences 15 (35) Net!cash!flows (1!567) 8!401 Cash"BoP 10"620 9"053 Cash"EoP 9"053 17"453 Apart from EBITDA main flows impacting the change in cash derive from: A negative change in working capital mainly resulting from: - An increase in inventories due to the sizing of the purchases adjusted to reforecast done in September. Since the actual sales level has been significantly lower, inventories could not be adjusted as quickly. - The unfavorable change in trade payables corresponds to the offset of previous year non recurring change and the impact of the very significant slow down of purchases during Q4 to adapt inventories as much as possible. - Changes in other payables and other receivables is relatively stable while it was impacted in 2016 by the absence of R&D Tax credit cash-in Capex mainly comprise: - Systems placed in pay-per-use in the US for 232k - Other capex include among others the new web sites, PLM software development and general renovation works Cash flow from financing comprise: - Paceo 1, 2 and 3 capital raise for respectively 2,7m, 7,8m and 4,9m - IPF debt drawdown net of related expenses and Coface repayment (*) difference with Ebitda in P&L due to non cash provision for warranty 30

31 A very strong liquidity position Liquidity position 9,1 9,6 m 7,0 13,1 Dec 16 June 17 Sept 17 Nov 17 Dec 17 Jan-18 Equity line #1 : 7,7m 17.6 Equity line #2 : 4,9m (not yet finished) 1,2m 4,18 (avg stock 4,48) 20.6 Equity line #2 : 1,05m shares remaining Implementation of two equity lines over Q4 which were successfully rolled out thanks to the strong rally of the stock price and high volumes (1,8% volume of total shares exchanged per day / 3,9% over the last quarter) Our strong cash position affords us the means to create significant value for the company in the next 24 months with important expected milestones 31

32 2018 1st Quarter Sales Turnover (M ) By activity Variation T versus T % Clinical -39% % Lab and Pre clinical -33% By product Variation T versus T T T U.S. commercial restart: new team places five Cellvizio units under pay-per-use program New partnership in China drives 20% Asia-Pacific sales growth Overall sales decreased 35% driven mainly by reduced system sales due to transition to pay-per-use model in U.S 21 % 43 % 36 % Cellvizio systems -46% Probes -17% Services -41%