Corporate Presentation

Transcription

1 Corporate Presentation Updated March 2013 (Y12 Results) Creating the Improved Standard in Healthcare Sterile Reprocessing

2 Company Overview Founded 1998 Designs and manufactures low temperature sterilizers for medical devices IPO 2001 TSX: TOS 73M outstanding shares

3 Historical Key Events Initial sterilization platform (limitations in offering as per cycle times and compatibility) Regulatory clearance in Canada and the United States Sold directly by TSO 3 with limited success (38 units/5 years) Renewed direction Second generation sterilization platform (superior offering with fast cycles, loading capacity and increased compatibility) Cleared in Canada and the European Union Filed for regulatory clearance in the United States Global partnership agreement with 3M Commercial launch in cleared markets Favorable customer response and feedback Still pursuing United States regulatory clearance Resetting Channel Partner Strategy 3

4 Organizational Structure President and CEO Customer Capture and Retention Innovation Management Supply Chain Quality Field Service Engineering Finance Procurement Customer Service Science HR Production IR / PR IT 4

5 Our Vision To Create the Improved Standard in Healthcare Sterile Reprocessing

6 Opportunity Medical Sterile Reprocessing of Reusable Instruments 6

7 Why low temperature sterilization?

8 Market Drivers 8

9 Growing Population 17% increase 7.9% increase More people = more surgeries Annals of Surgery August; 238(2):

10 Aging Population 53% increase 65 yrs + 45 to to yrs yrs+ is the fastest growing segment Annals of Surgery August; 238(2):

11 Impact of Age on Demand for Surgery 88% of ophthalmology surgeries Number of procedures (average) 70% of cardiothoracic surgeries 65% of urology surgeries 60% of general surgeries Age As we age, we require more OR time Annals of Surgery August; 238(2):

12 Advancement in Medical Techniques From Traditional Open Surgery To Minimally Invasive Surgery (MIS) 12

13 MIS Procedures Increasingly used and finding new applications everyday Orthopaedic Neurosurgery 30 million surgeries in US/year MIS Pulmonary medicine Gynaecology Urology Cardiology Gastrointestinal The National Institute of Health (NIH). 13

14 MIS Devices are Complex and Delicate $50k Colonoscope 14

15 MIS Devices require low temperature sterilization

16 Sterilization Areas in Hospitals 2 OR OR OR OR OR Operating Room Department (OR) OR OR OR OR Low Temperature Sterilization Gas 1 CS Central Sterilization (CS) Liquid OR Reprocessing and Sterile Storage Steam Sterilization 3 GI Gastrointestinal Department (GI) Liquid 16

17 Customers want THROUGHPUT TSO3 sterilizer conjoint study July Allegheny Marketing Group.

18 Low Temperature Sterile Reprocessing Solutions Ethylene Oxyde (EtO) Hydrogen Peroxide (H 2 O 2 ) Liquid Peracetic Acid (PAA) Hydrogen Peroxide + Ozone (H 2 O 2 /O 3 ) Efficacious Fast Specific use in OR Fast High material compatibility Limited in efficacy Liquid = Not terminal sterilization Efficacious Long cycles 16 to 30 hrsfor toxicity removal Good material compatibility Replacement offers reduced claims Good material compatibility Dangerous Carcinogenic, mutagenic, neurotoxic Load restrictive Only addresses OR segment High loading capacity Regulated pollutant Expensive 23,000 unitsin N/A Beingpulledout by FDA Lowestcost/instrument sterilized Throughput Throughput Throughput Throughput 18

19 Our Technology Enables Throughput By combining: Efficacy and compatibility High loading capacity Speed 19

20 Customer Feedback Improving our standard of care by terminally sterilizing devices previously reprocessed using a liquid chemical sterilization method Virtually eliminated the use of the liquid process, as flexible scopes are now terminally sterilized, along with additional devices Running up to eight loads a day Obtaining significantly shorter cycle times Already experiencing improved throughput Very happy with this acquisition 20

21 Global Market Overview / Low Temperature Sterilization* Capital equipment business Low temperature gas sterilizers in hospitals: ~30,000 installed worldwide Life span ~ 10 years Replacement business: 3,000 units/year Consummables business Estimated recurring revenues on low temperature gas sterilizers: $ 250M /year Worldwide Installed Base US Canada Europe ROW * Does not include Liquid Peracetic Acid (SS1 opportunity) ~12,000 installed in ORs in US Frost & Sullivan 2005 and TSO3 estimates

22 Revenues on Unit Sale over 10-year End-user Price $ 640k $480k $320k Margins $160k Year 22

23 Channel Partnership Signed agreement with 3M in December 2009 for the exclusive supply, distribution, license and service of the new STERIZONE 125L+ Sterilizer; Amended agreement in May 2011 to include new sterilizer intended for the OR Substerile Area in hospitals (STERIZONE 80L Sterilizer); On June 15, 2012 TSO 3 exercised right to terminate the agreement, as provided by the agreement; Entered into non-exclusive discussions seeking new agreement. 23

24 Activities Status 24

25 Key Strategic Activities Regulatory Focused on US 510(k) clearance for the STERIZONE 125L+ Sterilizer Commercial Bringing home the right partnership agreement Porfolio 3M Completing development and filing the STERIZONE 80L Sterilizer Settle dispute 25

26 Regulatory Status USA New simplified approach Filed January 28, 2013 Single cycle (one set of parameters/one set of monitoring) Increased claims Intact value proposition Shortened US regulatory process Total process time as per FDA guidelines = 270 days Passed acceptance review (administrative) Sterilizer, BI and CI files currently under substantive review 26

27 What is moving through the US Regulatory Process from TSO 3? Biological Indicator (BI) Process Indicator (CI) Test Pack Sterile Efficacy Validation Sterilizer 27

28 Current Negotiations 28

29 Preferred Partnership Global in scope Reputation and credibility at end-user level Experience in capital sales Direct experience in after-sales service Mutually beneficial Market reach for TSO 3 with commitments Bolt-on product/technology to existing offering for channel partner Reflects both US and ROW opportunities with platform and innovation capabilities 29

30 Next product: the STERIZONE 80L Sterilizer Approach is to secure 125L+ US clearance for subsequent international filing on the 80L. Targeting initial commercial event late 2013, early Market : OR Substerile Area Inventory limitations, flexibility in schedule, shorter turnaround time Potential placements (NA): > 7,500 units 50% of customers surveyed want the capability 30

31 Our Positioning 31

32 Our Strengths Rapid research and prototyping Small and flexible structure Tunable technology Sterilization testing expertise Microbiology Materials compatibility testing Positive regulatory track record Licensing-out 32

33 What to expect in the next 12 months? Obtain United States regulatory clearance for the STERIZONE 125L+ Sterilizer Subsequent completion of STERIZONE 80L Sterilizer development and filing for clearances (Health Canada, CE Mark and Food and Drug Administration) Secure the right channel partner agreement which reflects both US and ROW opportunities Support channel partner in launching the STERIZONE 125L+ Sterilizer in cleared markets Settle mediation with 3M 33

34 Financial Situation As of Dec. 31 Dec 2012 (000 s) Total Sales Revenue last 12 months 1,162,922 Cash, Cash Equivalents and Temporary Investments 12,807,190 Inventories 1,216,721 Total Assets 19,435,477 Equity 18,427,493 Monthly Burn Rate 735,737* Outstanding Shares 65,888,182 Outstanding Options and Warrants 7,509,145 *After adjustment to eliminate effect of nonrecurring elements. 34

35 Investment Highlights Large and growing market Superior technology meets customer needs pending FDA approval representing 40% of worldwide market In discussions with strong global channel partner Pursuing new applications and opportunities Financially sound 35

36 TSO 3 Inc., All rights reserved. No part of this publication may be reproduced or translated in any form or by any means, without the prior written permission of TSO 3 Inc. - OZO-TEST - STERIZONE are Reg. U.S. Pat. & Tm. Off. TSO 3 STERIZONE Sterilizer U.S. Pat. No. 7,128,872 / 7,582,257 / 7,588,720 / 7,608,217 TSO 3 STERIZONE Chemical Indicator U.S. Pat. No. 6,589,479 Licensed under U.S. Pat. No. 6,387,241 by Lynntech. Other patents pending