GenMark Diagnostics TRANSFORMING MULTIPLEX MOLECULAR TESTING. Investor Overview November 2018

Transcription

1 GenMark Diagnostics TRANSFORMING MULTIPLEX MOLECULAR TESTING Investor Overview November

2 Forward-Looking Statements This presentation contains forward-looking statements about GenMark Diagnostics, Inc. These statements involve known and unknown risks that relate to the Company s future events or future financial performance and the actual results could differ materially from those discussed in this presentation. Factors that may cause the Company's actual results to differ materially from those discussed in the presentation, include: failure of the Company s products to gain market acceptance domestically or internationally; failure to scale our manufacturing operations to sufficiently support our anticipated future growth; the refusal of third-party payors to reimburse the Company s customers for use of diagnostic systems and tests; the loss of the Company s largest customer; the Company s history of net losses; increases in the Company s projected expenditures on sales and marketing, research and development and administrative activities; less than anticipated growth in the market for diagnostic testing generally and for the tests the Company is developing or may develop in the future; inability to obtain regulatory clearance or approval for any of the Company s products; changes in the regulatory environment which may adversely impact the commercialization of the Company s new products and result in significant additional capital expenditures; failure to enter into or maintain successful strategic alliances, which may delay the development or commercialization of the Company s products or may result in significant additional expenditures; failure to obtain sufficient funding for the continued development and commercialization of the Company s products; inability to attract or retain skilled personnel for the Company s product development and commercialization efforts; and inability to protect the Company s intellectual property and operate the Company s business without infringing upon the intellectual rights of others, which could result in litigation and significant expenditures. Additional risks and uncertainties relating to the Company and its business can be found in the "Risk Factors" section of GenMark's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and other filings with the United States Securities and Exchange Commission. The forward-looking statements contained in this presentation represent the Company s estimates and assumptions only as of the date of this presentation and the Company undertakes no duty or obligation to update or revise publicly any forward-looking statements contained in this presentation as a result of new information, future events or changes in the Company s expectations. 2

3 Unique Opportunity for Growth and Value Creation Rapid, accurate, and actionable multiplex molecular diagnostics are needed for effective management of high-risk patients Complexity of current molecular diagnostic methods limits access to critical patient results GenMark s proprietary technologies are driving adoption of multiplex molecular sample-to-answer panels across care settings eplex is a uniquely differentiated solution in a large and growing market 3

4 Adoption Propelled by Favorable Macro Drivers Focus on value based care by enhancing patient outcomes, improving quality and reducing total cost-of-care CLINICAL Actionable information for high risk & acute care patients with > 65% faster time to result 1,2,5 10% increase in relative survival rate in ICU patients 3 18%-30% more positive test results reported 1,4,5 QUALITY Decrease in antibiotic duration drives key quality metrics such as antimicrobial stewardship 1,3,4 Supporting infection control by informing patient isolation strategies 2,4 and therapy guideline compliance 5 COST-OF-CARE > $8,000 cost savings / patient in ICU in a major IDN 3 Shorter length-ofstay improves bed management relative to conventional testing 5 Reduced hospital and antibiotic costs result in net cost savings Rogers BB, Arch Pathol Lab Med May;139(5): Xu M, Am J Clin Pathol. 2013;139(1): Martinez RM, Clinical Virology Symposium, May 19-21, 2016, Daytona Beach, FL. Geisinger Health System, Danville, PA. 4. Subramony A, J Pediatr. 2016; 173: Brendish NJ, Lancet Respir Med. 2017; 5(5):

5 Complexity Limits Access to Conventional Molecular Diagnostics Specialized infrastructure and labor confines testing to centralized labs or send out Conventional Molecular Testing (~6-24h+) Sample Transport Sample Preparation Extraction Formulation Amplification Detection Report Results 5

6 Significant Global Market Opportunity for Multiplex Testing $2.5B+ global market for multiplex tests with 10 or more targets GI RP Sepsis CNS HCV Pipeline $800M $500M $475M $140M $100M > $500M 6 Management estimates subject to change.

7 eplex Dramatically Expands Market Opportunity True Sample-to-Answer solution opens opportunity in new care settings and geographic markets U.S. FOCUS ONLY ~1,000 Post-PCR Labs GLOBAL EXPANSION >12,000 Care Settings 7 Management estimates subject to change.

8 GenMark s Winning Strategy Leverage Proprietary Platform Technologies to establish a Strong Competitive Position Develop a robust and Differentiated Menu Pipeline to Address Critical Unmet Needs for laboratories and patients Scale Operations and Commercial Organizations for rapid growth Led by an Experienced Leadership Team with a track record of success 8

9 Proprietary and Enabling Platform Technologies Provides a sustainable competitive advantage and differentiation esensor Detection Low background signal & detection threshold enable high sensitivity, specificity Electrochemical detection delivers true multiplexing Proven technology with over 2 million tests performed Electrowetting Technology Precision fluid management using digital microfluidics Enables efficient, sample-to-answer performance and rapid time to result Innovative Cartridge Design Universally programmable cartridge with on-board reagents Enables industry leading ease-of-use 9

10 eplex: The True Sample-to-Answer Solution Order-to-Report efficiency to improve patient care outcomes and reduce hospital costs Designed for the Patient Comprehensive pathogen coverage ensures rapid, accurate, clinically actionable results Positive patient ID capabilities reduce avoidable medical error and ensure patient safety Optimized for the Lab Optimized workflow from test order through sample processing and reporting results Minimal hands-on-time and high throughput provide maximum flexibility for managing peak testing demand Advanced LIS and system integration capabilities provide significant productivity improvements 10

11 Simplifying and Streamlining Access to Multiplex Molecular Testing Proprietary technologies enabled automated onboard extraction, amplification, detection, and reporting Conventional Molecular Testing (~6-24h+) Sample Transport Sample Preparation Extraction Formulation Amplification Detection Report Results eplex: The True Sample-to-Answer Solution (< 2h) Sample Transport Load Sample Insert Cartridge Report Results 11

12 Flexibility to Scale with Growth in Volumes and Menu Expansion Configuration NP 1 Tower 2 Tower 3 Tower 4 Tower Bays Nominal Shift Throughput 12 samples 24 samples 48 samples 72 samples 96 samples Target Market Segments <150 bed hospitals bed hospitals bed hospitals > 500 bed hospitals Decentralized testing Decentralized testing Central lab in medium IDNs Central lab in large IDNs Reference labs 12

13 Strong and Differentiated Competitive Positioning eplex s proprietary technology and customer-centered design drive differentiation Complete Workflow Integration Limited Low Multiplexing Capability High 13

14 High Leverage Revenue Model Growing installed base of eplex analyzers, recurring test cartridge revenue and menu expansion drive rapid growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 14

15 Robust and Differentiated Product Pipeline viral targets 2 bacterial targets CE-IVD FDA Clearance 20 targets 4 resistance markers Pan-GN Pan-Candida 21 targets 6 resistance markers Pan-GP Pan-Candida 10 Candida targets 6 other fungal targets CE-IVD CE-IVD CE-IVD FDA Clearance* FDA Clearance* FDA Clearance* ** 25+ clinically relevant bacterial, viral and parasitic targets In Development 15 Management estimates subject to change. * Product in development. Current expectations for timing of CE-IVD and/or FDA clearance are subject to change based on unforeseen delays due to risks and/or uncertainties. ** Not available for sale. Specifications subject to change.

16 The Respiratory Infection Challenge Clinical presentation of respiratory pathogens is very similar, complicating diagnosis and therapy selection ~1 billion colds in the United States per year 1 Influenza-like illness is caused by many distinct viruses and bacteria with differing therapy regimens Disease severity is elevated in high-risk patients with co-morbidities 2 Up to 50% of antibiotics are used inappropriately The Common Cold Fact Sheet. National Institute of Allergy and Infectious Diseases, National Institutes of Health. December Flu Symptoms & Complications. Centers for Disease Control and Prevention. (Accessed May, 2017) 3. Center for Disease Control. Facts about Antibiotic Resistance. (Accessed May, 2017)

17 eplex Respiratory Pathogen (RP) Panel Comprehensive syndromic diagnostic for upper respiratory infections Panel detects >20 common respiratory pathogens 1 Achieved CE Mark in Q and FDA Clearance in Q Validated clinical performance U.S. clinical study showed 95.2% agreement with comparator method in 3,235 samples 2 Rapid, accurate, actionable results inform patient care Order-to-report workflow integration Fewest pre-analytical steps and shortest hands-on time Standard-of-care for high-risk patients including elderly, pediatrics and immunocompromised patients CE-IVD RP Panel also detects Human Bocavirus, Middle East Respiratory Syndrome Coronavirus, Bordetella pertussis, Legionella pneumophila 2. eplex RP package insert. After discordant resolution. May 2017

18 Favorable Evidence Generating Support for eplex RP Growing body of peer reviewed journal articles demonstrate performance and utility Comparison of eplex respiratory pathogen panel with laboratorydeveloped real-time PCR assays for detection of respiratory pathogens Roel H. T. Nijhuis, Daniel Guerendiain, Eric C. J. Claas & Kate Templeton Accepted JCM manuscript posted online 12 April 2017 Multicenter Evaluation of the eplex Respiratory Pathogen Panel for the Detection of Viral and Bacterial Respiratory Tract Pathogens in Nasopharyngeal Swabs N. Esther Babady, Matthew R. England, Kristen L. Jurcic Smith, Taojun Hea, Dona Saumya Wijetunge, Yi-Wei Tanga, Robin R. Chamberland, Marilyn Menegus, Ella M. Swierkosz, Robert C. Jerris & Wallace Greene Accepted JCM manuscript posted online 6 December 2017 Clinical implications of rapid eplex Respiratory Pathogen Panel testing compared to laboratory-developed real-time PCR Anneloes L. van Rijn & Roel H. T. Nijhuis & Vincent Bekker & Geert H. Groeneveld & Els Wessels & Mariet C. W. Feltkamp & Eric C. J. Claas Accepted Eur Jrnl CMID manuscript: 24 November 2017 Clinical Significance of Upper Airway Virus Detection in Critically Ill Hematology Patients Legoff J, Zucman N, Lemiale V, Mokart D, Pène F, Lambert J, Kouatchet A, Demoule A, Vincent F, Nyunga M, Bruneel F, Contejean A, Mercier-Delarue S, Rabbat A, Lebert C, Perez P, Meert AP, Benoit D, Schwebel C, Jourdain M, Darmon M, Resche-Rigon M, Azoulay E. Accepted Resp & Critical Care Med manuscript: 19 September peer-reviewed publications in print 3+ peer-reviewed manuscripts in preparation 25+ posters and presentations at major conferences since clinical utility & health economic study planned for 2019 Multicenter prospective study of 747 patients with hematologic malignancies Respiratory virus detection was associated with higher ICU mortality 18

19 The Sepsis Challenge Sepsis is common, costly, and deadly and time is critical in ensuring positive outcomes Sepsis strikes ~30 million people worldwide each year 1 Resulting in a death every 3-4 seconds 2 Sepsis is one of the most expensive conditions treated in hospitals 3 For every 1 hour delay in effective treatment, mortality increases by up to ~8% 4 and 20-30% of patients receive ineffective initial antibiotic therapy Sepsis Fact Sheet, World Sepsis Day: 2. Institut Pasteur, Sepsis/Septicemia: 3. The UK Sepsis Trust Fact Sources; 4. Kumar, et. al., (2006) Crit Care Med, Vol. 34, No IDSA: Better Tests Better Care, The Promise of Next Generation Diagnostics

20 Gram Positive, Gram Negative, and Fungal Blood Culture Panels Unique panels designed to deliver high clinical value Three panels driven by gold-standard Gram stain result Achieved CE Mark in Q Submitted to FDA in Q2/Q distinct reportable ID and resistance targets Broad inclusivity designed to identify ~95% of positive blood bottles Pan targets improve co-detection and control for rare Gram stain misses Rapid time-to-result and resistance markers help support antimicrobial stewardship initiatives Inclusion of contamination rule out targets helps inform clinical, laboratory and pharmacy decision making 20

21 Addressing Challenges of Conventional Blood Culture The only test for rapid, routine BCID in a critical disease state Blood Draw Bottle Culture Gram Stain Sub-Culturing Conventional Blood Culture (~48-72h+) Organism ID & Antibiotic Susceptibility Testing (ID/AST) t=0 8h 16h 24h 32h 40h 48h 56h 64h 72-96h Blood Draw Bottle Culture ID/ AMR t=0 8h 10h eplex BCID* provides organism ID and detection of resistance genes within ~2 hours of bottle positivity 21 ID / AMR = Organism ID & Antimicrobial Resistance Testing * Product in development. Not available for sale in the U.S. Specifications subject to change.

22 Favorable Evidence Generating Support for eplex BCID Growing body of peer reviewed journal articles & conference presentations demonstrate performance and utility Evaluation of the eplex Blood Culture Identification Panels for Detection of Pathogens in Bloodstream Infections Huang T, Melnik E, Bogaerts P, Evrard S, Glupczynski Y Submitted JCM manuscript September 2018 in review Clinical Performance of the Novel GenMark eplex Blood Culture ID Gram- Positive Assay Carroll K, Wolk D, Zhang S eplex BCID-GP JCM manuscript in process, eplex BCID-GN and BCID-FP manuscripts initiated Profile of GenMark s eplex blood culture identification fungal pathogen panel Danièle Maubon, Céline Dard, Cécile Garnaud & Muriel Cornet Accepted Expert Review manuscript published online: 28 Dec 2017 Preliminary Blood Culture Rapid Identification and Resistance Targets Determination using GenMark Dx eplex Blood Culture Identification System improves Sepsis Management, aids Early Antimicrobial Stewardship (AMS) Interventions and Results in Significant Savings St. James Hospital, Dublin, Healthcare Infection Society (HIS) Meeting Poster, November 2018 in Liverpool 4 peer-reviewed manuscripts in preparation, 1 review published 20+ posters and presentations at major conferences since US Early Access studies in process 4+ clinical utility & health economic studies planned for 2019 Decreased TTR from 30 hrs to 2 hrs Change to more appropriate therapy in 18% of patients Cost savings on GP contamination rule-out ~ 6,000 per patient 22

23 Initial US eplex BCID Studies Highlight Unique Benefits Recent BCID presentations at Association for Molecular Pathology Annual Meeting (October 2018) Clinical study data summary presented at Association for Molecular Pathology Annual Meeting (October 2018) Strong sensitivity and specificity across all targets on each of the three panels Multiple novel targets included on eplex panels providing valuable differentiation from other multiplex BCID products Strong sensitivity across several contamination rule out targets to assist in antimicrobial stewardship and de-escalation of unnecessary therapy eplex BCID comparison versus a leading market competitor at major U.S. hospital system presented at Association for Molecular Pathology Annual Meeting (October 2018) Showed eplex BCID panels consistently provided more comprehensive information on more than 30% of the samples driven by unique panel design Demonstrated potential clinical utility of having Candida auris on the fungal panel by identifying 3 positive samples 23

24 Scaling Business to Support Rapid Growth Global Commercial Organization Growing U.S. direct salesforce to mid-30s by end of 2018 Expanding distributor network in Europe and other regions of the world eplex Manufacturing Capacity Fully dedicated eplex manufacturing facility Multiple manufacturing lines with space for additional lines to support future growth Key supply chain and automation investments to drive yield and margin accretion 24

25 Strong eplex Adoption and Commercial Progress Instrument placements in line with expectations 45 analyzers placed in Q3 bringing installed base to 312 Performance, workflow, ease-of-use leading to wins in major, strategic accounts Cumulative eplex Analyzers Placed Strong commercial execution with a strong funnel of opportunities Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 25

26 Historical Financial Performance Revenue (USD millions) $68-$72M** $30.6M $39.4M $49.3M $52.5M $51.4M* GROSS MARGIN % 61% 60% 38% 28-30% range* * YTD 3Q 18 reported revenue ** Reflects guidance provided on October 29,

27 2018 Guidance eplex Placements: net new analyzers Revenues: $68 $72 million Annuity of $100,000 $120,000 per eplex placement Gross Margin: 28-30% range Operating Expenses: mid $60 million range 27

28 Key Investment Highlights Large unmet clinical need driving adoption of multiplex molecular diagnostic testing GenMark s proprietary technologies dramatically expand addressable market eplex and robust menu pipeline create a strong, differentiated competitive position Business model delivers value to both customers and shareholders Experienced team with track record of success establish foundation for rapid growth 28

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