GenMark Diagnostics TRANSFORMING MULTIPLEX MOLECULAR TESTING. November 2017

Transcription

1 GenMark Diagnostics TRANSFORMING MULTIPLEX MOLECULAR TESTING November 2017

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 to obtain FDA clearance of our eplex system within our expected timeframe; 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 Third Quarter 2017 Driving eplex Commercialization Revenue of $11.6 million Mostly driven by XT-8 in the U.S. market Gross Margin of 36% Investing in manufacturing capacity eplex commercialization underway 147 instruments placed to date Cash Balance of $86.9 million Supporting commercial execution and eplex menu expansion 3

4 eplex Gaining Momentum Recent Development Milestones System and Respiratory Pathogen Panel Achieved CE Mark in Q2, 2016 Achieved FDA Clearance in Q2, 2017 Blood Culture ID Panels (Gram Positive, Gram Negative and Fungal Panels) Achieved CE Mark in Q2,

5 eplex Commercial Progress Placement momentum Fueled by FDA clearance Strong eplex Adoption U.S. launch significantly expanding addressable market Cumulative eplex Instruments Placed Instruments placed in Q3 Positive feedback on performance, workflow, ease-of-use Q16 3Q16 4Q16 1Q17 2Q17 3Q17 5

6 2017/2018 Outlook Key milestones/guidance viral targets 2 bacterial targets CE-IVD FDA Submission FDA Clearance 10 Candida targets 6 other fungal targets CE-IVD FDA Submission 20 targets 4 resistance markers Pan-GN Pan-Candida CE-IVD FDA Submission * 24 targets 6 resistance markers Pan-GP Pan-Candida 25+ clinically relevant bacterial, viral and parasitic targets CE-IVD FDA Submission CE-IVD FDA Submission Revenue Guidance Millions of dollars FY 2016 $49.3 FY 2017 $51 $53 6 Management estimates subject to change. * Product in development. Not available for sale. Specifications subject to change.

7 Unique Opportunity for Growth and Value Creation Rapid, accurate, and actionable 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 will drive adoption of multiplex molecular sample-to-answer panels across care settings Experienced leadership and commercial teams establish foundation for rapid growth eplex is a uniquely differentiated solution in a large and growing market 7

8 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 patients with > 65% faster TIME TO RESULT 1,2 10% increase in relative survival rate in ICU patients 3 18%-28% more positive test results reported 1,4 QUALITY Decrease in antibiotic duration drives key quality metrics such as antimicrobial stewardship 1,3,4 Supporting HAI management efforts by informing patient isolation strategies 2,4 COST-OF-CARE > $8,000 cost savings / patient in ICU in a major IDN 3 Demonstrated cost-effectiveness relative to conventional testing 5 Reduced hospital and antibiotic costs result in net cost savings 1 1. 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: Nelson RE, Pediatr Infect Dis J Jun;34(6):577-82

9 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 9

10 GenMark s Winning Strategy Proprietary and Enabling Technologies Strong and Defendable Competitive Positioning Robust and Differentiated Menu Pipeline Investing to Scale Operations for Rapid Growth Experienced team with a track record of success 10

11 Proprietary and Enabling Technologies Provides a sustainable competitive advantage and differentiation esensor Detection Low background signal, high signal-to-noise ratio, and low threshold detection drive superior performance 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 On-board reagents Universal programmable cartridge 11

12 eplex: The True Sample-to-Answer Solution Enabling true Order-to-Report efficiency to improve patient care outcomes and reduce hospital costs Designed for the Patient Rapid, accurate, clinically actionable results Informed treatment decisions for patient centered care Reduce avoidable medical error Optimized for the Lab Lean workflow for 24/7 lab efficiency Maximize uptime with focus on service & support Reduce administrative overhead with automated compliance management and data reporting 12

13 Simplifying and Streamlining Access to Multiplex Molecular Testing 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 13

14 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 14 Management estimates subject to change.

15 eplex Addresses a Large and Compelling Market Multiplex Tests with 10+ targets $2.5B+ Global Market GI $800M RP $500M Sepsis (GP, GN, Fungal) $475M CNS $140M HCV $100M Pipeline $500M+ 15 Management estimates subject to change.

16 Strong and Defendable Competitive Positioning eplex customer-centered design drives differentiation ATTRIBUTE GENMARK LUMINEX CEPHEID BIOFIRE High Multiplex True Sample-to-Answer Multi-sample, Random & Continuous Access --- Medical Error Reduction & Patient Safety Management estimates subject to change.

17 Robust and Differentiated Product Pipeline viral targets 2 bacterial targets CE-IVD FDA Submission FDA Clearance 10 Candida targets 6 other fungal targets CE-IVD FDA Submission 20 targets 4 resistance markers Pan-GN Pan-Candida CE-IVD FDA Submission * 24 targets 6 resistance markers Pan-GP Pan-Candida 25+ clinically relevant bacterial, viral and parasitic targets CE-IVD FDA Submission CE-IVD FDA Submission 17 Management estimates subject to change. * Product in development. Not available for sale. Specifications subject to change.

18 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 inappropriately prescribed 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. (Date accessed: May 2017) 3. Center for Disease Control. Facts about Antibiotic Reimbursement. Accessed May 10, 2017

19 eplex Respiratory Pathogen (RP) Panel Fast, accurate, clinically actionable results Deliver results in a clinically actionable timeframe Order-to-report workflow integration Fewest pre-analytical steps and shortest hands-on time Right treatment for each individual patient Comprehensive panel to identify causative agent Viruses and bacteria to enhance clinical decision making Standard-of-care for high-risk patients Elderly, pediatrics and immunocompromised patients

20 20 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 Independent, peer reviewed publication showed 97.4% concordance between eplex RP and real-time PCR LDT in 343 clinical samples 3 U.S. clinical study showed 96.5% agreement with comparator method in 3,234 samples 2 Differentiated customer experience: The short turnaround time and ease-of-use make this platform reasonable for a hospital ward or outpatient environment 3 eplex RP allows decentralization of testing in a multi-site hospital with 24/7 random access and highly efficient use of laboratory space and technical labor 4 1. 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 Nijhuis RHT, et al. Comparison of the eplex1 Respiratory Pathogen Panel with Laboratory Developed Real-Time PCR for the Detection of Respiratory Pathogens; JCM, published online 12-April Tingley L., Daigneault L., Chapin K. A Comparison of Multiplex Respiratory Panels: A Workflow Analysis. ASM Clinical Virology Symposium, May 2017 RP Panel Pathogens Detected 1 Adenovirus Coronavirus (229E, HKU1, NL63, OC43) Human Metapneumovirus Human Rhinovirus/Enterovirus Influenza A Influenza A H1 Influenza A H3 Influenza A H Influenza B Parainfluenza 1 Parainfluenza 2 Parainfluenza 3 Parainfluenza 4 Respiratory Syncytial Virus A Respiratory Syncytial Virus B Chlamydia pneumoniae Mycoplasma pneumoniae

21 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

22 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 distinct reportable targets Broad inclusivity designed to ID ~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 22

23 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 1 (~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 Conventional Blood Culture Reference: Mayo Clin Proc. March 2012;87(3): doi: /j.mayocp ID / AMR:Organism ID & Antimicrobial Resistance Testing *Product in development. Not available for sale. Specifications subject to change.

24 Scaling Operations to Support Rapid Growth Global Commercial Expansion Growing EU, US direct sales professionals by over 50% Leveraging distributors in multiple European countries Expanded Manufacturing Capacity Fully dedicated eplex manufacturing space and in-sourcing of subassemblies and processes Additional eplex cartridge manufacturing line to more than double production capacity Making key supply chain and automation investments to drive yield and margin accretion 24

25 Proven Management Team & Experienced Board MANAGEMENT TEAM Hany Massarany President & Chief Executive Officer Ventana, Roche Diagnostics, Bayer Diagnostics, Chiron Diagnostics Scott Mendel Chief Financial Officer The Active Network, GE Healthcare Jon Faiz Kayyem, Ph.D. Founder & SVP, R&D Efficacy Capital, Motorola Life Sciences, Clinical Micro Sensors Michael Gleeson SVP, North American Commercial Operations SYBASE, GuardianEdge, BEA Systems James McNally SVP, Marketing & Business Development Volcano/Philips, Boston Scientific, Morgan Stanley Brian Mitchell SVP, Operations Rainin Instruments, Alere, Chiron Diagnostics Eric Stier SVP, General Counsel & Secretary Hologic, Gen-Probe, Latham & Watkins LLP Jennifer Williams SVP, Human Resources Cerberus Operations & Advisory Co., HD Supply, The Home Depot BOARD OF DIRECTORS James Fox, Ph.D. Chairman Daryl J. Faulkner Director Lisa Giles Director Michael Kagnoff Director Kevin C. O'Boyle Director Hany Massarany President & Chief Executive Officer 25

26 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 A Unique Opportunity for Growth and Value Creation 26

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