Business Update October Duncan Ross CEO Peter Manley CFO

Transcription

1 Business Update October 2013 Duncan Ross CEO Peter Manley CFO 1

2 Investment Summary ASX Code: ACG Ordinary Shares on Issue:152.7m Market $0.15: $22.9m Enterprise Value (30 Sep 13): $19.7m Options on Issue: 22.8m (price range $ $0.165) 2013 share price range: $ $0.215 Average daily share volume (2013): 0.654m Cash 30 Sep: $3.2m Substantial Holders % UBS Nominees (Australian Leaders Fund Ltd) 9.0 Capital Investment Pty Ltd 8.1 CB Co Pty Ltd (The Curran Superannuation Fund) 6.6 Directors & staff

3 The SphygmoCor Product What Does SphygmoCor Do? Addresses the key cardiovascular risks: Heart failure, Heart attack, Stroke Provides key heart function parameters of cardiovascular function and risk : Blood pressure at the heart Load on the heart Coronary artery pressure Timing of the heart pumping cycle, and Measures of arterial stiffening This central data is only otherwise available via an invasive catheter. 3

4 The SphygmoCor Product How Does It Work? SphygmoCor: Records the blood pressure pulse waveform at the arm, non-invasively Using this recording, it derives the blood pressure pulse waveform at the heart From this pressure pulse waveform at the heart, SphygmoCor then calculates: central aortic blood pressures certain key heart function parameters Compares these patient parameters against population normals to assess CV status 4

5 Recent Company Highlights Maiden NPAT FY13 - $2.7m ($1.5m excl. tax rebates and grants) FY13 sales $9.1m - 41% growth pcp Record sales Pharma trials, USA Research & Clinical Cash flow positive for 5 consecutive quarters US FDA clearance for next generation product-xcel XCEL certified as excellent to European Artery Standards XCEL units placed since launch South African study demonstrates that central BP measurement can enhance clinicians ability to predict target organ damage 15 year Taiwanese study determines cutoff values for the values of Central BP for the diagnosis of hypertension. Australian study concludes using central BP to guide patient treatment results in the use of less medication to achieve blood pressure control. 5

6 Financial Performance FY2013 Profit & Loss (A$ 000) FY13 FY12 Revenue from sales of goods & services 9,056 6,441 Gross margin 7,844 5,449 Other income/revenue 1, Sales & marketing expenses (3,228) (4,106) Other expenses (3,455) (3,869) Depreciation & amortisation (151) (135) EBIT 2,733 (1,987) Other income & expenses 1 1 Income tax benefit/(expense) - - Net profit/(loss) 2,734 (1,986) less: R&D cash back, government grants (1,209) (559) Underlying profit/(loss) 1,525 (2,545) Revenue up 41% Gross margin 86.6% vs. 84.6% FY12 Expenses reduced 16% Underlying profit turnaround $4.0m Significant contribution for every extra $ of sales 6

7 Geographic split of revenue & EBIT - FY Sales by Region FX impact on FY13 sales: $124k unfavourable 4 3 EBIT by region Positive contribution from all regions A$m Pharma Americas EMEA Apac A$m Pharma/ Americas EMEA Apac FY12 FY13 FY12 FY13 7

8 Pharmaceutical Trials expansion Pharma revenue trend $7.0 Pharma revenue by year (US$M) $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 1st Half 2nd Half 8

9 Financial Performance Cash Flow Statement (A$ 000) 1Q14 FY13 FY12 Cash flows from operating activities Receipts from customers 2,292 8,551 7,108 Payment to suppliers and employees (2,120) (7,983) (8,851) Other income (grants, R&D tax etc) 12 1, ,778 (1,182) Cash flows from investing activities Payments for P,P&E (14) (60) (392) (14) (60) (392) Cash Flows from financing activities Net proceeds from issue of shares & option exercise 209 (14) (14) 932 Net increase (decrease) in cash and equivalents 379 1,704 (643) Cash and equivalents at beginning of period/year 2,874 1,117 1,714 Effect of FX rate changes (27) Cash and equivalents at end of year 3,226 2,874 1,117 Operating cash turnaround $3.0m (normalised ex tax rebate & grants - $2.3m) Improved collections and reduced spend 9

10 Financial Position as at 30 June 2013 Balance Sheet(A$ 000) ASSETS FY13 LIABILITIES & EQUITY FY13 Current Assets Current Liabilities Cash 2,874 Trade and other payables 1,395 Trade & other receivables 2,669 Provisions 40 Inventories 326 1,435 Other 156 Non-Current Liabilities 6,025 Provisions 61 Non-Current Assets 61 Property, plant & equipment 350 Total Liabilities 1,496 Intangibles Equity Total Assets 6,375 Contributed equity 32,110 Reserves 1,621 Accumulated losses (28,852) No debt Total Equity 4,879 $1.3m improvement in working capital R&D fully expensed Net tangible assets backing 3.2c/share 10

11 Four Distinct Market Segments..Annual global market potential US$500m Clinical Specialist Cardiologists, Hypertension, Nephrologists (kidneys), Endocrinologists (diabetes) Academic-based specialists Only 1.0% penetrated to date Clinical - Primary Care GP s, internists, executive health, wellness centres, etc. Future market opportunity. Clinical - specialist $100m Clinical - primary care $268m Pharma trials $110m Pharmaceutical trials Cumulative 5 year sales $23m or approx. 5% of potential Research $22m Research - Academia Universities & Hosp. Affiliated 11% market penetration Current served market US$232m * Early Days - Big Runway Ahead * i.e. all sectors except Clinical primary care 11

12 Research Market US$22m annual opportunity Market drivers Leading edge technology and breadth of product features Well validated-supported by third party peer reviewed publications for over a decade AtCor value proposition SphygmoCor systems can measure central pressures, pulse wave velocity & heart rate variability Range of systems with flexible features-allow easy upgrade path for customer Universally accepted gold standard Over 700 peer-reviewed publications utilising SphygmoCor Results & Forward Action SphygmoCor product of choice for researchers Captive market researchers use device deployed in previous studies Research version of XCEL under development Continued strong relationships & support with research groups and associations 12

13 Pharmaceutical Trials Market US$110m annual opportunity Market drivers Superior product & service offering (trial data and service support) Ability to better understand & differentiate drugs (safety, mechanism of action, move competitive position) Increasing focus from regulators on cardiac safety (labelling claims) AtCor value proposition SphygmoCor XCEL easier to use system = significant client efficiencies Exceptional service - 100% client retention rate SphygmoCor systems & joint product under development with SunTech Medical positions AtCor as the blood pressure core lab 13

14 Pharmaceutical Trials Market US$110m annual opportunity Results & Forward Action >30 pharma trials complete or in progress as of 1 October 2013 Total cumulative pharma trials subjects enrolled: >10,000 Potential deal pipeline opportunities under management - US$18.4m with 10 global companies Broaden reach (clients and drug classes) Significant time investment in market development over past 10 months Product development/evolution (SphygmoCor XCEL, follow-on products & SunTech) Maintain best innovator in product and service 14

15 Clinical Practice-Specialists Market US$100m annual opportunity Market drivers Improve patient outcome from current best practice - clinical utility Easy to use technology, cost effective for patient and office practice Well validated - supported by third party peer reviewed publications Reimbursement from health plans AtCor value proposition SphygmoCor XCEL developed primarily on clinical requirements ease of use Category 3 reimbursement code for test (CPTIII code 0311T) Current reimbursement from private payers ($40-$100) invest $15k, < 1 year payback Flexibility-purchase & leasing options Clinical Market Development Director and Consultants support doctors staff on reimbursement matters CPTIII Code was obtained by RPA (Renal Physicians Association) - Strong assurance of pathway to Category 1 Code with medical society support 15

16 CPT III Code Change to Category 1-AMA Criteria Checklist Criteria Status Notes US FDA Cleared Since 2002 Procedure or service is performed by many physicians or other qualified health care professionals across the United States. 180 clinical practices, >300 physicians; The procedure or service is performed with frequency consistent with the intended clinical use The procedure or service is consistent with current medical practice The clinical efficacy of the procedure or service is documented in literature that meets the requirements set forth in the CPT code change application. On track Procedure volume requirements established by US Renal Physicians Association (Code sponsor) on track Specialists managing complex and resistant cases of hypertension Meets criteria including highly valued randomized control BP Guide study 16

17 Clinical Practice-Specialists US$100m annual opportunity Results & Forward Action Over 180 practices in USA using SphygmoCor Targeting key Medicare regions for conversion for regional billing Estimated 58%** of 48m Medicare patients with Hypertension highest clinical & economic value Primary target-two large regions covering ~14m lives* Secondary target-regions covering ~6.5m lives Aligned with geographic concentration of installed SphygmoCor base Key clinical papers to report in next 8 months All of above build momentum for category 1 code filing-target 2014 * ** 17

18 Leverage Technology and IP-Partnering Market Drivers & AtCor value proposition Unique technology to respond to competitive gap or break-through differentiation. Premier brand position SphygmoCor inside 8 commercially relevant patents in multiple geographies with 2 granted since 2011 What have we been working on? 3 alliances in place & 2 under development covers 4 distinct clinical areas Complementary IP Clinical studies-advance market uptake & clinical reimbursement 18

19 Leverage Technology and IP-Partnering SphygmoCor is a platform technology Hypertension mgmt & related disorders Primary markets for AtCor Includes kidney disease and diabetes Mayo heart failure study & meta analysis to report this year Pacemaker optimisation Pilot studies underway with major in FY14 Underserved market Already reimbursed Cerebral vascular & intensive care Working with Macquarie University on IP Parallel investigation with European device company Alliances Allows product & market development without losing focus on primary markets 19

20 Leverage Technology and IP-Partnering Current alliances The preeminent supplier of clinical grade blood pressure monitoring products and technologies Was recently purchased by Halma PLC Joint development of new product to be launched July 14 A speciality disease management company working with Urology specialists Currently marketing SphygmoCor XCEL to urologists Targeting high end self testing market Pilot underway 20

21 Key Milestones FY14 Building momentum-delivering on commitments Continue to enhance financial strength Continue cash flow & earnings positive Currently US$25.3m in sales opportunities under management US$18.4m for pharma & US$6.9m for research/clinical Sales growth weighted to H2 Grow Pharma business & diversify customer base Harvest opportunities from strong business development & diversification focus Launch new products and market segment presence New product developed with SunTech Medical to launch at fiscal year end Sales in new market segments e.g., high-end self testing and urology One Medicare Region contracted Build foundation for Category 1 code application 21

22 Key Milestones FY14 Building momentum-delivering on commitments Advance New Business & IP Development Complete pilot studies in cardiac rhythm management, plan steps to market launch Complete cerebral vascular feasibility studies with European partner Key Scientific Studies Expected to be Published in the Coming Year Joint Heart Failure study with the Mayo Clinic and Uni Arizona. Aim is to demonstrate improved heart function and reduced care costs. BP Guide use of central pressure, to manage hypertension, patients improves patient care and reduces costs. Optimum blood pressure control with fewer drugs and side affects Critical win for patients and payers Central vs. brachial pressure in CV risk assessment; Meta-Analysis. >22,000 patients Publication of these studies will further demonstrate the superiority of utilising central pressures to manage high cost disease states through improved clinical and economic outcomes and improved patient quality of life 22

23 Summary Strong FY13 - Cash Flow and Earnings Positive Core Focus- Pharma & Clinical Specialist Markets Key Alliance Partners for Core Markets & OEM True Platform Technology US$500m Annual Market Opportunity-Massive Runway Delivering On Commitments 23

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