Jefferies Healthcare Conference. June 7 th, 2017

Transcription

1 Jefferies Healthcare Conference June 7 th,

2 Forward-looking Statements This presentation and the accompanying oral commentary contain forward -looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, any projections of financial information; any statements about historical results that may suggest trends for our business; any statements of the plans, strategies, and objectives of management for future operations; any statements of expectation or belief regarding future events, future regulatory clearances or approvals, potential markets or market size, technology developments, or enforceability of our intellectual property rights; and any statements of assumptions underlying any of the items mentioned. These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future performance. Actual results could differ materially from our current expectations as a result of many factors, including but not limited to: quarterly fluctuations in our business; market acceptance of our products; the effects of competition and technological advances on our ability to successfully commercialize our products; delays or denials of reimbursement for diagnostic products; the regulatory regime for our products; and any adverse changes in our strategic relationships, including with licensors of our technologies and manufacturers and distributors of our products. These and other risks and uncertainties associated with our business are described in our filings with the U.S. Securities and Exchange Commission. Except as required by law, we assume no obligation and do not intend to update these forward-looking statements or to conform these statements to actual results or to changes in our expectations. 2

3 NanoString Company Snapshot Leader in Precision Oncology ncounter a complete biomarker solution Adopted by leading academic, biopharma, & clinical labs Diagnostic pipeline building via biopharma partnerships Strong Financial Performance FY2016 revenue of $86.5M, growth of 38% ~510 system installed base, ~33% increase over past year $100,000+ annualized consumable revenue per system Positioned for Continued Growth Unique platform with large untapped markets Playing key role in immuno-oncology revolution Riding wave of oncology companion diagnostics Compelling roadmap of future instruments 3

4 Precision Oncology ncounter : Well-Differentiated Platform Powerful Chemistry, Simple Workflow Digitally Counts Single Molecules of Up to 800 Unique Targets Rapid Downstream Validation of NGS-Generated Data Translating Signatures for Clinical Applications Expanding Portfolio of Consumables, including Immuno-oncology Panels and 3D Biology 4

5 Consumables Instruments Precision Oncology ncounter: Complete Biomarker Solution Research Diagnostics SPRINT MAX FLEX PanCancer Panels Translational Research 5

6 Precision Oncology Unique Clinical Capabilities FDA CLEARED ncounter DX ANALYSIS SYSTEM 1 REGULATORY CLEARANCES IN 30 COUNTRIES ~75 SYSTEMS INSTALLED IN 13 COUNTRIES DIAGNOSTIC DEVELOPMENT TEAM OF 40+ PEOPLE 4 ONGOING IVD REGISTRATIONAL STUDIES 6 1 Prosigna Breast Cancer Prognostic Gene Signature Assay for use on the ncounter Dx Analysis System is 510(k) cleared for in vitro diagnostic use. See for Package Insert.

7 Precision Oncology Platform-of-Choice from Discovery to Diagnostic Research Development Treatment 1,600+ publications 7

8 Precision Oncology Discovery to Diagnostic: Merck Collaboration Q Q Q Q Q Q IVD Assay 1 : Tumor Inflammation Signature Purchases First ncounter System First Custom Codeset for Tumor Immunology Systematic use in Analyzing Tumor Samples Clinical Research Collaboration for Keytruda Expand Collaboration to Develop Companion Diagnostic Development & Analytical Performance Presented 8 1- The Tumor Inflammation Signature assay for use on the ncounter Dx Analysis System is for investigational use only. Limited by United Stated law to investigational use.

9 Financial Performance Strong Revenue Growth Collaboration Consumables Instrument and Service +32% $47.6M Annual Revenue $62.7M +38% $86.5M % $ M Quarterly Revenue $18.1M +23% $14.7M Guidance Q1 16 Q1 17 Q1'16 Q1'17 9

10 Financial Performance Key Growth Drivers Cancer ~75% ~70% ~75% of systems sold International >50% >60% >50% of systems sold BioPharma ~30% ~35% ~45% of consumables sales Panels ~30% ~45% ~50% of consumables sales Companion Dx $3.1M $6.0M $17.4M of collaboration revenue 10

11 Financial Performance First Quarter 2017 Highlights Biopharma Revenue grew by ~40% year-over-year Represented 40% of instrument revenue Academic Revenue grew by ~20% year-over-year Improved outlook under new budget proposal boosting NIH funding by $2 billion in FY17 Diagnostic Revenue grew by ~90% year-over-year Record Prosigna revenue of $1.4 million 11

12 Financial Performance Balance Sheet Strengthened Ended Q1 17 with $57M of cash and investments Raised net proceeds of $56M in June 17 in a bought deal follow-on offering 3,450,000 shares priced at $16.75 per share Positions company to capitalize on key business and technology development milestones over next months Strengthens position in ongoing business development negotiations Cash from additional biopharma and technology collaborations expected to augment offering proceeds 12

13 2017 Priorities Strategic Objectives for 2017 Optimize Reach and Support of our Commercial Channel New Products to Grow Revenue and Differentiate ncounter Lay Foundation for Expanding Companion Diagnostic Menu Advance Development of Digital Spatial Profiling and Hyb & Seq 13

14 Optimize Commercial Channel Continuing Expansion of Installed Base Significant Market Opportunity for All Systems Potential Placements 1 Current Penetration Clinical Labs FLEX 1,000 ~ 7% Core Research Labs MAX 5,000 ~ 7% Individual Researcher Labs SPRINT 10,000 < 1% 14 1 Company estimates

15 Optimize Commercial Channel Drive Installed Base Growth with SPRINT ncounter Installed Base Q1 17 SPRINT System Trends SPRINT MAX and FLEX ~480 ~ % to new customers ~360 ~90% to cancer researchers ~270 ~50% to distributor regions, mostly APAC ~30% to biopharma ~20% motivated in part by 3D biology Q1-17 ~50% of systems sold in Q1-17 were SPRINT 15

16 Optimize Commercial Channel Commercial Investments Underway Recruiting a new SVP of Sales and Marketing Increasing Sales headcount by ~30% Expanding inside sales and adding field-based consumables reps Investing in infrastructure to identify, qualify and convert sales leads New website and expanded tradeshow presence 16

17 Launch New Products Unprecedented Wave of Product Launches in 1H 17 PlexSet TM Reagents Alternative to qpcr enabling rapid high-throughput multiplexed digital gene expression Low RNA Input Kit Enables sample input of 1-10 ng and is compatible with all gene expression panels and custom codesets Vantage 3D TM Applications RNA MAPK-PI3K Pathways Panel curated gene expression panel designed to be combined with Vantage 3D DNA SNV and Protein Solid Tumor Panels Intracellular Compatible Universal Cell Capture Kit enables Vantage 3D RNA:Protein Immune Cell Signaling Assay with as few as 20,000 cells 17 Myeloid Innate Immunity Panel Curated gene expression panel designed in partnership with Lisa Coussens, Ph.D. of OHSU to profile the innate immune response in cancer and other diseases

18 Launch New Products 3D Biology Applications Having Early Impact Multiple Vantage 3D Product Launches 1 DNA Panel 10 RNA Panels 4 Protein Panels Important factor in ~20% of system sales 40+ 3D Biology customers Dec Trial usages by Biopharma Companies First peer-reviewed publication 3D Biology Top 10 Innovation award from The Scientist Plenary Session presentation at AGBT

19 Expand Diagnostics Prosigna Provides Solid Base for Dx Business Revenue and Installed Base Annual Revenue Installed Base $4.2M $2.5M $0.7M Status Treatment Guidelines ASCO Guidelines at parity with market leading test Reimbursement Progress >90% of US indicated patients covered Medicare in all 50 states New coverage from AETNA, CIGNA and Humana Positive assessment from Blue Cross Blue Shield Evidence Street Governments of France and Spain 19

20 Expand Diagnostics Biopharma CDx Collaborations Provide Multiple Value Drivers Cumulative Non-Dilutive Cash to Fund Operations $63M Growth from Layers of Collaboration Revenue New Collaborations Pipeline of New Products Under Development 3 Annual US Incidence $12M $18M Celgene Merck Tumor Inflammation Signature 1 Lymphoma (DLBCL) Lymphoma Subtyping Subtyping Test Test 2 ~100,000 ~22, seer.cancer.gov, 2-lymphoma.org, 3-These NanoString assays for use on the ncounter Dx Analysis System are for investigational use only. Limited by United States law to investigational use.

21 Percent Percent Expand Diagnostics Increase Penetration of CDx Opportunity in Oncology Oncology Dominates Marketed Precision Medicines 1 Marketed Drugs with Companion Dx 100% = $25B annual sales* Drug (Company) 1 1 Therapeutic Area 1 Cancer Drugs in Development with Companion Dx Most Cancer Drugs in Development Have Companion Dx 1 Pre-clinical Early clinical Late clinical Tufts Center for the Study of Drug Development

22 Expand Diagnostics Leading Position in Immuno-Oncology Research Products PanCancer Immune Profiling Panel Myeloid Innate Immunity Panel IO RNA:Protein Profiling Panel Publications Partnerships 200+ panel customers 90+ peer-reviewed papers 5 key partnerships 22

23 Sensitivity Expand Diagnostics Tumor Inflammation Signature for Anti-PD1 Response 3 Genes Capture Indicators of Tumor Inflammation 1 Potentially More Accurate Than PD-L1 IHC Tests 2 1 Specificity 23 1 ASCO 2016 Poster 1536: T-Cell Inflamed Gene Expression Signatures Predict Clinical Benefit 2 ASCO 2016, Abstract 6010, Biomarkers and response to pembrolizumab in recurrent/metastatic head and neck squamous cell carcinoma (R/M HNSCC). 3 The TIS assay for use on the ncounter Dx Analysis System is for investigational use only. Limited by United States law to investigational use.

24 Expand Diagnostics Evolve Toward Companion Dx for Multiple IO Agents Anti-VEGF HDAC or BET inhibitors Anti-PD-1 or Anti-PD-L1 Wnt, PI3K, or PARP-γ inhibitors CTLA-4 inhibitors STING, TLR, OX-40, or CD137 agonists Tumor Inflammation Signature COLD HOT Suppression in tumor micro-environment LAG-3, TIM-3, CD137, IDO blockade Vaccines or CAR-T MDSC targeting = Carbo/Taxol Treg targeting = CTLA-4 inhibitors 24

25 Advance Instrument Pipeline Digital Spatial Profiling Advances into Commercial Development Concept Unveiled Jan 2016 Reality Data at AACR, AMP, SITC, & ASCO meetings H i Expression Protein Lo CD9 CD4 CD28 IL2R PD-L1 RNA 25

26 Advance Instrument Pipeline Expanding our Technology Access Program for DSP FFPE Slides Processed on Digital Spatial Profiling Instrument Molecular Barcodes Counted on Standard ncounter Systems Commercial Launch Planned for Late

27 Advance Instrument Pipeline Hyb & Seq Offers Novel Clinical Sequencing Solution Simple Workflow Rapid Sample-to-Answer Clinically-relevant Samples DNA RNA FFPE Lysate Short Read Long Read Blood Tissue 27

28 Advance Instrument Pipeline Hyb & Seq : Status & Next Steps Hyb & Seq chemistry de-risked Looking to engage genomics community on key application development Evaluating corporate and academic partnerships Targeted Sequencing of from FFPE Direct Single-Molecule RNA Sequencing Accurate Reference Guided Assembler Long Read Targeted Sequencing Complete ~4,000 barcode set and customer presentation of data for AGBT 2018 Beta instruments expected in

29 2017 and Beyond Numerous Growth Drivers Unique platform with large untapped markets Playing key role in immuno-oncology revolution Riding wave of oncology companion diagnostics Compelling roadmap of future instruments 29

30 30 Thank You