Improving Asthma Diagnosis and Treatment

Transcription

1 Improving Asthma Diagnosis and Treatment January 2015

2 Contents/Agenda Introduction to Aerocrine Preliminary Q4/YTD 2014 Highlights Aerocrine Evolution NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 2

3 Introduction to Aerocrine Aerocrine markets its products in 40+ countries Aerocrine offers the only point-of-care device available to measure FeNO in the US* Also available in EU, Asia and other territories 6** and10 seconds for test Approx. one minute for results Noninvasive, maintenance free Appropriate for patients 7 years of age*** Data easily transferable to computer * FDA, EMEA approved ** CE marked in Europe (but not available in other markets with special regulatory requirements like the US) *** Age 4 in EU Page 3

4 Introduction to Aerocrine Proven Technology Aerocrine is now on its 4 th generation device. The NIOX VERO represents a state of the art device, developed in collaboration with Panasonic, to address the growing professional segment and will provide the basis for a bridge to the home care market Academic Scientific Utilization Key Opinion Leaders/ Rx Research Specialist use Routine Clinical use Home use Exhaled Breath Analyzer (EBA) 1999 NIOX FLEX 2000 (EU) 2003 (US) NIOX MINO 2004 (EU) 2008 (US) 2010 (China) 2013 (Japan) NIOX VERO 2013 (EU) 2014 (US) NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 4

5 Introduction to Aerocrine - Recent History Aerocrine s transformation has been driven by commercialization of FeNO and development of markets in Europe, Asia, and the US. Key metrics of sales, installed base, and test sales have all been increasing on a double digit compound basis 2013 Launch of NIOX VERO in Europe: Fourth generation and first fully portable commercial device Global test volumes exceed 2MM per year Aerocrine s products marketed in over 40 countries worldwide UK and Sweden converted to distributor models GSK bribery scandal in China unfolds negatively impacting sales in China Number of publications reaches >300 per year 2014 As of Q3 sales were on a strong positive trajectory Third controlled trial published in support of FeNO measurement NICE recommendation / demonstration of clinical value and healthcare economics Insurance coverage in the US reaches 64+% Installed base projected to reach over 7K devices worldwide Exponential growth in Japan Accumulated test sales exceed 10MM. ~4.5 MM in last 2 years U.S. Sales Model producing more productive results Late 2014/Early 2015: Aerocrine begins work to address the home market VERO approved in U.S. Q4 2014, full launch Q VERO approval/launch anticipated in Japan, and China Development of a device for home use that will carry its own IP NIOX VERO to be used as a lead in to this market Exploration of fifth generation technologies NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 5

6 Preliminary Q Highlights During Q4 Aerocrine achieved record sales for a fourth quarter and full year periods despite some significant challenges early in the year in the U.S. and historically low sales in China due to reregistration of the NIOX MINO January December 2014 Net sales increased by 22% to SEK 166.2m from SEK 136.2m in the same period in 2013 Net sales for clinical use increased by 26% Strategic sales increased by 20% Total test sales (repeat and initial) increased by 25% Significant Events During Q4 On November 6 th the United States Food and Drug Administration granted market clearance for NIOX VERO On November 28 th the company announced a rights offering to fund strategic imperatives and operational activities On December 12 th the company announced the termination of discussions of a non-binding offer for company and changes in Board of Directors Roster On December 15 th the company announced the re-registration of the NIOX MINO in China On December 22 nd the company announced an expansion of the underwriting consortium in the pending rights issue NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 6

7 Executive Summary - Financials 2013 had internal and external challenges but 2014 has show consistent growth trends on a quarterly basis. All facets of the business are contributing to a better topline result Global Sales by Quarter in SEK m Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Page 7

8 Executive Summary - Financials Despite internal and external challenges, Aerocrine has continued to show growth over the past several years. Global Sales in SEK m 2010 through : ATS guidelines published, Private insurance coverage in the US hits 39% 2012: Large GSA order carried over from 2011 due to ship date, Change EU and Chinese Distributors, Large order received by SHP (China distributor) for 2013 distribution 2013: Lower GSA Sales, Implementation of New Sales Model in US, Chinese market issues due to GSK scandal 2014: Improving US Sales Model, Exponential Growth in Japan, Double Digit Growth in Europe 2010 A 2011 A 2012 A 2013 A 2014 A NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 8

9 Executive Summary Financials We have focused on using our capital more efficiently. On a percent of sales basis we continue to leverage our fixed cost base and have driven our operating expenses down by SEK 17m while increasing sales by approximately SEK 16m (Q3 YTD 2014 vs. Q3 YTD 2013) for a resulting decrease of 45 percentage points (226% to 181%). Absent our cost control initiatives our expense base would have been SEK 52m higher. While we need to drive this number lower to attain our overall goal of profitability the results have been three consecutive quarters of reduced operating losses. Global Sales in SEK m 2010 through 2014 Expenses as a % of Sales 2010 through Q YTD % 200% 150% 100% 168% 211% 206% 223% 181% % A 2011 A 2012 A 2013 A 2014 A 0% Q YTD NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 9

10 Aerocrine Evolution Page 10

11 Operational Imperatives Aerocrine has built the global FeNO market and has created a global, high growth medtech company. Aerocrine will require additional capital to achieve its longer term vision of profitability which is milestone based and focused on four key operational imperatives 1 Establish FeNO as Standard of Care 2 Drive Penetration in Defined U.S. Professional Segment 3 Attain Profitability 4 Finalize Home Device Product and Business Model NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 11

12 1 Establish FeNO as Standard of Care Aerocrine has led the efforts to gain support by the world s leading societies and professional organizations for the use of FeNO in diagnoses and management of asthma. Additional investment will be required to achieve subsequent regional and key country support Additional Key Influencers and Payers Large US Private Insurers National Heart Lung and Blood Institute (NHLBI) Primary Care Network (US) The Global INitiative for Asthma (GINA) Germany & France Guidelines Germany, France & UK Reimbursement Japanese Reimbursement Chinese Reimbursement Page 12

13 1 Establish FeNO as Standard of Care Aerocrine is building support through promoting the value of FeNO to KOLs, payers and providers Unmet Need Value Added by FeNO Testing Better Asthma Outcomes FeNO testing improves patient outcomes while decreasing exacerbations. Cost-Effectiveness FeNO testing saves healthcare costs by decreasing ER visits and hospitalizations. Physician and Patient Behavior FeNO testing improves appropriate medication use, predicts relapse, and provides compliance monitoring. Page 13

14 1 FeNO Testing Improves Treatment Decisions and Reduces Healthcare Costs Treatment Changes Following FeNO Testing (N=50) Treatment Change Details No Change 64% Change 36% Added Medication or Increased Medication Dose Subtracted Medication or Decreased Medication Dose 10 (20%) 8 (16%) Treatment decision-making study evaluating FeNO testing s impact on asthma management (physician assessment of inflammation, dosing and cost savings) Treatment decisions were altered (step up, step down add-on) in 36% of subjects when FeNO was used in conjunction with standard clinical assessment, ACT and spirometry. Asthma therapy cost reductions of $ per patient for the 8 subjects (16%) in whom treatment was decreased La Force C et al, Annals Allergy Asthma Immunology, 113 (2014) Page 14

15 2 Drive Penetration in Defined U.S. Professional Segment Currently, Aerocrine has 26 sales territories staffed, 4 Regional Managers and 3 Clinical Science Liaisons Page 15

16 2 Drive Penetration in Defined U.S. Professional Segment Enhanced commercial execution is a priority for Aerocrine to build the US professional segment Reimbursement both on a coverage level and rate per test are key success factors Sales force deployment for acquisition of new customers and increased utilization in existing installed base Inside sales operations to drive repeat sales in white space Engage a regional or national partner to enhance coverage and gain further leverage Identification and rapid engagement of alternate site (pharmacies) and non-traditional players (reference labs) to drive incremental business Aerocrine is applying key learnings from recently completed commercialization project in the US Reimbursement (% of covered lives and level of per test reimbursement) are key drivers. Continued lobbying for coverage and increase of dollar per test are core activities Evaluation program ( try and buy ) program has been well received to drive acceptance and increase of number of tests per device. Program is now designed so customers can also trial reimbursement process to shorten the buying cycle FeNO experience database has become a core promotional tool to demonstrate identification of inflammation and therapy choice (~200 clinics and ~6000 patients to date) Plan is to selectively grow from our current complement of 28 sales representatives Model has improved $/rep from $209k in 2013 to $273k in 2014 (31% YOY increase). Based on current sales territory designs we have the ability to add an additional 13 reps to defined territories with reimbursement rates in excess of 75% Page 16

17 2 Drive Penetration in Defined U.S. Professional Segment Increase inside sales and support resources based on more efficient and cost effective model West, Inc. has been retained with 5 telemarketing professionals to drive repeat sales with existing customers. Based on our own internal sales force that has been in place for two years this is a productive design to increase repeat use with existing customers Effort will also increase customer satisfaction and loyalty through more regular contact than field based resources can provide Drive growth into new areas and alternate sites Identify and target key accounts (large practices), alternate sites for use of FeNO (Pharmacies) and reference laboratories such as Quest Diagnostics, LabCorp, etc. A new, key account management focus is in development of these sites and execution of programs to penetrate these markets Page 17

18 3 Attain Profitability Profitability will be achieved through growing the professional sector sales in key markets, launching VERO, optimizing distributor agreements and continuing to grow our Global Strategic Accounts business* Grow defined professional segment in core markets Imperative # 2 detailed this approach Launch VERO in major markets (US, Japan & China) Goal is to replace current installed base by the end of 2015 in US, Japan (2015) and China (2016) to follow closely Launch will allow faster penetration of the US primary care market which is a critical next step to the US expansion strategy Connectivity of device should reduce customer service costs and provide valuable sales data Review existing distributor arrangements to determine areas to improve topline performance and improvement in gross margin Stallergenes is at two year mark and requires review Expansion of some territories where distribution has proven effective UK/Benelux/Nordics Consider partnership/distributor in Germany as possible enhancement to profitability follow path Aerocrine took in UK Support Global Strategic Accounts as a source of continued profitability Consider additional avenues for growth * GSA sells to pharma / biotech clinical trial sponsors, CROs and Government Health Agencies Page 18

19 4 Finalize Home Device Product and Business Model In parallel, the software, connectivity and business model will also be created by Aerocrine and various, specialized partners for the home use market HOME Cloud storage Disposable App on your own device Device App Providers Streaming and Big Data Analytics Your Provider Abriiz, HealthVault, ihealth, etc Business Model Subscription Acquisition Others tbd Page 19

20 4 Finalize Home Device Product and Business Model Aerocrine will complete development of a product and consumable for the home market. The market need, value and distribution channels will be identified. A suitable partner for complete commercialization will be required Aerocrine will approach the FDA regarding the potential to move FeNO into the home market post the VERO 510K approval in Q4 VERO will be the starting platform Design Considerations for Devices Intended for Home Use recently published by FDA 6 second test functionality will be included for pediatric use in the home Product Development Committee has been formed to evaluate technology, intellectual property considerations, market potential, product development, and regulatory approach Evaluation of current VERO platform for bridge to home through prescription in moderate to severe patients Engagement of outside technology providers for different sensor technologies that may be more appropriate with a focus on: COGS, IP, and stability Aerocrine s goal is to build a solid proof of concept that would be viable from a value inflection perspective and of high interest to a strategic partner Design and prototype will be accomplished Regulatory/Clinical pathway defined Proof of concept of business model defined and tested Partnership with Microsoft and others will be part of the business model Page 20

21 Rights Offering Summary Page 21

22 Rights Issue 2014/2015 On November 27, 2014, Aerocrine s Board of Directors resolved on a rights issue of approx. SEK 445m in subject to approval by the Extraordinary General Meeting Size: SEK 445m before transaction costs Share capital increase: SEK 271.4m (542.7m new shares) Preferential rights (issue ratio): 7:2 Subscription price: SEK 0.82 per share Shares not subscribed for with preferential rights will be allotted to underwriters and others underwritten by inter alia largest shareholder Novo A/S and the largest Danish public pension fund, Arbejdsmarkedets Tillægspension (ATP). In total, subscription undertakings and underwriting commitments represent approx. 60% of the rights issue should no other shareholders or investors participate The proceeds from the rights issue will be used to fund ongoing commercial operations and enable several very valuable inflection points including: i. Establish FeNO as the standard of care ii. Drive penetration in the defined US professional segment iii. Reach overall profitability iv. Finalize home device product and business model Based on the rights issue, and assuming it will be fully subscribed, cash is expected to be sufficient to continue the planned operations and attain positive cash flow without additional financing 7 Jan 2015: EGM 8 Jan 2015: Last day of trading incl. right 9 Jan 2015: First day of trading excl. right 12 Jan 2015: Record date and publication of prospectus Jan 2015: Trading in subscription rights Jan 2015: Subscription period 30 Jan 2015: Announcement of preliminary result January 2015 NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 22

23 Next Step: Four Milestones Aerocrine has built the global FeNO market and has created a global, high growth medtech company. Aerocrine will require additional capital to achieve its longer term vision of profitability. 1 Establish FeNO as Standard of Care 2 Drive Penetration in Defined U.S. Professional Segment 3 Attain Profitability 4 Finalize Home Device Product and Business Model NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 23

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25 For More Information End of Year Report Published February 20, 2015 PR/IR Jenny Rosberg, ropa Management Scott Myers, Marshall Woodworth, Mats Carlson NOT FOR DISTRIBUTION IN OR TO THE U.S. (OR TO U.S. PERSONS), CANADA, ITALY, AUSTRALIA, HONG KONG, OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. Page 25