Cardiovascular Systems, Inc. · Sources: Sage Group, Millennium Research Group “US Markets for...
Transcript of Cardiovascular Systems, Inc. · Sources: Sage Group, Millennium Research Group “US Markets for...
Cardiovascular Systems, Inc. Redefining Interventional Vascular Solutions
LEERINK Partners Global Healthcare Conference
February 10, 2016
Safe Harbor
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FORWARD-LOOKING STATEMENTS Certain statements made in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are provided under the protection of the safe harbor for forward-looking statements provided by that Act. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. Examples of these statements include, but are not limited to, statements regarding Cardiovascular System, Inc.’s (“CSI” or the “Company”) future financial performance, product sales distribution, industry and market expectations and estimates, the benefits and uses of the Company’s products, market opportunity potential, clinical trials, international expansion, regulatory approvals, future profitability, debt capacity, use of proceeds, results of operations, prospects, plans and
objectives of management, and other statements that are other than statements of historical fact.
These statements involve risks and uncertainties which could cause results to differ materially from those projected, including those described under the heading “Risk Factors” contained in the prospectus filed with the Securities and Exchange Commission (the “SEC”) for our recent public offering, and as detailed from time to time in CSI’s SEC reports, including its Reports on Form 10-K and Form 10-Q. As a result of these matters, changes in facts, assumptions not being realized or other circumstances, CSI's actual results may differ materially from the expected results discussed in the forward-looking statements presented. The forward-looking statements are made only as of the date of this presentation, and CSI undertakes no obligation to update them to reflect subsequent events or circumstances.
Investment Rationale
• Multi-billion dollar market opportunity, early stage of adoption
• Unique products modify calcified plaque in large and small vessels
• Supported by robust clinical data
• Large clinically-focused direct sales force
• Attractive reimbursement
• Financial flexibility/attractive growth and profit potential
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Diseases dominated by calcium
Large and Growing Markets
PAD: 18 million people affected in U.S. • Up to 4 million with critical limb ischemia • Only 300,000 CLI patients receive interventions
annually (160,000 get debilitating amputations)
CAD: 16 million people affected in U.S. • 1.4 million annual U.S. procedures • Diamondback 360 is the only device approved for the
treatment of calcified coronary calcified lesions
Untapped international market
$14B Combined
PAD and CAD U.S. Market Opportunity
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2.5 Million Diagnosed with PAD
Only 600K Interventions (300K for CLI)
PAD: Large and Underserved
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Sources: Sage Group, Millennium Research Group “US Markets for Peripheral Intervention Devices 2014,” iData “US Market for
Peripheral Vascular Devices and Accessories” 2014, and Go, et al “Heart Disease and Stroke Statistics -- 2014 Update,” Circulation.
$12B+ CLI market opportunity in U.S. and growing
18 Million People in U.S. with PAD
4 Million with CLI*
(* 6 Million by 2030)
600K Procedural Interventions
Amputations and bypass
Plaque removal
High pressure
balloons and stents
Below the Knee Above the
Knee
OAS Technology Expands PAD Market
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Industry Procedure Mix
BTK - 80% calcified 20% require ankle/foot access
CSI Mix/Disease Prevalence
ATK - 40% calcified
Only device to broadly treat the disease
Below the Knee
Above the Knee
Sources: Millennium Research Group Inc 2014., National Hospital Discharge Survey 2009, CSI estimates.
Large Coronary Market Potential
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16 MILLION U.S. CAD PATIENTS DIAGNOSED
Annual U.S. CAD procedures
1.4 MILLION
% with Significant Calcium
38%
Potentially Treatable with
Diamondback 360
28% 400,000
$1.5 Billion
CSI Market Potential
SIMPLE SPEED SETTINGS
INSTANT RESPONSE ON/OFF SWITCH
SALINE PUMP REUSABLE, COMPACT
CROWNS SMALL PROFILE, ORBITAL ACTION
SLEEK ELECTRIC-POWERED HANDLE
Crowns shown are not to scale and for illustrative purposes only.
CSI Orbital Atherectomy Systems (OAS) Power and simplicity for streamlined set-up and treatment
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PERIPHERAL
CORONARY
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HEART-TO-HEELS CAN TREAT 11 VESSELS
CSI: Why We’re Unique
1 1 Above the Knee
3 Heart
Below the Knee 3 3
EFFECTIVE IN CALCIUM
EXCELLENT SAFETY
LONG-TERM DURABILITY
ECONOMICAL
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CSI: Why We’re Unique
Femoral
Pedal
Tibial
Radial
Brachial
ALTERNATE ACCESS SITES
• 93% < red blood cell size
• 99% < lumen size of capillaries
Unique Mechanism of Action Bi-directional and differential sanding
Calculation of mean particulate size is based particles larger than 1 micron from a representative study using carbon blocks and cadaver model systems. 11
Fundamentally Superior Technology
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EN-2260.A
Mechanical / Laser Atherectomy
• Challenged by hard calcium
• Lumen size limitations • Doesn’t fully protect native vessel
• Technique dependent
Laser Directional Rotational
• Treats all calcified vessels (65% of market)
• Lowest profile catheter; ideal for BTK
• Substantially reduced procedure time
• Maintains healthy vessel tissue
• Superior ease of use
Orbital Atherectomy: Diamondback 360
Leadership in Clinical Evidence
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LIBERTY 360 (Enrollment Complete)
ORBIT II (2-year Data)
COAST (Enrollment Complete)
OASIS, CONFIRM series, Calcium 360 and Compliance 360
• Supports 2nd Gen OAS in U.S. and Japan approval
• 94% freedom from revascularization
• Up to $4,946 per patient cost savings
• High rates of success and durability
• Low adverse events/bail-out stenting
• “All-comers” trial vs. any other treatment
• Over 600 Rutherford class 4, 5, or 6 n=1,200
n=100
Trial Importance Size
n=3,359
PAD
C
AD
n=443
Patients Lesions Physicians
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OPTIMIZE (Enrolling)
n=50 • OAS + DCB vs. DCB alone
• Calcified below-the-knee lesions
ORBIT II1: Results Out to 2 Years
1. ORBIT II INCLUDED PATIENTS WITH EJECTION FRACTIONS OF 25%+; MOST PCI STUDIES HAVE EXCLUDED PATIENTS BELOW 35% 2. KAPLAN-MEIER ESTIMATES
1-YEAR2 2-YEAR2
FREEDOM FROM TVR/TLR 94.2% 91.9%
FREEDOM FROM TVR 98.1% 97.1%
FREEDOM FROM TLR 95.3% 93.8%
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Attractive Reimbursement Rates (2016)
HOSPITAL
INPATIENT
OUTPATIENT
PAD $10,177 − $19,415 CAD $9,960 − $19,191 PAD (ATK) $9,542 PAD (BTK)/CAD $14,612
NON-HOSPITAL FACILITY PAD $11,085 − $15,186*
Small vessels receive higher reimbursement
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MS-DRG 246, 247, 248, 249, 250, 251, 252, 253, 254; CPT Codes 37225, 37227, 37229, 37231, 92933; C-APCs 5191,5192,5193; HCPCS Code C9602
* Procedures using atherectomy
Sales Force Optimization Strategy
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250 Professionals
• One sales professional selling two, high-margin, high-growth products
• Deeper penetration into fewer high potential accounts
• Higher productivity per sales professional
• Drives future profitability
Rev
en
ue
Pe
r Sa
les
Pro
fess
ion
al
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$0
$40
$80
$120
$160
$200
FY 12 FY 13 FY 14 FY 15 FY 16 -6 mo.
FY 15 -6 mo.
Revenue
Track Record of Revenue Growth Temporarily Affected by Sales Force Transition
$ in
Mill
ion
s
Amounts exclude revenue from distribution agreement terminated on June 30, 2015
Strong, Improving Gross Margins
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70%
75%
80%
85%
FY 13 FY 14 FY 15 H1 FY 16
78.2%
80.2%
76.5% 77.3%
Solid Balance Sheet
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$0
$20
$40
$60
$80
$100
June 2015 Dec. 2015
Cash
Adequate cash on hand to implement current strategy $
Mill
ion
s
Financial Flexibility • $65 million in cash • Potential facility financing • Debt capacity
Why CSI?
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Supported by robust clinical data
Large, clinically focused direct sales force
Multi-billion dollar market opportunity, early adoption stage
Financial flexibility/attractive growth and profit potential
Unique products
Attractive reimbursement
DIAMONDBACK 360® Coronary Orbital Atherectomy System
Indications: The DIAMONDBACK 360® Coronary Orbital Atherectomy System (OAS) is a percutaneous orbital atherectomy system indicated to facilitate stent delivery in patients with coronary artery disease (CAD) who are acceptable candidates for PTCA or stenting due to de novo, severely calcified coronary artery lesions.
Contraindications: The OAS is contraindicated when the VIPERWIRE guide wire cannot pass across the coronary lesion or the target lesion is within abypass graft or stent. The OAS is contraindicated when the patient is not an appropriate candidate for bypass surgery, angioplasty, or atherectomy therapy, or has angiographic evidence of thrombus, or has only one open vessel, or has angiographic evidence of significant dissection at the treatment site and for women who are pregnant or children.
Warnings/Precautions:; Performing treatment in excessively tortuous vessels or bifurcations may result in vessel damage; The OAS was only evaluated in severely calcified lesions, A temporary pacing lead may be necessary when treating lesions in the right coronary and circumflex arteries; On-site surgical back-up should be included as a clinical consideration; Use in patients with an ejection fraction (EF) of less than 25% has not been evaluated. See the instructions for use before performing DIAMONDBACK 360 coronary orbital atherectomy procedures for detailed information regarding the procedure, indications, contraindications, warnings, precautions, and potential adverse events. For further information call CSI at 1-877-274-0901 and/or consult CSI’s website at www.csi360.com.
Caution: Federal law (USA) restricts this device to sale by or on the order of a physician.
Diamondback 360® and Stealth 360®Peripheral Atherectomy Systems The Diamondback 360® and Stealth 360® PAD Systems are percutaneous orbital atherectomy systems indicated for use as therapy in patients with occlusive atherosclerotic disease in peripheral arteries and stenotic material from artificial arteriovenous dialysis fistulae. The Systems are contraindicated for use in coronary arteries, bypass grafts, stents, or where thrombus or dissections are present. Although the incidence of adverse events is rare, potential events that can occur with atherectomy include: pain, hypotension, CVA/TIA, death, dissection, perforation, distal embolization, thrombus formation, hematuria, abrupt or acute vessel closure, or arterial spasm. For further information call CSI at 1-877-274-0901 and/or consult CSI’s website at www.csi360.com. Caution: Federal law (USA) restricts this device to sale by or on the order of a physician.
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Investor Contact: Jack Nielsen Senior Director Corporate Communications & Investor Relations 651-202-4919 [email protected] ©2016 Cardiovascular Systems, Inc. All Rights Reserved Diamondback 360 and CSI are registered trademarks of Cardiovascular Systems, Inc. www.csi360.com
NASDAQ: CSII
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