Jefferies Healthcare Conference...DIAGNOSTIC DEVELOPMENT TEAM OF 40+ PEOPLE 4 ONGOING IVD...
Transcript of Jefferies Healthcare Conference...DIAGNOSTIC DEVELOPMENT TEAM OF 40+ PEOPLE 4 ONGOING IVD...
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June 7th, 2017
Jefferies Healthcare Conference
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• 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.
Forward-looking Statements
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•
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
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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
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Precision Oncology
nCounter: Complete Biomarker SolutionIn
str
um
en
ts
SPRINT
Co
ns
um
ab
les
Research Diagnostics
MAX FLEX
PanCancer PanelsTranslational Research
™
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Precision Oncology
Unique Clinical Capabilities
FDA CLEARED nCOUNTER DX ANALYSIS SYSTEM1
REGULATORY CLEARANCES IN 30 COUNTRIES
~75 SYSTEMS INSTALLED IN 13 COUNTRIES
DIAGNOSTIC DEVELOPMENT TEAM OF 40+ PEOPLE
4 ONGOING IVD REGISTRATIONAL STUDIES
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 www.prosigna.com for Package Insert.
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Precision Oncology
Platform-of-Choice from Discovery to Diagnostic
DevelopmentResearch Treatment
1,600+ publications
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Precision Oncology
Discovery to Diagnostic: Merck Collaboration
Purchases
First
nCounter
System
Q4 2008
First Custom
Codeset for
Tumor
Immunology
Q3 2013
Systematic
use in
Analyzing
Tumor
Samples
Q4 2013 Q2 2016Q1 2016Q2 2015
Development
& Analytical
Performance
Presented
Expand
Collaboration
to Develop
Companion
Diagnostic
Clinical
Research
Collaboration
for Keytruda
IVD Assay1:
Tumor
Inflammation
Signature
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.
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Financial Performance
Strong Revenue Growth
Annual Revenue Quarterly Revenue
Instrument and Service
Consumables
Collaboration
2014 2015 2016 2017
$47.6M
$62.7M
$86.5M
$106.0 -
111.0M
GuidanceQ1'16 Q1'17
$14.7M
$18.1M
Q1’16 Q1’17
+32%
+38%
+23-28%+23%
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Financial Performance
Key Growth Drivers
2014 2015 2016
Cancer of systems sold ~75% ~70% ~75%
International of systems sold >50% >60% >50%
BioPharma of consumables sales~30% ~35% ~45%
Panels of consumables sales~30% ~45% ~50%
Companion Dx of collaboration revenue$3.1M $6.0M $17.4M
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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
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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 12-18 months
• Strengthens position in ongoing business development negotiations
• Cash from additional biopharma and technology collaborations expected to augment offering proceeds
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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™
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Optimize Commercial Channel
Continuing Expansion of Installed Base
Potential
Placements1
1,000
5,000
10,000
FLEX
MAX
SPRINT
Significant Market Opportunity for All Systems
Current
Penetration
~ 7%
~ 7%
< 1%
1 – Company estimates
Individual
Researcher
Labs
Core
Research
Labs
Clinical
Labs
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Optimize Commercial Channel
Drive Installed Base Growth with SPRINT
nCounter Installed Base
MAX and FLEX
SPRINT
2014 2015 2016 Q1-17
~270
~360
~480
~50% of systems sold in Q1-17 were SPRINT
~510
Q1’17 SPRINT System Trends
• 100% to new customers
• ~90% to cancer researchers
• ~50% to distributor regions, mostly APAC
• ~30% to biopharma
• ~20% motivated in part by 3D biology
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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
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Launch New Products
Unprecedented Wave of Product Launches in 1H’17
PlexSetTM 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 3DTM 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
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
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Launch New Products
3D Biology™ Applications Having Early Impact
1 DNA
Panel
10 RNA
Panels
4 Protein
Panels
Multiple Vantage 3D™ Product Launches
Important
factor in
~20%of
system
sales
40+3D Biology
customers
5 Trial usages
by Biopharma
Companies
First peer-reviewed
publication
Dec.
’16
Top 10Innovation award
from The Scientist
Plenary Session
presentation at
AGBT 20173D Biology
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Expand Diagnostics
Prosigna® Provides Solid Base for Dx Business
Revenue and Installed Base
2014 2015 2016
37
70
55
Status
Installed Base
Annual Revenue
$0.7M
$2.5M
$4.2MTreatment 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
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Expand Diagnostics
Biopharma CDx Collaborations Provide Multiple Value Drivers
Pipeline of New Products
Under Development3
2014 2015 2016
$12M
$18M
$63M
Celgene
Merck
New
Collaborations
2014 2019
Lymphoma Subtyping
Test
Cumulative Non-Dilutive Cash to
Fund Operations
Growth from Layers of
Collaboration Revenue
Tumor
Inflammation
Signature1
Lymphoma
(DLBCL)
Subtyping Test2
Annual
US Incidence
~22,000
~100,000
1-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.
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Expand Diagnostics
Increase Penetration of CDx Opportunity in Oncology
Drug (Company) Therapeutic Area
100
90
80
70
60
50
40
30
20
10
0
Pre-clinical Early clinical Late clinical
1 - Tufts Center for the Study of Drug Development
Marketed Drugs with Companion Dx
100% = $25B annual sales*Cancer Drugs in Development with Companion Dx
Pe
rce
nt
Pe
rce
nt
Oncology Dominates
Marketed Precision Medicines1
Most Cancer Drugs in Development
Have Companion Dx1
1
1
1
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Expand Diagnostics
Leading Position in Immuno-Oncology
PublicationsResearch Products Partnerships
90+peer-reviewed papers
5key partnerships
IO RNA:Protein
Profiling Panel
PanCancer Immune
Profiling Panel
Myeloid Innate
Immunity Panel
200+panel customers
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Expand Diagnostics
Tumor Inflammation Signature for Anti-PD1 Response3
1 – Specificity
Se
ns
itiv
ity
Genes Capture Indicators of
Tumor Inflammation1
Potentially More Accurate Than
PD-L1 IHC Tests2
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.
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Expand Diagnostics
Evolve Toward Companion Dx for Multiple IO Agents
COLD HOT
Sup
pressio
n in
tum
or
micro
-enviro
nm
ent
Anti-PD-1 or Anti-PD-L1
LAG-3, TIM-3, CD137, IDO blockade
MDSC targeting = Carbo/TaxolTreg targeting = CTLA-4 inhibitors
Anti-VEGF
HDAC or BET inhibitors
Wnt, PI3K, or PARP-γ inhibitors
CTLA-4 inhibitorsSTING, TLR, OX-40, or CD137 agonists
Vaccines or CAR-T
Tumor Inflammation
Signature
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Advance Instrument Pipeline
Digital Spatial Profiling Advances into Commercial Development
Concept
Unveiled Jan 2016
Reality
Data at AACR, AMP, SITC, & ASCO meetings
CD9CD4
IL2RPD-L1
CD28
H
i
Lo
Expression Protein
RNA
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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 2018
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Advance Instrument Pipeline
Hyb & Seq™ Offers Novel Clinical Sequencing Solution
Rapid Sample-to-AnswerSimple Workflow Clinically-relevant Samples
LysateFFPE
TissueBlood
DNA
RNA
Short Read
Long Read
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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
• Complete ~4,000 barcode set and customer
presentation of data for AGBT 2018
• Beta instruments expected in 2019
Targeted Sequencing of from FFPE
Direct Single-Molecule RNA Sequencing
Accurate Reference Guided Assembler
Long Read Targeted Sequencing
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2017 and Beyond
Numerous Growth Drivers
Unique platform with
large untapped
markets
Compelling
roadmap of future
instruments
Playing key role in
immuno-oncology
revolution
Riding wave of
oncology companion
diagnostics
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Thank You