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TRANSCRIPT
Corporate OverviewJanuary 2014
OTC/QB: LCDX
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Forward-Looking Statements
This corporate overview contains statements about Caliber Imaging & Diagnostics’ or Caliber I.D.’s futureexpectations, plans and prospects that constitute forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of1934, as amended, including statements concerning the Company’s strategic goals and objectives relatingto, among other things: geographic and market expansion; new product opportunities; sales andmarketing initiatives; and research and development and financial projections. Actual results may differmaterially from those indicated by these forward-looking statements as a result of various importantfactors, including risks relating to: the Company’s ability to successfully obtain and maintain regulatoryapprovals; develop and market existing and new products; maintain key intellectual property rights;manage competitive pressures; successfully execute on its plans and strategies for growth; and overcomeadverse economic and market conditions, as well as those factors described in “Risk Factors” andelsewhere in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 and anysubsequent Quarterly Reports on Form 10-Q filed to date. The forward-looking statements included inthis corporate overview represent the Company's views as of the date hereof. The Company anticipatesthat subsequent events and developments will cause its views to change. While the Company may elect toupdate these forward-looking statements in the future, the Company specifically disclaims any obligationto do so. These forward-looking statements should not be relied upon as representing the Company’sviews as of any date subsequent to the date hereof.
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Developing and commercializing disruptive, non-invasive, point-of-care cellular imaging technologies
VivaScope® holds potential to improve patient outcomes while reducing costs to the healthcare system
VivaScope® provides physicians with a powerful tool to assist in the diagnosis of various conditions including skin cancers
VivaScope® has FDA 510(k) clearance and is supported by more than 350 independently sponsored studies and publications
Company Snapshot
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Investment Thesis
Poised for Market Expansion Installed base of 450 systems globally and growing Regulatory approvals in the U.S. and all major markets Widespread, independent and growing support via clinical studies and publications IP protection from 78 issued or pending patents worldwide Applications in dermatology and in surgery
Compelling Economics and Benefits Significantly improves outcomes and reduces costs Allows fast detection of cancerous lesions that appear benign Dramatically reduces the need for expensive, painful and time-consuming biopsies Potential cost savings of more than $1 billion annually in the U.S., not including any
productivity improvements
Initial Success in Europe VivaScope® a standard-of-care in Germany
Reimbursement in place in Germany
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A Compelling Need For Non-Invasive Diagnosis
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Initial Opportunity: Skin Cancer Screening
Prevalent, Treatable Cancers 1-in-5 (20%) Americans will develop skin cancer Melanoma accounts for 75% of all skin cancer
deaths, but is 95% curable if diagnosed early Non-melanoma skin cancer accounts for 3.5M
cancer diagnoses annually, 2.5x the number of all other cancers combined
Non-melanoma skin cancer diagnoses have increased 300% since 1994
Significant Expense Burden ~14M skin biopsies are performed annually 70% of biopsies by primary-care physicians are
benign Since 2008 treatment of non-melanoma skin
cancers has increased 137% The estimated direct cost of treating melanoma and
non-melanoma skin cancers in the U.S. exceeds $11B annually
Average number of deaths per year from melanoma
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Your Eyes Can Deceive You…
Standard-of-Care is Visual Inspection Low accuracy Frequent misdiagnosis
A B C D E Guidelines A: Asymmetry B: Border C: Color D: Diameter E: Elevation Suspicious lesions are biopsied
Which of these 2 abnormalities is malignant
and which is benign?
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…and Can Lead to Inaccurate Results
A conventional diagnostic approach would have biopsied the benign mole and ignored the malignant melanoma
Malignant Melanoma Benign Mole
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A New Standard with High Sensitivity and Specificity
Study Type Number of Lesions Sensitivity Specificity
BCC 1 152 100% 71%
Melanoma 2 102 97% 72%
Melanoma 3 351 91% 69%
Melanoma and Benign Nevi 4
32698% w/ dermoscopy
91% standalone68%
Melanoma and BCC 5 710BCC: 100%
Melanoma: 88%BCC: 89%
Melanoma: 71%
“Gold Standard” Histopathology for
Melanoma 61249
Agreement among dermatopathologists:80% for invasive melanoma70% for in situ melanoma
Using the “Gold Standard” histopathology, pathologists disagree on the diagnosis of melanoma 20-30% of the time
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VivaScope®
Cellular Imaging Technology
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Our Proprietary Technology
Confocal Cellular Imaging Creates layer-by-layer scans of living tissue, with a
>0.2mm imaging depth Provides a microscopic view of living cells in the skin,
with a 3-5 micron cellular resolution, comparable to histology
Point-of-Care Diagnosis Images entire lesions instead of portions of lesions Allows physicians to quickly diagnose melanoma and
other skin cancers, rashes and many common skin conditions
Reduces unnecessary biopsies of non-cancerous lesions
Cost-Efficient, Patient-Friendly Fast, painless procedure, allowing for accurate diagnosis
in minutes rather than days No side-effects from imaging procedure Eliminates the need for a follow-up visit
Pinhole and Detector
Laser
Scanning Opticsand Beam Splitter
Microscope Objective Lens
Horizontal Confocal Image
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The VivaScope® Platform: Products
VivaScope® 3000 FDA 510(k) cleared
In Vivo Cellular Imager
VivaScope® 1500 and VivaScope ®
1500 Multi LaserFDA 510(k) cleared
In Vivo Cellular Imager
VivaNet ® /VivaLANFDA Class 1 Device
TelepathologyVideoDermoscopy
In Vivo Cellular Imager
VivaCam ®
FDA 510(k) clearedVivaScope® 2500
FDA 510(k) cleared
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VivaScope® Confocal Imagers
Images can be interpreted by the physician at the point of patient care, and/or
Images can be securely transferred to a private-network pathologist for remote diagnosis
Basal Cell Carcinoma
Melanoma
Benign Mole
Squamous Cell Carcinoma
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Robust Intellectual Property-78 Patents Issued or Pending
Patent TypeU.S.
Issued / PendingEurope
Issued / PendingPacific Rim
Issued / Pending
Latest Expiration Based on Issued
Patents
Imaging system technology 26/3 1/5 3/3 Jul-22
In vivo and ex vivo disease screening, diagnosis, treatment
and therapy monitoring25/4 3/8 5/2 Nov-20
Tissue stabilization 18/5 2/6 3/2 Nov-20
Image capture and mosaicing 6/1 0/5 1/3 Nov-20
Image transfer, storage, viewing and retrieval
2/1 0/2 4/2 Feb-17
Patented core technology with ancillary blocking patents that makes the technology clinically viable and effectively protects our intellectual property for years to come
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Prestigious Customer Base
Cosmetic– Proctor & Gamble– Johnson & Johnson– Shiseido– L'Oréal – Avon– Amway
Academia– Rice– Texas A&M– Yale– Mass General
Current customers include some of the most highly regarded Fortune 500 companies, academic institutions and private practices
Over 300 units shipped into commercial research and academia markets and 125 units placed into dermatologist offices worldwide
Clinical– Memorial Sloan-Kettering Cancer
Center– University of Miami Dermatology– University of Connecticut– Rutgers University– Mayo Clinic
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Commercial Strategy
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Global Distribution and Regulatory Approvals
Distributor Territory *
Mavig GmbHEurope/Middle East
Emdutos Brazil
Integral Japan
Equipmed Australia
ConBio China
Shin Chen Instrument
Taiwan
True Systems South Korea
Filtech Enterprise Thailand
DirectNorth America
• Each territory has received regulatory approvals and recorded VivaScope® sales• Standard of care in Germany
Canada
Brazil
Australia
JapanChina
EuropeUnited States
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VivaScope® Revenue Stream
Imaging Process Can be done by
technician – frees up MD time
70% of biopsies test NEGATIVE!
Initial Examination
Diagnosis and Reporting
VivaNet Transfer and Storage Diagnosis to Patient and
Treatment PlanningSurgery can be
scheduled right away
$100 to ReferringPhysician
$100 to Imaging Center$50 to Caliber• System Sales• Recurring
revenue
$40 to Caliber• Per patient revenue
$60 to Pathologist
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Sales & Marketing Priorities
Research Market sales
Increase penetration in existing R&D and international markets
Skin Cancer Screening• HMOs • ACOs • IHNs
Therapeutic
Monitoring• SRT• Brachytherapy• PDT
IntraoperativePathology• Head and neck• Oral• Cervical• Breast
Increase organization to address managed care and concierge medicine
Systems integration with companies manufacturing skin disease therapeutics
Develop devices and techniques for real-time pathology in the operating room
Q3/2013-Q4/2013-onward
2014 - onward
2016
Active projects with major corporations ongoing in each category
Product Optimization
2011-12
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Beyond Diagnosis: Skin Cancer Treatment and Skin R&DTherapeutic Monitoring Examine tissue surrounding an excision to determine clear margins Examine tissue undergoing noninvasive therapy to determine therapeutic outcomes Reduce the number of noninvasive treatments required Currently in discussions with 2 significant OEMs
Skincare Product Research & Development Repeatedly and nondestructively examine tissue over time Determine safety and efficacy of commercially available skincare products Ability to perform a noninvasive cellular biopsy instead of relying on visual or indirect
measurement systems Contraction of product development cycles Attractive price point compared to other confocal devices Significant opportunity in U.S.; >300 devices shipped to-date, mostly OUS Hired first 2 salespeople to support this market in November 2013
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Beyond Dermatology
Opportunities in neuropathy, cervical, breast, colon and prostate cancers
Large opportunity for excised tissues in the OR
IndicationTechnical Feasibility
Pilot Accuracy
Oral ✓ ✓
Head & Neck ✓ ✓
Neuropathy ✓ ✓
Breast ✓ ✓
Cervical ✓
National Cancer Institute ongoing study
European VivaNet study
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Experienced Leadership Team
More than 15 years of experience as a CFO, and 15 years at publicly traded companies
Leadership positions at American Aerogel Co, HighRes Biosolutions, Inc., BioSense Corporation, Praxis International, Centennial Technologies and Conseco, Inc.
More than 20 years of experience advising, analyzing and managing in technology-driven companies
Leadership positions at American Aerogel, Conseco, Inc., Centennial Technologies and PSC, Inc.
More than 35 years of experience in sales, sales management and marketing
Leadership positions at Hewlett-Packard, PSC, Inc., Centennial Technologies and Conseco Insurance
More than 24 years of optical and medical device design, including medical image transfer and storage systems management
Leadership positions at Molded Interconnect Device (MID), Burron Medical and Fisher-Price
L. Michael HonePresident & CEO
Richard J. PulsiferChief Financial Officer
William J. FoxChief Technology Officer, VP Engineering
Richard StathesVP, Sales and Marketing
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Key Financial Data
Equity Metrics (12/31/13)
Market cap: $4.6 million
Shares out: 8.4 million (1)
Balance Sheet (9/30/13)
Cash: $2.4 million
Debt: $11.8 million (2)
1 Excludes 7.7M options and warrants2 Principal of $6M plus interest will convert into common stock at offering close. Remaining debt matures in 2020
Revenue
9 mos. ended 9/30/13: $2.3 million
9 mos. ended 9/30/12: $1.3 million
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2012
Multiple Upcoming Catalysts
2013 2014 2015 2016
Redesigned entire product line Upgraded performance Improved reliability Improved manufacturability
Launched customer training program Rebranded company
Planned product improvements Stitching – improves image quality Strip mapping – 4x increase in speed MEMS technology – reduces size False coloring – matches histology
Continue process of obtaining reimbursement codes
Identified immediate revenue opportunities R&D companies and institutions Managed care organizations Concierge medicine
Launched video dermoscopy product Secured regulatory approval in Australia
(one of the largest markets) and Brazil Established development strategy for
thyroid/parathyroid surgery in the OR
Complete reimbursement code process
Launch real-time pathology line for use in the OR
Introduce fluorescent biomarkers designed to highlight cancerous cells
Continue execution/rollout of revenue plan
Launch new compact confocal imaging device leveraging novel technology currently in development at U of R
Seek partnership with a pharmaceutical company for neuropathy applications
Continue product life cycle development
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Investment Thesis
Poised for Market Expansion Installed base of 450 globally and growing Regulatory approvals in the U.S. and all major markets Widespread, independent and growing support via clinical studies and publications IP protection from 78 issued or pending patents worldwide Applications in dermatology and in surgery
Compelling Economics and Benefits Significantly improves outcomes and reduces costs Allows fast detection of cancerous lesions that appear benign Dramatically reduces the need for expensive, painful and time-consuming biopsies Potential cost savings of more than $1 billion annually in the U.S., not including any
productivity improvements
Initial Success in Europe VivaScope® now standard-of-care in Germany
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References
1. Nori S, Rius-Díaz F, Cuevas J, Goldgeier M, Jaen P, Torres A, González S. Sensitivity and specificity of reflectance-mode confocal microscopy for in vivo diagnosis of basal cell carcinoma: a multicenter study. J Am Acad Dermatol. 2004 Dec;51(6):923-30.
2. Pellacani G, Cesinaro AM, Seidenari S.Reflectance-mode confocal microscopy of pigmented skin lesions--improvement in melanoma diagnostic specificity. J Am Acad Dermatol. 2005 Dec;53(6):979-85. Epub 2005 Oct 19.
3. Pellacani G, Guitera P, Longo C, Avramidis M, Seidenari S, Menzies S. The impact of in vivo reflectance confocal microscopy for the diagnostic accuracy of melanoma and equivocal melanocytic lesions. J Invest Dermatol. 2007 Dec;127(12):2759-65. Epub 2007 Jul 26.
4. Guitera P, Pellacani G, Longo C, Seidenari S, Avramidis M, Menzies SW, In vivo reflectance confocal microscopy enhances secondary evaluation of melanocytic lesions. J Invest Dermatol. 2009 Jan;129(1):131-8. doi: 10.1038/jid.2008.193. Epub 2008 Jul 17.
5. Guitera P, Menzies SW, Longo C, Cesinaro AM, Scolyer RA, Pellacani G. In vivo confocal microscopy for diagnosis of melanoma and basal cell carcinoma using a two-step method: analysis of 710 consecutive clinically equivocal cases. J Invest Dermatol. 2012 Oct;132(10):2386-94.
6. Braun RP, Gutkowicz-Krusin D, Rabinovitz H, Cognetta A, Hofmann-Wellenhof R, Ahlgrimm-Siess V, Polsky D, Oliviero M, KolmI, Googe P, King R, Prieto VG,French L, Marghoob A, Mihm M. Agreement of dermatopathologists in the evaluation of clinically difficult melanocytic lesions: how golden is the 'gold standard'? Dermatology. 2012;224(1):51-8. doi: 10.1159/000336886. Epub 2012 Mar 20.