echometrix pitch deck-jan 2015
TRANSCRIPT
Technically Sound. Objectively Better.™
Investor PresentationJeffrey L. Dalsin / CEO
The Echometrix Vision and Mission
Vision: To transform the way that soft tissue injuries are diagnosed and managed
Mission: To commercialize an ultrasound product for the objective diagnosis and management of musculoskeletal injuries that will lower costs and improve outcomes
Echometrix Team
Shawn Guse, J.D. (Chair)– CEO of Intuitive Biosciences, Fmr.
CEO of CPAC, Fmr. VP and Gen. Counsel at Tomotherapy
Janet A. Lippincott– Fmr. Marketing and Commercialization
lead at GE Healthcare
Board of Directors
Management TeamDaniel Malone, MD– Internist/Rheumatologist
– MSK Ultrasound expert
Sabrina Brounts, DVM, PhD– Developer of Echosoft equine
use
– International demonstration of Echosoft
Barbara Israel, Ph.D. – Co-founder, Fmr. CEO of Platypus
Tech, Secured $20M in federal grants, $3M in equity financing
Ray Vanderby, Ph.D. – Co-founder, Director of Orthopedic
Res at UW Madison 3
Clinical AdvisersJeffrey L. Dalsin, Ph.D. - CEO– Fmr. Dir. of Product Development
at Nerites Corp.
– Nerites acquired for $20M in 2011
Kenneth Lee, M.D., M.B.A. -CMO– Director of MSK Ultrasound at
UW Hospitals and Clinics
*Assumes $50,000 Echosoft-equipped ultrasound cost and 5-yr replacement
18M MSK injuries create $92B healthcare burden
U/S could replace 45% of initial MSK diagnoses and save Medicare $700M/yr
Underpenetrated due to lack of standard U/S diagnostic approach
Future Markets
– Cardiac function (post-MI, CHF)
– Early detection of atherosclerosis
Annual US Market Potential*
Segment
Number of
potential
users
Early Adopter Total Size
Biomechanics
researchers120 $1,200,000 $1,200,000
Private Practice
Equine Veterinarians3800 $3,800,000 $38,000,000
Physiatrists 2000 $10,000,000 $20,000,000
Athletic Trainers 1200 $6,000,000 $12,000,000
Orthopedic Practices 8600 $8,600,000 $86,000,000
Physical Therapists 95000 $950,000,000
Upgrades to
Installed Base (MSK)10000 $50,000,000
Total
Annual$29,600,000 $1,157,200,000
Musculoskeletal Ultrasound Market
Inefficient MSK Diagnosis and Management
General Practitioner
•No Diagnosis
•Referral to PT
Physical Therapy
•Multiple visits
•No ability to monitor progress
General Practitioner
•Referral to Radiology for MRI
MRI with Radiologist
•High cost
•Potential discomfort
•Differential diagnosis
Diagnosis
•Referral to specialist
Application of Therapy
•No ability to objectively monitor healing
5
General Practitioner
•Point-of-careEchosoft Evaluation
•Definitive Diagnosis
Diagnosis
•Referral to specialist
Application of Therapy
•Echosoft objective monitoring of healing
If you get injured today…
With Echosoft-enhanced ultrasound…
Echosoft reduces “touches” to decrease cost while improving outcomes
Standard Ultrasound Echosoft
The Echosoft Solution
6
How Echosoft Works
7
Proprietary
algorithms
Compatible with
all ultrasound
hardware and
images
Scan Track
Compute Map
U.S. Patents 7,744,535; 7,736,315; 8,282,553; 8,840,555
-0.05 0 0.05 0.1 0.15 0.20
20
40
60
80
100
120
Stiffness Gradient (SG)
Pix
el count
Quantify
Score =𝐻
𝑊H
W
Monitoring Healing in Tennis Elbow
8
“Pathology Index” (PI) Color Map
Abnormal (Right Aug.) Abnormal (Right Sept.) Abnormal (Right Jan.) Normal (Left Aug.)
Health Status Score
7.742.1
96133
• Echosoft can be used to monitor tissue healing• Echosoft scoring correlates well with pain scoring
Ken Lee, UW Health
𝐻𝑆 =ℎ𝑒𝑖𝑔ℎ𝑡
𝑤𝑖𝑑𝑡ℎ
Fre
quency
Pathology Index
Achilles Healing in Canine
Monitoring mechanical healing of an Achilles tendon
laceration in a dog after suture repair
9Hans EC, et al. Vet Rec Case Rep. 2. p1. July 2014.
t=0 (post-surgical) t= 4 weeks
t = 16 weeks t = 22 weeks
Achilles Healing in Canine
PI distribution suggests mechanical healing of the tissue
10Hans EC, et al. Vet Rec Case Rep. 2. p1. July 2014.
Pathology Index Pathology Index
Pathology Index Distribution
Echosoft RV
Desktop, offline product
Targeted toward research and veterinary use
Will serve as source of early revenues
Sales and use will help validate Echosoft technology, spur sales of future products
Echosoft Tablet
Real-time image processing
Compatible with all standard
ultrasound systems
Wireless image transmission
Provides diagnostic and healing
information at the point of care
Echosoft Products
11
Echosoft Creates Value
12
• Point-of-care diagnosis•Decreased re-
injury rate
•Better care•New source of
reimbursement• Improved patient
compliance
•Decreased costs• Fewer visits
$1B MSK ultrasound market only 5-10% penetrated
Echosoft: a catalyst for greater market penetration
Competitive Advantage: Global Patent Portfolio
“Method and Apparatus Providing Improved Ultrasonic Strain Measurements of Soft Tissue” – U.S. Patent 7,736,315, PCT US2005/027081, EPO 05804640.0 and Japan 2007-523863
“Method and Apparatus for Acoustoelastic Extraction of Strain and Material Properties” – U.S. Patent 7,744,535, PCT US2007/081515, EPO 07868456.0 and Japan 2009-533478
“Method and Apparatus for Acoustoelastic Extraction of Strain and Material Properties” – U.S. Divisional Patent 8,282,553
“System and Method of Ultrasound Image Processing” – U.S. Patent 8,840,555, PCT US2011/060234, Japan/EU Pending
Licensed from University of Wisconsin
Assigned to Echometrix
Competitive Landscape
Echosoft™
module +
Ultrasound
Diagnostic
Ultrasound
Shear Wave
ElastographyMRI
Physical
Manipulation
Real-Time Imaging
Portable
Point-of-Care
Quantifies Tissue
Function
Reimbursed Use
Widely AcceptedUse in MSK
14
Business Model
15
Offering
Revenue Streams
Phase 1Q1 2015
“Off-line”Echosoft RV (Research
and Veterinary Use)
• Initial License Fee• Annual Maint.
Phase 3Timing TBD
Real-time Echosoft Tablet
• Initial Purchase• Annual Maint.
Phase/TimingPhase 2
Q3-4 2016
• Partner License Fee • Royalties
U/S Hardware Intergration
Channels •Direct Sales• Co-marketing
•Direct Sales• Co-marketing
• Partner Distribution
Timeline
16
Partnering
Real-time
Prototype
Clinical
Verification
FDA-
510kCommercial Development
Tablet
Sales
2015 2016
Echosoft RV Sales
Bridge Round - $500k
NSF
grant -
$74kSeries A - $3-4MM
Partner Co-development/Licensing Fees
Partners
Hardin Design and Development (Madison, WI)– Echosoft Tablet prototyping
Farwell Project Advisors (Madison, WI)– Echosoft RV development
Regulogic, LLC (Madison, WI)– Quality Management System development
Regulatory and Clinical Research Institute (MN)– Clinical study design and administration
Starfish Medical (Vancouver, BC)– Commercial product development
UW Hospitals and Clinics (Madison, WI)– Access to clinical guidance via Ken Lee
17
Financial Projections
18
Proforma Cash Flows (000’s) 2015 2016 2017 2018 2019
Revenue
Capital Contributions $4,350 $- $- $- $-
Sales $258 $723 $3,137 $7,990 $14,059
Grants $74 $300 $750 $- $-
License Agreements $2,000 $4,000 $4,000 $4,000 $4,000
Royalties $- $2,500 $10,000 $22,500 $42,500
Expenses
Cost of Goods $15 $91 $704 $1,924 $3,414
Operating Expenses $1,519 $4,106 $4,098 $6,267 $8,997
Net cash $5,147 $3,401 $13,085 $26,299 $48,147
Cash at beginning of period $92 $5,240 $8,641 $21,726 $48,024
Cash at end of period $5,240 $8,641 $21,726 $48,024 $96,172
Exit Strategy: Acquisition by Partner
Exit through acquisition by medical imaging company anticipated
Ultrasound
ExitsLumenVu
R2
TechnologiesSonosite ZONARE
Exit Timing 2007 2006 2011 2013
Exit Price $13.6 M $220 Million $995 M $105 M
Status at ExitPre-revenue
and Pre-510K
$45 M in
Revenue
$300 M in
Revenue
$64 M in
Revenue
Exit Multiple N/A 5x Revenue ~3x Revenue 1.6x Revenue
Acquirer Sonosite Hologic FujiFilm Mindray19
Recent Milestones Achieved
Solid and growing IP position
Code functioning in real time
Customer Development ongoing
CMO and clinical advisors recruited
Clinical evidence of basic utility
Echometrix has great momentum! 20
Strong team, strong plan
Funding to date
– $700k angel, $800k SBIR
Convertible Note Bridge
– Seeking $500,000
5% interest, 20% discount
$150k closed, $100k soft-circled
– Launch Echosoft RV
– Complete Echosoft Tablet prototype, verify clinically
– Prepare company for Series A
Financing Strategy
Series A
– $3-4M in mid-2015
– Commercial development, approval, and launch of Echosoft Tablet
– Development of reimbursement strategy for treatment monitoring, physical therapy segment
– Development of new markets, indications
– Pursuit of strategic partner
