general overview of mc health tech 011614

MCHT: A global medical device company

Confidential – MC HEALTH TECH – Contact: [email protected] – Nov 2013

Outline

The MC Health Tech project.• Team.

• Associated centers.

• Unmet needs in neck and low back pain.

• Solution for chronic pain.

• The best lymphatic draining device.

• Aesthetic market.

•Regulatory and clinical plans.

•Business model & financial projections.

Confidential – MC HEALTH TECH – Contact: [email protected] – Nov 2013 2

MCHT Technology

Product 1

Product 2

Future plans

The MC Health Tech (MCHT) project


Chronic neck and low back pain

• Clinical and regulatory strategy

• Marketing and commercial strategy

Physical therapists / chiropractors

Product 1One single technology

•Full vacuum control

•Multiple arms2 Products, 2 markets

Outstanding efficacy,

long-lasting effects,lack of

rhizarthrosis…

…in highly prevalent unmet needs

MCHT2 patent

applications

Breakthrough technology:REPRODUCIBILITY of massage therapy

Lymphatic drainage and cellulite

• Marketing and commercial strategy

Aesthetic

Product 2

Reproducibility is a Revolution in Physical Therapy (PT)


“Revolution similar to the impact of chemistry on drugs: highly variable treatments based on plant extracts become reproducible when single

organic compounds were used.This is what MCHT technology does to massage therapy”

Minimizes variability:•Intra-day•Practice to

practice

Rigorous clinical studies can be run

Optimization of protocols:

•Enhance efficacy•Novel indications

Inventors PHYSIUM and LIPODREN technologies

MCHT Team

Francesc Trias, MBA. CEO18 years experience, startup incubators


Xavier Buxareu, MD, MBA. COO20 years worldwide experience,sales and marketing of devices

Carme Carré, MD, PhD. Medical Director30 years experience in clinical development

Joaquim Trias, PhD. Director20 years experience serial entrepreneur

Mark Stultz, Physical Therapist, MS.15 years experience serial entrepreneur

Jordi Saló, Physical TherapistDirector of R&D and Training10 years physical therapist and chiropractor

Antoni Godayol, EngineerDirector of Manufacturing9 years industrial manufacturing

6Confidential – MC HEALTH TECH – Contact: [email protected] – May 2013

SABJoaquim TriasMark StultzJosep Pous

Admin & FinanceD’Aleph

Sales & MarketingXavier Buxareu

MedicalCarme Carré

R&D and TrainingJordi Saló

ManufacturingToni Godayol

Quality controlRaül Trias

MCHT Team

CEOFrancesc Trias

Partner’s team

Board of Directors

Associated reference and physical therapy (PT) centers

• Reference centers provide guidance and clinical data:

• CAR, elite sports medicine reference center

• Neck and low back pain, sports medicine

• Spanish olympic team, professional athletes

• Professional football club, strong interest, negotiations ongoing

• Teaching hospitals, lead institutions in Spain:

• >16,000 patients treated in 14 PT centers in Spain: Neck and low back pain

• SAB, investigators from reference centers are committed to join: Dr Til (CAR), Dr Pelayo (Guttmann), Dr Pous (CEMATEC)


Centre d’Alt Rendiment


Physical therapist and chiropractor markets

Product 1

Solution for chronic pain

• Investigator driven prospective studies in chronic neck pain, chronic low back pain.

• Over 16,000 patients have been treated in physical therapist practices, excellent efficacy and safety profiles.


• Addressing unmet medical needs in chronic myofascial pain.

• $51.6B WW neck and back pain market in 2007.

• $11.9B out-of-pocket visits in US, $19.2B in OECD countries.

• High prevalence, 14-19% WW.

No other current treatment gets close to the efficacy shown by PHYSIUM:

• Wider and deeper painless massage than MT, without effort.

• Matches 8 physical therapist workforce thanks to its multiple arm system.

• Standarized treatments are tested and improved for efficacy; and prescribed, because they are optimized.

• 60-minute weekly session.

• 4 to 10 sessions to resolve.

• Long-lasting results.

Much more comfortable treatment than manual therapy

(MT)• Protocols result of 2

years of work with patients.

Prospective chronic neck pain study

• 20 non-responders patients with chronic pain (3 to 12 months, Canadell, 2011).


Results• Patients achieved a 45% decrease in

average pain (standard VAS scale) after 2.8 sessions.

• Cervical mobility improved to normal levels.• No relapse after 3 months.

PHYSIUM treatment: 60-min weekly session up to 6 sessions.

PHYSIUM showed efficacy for the treatment of chronic neck pain

Neck mobility (goniometer)

Prospective chronic low back pain study

• 21 non-responder patients with chronic pain that required daily or weekly treatment.


Results• 20 of 21 (95%) of patients showed a

clinically significant reduction of pain, 70% between sessions 3 and 5.

• Mobility improved.

• PHYSIUM treatment: 60-min weekly session, up to 10 sessions.

PHYSIUM showed long-lasting efficacy for the treatment of chronic low back pain

Results• Long lasting effects are impressive.• Patients do not need daily or weekly

treatment any longer.

• Post treatment: Monitor for relapse in pain / mobility for up to 6 months (N=19 patients that responded to original treatment.

Relapse after last treatment

Patients (N=19)

< 6 weeks after last treatment 0

Relapse in 6-8 weeks 7

Relapse in 13-18 weeks 7

Relapse in 26 weeks 1

Discharge (no relapse in 26 weeks) 4

Use in PT practices

• Use of PHYSIUM: 14 PT practices have treated 16,000 patients in 2 years in Spain (€2M of PHYSIUM sales).


PT TESTIMONIALS

“Never could I have these results before.” / “Incredibly fast results.”“I can treat many different disorders with astounding efficacy with a

single device.”“None of the current devices can match the efficacy and versatility of

yours.”“I can treat more patients a day. I no longer go back home exhausted.”

PHYSIUM device N

Sessions per patient, once a week 4.4

Treatments per day 6

Treatments per year 1,488.5

PT Practice N

PT practices 14

Treatment days in practice 250

Patients per practice 672.2

PT practices that use PHYSIUM:

• Acquired the device.• Switch to PHYSIUM.

PHYSIUM users abandon other PT

treatments

Marketing strategy


Why physical therapists (PT) buy MCHT devices:

• Efficacy in chronic conditions leads to expanded customer base and higher income.

• More treatments are provided: increase number of patients.

• Limited physical effort for therapist: more patients can be treated daily.

• PT uses diagnostic tests and requires less physical effort: job is enriched.

• Clinical trials in chronic neck and back pain.

• KOL and reference centers.• Conferences and professional

fairs.• Publish clinical results.• Training in PT schools.

• Access through local distributors (40% commission).

• Demo and training centers in PT offices.

• Support distributors in fairs.

• PHYSIUM basic device:40.000 € retail price.

• Accessories:• Treatment protocols (800

to 2.100 €).• Specific applicators.• Filters and spare parts

Product and price Communication Distribution

Competitive advantage, neck and back pain


PHYSIUM Vacusport Drugs Other PT

Company MCHT LPG Pharma Various

Technology Vacuum, MCHT VacuumNSAID, opioids,

steroidsIR, ultrasound,

microwave laser

Clinical studies

Efficacy

Safety

Lasting results

Chronic neck pain

Chronic low back pain


Aesthetic market

Product 2

The best lymphatic draining device

• Investigator driven prospective study in cellulite.

• Over 35,600 visits in 30 aesthetic centers up to date, excellent efficacy and safety profiles.


• Large market, (estimated body shaping market $792 million in 2012), global growth rate of 11%..

• 22% of market due to volume reduction and cellulite (21% growth).

• Manual therapy (MT) is standard of care but has severe limitations.

No other current treatment gets close to the efficacy shown by LIPODREN:

•Lymphatic drainage, volume reduction, cellulite.

•C-section fibrotic scars.

• 60-minute weekly session.

• 4 to 10 sessions.• Long-lasting results, no

flaccidity.

Comfortable treatmentand fast results

Prospective cellulite study


• 24 women with cellulite in lower extremities, not responding to other treatments.

LIPODREN is efficacious for the treatment of cellulite

Results• Reduction of leg and abdominal perimeters from the first session.• Improved the look of lower extremities.

• LIPODREN treatment: 11 visits (60-min weekly session).

Before treatment After treatment

Marketing strategy


Why aesthetic centers (AC) buy:• Efficacious in volume reduction and cellulite prevention.

• More treatments are provided: increase number of patients

• Limited physical effort : more patients can be treated daily.

• AC uses diagnostic tests and avoids physical effort: job is enriched.

• Clinical trials in cellulite and scarring.

• KOL and reference centers.• Conferences and professional

fairs.• Publish clinical results.• Training in AC or PT schools

• Access through local distributors (35% commission).

• Demo and training centers in AC or PT offices.

• Support distributors in fairs.

• LIPODREN basic device:28.000 € retail price.

• Accessories:• Treatment protocols (200

to 800 €).• Specific applicators.• Filters and spare parts

Product and price Communication Distribution

Future plansClinical and regulatory path


Regulatory Path in Europe and US

• Follow 2 distinct paths for LIPODREN and PHYSIUM.

20

No regulatory approval required, marketed in Spain, but aesthetic distributors are increasingly requiring approval from regulatory agencies.

In Europe:• CE mark Q4 2014

Class I in USA (Q4 2014), requires simple regulatory clearance

Class I in USA. Requires simple regulatory clearance

Get additional clinical claims by equivalence using 510(k) pathMeeting with FDA to agree on regulatory path.

Additional clinical claims using De novo process:Pre-De novo meeting with FDA.

Reach agreement with FDA on clinical studies.

Class IIA in Europe. Requires regulatory approval.• CE mark• Expected in Q2 2014

Regulatory expert Richard Quinn Esq. (from BLEA, LLC and FDAimports, Glen Burnie, MD).

Phase 1

Phase 2

MC HEALTH TECH – Contact: [email protected] – Jan 2014

Clinical studies

• Clinical studies for low back and neck pain in Europe and US with PHYSIUM.

• Support FDA filing, marketing in Europe, publication.

• Multicenter study for chronic low back pain (similar study for neck pain) in 2014.

• LIPODREN, cellulite study with similar design.

21

Patients: chronic low back pain, VAS≥6.Primary endpoints: pain (VAS), disability.Secondary endpoints: mobility, relapses, QOL (α=0.05, power 90%).


Future plansFinancial projections


Financial needs and future plans


2014 milestones (1)


Neck pain pivotal trial:• High prevalence and unmet need, endpoints fast to track, easy patient recruitment

• Start regulatory approval path for FDA and KOL.

Increase number of investigator driven studies:• Priority study fields: chronic back pain, chronic pain, fibrotic scars, lymphatic drainage,

• Involve professional sports clubs and KOL in sports medicine.

• PT network to create and train for new treatment protocols.

• Publish clinical data.

Establish evidence of PHYSIUM efficacy and regulatory path for approval

Expand range of treatments and get KOLs involved

1

2

Goals

Get regulatory approval:• CE mark for LIPODREN.

• 510(k) for PHYSIUM and LIPODREN in the US.

Expand range of treatments and get KOLs involved

3

Clinical and regulatory strategies

2014 milestones (& 2)


Strengthen the commercial position in Spain and Portugal:

• Expand and train sales force through sales agents.

• 3 additional demo centers to cover all the Spanish and portuguese area.

• Sales expected to take off in Q2 after sales force training (€ 1 M).

Set the commercial structure in 5 major European markets:

• Distributors in France, Italy, Germany, Austria and United Kingdom (Q3).

• 6 demo centers: Fr (2); I (1); G (1); A (1); UK (1) (Q3).

• Train distributors sales force and technical support (Q3).

• Start sales in Q4.

• Attend MEDICA 2014 professional fair.

Set up sales force and supporting demo centers in Spain

Set up sales force and supporting demo centers in major european markets

1

2

GoalsCommercial strategy

LAUNCH MCHT SALES IN 5 MAJOR EUROPEAN MARKETS

Long term sales & marketing development


LIPODREN booth at COSMOPROF(march 2013, Bologna, It)

Market access through local distributors• Set up showrooms in reference centers.• Provide training and technical support.• Attend professional fairs and conferences.

Integrate sales network in major markets• Joint ventures, merge or develop own sales network.• Distributors in small markets.

Manufacturing is subcontractedcurrent capacity is 500 units/year

Phase 1

Phase 2

Sales & EBITDA projections

• Forecast data based on OECD countries (No data available from BRIC markets).

• Estimated physical therapists offices in OECD market: 1,000,000.

• Estimated aesthetic centers in OECD market : 1,500,000.


Years

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Set up sales force UK, GE, A, FR, IT

USA (LATAM, south Asia)

Japan (China)

Other

Sales launching SP, North IT

UK, GE, A, FR, IT

USA (LATAM, south Asia)

Japan (China)

Other

PHYSIUM sales (MM €) 0.9 3.5 18.3 55.8 99.1 155.2 231.9 280.6 270.1 280.6

Units 21 85 438 1,337 2,373 3,717 5,553 6,718 6,468 6,718

LIPODREN sales (MM €) 0.6 3.0 12.6 26.8 62.8 131.8 185.5 250.4 297.5 297.5

Units 20 100 419 891 2,086 4,378 6,161 8,317 9,882 9,882

= Total sales 1.5 6.6 30.9 82.7 161.9 287.0 417.4 530.9 567.6 578.1

EBITDA (MM €) -0.7 -0.7 4.6 14.6 33.2 67.9 98.9 125.4 139.6 139.4

Market Share accumulated

(OECD countries)0.0% 0.0% 0.1% 0.3% 0.8% 1.6% 2.7% 4.1% 5.6% 7.2%

Backup slides


Financial needs and exit strategy

(1)Fixed costs includes common fixed costs of 2 years :personnel, facilities rental, communications, etc.). Investments includes: patents, demo devices, engineering & manufacturing (moulds, treatment software, etc.).

(2)Clinical & regulatory includes chronic neck and back pain clinical trial (Phase III) external costs (CRO, . MCHT internal costs are included in (1).

(3)Commercial development includes commercial costs (fairs, travels expenses, etc.) inventory and accounts receivable. Other MCHT internal costs are included in (1).

4,000,000 € = 40% shares of MC HEALTH TECH; ROE: 95% in 5 years

• Raised 400,000 seed capital

• Seeking 3,600,000 round

Exit strategy:

• M&A when sales reach €25/40M and gross margin = 50%.

• IPO after clinical trials and regulatory approvals.


ALLOCATION FIXED COSTS & INVESTMENTS (1)

CLINICAL & REGULATORY (1)

COMMERCIAL DEVELOPMENT (2)

TOTAL (€)

FINANCIAL NEEDS 1,600,000 1,100,000 1,300,000 4,000,000

Competitive landscape


Competing technologies Companies

PHYSIUM

• Manual therapy techniques, vacuum technologies and pharmacology (NSAIDs, corticoteroids and opioid painkillers) are the main competitors technologies.

• Physical therapies (ultrasound, electric currents, microwave, laser and infrared techniques) have not been proved to be effective to date in clinical studies.

Indiba, Vacusport,Cynosure, Syneron, Alma Laser Accent, Chattanooga ITO Physiotherapy & Rehabilitation, Iskra Medical, Bösl, L-Tech, Fysiomed

LIPODREN

• Manual therapy techniques, vacuum technologies, pressotherapy, laser, lontophoresis, carboxytherapy, mesotherapy, radiofrequency and cryopolysis have not been proved to be effective to date in clinical studies.

LPG, Icoone,

Prospective spina bifida study

31

Study #2: Patient spasticity before and after treatment with Physium (Saló Darder et al, 2013)

Study #1: Improvement of deep sensitivity in the right and left hemispheres measured by algometry was statistically significant (Gutiérrez et al, 2013)

EIPS

P.A C

5-C6

2 METACARPIA

NO

TIBIA

L ANTERIO

R02468

1012

Pre

ss

ure

(kG

/cm

2)

P <0 , 0 0 5

Results of study #1:• 5 patients with Spine bifida: injury at L3-

L4, muscles in minimum caudal in quadriceps and without amputation of members.

• Deep sensitivity: a statistical significant increase after the 5 weekly treatments. Improvement maintained at 1 month after last treatment, (no relapse).

• Superficial sensitivity wasn’t observed. It could be due to the low sample size and the reduced number of sessions of treatment applied to these patients.

• Promising effects when frequent pressure ulcers by lack of the deep sensitivity and incontinence. Effects on the sphincter control should be studied.

Results of study #2:• 3 patients with spine bifida treated for their fibrotic scars

showed a significant improvement in their knee extension and a reduction of the stiffness.

EIPS

P.A C

5-C6

2 METACARPIA

NO

TIBIA

L ANTERIO

R0

2

4

6

8

10

12

Pre

ss

ure

(k

g/c

m2

)

P <0 , 0 0 5

Deep sensivity left Deep sensivity right


(1) Iliac spine postero-superior (2) joint pillar of C5-C6 (3) second metacarpal (4) tibialis anterior

(1) (2) (3) (4) (1) (2) (3) (4)

MCHT business model


Physical therapists and physicians (orthopedic, cosmetic, rehabilitator, sports medicine); and beauty centers

Manufacture and sell PHYSIUM and LIPODREN (+

accessories)…

…to therapists for myofascial and articular pain, and to aesthetic

sector

Clinical trials, publications,

conferences, FDA, EMA.…prove efficacy and safety…

Competitors have very weak clinical studies

…sell worldwide through distributors…

…and protect our technology with

integratedpatent and regulatory strategies

Competitors have weak regulatory strategy

general overview of mc health tech 011614

Health & Medicine

years experience

years physical therapist

pain clinical

mcht technology team

mcht teamfrancesc trias

pain sab

associated centers

clinical data