investor presentation september 2017 - tearlab · 2017-09-12 · investor presentation september...
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Investor PresentationSeptember 2017
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Forward-Looking Statements
This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation such as “expects,” “contemplates,” “anticipates,” “plans,” “intends,” “believes” and variations of such words or similar expressions that predict or indicate future events or trends, or that do not relate to historical matters are forward-looking statements, including, among others: statements relating to plans and objectives of management for future operations and future results; the projected growth of the dry eye market; the anticipated shift to increased utilization of diagnostics in eye care; our belief that new and more expensive treatments will increasingly require diagnostics to gain payer support; our expectations for the approval of our next generation Discovery system; and, our belief that the TearLab platform is well positioned to lead and capitalize on the shift in the market to personalized medicine. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Risks and uncertainties include, but are not limited to: our ability to successfully commercialize the TearLab Osmolarity System and the Discovery System in the US; being able to generate sufficient cash flow to service our indebtedness; our financial leverage; operating successfully outside the US; raising additional capital; the ability to comply with and meet applicable laws and regulations; competition; enforcing our intellectual property; maintaining our key personnel; maintaining our listing on the Nasdaq capital markets; and successfully introducing new products. You should review the risks and uncertainties contained in our filings with the United States Securities and Exchange Commission, including risks and uncertainties described in detail under the caption “Risk Factors” in such filings. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
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Our Mission
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Our Journey
Existence Growth Plateau Innovation Maturity
Today
Gro
wth
Time
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Creating a New Paradigm
Our platform uses tears to diagnose disease
Proprietary nano-fluidic technology that leverages molecular data from the tear film
Eye care doctors can now rely on the tear film for information just as general MD’s now look to the blood
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Safe, Fast and Painless Tear Collection
Collection takes only seconds and delivers quantitative results in under two minutes
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Tear Collection Demonstration
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Quantitative and Highly Accurate Results
Sources: Kimberly MM et. al., Clinica Chimica Acta 364 (2006); Volles DF et. al. Pharmacotherapy 18:1 (1998)
Sample Size Comparative TestsAccuracy
Coeff. Var.
20 Micro-liters Cholesterol 4.0%
5 Micro-liters Glucose 5.0%
50 Nano-liters Osmolarity 1.5%
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First Generation Technical Achievements
FDA approval and registration in 40+ countries
Established our own CPT reimbursement code for $45.00 per patient
First CLIA waiver approval in eye care for point-of-care use
CLIA
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First Generation Commercial Results
Significant scale and brand equity created despite single, obscure biomarker for low interest disease
1,500
1,600
1,700
1,800
1,900
4,000
4,100
4,200
4,300
4,400
4,500
4,600
Q3 2016 Q4 2016 Q1 2017 Q2 2017
Device and Account Base
Device Installed Base Account Base
Scale
• $28M revenue run rate
• 5,000 devices in the field
• More than 8 million tests performed
• 90%+ insurance coverage
Productivity• $22K annualized revenue per account
• $6K annualized revenue per device
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Molecular Data in the Tear Film
Dry eye, Inflammation, allergy, infection
Glaucoma, retinal, macular
Diabetes (diabetic retinopathy)
Neurological (Parkinson’s, systemic sclerosis)
The tear film contains many of the same biomarkers as the blood
Hagan et al. The EPMA Journal (2016) 7:15 DOI 10.1186/s13167-016-0065-3 “Tear fluid biomarkers in
ocular and systemic disease: potential use for predictive, preventive and personalized medicine”,
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Platform Evolution from Single Test to Multiple Disease Panel
Patient Journey
Test Relevance
Initial diagnosis
Drive therapeutic selection
Chronic disease management
Multiple Bio-Markers and Multiple Diseases
Single Test Osmolarity
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U.S. Market Opportunity
Disease Patie
nts
In V
itro
Dia
gnostic
Penet
ration
Trea
tmen
t Cost
Near Term
Dry Eye 30 Million <10% $$$
Allergy 60 Million <5% $$
Infection 6 Million <5% $
Mid Term
Glaucoma 3 Million 0% $$
Retinal 18 Million 0% $$$$
Longer Term
Parkinson's 1 Million <20% $$$$
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Point of CareApplication
• Quantitative and rapid results
• Safe, easy and cost effective
• Multiplexed biomarkers for multiple diseases
• Hardware supports future tests
Clinical Application
• R&D platform for new marker validation
• Customized tests in line with clinical and regulatory strategy
TearLab DiscoveryTM
New Platform with Multiplexing Capability in Single Tear Collection
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Nitrocellulose protein paper
integrated with collection device
Low Risk Regulatory Path
We combine our unique tear collection method and nano-fluidic technology to leverage regulatory friendly lateral flows assays
FDA approved tear
collection technology
Lateral flow spotting technology
FDA friendly
• European CE mark July 2017
• FDA 510(k) filing in Q4 2017
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First Test Inflammation: Universal Importance
Osmolarity
• Well known and established biomarker
• Indicator of severe inflammation
• Highly associated with DED
MMP-9
• Produced in proportion to active inflammation
• 2nd inflammation marker improves therapy tracking
• Highly associated with DED IL-1Ra
• Quality & stability of tear film
• Differential, early stage dry eye disease (DED)
diagnosis
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Drivers of Increased Utilization
Current Test
Discovery Platform
First Test Launched
• Osmolarity not well known or understood
• Osmolarity not clearly linked to therapy selection and effectiveness
Clinical
Reimbursement
• Inflammation is dogma
• Multi-billion dollar market for anti-inflammatory drugs
• $45 per patient• One marker
• $113 per patient• Three markers
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Current U.S.Installed Base
• 1,801 accounts
• 4,587 devices
• Immediate target for upgrade
Conversion
• Today 80% of revenue comes from 40% of accounts
• Immediate target accounts well within current sales force scale
Pricing• $4,000 - $5,000 revenue on capital charge
• 65% - 70% increase in test card price
Launch Velocity of First Test
Current user base provides immediate revenue inflection
point through capital charge and increased test card pricing
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Revenue Model
Discovery launch is the catalyst to significantly reduce cash burn and reach sustainability
$10
$20
$30
$40
$50
$60
Q2 2017 Run Rate Year 1 Launch Year 2 Launch Year 3 Launch
$Millions
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Our Journey
Existence Growth Plateau Innovation Maturity
Today
Gro
wth
Time
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Future Catalyst
• FDA filing for next generation platform (NGP)
• Summary of FDA clinical data
• Professional guidelines
• EU launch of NGP
• FDA approval of NGP
• U.S. launch of NGP
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Summary
• Novel platform: Using human tears to diagnose disease
• Next generation technology: Multiplexing capability to make the tear film a
leading diagnostic platform
• Large and growing market: Eye care diagnostics are in their infancy and
systemic opportunity using the tear film is untapped
• 2018 Launch: Large customer base will drive immediate growth through capital
upgrade and higher test card reimbursement
Investor PresentationNovember 2016