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Cardiovascular Systems, Inc. Redefining Interventional Vascular Solutions
Bank of America Merrill Lynch
2016 Health Care Conference
May 11, 2016
Safe Harbor
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FORWARD-LOOKING STATEMENTS Certain statements made in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are provided under the protection of the safe harbor for forward-looking statements provided by that Act. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. Examples of these statements include, but are not limited to, statements regarding Cardiovascular System, Inc.’s (“CSI” or the “Company”) future financial performance, product sales distribution, industry and market expectations and estimates, the benefits and uses of the Company’s products, market opportunity potential, clinical trials, international expansion, regulatory approvals, future profitability, debt capacity, use of proceeds, results of operations, prospects, plans and
objectives of management, and other statements that are other than statements of historical fact.
These statements involve risks and uncertainties which could cause results to differ materially from those projected, including those described under the heading “Risk Factors” contained in the prospectus filed with the Securities and Exchange Commission (the “SEC”) for our recent public offering, and as detailed from time to time in CSI’s SEC reports, including its Reports on Form 10-K and Form 10-Q. As a result of these matters, changes in facts, assumptions not being realized or other circumstances, CSI's actual results may differ materially from the expected results discussed in the forward-looking statements presented. The forward-looking statements are made only as of the date of this presentation, and CSI undertakes no obligation to update them to reflect subsequent events or circumstances.
Investment Rationale
• Multi-billion dollar market opportunity, early stage of adoption
• Unique products safely modify calcified plaque – In both large and small vessels
• Supported by robust clinical data
• Large clinically-focused direct sales force
• Attractive reimbursement
• Ability to leverage revenue growth for future profitability
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2.5 Million Diagnosed with PAD
Only 600K Interventions (300K for CLI)
PAD: Large and Underserved
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Sources: Sage Group, Millennium Research Group “US Markets for Peripheral Intervention Devices 2014,” iData “US Market for
Peripheral Vascular Devices and Accessories” 2014, and Go, et al “Heart Disease and Stroke Statistics -- 2014 Update,” Circulation.
Multi $ Billion Calcium Market Opportunity in U.S. and Growing
18 Million People in U.S. with PAD
4 Million with CLI*
(* 6 Million by 2030)
600K Procedural Interventions
Amputations and bypass
Plaque removal
High pressure
balloons and stents
Below the Knee Above the
Knee
OAS Technology Expands PAD Market
5 Source: CSI data on file, Millennium Research Group
Industry Procedure Mix
BTK - 80% calcified 20% require ankle/foot access
CSI Mix/Disease Prevalence
ATK - 40% calcified
Diamondback 360 is only device to broadly treat the disease
Below the Knee
Above the Knee
Sources: Millennium Research Group Inc 2014., National Hospital Discharge Survey 2009, CSI estimates.
Large Coronary Market Potential
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16 MILLION U.S. CAD PATIENTS DIAGNOSED
Annual U.S. CAD procedures
1.4 MILLION
Treatable Patients With Significant Calcium
28% 400,000
$1.5 Billion
Calcium Market Potential
(50% severely calcified)
SIMPLE SPEED SETTINGS
INSTANT RESPONSE ON/OFF SWITCH
SALINE PUMP REUSABLE, COMPACT
CROWNS SMALL PROFILE, ORBITAL ACTION
SLEEK ELECTRIC-POWERED HANDLE
Crowns shown are not to scale and for illustrative purposes only.
CSI Orbital Atherectomy Systems (OAS) Power and simplicity for streamlined set-up and treatment
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PERIPHERAL
CORONARY
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HEART-TO-HEELS CAN TREAT 11 VESSELS
CSI: Why We’re Unique
1 1 Above the Knee
3 Heart
Below the Knee 3 3
EFFECTIVE IN CALCIUM
EXCELLENT SAFETY
LONG-TERM DURABILITY
ECONOMICAL
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CSI: Why We’re Unique
Femoral
Pedal
Tibial
Radial
Brachial
ALTERNATE ACCESS SITES
• 93% < red blood cell size
• 99% < lumen size of capillaries
Unique Mechanism of Action Bi-directional and differential sanding
Calculation of mean particulate size is based particles larger than 1 micron from a representative study using carbon blocks and cadaver model systems. 10
Leadership in Clinical Evidence
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LIBERTY 360 (Enrollment Complete)
ORBIT II (3-year Data)
COAST (Enrollment Complete)
OASIS, CONFIRM series, Calcium 360 and Compliance 360
• Supports 2nd Gen OAS in U.S. and Japan approval
• 92% freedom from revascularization at 3-years
• Up to $4,946 per patient cost savings at 2-years
• High rates of success and durability
• Low adverse events/bail-out stenting
• “All-comers” trial vs. any other treatment
• Over 600 Rutherford class 4, 5, or 6 n=1,200
n=100
Trial Importance Size
n=3,359
PAD
C
AD
n=443
Patients Lesions Physicians
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-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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OPTIMIZE (Enrolling)
n=50 • OAS + DCB vs. DCB alone
• Calcified below-the-knee lesions
Attractive Reimbursement Rates (2016)
HOSPITAL
INPATIENT
OUTPATIENT
PAD $10,177 − $19,415 CAD $9,960 − $19,191 PAD (ATK) $9,542 PAD (BTK)/CAD $14,612
NON-HOSPITAL FACILITY PAD $11,085 − $15,186*
Small vessels receive higher reimbursement
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MS-DRG 246, 247, 248, 249, 250, 251, 252, 253, 254; CPT Codes 37225, 37227, 37229, 37231, 92933; C-APCs 5191,5192,5193; HCPCS Code C9602
* Procedures using atherectomy
Sales Force Optimization Strategy
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240 Professionals
• One sales force selling two, high-margin, high-growth products
• Deeper adoption into fewer high potential accounts
• Higher productivity per sales professional
• Drives future profitability
Rev
en
ue
Pe
r Sa
les
Pro
fess
ion
al
14
$0
$40
$80
$120
$160
$200
FY 12 FY 13 FY 14 FY 15 FY 16 -9 Mo.
FY 15 -9 Mo.
Revenue
Track Record of Revenue Growth FY 2016 Slowed by Sales Force Transition
$ in
Mill
ion
s
Amounts exclude revenue from distribution agreement terminated on June 30, 2015
Strong, Improving Gross Margins
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70%
75%
80%
85%
FY 13 FY 14 FY 15 FY 16 (9 mo.)
78.2%
80.3%
76.5% 77.3%
Solid Balance Sheet
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$84
$65 $62
$0
$20
$40
$60
$80
$100
June 2015 Dec. 2015 March 2016
Cash
Cash Sufficient to Reach Profitability and Positive Cash Flow $
Mill
ion
s
• Decreasing cash burn from cost reductions/increasing revenues • Additional cushion potential from facility financing/debt capacity
Why CSI?
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Supported by robust clinical data
Large, clinically focused direct sales force
Multi-billion dollar market opportunity, early adoption stage
Ability to leverage revenue growth for future profitability
Unique products safely modify calcified plaque
Attractive reimbursement
DIAMONDBACK 360® Coronary Orbital Atherectomy System
Indications: The DIAMONDBACK 360® Coronary Orbital Atherectomy System (OAS) is a percutaneous orbital atherectomy system indicated to facilitate stent delivery in patients with coronary artery disease (CAD) who are acceptable candidates for PTCA or stenting due to de novo, severely calcified coronary artery lesions.
Contraindications: The OAS is contraindicated when the VIPERWIRE guide wire cannot pass across the coronary lesion or the target lesion is within abypass graft or stent. The OAS is contraindicated when the patient is not an appropriate candidate for bypass surgery, angioplasty, or atherectomy therapy, or has angiographic evidence of thrombus, or has only one open vessel, or has angiographic evidence of significant dissection at the treatment site and for women who are pregnant or children.
Warnings/Precautions:; Performing treatment in excessively tortuous vessels or bifurcations may result in vessel damage; The OAS was only evaluated in severely calcified lesions, A temporary pacing lead may be necessary when treating lesions in the right coronary and circumflex arteries; On-site surgical back-up should be included as a clinical consideration; Use in patients with an ejection fraction (EF) of less than 25% has not been evaluated. See the instructions for use before performing DIAMONDBACK 360 coronary orbital atherectomy procedures for detailed information regarding the procedure, indications, contraindications, warnings, precautions, and potential adverse events. For further information call CSI at 1-877-274-0901 and/or consult CSI’s website at www.csi360.com.
Caution: Federal law (USA) restricts this device to sale by or on the order of a physician.
Diamondback 360® and Stealth 360®Peripheral Atherectomy Systems The Diamondback 360® and Stealth 360® PAD Systems are percutaneous orbital atherectomy systems indicated for use as therapy in patients with occlusive atherosclerotic disease in peripheral arteries and stenotic material from artificial arteriovenous dialysis fistulae. The Systems are contraindicated for use in coronary arteries, bypass grafts, stents, or where thrombus or dissections are present. Although the incidence of adverse events is rare, potential events that can occur with atherectomy include: pain, hypotension, CVA/TIA, death, dissection, perforation, distal embolization, thrombus formation, hematuria, abrupt or acute vessel closure, or arterial spasm. For further information call CSI at 1-877-274-0901 and/or consult CSI’s website at www.csi360.com. Caution: Federal law (USA) restricts this device to sale by or on the order of a physician.
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Investor Contact: Jack Nielsen Senior Director Corporate Communications & Investor Relations 651-202-4919 [email protected] ©2016 Cardiovascular Systems, Inc. All Rights Reserved Diamondback 360 and CSI are registered trademarks of Cardiovascular Systems, Inc. www.csi360.com
NASDAQ: CSII
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