Embed Size (px)
Citation preview
Creating the Improved Standard in
Healthcare Sterile Reprocessing™
TSX:TOS
Corporate Presentation July 2016
TSX:TOS
2
Important Cautions Regarding Forward Looking Statements and Other DisclosuresThe statements in this presentation and oral statements made by representatives of TSO3 Inc. (“Company”) relating to matters that are not historical facts (including, without limitation, those regarding the timing or outcome of any financing undertaken by the Company) are forward-looking statements that involve certain risks, uncertainties and hypotheses, including, but not limitedto, general business and economic conditions, the condition of the financial markets, the ability of TSO3 to obtain financing on favorable terms and other risks and uncertainties.
This presentation shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.
The TSX has neither approved nor disapproved the information contained herein and accepts no responsibility for it.
- STERIZONE® are registered trademarks of TSO3 Inc.
U.S. Pat. No. 9,101,679
US Pat. Applications No.13/779,132; 13/779,193; 13/780,464; 14/820,965
Corresponding patents granted or pending in other countries
© 2016 TSO3 Inc., all rights reserved for all countries. No part of this publication may be reproduced or translated in any form or by any means, without the prior written permission of TSO3 Inc.
TSX:TOS
TSO3 - Our Vision
3
To Create the Improved Standard
in Healthcare Sterile Reprocessing™
TSX:TOS
2016• Record revenue
• Record assembly capacity
• 91M shares oustanding1
• US$24.4M in cash2
• Received flexible multi-channeled endoscope claims in U.S.
Where We Are From and Where We Are Going
1) As of March 31, 2016. 2) As of March 31, 2016. Cash reflects cash and short term investments in USD. 4
Founded: 1998
HQ: Québec City, Canada
2001 IPO (TSX: TOS)
2009 - 2014• Reworked products
• Introduced STERIZONE® 125L+ and STERIZONE® VP4 Sterilizers
• 18 sterilizers in operation at Canadian hospitals
Global Distribution Partner
2014 - 2015• FDA clearance w/ broadest U.S. claims in the industry
• Exclusive distribution agreement with Getinge -US$7.5M in cash + performance minimums
• PO received for Getinge’s full minimum purchase commitment in 2016
• Extended claims in Canada and Europe
TSX:TOS
Purpose
A Sterile Device for Every Procedure
5
TSX:TOS
Approach
6
TSX:TOS
Low Temperature Sterilization
• 20+ year-old core technology
• Operators must choose from several operating cycles
• Expensive, time consuming
• Small, segregated loads
GI Endoscopes*
• High level disinfection was the best available
• Contaminated scopes
• Millions of impacted procedures every year: colonoscopies, gastroscopies and others
Low Temperature Sterilization
The next generation industry technology
Simple Single Cycle Operation
Large Loads
Mixed Loads
GI Endoscopes
The only cleared technology validated to terminally sterilize a vast majority of the 75 million endoscopies predicted by 2020
Complete eradication of bacteria and spores
Fast, economical and convenient
Modernizing Healthcare Sterilization Technology
7* GI = Gastrointestinal, such as colonoscopes and gastroscopes.
Old Technology TSO3 Technology
TSX:TOS
$4.3B $4.6B $4.9B $5.3B $5.7B $6.1B
15 16E 17E 18E 19E 20E
55M
75M
2009 2020E
• Fastest growing sterilization segment (9%–10% CAGR1)
• Total equipment replacement value: $4.5 billion2
• ~30,000 units globally with ~3,000 replaced annually
• Millions of consumable cycles annually
• Greenfield terminal sterilization opportunity for 75 million procedures annually in US & Europe by 20205
• Displacement of high-level disinfection (HLD)
• Almost 50% of procedures are colonoscopies – none of which are terminally sterilized today4
Multiple Large Target Markets
81) Markets and Markets June 2016 2) Company estimates. 3) Markets and Markets, July 2015 4) Becker’s GI & Endoscopy 5) iData Research
Global Sterilization Equipment Market3
($ billions)
Endoscopic Procedures in Europe & U.S.4,5
(millions)
By 2020, estimated 75M endoscopic procedures in Europe & U.S.
Existing Low-Temp Sterilizer Market NOW AVAILABLE: Endoscopy/GI Market
TSX:TOS
9
STERIZONE® VP4 Sterilizer
Advantages
• Single cycle – easy to use, error free cycle selection
• Mixed load sterilization
• Up to 75 Ib in a single load
Proprietary Consumables
• 125-280 Solution™ (H2O2)
• STERIZONE® BI+ / Test Pack advanced process monitoring
Other Key Features
• The only FDA cleared device validated to sterilize colonoscopes, gastroscopes and other flexible endoscopes up to 3.5m in length and 4 channels.
Dynamic Sterilant Delivery System™
Proprietary Software automatically adjusts the sterilant quantity based on load composition, weight and temperature.
STERIZONE® VP4 Sterilizerand Accessories
FDA-Cleared- Dual Sterilant, Low Temperature Sterilization System –With Multi-Channeled Flexible Scope Claim
TSX:TOS
The Science – 36 Patents or Pending or Applied For
10
TSX:TOS
11
Key Market Driver: Demographics
Aging population to result in increasing demand for minimally invasive diagnostic and surgical procedures (MIS)1
Global population is aging
U.S. 65+ age group to grow 35%, from 40 million in 2010 to 54 million by 20202
Globally, 65+ to grow >100% by 20203
Patients age 65+ currently consume 50% of surgical suite time 1
1) Markets and Markets, February 20152) U.S. Census Bureau3) United Nations
Source: U.S. Census Bureau
Aging Population Expected to Drive Growth in MIS Surgeries and Endoscopies
TSX:TOS
Endoscopy Market
Many endoscopes, including colonoscopes and gastroscopesare not terminally sterilizedbetween patient use
Disinfected-only scopes are linked to patient illness and death
Disinfection does not kill biological spores (CRE) or prions
75 million endoscopic procedures, almost half of which are colonoscopies, annually in the U.S. & Europe by 2020 1
12
“We have to transition to sterilization. That is the only way we’ll eliminate the outbreaks associated with scopes.”
Dr. William Rutala, APIC Daily News, June 2016
“Despite reprocessing in accordance with US guidelines, viable microbes and biologic debris persisted in clinically used [GI] endoscopes, suggesting current reprocessing guidelines are not sufficient to ensure successful decontamination.”
American Journal of Infection Control (with Mayo Clinic), 2015
1) iData Research
“…despite adherence to strict guidelines, despite all that, bacteria can at times remain on these scopes… …Microbial contamination was detected in 5 percent of more than 4,000 individual specimens collected after cleaning.”
Providence Health & Services, Seattle Times, June 2016
TSX:TOS
July 2016: FDA cleared expanded indications for use of STERIZONE® VP4 Sterilizer to include:
Colonoscopes
Gastroscopes
Other multi-channel (up to 4 channels) flexible endoscopes
FDA clearance of these extended claims makes TSO3’s STERIZONE® VP4 Sterilizer the onlyvalidated terminal sterilization option for the vast majority of the 75 million endoscopy procedures predicted by 2020.
FDA Clearance of Extended Claims – an Industry First
Video Gastroscope
FDA has cleared the STERIZONE® VP4 Sterilizer for the sterilization of multi-channeled flexible endoscopes (with a maximum of four channels) having internal lumens of ≥ 1.45 mm in inner diameter and ≤ 3,500 mm in overall length, and ≥ 1.2 mm in inner diameter and ≤ 1,955 mm in overall length, which are commonly found in video colonoscopes and gastroscopes.
Video Colonoscope
13
CLEARED
TSX:TOS
14
SUPERBUG = Antimicrobial Resistant Bacteria
2 million+ Americans suffer from antibiotic-
resistant bacteria annually – 23,000 die1
CRE is resistant to most available antibiotics - up
to 50% of infected patients die1
CRE infections increasingly prevalent and linked
to use of endoscopes: seven incidents and two
deaths at UCLA Medical Center2
ECRI Institute’s 2016 Top 10 Health Technology
Hazards List: No. 1 concern is inadequately-
cleaned endoscopes3
1) Centers for Disease Control (CD)2) Associated Press, February 20, 2015 and Los Angeles Times, January 26, 20163) ECRI Institute
Endoscopes & Superbugs
TSX:TOS
15
Potential Future Regulatory Growth Driver: Evolution of Classification of Reprocessing Requirements
Since multi-channeled flexible endoscopes, including colonoscopesand duodenoscopes are typically not sterilized in U.S., FDA is considering an expansion of its sterilization requirements1
In May 2015, the FDA recommended at an FDA joint session that by 2018 flexible scopes be defined as “critical devices” which would mandate sterilization (versus their current status as semi-critical devices, which only require disinfection.)
Requiring more devices to be sterilized, rather than just disinfected, would dramatically increase our addressable market
Margin of
Safety
Lowest
Highest Body Contact
Reprocessing Requirements
FDA Device Class
Today Signaled
Sterile BodyCavity
Sterilization Critical Critical
MucousMembranes
High Level Disinfection
Semi-Critical Critical?
Intact SkinLow Level
DisinfectionNon-Critical
Non-Critical
1) Bloomberg, Sept. 2015
TSX:TOS
Getinge Infection ControlExclusive Global Distribution Agreement
Getinge - exclusive global distributor rights to STERIZONE® VP4 Sterilizer
Global sales and service - over 3,000 associates in 36 countries
Minimum annual purchase commitments
Consumables are additional
US$7.5M license fee paid to TSO3 in 2015
TSO3 fills a gap in Getinge’s portfolio
16
“The STERIZONE® VP4 Sterilizer uniquely
addresses an unmet global need for cost
effective, high throughput sterilization of
complex medical devices used in hospital
environments.
“Our initial customer experience with
the product line has been excellent.
“We’re now laying plans for a global
rollout, designed to leverage the global
reach of Getinge’s subsidiaries and
distributors partnerships across six
continents.”
- Joacim Lindoff, President & CEO Getinge Infection ControlNov. 25, 2015
TSX:TOS
Q1 2016 Revenues a record $3.1M, primarily driven by 25 STERIZONE ® VP4 Sterilizers shipped to Getinge
Gross Margin of 36% - indicating equipment margins and limited consumables.
Cash & cash equivalents totaled $24.4M1
No warrants
No debt
Q1 2016 Financial Highlights – USD
17
Quarterly Revenue
$0.1M
$0.9M
$0.2M
$3.1M
Q2-15 Q3-15 Q4-15 Q1-16
(US$ Millions)
Received initial PO for STERIZONE® VP4 Sterilizer
Shipped 25 STERIZONE® VP4 Sterilizers to Getinge in the U.S.
17
1) As of March 31, 2016
TSX:TOS
Distributor (Getinge) 5-Year Sales Target
300+ units1
2016E 2017E 2018E 2019E 2020E18
Key Stats (TSX: TOS) All Dollars in USD, unless noted otherwise
Stock Price (7/14/16) CAD $3.30
52 Week High-Low CAD $1.42-$3.49
Avg. Daily Vol. (3 mo.) 0.3M
Shares Outstanding2 91.2M
Warrants Outstanding2 0
Float (est.) ~99%
Institutional Holdings ~42%
Insider Holdings <1%
Market Cap CAD $301M
Enterprise Value CAD $266M
Date Founded 1998
Employee Count 62
Fiscal Year End December 31
Data sources: Yahoo! Finance, S&P Capital IQ, company estimates
(ttm) = trailing 12 months at March 31, 2016 (mrq) = most recent quarter at March 31, 2016
1) Units based on TSO3 market estimates, issued and effective only on November 25, 2015.
2) Issued and effective only as of March 31, 2016
Total Revenue (ttm) $4.3M
Gross Profit (ttm) $0.9M
Net Loss (ttm) $(4.2)M
EPS (ttm) $(0.05)
Cash & ST Investments (mrq) $24.4M
Total Assets (mrq) $30.7M
Total Debt (mrq) $0.0M
Total Liabilities (mrq) $9.6M
Total Equity (mrq) $21.1M
High-margin consumables and maintenance offer substantial additional revenue opportunity
TSX:TOS
19
TSO3 Key Takeaways
STERIZONE® VP4 Sterilizer:
The ONLY FDA-cleared medical device sterilizer validated to terminally sterilize colonoscopes and gastroscopes
Multiple breakthroughs in design, capability, effectiveness and operational cost to beat incumbent technologies in the traditional low temperature sterilization market.
Multi-billion dollar market opportunity
Exclusive global distribution agreement with Getinge Infection Control with performance minimums.
Razor/Razorblade recurring revenue business model with proprietary consumables.
Company at inflection point: initial sales kicked off in 2015, now ramping up.
Global Distribution Partner
TSX:TOS
Contact Us
TSO3 Inc. - Canada2505, avenue DaltonQuébec, QuébecG1P 3S5 CANADA
Tel (418) [email protected]
TSO3 Corporation - USA1636 American WayMyrtle Beach, SC 29577
Investor Relations
Liolios Group, Inc.Ron Both, Senior Managing DirectorTel (949) [email protected]
Renmark Financial Communications Inc.Barry Mire, Vice PresidentTel (416) 644-2020Tel (514) [email protected]
20
Appendix
TSX:TOS
Important Regulatory Growth Driver
FDA identified flexible endoscopes asknown source of infection and cause of death
FDA has recorded 109 reports of infections or contamination related to bronchoscopes over the past five years, including 50 in 2014 alone1
TSO3 sterilizer is validated for sterilization of colonoscopes, gastroscopes, and duodenoscopes in Europe and Canada
TSO3 is pursuing claims expansion with the FDA for sterilization claims of important flexible endoscopes
FDA safety communication: Design of endoscopic retrograde cholangio-pancreatography duodenoscopes may impede effective cleaning
New safety alert warns that bronchoscopes may transmit infections even when cleaned properly
Posted Sept. 21, 2015
221) Bloomberg, Sept. 2015
TSX:TOS
23
Growth Strategies
Support Getinge for global introduction and commercialization of STERIZONE® VP4 Sterilizer
Expand manufacturing/assembly operations
Broaden product portfolio:
Sterilizer products purpose-built for the operating room (OR)
Iterations of existing systems for local markets
Acquire complementary technology or product lines in sterile reprocessing market
Medical Reprocessing Lifecycle
