Novadaq Technologies January 2016

7/23/2019 Novadaq Technologies January 2016

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Empowering Physicians withImaging at the Point of Care

January 2016

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The statements and discussions contained in this presentation that are not historical factsconstitute forward-looking statements, which may be identified by the use of forward-lookingwords, including but not limited to,believes, expects, may, intends, anticipates, plans,estimates and analogous or similar expressions intended to identify forward-lookingstatements. These forward-looking statements and estimates as to future performance,estimates as to future valuations and other statements contained herein regarding matters thatare not historical facts, are only predictions, and that actual events or results may differmaterially. We cannot assure or guarantee you that any future results described in thispresentation will be achieved, and actual results could vary materially from those reflected in

such forward-looking statements due to numerous known and unknown risks and uncertainties,including theRisk Factors described in our filings with the Ontario Securities Commission andthe U.S. Securities and Exchange Commission. Information contained in this presentation hasbeen compiled from sources believed to be credible and reliable. However, we cannotguarantee such credibility and reliability. The forecasts and projections of events containedherein are based upon subjective valuations, analyses and personal opinions. All forward-looking statements are qualified in their entirety by this cautionary statement, and Novadaqundertakes no obligation to revise or update this presentation to reflect events or circumstances after the date hereof.

This presentation shall not constitute an offer to sell or the solicitation of an offer to buy anysecurities. Such an offer or solicitation, if made, will only be made pursuant to an offeringmemorandum and definitive subscription documents.

NOVADAQ, SPY, PINPOINT and LUNA are registered trademarks of Novadaq TechnologiesInc. DermACELL is a registered trademark of LifeNet Health.

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Forward Looking StatementsNASDAQ:NVDQ, TSX:NDQ


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SPY Fluorescence Imaging


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SPY Imaging Transforms Surgical Intervention andTherapy Delivery in Complex High Risk Open Surgery

SPY Elite System

Colorectal Surgery

Breast Reconstruction

Assess tissue perfusion, segmenthealthy from abnormal tissue

Vascular Surgery

Assess blood inflow and outflowand tissue perfusion

Assess tissue perfusion, guidetransection margins

Assess microvascular blood flow,anastomotic patency and perfusion

Head and Neck Surgery

Colorectal Surgery

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SPY Imaging Transforms Surgical Intervention and TherapyDelivery in Complex, High Risk Minimally Invasive Surgeries

Colorectal Surgery

Assess tissue perfusion,healthy versus unhealthy tissue

Lap Cholecystectomy

Visualize critical anatomy, suchas bile and cystic ducts

PINPOINT System

SLN

Visualize lymph nodes*,improve cancer staging

Gynecological Cancer*

Bariatric Surgery

Visualize tissue perfusionand critical anatomy

*Not yet cleared of approved by the U.S. FDA 5


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SPY Imaging Transforms Outpatient Assessment of Wounds

Limb Salvage

Visualize hyperemia for betterstaging of wound disease

LUNA System

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Serial Functional Imaging and Analysis

LUNA Score

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Single Technology Platform Creates a Continuum of Care Ecosystem

NOVADAQ Surgery

Today

PINPOINT

Minimally Invasive SPY Elite

Open

FireflyRobotic

NOVADAQ Diagnostics

Today

LUNA

Wound Care

Operating Room Primary Care Physician

Tomorrow

Next molecule

Tomorrow

Laser Doppler

Outpatient ClinicOperating Room Primary Care PhysicianOutpatient Clinic

NOVADAQ is the only company that can provide a comprehensivefluorescence imaging solution to all hospital departments

DermACELL PRS DermACELL WH7


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175+

200,000

+650+

Standalone Systems

1700+FireFly Systems

Includes SPY technology licenses to ISRG

Data as of Dec 2015

SPY Imaging Proven Across Multiple Specialties

Peer ReviewedPublications

SPY TechnologyProcedures SPY Hospitals

DocumentedApplications

75

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Top 50 Cancer Hospitals* Use SPY

University of Texas M.D. AndersonCancer Center

Houston, TX

Memorial Sloan-Kettering Cancer CenterNew York, NY

Johns Hopkins HospitalBaltimore, MD

Mayo ClinicRochester, MN

Dana-Farber/Brigham and Women's

Cancer CenterBoston, MA

University of Washington Medical Center

Seattle, WA

Massachusetts General Hospital

Boston, MA

UCSF Medical Center

San Francisco, CA

Cleveland ClinicCleveland, OH

Ronald Reagan UCLA Medical CenterLos Angeles, CA

Duke University Medical CenterDurham, NC

Stanford Hospital and ClinicsPalo Alto, CA

University of Michigan Hospitals andHealth CentersAnn Arbor, MI

University of Chicago Medical CenterChicago, IL

Hospital of the University of PennsylvaniaPhiladelphia, PA

Barnes-Jewish Hospital/WashingtonUniversity

Saint Louis, MO

City of HopeDuarte, CA

Moffitt Cancer CenterTampa, FL

New York-Presbyterian UniversityHospital of Columbia and Cornell

New York, NY

Ohio State University James CancerHospital

Columbus, OH

Northwestern Memorial HospitalChicago, IL

University of Maryland Medical CenterBaltimore, MD

University of Minnesota Medical CenterMinneapolis, MN

Yale-New Haven HospitalNew Haven, CT

NYU Langone Medical CenterNew York, NY

Vanderbilt University Medical CenterNashville, TN

Roswell Park Cancer InstituteBuffalo, NY

University of Iowa Hospitals and ClinicsIowa City, IA

University of Wisconsin Hospital andClinics

Madison, WI

UPMC-University of Pittsburgh MedicalCenter

Pittsburgh, PA

Thomas Jefferson University HospitalPhiladelphia, PA

Cedars-Sinai Medical CenterLos Angeles, CA

Beth Israel Deaconess Medical CenterBoston, MA

University of Colorado HospitalAurora, CO

Shands at the University of FloridaGainesville, FL

University Hospitals Case Medical CenterCleveland, OH

Emory University HospitalAtlanta, GA

Fox Chase Cancer CenterPhiladelphia, PA

University of California, Davis MedicalCenter

Sacramento, CA

Rush University Medical CenterChicago, IL

Mount Sinai Medical Center NYUNew York, NY

Hackensack University Medical CenterHackensack, NJ

Wake Forest Baptist Medical CenterWinston-Salem, NC

University of Kansas HospitalKansas City, KS

Magee-Womens Hospital of UPMCPittsburgh, PA

Mayo ClinicJacksonville, FL

UC San Diego Medical CenterSan Diego, CA

University of Virginia Medical CenterCharlottesville, VA

USC Norris Cancer HospitalLos Angeles, CA

University of California, Irvine MedicalCenter

Orange, CA *U.S. News and World Report Rankings 2015 9


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$10.3$11.2

$12.1$13.0

$11.7

$15.1

$17.0

$20.0 *

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

$20.0

$22.0

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Millions$

Total Revenue

528

559

581591

575

611

647

450

470

490

510

530

550

570

590

610

630

650

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Units

Install Base

$3.7$3.4

$4.3

$5.0 $4.9

$5.7

$6.1

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

$5.5$6.0

$6.5

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Millions$

Recurring Revenue

$6.7 $6.9

$7.8

$9.1

$7.5

$10.7

$12.6

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

$10.0

$11.0

$12.0

$13.0

$14.0

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Millions$

Gross Margin

Financial and Corporate Performance

10

* Preliminary Unaudited


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1. Improving clinical outcomes that result in true, realizable economic benefit

E.g. reductions in anastomotic leaks in colorectal surgery

2. Enabling new surgical procedures not possible without physiologic imaging

E.g. single stage and nipple sparing mastectomy and breast reconstruction

3. Delivering more effective life saving surgeries

E.g. statistically reducing the probability of cancer reoccurrence and repeat

surgeries

..NOVADAQs value proposition

Value Based Healthcare Defined


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PILLAR II: 11-center U.S. prospective trial of perfusion assessmentduring left-sided colectomy and LAR in 139 patients

represents the anastomotic leak rate in resectionsperformed in the PILLAR II trial11.4%

12.6%of low anterior resections performed in theBSLR study resulted in an anastomotic leak2

1. Jafari et al. JACS. Submitted 20142. Senagore A, et al. Dis Colon Rectum. 2014 Mar;57(3):32430

1. Improving Clinical Outcomes, Realizable Economic Benefit in

Colorectal Surgery

Use of PINPOINT led to a change in operative plan in 8% of procedures,resulting in a 0% anastomotic leak rate in patients where a change was made1

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2. Enabling New Surgical Procedures Not Possible WithoutPhysiologic Imaging

SPY Enables Single Stage ReconstructionEliminates a second s urgery and mu lt ip le post-operat ive fol low -up s

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Excellent Perfusion to Nipple Area Poor Perfusion to Nipple Area

2. Enabling New Surgical Procedures Not Possible WithoutPhysiologic Imaging

Images Courtesy of Geoffrey Gurtner, MD, Stanford, CA

Nipple sparing mastectomy is overwhelmingly in demand because the techniqueallows for a more aesthetically and emotionally pleasing outcome for patients

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1., 2. Improving Clinical Outcomes and Enabling New SurgicalProcedures

The Clinical Efficacy and Financial Impact of Laser-assisted Indocyanine Green Angiography on Implant-based BreastReconstruction at a Large Academic Medical CenterAbstract presented by Christian A. Harless, MD; Sue Visscher, PHD;

Steven R. Jacobson, MD, Mayo Clinic, Rochester, MN, at the Plastic Surgery Research Council Meeting, May 15, 2015

Breast Reconstruction 2011-2013 Without SPY With SPY Total

No. of Patients 590 352 942

Any Complications 100 (17%) 21 (6%) 121 (12%)

Skin Necrosis 32 (6%) 2 (1%) 34 (4%)

Nipple Sparing 28% 32% 60%

Single Stage Direct Implant 7% 23% 30%

Authors Conclusions:

The average cost of a necrotic event was $14,441. Modeling these results demonstrate a potential avoidance of 59 episodes of skin necrosis

through the use of SPY. At an average cost of $14,441 per necrotic event, use of SPY would result in a total cost

savings of $852,019 over a 5 year period.

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3. Delivering More Effective Lifesaving Surgeries

Plante et al., Gyn Onc, 2015 (n=50)Howe et al., Gyn Onc, 2015 (n=100)

Technique SLN identified Bilateral SLNs Identified

Technetium Only 83% 19%

Blue Dye Only 79% 50%

Blue Dye + Technetium 87% 54%

PINPOINT Imaging Only 96% 88%

Sentinel Lymph Node (SLN) Identified in Gynecological Cancers

5-year survival in stage II- IV in ovarian cancer at best case is 70% and the worsecase is 17%. 85% of patients with these types of cancers are in stage II- IV.

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Changing the Healthcare Delivery Paradigm- MedicareReadmission Reduction Program

Procedure30-day

ReadmissionRates

Est. # ofPatients

Readmitted

Est.Annual

Cost

Cholecystectomy 9.5% 53,065 $3.9B

Colorectal Resection 14.8% 23,184 $2.2B

Open, Heart Bypass Surgery 15.1% 26,200 $0.4B

Debridement of Wound 19.1% 416,000 $5.0B

Amputation of Lower Extremity 22.8% 26,400 $4.2B

Weiss, et al., AHRQ Pub. No. 10 (11)- EHC009-2-EF. Agency for Healthcare Research and Quality, Rockville, MD 2013,Centers for Disease Control, 2015, Modern Healthcare December 10 2015, www.CMS.gov

758 U.S. hospitals were penalized in 2015, 54% were teaching institutions Medicare is expected to reduce spending by $364M Hospital and physician performance data is made public and easily searchable

The Hospital Readmissions Reduction Program is part of the CMS effort to aggressivelymove towardpaying for high performance rather than paying for volumes of services


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Guaranteed By SPY

When SPY is used in the first surgery and a

revision is still necessary, well pay for the tissue.

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Opportunity > 2 Million Complex, High Risk

Procedures / Year in U.S.


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Application Pts. /Year (U.S.) Surgery Type Device

Breast Reconstruction 100,000 Open SPY

Other Reconstruction 250,000 Open SPY

Vascular 100,000 Open SPY

Abdominal Wall 50,000 Open SPY

Maxillofacial / Head & Neck 100,000 Open SPY

Gastrointestinal 200,000 Open or MIS SPY / PINPOINT (50:50)

Lymphatic 400,000 Open or MIS SPY / PINPOINT (25:75)

Gynecological Oncology 100,000 MIS PINPOINT

Cholecystectomy 100,000 MIS PINPOINT

Wound Healing 600,000 Outpatient LUNA

Opportunity Associated with Complex, HighRisk Segment of Key Applications

ASPS and SAGES Procedure Statistics, 2015 Medtech Insight Report, U.S. Surgical Volumes 2014-2020

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Procedure Opportunity per System70% Surgery, 30% Wound Healing

40%

30%30%

Wound Healing

MIS Surgery

Open Surgery

Additional commercial relationships: LifeNet Health, Arthrex, ISRG

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Growth Drivers

1. Expanded, Focused Sales Channels

2. International Expansion

3. New Product Introductions 2016

4. Outcomes Based Level I Clinical Studies

(FILM Trial)

(PILLAR III)

5. New Imaging Molecules


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1. Expanded, Focused Sales Channels

%

10%

20%

30%

40%

50%

60%

70%

Surgery Wound Care

% Opportunity

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Key Markets

Europe: United Kingdom, Germany and the Nordics

Asia: China, Japan, Korea

Sales Channels Regional distributors in place

NOVADAQ direct management and subsidiary companies in place inEurope and in Asia

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3. New Product Introductions 2016

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Color Segmented Fluorescence Imaging

LUNA Score Functional Imaging and AnalysisHandheld SPY Imaging

5.0mm PINPOINT Endoscopes

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4. Outcomes Based Level I Clinical Studies

Randomized multicenter trial of PINPOINT inColorectal Surgery (n=500-900)

25 U.S. centers

Recruitment on-going

Interim results report expected at SAGES 2017

FILM Trial PILLAR III

Obtain FDA Indication for SLN Mapping

A Prospective, Open Label, Multicenter Study ofPINPOINT in Gynecological Oncology (n=150)

6-8 U.S. and Canadian Centers

Recruitment on-going Results expected Q4-2016

Obtain Outcomes-Based FDA Label

Images Courtesy of Nadeem Abu-Rustum, M.D., NY,NY and Michael Stamos, M.D. Irvine, CA 26


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Cancerous tumor fluorescing, the normal tissue is not

Image courtesy of Eben L. Rosenthal, MD, Stanford, CA

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Summary of Growth Drivers

Drivers 2016 2017 2018

1. Expanded, FocusedSales Channels


3. New Product Introductions

4. Level I Clinical Studies

FILM

PILLAR III


Add 40 Sales Pros

NVDQ Direct Team

Clinical Trial and Results Submission to FDA

Clinical Trial and Results Submission to FDA

Hardware/Software

Molecule Identified, Clinical Trial Phases I and II Phase III & NDA or PMA Submission

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Documents

Novadaq Technologies January 2016