© Sphere Medical 2016
Company Presentation
6 October 2016
© Sphere Medical 2016 2
Background
Sphere Medical provides innovative monitoring and
diagnostic devices for the critical care setting, part of a fast
growing multi-billion $ market
First commercial product, Proxima 3, has been launched to
early adopters to gain feedback. Next generation, Proxima 4,
CE marked and expected to be launched in 2016
Proxima 4 increases the addressable market fourfold through
added functionality
Good support from leading fund managers, including
Woodford Investment Management, Arthurian Life Sciences
and LSP
Board and management team strengthened to lead Company
into commercialisation phase
Identifying regional commercialisation partners to take
Proxima worldwide – first distributor appointed, in Italy
© Sphere Medical 2016 3
Clinical Value Proposition
Frequent blood sampling required to manage critically ill, unstable patients and improve
patient outcomes
Provides vital information to the clinician on patient physiology
Current solutions have significant barriers to frequent measurements
Proxima is a patient connected BGE (blood gas, electrolytes and metabolites) solution which
provides better patient management during a patient’s critical period while reducing
nursing work load
provides faster and more frequent production of results
avoids blood loss and reduces infection risks
“… Proxima has the potential to bring about a paradigm shift in the intensive and critical care setting”
Prof Vincent, Belgium, chairman of the medical advisory board
© Sphere Medical 2016 4
Blood Gas Measurement: Current Practice
BGEs are the most frequent diagnostic test performed in critical care
Key indicators of lung and kidney function
On average, blood gases are measured every 3-4 hours by drawing
blood with a syringe
For critically ill patients, up to 19 measurements are made per day(1)
Nurse has to leave the patient
Open arterial line to draw blood sample
Blood samples are moved within & outside the critical care area
(1) Nursing in Critical Care 2008
© Sphere Medical 2016 5
Proxima – Patient Dedicated BGE Solution
Disposable patient-attached device mounted in arterial
line
Closed system where all blood is returned to the patient
Accompanies the patient throughout the entire Critical
Care pathway
BGE data is collected at the patient’s bedside
Enables more frequent measurement of BGE
Multi-use disposable approved for up to 72 hours
© Sphere Medical 2016 6
Proxima - Data demonstrates Value
More frequent measurement desirable but increases workload, blood loss and infection risk
Proxima can deliver closer monitoring (50% more measurements) with
Identical nursing workload (46% reduction if cover included)
No time away from bedside
No blood loss
75% reduction in opening of arterial lines
Source: Data collected during typical evaluations
3.3
6
1.9
4.8
8.8
2.9 3.2 3.2
0 0
2
4
6
8
10
Nurse time w/o cover (h) Nurse time with cover (h) Away from bedside (h)
Nurse time over 72 hours use
BGE every 3 hours BGE every 2 hours Proxima every 2 hours
Nurse time w/o cover (h) Nurse time with cover (h) Away from bedside (h)
Other metrics over 72 hours use
BGE every 3 hours BGE every 2 hours Proxima every 2 hours
125
185
0 0
50
100
150
200
Blood loss (ml)
48
72
12
0
10
20
30
40
50
60
70
80
Arterial line openings
24
36
0 0
5
10
15
20
25
30
35
40
Arterial line openings
© Sphere Medical 2016 7
New study demonstrates Proxima benefits
Study conducted at University Hospital Southampton cardiac intensive care unit in H1 2016
20 patients recruited – 10 on Proxima and 10 using standard process involving near-patient
benchtop blood gas analysers
Average of 10 measurements made on each patient over 24 hours
Proxima delivered:
>20% reduction in total time per sample (from decision taken that a test is needed until
results available at the bedside)
>50% reduction in delay to start of testing
Mean time nurse spent away from the bedside when using conventional analysers was 3:07
minutes: in c. 20% of samples delays were caused by the benchtop analyser not being
immediately available
Outcome confirms workflow benefits from using Proxima on unstable patients requiring
frequent blood gas measurements, even in a highly optimised critical care environment
© Sphere Medical 2016 8
Attractive and Growing Market
$1.4 billion market worldwide for blood gas and electrolyte
testing in 2014 growing at c. 10% p.a.(1)
Worldwide market projected to be $3.5 billion by 2023(1)
Global potential revenue of Proxima platform > $200m p.a.
Revenues proportional to number of patients
One disposable per patient
Fixed ASP for 3 days use, irrespective of number of tests
COGs in line with industry standards
(1) Transparency Market Research, January 2016
US$ 3.5 billion in 2023
US$ 1.4 billion in 2014
Global market(1)
© Sphere Medical 2016 9
Product Strategy
Proxima 3 Proxima 4 Proxima 4+
Analytes pH,pCO2,pO2 pH,pCO2,pO2 pH,pCO2,pO2
Hct, K+ Hct, K+, Na+ Hct, K+, Na+
Glucose Glucose, Lactate
Patient Groups Respiratory disease,
ECMO
Respiratory disease,
ECMO
Respiratory disease,
ECMO
Glycaemic control,
neurosurgery,
cardiac surgery
Glycaemic control,
neurosurgery,
cardiac surgery
Sepsis, trauma,
complex surgery
Patient Groups Adults Adults Adults
Paediatrics > 15 kg Paediatrics
Proportion of ICU
patients
10-20% 40-50% 50-60%
Increase market penetration through product evolution
© Sphere Medical 2016 10
Go-To-Market Strategy
Proxima 3
Hire a small dedicated own sales force
Sell directly to early adopters in limited territories in Europe
Obtain key feedback on product positioning and product
performance
Prepare market for future product generations
Proxima 4
Obtain CE mark for Proxima 4
Launch for sales in established European countries, replaces Proxima 3
Find partners to:
Sell to end customers throughout Europe ()
Obtain US and Japanese approval subsequently
Sell on a world-wide basis upon approvals
Proxima 4+
Aim is to deliver annual innovation increments
Objective is to build an active customer base leading to recurring revenues
Market penetration (not to scale)
© Sphere Medical 2016 11
Sales Progress: Europe
Proxima 3 launched in September 2014 in UK and March 2015 in continental
Europe
Direct sales team operating in the UK, Germany, Netherlands, Belgium
focussing on obtaining direct market feedback on Proxima 3
First commercial sales achieved in UK, Germany and Belgium
Increasing interest in Proxima in the market
To date more than 30 hospitals have undertaken evaluations
To date around 150 patients have been connected
Process underway to appoint distributors in key European markets
Burke & Burke appointed as Proxima 4 distributor for Italy
© Sphere Medical 2016 12
Proxima 3 Feedback
Topic I would like… Improvements
Set-up process A quicker set-up time or ideally not to be
involved in the set-up of the system.
BGAs are usually set up and maintained by
lab technicians, or the process is largely
automated.
Proxima 4 incorporates a number of
improvements, including fewer steps and a
significant reduction in set-up time.
Ultimately the aim is to automate the process,
which requires 2-3 years development and
significant investment.
Additional
analytes
To be able to treat more patients with
Proxima, for which I need glucose and/or
lactate.
Glucose added in Proxima 4.
Lactate development underway and expected to
be in next upgrade.
Graphical trends To be reminded when the next measurement
is due.
A graphical trend to provide additional
information on the effectiveness of the
therapy.
Scheduling functionality and graphical trends
expected to be launched in next update.
Connectivity to
hospital IT
systems
To see the blood gas results together with
other important diagnostic information.
Conworx and CliniSys connectivity already
added.
Connectivity to further systems being added
over the next year.
© Sphere Medical 2016 13
Financial Summary
Continuing tight financial control keeping operating expenses below budget
Total operating expenses £2.6 million in H1 2016
Product development costs capitalised £1.1 million in H1 2016
Other capex requirements are minimal in the near term
Cash balance better than budget
Cash and short-term investments at 30 June 2016 of £6.6 million
£0.6 million research and development tax credit received
© Sphere Medical 2016 14
Anticipated upcoming newsflow catalysts
Sales launch of Proxima 4 in Europe expected in 2016
Further commercialisation deals for Proxima 4
Proxima 4 sales traction
Additional clinical evaluation results
Proxima 4+ development progress
© Sphere Medical 2016 15
Summary
Proxima is a patient connected BGE solution which provides
better patient management during a patient’s critical period while
reducing nursing work load
faster and more frequent production of results
avoids blood loss and reduces infection risks
Strong endorsement by leading European clinicians
Global potential revenue of Proxima platform > $200m p.a.
Clear commercialisation strategy underway
Proxima 3 successfully launched into Europe to gain early adopter
feedback
Proxima 4 CE mark process complete and launch expected 2016
First regional commercialisation partner appointed
© Sphere Medical 2016
Appendices
© Sphere Medical 2016 17
Executive Directors
Dr. Wolfgang Rencken
CEO
Richard Wright
CFO
Appointed CEO in February 2014
More than 15 years’ experience in the
healthcare and medical devices industries
Proven track record in developing and
commercialising medical devices and driving
significant product revenue growth
Previous roles:
CEO of MAQUET Cardiopulmonary AG, an
international medical devices group with over
1,000 employees. Over three years as CEO, he
oversaw revenue growth of over 50% and more
than doubled EBITDA
COO and a director of Definiens AG
Siemens AG over a 15 year period
Appointed CFO in July 2015
More than 20 years of experience in financial
roles across a variety of sectors
Chartered Accountant with a degree in
mathematics from Cambridge University
Previous roles:
Finance Director of Alliance Pharma plc for 8
years, a UK based AIM-listed speciality
pharmaceutical company
Finance Director of Great Western Trains and
Parragon Publishing
© Sphere Medical 2016 18
Non-Executive Directors
Non-Executive Director
Stephen H. Mahle
Joined Sphere in December 2011
Current role
Non-Executive Director - EBR Systems, Inc.
Previous roles
Former Executive Vice President of Medtronic
Inc. and President of Medtronic’s largest
division, Pacing and subsequently President of
Cardiac Rhythm Disease Management - retired
after 37 years
Non-Executive Chairman
Dr David Martyr
Joined Sphere in January 2015
Current roles
CEO - Tecan AG
Non-Executive Director - ALDA (Analytical Life
Science Diagnostics Association), Washington
DC, Buechi Labortechnik AG
Previous roles
Group President Leica Microsystems and VP
& Group Executive, Danaher Corporation
Non-Executive Director
Brenig Preest
Joined Sphere May 2015
Current roles
Investment director at Arthurian Life Sciences
Ltd
Non-Executive Director at Simbec Orion Ltd,
Apitope BV and CeQur AG
Previous roles
Investment Driector at Excalibur Fund
Managers Ltd and Merchant Ventures Ltd
Various other roles including at PwC and GE
Healthcare
John Gregory
Joined Sphere in December 2011
Senior Independent Director
Current role
Non-Executive Chairman – Foresight VCT
Previous roles
Non-Executive Chairman – IS Pharma,
Sinclair IS Pharma
Executive Director –Singer & Friedlander
Holdings and Managing Director – Henry
Ansbacher & Co.
Non-Executive Director
Meinhard Schmidt
Joined Sphere in January 2015
Current roles
Executive Chairman – Austin Life Science
Partner AG, mt:onyx AG, Non-Executive
Chairman – Oncimmune PLC, Non-Executive
Director – CeQur AG, ValuationLab AG
Previous roles
Director of Cellnovo Ltd, Quanta FS Ltd, Non-
Executive Chairman – Promimic AB
CEO, SVP & Head Business Unit
Prosthetics/Digitalization - Institut Straumann
AG and Open Digital Dentistry AG, SVP Head
Roche Decentralized Solutions – Roche
Diagnostics
Non-Executive Director
© Sphere Medical 2016 19
Medical Advisory Board
Professor Jean-Louis Vincent Professor Mike Grocott
Professor of Intensive Care at the Université
Libre de Bruxelles
Intensive care physician, Erasme University
Hospital, Brussels
Past President of the World Federation of
Societies of Intensive and Critical Care
Medicine from 2009-2013
Professor of Anaesthesia and Critical Care
Medicine at the University of Southampton
Consultant in Critical Care Medicine at the
University Hospital Southampton
Head of the University of Southampton’s Centre
for Human Integrative Physiology and the
critical care research area of their NIHR
Respiratory Biomedical Research Unit
Member of the Royal College of Anaesthetist’s
Council
Board member of the UK Faculty of Intensive
Care Medicine
Medical Advisory Board Medical Advisory Board
Professor Michael Quintel
Director of the Department of Anaesthesiology,
Emergency and Intensive Care Medicine at the
University of Göttingen, Germany
Member of the European Society of Intensive
Care Medicine (ESICM) group on respiratory
failure
Member of the Scientific Committee of
International ECMONet
Past President of the German Interdisciplinary
Society of Intensive Care Medicine (DIVI) and a
past council member of the German Society of
Anaesthesia and Intensive Care (DGAI).
Professor Quintel is also a member of the
German Sepsis Society and an Investigator in
the SepNet Sepsis Clinical Trial Network in
Germany and has participated in numerous
sepsis and critical care trials.
Medical Advisory Board
© Sphere Medical 2016 20
Proxima – Frequent Measurements Example
Hours Proxima attached to the patient
Proxima pH
Proxima pCO2
Proxima pO2
Patient undergoing cardiac
surgery.
Use of frequent
measurements enables
clinicians to react quickly
when pH and CO2 move
out of physiological range.
Oxygen readings relatively
high because patient was
on bypass, not a ventilator.
© Sphere Medical 2015 21
Welsh production facility
Located in St Asaph, North Wales
5,000 sq ft
Includes 2,750 sq ft clean room
Sufficient capacity for next few years
Lease acquired Feb 2016
Operational June 2016
Current lease runs to 2020
© Sphere Medical 2016 22
Top 15 investors
Holder / Fund Manager No. of shares % holding
Woodford Investment Management LLP 42,522,364 29.99%
The Wales Life Sciences Investment Fund LP 25,000,000 17.6%
LSP Life Sciences Fund 10,904,000 7.7%
Ortho Clinical Diagnostics 8,141,250 5.7%
Octopus Investments Nominees Limited 6,250,000 4.4%
Ruffer LLP 5,653,895 4.0%
Royal London Asset Management 5,624,185 4.0%
Parkwalk Technology Funds 3,437,779 2.4%
Herald Investment Management 2,009,262 1.4%
UBS 1,804,435 1.3%
Edwards Life Sciences AG 1,176,470 0.8%
Directors 1,080,985 0.8%
Oxford Capital Partners 971,134 0.7%
William Solomon 920,652 0.6%
Artemis Fund Managers 807,091 0.6%
Updated: 4 September 2016 Issued share capital: 141,757,872
© Sphere Medical 2011 23 CONFIDENTIAL