Outset Medical, Inc. · NASDAQ:OM
Outset Medical — Q3 2023 Earnings Presentation
29 slides from Outset Medical's earnings presentation, Nov 7, 2023
Slide 1: Outset Medical Investor Presentation November 2023
Outset Medical Investor Presentation November 2023
Slide 2: Forward-looking statements and non-GAAP information
Forward-looking statements and non-GAAP information This presentation and the accompanying oral statements contain forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements. In some cases, you
Slide 3: Transforming dialysis from the hospital to the home
Transforming dialysis from the hospital to the home
Slide 4: Reducing the cost and complexity of dialysis
Reducing the cost and complexity of dialysis SUMMARY Established footprint in $2.5B U.S. acute care market Growing patient base in $8.9B U.S. home market $11.4B U.S. total addressable market1 1. Company estimates based on data contained in U.S. Renal Data System (USRDS) 2021 Annual Data Report 2023
Slide 5: Dialysis is one of the largest, most expensive, least-changed sectors of healthcare
7%2 for 1%2 CURRENT STATE Dialysis is one of the largest, most expensive, least-changed sectors of healthcare $73B1 Annual spending on U.S. ESRD patients $41B1 Paid by Medicare 600,0003 Dialysis patients 90M3 Annual dialysis treatments 2022 2030 30% 1. Company estimates based on data contained in US
Slide 6: Dialysis care pathways
135,000 New ESRD patients diagnosed annually in the U.S. 60% Crash into dialysis Acute USRDS 2021 and 2022 Quarterly and Annual Data Reports CURRENT STATE Dialysis care pathways
Slide 7: Dialysis care pathways
60% Crash into dialysis 40% Managed into dialysis Clinic 13% 87% Acute Home USRDS 2022 Annual Data Report CURRENT STATE Dialysis care pathways
Slide 8: This is an expensive care delivery model
CURRENT STATE This is an expensive care delivery model… 60% Crash into dialysis 40% Managed into dialysis Acute Clinic $5,000–$25,000 Average loss by hospital for each inpatient stay for renal failure with dialysis1 $30 billion Annual cost of in-center dialysis treatment in clinics 34%1 30-day hospi
Slide 9: Dialysis is in need of new solutions
Dialysis is in need of new solutions CURRENT STATE Hospitals lose money on every treatment Staffing challenges constrain optimal patient care and drive up cost Complicated technologies made home hemodialysis impractical for most patients
Slide 10: We see a technology-driven way forward
We see a technology-driven way forward
Slide 11: Tablo is a first-of-its-kind technology designed to reduce cost and complexity of dialysis
Tablo® is a first-of-its- kind technology designed to reduce the cost and complexity of dialysis Single device from ICU to home Connected and intelligent Small and mobile
Slide 12: An all-in-one solution replacing multiple machines and a water treatment room
An all-in-one solution that replaces multiple machines and a water treatment room with a single device
Slide 13: One device, multiple markets
One device, multiple markets $2.5B Acute market Hospital & sub-acute based dialysis $8.9B Home market Home hemodialysis & transitional care $11.4B U.S. TAM Company estimates based on data contained in USRDS 2021 Annual Data Report
Slide 14: One device, multiple markets
One device, multiple markets $11.4B U.S. TAM $2.5B Acute market Hospital & sub-acute based dialysis $8.9B Home market Home hemodialysis & transitional care Company estimates based on data contained in USRDS 2021 Annual Data Report
Slide 15: Tablo reduces the cost and complexity of acute dialysis
ACUTE CARE Tablo reduces the cost and complexity of acute dialysis TOTAL POTENTIAL COST SAVINGS 50%–80%1 Potential payback period <1 year 1. Company estimates based on data provided by third party health systems Supplies cost reduction Before Tablo With Tablo Existing ICU machines require numerous d
Slide 16: Tablo can deliver significant savings
ACUTE CARE Tablo can deliver significant savings Hospital St. Mark’s Hospital Location Salt Lake City, Utah Beds 300 ICU beds 24 “(We saw) huge cost savings and high ratings on the training experience, treatment setup and starts, and a 96.2% average success rate.” —Kasi Moore, Nurse Manager $450K An
Slide 17: One device, multiple markets
One device, multiple markets $2.5B Acute market Hospital & sub-acute based dialysis $8.9B Home market Home hemodialysis & transitional care $11.4B U.S. TAM Company estimates based on data contained in USRDS 2021 Annual Data Report
Slide 18: The home market is significantly underpenetrated
The home market is significantly underpenetrated HOME CARE REIMBURSEMENT Medicare reimbursement misaligned with treatment frequency Historical barriers INCENTIVES Inadequate provider payment incentives TECHNOLOGY Cumbersome technology and training
Slide 19: The home market is poised for change
The home market is poised for change. Outset’s commercial strategy is designed to capitalize on it HOME CARE New financial incentives Medicare Advantage eligibility Clinic staffing shortages Patient preferences
Slide 20: Tablo addresses key barriers to home dialysis adoption and retention
Tablo addresses key barriers to home dialysis adoption and retention HOME CARE 5–6 Treatments per week 100 hours Training per patient 16–24 hours Dialysate prep time per week Historical device 3 Treatments per week <25 hours Training per patient 0 hours Dialysate prep time
Slide 21: Tablo changes the home benefit-burden ratio
HOME CARE Tablo changes the home benefit-burden ratio Patients report fewer symptoms on Tablo Patient-reported outcomes survey comparing in-clinic treatments on Tablo vs their previous dialysis machine Felt more energized after dialysis 34% Reported less cramping during treatment 61% Felt more relax
Slide 22: Commercial strategy
Commercial strategy Clinic DRIVERS / BENEFITS New revenue stream Attractive contribution margin Discharge management solution Acute Home DRIVERS / BENEFITS Higher patient adoption of home Faster training Longer retention
Slide 23: A highly efficient business model
A highly efficient business model SINGLE PLATFORM RECURRING REVENUE : ACUTE ~$20K per console per year RECURRING REVENUE : HOME ~$15K per console per year ONGOING REVENUE Initial console purchase generates recurring and predictable consumable and service revenue INITIAL CONSOLE PURCHASE
Slide 24: Strong financial position as of September 30, 2023
Strong financial position as of September 30, 2023 Acute Console growth across acute and sub-acute providers driven by new sales agreements and expansion within existing accounts Home Continued progress against home expansion initiatives within MDOs, hospital to home programs, and new alternative pr
Slide 25: 2023 outlook
2023 outlook Non-GAAP gross margin Low-20% range full year Mid-20% range exiting Q4 Commercial execution Land and expand in the Acutes High growth, high retention focus in the Home Revenue guidance ~$130M ~13% year-over-year growth
Slide 26: 2024 and long-term outlook
2024 and long-term outlook 2024 non-GAAP gross margin Low-30% range full year Mid-30% range exiting Q4 Long-term guidance High-teens annual revenue growth 2025-2027 ~50% non-GAAP gross margin as revenues reach ~$250M, exiting 2027 2024 revenue guidance Mid-teens year-over-year growth
Slide 27: Social media posts from Outset Medical
ee Specialist at Outset M... Reshared from Outset M Very proud of our partnship and Outset Medical, Inc. cd accomplishments. #betterbeginsnow vutset_ 27,920 followers amo « Edited - © These happy faces are the dialysis patients who are catching the latest wave of_—_...see more Treatments on Tablo -
Slide 28: Outset Medical contact details
Outset Medical 3052 Orchard Drive San Jose, CA 95134 outsetmedical.com
Slide 29: Results of Operations – Non-GAAP
Outset Medical, Inc. Results of Operations – Non-GAAP (in thousands, except per share amounts) (unaudited)