Atricure, Inc. · NASDAQ:ATRC
Atricure — Investor Presentation (August 2017)
36 slides from Atricure's investor presentation, Aug 21, 2017
Slide 1: AtriCure Investor Presentation August 2017
AtriCure® Investor Presentation August 2017 1 Atri
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements’ that is, statements related to future events that by their nature address matters that are uncertain. All forward-looking information is inherently uncertain and actual results may differ materially from assumptions,
Slide 3: Atri
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Slide 4: Afib: serious and costly problem
Afib: 4 serious 2 Stroke is leading fos cause oflo! and costly problen J term disability Afib patients are More deadly than Afib is second 5X more likely non-Afib strokes leading cause to have a stroke of stroke Total cost of Afib to U.S. $ healthcare each year BILLION Atri€
Slide 5: Key Investment Rationale
Key Investment Rationale jue company addressing an underserved and ‘growing population of patients ~17 million chronicAfio patients lobally Current standard of care does not adequately address this population Portfolio of Standalone/Minimally Invasive (MIS) ‘opportunities to drive long term growth C
Slide 6: Two Distinct Patient Profiles
Two Distinct Patient Profiles 6 MILLION OPEN PROCEDURES STAND-ALONE Afib patients in the U.S. 25% PENETRATED PROCEDURES PENETRATED + Treating afb ndalone procedure + Afi tr time of, 3M Effectively rgery Treated Medication / - Pulmonary Vein Pulmonary VEIN Cardioversion Isolation Isolation (Clamp or
Slide 7: AtriCure Product Portfolio
AtriCure Product Portfolio OPEN ABLATION MIS ABLATION Ls sr LAA CLOSURE MANAGEMENT = = NY “A
Slide 8: U.S. Market - $1 Billion Opportunity
U.S. Market - $1 Billion Opportunity 6 million Afib patients in the U.S. ADDRESSABLE MARKET OPPORTUNITY oe ©& OPENABLATION —LAA CLOSURE MIs ABLATION $260M $290M $480M Market apptes to maior Market apples to both open Market inclides ALL non- forms ofstrucuralneart chestand mnimaly-nvasive paroxysmal
Slide 9: Business Evolution to Drive Long Term Growth
Business Evolution to Drive Long Term Growth ACCELERATING GROWTH $260 SOLID MILLION GROWTH OPEN ABLATION ccurReNT Penerrarion “25% $200 MILLION $480 MILLION CORE BUSINESS EVOLUTION TO DRIVE LONG TERM GROWTH LAA CLOSURE MANAGEMENT MIS ABLATION is <3% AtriCure
Slide 10: U.S. Open Ablation
U.S. Open Ablation Competitive Advantages + Labeling advantage in the U.S : + Robust portfolio across two technology platforms Solid gross margins, Leader in market development via physician education OPEN ABLATION Growth Drivers STS/HRS Class 1 recommendations Focused sales force Major emphasis on
Slide 11: U.S. LAA Closure Management
U.S. LAA Closure Management Open LAA Growth Drivers Broadening awareness of benefits of LAA management (science and society endorsement) Technology-driven benefits (ease of use and closure) ATLAS trial studying prophylactic treatment for non-Afib patients OPEN & MIS LAA CLOSURE MANAGEMENT Highest gr
Slide 12: U.S. MIS Ablation
U.S. MIS Ablation Competitive Advantages Favorable reimbursement environment High gross margin portfolio Pipeline of continued development Leveraging expertise in epicardial ablation to serve non-paroxysmal opportunity market Growth Drivers + CONVERGE IDE trial for Afib labeling expansion + Cardiolo
Slide 13: Summary of U.S. - Large, Underpenetrated Market
Summary of U.S. - Large, Underpenetrated Market Opportunity $4g0M $2601 soot soim Open Alblation AtriClip MIS Ablation © CURRENT U.S. MARKET (© POTENTIAL U.S. MARKET U.S. GROWTH DRIVERS... Continued penetration into the Open market Growing MIS clinical data and continuing commercial execution + Clip
Slide 14: Aligning Expertise With Opportunity
Aligning Expertise With Opportunity Sales structure and talent — maximizing productivity * Shifting headcount growth from Regional Sales Managers to Ablation/Clinical Specialists + Solid case coverage while managers build relationships, broaden adoption * Onboarding and training of current team is a
Slide 15: Mid-teens growth driven by product expansion and reimbursement
Mid-teens growth driven by product expansion and reimbursement International Market = $2B @ $525M OPEN ABLATION Growth Drivers imbursement in the EU ¢ + Clinical Data - CEASE AF $600M LAA CLOSURE e $985M MIS ABLATION Curent Internationa Sales (Smim "8 AtriCure
Slide 16: Financial Performance
Financial Performance Revenue growth expectations fueled by stability in OPEN ablation and high growth in MIS and LAAClosure REVENUE EBITDA $176.8M -$178.4M $155.4M $129.8M worm [| [| 2014 2015 2016 20176 I ($4.0-$6.0) ($8.2) ($11.5) ($12.0) & Cash, cash equivalents, and investments position of $35M
Slide 17: Investor Highlights
Investor Highlights Leader in $1B US addressable market for atrial fibrillation solutions a A Market Leadership Only on-label (FDA) product in the persistent/long-standing persistent Afib market Robust product portfolio and pipeline focused on minimally-invasive solutions Most widely adopted LAA pro
Slide 18: Thank You!
Slide 19: Supplemental Information
Supplemental Information Atri
Slide 20: Franchise / Market Overview
Franchise / Market Overview OPEN Ablation (Concomitant) Overall 2017 First-Half Revenue $32.5 US. +13% $11.8M US +18% ‘S17.0M US. +16% ‘$6.3M US 201% S177 +8% (9% CC) $85.5M +14% (+15%CC) 20 2016 FullYear } Global Market Revenue Potential $58.0M US. oe ‘S770M Annually $20.4M US. ie oe ‘$275M+ Annual
Slide 21: Franchise / Business Overview
Franchise / Business Overview _ _ OPEN Ablation (Concomitant) re = ee MIS Clip —_<- EDAPUA label for Afb (2011), ‘Advanced Training — EXCLUDE til @10K data) ‘Coninues esvoston snd svateness Te to ablaton gown New Cip in 2018 ATLAS ang otter ats ‘Tals — DEEP and CONVERGE Colasestve care Convergent gr
Slide 22: AtriCure Portfolio Designed to Treat Afib
AtriCure Portfolio Designed to Treat Afib 2016 U.S. REVENUE BY PRODUCT CATEGORY 25% $58M P—47% $31M $30M 25 OPEN ABLATION LAA CLOSURE MANAGEMENT MIS ABLATION NEW! 2017 STS and HRS OPEN mis CONVERGE trial guidelines recommend NEW! 2017 TS Strong productline with underwayto support FDA surgical ablati
Slide 23: Keys to Market Development
Keys to Market Development Expand Product Increase Education Portfolio & Awareness innovative pipeline to drive Afib training programs Open ablation penetration delivered to 2, and build MIS market PRO-V, PRO2, cryoFORM, Cryo3, et. Commercial Talent & Expertise Strong comme leadership and sales infr
Slide 24: Expanding Product Portfolio
Expanding Product Portfolio + Launched 8 products in last three years (2 from acquisitions) * Defined track record of organic and inorganic execution + Pipeline focus across all franchises + Innovation toward less invasive, simpler, easier to use, and more efficient products + Strong commercial pric
Slide 25: Increase Education and Awareness
Increase Education and Awareness Investment + Significant resources toward physician education + Multiple options including didactic, hands-on, proctoring, and case observations Steering Committee + Comprised of highly regarded KOLs Strong Network + Established strong network of revered physician tr
Slide 26: Advancing Clinical Outcomes
Advancing Clinical Outcomes Robust clinical program with several studies underway to generate clinical evidence CONVERGE PIVOTAL Trial designed to support FDA approval of EPi-Sense device specifically for the treatment of persistent Afib through an abdominal approach DEEP PIVOTAL Trial designed to s
Slide 27: CONVERGE Pivotal Study
CONVERGE Pivotal Study STUDY DESIGN Summary Multi-center, prospective, open label randomized 21 (Convergent procedure vs endocardial catheter ablation) pivotal study Number of Subjects and Sites Up to 153 subjects Up to 30 sites (27 US and 3 OUS) Study Duration 5 year follow-up of all subjects Trial
Slide 28: Guidelines to Fuel Adoption
Guidelines to Fuel Adoption 2017 STS Guidelines + Applies to ALL-COMER Afib patients. Previously only “symptomatic patients refractory or intolerant to at least one AAD” + Surgical Ablation is RECOMMENDED not just reasonable. It doesn't increase operative risk. + LAAManagement is mentioned for the f
Slide 29: Society Guidelines for Treatment of AF
Society Guidelines for Treatment of AF SOCIETY STS (2016)! RECOMMENDATION Surgical ablation for AF can be performed without addtional operative isk of mortalty or major morbidity, and is recommended atthe time of concomitant isolated aortic valve replacement, isolated coronary artery bypass raft sur
Slide 30: Society Guidelines for LAAM
Society Guidelines for LAAM SOCIETY STS (2016)! RECOMMENDATION It is reasonable to perform left atrial appendage excision or exclusion in conjunction with surgical ablation for AF for longitudinal thromboembolic morbidty prevention, ‘AHAIACCIHRS (20147) Surgical excision of the left atrial appendage
Slide 31: U.S. Open Market Work-Up
U.S. Open Market Work-Up Total Open WW Procedures 900,000 Total Open U.S. Procedures 300,000 ~~ oABG. <i Penette USS. Procedures with Afib 90,000 — + 20K Aortic...< 20% Penetrated + ~80K Witral...< 0% Penetrated ~ U.S. Annual Opportunity! $260M 2016 U.S. OPEN Ablation Sales $60M \ to, ( — <a AtriGur
Slide 32: U.S. LAA Closure Market Work-Up
U.S. LAA Closure Market Work-Up OPEN LAA MIS LAA Total OPEN WW Procedures 900,000 Non-paroxysmal Pts Annually Treated w Cath Ablation 80,000 Total OPEN U.S. Procedures 300,000 U ful Outcomes with Cath Ablation, ue MIS Ablations (Non-paroxysmal, post Cath) 56,000 US. Procecures with io 99,000) ~ Annu
Slide 33: U.S. MIS Market Work-Up
U.S. MIS Market Work-Up Non-paroxysmal Pts Annually Treated w Cath Ablation ful Outcomes with Cath Ablation, 70% MIS Ablations (Non-paroxysmal, Post Cath) ~ Annual U.S. MIS Ablation Opportunity! ~Current MIS OPEN Ablat tration, 5% 2016 U.S. MIS Ablation Sales 1+ Asnaes ssl pring ets600 80,000 56,000
Slide 34: Additional Growth Drivers with AtriClip
Additional Growth Drivers with AtriClip Sole Therapy LAAM Market ‘Treatment Resistant Af Patients inthe U.S. 333,333 + Competition includes implants and EP closure (oetioln EDR approval). ~Annual Market Opportunity’ $120M MIS Clip with Heart Procedures ‘Yearly MIS Heart Procedures (Valve Replacement
Slide 35: Non-Drug Options of Care For Non-Paroxysmal Afib
Non-Drug Options of Care For Non-Paroxysmal Afib Least Im infu / Efe THERAPY Catheter Ablation (Endocardial) ACUTE CLINICAL SUCCESS 30% g | single treatment Hybrid - CONVERGENT (Trans-Diaphragmatic) 70-80% on AADS 60-65% et off AADS Hybrid - DEEP (i-Latera! Totany-Thoracoscopie) 80-90% on AADS 70-80
Slide 36: Maze IV Procedure
Maze IV Procedure AtriCure