Slide 1: Innovation
INNOVATION March 2016
Slide 2: Disclaimer
This presentation is for information purposes only. By this presentation, Elron does not intend to solicit offers to purchase its securities and the presentation does not constitute an invitation to receive such offers. Elron may make improvements and/or changes in the features or content presented
Slide 3: Recent portfolio company updates
BrainsGate began the follow-up period after Notal Vision achieved coverage from a Medicare enrolling the 600th patient in Dec. 2015 carrier amounting to $74 per patient per month The DSMB is expected to conduct the interim The company estimates the eligible population at analysis in Q2/16 about 2.5m
Slide 4: Elron
DISCOVER. ELRON
Slide 5: Years of experience identifying opportunities, building technology leaders, and exiting holdings
+ WE HAVE YEARS EXPERIENCE IDENTIFYING OPPORTUNITIES, BUILDING TECHNOLOGY LEADERS, AND EXITING HOLDINGS + WE INVEST PRIMARILY IN EARLY STAGE COMPANIES + WE RELY ON A PROVEN STRATEGY OF HANDS-ON INVOLVEMENT IN THE DAY-TO-DAY OPERATIONS OF OUR GROUP COMPANIES + OUR COMPANIES BENEFIT FROM OUR SKILL AT
Slide 6: Since 2010: exit proceeds, gains, investments, liquid resources
Exit Proceeds, after tax ($m)* Gain ($m) 85.5 66.3 SINCE 2010: 269 17.9 114 -8.4 4.4 2.5 59 20 26 4 2010 2011 2012 2013 2014 2015 $168M 2010 2011 2012 2013 2014 2015 $125M Investments ($m)* Liquid Resources at Year End ($m) 37 36 93.7 * $1.5B 30 76.2 18 16 40.7 13 31 21.1 * $150M 15.7 2010 2011 2012
Slide 7: Holdings in companies
Holdings in companies 1 Book value at Amount invested Dec. 31, 2015 ($m) ($m) Associates and consolidated companies: Pocared (58%) 15.6 53.4 BrainsGate (30%) 0.4 24.5 PLYmedia (25%) - 2.5 Others 13.0 22.8 Companies presented at fair value: Notal Vision (21%) 15.7 10.1 Others 4.6 18.6 Total Holdings
Slide 8: BrainsGate
DISCOVER. BRAINSGATE
Slide 9: BrainsGate: our investment $25M
2000 OUR INVESTMENT: 2005 $81M $25M Johnson & Johnson, Boston Scientific, Medtronic, Pitango, Cipio Partners To increase the potential number of stroke victims who receive OUR treatment from ~7% to ~80% HOLDING: Electrode used to electrically stimulate a nerve center behind the nasal cavity (the SPG
Slide 10: Interruption of blood flow to the brain
INTERRUPTION OF BLOOD FLOW TO THE BRAIN When blood flow to an area of the brain is cut off When brain cells die, functions controlled by that part of the brain (e.g. memory, muscle control) Blood flow to the brain is blocked by a Blood leaks into the brain from a blood vessel of strokes are ischemic
Slide 11: Stroke survivors left permanently disabled
Average Lifetime Cost Per Stroke Patient OF STROKE $300 K $450 K SURVIVORS ARE LEFT $130 K $60 K PERMANENTLY $10 K $25 K $25 K DISABLED mRS 0 1 2 3 4 5 6 Sources: Samsa et al, Performing Cost-Effectiveness Analysis by Integrating Randomized Trial Data with a Comprehensive Decision Model: Application
Slide 12: Ischemic penumbra: viable tissue at risk
Cells in the affected area die almost immediately, and cannot be salvaged However, surrounding the blockage are regions of viable tissue at risk – the ischemic penumbra – Source: American Heart Association: Temporal Trends in Patient Characteristics and Treatment With Intravenous Thrombolysis Among
Slide 13: Stroke treatments: clot-busting drug
CLOT-BUSTING DRUG • The risk of hemorrhage just 3 hours after stroke onset increases 10X • Certain patients are eligible for treatment up to 4.5 CLOT RETRIEVING DEVICES hours after symptoms first start • tPA is not approved for use after 4.5 hours from stroke onset • MOST PATIENTS DO NOT GET TO THE
Slide 14: Stroke treatments: clot retrieving devices
CLOT-BUSTING DRUG • In the past this treatment was used in an 8-hour treatment window, but was not widely adopted due to lack of proven clinical benefit CLOT RETRIEVING DEVICES • 2015: Several large multicenter trials were published showing that treatment with endovascular treatment in a limited tim
Slide 15: Stroke treatments: electrical stimulation
CLOT-BUSTING DRUG • Electrical stimulation of the SPG (a nerve center behind the nasal cavity) using a miniature electrode CLOT RETRIEVING DEVICES • The electrode’s activation induces dilation of cerebral blood vessels, and augments cerebral blood flow; without affecting central blood pressure • THE
Slide 16: The ISS system and stimulation sessions
5 daily stimulation sessions, of 4 hours each The neurologist performs the implantation (which is brief and simple), with the aid of a navigation system GuideView SPG (sphenopalatine ganglion) = supplies parasympathetic innervation to the anterior cerebral circulation and some of the posterior c
Slide 17: Pivotal trial for U.S. marketing approval
BRAINSGATE IS CONDUCTING AN FOR U.S. MARKETING APPROVAL OF THE ISS: This slide contains forward-looking information as defined in Section 21E of the U.S. Securities Exchange Act of 1934, and in Section 32A of the Israel Securities Law, 5728-1968. See Slide 2 of this presentation. 17
Slide 18: Pocared
DISCOVER. POCARED
Slide 19: Pocared: our investment $53M
OUR 2004 INVESTMENT: 2007 $53M $95M SCP Vitalife To promote antibiotic stewardship and significantly reduce lab costs OUR by providing a method for rapid infectious diseases diagnostics HOLDING: Rapid and automated microbiology lab system for infectious diseases diagnosis 58% 19
Slide 20: Limitations of traditional microbiology testing
Since the 19th century, microbiology testing has been done by culturing In the 21st century, developed a technology for automatically bacteria in petri dishes identifying bacteria in body fluids, by identifying their optical “fingerprint” Expensive: Requires reagents and skilled lab technicians Manu
Slide 21: Antibiotic resistance and overprescribing
The use of antibiotics is the single most important factor leading to antibiotic resistance around the world Antibiotics are among the most commonly prescribed drugs Up to 50% of all the antibiotics prescribed are not needed or are not optimally effective as prescribed ILLNESSES EACH DEATHS EACH YEA
Slide 22: Lab workforce, testing volume and cost pressures
FEWER SKILLED WORKERS HIGHER THROUGHPUT GREATER EFFICIENCY The average age of the lab workforce in the Testing volumes are increasing per Economic pressures drive the need to U.S. is about , and increasing year, due to factors such as: contain costs while maintaining high tec
Slide 23: Pocared optical fingerprint diagnostic system
+ Micro-organisms are identified based on their unique optical signatures in response to different UV wavelengths + Culture-free, lab assistant operated + Gold standard accuracy + A full batch of 42 samples takes 2 hours to diagnose Filtration using “wet foam” technology to The Analyzer employs A re
Slide 24: Clinical trial results update
+ In February 2016, with the completion of sample collection at 3 of the 4 centers at which the trial is taking place, data was received from the three centers and the analysis of the results commenced. + From an examination of the results received to date, it would appear that they do not match Poc
Slide 25: Pocared applications and development stages
(streptococci) (MRSA/MSSA) 41m tests in the U.S. annually 8m tests in the U.S. annually clinical validation, ready for clinical feasibility regulatory studies (sepsis) (rapid AST) 50m tests in the U.S. annually NO rapid solution currently available clinical proof of concept clinical feasibility Sour
Slide 26: Notal Vision
DISCOVER. NOTAL VISION
Slide 27: Notal Vision: our investment $10M
OUR 2000 INVESTMENT: 2002 $10M $45M Ganot, Evergreen To save the eyesight of Age-related Macular Degeneration (AMD) OUR patients HOLDING: Home-monitoring system that sends out an alert when a change for the worse is detected in the condition of dry AMD patients 21% 27
Slide 28: Age-related macular degeneration
AGE-RELATED MACULAR DEGENERATION AMD destroys sharp, central vision, necessary for common tasks such as facial recognition, driving, reading, & watching television AMD has 2 stages: “dry” (non-neovascular) and “wet” (neovascular) ~90% of blindness due to AMD is associated with the wet stage AMD PROG
Slide 29: Home monitoring for dry AMD patients
It is not possible to predict who will develop wet AMD, and if so, when Dry AMD patients are monitored once or twice a year, in routine check-ups at the eye doctor Wet AMD can be treated, but due to late diagnosis, 64% of eyes end with dysfunctional vision even after treatment The device is easy t
Slide 30: AREDS2 trial with NIH
AREDS2: Notal Vision conducted a trial in collaboration with the NIH on 1,520 patients in 44 eye clinics: 94% of patients who used the device as directed preserved functional vision at diagnosis vs only 62% of patients using other detection methods 30
Slide 31: Medicare coverage achieved
NOTAL VISION ACHIEVED AMOUNTING TO $74 PER At this stage, dry AMD patients at high risk of developing wet AMD who received a doctor’s PATIENT PER MONTH prescription are eligible for Medicare coverage. Notal Vision estimates this population at about This slide contains forward-looking information as
Slide 32: CartiHeal
DISCOVER. CARTIHEAL
Slide 33: CartiHeal: our investment $12M
OUR 2009 INVESTMENT: 2012 $12M $30M Johnson & Johnson, Accelmed To treat joint surface lesions, and to halt the progression of knee OUR osteoarthritis and delay or prevent knee replacement HOLDING: Implant for cartilage and bone repair in the joint 35% 33
Slide 34: Cartilage damage and osteoarthritis
Cartilage does not possess spontaneous healing There are no treatments that halt the progression potential of osteoarthritis (OA) During 2004-2011 people underwent a In 2010 total knee replacements were surgical procedure addressing a cartilage defect in performed the knee Persons with knee OA spend
Slide 35: Agili-C implant post-op results
3 weeks post-op 6 weeks post-op 12 weeks post-op The Agili-C is investigational in the U.S., and CE-marked in the EU. 35
Slide 36: Agili-C implanted in Europe; next milestones
CARTIHEAL’S AGILI-C HAS BEEN IMPLANTED IN THROUGHOUT EUROPE, MOSTLY TO TREAT TRAUMATIC AND DEGENERATIVE KNEE LESIONS Implant an additional 50 patients for various indications such as knee OA, great toe & ankle Product freeze of Agili-C & high manufacturing capacity build-up Pre-IDE meeting with the
Slide 37: Coramaze
DISCOVER. CORAMAZE
Slide 38: Coramaze: our investment €1.75M
OUR 2013 INVESTMENT: 2015 €1.75M €4.5M HTGF, SeedCapital To offer functional mitral valve regurgitation (fMR) patients a OUR minimally invasive treatment in lieu of open heart surgery HOLDING: Transcatheter mitral valve repair system with atraumatic anchoring 28%* * 28% after the funding round will
Slide 39: Functional mitral valve regurgitation
FUNCTIONAL MITRAL VALVE REGURGITATION is very effective but severely limited in its fMR affects up to applicability due to high risk & cost suffer from 1 or more of the following fMR patients suffer from severe symptoms and difficulties: limited efficacy complex delivery & deployment invasive anchor
Slide 40: Percutaneous transfemoral implantation device
CORAMAZE IS DEVELOPING A DEVICE DESIGNED TO SELF- EXPAND ON SITE, AND BE POSITIONED BETWEEN THE VALVE’S LEAFLETS PERCUTANEOUS SPACER THAT ATRAUMATIC TRANSFEMORAL ENHANCES LEAFLET ANCHORING IN THE IMPLANTATION COAPTATION LEFT ATRIUM A SAFE, SIMPLE, AND PRESERVES NATURAL REPOSITIONABLE, QUICK IM
Slide 41: Mitral valve acquisitions by strategic acquirers
ACQUIRER TARGET DEAL SIZE DEVICE STAGE Edwards Lifesciences CardiAQ Valve up to $400m ($350m mitral valve replacement clinical development Technologies upfront + milestone) Abbott Tendyne up to $250m ($225m mitral valve replacement clinical development upfront + milestone) Abbott Cephea Valve undisc
Slide 42: Cyber investment with Rafael
Our 1st investment with Rafael (one of Israel’s largest defense companies) in the cyber space, in a company that designed a spear phishing mitigation solution for enterprises The company closed an $11m financing from Carmel Ventures and RDC (our subsidiary jointly held with Rafael) Secured contracts
Slide 43: Proven expertise and anticipated developments
WE HAVE PROVEN EXPERTISE IN OPPORTUNITIES, TECHNOLOGY LEADERS, AND HOLDINGS WE ANTICIPATE SIGNIFICANT DEVELOPENTS IN OUR MATURE COMPANIES OUR CURRENT MARKET VALUE IS , AND OUR LIQUID RESOURCES BALANCE IS This slide contains forward-looking information as defined in Section 21E of the U.S. Securities
Slide 44: Opportunity
ELRON. OPPORTUNITY Thank you.