Staar Surgical Company · NASDAQ:STAA
Staar Surgical — Investor Presentation (November 2014)
25 slides from Staar Surgical's investor presentation, Nov 20, 2014
Slide 1: STAAR Surgical Investor Presentation, November 20, 2014
1 NASDAQ: STAA November 20, 2014
Slide 2: Forward-Looking Statements
Forward - Looking Statements All statements in this press release that are not statements of historical fact are forward - looking statements, including statements about any of the following: any projections of earnings, revenue, sales, profit margins, cash, effective tax rate or any other financial
Slide 3: Generating Strong Current and Future Growth
3 Generating Strong Current and Future Growth Q3 YTD 2014 +10%/+12% in CC; FY 2013 +13 %/+19% in CC • Two large m arket o pportunities • Sustainable competitive a dvantages • Rapid cadence of new p roducts • Increasing IP position with new t echnologies • Strong B alance Sheet while i nvesting for f
Slide 4: Strategic Focus on Vision Correction
Strategic Focus on Vision Correction Only Lenses Placed within the Eye 4 Cataract IOL Refractive ICL 60% YTD Revenue 61% in 2013 32% YTD Revenue 33% 2013 Revenue 85% OUS YTD vs 82% PY
Slide 5: STAAR's Pathway to Future Growth: Annual Drivers
• Continued Visian ICL m arket p enetrations – Expect double digit r evenue growth (YTD +8%) – 85 % gross m argin – New products (CentraFLOW, Preloaded, and V6) • Targeted IOL p rofitable g rowth – Expect single digit r evenue growth (YTD +7% & Other +46%) – 60 %+ gross m argin t arget – New product
Slide 6: STAAR's Value Driver: The Visian ICL
STAAR’s Value Driver 6 The Visian® ICL TM Source: Global Refractive Surgery Market by Market Scope April 2014. • >$ 3B addressable m arket and growing – 3.4M procedures in 2014 growing to 4.3M in 2019 • Currently about 2.7% m arket s hare & growing • $24M of revenue in H1 – >$85M end - customer s al
Slide 7: Visian ICL and TICL: Premium Material and Product
• Implantable Collamer® Lens Better Known as the “Implantable Contact Lens” or ICL • Proprietary material c alled “Collamer” m ade from scratch • Corrects Myopia (Nearsightedness/Inability to see f ar) • Toric ICL (TICL TM ) Version corrects Both Myopia and Astigmatism (Blurred vision d ue to inabil
Slide 8: Competitive Landscape Changing Lens Based Segment
Competitive Landscape Changing Lens Based Segment • STAAR Is the Market Leader – ≈65% Unit & Dollar Market Share – Posterior Lens Approach • Other Players – Abbott - AMO (Not Competitive) – Novartis - Alcon ( Removed from Market 9/14 ) – Ophtec (Lower Tier Pricing) – IOC (India Lower Tier Pricing) •
Slide 9: Real Competition is LASIK: Advantages of ICL over LASIK
9 ICL • Small micro i ncision • Adds lens into the eye • Permanent but removable • No induced Dry Eye • Future o ptions p reserved LASIK • O ver 1 inch - long incision • Burns material a way • Can NOT be r eversed • Potential Dry Eye • May reduce f uture o ptions Real Competition is LASIK Advantages
Slide 10: Why LASIK Under Pressure Globally?
Why LASIK Under Pressure Globally? Good Procedure for Some, 8 - 12% Not Candidates • Limitations of LASIK – Contraindications: • Dry Eye • Thin Cornea • Large Pupils • Cornea Disease • High Level of Myopia and/or Astigmatism • When LASIK Patients Reach Cataract Age – “ Patients who’ve had LASIK pres
Slide 11: Visian ICL with CentraFLOW Driven by KS-AquaPORT
Visian ICL with CentraFLOW ® Driven by KS - AquaPORT® • CentraFLOW technology a ssists the Natural Aqueous Flow within the e ye u tilizing the KS - AquaPORT • Eliminates a procedure & visit ( S urgeon & P atient Convenience) • Same Day ICL surgery now possible • Economics better for t he surgeon • >
Slide 12: Regulatory Process: CentraFLOW ICL in China
Regulatory Process CentraFLOW ICL in China 12 • Process Included: – Successful May 15 th Expert Panel Meeting in China – September 24 th Technical Recommendation of Approval from CMDE – Marketing Approval from CFDA on October 29 th • Approval Certification on November 3 rd – Began shipping product o
Slide 13: Operational Updates: ESCRS & AAO Clinical Data on CentraFLOW ICL
13 Operational Updates ESCRS & AAO Clinical Data on CentraFLOW ICL • Very interesting clinical data presented • Dr. Alfonso data from Spain – Zero Cataracts in over 1,000 ICLs with CentraFLOW – Two years out • Dr. Mertens data from Belgium – Zero cataracts in nearly 1,000 ICLs with CentraFLOW – Thre
Slide 14: Visian ICL Gains Market Share in All Target Markets
Visian ICL Gains Market Share in All Target Markets 2013 Total Refractive Proc. ↓4.6% & ICL Proc .↑25.5 % 14 Market 2013 Total Ref. Proc.* 2013 Ref. Proc. ∆ 2013 ICL Proc. ∆ ICL Share Ref. Proc. 2013 ICL Gain China 875,000 +5% +41% 1.6% x U.S. 602,000 (3%) +19% 1.2% x Latin Am*** 226,380 (0.4%) +43%
Slide 15: Rapid Cadence of New Products: Preloaded ICL in 2015
Rapid Cadence of New Products Market Introduction of the Preloaded ICL in 2015 15 • Preloaded ICL with Enhanced Optics – Saves Procedure Time – Learning Curve Shortened – More Consistent Delivery • New IP around Product • Enhanced Optic Design Increasing U seful O ptical Z one to Benefit P atients w
Slide 16: Rapid Cadence of New Products (2015): V6a ICL
Rapid Cadence of New Products (2015) V6a ICL Next in Line • Differentiates ICL for Myopic patients n earing age 40 who w ill n eed near & intermediate A dds • Goal to a dd Near - Vision Enhancement Capability – Treats the early onset and progression of Presbyopia – Adds ≈2.0 Diopters of Near while p
Slide 17: Rapid Cadence of New Products (2016): V6b ICL
Rapid Cadence of New Products (2016 ) V6b ICL Next in Line • Targets New Market : Presbyopic p atients age 40+ – Solution to the need for permanent N ear & Intermediate v ision enhancement – 100% of population over ~ age 50 affected (estimated 1.8 billion a re challenged with Presbyopia, 3.6 billion
Slide 18: Cataract IOL: Large and Growing Market, Tough Competitive Landscape
• 21.9M IOLs i mplanted in 2013 ( 26.1M 2018) • The Big Three hold ≈70% market share – Novartis (Alcon), Abbott (AMO), Valeant (B&L) • STAAR strategy – Focused on ONLY the higher - margin Premium IOLs – Focused ONLY in markets that g enerate a f air p rofit Large & Growing Market Tough Competitive L
Slide 19: Growth Despite Headwinds: New IOL Products
• YTD sales $18.8M, an increase of 7%/12% CC • IOL units increased 15% during YTD – Driven by 7 % unit increase in Japan – 77% unit increase in Europe – 9% unit decline in U.S. • Supply of KS - IOLs good & even more promising for Q4/2015 – Initiating KS - IOL sales to four new markets in Europe – Su
Slide 20: YTD Key Financial Results: 2014 GAAP
YTD Key Financial Results 20 YTD Q3 2014 YTD Q3 2013 Change Revenue $58,414 $53,271 +$5,143/+10% Gross Profit $39,419 $37,332 +$2,087/+6% Gross Profit Margin 67.5% 70.1% (260bps) Operating Expenses $43,705 $35,381 +$8,324/+23.5% Other Income (Loss) $( 434) $ 211 $( 645) Income (Loss) Before Taxes $(
Slide 21: YTD Key Financial Results: 2014 Non-GAAP Measures
YTD Key Financial Results 2014 Non - GAAP Measures ($000’s except per share) 21 Measure YTD Q3 2014 YTD Q3 2013 GAAP Net Income (Loss) $(5,854) $1,274 Mfg. Consolidation Expenses $334 $2,004 Spain Distribution Transition Cost ---- $442 Foreign Currency Impact $696 $ 38 Adjustment of Warrant Value --
Slide 22: Gross Margin Expansion Opportunities and Headwinds YTD
Gross Margin Expansion Opportunities and Headwinds YTD 22
Slide 23: GMP Warning Letter Updates: Working Diligently to Resolve
2/10 Insp 3/21 483 Issued 4/11 Initial Response to 483 5/12 1 st Monthly Update 5/27 WL Received 6/13 2 nd Update, 483 & WL Data 7/18 3 rd Update + 483 & WL Data 8/14 4 th Monthly Update 9/12 5 th Monthly Update 10/14 6 th Monthly Update 11/14 7th Monthly Update GMP Warning Letter Updates Working Di
Slide 24: Upcoming STAAR Catalysts: Q4 and 2015 Growth Roadmap
• Continued Adoption of ICL CentraFLOW technology – Began shipping product to China in November – Interesting Clinical results seen in First Three Years • We are committed to enhancement of our Quality System and investing significant resources to improve • Continue to Dialogue with the Agency on TI
Slide 25: November 20, 2014
25 NASDAQ: STAA November 20, 2014
Staar Surgical — Investor Presentation (November 2014) on 6ix