Atricure, Inc. · NASDAQ:ATRC
Atricure — Investor Presentation (January 2017)
42 slides from Atricure's investor presentation, Jan 9, 2017
Slide 1: AtriCure Investor Presentation January 2017
Exhibit 99.2 AtriCure Investor Presentation January 2017
Slide 2: Forward Looking Statements/Non-GAAP Measures
Forward Looking Statements/Non-GAAP Measures This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that address activities, events or developments that AtriCure expects, believ
Slide 3: Atrial fibrillation is an irregular and often rapid heart rate
Atrial fibrillation (Afib) is an irregular and often rapid heart rate that can increase the risk of stroke, heart failure and other heart-related complications. AtriCure
Slide 4: Afib Is Bad, It Is Growing, and It Is Untreated
is Bad, It Is Growing, and It Is Untreated '° Afib Risks & Symptoms A Growing Epidemic > 5-6x higher risk of STROKE (2"4 > 33M people affected WW, 15M leading cause; due to LAA) > May lead to Congestive Heart Failure > 60-90% are symptomatic > Chest pain, pressure, or discomfort (angina) Shortness o
Slide 5: Addressing the Growing Afib Epidemic
Addressing the Growing Afib Epidemic Undisputed Leader + The only FDA-approved devices for surgical Afib ablation: 250,000+ cases in 900 US centers + Leading KOL support and enthusiasm Strong Growth and Pipeline + 4 years of 15%+ organic growth * Solid commercial team + Robust R&D Pipeline and IP (o
Slide 6: Two Distinct Procedure Types
Two Distinct Procedure Types PAROXYSMAL (INTERMITTENT) + ~25% Penetrated + ~75% Remaining Market Opportunity OPEN PULMONARY VEIN (w/ heart ISOLATION COMPLETE MAZE surgery) (CLAMP or FUSION) % | + Paroxysmal | HYBRID Ey/Wie\Ke)\(=9 © PULMONARY VEIN eats (only operating ISOLATION (SURGERY + EP . ee ee
Slide 7: Afib Clinical Hierarchy
Afib Clinical Hierarchy” Afib Patient Population Developed Countries ~15M Anti-arrhythmic drugs and/or Anti-arrhythmic drugs and/or anti-coagulants are effective anti-coagulants are not effective ~50% or 7.5M ~50% or 7.5M + electrical cardioversion (Feleehs EL Nils Persistent Af T -Standing Persiste
Slide 8: Global Market Opportunity — Afib OPEN
Global Market Opportunity — Afib OPEN OPEN Ablatio: + Labeling advantage in U.S. + Best products Estimated open heart surgeries per year 900,000 | | « High gross margins Estimated % that have Afib ~30% + Education is key Estimated Afib patients undergoing surgery 270,000 | | + Competition is large d
Slide 9: Stable Underlying US Heart Surgery Market
Stable Underlying US Heart Surgery Market: CABG procedures expected to grow AVR procedures will remain steady to slightly down MVR procedures projected to grow isolated CABG sm. mAV Procedures mv Procedures "7 Black Error Bars: 50,000 : projections from3* party mmarketresearch firm ° 2013 «-2014E_-—
Slide 10: Class Recommendation — STS 2017
Class 1 Recommendation — STS 2017 The Society of Thoracic Surgeons 2017 (Jeers Clinical Practice Guidelines for the Surgical Treatment of Atrial Fibrillation CLASS OF RECOMMENDATION - 1 MVR CABG —— ——— AVR AVR + CABG —— ——- + Surgical ablation for AF can be performed without additional risk of opera
Slide 11: Class Recommendation — STS 2017
Class 1 Recommendation — STS 2017 CIAL REPORT The Society of Thoracic Surgeons 2017 (eens Clinical Practice Guidelines for the Surgical Treatment of Atrial Fibrillation > 2Years in STS’s “working committee”, 125 publications to support recommendation. > Applies to ALL-COMERS Afib patients, previousl
Slide 12: Global Market Opportunity - OPEN LAA (AtriClip)
Global Market Opportunity - OPEN LAA (AtriClip) OPEN LAA (AtriClip) + Best in class LAA management = + Superior safety - No adverse events ec. Oper heat stmenes Det yea 900,000 | | Mechanical & Electrical Solution (Bear Eee __~20% | | . Competition includes staple, suture, Estimated Afib patients un
Slide 13: Non-Drug Options of Care For Non-Paroxysmal Afib
Non-Drug Options of Care For Non-Paroxysmal Afib y Least Acute Invasive’ Therapy -_ / Painful Clinical Success + Catheter Ablation 30% (Endocardial) single treatment 70-80% Hybrid - CONVERGENT on nas (Trans-Diaphragmatic) 60-65% off AADs 80-90% Hybrid - DEEP on ans (Bi-Lateral Totally- 70-80% Thorac
Slide 14: MIS Ablation — Another $2B+ Market
MIS Ablation — Another $2B+ Market MIS Ablatio + High reimbursement + High gross margins Estimated Afib patients | 15,000,000 + Growing internationally Estimated Persistent and Longstanding Persistent subset ~ 65% « Development needed Subtotal 9,750,000 + Competition is start-ups Estimated % drug re
Slide 15: Global Market Opportunity - LAA MIS (AtriClip PRO)
Global Market Opportunity - LAA MIS (AtriClip PRO) MIS Clip With MIS Ablation Estimated Afib patients 15,000,000 Estimated Persistent and Longstanding Persistent subset 65% One Product, Two Markets Sipicial 21750,000 Concomitant with MIS Ablation Estimated % drug refractory and symptomatic 50% *Toda
Slide 16: Potential Market ... With FDA Trial
Potential Market ... With FDA Trial Sole Therapy M Market Estimate of treatment-resistant Afib patients 4,000,000 Estimated global revenue per device (all modes) $3,500 Estimated Market Opportunity - Total $3,500,000,000 Estimated % treated annually 10% Estimated Market Opportunity Annual Sure: Atnu
Slide 17: Market Summary
Market Summary Strong Revenue Growth 2016 Revenue — $155.1M (20% constant currency growth) 2013-2016 — Consistent 15+% organic growth Open Ablation $770M+ market — 5+ years of strong growth Stand Alone Ablation $2B+ Market and trial key Clip $1B+ Market and growth accelerating CryoA NEW $100M+ Pain-
Slide 18: Afib Solutions for Multiple Approaches
Afib Solutions for Multiple Approaches Open (w/cardiac surgery) Stand-Alone (only operating on Afib) 18 Open Surgery MIS Totally- Thoracoscopic, Robotic RF / Cryo Ablation, Dissection, Sensing/Pacing, LAAM (AtriClip PRO), Pain Management nContact Epi-Sense ep * Cardiac Surgeon Working ogether . Atri
Slide 19: Franchise / Business Overview
Franchise / Business Overview Focus Areas 2016 Full-Year 2015 Full-Year Revenue Revenue in $58.0MUS $53.5MUS (Concomitant) +8% +20% $770M Annually $20.4MUS $17.5MUS +17% +40% $275M+ Annually i $31.2MUS $21.6M US. MIS Ablation +44% +34% $2B+ Annually $9.9M US $6.9MUS +43% +63% $850M+ Annually $32.7M
Slide 20: Franchise / Business Overview
OPEN Ablation (Concomitant) OPEN Clip MIS Ablation MIS Clip International Franchise / Business Overview > Keysto Success FDA PMA label for Afib (2011) Advanced Training — CABGIAVR/Fellowships Conversions and add-on sales- cryoFORM adoption Guideline changes w/ Societies Synergy ll Exclude trial (510
Slide 21: How do we develop these markets?
How do we develop these markets? Three Pillars + Execution Education & Awareness- Treat, Treat, Treat Guidelines, MAZE IV Courses, AATS Fellowships, Case Observations, — a Cardiology campaign ey ey bas) Clinical Trials and Data (Science) DEEP, CONVERGE, ATLAS, CEASE AF, FROST, PAS, TRAC AF, REGISTRI
Slide 22: ATRC Company Overview
ATRC Company Overview 500+ AtriCure employees globally and growing: Clinical: 15+ FTE’s, in-sourcing trial work R&D: 50+ FTE’s across multiple US offices Sales/Mkt: 150+ FTE’s incl. sales support, and training/education Intl: 30+ FTE’s covering EU, Japan, China, and LA Minneapolis, MN IN * | San Ram
Slide 23: Robust Infrastructure
Robust Infrastructure Sales/Marketing Education & Ti ig + Highly experienced sales and + Significant resources focus on marketing team (US and International) physician education + 100+ employees supporting ~60 US + FDA-approved; STS and EACTS sales territories, EU subsidiary and 30 endorsed training
Slide 24: U.S. Commercial Sales Structure
U.S. Commercial Sales Structure 2012 Today 2016 2017 coo 0 1 {l 4 VPs 1 2 2 2 Area Directors i 1 11 2 Regional Sales Manager (RSM) 36 53 53 56 Clinical/Ablation Specialist (ABS) 13 39) 48 53 MIS or Other Specialist 0 S) 11 14 Total’ 57 115 [ 126 [ 138 Each Area Includes: 5-6 Regional Sales Managers
Slide 25: Financial Snapshot
Financial Snapshot Revenue and Gross Marg $129.8 + 2016 Total Revenue Growth of 20% $120M $107.5 + 2015 Total Revenue Growth of 21% $81.9 + 2014 Total Revenue Growth: 31% $80M goss (S02 + Four Year CAGR of 16% + Historical Gross Margins 70-73%, with $40M expansion opportunity 71.2% 72.7% 70.5% 71.6%
Slide 26: In 2017 We...
In 2017 We... * Are on the cusp of profitability — Expect $4M to $6M EBITDA loss for the year and — Committed to positive full year EBITDA profit for 2018 + Willserve over 65,000 patients and grow revenue 13% to 15% — Open will grow 5-10% — MIS and Clip will continue to see strong growth of over 20%
Slide 27: AtriCure... Positioned for Success
AtriCure... Positioned for Success Strong Foundation Products, Approvals, Brand, Education Platform, Trials and Science, International = Strong Revenue Base and Momentum Over 15% Organic Revenue Growth in 2013 - 2016 = Key Investments and Execution Stroke and DEEP Trial, Cease AF, ATLAS, Education,
Slide 28: Thank You!
Thank You! AtriCure
Slide 29: References
References 4.Clinical Epidemiology 2014. 2.American Col of Card 2013. 3.Am J Card 2013, 112: 1142-1147. 4.Am J Card. Vol 87. June 1, 2001 5.NIH Incidence Prevalence Chartook 2006. 6.Circulation. 2006;114:119-125, 7.Kim M, et al. Cire Cardiovasc Qual Outcomes. 2011; 4:313-320 8.2012 HRS/EHRA/ECAS Exp
Slide 30: Appendix — Afib information
Appendix — Afib information AtriCure
Slide 31: Atrial Fibrillation Overview
Atrial Fibrillation Overview + Abnormal electrical impulses cause the upper + Causes blood in the atria to become static, chambers of the heart to quiver at rapid rates of 400 increasing the risk of blood clot formation, stroke, to 600 BPM and other serious complications + Frequently associated with
Slide 32: Afib Population: Large, Growing & Undertreated
Afib Population: Large, Growing & Undertreated + US. prevalence projected to grow to 12-15 million by 2050 Afib affects over 5 million + International prevalence is comparable to the U.S in the U.S. + Most common sustained cardiac arrhythmia) + Lifetime risk of Afib: ~1 in 4 for adults >40 years of
Slide 33: U.S. Afib Prevalence and Incidence Projections
U.S. Afib Prevalence and Incidence Projections m0 Barry 33M suffering from AF m0 RBA 15 suffering from AF in Developed Countries 6M+ suffering from AF in U.S. today > 10M+ in 2025 + Aging “Baby-boomers” oo : : — . * Aggressive about healthcare eee a eee Year Prevalent Number of AF Cases in U.S. (Mil
Slide 34: Afib Increases Mortality
Afib Increases Mortality 100- Sinus rhythm 75 2 sg 3 AF = 50 a ze 25 0 0 2 4 6 8 10 Years since screening Number at risk 3743 3669 3575 3218 1734 Sinus rhythm 78 72 64 50 15 AF Figure 3 Kaplan—Meier survival graph for those in sinus rhythm and atrial fibrillation. as Davie RC eta. Prevalence of ata
Slide 35: Efficacy of Afib Ablation — Pivotal Trial
Efficacy of Afib Ablation — Pivotal Trial The ABLATE Trial: Safety and Efficacy of Cox Maze-IV Using a Bipolar Radiofrequency Ablation System Jonathan M. Philpott, MD, Christian W. Zemlin, PRD, James L. Cox, MD, ael Mack, MD, Robert L. Hooker, MD, Allen Morris, MD, David A. Heimansohn, MD, James Lon
Slide 36: Efficacy of Afib Ablation — Mitral Valve
Efficacy of Afib Ablation — Mitral Valve The NEW ENGLAND JOURNAL of MEDICINE | ORIGINAL ARTICLE Surgical Ablation of Atrial Fibrillation during Mitral-Valve Surgery A, Marc Gillinov, M.D., Annetine C. Geliins, Ph.D., Mic Paci Prospective, multi-center, randomized trial of 260 patients with Persisten
Slide 37: Treatment of Afib Patients in 2015
Treatment of Afib Patients in 2015 1,000,000 750,000 500,000 250,000 37 259,274 Paroxysmal AF (33%) - US Y Treated Surgically Open Surgery & No Treatment Catheters Treated or Undertreated by Medication Failed Medication & Declined Surgery non-Paroxysmal AF (67%) - US AtriCure 1.2M Annual AF Diagnose
Slide 38: Society Guidelines for Treatment of AF
Society Guidelines for Treatment of AF Society Recommendation STS (2016) * AHAJACC/HRS (20142 Surgical ablation for AF can be performed without additional operative risk of mortality or major morbidity, and is recommended at the time of concomitant isolated aortic valve replacement, isolated coronar
Slide 39: Society Guidelines for LAAM
Society Guidelines for LAAM Soc Recommendation STS (2016)' It is reasonable to perform left atrial appendage excision or exclusion in conjunction with surgical ablation for AF for longitudinal thromboembolic morbidity prevention. AHAIJACCIHRS (2014)? Surgical excision of the left atrial appendage ma
Slide 40: Maze IV Procedure
Maze IV Procedure ft ight Atrial Left Atrial pawns Right At Appendage Sinus Appendage Mitral Right Coronary Annulus Tricuspid Annulus Circumflex Coronary Artery sees Bipolar RF Clamp ve == Surgical Incision eevee Cryo- Endocardial weceeee (10- Epicardial “ AtriCure
Slide 41: DEEP Pivotal Study
DEEP Pivotal Study Establish the safety and effectiveness of a dual epicardial and endocardial ablation procedure for patients presenting with Persistent Atrial Fibrillation or Longstanding Persistent Atrial Fibrillation utilizing the AtriCure Bipolar System and AtriClip® PRO LAA Exclusion System in
Slide 42: CONVERGE Pivotal Study
CONVERGE Pivotal Study Objective Evaluate the safety and efficacy of the nContact Epi-Sense Guided Coagulation System to treat Symptomatic Persistent AF patients, refractory or intolerant to at least one Class | andior Ill AADs. Study Design Study Design: Mutti-center, prospective, open label random