Harrow, Inc. · NASDAQ:HROW
Harrow — Imprimis Pharmaceuticals — Investor Presentation (January 2016)
34 slides from Harrow's investor presentation, Jan 6, 2016
Slide 1: Imprimis Pharmaceuticals
IMPRIMIS PHARMACEUTICALS NASDAQ: IMMY MARK L. BAUM, CEO JANUARY 2016 imprimis
Slide 2: Safe Harbor
SAFE HARBOR This presentation contains express "forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. You are cautioned not to rely on these forward- looking statements. These statements are based on current expectations of future events. If underlying assum
Slide 3: Company Overview
COMPANY OVERVIEW = We believe we are disrupting the >$300B' annual branded and generic drug business and are positioned to continue to grow significantly in 2016 and beyond = We have two core businesses: = Imprimis Cares™ offers high quality compounded alternatives to high priced branded and generic
Slide 4: Pharmaceutical Compounding
PHARMACEUTICAL COMPOUNDING Imprimis uses the more than 7,800 FDA-approved off-patent generic drugs‘ to create new low cost, high quality, customizable and often patentable compounded drug formulations “Compounding pharmacies were the original drug companies. Compounding existed before Merck & Co. an
Slide 5: Imprimis Cares Program
Imprimis CARES! PROGRAM = Provide access to cost-effective clinically relevant compounded alternative choices = Active in several therapeutic verticals (ophthalmology, urology, sinus, dermatology) = Introduced pyrimethamine and leucovorin as alternative choice to Daraprim® in Oct 2015 = Partnered wi
Slide 6: Imprimis Cares Expansion
Imprimis CARES! EXPANSION = We intend to expand Imprimis Cares™ in Q1 2016 by releasing two new patent-pending compounded alternative choices to branded and generic drugs that had 2015 sales of >$1.75B = Our pricing will be 60-80% less than the current branded and generic incumbents = Estimate >70%
Slide 7: Imprimis Cares Media Coverage
Imprimis CARES! MEDIA COVERAGE THE NEW YoRK TIMES = THE WALL STREET JOURNAL BLOOMBERG US CNN Money ASSOCIATED PRESS FORTUNE FIERCE PHARMA ALJAZEERA AMERICA CBS CNBC FOx BUSINESS INQUISITR CNNTV
Slide 8: Imprimis Cares in Action
Imprimis CARES! ... IN ACTION = Post-cataract surgery eye drops are expensive and challenging to administer = Dropless Therapy™ is a patent-pending injectable combination of steroid & antibiotic = 120,000+ surgeries; 400+ ophthalmologists = Single injection vs. >150 eye drop applications = >90% of D
Slide 9: Dropless Market Opportunity
DROPLESS MARKET OPPORTUNITY = Eye drop market >$1B U.S.23 = 3.6M cataract surgeries in 2013; 4.3M estimated in 2017 (U.S.)? » >50% market share potential derived from study by Grail Research (sponsored independent of Imprimis)'> « Factors for greater adoption at payment of $100 per eye: » Medicare p
Slide 10: Imprimis Cares in Action
Imprimis CARES! ... \N ACTION = LessDrops™ topical combination eye drops = Antibiotic + Steroid = NSAID + Steroid * Triple Drop™ = One bottle vs. 3 separate bottles = 50% fewer drops‘4 = Lower cost ($60 vs. $3233) = Better patient compliance’? = Prescribed by MDs for LASIK and cataract surgeries imp
Slide 11: LessDrops Topical Solutions
LESSDROPS™ TOPICAL SOLUTIONS in mam >$323.00 imprimis .
Slide 12: Economics of Disruption
ECONOMICS OF DISRUPTION Daily Surgeries (Nov) Avg. Rx Price (Nov) Total Daily Sales (Nov) Total Daily ($100/Rx) Annualized ($100/Rx - 5% share) Annualized ($100/Rx - 20% share) Go DROP LESS 750 $22.50 $16,875 $75,000 $19.5M $78M $52.48 $7,339 $14,000 $3.6M $14.4M Lossesto Eye Drop Companies 890 890
Slide 13: Imprimis Cares in Action
Imprimis CARES! ... \N ACTION " Defeat IC™ urology program started in 2015 for chronic interstitial cystitis (IC) » IC is characterized by bladder pain and frequent urination = Up to 10M USS. IC patients>"6 " Offering: = Insurance reimbursed and patented bladder instillation recommended by the Ameri
Slide 14: Imprimis Cares in Action
Imprimis CARES! ... IN ACTION " Chronic sinusitis business acquired in Oct 2015 = >8,000 MD prescribers and >38,000 paying patients past year = >30M U.S. adults suffer from sinusitis’® " Costs of chronic/acute sinusitis in U.S. exceeds $11B annually'® = Our sinus offering: = Topical delivery of anti
Slide 15: Imprimis Pharmaceuticals
IMPRIMIS PHARMACEUTICALS Own library of patented & patent-pending compounded drug formulations Headquartered in San Diego, CA and operate 4 compounding facilities: = Irvine, CA = Randolph, NJ = Allen, TX 2 = Folcroft, PA * > Licensed to ship to all 50 states Q1 — 2016 renovated TX facility to be FDA
Slide 16: Partners, Customers & Clients
PARTNERS, CUSTOMERS & CLIENTS = Pharmacy Benefit Managers (PBMs) = Express Scripts = CVS Caremark = OptumRx = Government Payors = Department of Defense / Tricare = Private Cash Payors = Patients (ex. 120,000+ Dropless Therapy patients) = Physicians (ex. >400 Dropless Therapy prescribers) = Hospitals
Slide 17: Land and Expand with Complementary Medications
“Land” to Establish New Customer Relationship “Expand” with Complementary Medications Dropless LessDrops Sinus Imprimis
Slide 18: Revenue Performance
REVENUE PERFORMANCE Quarterly Revenue (in thousands of dollars) 3,000 $2,683 2,000 $1,967 $1,563 1,000 554 $439 . i Q3-2014A, Q4-2014A, Q1-2015A Q2-2015A Q3-2015A % Growth : 26% 182% 26% 36% Gross Margin 46% 39% 36% 47% 55% Dropless $149 $299 $321 $516 $594 LessDrops - - - $96 $263 HLA 5 3 $7 $215 $
Slide 19: Near Term Growth Catalysts
NEAR TERM GROWTH CATALYSTS = Imprimis Cares™ expansion in Q1 2016 to significant new, large and profitable markets = Developing current and new PBM relationships to make our formulations available for reimbursement payment through their respective networks = Opening first FDA registered outsourcing
Slide 20: Company Profile
COMPANY PROFILE " Trading Symbol: NASDAQ: IMMY = Current Price per Share (12-29-15): $7.16 = Market Cap: $69 million » Shares Outstanding: 9.6 million = 52-Wk Range: $4.94 — $8.79 = Number of Employees: 107 = Headquarters: San Diego, CA = Q3 2015 revenues: $2.7 million = Calendar 2015 revenue guidan
Slide 21: Contact Us
CONTACT US Imprimis Pharmaceuticals (NASDAQ: IMMY) . age seteee- IMpPrimMis 12264 El Camino Real, #350 PHARMACEUTICALS San Diego, CA 92130 858-704-4040 www.imprimispharma.com
Slide 22: Appendix and References
APPENDIX AND REFERENCES
Slide 23: References
REFERENCES 11. Greenberg, S. Five Years Later: ACA’s Branded Prescription Drug Fee May Have Contributed to Rising Drug Prices. http://taxfoundation.org/blog/five brands prices. June 17, 2015 and The Generic Pharmaceutical Manufacturing market research report. hitp:/Amww.ibisworld.com/industry/defaul
Slide 24: References
REFERENCES 12. 13. 14. 15. 16. 17. 18. 19. 20. Thompson, V. Post-Cataract Surgery Intraocular Injections Offer Alternative to Traditional Drop Therapy; Injections of Tri- Moxi-Vanc can benefit patients, surgeons and staff. Ocular Surgery News (U.S. Edition). September 2015. Grail Research, a divisio
Slide 25: Capital Structure
CAPITAL STRUCTURE As of September 30, 2015 (unaudited): Common stock issued and outstanding 9,681,646 Options, weighted avg. ex. $6.54* 963,213 Warrants, weighted avg. ex. $7.41 240,688 RSUs** 330,617 Total diluted outstanding 11,216,164 *Number of options does not include 600,000 market based optio
Slide 26: Condensed Balance Sheet
CONDENSED BALANCE SHEET (in thousands, unaudited) Cash, equivalents and short-term investments Accounts receivable Inventories Other short-term assets Total current assets Furniture and equipment, net Intangible assets and goodwill, net TOTAL ASSETS Total current liabilities Senior note payable, net
Slide 27: Compounding Investment Trends
COMPOUNDING INVESTMENT TRENDS * Compounding sector undergoing “growth renaissance” (Eric Coldwell, Baird Equity Research, WSJ, Oct 2015)?0 » Amerisource Bergen (ABC) acquired PharMEDium in Oct 2015, the largest compounding pharmacy company in the U.S., for $2.6B, equating to 22x EBITDA” * QuVa Pharm
Slide 28: Current Eye Drop Costs
CURRENT EYE DROP COSTS* Medicare Medicaid Weighted Weighted jeighter ioe jeighter L Average Average sa $139 ear NSAID $165 (Bromfenac ee $168 (Bromfenac eee , Sodium) ( y) Sodium) y $12 $109 $12 Aap ia © Crobramycin) | (Besivance) | °° (Tobramycin) | (Besivance) $24 $25 $70 | (Prednisolone ST $80 |
Slide 29: Estimated savings to US healthcare system from Dropless Therapy
Andrew Chang & Co, LLC estimates up to $13B savings to US healthcare system and patients over next 10 years Dropless Therapy”? sta Suite 1 Patient Federal s12 s10 «a Low Estimate Weighted Average High Estimate
Slide 30: Enabled by SSP Technology
ENABLED BY SSP TECHNOLOGY™ a = ricco Moxid (15/1)mg/mt Steril? Tamcinolone Acé# ‘oxifloxacin HCl - aie = SSP Technology™ allows active drugs to mix and become usable as an injection Without SSP Technology™, large irregular clumps of active drugs persist, not usable as an injection imprimis ..
Slide 31: The Eye Drop Journey
THE EYE DROP JOURNEY _— —— <= ultiple eye Lat Imprimis .
Slide 32: Patient Profile Scheduling Surgery Day
PATIENT PROFILE SCHEDULING SURGERY DAY = 80 years old + No eye drop Rxs * Dropless Therapy injected intravitreally * Arthritis * Informed about * Scoliosis Dropless Therapy = Lives alone * Social Security = Eye looks quiet + No eye drop Rxs * No infection * Informed about Dropless Therapy = No infla
Slide 33: Dropless Research Report
DROPLESS RESEARCH REPORT report by Grail Research’? (n=257) 4 ~ = 57% MDs are aware of Dropless 18'}mgim. Stat Therapy™ = 91% of aware are likely to use a compounded formulation if made in FDA approved facility = 52% of non-users (n=118) cited high cost as barrier to Dropless adoption ( = = Findings
Slide 34: Commitment to Quality
COMMITMENT TO QUALITY STERILITY TESTING ENDOTOXIN TESTING PRE-SHIPMENT QUARANTINE, ENVIRONMENTAL TESTING ‘TEST RESULTS INCLUDED WITH ORDER BEYOND USE DATING PERSONNEL ‘COMPOUNDING ENVIRONMENT ‘QA PROGRAM DOCUMENTATION AND POLICIES U.S. Pharmacopeia (USP) <797> Store lot per USP <71> Stare rjcable lo
Imprimis Pharmaceuticals — Investor Presentation (January 2016) on 6ix