Atricure, Inc. · NASDAQ:ATRC
Atricure — Investor Presentation (January 2019)
41 slides from Atricure's investor presentation, Jan 7, 2019
Slide 1: AtriCure Investor Presentation January 2019
AtriCure Investor Presentation January 2019 © 2019 AtriCure, Inc. All rights reserved. AtriCure 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements,” which are 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: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement the Company’s consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, the Company uses certain non-GAAP financial measures in this presentation. Adjusted EBITDA, which t
Slide 4: Atrial Fibrillation
Atrial Fibrillation Approximately 9% of people over 65 suffer from atrial fibrillation (also called Afib or AF), a quivering or irregular heartbeat (arrhythmia) that can lead to blood clots, stroke, heart failure and other heart-related complications. More than 33 million people are affected worldwi
Slide 5: Afib: A serious and costly problem
Afib: A serious and costly problem Stroke is leading cause of long-term disability Afib increases the risk of stroke by 5x times 3x People with Afib have three times the risk for heart failure #2 Afib is second leading cause of stroke $26 Billion Total cost of Afib to U.S. healthcare each year 73% h
Slide 6: Key Investment Rationale
Key Investment Rationale Addressing an underserved and growing population of patients About 17 million chronic Afib patients globally Current standard of care does not adequately address this population Portfolio of Standalone/Minimally Invasive (MIS) solutions to drive long-term growth Two PMA tria
Slide 7: 2018 Highlights
2018 Highlights Achieved over $200 million in revenue and annual growth rate of 15.4% Completed enrollment in CONVERGE clinical trial Trained over 400 healthcare professionals worldwide Impact of innovation continued with successful product launches in 2018 AtriClip Flex·V® device in March (U.S.) Li
Slide 8: Strong Financial Performance
Strong Financial Performance Worldwide Revenue 2013-2018 20% CAGR In Millions $ $50 $100 $150 $200 2013 2014 2015 2016 2017 2018 US EMEA Asia Other 25 Straight Quarters of Double-Digit YoY Growth Consistent Growth $201.6M 2018 Revenue 15.4% YoY Growth © 2019 AtriCure, Inc. All rights reserved Atricu
Slide 9: Two Distinct Patient Profiles
Two Distinct Patient Profiles 6 Million Afib patients in the U.S. 3.0M Effectively Treated Medication / Cardioversion 1.4M Paroxysmal (Intermittent Afib) Non-paroxysmal (Continuous Afib_ 1.6M Patients OPEN PROCEDURES ~25% PENETRATED Patients already undergoing heart surgery Afib treatment at time of
Slide 10: Looking Forward … U.S. Market - $1 Billion Opportunity
Looking Forward … U.S. Market - $1 Billion Opportunity 6 million Afib patients in the U.S. Medication / Cardioversion Paroxysmal (Intermittent Afib) Non-paroxysmal (Continuous Afib) 1.6M PATIENTS ADDRESSABLE MARKET OPPORTUNITY OPEN ABLATION $270M Market applies to major forms of structural heart sur
Slide 11: Business Evolution to Drive Long-Term Growth
Business Evolution to Drive Long-Term Growth ACCELERATING GROWTH $90 Million1 $200 Million1 $560 Million1 CORE BUSINESS EVOLUTION TO DRIVE LONG TERM GROWTH SOLID GROWTH $270 Million1 OPEN ABLATION CURRENT PENETRATION <25% APPENDAGE MANAGEMENT OPEN MIS <5% MIS ABLATION <3% Core business is evolving t
Slide 12: U.S. Open Ablation
U.S. Open Ablation 90K Cardiac surgeries on patients with pre-existing Afib $270M Market size Competitive Advantages Labeling advantage in the U.S. Robust portfolio across two technolog y platforms Solid gross margins Strong physician education programs Growth Drivers STS/HRS Class 1 recommendations
Slide 13: Surgical Ablation Guidelines are Advancing
Surgical Ablation Guidelines are Advancing The Society of Thoracic Surgeons American College of Cardiology American Heart Association ESC European Society of Cardiology Heart Rhythm Society COR LOE 1 1 1 lla lla lla llb llb llb A B C A B C A B C Ablation Considered Ablation Reasonable Albation Recom
Slide 14: U.S. MIS Ablation
U.S. MIS Ablation $560M U.S. Total Market High growth opportunity in underserved and underdeveloped market Competitive Advantages Favorable reimbursement environment High gross margin portfolio Pipeline of continued development Leveraging expertise in epicardial ablation to serve non-paroxysmal oppo
Slide 15: U.S. Appendage Management
U.S. Appendage Management $290M U.S. Total Market $90M Open Ablation $200M MIS Ablation APPENDAGE MANAGEMENT OPEN and MIS Open Growth Drivers Broadening awareness of benefits of LAA management (science and society endorsement) Launched AtriClip Flex·V® device in March 2018 – benefits include ease of
Slide 16: AtriCure Product Portfolio
AtriCure Product Portfolio OPEN ABLATION ISOLATOR® SYNERGY™ CLAMP cryoICE ® CRYOABLATION PROBE cryoFORM ® CRYOABLATION PROBE ISOLATOR ® TRANSPOLAR PEN MIS ABLATION ISOLATOR SYNERGY ACCESS® CLAMP COBRA FUSION ® 150 ABLATION SYSTEM EPI-SENSE ® DEVICE SUBTLE ® CANNULA APPENDAGE MANAGEMENT ATRICLIP ® LO
Slide 17: Expanding Product Portfolio
Expanding Product Portfolio Launched 6 products in last four years (1 from acquisition) Track record of organic and inorganic execution Future pipeline focus across all franchises – Open clamp, linear ablation, minimally invasive AtriClip Innovation toward less invasive, simpler, easier to use, and
Slide 18: 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 19: CONVERGE Pivotal Study
CONVERGE Pivotal Study CONVERGE Clinical Trial Trial designed to support FDA approval of EPi-Sense device specifically for the treatment of persistent Afib STUDY DESIGN Summary Multi-center, prospective, open label randomized 2:1 (Convergent procedure vs endocardial catheter ablation) pivotal study.
Slide 20: Summary of U.S. – Large, Underpenetrated Market Opportunity
Summary of U.S. – Large, Underpenetrated Market Opportunity Open Ablation $65 $270 Appendage Management $37 $290 MIS Albation $34 $560 $0 $100 $200 $300 $400 $500 $600 Potential Market ($M) 2017 R evenue ($M) U.S. GROWTH DRIVER Continued penetration into the Open Market Growing MIS clinical data and
Slide 21: 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 current team is a top prio
Slide 22: International Market = $2 Billion Opportunity
International Market = $2 Billion Opportunity Mid-teens growth driven by product expansion and reimbursement Growth Drivers Product expansion i n Asia Reimbursement in the EU Clinical Data – CEASE AF Sales team coverage $525M OPEN ABLATION $600M APPENDAGE MANAGEMENT $985M MIS ABLATION 2017 Internati
Slide 23: Financial Performance
Financial Performance Revenue growth expectations fueled by stability in Open ablation and high growth in MIS ablation and Appendage Management Strong historical revenue growth across the business – 25 quarters of double digit year-over-year growth Historical gross margins 70 – 73% with expansion op
Slide 24: Investor Highlights
Investor Highlights Leader in $1B+ U.S. addressable market for atrial fibrillation solutions 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 prod
Slide 25: Thank You!
Thank You! © 2019 AtriCure, Inc. All rights reserved. AtriCure 25
Slide 26: Supplemental Information
Supplemental Information Note that citations/references for any comments, statistics, or figures in this presentation are available upon request. © 2019 AtriCure, Inc. All rights reserved. AtriCure 26
Slide 27: Revenue / Market Overview
Revenue / Market Overview Geography 2016 Full-Year Revenue 2017 Full-Year Revenue 2018 Full-Year Revenue Global Market Potential United States $1 22.4M +20% $138.4M +13% $162.1M +17% $1B+ Annually International $32.7M +19% $36.3M +11% $39.5M +9% $2B+ Annually Overall $155.1M +20% $174.7M +13% $201.6
Slide 28: Franchise / Business Overview
Franchise / Business Overview Focus Areas Products Keys to Success Trials/Data OPEN Ablation (Concomitant) OPEN Appendage Management MIS A b l ation MIS Appendage Management International FDA PMA label for Afib (2011) Advanced Training – CABG/AVR/Fellowships Conversions and add-on sales – cryoFORM a
Slide 29: AtriCure Portfolio Designed to Treat Afib
AtriCure Portfolio Designed to Treat Afib 2017 U.S. REVENUE BY PRODUCT CATEGORY $64M 47% OPEN ABLATION 2017 STS and HRS guidelines recommend surgical ablation for the treatment of Afib at the time of MVR, AVR, and CABG $37M 27% APPENDANGE MANAGEMENT OPEN 2017 STS Guidelines include LAA Management as
Slide 30: Keys to Market Development
Keys to Market Development Expand Product Portfolio Innovative pipeline to drive Open ablation penetration and build MIS market AtriClip PRO·V device, AtriClip PRO2 device, cryoFORM probe, Cryo3 probe, etc. Increase Education and Awareness Afib training programs delivered to 2,000+ surgeons UPDATED
Slide 31: 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 trainers S
Slide 32: 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. LAA Management is mentioned for the first
Slide 33: Society Guidelines for Treatment of Afib
Society Guidelines for Treatment of Afib SOCIETY RECOMMENDATION STS (2016) 1 Surgical ablation for Afib 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 coronary artery bypass
Slide 34: Society Guidelines for Appendage Management
Society Guide lines for Appendage Management SOCIETY RECOMMENDATION STS (2016) 1 It is reasonable to perform left atrial appendage excision or exclusion in conjunction with surgical ablation for Afib for longitudinal thromboembolic morbidity prevention. AHA/ACC/HRS (2014)2 Surgical excision of the l
Slide 35: U.S. Open Market Work-Up
U.S. Open Market Work-Up Total Open U.S. Procedures 300,000 30% with Afib U.S. Procedures with Afib 90,000 ~ U.S. Annual Opportunity1 $270M ~Current U.S. OPEN Ablation penetration, 25% 2017 U.S. Open Ablation Sales $65M 1. Assumes Open ablation procedural pricing of $3,000. © 2019 AtriCure, Inc. All
Slide 36: U.S. Appendage Management Market Work-Up
U.S. Appendage Management Market Work-Up OPEN APPENDAGE MANAGEMENT Total Open U.S. Procedures 300,000 30% with Afib U.S. Procedures with Afib 90.000 ~U.S. Annual Opportunity2 $90M MIS APPENGAGE MANAGEMENT Non-paroxysmal Pts Annually Treated with Cath Ablation 80,000 ~Unsuccessful Outcomes with Cath
Slide 37: U.S. MIS Market Work-Up
U.S. MIS Market Work-Up Non-paroxysmal Pts Annually Treated with Cath Ablation 80,000 ~Unsuccessful Outcomes with Cath Ablation, 70% MIS Ablations (Non-paroxysmal, Post Cath) 56,000 ~ Annual U.S. MIS Ablation Opportunity1 $560M ~Current MIS OPEN Ablation penetration, ~5% 2017 U.S. MIS Ablation Sales
Slide 38: Additional Growth Drivers with Appendage Management
Additional Growth Drivers with Appendage Management Prophylactic treatment for Open Appendage Management Additional $500M global market Total OPEN U.S. Procedures 300,000 70% without Afib ~U.S. Procedures without Afib 210,000 ~U.S. LAA Prophylactic Annual Opportunity2 $215M Sole Ther apy Appendage M
Slide 39: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (millions of dollars) Net loss, as reported ($16.2) ($27.2) ($33.3) ($26.9) Income tax expense $0.0 $0.0 $0.0 $0.0 Other (income)/expense, net ($0.2) $0.5 $2.2 $1.9 Depreciation and amortization expense $4.8 $6.3 $9.3 $9.1 Share-based compensation expense $7.6 $9.0 $11
Slide 40: Non-Drug Options of Care For Non-Paroxysmal Afib
Non-Drug Options of Care For Non-Paroxysmal Afib Least Painful / Invasive Most Effective THERAPY ACUTE CLINICAL SUCCESS Catheter Ablation (Endocardial 30% single treatment Hybrid – CONVERGENT (Trans-Diaphragmatic) 70-80% on AADs 60-65% off AADs Hybrid – DEEP (Bi-Laterl Totally -Thoracoscopic) 80-90%
Slide 41: Cox-Maze IV Procedure
Cox-Maze IV Procedure Left Atrial Appendage Coronary Sinus Mitral Annulus Circumflex Coronary Artery SVC Right Atrial Appendage Right Coronary Artery Tricuspid Annulus IVC Bipolar RF Clamp Surgical Incision Cryo – Endocardial Cryo- Epicardial © 2019 AtriCure ,Inc. All rights reserved. AtriCure 41