Staar Surgical Company · NASDAQ:STAA
Staar Surgical — Jefferies 2010 Global Life Sciences Conference
34 slides from Staar Surgical's conference presentation, Jun 9, 2010
Slide 1: Jefferies 2010 Global Life Sciences Conference
! SURGICAL (NASDAQ: STAA) Jefferies 2010 Global Life a > Sciences a Conference
Slide 2: Forward-looking statements
—— Goninerncl tolerance i rasta concerning prope a itariienrllneat saa Pte d new products and government approval of new products, services or developments, eme ing future economic conditions or performance, statements of belief and any statements ssumptions underlying any of the foregoing. ‘These s
Slide 3: Two Large Market Opportunities
= Two Latge Market Opportunities = Two Differentiated Product Lines = Strong Barriers to Entry = Improving Financial Performance = Strong Balance Sheet = Poised for Growth and Profitability in 2010 Sas
Slide 4: Surgical Technology And Applied Research
= Surgical Technology And Applied Research = Leaders of Innovative Ophthalmic Devices = Foldable Intraocular Lens (IOL) = Collamer® Material = Toric IOL = IOL Delivery Systems (Preloaded, small incisions) = Implantable Collamer Lens (ICL™) u STAAR’s business is Intraocular Lenses (IOLs) YZ ANE
Slide 5: Intraocular Lens (IOL)
Intraocular Lens (LOL) Aphakic IOL Phakic IOL = Replaces natural = Sits in front of natural crystalline lens crystalline lens = Cataract IOL = Refractive IOL
Slide 6: Up to 1.5 billion nearsighted people worldwide
= Upto 1.5 billion nearsighted people worldwide = 5 Million Refractive procedures WW by 2014 a 7.7% CAGR = LASIK challenged by economy and technology’s limitations Source: The Global Refractive Surgery Market by Market Scope November 2009 Ke jee
Slide 7: Competitive Landscape
Competitive Landscape a STAAR is the market leadet in this segment = Other players: = Ophtec (Anterior Phakic IOL) = Ina few countries they may have a 20% share = AMO has marketed as distributor with little success = Alcon-Novartis (Anterior Phakic IOL) = CE Mark Approval in August 2008 a Very littl
Slide 8: Implantable Collamer Lens
= Implantable Collamer Lens better known as “the implantable Contact Lens.” m Made from a proprietary material called Collamer allowing placement between the itis and natural lens = Corrects myopia (nearsightedness) from 3 diopters to 15 diopters for patients ages of 21 to 45 = Toric ICL version cor
Slide 9: Refractive Procedures
Refractive Procedures Laser Based Lens (IOL) Based Visian ICL
Slide 10: ICL versus LASIK comparison
= Small micro incision = Adds a lens into the eye = Permanent but removable = Provides UV protection = No dry eye = 99% satisfied after five years with ICL = Incision over 1 inch-long = Burns material away = Cannot be reversed = No UV protection = Potential dry eye = High percent of enhancements
Slide 11: Superior Data for Young Adults in the Military with Low Myopia
Superior Data for Young Adults in the Military with Low Myopia “Weapons Grade Vision” UCVvA Hort Hort Typical | Custom Brage* | Hood* ICL* 20/10 or better % 4% 1% 20/15 or better [IBi¥A5) 78% SS 20/20 or better 98% 100% 80% 70-80% Myopic error -71 ~6.2 *Eyes with pre-op cylinder of 1D or less.
Slide 12: Approval in Japan of the Visian ICL
= Approval in Japan of the Visian ICL in February = Submission of the Visian TICL filed = Actively responding to questions from PMDA on submission = Myopic error demographics makes the opportunity equal to U.S. = Submission in U.S. of the Visian Toric ICL aC ly keted in 45 = Responding to current qu
Slide 13: Visian Toric ICL visual acuity results
= 77% of eyes post-op Uncorrected Visual Acuity was the same or better than the Best Corrected Visual Acuity pre-op = With Visian Toric ICL they saw the same or better than their best day with glasses or contacts u 47% of the eyes saw BETTER with Visian Toric ICL than their best day with glasses or
Slide 14: Expanded Visian ICL treatment range
= Expands treatment range on both Visian ICL (myopia) and HICL (hyperopia) = Adds -0.5 D to -2.75 D for low myopes a Adds +0.5D to +2.75 D for low hyperopes = Both expansions approved in quarter diopter steps u Can be used as LASIK enhancement = Visian Toric ICL range expanded = Up to 6 D treatments
Slide 15: Global ICL Revenues
Millions Global ICL Revenues HD DH HDD PM Pw DS? AD? 4D? 99? AD? AD? 1? 1G? VO OPS SESS SS SH SSK 85%+ Gross Margins
Slide 16: Visian ICL Grows Despite Economy
Visian ICL Grows Despite Economy Top Ten Refractive Markets 09 Procedures | 07 Procedures | 09 ICL Growth | ICL Share US. 1,417,000 Flat China 650,000 +37% Japan 439,000* (17%) Spain 180,000 +1% India 120,000 +79% Italy 135,000 +21% S. Korea 135,000 +87% Germany 125,000 (1%) UK. 82,000 (7%) France 8
Slide 17: $3.1 billion Worldwide IOL market in 2014
= $3.1 billion Worldwide IOL market in 2014 = 8.2% CAGR = U.S. Market is $1.1 billion in 2014 = 8.7% CAGR = Driven by innovation / improved outcomes / aging population Source: The Global IOL Market by Market Scope June 2009 Kaus
Slide 18: Global IOL units and share leaders
= 15 million global units in 2009 growing by 3.8% per year to 2014 = The Big Three Global IOL share leaders = Alcon (Novartis) 54% = AMO (Abbott) 16% = B&L (Private) 10% a STAAR goal to be a significant #4 player a 9% share in Japan, 3% share in U.S., target markets = Other players: Hoya, Kowa, Lens
Slide 19: STAAR Cataract IOLs
STAAR Cataract IOLs Preloaded Proprietary IOLs a _ *Actylic ( : Y . Silicone Collamer Afinity Aspheric Collamer nanoFLEX Three Piece (NIIOL) Aspheric (NTIOL) E Silicone Toric Plate Silicone Aspheric Three (Premium Channel) Piece (NTIOL)
Slide 20: Collamer proprietary hydrophilic material
= Proprietary hydrophilic material produces superior quality of vision = 40% water content produces: = Less internal reflectance (reduces glare and halo) as compared to all other materials = Induces fewer higher order aberrations = Free from glistenings = Patent protection until 2015 = Preliminary d
Slide 21: Standard Channel vs Premium Channel
Standard Channel Premium Channel = Standard IOLs are = Premium IOLs are reimbursed reimbursed by CMS at by CMS as standard plus the $150 to $200 (NTIOL) sutgeon can charge the patient = Current aspheric additional sum = ASP is about $130 = Toric, Multifocal, = Good distance vision Rese riiasentis Is
Slide 22: Presbyopia-correcting IOL market
= “This rapidly developing market is still in its infancy with 2009 revenues of $265M.” = 380k procedutes grow to 3.8M in 2020 = Provides good neat, intermediate and distance vision results = Sutgeons charge as much as $3,000 or $4,000 per eye = Surgeons and patients motivated Source: The Global Mar
Slide 23: Collamer accommodation clinical observations
= Clinical observations: Collamer provides some accommodation or better visual results = Inherent property of the material?? = Collamet Accommodating Study Team = Eight leading ophthalmic surgeons = Team will be monitoring three evaluations: = First is to benchmark current nanoFLEX IOL (Complete) By
Slide 24: Distance Corrected Near Vision - nanoFLEX vs. Standard IOLs
Distance Corrected Near Vision - nanoFLEX vs. Standard IOLs COMPELLING NEAR VISION When compared | | to Standard IOLs __s = a | $20/20 $20/25 $20/32 $20/40 >20/40 s nanoFLEX (73) 0.0% 68% 301% 479% s2in% AMO Tecnis(119)| 08% Ga 176% Ecad wa Std Sileone( 64) 00% 00% am 350% eam "Colamer3-pe(54)| 04 0
Slide 25: Average Distance Corrected Intermediate Vision
Average Distance Corrected Intermediate Vision 20738 E E e PTT TT = | nanoFLEX Cry Cr ReSTOR ()) HD(N=64) 5.0 (N=47) (N=138) (N=46)
Slide 26: CAST IT
CAST IT = Clinical protocol using the . current nanoFLEX IOL, = Goal: confirm CAST findings in rigid clinical trial : = Bi-lateral 125 patients with 9 to 12 month follow = Potential new NTIOL class #® = Ata minimum new marketing data for nanoFLEX CAST IIT Clinical protocol with a few design changes
Slide 27: Abbott acquires Visiogen for $400M plus earn out
$400M plus three year earn out = Sales at about $35M in 2007 = Sales in 2009 about $70M = 2009 Abbott acquires Visiogen IOL technology for $400M plus = Not yet FDA approved = Market Scope Global PCIOL Market Estimates = Grow from $265M in 09 to $1.1B in 2015 Source: The Global Market for Presbyopia-
Slide 28: 2009 Results
2009 RESULTS Excluding Other Charges 2009 2008 2007. 09 to 08 Revenue $ 753M $ 749M $ 594M +1% Gross Profit $ 419M $ 416M $ 29.3M +1% Operating Exp $ 456M $ 50.7M $ 434M (10%) Operating Inc. $ (3.7M) $ (91M) $(14.1M) +59% Net Income $ (6.2M) $ (119M) $(16.0M) +48% + Other charges in 2008 of $11.3M:
Slide 29: 2010 First Quarter
2010 First Quarter Comparison to Q1 2009 Qi 10 Qi 09 Revenue $ 138M $ 12.2M Gross Profit $ 88M $ 7.7M Gross Profit % 64.1% 63% Operating Expenses $ 88M $ 95M Oper Exp % 63.5% 78.3% Operating Income $ 76k $( 1.9M) Delta +13.3% +15. 3% +110bps (8%) (1480bps) +104%
Slide 30: Continuing Financial Improvements
Continuing Financial Improvements Gross Margin and Operating Expense Ratios SF Dh GD HS HP HF HF GO OP GO OP Ww SKS HF oF PEF PS PW oS
Slide 31: 2010 Key Metric Report Card
2010 Key Metric Report Card Double Digit Revenue growth in ICL and IOL Gross Margin mid 60% Progress toward profitability Cash from operations J Improve balance sheet
Slide 32: Strong cash position allows debt retirement
= Strong cash position allows debt retirement = $4 Million due for litigation settlement = During May $6.8 Million paid to Canon to retire 1.7 million shares of preferred stock = $5 Million Note due Broadwood in December for Japan acquisition (no penalty to prepay) = Will allow interest saving of $8
Slide 33: A Road to Profitability in 2010?
A Road to Profitability in 2010? 2009 Pro Forma* | 2010 Way Revenue $ 75.3M $51.8M $ 59.6 M** Gross Profit $419M $31.8M $ 38.7 M Op Expenses $456M $36.8M $ 34.0M OpIncome $(3.7M) $(5.0M) $ 47M NetIncome $(6.2M) $(7.8M) $ 35M *2009 Pro Forma excluding Domilens Business. #*Theoretical model intended t
Slide 34: Two Large Market Opportunities
= Two Latge Market Opportunities = Two Differentiated Product Lines = Strong Barriers to Entry = Improving Financial Performance = Strong Balance Sheet = Poised for Growth and Profitability in 2010 Mavs
STAAR Surgical — Jefferies 2010 Global Life Sciences Conference on 6ix