Entellus Medical — Investor Presentation (August 2017)
42 slides from Entellus Medical's investor presentation, Aug 8, 2017
Slide 1: Entellus Investor Presentation August 2017
Entellus Investor Presentation August 2017 entellus MEDICAL
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “expect,” “anticipate,” “could”, “may,” “intend,” “will,”
Slide 3: Note on Non-GAAP Financial Measures
Note on Non-GAAP Financial Measures To supplement its consolidated financial statements prepared in accordance with United States generally accepted accounting principles (“GAAP”), Entellus uses certain non-GAAP financial measures, including adjusted EBITDA and adjusted gross margin. Entellus’s mana
Slide 4: Transforming ENT: minimally invasive technologies for better outcomes
Large, unpenetrated market and disease states treated by the same physicians Transforming Minimally invasive technologies for better the ENT outcomes Market Shifting ENT procedures to cost effective settings © 2017 Entellus Medical. All rights reserved. entellus MEDICAL
Slide 5: Multiple ENT Disorders – Common Symptoms
Multiple ENT Disorders – Common Symptoms PROBLEM: 44M PATIENTS SYMPTOMS: 12M MD VISITS 5 CHRONIC SINUSITIS Cavities around nasal passages (sinuses) become inflamed and swollen for >12 weeks despite treatment attempts with medication EUSTACHIAN TUBE DYSFUNCTION Eustachian tube equalizes ear pressure
Slide 6: Standard Of Care—Invasive, Complex & Costly
Standard Of Care—Invasive, Complex & Costly CHRONIC SINUSITIS EUSTACHIAN TUBE DYSFUNCTION NASAL AIRWAY OBSTRUCTION CURRENT TREATMENT, Pharmacological care with antibiotics Functional endoscopic sinus surgery (FESS), Pharmacological care Myringotomy with tube placement No current long-term solution O
Slide 7: Large Under-Treated Patient Population
Large Under-Treated Patient Population CHRONIC EUSTACHIAN TUBE NASAL SINUSITIS DYSFUNCTION AIRWAY OBSTRUCTION 35M Patients 7.4M Patients 19.3M Patients Medical Surgically Treat Medical for Nasal Valve Therapy Therapy 125K Compromise 30K 14.0M Treated Medical Surgically 20.5M Therapy 7.3M None 19.0M
Slide 8: U.S. ENT Market Opportunity
U.S. ENT Market Opportunity Entellus minimally invasive technologies are uniquely positioned to enable a shift in procedures to more efficient care settings, creating greater opportunity for market expansion $2.1B $1.0B Growth Opportunity 700K $1.1B 30K 125K NUMBER OF PATIENTS 0K Chronic Sinusitus 7
Slide 9: Chronic Sinusitis: Large Market Potential
Chronic Sinusitis: Large Market Potential U.S. Adult Statistics • Approximately 29 Million afflicted1 • 1.23M patients seen by ENTs annually • $8.6 Billion in healthcare costs 1 12% of US adults per 2013 U.S. census data CURRENT SHIFT POTENTIAL PATIENTS 550,000 700,000 TREATED REVENUE $220M $1.06B M
Slide 10: ETD: Expansive Growth Opportunity
ETD: Expansive Growth Opportunity EUSTACHIAN TUBE DYSFUNCTION U.S. Adult Statistics • Incidence in adults 1—5% 1,2 • Symptoms: fullness, pressure or clogged feeling in ear; headaches 1 Di Martino et. al. 2 Browning et. al. CURRENT SHIFT POTENTIAL PATIENTS Minimal 125,000 TREATED REVENUE Minimal $185
Slide 11: Nasal Valve Compromise: Unpenetrated
Nasal Valve Compromise: Unpenetrated 3 1 2 Nostril inferior view Primary contributors to nasal obstruction: 1. SEPTUM (500K patients/year) = 95% 2. TURBINATES (770K patients/year) OF PATIENTS 3. LATERAL WALL (>30K patients/year) > 70% of these patients would benefit from lateral wall interventions.1
Slide 12: Entellus – Improved Treatment Options
Entellus – Improved Treatment Options Providing less invasive technologies that offer better outcomes in more cost effective settings CHRONIC SINUSITIS EUSTACHIAN TUBE DYSFUNCTION NASAL AIRWAY OBSTRUCTION © 2017 Entellus Medical. All rights reserved. entellus MEDICAL
Slide 13: XprESS ENT Dilation System
XprESS™ ENT Dilation System Proven to enable comfortable treatment of patients in the Physician Office or the OR Single integrated device for sinus and Eustachian tube dilation Malleable, controllable tip can be customized to unique anatomy Tip can be shaped to treat the the Eusthachian tube, and th
Slide 14: XprESS Commercial Experience
XprESS Commercial Experience XprESS ENT Dilation System has been used on more than 150,000 patients 3.6 days 2 days Saved due to Saved from prescription faster recovery pain medicine exposure PATIENT 20 minutes Saved from General Anesthetic exposure 14 © 2017 Entellus Medical. All rights reserved. O
Slide 15: LATERA System
LATERA™ System Includes the Latera Absorbable Nasal Implant and the Implant Delivery Device Implant Delivery Device Single-use device including a 16-gauge delivery cannula Latera Absorbable Nasal Implant Absorbed in the body ~18 months Supports upper and lower lateral nasal cartilage Absorbable PLLA
Slide 16: LATERA Experience
LATERA Experience 500+ Clinicians Using LATERA 5,000+ Cases Reported 10,000+ Implants Delivered 16 © 2017 Entellus Medical. All rights reserved. 93% Satisfied with Appearance 86% Satisfied with Breathing entellus MEDICAL
Slide 17: Supporting Technologies
Supporting Technologies Suite of supporting technologies with smaller footprint, simplicity and wireless advantages FOCESS™ HD FIAGON™ SINUS MINIFESS™ SURGICAL WIRELESS CAMERA NAVIGATION SYSTEM INSTRUMENTS MEDICAL SHAVER XEROGEL™ NASAL SYSTEM DRESSIN FOCESS™ MINIFESS™ TURBINATE SINUSCOPES FORCEPTS G
Slide 18: Shift to Cost Efficient Settings
Shift to Cost Efficient Settings $ PATIENTS PHYSICIANS PAYORS Faster recovery Greater efficiency in office Favorable economics for the Lower cost for patients setting healthcare system High level of patient comfort Familiar design and ease-of- Decreased healthcare utilization, use for physicians mig
Slide 19: Clinically Proven
Clinically Proven STUDY OUTCOME REMODEL Trial XprESS products are the only devices proven to be as effective as FESS in a sufficiently powered prospective, multicenter, randomized, controlled trial XprESS Eustachian Tube Dilation Study Primary efficacy endpoint was met demonstrating superiority over
Slide 20: Global Market Development
Global Market Development INNOVATION AND PIPELINE CLINICAL AND ECONOMIC EVIDENCE STRENGTHENING COMMERCIAL TEAM EDUCATION AND AWARENESS Expand treatable patient population and market Robust clinical evidence Broad reimbursement Strong commercial team and infrastructure Patient and physician focused a
Slide 21: Reimbursement Landscape
Reimbursement Landscape CHRONIC SINUSITIS EUSTACHIAN TUBE DYSFUNCTION NASAL AIRWAY OBSTRUCTION Balloon Sinus Dilation ETD Lateral Wall Implant COVERAGE 82% stand-alone coverage Medicare Temporary C-code for Cost included in OR facility Medicare Hospital Outpatient Prospective payment rate for proced
Slide 22: International Opportunity
International Opportunity International revenue of $3.5 million in 2016 Established direct sales team in the UK Indirect distribution efforts underway in over 15 countries in Europe and Canada NICE issued positive guidance for use of the XprESS System in December 2016 CE Mark for Eustachian Tube Dys
Slide 23: Financial Performance
Financial Performance REVENUE (millions) GROWTH 22 – 26% $91.5—$94.5M Approximately $62.9 $75.2M million in cash and investments1 $61.6M $48.8M Approximately $21.1 million in debt1 $32.5M $17.6M 2012 2013 2014 2015 2016 2017E 2 GROSS MARGIN 73% 76% 78% 77% 75% 72—74%3 23 1 As of June 30, 2017 3 Anti
Slide 24: 2017 Outlook
2017 Outlook Total revenue $91.5 – $94.5 million, growth of 22% – 26%1 Expect international sales to be in the mid-single digits as a percentage of total 2017 revenue Gross margin is expected to be in a range of 72% to 74%2 Sales force expansion Adding 10-20 full quota-carrying reps in 2017 1 Guidan
Slide 25: Investment Highlights
LARGE MARKET Significant opportunities to shift patients from surgical and medical management options, $2.1 billion opportunity in the U.S. CLINICAL EVIDENCE Randomized trial shows Entellus balloon dilation is as effective as sinus surgery BETTER OUTCOMES Provides superior economic outcomes for pati
Slide 26: Thank You
Thank You 26 © 2017 Entellus Medical. All rights reserved. entellus MEDICAL
Slide 27: Appendix
Appendix 27 © 2017 Entellus Medical. All rights reserved. entellus MEDICAL
Slide 28: Treatment of Chronic Sinusitis Patients
Treatment of Chronic Sinusitis Patients Annual Patients to ENT in U.S. Entellus Market Opportunity in U.S. ~1.2M ~630K ~630K 1,200,000 600,000 85% Ideal for 160K Symptoms Relieved BSD in Office (25%) 1,000,000 493K by Medical (40%) Management (Rx) Office Market 800,000 464K 400,000 (73%) 55% Ideal f
Slide 29: Recent Product Launches
Recent Product Launches New products and expanded indications facilitate procedures in efficient care settings Product Features and Advantages FullLaunch Cyclone Simultaneous suction and irrigation Q4 2016 Sinonasal Suction & Irrigation Easy to use, comfortable saline lavage System High quality HD i
Slide 30: Cost of Standalone Office Balloon Dilation vs. FESS
Cost of Standalone Office Balloon Dilation vs. FESS Office BSD is less costly than FESS – regardless of number of sinuses treated Sinuses Dilated 2017 Medicare National Avg. Payment Rates Office FESS in FESS in % FESS costs more Balloon Hospital ASC than dilation: Dilation Hospital & ASC Maxillary+
Slide 31: New Medicare Eustachian Tube Payment
New Medicare Eustachian Tube Payment Change in payment for standalone ET balloon dilation in hospital and ASC Medicare HOPD Medicare ASC Standalone ETD Standalone ETD $4,131 $3,060 $177 Current 7/1/2017 $0 HOPD Current ASC 7/1/2017 Medicare facility payments for medically necessary and covered bilat
Slide 32: BSD – Significant Advantages
BSD – Significant Advantages Rhinosinusitis Symptom Inventory (RSI) Healthcare Use (Meta-analysis) 8.0 N = 167 N = 165 N = 172 7.0 Reduces or Improves: p <0.0001 6.8 6.0 Sinusitis episodes p <0.0001 Sinus infections 5.0 5.4 Antibiotic use p <0.0001 4.0 4.5 Physician visits 3.0 Homebound days Daily a
Slide 33: XprESS Pediatric Study Published Nov 2016
XprESS Pediatric Study Published Nov 2016 Prospective, Multicenter Evaluation of Balloon Sinus Dilation for Treatment of Pediatric Chronic Rhinosinusitis Zachary M. Soler, MD, MSc; Jeffrey S. Rosenbloom, MD; Michael Gutman, MD; Mark J. Hoy, MD and Shaun A. Nguyen, MD International Forum of Allergy &
Slide 34: XprESS Pediatric Clinical Study
XprESS Pediatric Clinical Study Balloon sinus dilation can be safely and successfully performed on children with CRS Mean Change from Baseline in SN-5 Overall and Subscale Scores Prospective, multicenter, single-arm study of balloon sinus dilation in 50 pediatric CRS patients (ages 2 to 21 years) wi
Slide 35: XprESS Eustachian Tube Dilation Study
XprESS Eustachian Tube Dilation Study Prospective, multicenter, randomized controlled trial 60 ETD patients randomized to balloon dilation or continued medical therapy Primary endpoints ? Comparison between arms in the change from baseline to 6 weeks in mean overall ETDQ-7 score: Balloon dilation wa
Slide 36: REMODEL Study Published Jan 2016
REMODEL Study Published Jan 2016 REMODEL Larger Cohort With Long-term Outcomes and Meta-Analysis of Standalone Balloon Dilation Studies Rakesh K. Chandra, MD; Robert C. Kern, MD; Jeffrey L. Cutler, MD; Kevin C. Welch, MD; Paul T. Russell, MD The Laryngoscope. January, 2016. [printed version] REMODEL
Slide 37: REMODEL Randomized Trial of Office Balloon Sinus Dilation vs FESS
REMODEL Randomized Trial of Office Balloon Sinus Dilation vs FESS: Both Primary Endpoints Acheived SNOT-20 Symptom Score Avg. Debridements per Patient 3 1.2 1.0 Similar p < 0.0001 2 0.8 Symptom Debridement Rate Reduction 1 Superior to FESS 0.4 0.2 0 0 Pre-Tx 6M 12M 18M 24M Category 1 Balloon dilatio
Slide 38: REMODEL Trial – Additional Key Findings
REMODEL Trial – Additional Key Findings XprESS products are the only devices proven to be as effective as FESS in a well-powered RCT Bleeding After 18-Mo Duration (Days) of Discharge Revision Rate Prescription Pain Rx 100% 4 p = 0.009 9% p < 0.001 2.8 75% p = NS 6.9% 3 56% 6% 2 50% 32% 2.7% 1.0 3% 1
Slide 39: Nasal Airway Obstruction
Nasal Airway Obstruction NASAL AIRWAY OBSTRUCTION Primary contributors to nasal obstruction: Nose provides > 1. SEPTUM (500K patients/year) 70% of airflow to = 95% of patients lungs 2. TURBINATES (770K patients/year) Improved nasal 3. LATERAL WALL (>30K patients/year) > 70% of these valve integrity
Slide 40: LATERA: Lateral Cartilage Support
LATERA: Lateral Cartilage Support Latera supports the upper and lower lateral cartilage by anchoring above the maxilla to provide cantilever support 40 © 2017 Entellus Medical. All rights reserved. entellus MEDICAL
Slide 41: LATERA: Technique Keys
LATERA: Technique Keys: Spirox 4 P’s ? PLAN: Vector from cephalic to the Alar Crease to above the Bone ? PIERCE: Caudal pierce in vestibular skin to Protect the Implant ? PLANE: Hug the cartilage to Glide the cannula forward ? PUSH: Push the Plunger to Place implant in plane with bone 41 © 2017 Ente
Slide 42: LATERA: Implant Absorption over 18-24 Months
LATERA: Implant Absorption over 18-24 Months Histologic findings from implants placed in the Nasal Dorsum (Ovine model), 6 weeks through 24 months1 12 mo. 6 wk. Tissue encapsulation promotes acute implant stability Safety profile shows minimal inflammatory responseand expected surrounding tissue rea
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