Harrow, Inc. · NASDAQ:HROW
Harrow — Imprimis Pharmaceuticals — Investor Presentation (November 2016)
28 slides from Harrow's investor presentation, Nov 15, 2016
Slide 1: Imprimis: High-quality, innovative medications at accessible prices
NASDAQ: IMMY Mark L. Baum, CEO November 2016 IMprimis High-quality, innovative medications at accessible prices.
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: Prescription Drug Market is in Transition
Prescription Drug Market is in Transition « Prescription Drug Market Realities Some pharma companies are abusing monopoly rights conferred by federal policy Dramatic price increases for old off-patent drugs in $250M to $1B niche markets Patient deductibles and out-of-pocket cost are increasing 17% o
Slide 4: Imprimis' Market Based Solution
“= Imprimis’ Market Based Solution Disrupting the $450B+ Total Drug Market? 50-80% payor savings; 60%+ gross margins Pioneering Proven Success is 10%+ market share in a Solution to ost Pee wes large ophthalmolo: ici ' 9 iahent oy Drug Pricing and pending Challenges Financial Fundamentals Strong reve
Slide 5: Prescription for Lower Drug Prices
- Prescription for Lower Drug Prices We use 7,800+ FDA-approved generic drugs to create new lower-cost, high-quality, customizable and often patentable compounded formulations ee ; = < = y! f Coa FDA-approved APIs Strict quality Lower-cost novel made in FDA standards mandated compounded registered f
Slide 6: Marketing and Distribution
Marketing and Distribution = Two captive sales teams: Ophthalmology and Non-Ophthalmology = Customers are: = Insurance/Managed Care = PBM networks = MDs and patients » Headquartered in San Diego with three production facilities: = Irvine, CA = Ledgewood, NJ = Folcroft, PA = Ship direct to patients a
Slide 7: Growing Payor Adoption
*s» Growing Payor Adoption Pharmacy Benefit Managers (PBMs) EXPRESS SCRIPTS® = Tf Q OPTUMR<x’ CVS/caremark” Healthcare Payors and Strategic Accounts AD ee NVISION A Institute BECENSS TRICAR E AMSURG 8% KAISER PERMANENTE.
Slide 8: Ophthalmology Program
Ophthalmology Program
Slide 9: Ophthalmology Business Pipeline
Ophthalmology Business Pipeline ucenns NAMES TOPICAL EYE DROPS EYLEA | Mitosol’ | InTRAVENOUS SEDATION | OMIDRIA’ | WiTHHELD Post- | PostLASIK, | Chronic wet | Glaucoma | Ophthalmic ) Oral and | Cataract cataract cataract | age-related | surgery surgeries urologic Surgery | Glaucoma surgery surgery
Slide 10: Disruption in the Ophthalmology Market
* Disruption in the Ophthalmology Market » Market Opportunity of $400M: = 3.9M cataract surgeries in 20177 = 700,000 LASIK surgeries annuallyé = Standard of Care: = 2-3 eye drops cost patients ~$323 per eye* = Our Solution: « Patent-pending injectable and topical formulations, enabled by SSP Technol
Slide 11: Increasing Dropless and LessDrops Adoption
Increasing Dropless and LessDrops Adoption Dropless Therapy Since Inception in Q2-2014 10000 sane Market Share Est. 10%+ sren0000 seona00 seo 00 pee LessDrops Since Introduction in Q1-2015 200000 172000 : s1s0n00 2216 08 4 ae 14 at 18 218 a3 15 a4 8 a1 18 a2 aE 1220000 1200000 s00 sson000 ‘250.000 %
Slide 12: IV Free Conscious Sedation
- IV Free™ Conscious Sedation IY FREE’ * Sublingual midazolam, ketamine and ondansetron “lozenge” alternative to intravenous sedation * Market Opportunities: = 4.5M ocular surgeries’® * 500K vasectomies™ = 14M colonoscopies‘’? = 1M+ dental procedures requiring sedation® « Patients prefer sublingual
Slide 13: Growth Strategy
Growth Strategy
Slide 14: Removing Friction Q1 '17
Removing Friction Q1 ‘17 = Currently operate as a compounding pharmacy = Regulated by 50 separate state regulatory bodies = Restrictions include: = Small batch production = Patient-specific prescriptions required for each order = Higher labor costs associated with customer service, dispensing, shipp
Slide 15: Imprimis Cares Pipeline (Non-Ophthalmology)
~ Imprimis Cares® Pipeline (Non-Ophthalmology) Thiola cystinuria Tiopronin D-R 500m: (ecsrber ergs) $160m fanny eat TAN? MAY 2016 ELMIRON: Interstitial cystitis (IC) PPS-DR™ (Pentosan Polysulfate Sodium D-R) $280m=« (ounbert dg) $100m ocT 2015 EPIPEN’ Allergic reactions (anaphylaxis) Epinephrine Inj
Slide 16: Imprimis Cares Strategic Partners
Imprimis Cares Strategic Partners « Express Scripts Largest PBM in the US. Express scripts covers 85M lives and processes over 1.3B prescriptions annually Partnership announced December 2015 offering patients Imprimis’ low-cost alternative to Daraprim® for $1.00 per capsule representing Daraprim alt
Slide 17: Implementing Efficiencies to Grow Margins
= Implementing Efficiencies to Grow Margins Order Inflow: = MaxRx Prescriber Portal™ Production: = State-of-the-art changes to NJ and CA facilities » Automated Filling and Labeling * Labeling / Shipping Automation Dispensing: = Eliminating processing patient prescriptions
Slide 18: Recent Management Additions
~ Recent Management Additions Clayton Edwards a SVP, Pharmacy Operations Ah PREVIOUSLY: OPTUMRX, LIBERTY MEDICAL g Pramod Sharma VP, Quality PREVIOUSLY: AKORN, ALVOGEN, ALBANY MOLECULAR RESEARCH Eric Rice VP, Client Services PREVIOUSLY: PHILIDOR RX, COMCAST « Sanjay Samudre Director, Manufacturing P
Slide 19: Tip of the Iceberg
- Tip of the Iceberg 2014 to Present: Proving the Model = Launched Ophthalmology business = Acquired compounding infrastructure » Launched Imprimis Cares formulary 2016 and Beyond: Growth and Scale * Imprimis Cares portfolio expansion Large payor relationship initiations Market share penetration Pro
Slide 20: Structure and Financials
Structure and Financials
Slide 21: Revenue Performance & Insurance Claim
Revenue Performance & Insurance Claim 6,000 = 1 Ophthalmology Sales {in thousands of dollars) Soi780 I Non-Ophtnaimology Sales @ insurance Claim 5000 mec __ $4,907 $4,381 4,000 3,000 2,000 1,000 $554 Q4-2014 Q1-2015 > Q3-2015 Q4-2015 Q1-2016 Q2-2016 Q3-2016 Gross Margin 39% 36% AT% 55% 48% 49% 56% 5
Slide 22: Capital Structure
- Capital Structure As of September 30, 2016 (unaudited): Common stock issued and outstanding 13,229,320 Options, weighted avg. ex. $6.26* 1,971,063 Warrants, weighted avg. ex. $5.20 240,688 Convertible note, conv. price $3.60 833,333 RSUs (time based vesting) 98,068 RSUs (market based vesting)** 1,
Slide 23: Condensed Balance Sheet - Unaudited
~ Condensed Balance Sheet - Unaudited (in thousands of dollars) at September 30. 2016 ASSETS Current assets Cash and restricted cash and investments $ 2,812 Receivables, net 3.074 Prepaid expenses, inventories and other current assets 3.064 Total current assets 8,950 Goodwill and intangible assets,
Slide 24: Company Profile
*- Company Profile * Trading symbol: NASDAQ: IMMY Price per share (11-11-16): $2.66 = Stock price range (52-week): $2.28 - $7.81 Average daily trading volume (3 months): 50,000 shares Market cap: $35 million = Shares Outstanding: 13.2 million * Float: 10.4 million Q3-2016 Net loss: ($3,850,000) = Q3
Slide 25: References and Appendix
References and Appendix
Slide 26: References
* References 10. Guggenteim Secures, LLC heatthoare analyst Louise Chen ‘Agarey for Healthcare Research & Quality - Off-Label Drugs: What YouNeed to Know. (2015, September 01). Retrieved November 08, 2016, from ‘ttpstwwor ata, goulpaients-consumers/patent-nvolementot-labetrug-wsage.himl observations
Slide 27: References
* References 18, 16, 17. 18, 19, Price Compasison for Elion, Average cost of $650 (90 court). Retrieved June, 3, 2016 from ill coos on ton Trader, 0.2016, September 28), Seeking Abpha -- Updating My Thesis On Aquinox After The Equly Raise. Retrieved October'8, 2016, fom tip! soekingalpha.com/articl/
Slide 28: Imprimis Pharmaceuticals
IMprimis Imprimis Pharmaceuticals (NASDAQ: IMMY) 12264 El Camino Real, #350 San Diego, CA 92130 (858) 704-4040,
Imprimis Pharmaceuticals — Investor Presentation (November 2016) on 6ix