Harrow, Inc. · NASDAQ:HROW
Harrow — Imprimis Pharmaceuticals — Investor Presentation (March 2016)
39 slides from Harrow's investor presentation, Mar 3, 2016
Slide 1: Imprimis, Mark L. Baum, CEO, March 2016
NASDAQ: IMMY imprimis Mark L. Baum, CEO March 2016
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 assump
Slide 3: Vision
= Vision We offer compounded drugs as alternative choices to expensive branded and generic drugs, lowering drug costs and driving greater patient access imprimis 3
Slide 4: Opportunity
; Opportunity = Lack of competition for branded drugs has led to price expansion = 12% of drugs do not and likely will not have generic competition’ = PBMs and insurance companies are demanding lower cost options = We believe Imprimis can thrive in a lower cost environment = We have demonstrated: =
Slide 5: Structure
~ Structure FON One Operating ImprimisRx™ Brand YY a eo, wo N P; aoe sii Custom Compounding doy enie Imprimis Cares Choice™ Su SY imprimis
Slide 6: Business Description
~ Business Description a, ImprimisRx a $300B2 a“ —_— $10B Pharma Imprimis Cares i i fickel p Compounding Choice i Le A — Market Customizable patented, Customizable compounded patent-pending and non- drugs forhumans and patented compounded animals in therapy areas alternative choices to overlooked by
Slide 7: Therapeutic Markets
» Therapeutic Markets re ImprimisRx wa $300B2 le glen $10B Pharma — Guster Compound Market imprimis Cares Compounding Choice Drug yf Nn Market Ophthalmology Integrative Medicine Urology Obstetrics/Gynecology Sinus Oncology Dermatology (acne) Dermatology Infectious Disease Weight Loss Drug Shortage V
Slide 8: Company Overview
~ Company Overview = Qwn library of 33 drug formulation patents and patents pending = Sell to prestigious healthcare institutions nationwide through PBM networks, and via cash-pay to buy-and-bill customers = Headquartered in San Diego, CA and operate four facilities: = Irvine, CA = Randolph, NJ = Al
Slide 9: Imprimis CARES ... in Action
Imprimis CARES! ...1n Action Post-cataract surgery eye drops are expensive and challenging to administer Our Dropless Therapy® is a patent-pending injectable combination of steroid & antibiotic Single injection vs. >150 eye drop applications >90% of Dropless Therapy cases eliminate the need for eye
Slide 10: Imprimis CARES ... in Action
- Imprimis CARES! ...1n Action = Eye drop market >$1B U.S.11.12 = 3.6M cataract surgeries in 2013; 4.3M estimated in 2017 (U.S.)" = >50% market share potential derived from study by Grail Research’? = Factors we believe for greater adoption at payment of $100 per eye: = Medicare patients must be abl
Slide 11: Imprimis CARES ... in Action
~ Imprimis CARES! ...\n Action LessDrops® topical combination eye drops = One bottle vs. 3 separate bottles = Antibiotic + Steroid = NSAID + Steroid = Triple Drop™ 50% fewer drops'? Lower cost ($60 vs. $323'2) Better patient compliance’? Prescribed for cataract surgery and LASIK imprimis 11
Slide 12: Ophthalmology Market Growth
Ophthalmology Market Growth Weekly Unit Sales Market Share Est. (Jan 2015 — Feb 2016) 8% - 10% si 9535 2000 e000 LessDrops Launch 4000 “thant wil | ll Jan | Feb | Mar | Apr | May | Jun Jul Aug | Sep | Oct | Nov Jan | Feb imprimis 2
Slide 13: Imprimis CARES Media Coverage
* Imprimis CARES! Media Coverage BLOOMBERG. THe New York THE WALL STREET JOURNAL US Times CNN Money ASSOCIATED PRESS FORTUNE FIERCE PHARMA Fox Business CBS News CNBC US News & — WortpD REPORT J ! f > Business EquiTies.coM INSIDER imprimis USA TODAY Tue Daly MSNBC Beast REUTERS 13
Slide 14: Revenue Performance
~ Revenue Performance 4,000 Quarterly Revenue (in thousands of dollars) $3,500 3,000 $2,683 2,000 $1,967 $1,563 1,000 $439 $554 on Q3-2014A Q4-20144 Q1-2015A Q2-2015A Q3-2015A, Q4-2015E % Growth : 26% 182% 26% 36% Gross Margin 46% 39% 36% 47% 55% imprimis 14
Slide 15: Near Term Potential Growth Catalysts
~ Near Term Potential Growth Catalysts = Imprimis Cares formulary expansion in 2016 to significant new, large and profitable markets = Developing current and new PBM relationships to make our formulations available for in-network reimbursement = Two FDA registered outsourcing facilities will provide
Slide 16: 2016 Execution
= 2016 Execution = Accelerate revenue growth = Continued focus towards large national account acquisition = Hold ground and grow share with smaller accounts = Improve margins = Implement automation = Transition high volume Rx sterile orders to 503B facilities Complete integration of improvements to
Slide 17: 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 CEO’s 600,000 market bas
Slide 18: Company Profile
=» Company Profile = Trading Symbol: NASDAQ: IMMY = Current Price per Share (2-22-16): $4.08 = Market Cap: $39.5 million = Shares Outstanding: 9.6 million = 52-Wk Range: $3.80 — $8.79 = Number of Employees: 108 = Headquarters: San Diego, CA = Q4 2015 estimated revenues: $3.5 million = Calendar 2015
Slide 19: Imprimis Pharmaceuticals
IMmMprimis Imprimis Pharmaceuticals (NASDAQ: IMMY) 12264 El Camino Real, #350 San Diego, CA 92130 (858) 704-4040
Slide 20: References and Appendix
References and Appendix
Slide 21: References
References U.S. House, Oversight and Government Reform Committee. Prescription Drug Pricing. Feb. 4, 2016. Statement of Janet Woodcock, MD, Director of the FDA Center for Drug Evaluation and Research, [Video File]. Available at http:/www.c-span.orgivideo!?404183- ‘/hearing-prescription-drug-market&l
Slide 22: References
References 13. Wiley, WF. Simplifying Postoperative LASIK Care. A compounded formulation of topical postsurgical medications can enhance patients’ compliance. Cataract & Refractive Surgery Today. http://crstoday.com/2015/08/simplifying-postoperative-lasik-care/. August 25, 2015. Accessed October 18,
Slide 23: 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.
Slide 24: Compounding Investment Trends
*» Compounding Investment Trends = Compounding sector undergoing “growth renaissance” (Eric Coldwell, Baird Equity Research, WSJ, Oct 2015)'6 = 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 P
Slide 25: Cost Savings
~ Cost Savings Formulation Imprimis Pricing | Branded Drug Dropless Therapy $25 (one-time) 2-3 eye drops LessDrops $60 (30 days) 2-3 eye drops PPS-DR $99 (60) Elmiron Pyrimethamine $99 (100) Daraprim and leucovorin Tiopronin $1,688 (30) Thiola imprimis Branded Pric $323 (30 days) $323 (30 days) $840
Slide 26: U.S. Pharmacopeia (USP)
U.S. Pharmacopeia (USP) ~ Commitment to Quality ‘An Imprimis Pharmacy" imprimis Quaity assurance program Record keeping requirements Recall procedures Quaity assurance program Record keeping requirements Recall procedures: Quaity assurance program Recordkeeping requirements Recall procedures <797> S
Slide 27: Dropless Research Report
*- Dropless Research Report = Findings of independent research report by Grail Research’? (n=257) = 57% MDs are aware of Dropless 15!) a 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 Droples
Slide 28: Current Eye Drop Costs
~ Current Eye Drop Costs‘? Medicare Medicaid Weighted Weighted Low Average Average fe $207 $137 $206 (Bromfenze ——(g,Smday) $168 (Bromfenae —g Smday) Sodium) m Sodium) ” $12 $109 om $12 $109 (Tobramycin) _ (Besivance) (Tobramycin) (Besivance) $24 $25 $70 (Prednisolone caren) $80 (Prednisolone cares)
Slide 29: Economics of Disruption
~ Economics of Disruption ee ($100/Rx - 20% share) imprimis Losses to LESS Total Eye Drop Go DROP LESS DR@PS Companies Daily Surgeries (1 month) 750 140 890 890 cases Avg. Rx Price (1 month) $22.50 $52.48 $27.21 $323 avg. $icase Total Daily Sales (1 month) $16,875 $7,339 $24,214 $287,470/day Total D
Slide 30: Value Creation from Cost Savings
* Value Creation from Cost Savings Andrew Chang& Co, LLC estimates upto $13B savingsto US healthcaresystem and patients over next 10 years with Dropless Therapy’? 314g asa Patient sie | Lm Foca s10 ge i an | ee | | +=& zs Low Estimate ‘Weighted Average High Estimate At $100 per dose, we believe Drop
Slide 31: The Eye Drop Journey
*- The Eye Drop Journey em = @ PATIENT PROFILE @ SCHEDULING Pv) SURGERY DAY 80 years old Rxs for multiple eye Rxs — i—_ { 2) POST-OP SUMMARY imprimis a
Slide 32: The Dropless Therapy Journey
The Dropless Therapy Journey PATIENT PROFILE SCHEDULING SURGERY DAY = 80 years old = No eye drop Rxs = Dropless Therapy = Arthritis * Informed about injected intravitreally Eicent gee Dropless Therapy + Lives alone = Social Security POST-OP SUMMARY = Eye looks quiet = No eye drop Rxs = No infection
Slide 33: Enabled by SSP Technology
* Enabled by SSP Technology™ (7) [= SSP Technology allows . active drugs to mix and iM la f become usable as an 5 injection ‘iamcinolone Act re ox SSCL (15/1)mg/mL Steril? Without SSP Technology, large irregular clumps of active drugs persist, not | y 4 =— usable as an injection imprimis x3
Slide 34: LessDrops Topical Solutions
of LessDrops Topical Solutions imprimis 34
Slide 35: 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 with Exp
Slide 36: 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'”-18 = Offering: = Insurance reimbursed and patented bladder instillation recommended by the Am
Slide 37: Imprimis CARES ... in Action
~ Imprimis CARES! ...\n 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 annually2° Our sinus offering: = Topical delivery of antibiotics,
Slide 38: Land and Expand Strategy
~ Land and Expand Strategy “Land” to Establish New Customer Relationship “Expand” with Complementary Medications Lyophilized Epinephrine Shugarcaine Hyaluronidase Mitomycin Other Mydriatic formulations Povidone lodine Pentosan delayed release capsules Lyophilized Tri-Mix Elmiron® Hormone Replacement
Slide 39: Condensed Balance Sheet
~ Condensed Balance Sheet (in thousands, unaudited) at —- a0, Cash, equivalents and short-term investments $ 6,706 Accounts receivable 701 Inventories 1.273 Other short-term assets 685 Total current assets 9,365 Furniture and equipment, net 1,067 Intangible assets and goodwill, net 4,589 TOTALASSETS
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