Company Presentation - Proactiveinvestors UK€¦ · $1.4 billion market worldwide for blood gas...

© Sphere Medical 2016

Company Presentation

6 October 2016

© Sphere Medical 2016 2

Background

Sphere Medical provides innovative monitoring and

diagnostic devices for the critical care setting, part of a fast

growing multi-billion $ market

First commercial product, Proxima 3, has been launched to

early adopters to gain feedback. Next generation, Proxima 4,

CE marked and expected to be launched in 2016

Proxima 4 increases the addressable market fourfold through

added functionality

Good support from leading fund managers, including

Woodford Investment Management, Arthurian Life Sciences

and LSP

Board and management team strengthened to lead Company

into commercialisation phase

Identifying regional commercialisation partners to take

Proxima worldwide – first distributor appointed, in Italy


Clinical Value Proposition

Frequent blood sampling required to manage critically ill, unstable patients and improve

patient outcomes

Provides vital information to the clinician on patient physiology

Current solutions have significant barriers to frequent measurements

Proxima is a patient connected BGE (blood gas, electrolytes and metabolites) solution which

provides better patient management during a patient’s critical period while reducing

nursing work load

provides faster and more frequent production of results

avoids blood loss and reduces infection risks

“… Proxima has the potential to bring about a paradigm shift in the intensive and critical care setting”

Prof Vincent, Belgium, chairman of the medical advisory board


Blood Gas Measurement: Current Practice

BGEs are the most frequent diagnostic test performed in critical care

Key indicators of lung and kidney function

On average, blood gases are measured every 3-4 hours by drawing

blood with a syringe

For critically ill patients, up to 19 measurements are made per day(1)

Nurse has to leave the patient

Open arterial line to draw blood sample

Blood samples are moved within & outside the critical care area

(1) Nursing in Critical Care 2008


Proxima – Patient Dedicated BGE Solution

Disposable patient-attached device mounted in arterial

line

Closed system where all blood is returned to the patient

Accompanies the patient throughout the entire Critical

Care pathway

BGE data is collected at the patient’s bedside

Enables more frequent measurement of BGE

Multi-use disposable approved for up to 72 hours


Proxima - Data demonstrates Value

More frequent measurement desirable but increases workload, blood loss and infection risk

Proxima can deliver closer monitoring (50% more measurements) with

Identical nursing workload (46% reduction if cover included)

No time away from bedside

No blood loss

75% reduction in opening of arterial lines

Source: Data collected during typical evaluations

3.3

6

1.9

4.8

8.8

2.9 3.2 3.2

0 0

2

4

6

8

10

Nurse time w/o cover (h) Nurse time with cover (h) Away from bedside (h)

Nurse time over 72 hours use

BGE every 3 hours BGE every 2 hours Proxima every 2 hours

Nurse time w/o cover (h) Nurse time with cover (h) Away from bedside (h)

Other metrics over 72 hours use

BGE every 3 hours BGE every 2 hours Proxima every 2 hours

125

185

0 0

50

100

150

200

Blood loss (ml)

48

72

12

0

10

20

30

40

50

60

70

80

Arterial line openings

24

36

0 0

5

10

15

20

25

30

35

40

Arterial line openings


New study demonstrates Proxima benefits

Study conducted at University Hospital Southampton cardiac intensive care unit in H1 2016

20 patients recruited – 10 on Proxima and 10 using standard process involving near-patient

benchtop blood gas analysers

Average of 10 measurements made on each patient over 24 hours

Proxima delivered:

>20% reduction in total time per sample (from decision taken that a test is needed until

results available at the bedside)

>50% reduction in delay to start of testing

Mean time nurse spent away from the bedside when using conventional analysers was 3:07

minutes: in c. 20% of samples delays were caused by the benchtop analyser not being

immediately available

Outcome confirms workflow benefits from using Proxima on unstable patients requiring

frequent blood gas measurements, even in a highly optimised critical care environment


Attractive and Growing Market

$1.4 billion market worldwide for blood gas and electrolyte

testing in 2014 growing at c. 10% p.a.(1)

Worldwide market projected to be $3.5 billion by 2023(1)

Global potential revenue of Proxima platform > $200m p.a.

Revenues proportional to number of patients

One disposable per patient

Fixed ASP for 3 days use, irrespective of number of tests

COGs in line with industry standards

(1) Transparency Market Research, January 2016

US$ 3.5 billion in 2023

US$ 1.4 billion in 2014

Global market(1)


Product Strategy

Proxima 3 Proxima 4 Proxima 4+

Analytes pH,pCO2,pO2 pH,pCO2,pO2 pH,pCO2,pO2

Hct, K+ Hct, K+, Na+ Hct, K+, Na+

Glucose Glucose, Lactate

Patient Groups Respiratory disease,

ECMO

Respiratory disease,

ECMO

Respiratory disease,

ECMO

Glycaemic control,

neurosurgery,

cardiac surgery

Glycaemic control,

neurosurgery,

cardiac surgery

Sepsis, trauma,

complex surgery

Patient Groups Adults Adults Adults

Paediatrics > 15 kg Paediatrics

Proportion of ICU

patients

10-20% 40-50% 50-60%

Increase market penetration through product evolution


Go-To-Market Strategy

Proxima 3

Hire a small dedicated own sales force

Sell directly to early adopters in limited territories in Europe

Obtain key feedback on product positioning and product

performance

Prepare market for future product generations

Proxima 4

Obtain CE mark for Proxima 4

Launch for sales in established European countries, replaces Proxima 3

Find partners to:

Sell to end customers throughout Europe ()

Obtain US and Japanese approval subsequently

Sell on a world-wide basis upon approvals

Proxima 4+

Aim is to deliver annual innovation increments

Objective is to build an active customer base leading to recurring revenues

Market penetration (not to scale)


Sales Progress: Europe

Proxima 3 launched in September 2014 in UK and March 2015 in continental

Europe

Direct sales team operating in the UK, Germany, Netherlands, Belgium

focussing on obtaining direct market feedback on Proxima 3

First commercial sales achieved in UK, Germany and Belgium

Increasing interest in Proxima in the market

To date more than 30 hospitals have undertaken evaluations

To date around 150 patients have been connected

Process underway to appoint distributors in key European markets

Burke & Burke appointed as Proxima 4 distributor for Italy


Proxima 3 Feedback

Topic I would like… Improvements

Set-up process A quicker set-up time or ideally not to be

involved in the set-up of the system.

BGAs are usually set up and maintained by

lab technicians, or the process is largely

automated.

Proxima 4 incorporates a number of

improvements, including fewer steps and a

significant reduction in set-up time.

Ultimately the aim is to automate the process,

which requires 2-3 years development and

significant investment.

Additional

analytes

To be able to treat more patients with

Proxima, for which I need glucose and/or

lactate.

Glucose added in Proxima 4.

Lactate development underway and expected to

be in next upgrade.

Graphical trends To be reminded when the next measurement

is due.

A graphical trend to provide additional

information on the effectiveness of the

therapy.

Scheduling functionality and graphical trends

expected to be launched in next update.

Connectivity to

hospital IT

systems

To see the blood gas results together with

other important diagnostic information.

Conworx and CliniSys connectivity already

added.

Connectivity to further systems being added

over the next year.


Financial Summary

Continuing tight financial control keeping operating expenses below budget

Total operating expenses £2.6 million in H1 2016

Product development costs capitalised £1.1 million in H1 2016

Other capex requirements are minimal in the near term

Cash balance better than budget

Cash and short-term investments at 30 June 2016 of £6.6 million

£0.6 million research and development tax credit received


Anticipated upcoming newsflow catalysts

Sales launch of Proxima 4 in Europe expected in 2016

Further commercialisation deals for Proxima 4

Proxima 4 sales traction

Additional clinical evaluation results

Proxima 4+ development progress


Summary

Proxima is a patient connected BGE solution which provides

better patient management during a patient’s critical period while

reducing nursing work load

faster and more frequent production of results

avoids blood loss and reduces infection risks

Strong endorsement by leading European clinicians

Global potential revenue of Proxima platform > $200m p.a.

Clear commercialisation strategy underway

Proxima 3 successfully launched into Europe to gain early adopter

feedback

Proxima 4 CE mark process complete and launch expected 2016

First regional commercialisation partner appointed


Executive Directors

Dr. Wolfgang Rencken

CEO

Richard Wright

CFO

Appointed CEO in February 2014

More than 15 years’ experience in the

healthcare and medical devices industries

Proven track record in developing and

commercialising medical devices and driving

significant product revenue growth

Previous roles:

CEO of MAQUET Cardiopulmonary AG, an

international medical devices group with over

1,000 employees. Over three years as CEO, he

oversaw revenue growth of over 50% and more

than doubled EBITDA

COO and a director of Definiens AG

Siemens AG over a 15 year period

Appointed CFO in July 2015

More than 20 years of experience in financial

roles across a variety of sectors

Chartered Accountant with a degree in

mathematics from Cambridge University

Previous roles:

Finance Director of Alliance Pharma plc for 8

years, a UK based AIM-listed speciality

pharmaceutical company

Finance Director of Great Western Trains and

Parragon Publishing


Non-Executive Directors

Non-Executive Director

Stephen H. Mahle

Joined Sphere in December 2011

Current role

Non-Executive Director - EBR Systems, Inc.

Previous roles

Former Executive Vice President of Medtronic

Inc. and President of Medtronic’s largest

division, Pacing and subsequently President of

Cardiac Rhythm Disease Management - retired

after 37 years

Non-Executive Chairman

Dr David Martyr

Joined Sphere in January 2015

Current roles

CEO - Tecan AG

Non-Executive Director - ALDA (Analytical Life

Science Diagnostics Association), Washington

DC, Buechi Labortechnik AG

Previous roles

Group President Leica Microsystems and VP

& Group Executive, Danaher Corporation


Brenig Preest

Joined Sphere May 2015

Current roles

Investment director at Arthurian Life Sciences

Ltd

Non-Executive Director at Simbec Orion Ltd,

Apitope BV and CeQur AG

Previous roles

Investment Driector at Excalibur Fund

Managers Ltd and Merchant Ventures Ltd

Various other roles including at PwC and GE

Healthcare

John Gregory

Joined Sphere in December 2011

Senior Independent Director

Current role

Non-Executive Chairman – Foresight VCT

Previous roles

Non-Executive Chairman – IS Pharma,

Sinclair IS Pharma

Executive Director –Singer & Friedlander

Holdings and Managing Director – Henry

Ansbacher & Co.


Meinhard Schmidt

Joined Sphere in January 2015

Current roles

Executive Chairman – Austin Life Science

Partner AG, mt:onyx AG, Non-Executive

Chairman – Oncimmune PLC, Non-Executive

Director – CeQur AG, ValuationLab AG

Previous roles

Director of Cellnovo Ltd, Quanta FS Ltd, Non-

Executive Chairman – Promimic AB

CEO, SVP & Head Business Unit

Prosthetics/Digitalization - Institut Straumann

AG and Open Digital Dentistry AG, SVP Head

Roche Decentralized Solutions – Roche

Diagnostics



Medical Advisory Board

Professor Jean-Louis Vincent Professor Mike Grocott

Professor of Intensive Care at the Université

Libre de Bruxelles

Intensive care physician, Erasme University

Hospital, Brussels

Past President of the World Federation of

Societies of Intensive and Critical Care

Medicine from 2009-2013

Professor of Anaesthesia and Critical Care

Medicine at the University of Southampton

Consultant in Critical Care Medicine at the

University Hospital Southampton

Head of the University of Southampton’s Centre

for Human Integrative Physiology and the

critical care research area of their NIHR

Respiratory Biomedical Research Unit

Member of the Royal College of Anaesthetist’s

Council

Board member of the UK Faculty of Intensive

Care Medicine

Medical Advisory Board Medical Advisory Board

Professor Michael Quintel

Director of the Department of Anaesthesiology,

Emergency and Intensive Care Medicine at the

University of Göttingen, Germany

Member of the European Society of Intensive

Care Medicine (ESICM) group on respiratory

failure

Member of the Scientific Committee of

International ECMONet

Past President of the German Interdisciplinary

Society of Intensive Care Medicine (DIVI) and a

past council member of the German Society of

Anaesthesia and Intensive Care (DGAI).

Professor Quintel is also a member of the

German Sepsis Society and an Investigator in

the SepNet Sepsis Clinical Trial Network in

Germany and has participated in numerous

sepsis and critical care trials.

Medical Advisory Board


Proxima – Frequent Measurements Example

Hours Proxima attached to the patient

Proxima pH

Proxima pCO2

Proxima pO2

Patient undergoing cardiac

surgery.

Use of frequent

measurements enables

clinicians to react quickly

when pH and CO2 move

out of physiological range.

Oxygen readings relatively

high because patient was

on bypass, not a ventilator.


Welsh production facility

Located in St Asaph, North Wales

5,000 sq ft

Includes 2,750 sq ft clean room

Sufficient capacity for next few years

Lease acquired Feb 2016

Operational June 2016

Current lease runs to 2020


Top 15 investors

Holder / Fund Manager No. of shares % holding

Woodford Investment Management LLP 42,522,364 29.99%

The Wales Life Sciences Investment Fund LP 25,000,000 17.6%

LSP Life Sciences Fund 10,904,000 7.7%

Ortho Clinical Diagnostics 8,141,250 5.7%

Octopus Investments Nominees Limited 6,250,000 4.4%

Ruffer LLP 5,653,895 4.0%

Royal London Asset Management 5,624,185 4.0%

Parkwalk Technology Funds 3,437,779 2.4%

Herald Investment Management 2,009,262 1.4%

UBS 1,804,435 1.3%

Edwards Life Sciences AG 1,176,470 0.8%

Directors 1,080,985 0.8%

Oxford Capital Partners 971,134 0.7%

William Solomon 920,652 0.6%

Artemis Fund Managers 807,091 0.6%

Updated: 4 September 2016 Issued share capital: 141,757,872

Company Presentation - Proactiveinvestors UK€¦ · $1.4 billion market worldwide for blood gas...

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Transcript of Company Presentation - Proactiveinvestors UK€¦ · $1.4 billion market worldwide for blood gas...