Confidential - TASE · 17. Confidential. Reimbursed treatment of Vitiligo and . XTRAC™...
Transcript of Confidential - TASE · 17. Confidential. Reimbursed treatment of Vitiligo and . XTRAC™...
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Confidential
This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation ReformAct of 1995 that are subject to risks, uncertainties and other factors. All statements other than statements of historicalfact are statements that could be deemed forward-looking statements, including any statements of the plans,strategies and objectives of management for future operations; any statements regarding product development,product extensions, product integration or product marketing; any statements regarding continued compliance withgovernment regulations, changing legislation or regulatory environments; any statements of expectation or belief andany statements of assumptions underlying any of the foregoing. In addition, there are risks and uncertainties related tosuccessfully integrating the products and employees of the Company and Radiancy, as well as the ability to ensurecontinued regulatory compliance, performance and/or market growth. These risks, uncertainties and other factors,and the general risks associated with the businesses of the Company described in the reports and other documentsfiled with the SEC, could cause actual results to differ materially from those referred to, implied or expressed in theforward-looking statements. The Company cautions readers not to rely on these forward-looking statements. Allforward-looking statements are based on information currently available to the Company and are qualified in theirentirety by this cautionary statement. The Company anticipates that subsequent events and developments will causeits views to change. The information contained in this presentation speaks as of the date hereof and the Companyhas or undertakes no obligation to update or revise these forward-looking statements, whether as a result of newinformation, future events or otherwise.
Safe Harbor Statement
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Confidential
Key Investment Highlights§ End-to-end Product Solutions Serving the Consumer, Physician and Professional Aesthetics Markets
§ Strong Brand Recognition and Award Winning Products
§ Cross-Selling and Development Opportunities to Drive Future Growth
― Leveraging our highly successful Consumer sales engine and creative marketing programs to:
• Bring select PhotoMedex products (including the Neova brand) into the Consumer channel
• Increase the brand awareness and adoption of PhotoMedex’s current Physician Recurring Aesthetics products
― Leveraging direct sales force to drive Radiancy’s Professional Aesthetics products
§ Financial Profile
― FYE 2011 Pro Forma revenue of $162 million and adjusted income of $35 million - $1.87 per share
― 1Q12 Revenue $50.3 million and adjusted income of $10.7 million - $0.564 per share
§ Strong IP Position - 257 patents (filed and pending), 91 FDA 510(k)’s
§ Experienced Leadership with Expertise in Consumer, Physician and Professional Product Development and Sales
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Overview§ PhotoMedex/Radiancy Merger
― Announced: July 2011
― Closed: Dec 2011
§ NASDAQ:PHMD
§ Market Cap of $392 million
― Price (05/11/12): $17.93/shr
― Basic Shares1 O/S:21.9 million
― $20 Warrants: 1.1 million
― Options: 0.9 million
§ Pro Forma Financials
FYE 2011 1Q12
― Revenue: $162 million $50.3 million
― Adj. income: $35 million $10.7 million
1 April 27, 2012 - $40 million registered share offering completed, net proceeds approximately $38 million
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End-to-End Solutions§ Continued innovation in the Physician and Professional channels is complementary to our
demonstrated expertise in the Consumer channel
― Development of an idea, regulatory clearance, adoption, acceptance and validation in the Physician and Professional communities, miniaturization and delivery directly to the Consumer
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§ Direct sales channels covering U.S., Canada, the U.K., Argentina, Uruguay, Spain, Portugal, & Israel
§ Distribution relationships in Japan, Australia, New Zealand, Singapore, Thailand, Russia, South Africa, various South American countries and the Middle East
Global Reach§ Consumer products are sold globally
― High-end retailers: ~5,000 retail outlets in 55 countries
― Company stores/kiosks
― Home shopping channels: including HSN and QVC
― Online: including Amazon.com, Dermadoctor.com, and Drugstore.com
― Direct-to-consumers: through infomercials, commercials, catalogs and internet-based marketing initiatives
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Select RetailersUnited States/Canada United Kingdom Australia & New Zealand
South America Japan
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Solta, 0.2%Syneron,
1.0%
Tria, 12.5%
Ultragen, 2.3%
Zeno, 3.5%
Others, 13.4%
Dezac, 1.1%
Home Skinovations, 5.3%
Labowell, 1.7%
Lexington, 7.1%
Pacific BioScience (1), 23.4%
Philips, 1.7%
Significant Market Share
Market Share of Top Home-Use Aesthetics Companies (by Retail Sales – Dec 2010)
§ As of the most recent data published in August 2011 for 2010 Retail Sales, the no!no! brand commanded a higher market share of global home-use retail sales than any other brand in the market
Source: “Mini Report – Home-Use Devices: Rapidly Moving Into the Mainstream.” Medical Insight, Inc. August 2011.
26.8%
(1) Pacific BioScience sells a scrubbing brush and recently sold company to Loreal
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§ Proprietary marketing engine allows fluid deployment of resources to lever Global Home Use trends leading to significant growth during a sustained period of staggering economy
§ Multiple Consumer Channel initiatives (Infomercial, Traditional retail stores, Online, TV retail, Kiosks) have built rapid Brand Awareness across multiple geographies
§ More than 50 Direct Response Performance Metrics tracked and monitored weekly allowing management to quickly direct resource allocation to better performing Media Agencies, Call Centers, Fulfillment houses, and Manufacturers
― Metrics by market, by type, by facility include Media ROI, Conversion Rates, Up-sell, Customer Service Scorecard, CPO, AOV etc.
Consumer Sales by Geography(FYE 2011)
Consumer Sales by Channel (FYE 2011)
Consumer Marketing Engine
* Includes U.S. and Canada.
61%23%
16%
Direct-to-Consumer
Distributors
Retailers & HSN 71%29%
North America*
International
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Radiancy Professional LHE™ Products
Mistral Duet & Duet Pro Kona SpaTouch Elite FTD
Launched 2009 2008/2009 2008 2010 2005
Skin Rejuvenation P P P P
Hair Removal P P P P
Acne Clearance P P
Skin Tightening P
Psoriasis Care P
Physician Aesthetician
For Physician Offices, Medical Spas & Salons
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Reimbursed treatment of Vitiligo and Mild-to-Severe PsoriasisXTRAC™
§ The only technology available with minimal side effects
§ 89% efficacy
§ 8-12 treatments to remission vs. 30-40 treatments for the next option
§ Close to full reimbursement for psoriasis; growing reimbursement for vitiligo
§ US Market Size
― 7.5 million Psoriasis patients
― 2.5 million Vitiligo patients
― Typical reimbursement of $175 per treatment
Before After 13 treatments
After 6 months of treatment
PhotoMedexPhotoMedex6
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NEOVA™ – DNA + Copper Combination Therapy
§ Neova DNA + Copper Combination Therapy products offer powerful therapeutic intervention for UV-induced DNA damage and advanced delivery systems
DNA Repair Enzymes Copper Peptide Complex§ Continuously repair, enhances skin’s natural processes
§ Protect from UV immunosuppression
§ Restore barrier function
§ Promote collagen and elastin regeneration
§ Assist in correcting and improving cell metabolism
§ Promotes new blood vessel growth
§ Enhances the expression of growth factors
§ Stimulates the formation of new collagen, elastin, and tissue components to accelerate the repair process.
§ Promotes powerful antioxidant defense against free radicals
Real Science. Proven Results.
45% DecreaseUV Damage
97% DecreaseWrinkleScoresSize, area
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§ Omnilux™ is a three-head LED device that treats all skin types by employing the principle of photo bio-modulation
§ The system is FDA cleared for treatment of
― Periorbital wrinkles
― Acne vulgaris
― Minor muscle and joint pain
― Superficial, benign and pigmented lesions
Physicians
Spa’s & Salons
§ Non-medical application of the Omnilux technology; same patent protection
§ Combines Light Therapy with proprietary (DNA repair and Copper Peptide) topical skincare products to:
― Create even skin tone and texture
― Lighten age spots, sun spots and dark circles
― Clear and soothe problematic skin
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The Consumer Opportunity
Acne P P
Consumer Topicals P
Hair Removal P
Periorbital Wrinkles P
Facial Tightening P
§ Radiancy has been successful in bringing Professional technologies into the home-use market
― Over 2.5 million units sold worldwide
― Highly successful direct-to-consumer sales engine
― Creative marketing programs to drive brand awareness
§ Ability to bring Neova and other select PhotoMedex technologies into the Consumer channel
§ Strong technology platforms in the Physician and Professional markets will drive new products for the Consumer channel
Professional Technology Made for Consumers
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The Physician Recurring Opportunity§ Radiancy brings critical expertise in direct-to-consumer advertising and innovative
marketing programs
§ Opportunity to leverage the expanded marketing platform to drive brand awareness and adoption for XTRAC and Neova products
§ Both XTRAC and Neova represent recurring revenue streams with significant market opportunities
• Over 7.5 million Psoriasis patients and over 2.5 million Vitiligo patients in the U.S.
• Close to full reimbursement for psoriasis; growing reimbursement for vitiligo
• Comprehensive approach to medically direct skincare
• Over $30 billion in estimated global sales from anti-aging skincare products
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The Professional Opportunity
Acne P P
Atopic Dermatitis P
Hair Removal P
Joint Pain P
Leukoderma P
Periorbital Wrinkles P P
Physician Topicals P
Psoriasis P P
Skin Rejuvenation P P
Skin Tightening P
Vascular & Pigment Lesions P P
Vitiligo P
§ Greatly expanded product offering
§ Will leverage our 48 person domestic sales force selling into 3,000 physician dispense locations
― Radiancy Professional products generated revenue of $5.6 million for 2011 with a limited direct sales force
― Radiancy’s Professional products are based on LHE technology
§ Combined portfolio of proprietary technologies will drive product innovation in the channel
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Efficacy:It has to work objectively
IP Protection:Brand equity protection
Cost of Goods:Low enough to create “right” price point and good company margin
Market:Well defined, big enough and wide enough for the
product/service
Critical Success Factors
Consumer
§ Continued geographic expansion
§ Several no!no! brand extensions
§ Neova and other products into the Consumer channel
§ Technology development in Physician and Professional channels drives new products for Consumer channel
Professional§ Radiancy Professional
products in the hands of 48 person direct U.S. sales force
Physician Recurring
§ Direct-to-consumer expertise to drive XTRAC and Neova brand awareness and utilization
§ Increasing insurance reimbursement for Vitiligo
§ Clinical trial for drug / device combination - $10B market
Growth Drivers & Product Development
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Reported Financial Results2011 Revenues Increase 89%; Gross Profit increases 97%;
Non-GAAP Adjusted Income increases 95%
1Q12 Revenues exceed $50 million
$70.1
$132.1
$53.6
$105.8
$19.0
$37.0
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
2009 2010 2011
Revenue Gross Profit Normalized Earnings
(in millions, except per share data)FYE/2009 FYE/2010 FYE/2011 1Q12
Revenue $16.0 $70.1 $132.1 $50.3
Gross Profit $9.9 $53.6 $105.8 $39.0Gross Margin 61.5% 76.5% 80.1% 77.7%
Net Income $5.4 $11.6 ($0.7) $4.9Adjustments to Net Income:
D&A $0.5 $0.4 $0.6 $1.3Stock Based Comp $1.0 $0.4 $34.0 $1.8Interest - - $0.0 $0.2Major Litigation Expense - $0.3 $3.0 $1.8Merger Related Expenses/other - - $2.1 $0.5Taxes ($3.6) $6.3 ($2.0) $0.2
$3.3 $19.0 $37.0 $10.7
Non-GAAP adj. Margin 20.4% 27.1% 28.0% 21.2%
Pro Forma Basic Shares Outstanding 18,822 18,822 18,822 18,340
Adj. Non-GAAP Income Per Share 0.17$ 1.01$ 1.97$ 0.58$
Non-GAAP adj. Income
1 April 27, 2012 - $40 million registered share offering completed, net proceeds approximately $38 million
Balance Sheet as of March 31, 2012
Cash & Short-term Investments $23.5 1 Total Debt $1.6
Total Assets 157.6 Total Liabilities 38.9
Working Capital 40.0 1
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510(k) Patents
Originated In U.S. Row Pending Total
Israel 13 10 31 57 98
PA 72 33 59 39 131
CA 6 5 8 15 28
Total 91 48 98 111 257
OverviewPeople Patents
Location ISO Certification
Israel ISO:13485:2003
PA ISO:13485:2003
CA ISO:13485:2003
§ 600 FTE Outsourced
§ 8 Call Centers
§ 4 Fulfillment Centers
§ 10 Contract Manufacturers
FacilitiesFlexible Business Model
PA, 64
Israel, 40CA, 27
NY, 10
Remote, 50
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Board of DirectorsBoard Member Background
Lewis Pell
Chairman
§ 30+ years of industry experience
§ Prior: Founded Pentax Precision Instruments, American Endoscopy Inc. Versaflex Inc. Heart Technology Corp. InStent Inc., Influence Inc., Biosense Inc., Vision-Sciences, Inc.
Dr. Dolev Rafaeli
Chief Executive Officer
§ 20+ years experience managing international operations
§ Prior: USR Group, Orbotech, Motorola-Land Mobile Product Solutions division
Dennis M. McGrath
President & Chief Financial Officer
§ Prior: President and CEO of PhotoMedex, AnswerThink Consulting Group, Inc.
Dr. Yoav Ben-Dror
Vice-Chairman
§ 30+ years of experience in technology, medical devices and financial innovations
§ Prior: Cellcom, Dagon Batey-Mamguroth Le-Israel Ltd, Final Inc. InStent, Disc-O-Tech
Stephen P. Connelly
Member
§ 25+ years of industry experience in planning, development and management
§ President and Chief Operating Officer of Viasys Healthcare, Inc., Prior: Rhone Poulenc Rorer
Nahum Melumad
Member
§ Professor of Accounting and Business Law at the Columbia Business School since 1993
§ Served as a consultant and advisor to many organizations, including Bristol-Myers Squibb, General Electric, the New York Stock Exchange, and Morgan Stanley
Katsumi Oneda
Member
§ Prior: Co-founder, President, CEO of Vision-Sciences Inc.
James W. Sight
Member
§ 20+ years experience in corporate restructurings and financings
§ Prior: Feldman Mall Properties, Inc., LSB Industries, Westmoreland Coal
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Board Member BackgroundR. Rox Anderson, M.D.
Chairman
§ Director of the Wellman Center for Photomedicine at Massachusetts General Hospital, Harvard Medical School
John Y.M. Koo, M.D.
Member
§ Vice chairman and associate clinical professor in the Department of Dermatology at the University of California San Francisco Medical Center
Daniel Siegel, M.D.,M.S.
Member
§ Professor of Clinical Dermatology at the State University of New York at Downstate
Emil A. Tanghetti, M.D.
Member
§ Board certified dermatologist at the Center for Dermatology & Laser Surgery
James Spencer, M.D.
Member
§ Clinical Professor in the Department of Dermatology at Mount Sinai
David J. Friedman, M.D.
Member
§ Director of LaseOhr, and a board certified dermatologist and a laser surgeon
Scott Guenthner, M.D.
Member
§ Founded Dermatology Center of Indiana
Elma Baron, M.D.
Member
§ Associate professor in dermatology at University Hospitals and Case Western Reserve University
Klaus Fritz, M.D.
Member
§ Vice President and board member of the ESLD (European society of laser dermatology)
Richard Fitzpatrick, M.D.
Member
§ Laser surgery specialist. Studied Internal Medicine at USC; Dermatology at UCLA
Scientific Advisory Board
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Key Investment Highlights§ End-to-end Product Solutions Serving the Consumer, Physician and Professional Aesthetics Markets
§ Strong Brand Recognition and Award Winning Products
§ Cross-Selling and Development Opportunities to Drive Future Growth
― Leveraging our highly successful Consumer sales engine and creative marketing programs to:
• Bring select PhotoMedex products (including the Neova brand) into the Consumer channel
• Increase the brand awareness and adoption of PhotoMedex’s current Physician Recurring Aesthetics products
― Leveraging direct sales force to drive Radiancy’s Professional Aesthetics products
§ Financial Profile
― FYE 2011 Pro Forma revenue of $162 million and adjusted income of $35 million - $1.87 per share
― 1Q12 Revenue $50.3 million and adjusted income of $10.7 million - $0.564 per share
§ Strong IP Position - 257 patents (filed and pending), 91 FDA 510(k)’s
§ Experienced Leadership with Expertise in Consumer, Physician and Professional Product Development and Sales