Business Strategy - Investor Relations Management
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Transcript Business Strategy - Investor Relations Management
GenMark Diagnostics
Superior Solutions for Multiplex Molecular Testing
& Personalized Medicine
Forward-Looking Statements
This presentation contains forward-looking statements about GenMark Diagnostics, Inc. These statements involve known and unknown risks that relate to the
Company’s future events or future financial performance and the actual results could differ materially from those discussed in this presentation, including
Factors that may cause the Company's actual results to differ materially from those discussed in the presentation, include:
•failure to obtain sufficient funding for the continued development and commercialization of the Company's products;
•failure to expand the Company's menu of diagnostic tests, including the failure to obtain licenses to additional biomarkers on commercially reasonable terms;
•increases in the Company's projected expenditures on sales and marketing, research and development and administrative activities;
•less than anticipated growth in the market for diagnostic testing generally and for the tests the Company is developing or may develop in the future;
•failure of the Company's products to gain market acceptance domestically or internationally;
•inability to obtain regulatory clearance or approval for any of the Company's products;
•changes in the regulatory environment which may adversely impact the commercialization of the Company's new products and result in significant additional
capital expenditures;
•failure to enter into or maintain successful strategic alliances, which may delay the development or commercialization of the Company's products or may
result in significant additional expenditures;
•inability to attract or retain skilled personnel for the Company's product development and commercialization efforts;
•inability to protect the Company's intellectual property and operate the Company's business without infringing upon the intellectual rights of others, which
could result in litigation and significant expenditures;
•refusal of third-party payors to reimburse the Company's customers for use of diagnostic systems and tests; and
•failure to develop the Company's next-generation AD-8 System with the capabilities the Company intends to offer.
Additional risks and uncertainties relating to the Company and its business can be found in the "Risk Factors" section of GenMark's Registration Statement
on Form S-1. The forward-looking statements contained in this presentation represent the Company’s estimates and assumptions only as of the date of this
presentation and the Company undertakes no duty or obligation to update or revise publicly any forward-looking statements contained in this presentation as
a result of new information, future events or changes in the Company’s expectations.
2
Business Evolution
1995
2000
2005
2010
Life Sciences
Original Technology
invented by Jon Faiz
Kayyem, PhD
Caltech Innovation
Clinical Micro
Sensors
acquired by
Motorola
Osmetech plc
acquires Clinical
Micro Sensors
AIM Listed
1st Generation
eSensor
Platform
Developed
Consolidate all Ops in
San Diego
New Board and
Management
New Commercial Team
XT8 Platform
Developed
New menu-driven strategy
Nasdaq Listing
$100M+ invested in tech/product development and IP
3
Large Growing
Market
Multiplex Molecular Diagnostics
growing ~14% CAGR
U.S. MDx Supplier Revenues
$ Billions
4.0
$3.4B
3.5
Other* 17%
PGx 38%
Main Growth Drivers
Genomics discoveries
Conversion from “LDT” to IVD
Decentralization
3.0
Oncology
16%
Genetic Disease
7%
2.5
Blood
Screening 4%
$1.9B
2.0
Areas of high growth (est. CAGR)
Personalized medicine (38%)
Infectious disease panels (>14%)
Oncology (16%)
Mycobac,
RVP, other
Specific
Tests
1.5
$1.3B
Infectious
Disease
14%
1.0
0.5
0.0
Source: Kalorama, Frost and Sullivan, L.E.K. 2009
4
*
*
*
Estimated
Forecast
Forecast
Percentages represent segment specific CAGR
Fragmented Competition
Increasing Emphasis on Multiplex IVD MDx
Multiplex
Low-plex
Centralized
Decentralized
Companies listed are representative
Positioning reflects management’s current opinion and is subject to change
5
GenMark Target Customers
XT-8 System
Post-PCR –
1000 Labs
500 Full Service MDx
Labs
~1000 Labs with
Limited Menu
~4500 Labs
not currently
running MDx
35,000+ Physician
office and other
Laboratories
Target Customers: US only
6
GenMark: Simplified, Standardized,
Scalable
Add
Proprietary
Label
Insert cartridge
into XT-8
Load mixture
onto cartridge
Amplified
Patient Sample
Patient Results
Reported
7
The GenMark eSensor Technology
Hybridization Produces Electrochemical Signal
Electronic DNA detection
Capture
Probe
Highly specific and sensitive
No washing or purification
steps
Target DNA
Extremely stable chemistry
Signal
Probe
Heavily protected Intellectual
Property
Fully Developed and
Commercialized
Ferrocene
Label
8
GenMark’s Competitive Advantage
Superior Quality
Fast processing – 30 minutes
100% accuracy in multiple IVD products
Minimal DNA input required
Reliable
No operator interpretation
No calibration required
Virtually maintenance free
Ease of Test Development
Convenient Workflow
Minimal sample handling
Easy-to-use software interface
Easily Integrated & Scalable platform
Sources: Package Inserts, LEK Market Research, Scientific Conference Posters
9
The Business Model
Placements + Menu = Reagent Annuity
8 tests/system
90
6 tests/system
60
4 tests/system
30
2 tests/system
Revenue ($M)
120
0
0
100
200
300
400
Instruments
For illustration only.
Model assumes an average annual revenue per test per instrument of $30K.
10
500
Business Strategy
Commercial
Execution
High Value
IVD Menu
Development
11
NexGen
Sample to
Answer
Platform
Business Strategy
Commercial
Execution
High Value
IVD Menu
Development
12
NexGen
Sample to
Answer
Platform
FDA Cleared IVD Tests
Cystic Fibrosis Genotyping
For couples, expecting couples, newborn
screening/confirmation
Addresses an estimated $70M US market
ACOG/ACMG recommended Panel
Warfarin Sensitivity
2 Million new patients/year in US alone
Genetic testing recommended by FDA and PBMs
NIH clinical outcomes study underway
Thrombophilia Risk Test (TRT)
Factor V Leiden, Factor II Prothrombin & MTHFR
Thrombophilia disorders affect 1 in 1000 individuals
Only cleared test for MTHFR 1298
Source: LEK, AEI-Brookings Joint Center, Management estimates
13
In Development for FDA submission
Respiratory Viral Panel (RVP)
Approx. 20 upper respiratory viruses including H1N1
Immuno-compromised and high risk patients
200,000+ people hospitalized w/ respiratory infections annually
Plavix Metabolism (2C19)
Over 1.6 million new US prescriptions annually
Tests for gene variations on Plavix label
Indicates reduced effectiveness in 2-14% of patients
K-ras Mutation
Tests for mutations related to colorectal cancer treatments
Over 200,000 US patients with related forms of cancer
Rules out anti-EGFR therapy if mutation is present
Source: Frost and Sullivan, FDA statement, L.E.K. 2009
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Future Menu Development
Test Name
Market Opportunity
Lower Respiratory Tract Infections
Community Acquired Pneumonia
Central Nervous System Infections
Meningitis and Encephalitis
Hepatitis C Virus Genotyping
Type and Subtype
2D6 Tamoxifen Metabolism
Breast Cancer
EGFR Pathway
Colorectal and Other Cancers
Human Papillomavirus Genotyping
High Risk Typing/Cervical Cancer
15
Business Strategy
Commercial
Execution
High Value
IVD Menu
Development
16
NexGen
Sample to
Answer
Platform
Commercial Execution
Target 1,000 top molecular laboratories
Flexible placement strategies to accelerate market uptake
– System sales, leases and reagent rental agreements
Ten Field Sales/Support representatives expanding to twenty +
Recruiting and training highly productive “A” players
Marketing support with key opinion leaders, physician tools,
publications and trade shows
Establishing International distributor network
17
The Road to Operational Excellence
•
•
•
•
Best in Class Quality System
Conversion to Lean Manufacturing Operations
Upgraded ERP system
Highly Efficient Customer Service & Support Interface
Business Strategy
Commercial
Execution
High Value
IVD Menu
Development
19
NexGen
Sample to
Answer
Platform
Sample to Answer Multiplexed Molecular
IVD Testing
Next Gen Feasibility Completed
Sample to Answer Capability
Based on XT-8 system and cartridge
Integrates Extraction and PCR
Engineering/Systems Integration Partner
Selection Process Underway
Hybuffer
PCR tube
20
Exochamber
Target Customers
AD-8 System
500 Full Service MDx
Labs
Sample-To-Answer
5000+ Labs
~1000 Labs with
Limited Menu
~4500 Labs
not currently
running MDx
35,000+ Physician
office and other
Laboratories
Target Customers: US only
21
Summary Statement of Operations
unaudited
($ in thousands)
Revenue
2008
2009
Q1 2010
Q2 2010
Q3 2010
YTD 2010
$647
$998
$399
$651
$667
$1,717
-2,591
-3,334
-168
-212
-554
-934
3,394
3,182
1,058
1,204
1,109
3,371
R&D
13,424
5,634
1,454
1,724
1,669
4,847
G&A
9,633
8,289
2,167
2,002
1,592
5,761
Operating Loss
-29,041
-20,438
-4,847
-5,142
-4,924
-14,913
Net Loss
-28,363
-19,963
-4,849
-5,137
-4,917
-14,903
($26,169)
($15,444)
($4,982)
($4,127)
($4,481)
($13,590)
Gross Loss
Sales & Marketing
Operating cash use
22
Summary Balance Sheet
unaudited
September 30, 2010
($ in thousands)
Cash
$24,144
AR & Inventory
1,273
Other assets
491
PPE, Intangibles, other
2,461
Total Assets
28,369
AP & Accrued Comp
2,481
Other liabilities
1,768
Stockholders Equity
24,120
Liabilities & Equity
28,369
23
Installed Base Steadily Growing
GenMark Systems
70
65
60
52
50
40
40
32
30
20
10
0
Dec-09
March
June
Sept
Reagent Revenue Increasing
Reagent Revenue
82%
$700
$600
581
62%
164%
(ooo's)
$500
82%
$400
$300
$200
62%
420
289
231
220
178
$100
$0
Q-1 09
Q-1 10
Q-2 09
Q-2 10
Q-3 09
Q-3 10
Accelerating Annuity per System
Annualized Revenue per System
50
45
42
40
(ooo's)
35
45
36
31
30
25
20
15
10
5
2009
Q-1 2010
Q-2 2010
Q-3-2010
Investment Highlights
Expanding $2+ billion Market, High Growth Multiplex Segment
Management Team and Board with proven record
Attractive Reagent Annuity Business Model Driven by High Value,
Clinically Relevant, IVD Molecular Tests
Fully Developed, Simple to Use FDA-cleared Platform
Deep pipeline of products in development for FDA submission
Extensive IP portfolio with 94 patents approved in the US
27
GenMark Diagnostics
Superior Solutions for Multiplex Molecular Testing
& Personalized Medicine