Oxford Immunotec Jefferies Healthcare Conference June 3, 2014 Dr. Peter Wrighton-Smith, Chief Executive Officer Rick Altieri, Chief Financial Officer
Safe harbor statement Certain information contained in this presentation constitute forward-looking statements, including those related to future performance and revenues, financial condition, prospects, growth, strategies, expectations and objectives of management. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. The preliminary financial results and forward-looking statements contained in this presentation reflect our current expectation and are subject to risks and uncertainties. Actual results may differ materially from those projected or implied by forward-looking statements. Please review our SEC filings for more information regarding those factors that could cause actual results and events to differ materially from those indicated in the forward-looking statements. Our filings are available for free by visiting EDGAR on the SEC Web site at www.sec.gov. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation. We do not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law.
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Note regarding financial information Where noted on Slide 16, we have presented certain financial information that has been prepared in accordance with U.K. GAAP. Such information could differ materially from U.S. GAAP financial information. In addition, such information may not be comparable to that of other companies who present financials prepared in accordance with U.S. GAAP. On Slide 19, we have presented a non GAAP measure, Adjusted EBITDA. We present Adjusted EBITDA because we consider it a useful financial metric in assessing our operating performance from period to period by excluding certain items that we believe are not representative of our core. Adjusted EBITDA is not a measure of our financial performance under U.S. GAAP and should not be considered as an alternative to net loss or any other performance measure derived in accordance with U.S. GAAP.
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Company overview Commercial
Technology
Commercial stage, high growth diagnostics company □ Global outlook and presence >150 staff across 5 facilities □ Sales to >40 countries
$43.4M LTM revenues (through Q1’14) □ 2009-2013 CAGR 73% □ Revenues split approx. 45:55 between US:OUS □ >1,000 active customers
Powerful underlying technology platform for measuring T cell response □ Applicable to many immunologically controlled diseases
First product: the T-SPOT®.TB test □ Diagnostic for tuberculosis infection □ Market size estimated to be well in excess of $1BN □ Has regulatory approval in US, Europe, Japan, China and multiple other jurisdictions
Next focus: Transplant arena □ In development □ Total market opportunity estimated to be approx. $500M
Boston, MA
Memphis, TN
Oxford, UK
Oxford, UK
Tokyo, Japan
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Tuberculosis “Global Emergency”
No country has been able to eliminate TB. Constant efforts are required to control it.
Reinfection
~8.6 million people got active TB in 2012: ~1.3 million died
Reactivation
~2 billion people infected worldwide, each with a 10% chance of developing active TB
There is no effective vaccine for TB, therefore we have to diagnose and treat It is a leading cause of preventable infectious disease death
To treat it, we have to catch it early, ideally before infection turns to disease (TB screening) Source: WHO, CDC, US Institute of Medicine
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TB screening is different from diagnosing TB disease TB screening • •
•
Detect asymptomatic (latent) TB infection in high risk groups Give infected individuals prophylactic treatment to cure the infection, thereby reducing their chance of developing TB and transmitting it to others Primarily a developed world market
TB diagnosis • •
Confirm active TB disease in symptomatic patients Primarily a developing world market
Adapted from : Centers for Disease Control and Prevention. Targeted tuberculin testing and treatment of latent tuberculosis infection. MMWR 2000;49(No. RR-6)
Some at Kaiser SD Exposed to Tuberculosis
Tuberculosis deaths at Las Vegas hospital's NICU spur health alert Nov. 2013
Worker in Maternity Ward of Manhattan Hospital Tests Positive for TB Oct. 2013
St. Luke's Roosevelt maternity ward has TB scare Oct. 2013
Oct. 2013
Tuberculosis 'Time Bomb' Costs Europe Billions Annually Aug. 2013
Response to TB Outbreak in South Carolina Raises Questions July 2013
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Our 1st market - TB screening A major global market opportunity
• ~50M Latent TB Infection (LTBI) screening tests performed each year1 • >$1BN estimated market opportunity2
1 2
Diagnostics for Tuberculosis: Global Demand and Market Potential. WHO 2006 Company estimates based on current ASP and business model
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The current screening test for TB Tuberculin Skin Test (‘TST’) “This method has been in clinical use for more than 90 years. Unfortunately, its application is problematic due to the frequency of false-positive and false-negative skin reactions.” World Health Organization
Main Limitations • •
Low sensitivity, especially in immunosuppressed, newborns and elderly Poor specificity due to: – Prior BCG vaccination – Environmental mycobacteria
• • •
Requires a return visit for reading Inoculation and reading are techniquedependent and require specially-trained operators Collectively these issues result in inefficient use of healthcare resources Source: WHO. “Diagnostics for Tuberculosis” 2006
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Market replacing TST with IGRA blood tests •
Market adopting blood tests called interferon-gamma release assays (IGRAs) • •
•
IGRAs have several advantages over the TST • • •
•
Measure increased IFN-secretion by T cells previously exposed to M. tuberculosis Use purified M. tuberculosis-specific antigens, such as ESAT-6 & CFP10
Higher specificity (fewer false positives) No need for specifically trained healthcare workers No need for return visit
IGRAs now included in clinical guidelines for TB screening from multiple countries, including in the US, Europe and Japan 9
IGRA players
Product
QuantiFERON® – TB Gold In-Tube
Note: Qiagen acquired this product through the acquisition of Cellestis for $374M in 2011 QuantiFERON is a registered trademark of Qiagen NV
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Global regulatory approvals T-SPOT.TB approved in >50 countries
2004: European approval (CE mark)
2009: Taiwan approval
Step 3 2005: Canadian approval
2010: Chinese SFDA approval
2006: Korean approval
2012: Russian approval
2008: US FDA (PMA) approval
2012: Japanese approval
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Test performance well validated ~350 published studies on T-SPOT.TB test
Number of published articles on T-SPOT.TB (Cumulative)
350 300 250 200 150 100 50 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Year
Source: PUBMED. Accessed July 23rd 2013, updated Feb 24th 2014
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Reimbursement established Strong health economic case Inclusion in formal clinical lab fee schedules, e.g. • • •
US: Unique CPT code 86481, CMS $102/test Germany: €68.40 ($94.40/test1) Japan: ¥6,300 ($61.90/test1)
Strong health economic case • •
Multiple peer-reviewed publications SWITCH study with Johns Hopkins – Systematic analysis of true cost of running a TB screening program with the TST for healthcare worker screening in a large US urban hospital – TST-based screening costs $73.20 per worker – An IGRA saves money at a test cost ≤$54.83 per test and results in higher compliance rates
1.Currency conversions using Fx rates on 2nd March 2014
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Commercial infrastructure Direct in US, Europe and Japan
US
22M tests*
Sales personnel across the US
28M tests*
OUS
OUS represents sales to >40 countries □ Key focus on Europe, China & Japan
Current focus on Hospitals and Public Health segments □ Concentrated markets □ Client bill □ Other segments represent future growth opportunity
Direct presence in Europe & Japan Distribution partners used for other countries Primarily selling our kit offering
Primarily selling our service offering * Company estimates of market size by test volume
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Cumulative test volumes 2,500,000
Total
OUS
US
Japan MHLW Approval (Oct.) and reimbursement listing (Nov.)
Cumulative test volumes
2,000,000
German reimbursement established (Jan) Revised UK guidelines (Mar) Revised German guidelines (May)
1,500,000
Chinese MOH listing
Revised Japanese LTBI guidelines
1,000,000 US Approval
500,000 European Approval
First European guideline (UK)
Second European guideline (DE)
Chinese Approval
ODL opens (CLIA certified) CPT code and reimbursement established for T-SPOT CDC guidelines SWITCH study published
-
1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 Period / Year
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Revenue growth CAGR 73% $40
UK GAAP
US GAAP
Annual Revenues ($M’s)
$35
$30
$25
$20
$15
$10
$5
$0
Note: 2004 -2007 – audited revenue based on UK GAAP, converted to $ at fixed Fx rate of £1:$1.55. 2008-2010 – unaudited revenue based on US GAAP. 2011-2013 – audited revenue based on US GAAP. CAGR calculated from 2009 to 2013 inclusive
Calendar Year
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Quarterly revenues $13.0 $12.0 $11.0 $10.0 $9.0
Quarterly Revenues ($M’s)
• Seasonal profile to revenues - Q3 strong/Q4 weak in US business - Seasonality and volatility in order patterns for OUS business
$8.0
$7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0
$0.0
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Revenue guidance We estimate that our revenues for various fiscal periods not yet reported will be in the ranges set forth below: •
Q2 2014 – $11.1M-$11.6M
•
FY 2014 – $47M-$50M
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Thousands
Revenues ($M’s)
Attractive financial profile $40.0 $35.0
$38.8 Service revenue
•
–
Product revenue
$30.0
$18.9
$25.0
•
$20.7
$15.0
$5.0 $0.0
$12.3 $7.7 $3.6 $4.1
2013 $’000s Total revenue Total cost of sales Gross profit Gross margin
$11.6
$6.8
2014
3 months ended 31 Mar
–
$19.9
$5.4
–
$9.1
2012
Allows us to focus sales teams primarily on driving growth
Demonstrated profitability trajectory –
$20.0
$10.0
Recurring revenue
Gross margin of 33% in 2011, 40% in 2012, 52% 2013 Ability to take the core business to profitability Losses will widen with investment of IPO proceeds
2013
Year ended 31 Dec
$7,679 (4,367) $3,312 43.1%
$12,274 (6,012) $6,262 51.0%
$20,685 (12,424) $8,261 39.9%
$38,784 (18,600) $20,184 52.0%
R&D S&M G&A Total opex
(474) (3,013) (2,120) ($5,607)
(724) (4,565) (3,912) ($9,201)
(1,947) (11,177) (8,068) ($21,192)
(2,146) (13,270) (12,119) ($27,535)
Operating loss
($2,295)
($2,939)
($12,931)
($7,351)
Non-GAAP Adjusted EBITDA
($1,782)
($2,406)
($12,131)
($5,717)
•
Sound financial footing –
•
$67.6M in cash as of December 31, 2013
Multiple avenues to drive future growth – – – – –
US sales & marketing expansion OUS sales & marketing expansion New US segments Geographical expansion OUS Product Pipeline 19
Significant growth opportunity in TB Market is estimated to be $1BN market opportunity for Oxford Immunotec – Global regulatory clearances, scientific validation and supportive guidelines 3. Next in pipeline: transplantation arena – T cell measurement (immune status) relevant pre- and post-transplant – $500M potential market opportunity for Oxford Immunotec 4. Attractive financial profile – Rapid revenue growth – Recurring revenue – Attractive and improving gross margins – Demonstrated profitability trajectory – Multiple avenues for further growth 23