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CBMX investor presentation

  1. 1. CombiMatrix Corporation (NASDAQ:CBMX) Business Update – January 2014
  2. 2. Safe  Harbor   This  presenta,on  and  our  discussion  contains  forward-­‐looking  statements  within  the  meaning  of  the  "safe   harbor"  provisions  of  the  Private  Securi,es  Li,ga,on  Reform  Act  of  1995.    These  forward-­‐looking  statements   are  based  on  the  Company’s  current  expecta,ons,  es,mates  and  projec,ons  about  the  Company,   management’s  beliefs,  and  certain  assump,ons  made  by  the  Company,  and  events  beyond  the  Company’s   control,  all  of  which  are  subject  to  change.    Forward-­‐looking  statements  can  oKen  be  iden,fied  by  words  such   as  “an,cipates,”  “drive,”  “focus,”  “expects,”  “intends,”  “plans,”  “predicts,”  “believes,”  “seeks,”  “es,mates,”   “may,”  “will,”  “should,”  “would,”  “could,”  “likely,”  “poten,al,”  “con,nue,”  “ongoing,”  similar  expressions,   varia,ons  or  nega,ves  of  these  words.    These  forward-­‐looking  statements  are  not  guarantees  of  future  results,   and  they  are  subjected  to  risks,  uncertain,es  and  assump,ons  that  could  cause  actual  results  to  differ   materially  and  adversely  from  those  expressed  in  any  forward-­‐looking  statement.    The  risks  and  uncertain,es   referred  to  above  include,  but  are  not  limited  to,  market  acceptance  of  the  Company’s  test  offerings,  the   Company’s  ability  to  grow  and  expand  its  business,  success  in  launching  new  strategic  partnerships  and   alliances,  the  Company’s  ability  to  raise  addi,onal  capital  on  a  ,mely  basis,  or  at  all,  or  to  improve  its  opera,ng   results  in  the  near  future;  and  such  other  factors  described  in  the  Company’s  filings  with  the  Securi,es  and   Exchange  Commission.    The  forward-­‐looking  statements  in  this  presenta,on  speak  only  as  of  the  date  they  are   made.    The  Company  undertakes  no  obliga,on  to  revise  or  update  any  forward-­‐looking  statement  for  any   reason.   2
  3. 3. CombiMatrix  –  A  Healthcare  Services  Company   Strategy   Technology   Management  Team   Provide  data  and  clinical  support  to   clinicians  and  pathologists  in  the   areas  of  prenatal  gene,cs,  pediatric   developmental  disorders  and   oncology   Microarray  plaTorms,  karyotyping,   and  FISH  for  elucida,ng  gene,c   anomalies  in  the  cytogene,c  arena   Leadership  has  extensive  experience   in  diagnos,c  industry             •  Strategic  refocus  in  2012  to  prenatal   and  pediatric  segments   •  A  leader  in  microarray  tes,ng  with   over  25,000  tests  performed   •  New  commercial  and  medical   leadership  in  2012   •  Building  sales  force  and  strategic   partnerships  to  drive  volume   •  Provides  informa,on  on  specific   disease  and  clinical  manifesta,ons  for   improved  pa,ent  care   •  Headquarters  in  Irvine,  CA   •  LTM  revenue:  $5.9M  (as  of  6/31/13)   Comprehensive  Service  Solu;ons  for  Clinicians   MFM*  Clinics  •  Ob-­‐Gyn  Clinics  •  Oncologists  •  Payer  Systems  •  Reference  Labs   !  !  !  Apply  cuRng  edge  technologies  to  g   enerate  gene,c  data   Timely  transmission  of  reports  in  an    easy-­‐to-­‐read  format   Provide  best-­‐in-­‐class  post-­‐test  support  to  health  care  providers       *  MFM  stands  for  Maternal  Fetal  Medicine   3
  4. 4. Management  Team   Mark  McDonough  –  President  &  CEO   !  Served  as  VP  of  U.S.  Sales,  Customer  Service  and  Training  at  Pathwork  Diagnos,cs   !  Served  various  roles  including  District  and  Regional  Manager,  and  VP,  Sales  of  U.S.  LABS,  Inc.,  which  was  acquired  by   Laboratory  Corp.  of  America  Holdings  (NYSE:LH)  for  $155.0  million.  He  earned  the  dis,nc,on  of  being  named  District   Manager  of  the  Year  and  Regional  Manager  of  the  Year  in  consecu,ve  years  prior  to  his  promo,on  to  Vice  President.     !  Served  in  various  Management  and  Specialty  Sales  posi,ons  at  Ventana  Medical  Systems,  a  healthcare  equipment   company  that  was  acquired  by  Roche  Holding  AG  (SWX:ROG)  for  $3.4  billion;  and  EMC  Corpora,on-­‐Hopkinton,  MA.   !  B.S.  in  Finance  from  Miami  University  (Ohio)     Rick  HockeL,  M.D.  –  Chief  Medical  Officer   !  Served  as  Vice  President  and  Chief  Medical  Officer  at  Affymetrix   !  Served  as  Director  of  Genomic  Medicine  at  Eli  Lilly     !  M.D.,  University  of  Minnesota   ScoL  Burell  –  Chief  Financial  Officer   !  Has  held  various  roles  at  the  Company  including  Secretary,  Treasurer,  Vice  President  of  Finance,  and  Controller   !  Served  as  Controller  for  Network  Commerce,  Inc.     !  Served  at  Arthur  Andersen's  Audit  and  Business  Advisory  prac,ce  for  9  years.     !  B.S.  in  Accoun,ng  and  Finance  from  Central  Washington  University.   4
  5. 5. Recent  Highlights   Summary  of  Recent  News  Events   Date   Milestones   •  ACOG  recommends  Microarray  analysis  as  first-­‐line  gene,c  tes,ng  over  Karyotyping   •  Launch  of  Sequenom  /  CombiMatrix  partnership  to  market  Prenatal  microarray  tes,ng.   •  3rd  Quarter  2013  results:   2013:  Q4   −  Quarterly  growth  in  prenatal  microarray  tes4ng  volumes  and  revenues  of  140%  &  129%  for                Q3-­‐2013  over  Q3-­‐2012   −  Quarterly  revenue  of  $1.5  million,  up  16%  from  Q3-­‐2012   2013:  Q3   •  2nd  Quarter  2013  results:   −  Quarterly  growth  in  prenatal  microarray  tes4ng  volumes  and  revenues  of  156%  &  152%  for                Q2-­‐2013  over  Q2-­‐2012   −  Quarterly  revenue  of  $1.5  million,  up  15%  from  Q2-­‐2012   2013:  Q2   •  1st  Quarter  2013  results:   ₋  Quarterly  growth  in  prenatal  tes4ng  volumes    and  revenues  of  124%  &  158%  for  Q1-­‐2013  over  Q1-­‐2012     ₋  Quarterly    revenue  of  $1.6  million,  up  9%  from  Q4-­‐2012.   2013:  Q1   •  Fiscal  Year  2012  results:     −  Revenue  increased  15%  to  $5.4  million  over  FY  2011   −  Prenatal  tes4ng  revenue  increased  by  more  than  101%  vs.  FY  2011   •  Mark  McDonough  appointed  as  new  CEO   2012:  Q4   2012:  Q1  –  Q3   5 •  Two  ar,cles  published  in  the  New  England  Journal  of  Medicine  document  favorable  clinical  u,lity  from  using   microarrays  over  tradi,onal  tes,ng  in  both  the  prenatal  and  miscarriage  management  markets.   •  Mark  McDonough  joins  CombiMatrix  as  Chief  Commercial  Officer  to  lead  and  build  sales  team  to  grow  its   prenatal  and  pediatric  businesses.   •  Richard  Hockeu,  Jr.,  M.D.  joins  CombiMatrix  as  Chief  Medical  Officer,  providing  cri,cal  microarray  exper,se   and  leadership  to  the  Company’s  leadership  team.  
  6. 6. Market  Drivers   Professional Society Practice Guidelines Peer-to-Peer Influence High Profile Publications Increased  U;liza;on  by  Key  Customers   MFM  Clinics  •  Ob-­‐Gyn  Clinics  •  Partner  Labs     6      
  7. 7. Poten;al  Prenatal  Market  Opportunity   236,600  Pa;ents   Prenatal (42%): 98,200 patients Miscarriage (58%): 138,400 patients 7
  8. 8. Prenatal  Diagnos;c  Tes;ng   Customers   Medical  Benefits   Maternal  Fetal  Medicine   specialists  (MFM)   !  !  OB/GYNs   !  !  Gene,c  Counselors   !  !  Provides  high  resolu,on  diagnosis  of  cytogene,c  disorders   Allows  parents  to  make  informed  decisions  on  pregnancies   Recently  published  NICHD  study  supports  microarrays  over   karyotyping  for  prenatal  tes,ng   Compe;;ve  Advantages   !  !  !  !  !  8 A  pioneer  of  direct  microarray  analysis  of  amnio,c  fluid  and  CVS.   Rapid  7-­‐day  turn  around  ,me   All  tests  performed  in  one  loca,on   CombiCounsel™  Gene,c  Counseling  Program   Unique  counseling  and  physician  summary  reports  
  9. 9. Jim  Goldberg  –  MFM  Key  Opinion  Leader     “The  NIHCD  study  clearly  demonstrated  the  superiority  of  microarrays  over   tradi,onal  karyotyping”,  said  Jim  Goldberg,  MD  of  San  Francisco  Perinatal   Associates.    “Due  to  the  strength  of  the  data  in  that  study,  we  now  counsel   pa,ents  on  the  availability  of  microarray  tes,ng  and  offer  this  op,on  to  them   as  a  first  ,er  test.”  Dr.  Goldberg  reiterated  “ The  clinical  u,lity  of  microarrays   are  their  ability  to  detect  chromosomal  copy  number  abnormali,es  that  are   missed  by  tradi,onal  karyotyping.  The  accuracy  of  microarray,  coupled  with   the  test’s  fast  turn-­‐around-­‐,me,  helps  reduce  pa,ents’  anxiety  by  providing   comprehensive  results  as  we  move  toward  this  new  standard  of  care.”     9
  10. 10. Comprehensive  Prenatal  Tes;ng  Solu;on   Microarray  is  Complementary  to  NIPS   Chromosomal  Microarray   •  ACOG  recommends  all  posi,ve  NIPS  screens   receive  invasive  tes,ng   •  Microarray  is  proven  to  be  test  of  choice  aKer   invasive  procedure  (NIHCD  study,  Dec  2012   NEJM)     10 Non-­‐Invasive  Prenatal  Screening    (NIPS)   •  Screening  test  for  aneuploidies  of  chromosomes   13,  18,  21,  X  &  Y   •  Expect  over  375,000  NIPS  tests  to  be  run  in  2013;   run  rate  is  growing  at  480,000   •  Reflex  to  invasive  tes,ng  an,cipated  to  be  ~5%    
  11. 11. Executed  Payor  Contracts   Date   Payor  Group   Covered  Lives   2013:  Q4   • FedMed  Na4onal  Provider  Network   • America’s  Choice  Provider  Network   • Blue  Cross  and  Blue  Shield  of  Kansas  City   • Three  Rivers  Provider  Network   • 40  million   • 14  million   • 800,000   • 15  million     2013:  Q3   • Blue  Shield  of  California   • 3  million     • Mul4plan   • 57  million   2012   11
  12. 12. Sequenom  Partnership  –  Press  Release     !  We have established several key partnerships in the past year, most notably with Sequenom, Inc., where we jointly announced in August 2013, that we entered into a collaboration agreement to market and promote chromosomal microarray analysis (or “CMA”) to broaden and confirm the results of NIPS for physicians and their patients. Under this agreement, our two companies will collaboratively use our respective marketing channels and sales forces to promote the use of NIPS and CMA and work together to provide technical training to physicians and counseling, education and support services to expectant parents. Our two companies plan to provide, when clinically appropriate, a comprehensive test results report for physicians and parents. !  “The collaboration with Sequenom is a significant validation of the rapidly expanding acceptance of CMA as a standard of prenatal care as well as an endorsement of the services CombiMatrix provides,” noted CombiMatrix CEO Mark McDonough. !  “We are focused on establishing CombiMatrix as the premier specialty laboratory for chromosomal microarray analysis for prenatal testing,” McDonough said. “The fact that Sequenom has joined forces with us and selected us for this collaborative testing relationship demonstrates that we have made great strides in reaching our goal.”   12
  13. 13. Miscarriage  and  S;llbirth  Tes;ng   Customers   !  Maternal  Fetal  Medicine   specialists  (MFM)   !  OB/GYNs   !  Pathologists   !  Reproduc,ve   Endocrinologists   Medical  Benefits   !  !  !  Microarray  provides  high  resolu,on  diagnosis  of  gene,c  disorders,   which  account  for  50%  of  miscarriages  occurring  prior  to  20  weeks   gesta,on.   Avoid  costly  evalua,ons  of  mother,  if  chromosomal  e,ology   uncovered,  saving  $500  -­‐  $1,200  per  pa,ent*.   Allows  parents  to  make  informed  decisions  on  future  pregnancies   by  enabling  the  refinement  of  risk  for  addi,onal  pregnancy  loss   Compe;;ve  Advantages   !  !  !  !  !  !  Mul,ple  plaTorms,  to  enable  analysis  of  fresh  and  FFPE  POC   samples   Rapid  turn  around  ,me  (7-­‐10  days).   All  tests  performed  in  1  loca,on   High  success  rates:  95%  from  fresh  POC  and  93%  FFPE  POC   Unique  extended  counseling  and  physician  summary  reports   Ready  access  to  medical  staff,  to  answer  technical  and  clinical   inquiries.   *Foyouzi,  et  al.  Fer,l  Steril  2012;98:151-­‐155    Bernardi,  et  al.    Fer,l  Steril  2012;98:156-­‐161   13
  14. 14. Growing  Prenatal  Microarray  Services  Business   Volumes   $1,000     273%  Volume  Increase   546   500   387   300   213   200   145   168   225   271%  Revenue  Increase   $836     $836     $847     $800     461   400   #  of  Tests   541   $  in  Thousands   600   Revenues  ($  in  ‘000s)   $660     $600     $400     158   $313     $331     $370     $228     $232     $200     100   0   Q3'11   Q4'11   Q1'12   Q2'12   Q3'12   Q4'12   Q1'13   Q2'13   Q3'13   Refocused  commercial  strategy   $0     Q3'11   Q4'11   Q1'12   Q2'12   Q3'12   Q4'12   Q1'13   Q2'13   Q3'13   Refocused  commercial  strategy   Management’s  strategic  shiW  in  mid-­‐2012  to  focus  company  resources  on  its  prenatal   services  has  resulted  in  record  tes4ng  volumes  and  rapid  revenue  growth   14
  15. 15. Financial  Summary   Summary  Income  Statement  (in  thousands)   Q3  2013   Q3  2012   FY  2012   FY  2011   $1,502   $1,295   $5,350     $4,658     16.0%   4.6%   14.9%   31.1%   $847   $370   $1,675     $892     128.9%   62.3%   87.8%   117.6%   ($1,226)   ($1,420)   ($5,940)   ($6,542)   Q3  2013   Q3  2012   FY  2012   FY  2011   Cash  &  Equivalents   $4,007   $1,709   $2,372     $6,385     Total  Assets   $6,971   $4,103   $5,180     $9,448     Total  Warrants  &  Preferred  Stock   $1,090   -­‐   $4,598     -­‐   Total  Liabili,es   $2,579   $1,362   $5,905     $1,298     Stockholders’  Equity  (Deficit)   $4,392   $2,741   $(1,119)   $8,150   Total  Revenue   YOY  Growth   Prenatal  Microarray  Revenue   YOY  Growth   Cash  Used  in  Opera,ons   Summary  Balance  Sheet    (in  thousands)   15
  16. 16. Near-­‐Term  Catalysts  for  Growth  &  Profitability   Fast  Growing  Molecular  Diagnos;cs  Market   !  New  tes,ng  algorithms  driven  by  molecular  tes,ng   !  Data  published  suppor,ng  microarray  technology  as  superior  (NIHCD  study  in  NEJM)     Consolida;ng  Market  Creates  Opportuni;es  in  the  Industry   !  Disrup,on  of  exis,ng  client  rela,onships   !  Mul,ple  recent  transac,ons     Revenue  Cycle  Management   !  Internalized  Billing  /  Collec,on  solu,ons,  thus  driving  faster  revenue  capture     Three  Pronged  Commercial  Strategy  to  op;mize  Prenatal  Market  Growth   !  Direct  sales  force   !  Industry  partners-­‐  Plan  to  leverage  industry  partners  to  lower  cost  of  sales,  drive  adop,on,  and   complete  the  offering   !  Regional  and  na,onal  pathology  lab  partners-­‐  Plan  to  leverage  them  to  lower  cost  of  sales,   drive  adop,on  quickly   16
  17. 17. Plans  to  Deploy  Recent  Capital  Investment   !  Sales  force  expansion     !  Test  menu  and  new  market  expansion   !  Managed  care  team  expansion   !  Partnership  opportuni,es   !  Interna,onal  distribu,on     17
  18. 18. Summary   !  CombiMatrix  provides  valuable  molecular  diagnos,c  solu,ons  that  include   advanced  DNA-­‐based  assays,  and  comprehensive  clinical  support  and  customer   service  for  the  highest  quality  of  care  –  specializing  in  miscarriage  management   on  POCs,  prenatal,  and  pediatric  healthcare     !  Execu,ng  on  the  expanding  Prenatal  tes,ng  market  that  has  followed  the   publishing  of  the  recent  NICHD-­‐sponsored  study  endorsing  microarray  tes,ng   !  Op,mizing  and  expanding  the  Sales  organiza,on   !  Implemented  cost  control  measures  and  efficiency  improvements   !  Experienced  management  team   !  Mul,-­‐specialty  DNA-­‐based  genomic  tes,ng  services  addressing  large  and   growing  prenatal,  pediatric  and  oncology  markets     18
  19. 19.   CombiMatrix  Corpora;on  (NASDAQ:CBMX)   Mark  McDonough   CEO  &  President     CombiMatrix     300  Goddard,  Suite  100     Irvine,  CA    92618   www.combimatrix.com   19