Investor presentation
MDGS.TASE
November 2014
Forward looking statements
This presentation contains "Forward Looking Statements" as defined in the Israeli Securities
Law, 1968, which are based upon the current estimates, assumptions and expectations of
the company's management and its knowledge of the relevant market. Forward Looking
Statements involve uncertainties which may cause future results of the company's activity
to differ significantly from the content and implications of such statements. Among the
factors which may cause the actual results to differ from the Forward Looking Statements
are changes in the target market and the introduction of competitive products, regulatory,
legislative and policy changes, and clinical results. Forward Looking Statements are
pertinent only as of the date on which they are made, and the company undertakes no
obligation to update or revise any Forward Looking Statements, whether as a result of new
information, future developments or otherwise.
Neither the company, nor its shareholders, officers and employees, shall be liable for any
action and the results of any action taken by any person based on the information
contained herein, including without limitation the purchase or sale of company securities.
Nothing in this presentation should be deemed to be medical or other advice of any kind.
3
Company highlights
Lead product – rebranded MUSE™ System for minimally invasive GERD
surgery – FDA cleared and CE marked, initial revenue
Large market opportunity, high gross margin, single-use device
Compelling technology; world’s smallest video camera combined with
flexible, endosurgical tools
78 issued patents
Separate camera division developed and now in operation
4
What we do
See & treat
Transoral endosurgical platform to deliver
minimally invasive solutions for common
surgical procedures:
1.
2.
3.
4.
5.
6.
Vision + light + tools
Ultrasound guided
Endoscope mounted surgical stapler
Single operator
Disposable surgical device
Cost efficient
5
Leadership
Dr Nissim
Darvish
Chairman
Chris
Rowland
CEO
Tom
Dempsey
US
VP/GM
Milena Ridl
EU VP/GM
Menashe
Sonnenschein
Israel VP
Senior Managing Director, OrbiMed Israel. MD, PhD. Previously
partner with Pitango, Founder and CEO of Impulse Dynamics $250m realization event. Led investment through several exits
including SuperDimension ($300m to Covidien)
25 years of medical device senior leadership experience,
including 17 years in senior leadership roles at Boston Scientific,
President Americas at Given Imaging, recently acquired by
Covidien
for $860m,and
CEO of
IntraPace
Insert pictures
short
bio
Innovative leader with 20 years of experience in start up through
established medical device companies, including 13 years with
Boston Scientific in senior leadership roles, VP Commercialization
at EGS, and CEO of Medical Diagnostic Technologies which was
acquired by Imagistx Canada
20 years experience in healthcare, fluent in 5 languages. Vice
President Sales and Marketing Simpiria Spine, Vice President
Europe, Middle East Africa MiMedx Group, Director
Medtronic/Kyphon
Founding member and officer of Medigus, 20 years
R&D leadership in starts-ups, directly responsible for the
development of the MUSE platform. Menashe has his M. Sc in
electrical engineering and electronics from Ben Gurion
University of the Negev.
6
GERD (gastric reflux) – the condition
Stomach acid
rising through
lax sphincter
good
Resulting in
pain and
eventually
esophageal
cancer
Current
therapy: drugs
and surgery
bad
7
GERD – significant unmet need
24m adults suffer from GERD
in the US
14.5m have GERD symptoms 2 x / week
8.6m with severe GERD go untreated
7x increased probability of esophageal
cancer from daily GERD
40% of PPI (proton pump inhibitor such as Nexium /
users - not satisfied- woken up by
GERD, daily life impact. 72% of them would try
new MIS therapy
Omeprazole)
Anti PPI trend, FDA Warning; Chronic PPI
users are 2.2x more likely to suffer hip fractures
(4.5x more likely after 7 years)
Aliment Pharmacol Ther. 2010 Nov;32(10):1222-7
http://www.ncbi.nlm.nih.gov/pubmed/20955441
8
Current standard surgical procedure –
laparoscopic Nissen fundoplication
Unpopular (2% of patients) – invasive (laparoscopic) procedure
Early complications: bleeding, perforation, conversion to open
surgery, death. Late complications: dysphagia, bloating/pain
Source: Gut. 2012; 61(4): 501-506
9
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The Medigus Solution – The intersection of ‘See & Treat’
Flexible endoscope
Can fold on itself
to complete
endoluminal
stapling
Vision + surgical capability
Small, high resolution
video camera
Stapler using
standard surgical staples
Ultrasound
MUSE™ System for GERD; FDA cleared, CE marked, on market OUS
11
The opportunity – convert PPI users and lap
patients to minimally invasive surgery
New
Surgical Threshold
Current
Surgical Threshold
Chronic GERD (24M patients)
Continued PPI Therapy
Therapy Gap
Fundoplication
Market
Disease Progression
Continued Heartburn
Lifelong PPI Use
Regurgitation
Severity of Symptoms and Dissatisfaction
Low
Source: US market for Gastrointestinal endoscopic devices, iData, 2012; Gut. 2012; 61(4): 501-506
High
12
GERD – US Market Map (millions of patients)
Potentially
relevant
patients
8.6
24
8.9
3.8
severe
patients
untreated
treated
controlled
treated not
controlled
Source: US market for Gastrointestinal endoscopic devices, iData, 2012; Gut. 2012; 61(4): 501-506
13
How MUSE™ works – trans-oral fundoplication
The MUSE™ device is
placed through the
esophagus and into
the stomach
The MUSE™ device is then retroflexed below the Z line and
the stapling position is located using direct visualization
and ultrasound.
The MUSE™ ratchet
is engaged and
positioned to
correct stapling
position.
Ultrasound and
concave/convex
surfaces provide
alignment
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Medigus MUSE™ System – clinical results similar
to current surgical standard – but less invasive
Lap Nissen
MUSE™
15
Medigus MUSE™ – Pilot Study of 13 patients
5 year results (2007-2012) – comparison to current standard
90% success
GERD-HRQL score dropped
≥ 50% from baseline (10/11 pxts)
73%
Stopped or
reduced PPI usage
≥ 50% (8/11 pxts)
The pilot study was conducted in 2007 in India with 13 patients – 11/13 available for 5 year follow up
16
MUSE™ System multi center trial overview (2008-2011)
centers, PIs
Amol Bapaye, MD
Deenanath Mangeshkar Hospital
Medical Research Center
Pune, India
Prof. Luigi Bonavina
Policlinico San Donato
Milan, Italy
Santiago Horgan, MD
UCSD Medical Center
San Diego, CA
patients
Prof.Dr.Ralf Kiesslich
Med. Klinik Universitatsmedizin
Mainz, Germany
72 patients enrolled, 69 treated, 66
followed (ITT) for 6 months
Glen Lehman, MD
Indiana University Hospital
Indianapolis, IN
Inclusion criteria: GERD diagnosed at
least 2 years, on PPI at least 6 months,
GERD HRQL off PPI >20
Prof. Johannes Zacherl
Medical University of Vienna
Vienna, Austria
Exclusion criteria: hernia >3cm
procedure
endpoints
Partial fundoplication. Place 2 or 3 groups of B
shaped staples 1.5 cm above the GE junction,
connecting the stomach fundus to the
esophagus
PRIMARY: >50% improvement in GERD related HRQL (Health Related Quality of
Life) score off PPI, vs baseline
Under general anesthesia, using over tube
and either 2 or 3 staples
SECONDARY:
• Reduction of acid exposure off PPI at 6 months, vs baseline
• Proportion of patients reducing daily PPI use by >50%
• Anatomical change – satisfactory flap valve (endoscopy, 6 months);
percentage of patients without hernia after 6 months
• Correlation of primary with secondary effectiveness variables
69 patients treated, 69 in safety analysis, 66 in efficacy analysis at 6 months (3 excluded, treated, but excluded – did not meet IC
17
MUSE™ multi center trial outcomes
85% of patients stopped or significantly reduced PPI usage
65% were off PPI completely
20% reduced dosage by ≥50%
73% reduced GERD HRQL (off PPI) score by ≥50%
Acid Exposure
Mean percentage of time pH <4.0 significantly reduced
from 10.9 to 7.3 between baseline and 6 months (p<.001)
Anatomical Change
The proportion of patients with Hill Grade score >2 was
0.661 before and 0.062 after the procedure (p<.0001)
66 patients at 6 months
18
Competitive landscape
MUSE™
Esophyx
Linx
Stretta
yes
yes
yes
yes
yes
yes
yes
yes
no
no
no
no
no
yes
no
yes
yes
yes
yes
yes
yes
no
no
no
no
yes
no
no
no
no
no
no
no
no
no
yes
1
GI/Surgeon
2
GI/Surgeon
1
Surgeon
1
GI/Surgeon
clinical
True anterior fundoplication (identical to current standard)
Minimally invasive
Minimal risk of migration or damage to adjacent organs
Minimal/no potential of erosion
technology
Direct vision as part of the endoscope, no other devices needed
Ultrasound to guide tissue thickness and stapling accuracy
Use of standard surgical staples
Single use surgical endoscope
MRI safety
operator
Number of operators
Medical specialty
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MUSE™ vs competition
Summary – why MUSE™?
Lap
Nissen
reward
MUSE™
Torax/
EGS/
Stretta
drugs
Clinical value
No Incision, no scar, less invasive
True surgical anterior fundoplication
Clinical equivalence to current standard
Durable results using standard surgical staples
Economic benefit
Single operator, surgical endoscope
Out patient procedure
Potential to eliminate lifelong medication
Efficient and cost effective
CE marked, FDA 510(k) cleared
risk
20
IP summary – key issued patents
Endoscopic device
having ultrasonic
positioning
Transgastric method for
carrying out a partial
fundoplication
Autoclavable imager
assembly
Stapling device
USA, Australia, Israel,
Germany, UK, France, South
Korea
USA, South Africa, Australia,
Israel, Mexico
USA
USA, Australia, Israel, Canada,
South Korea
Articulation section
Endoscopic device
comprising linear
staplers and a video
camera on its distal end
Method of performing
surgical procedures on
patients suffering from
hiatal hernia
USA
USA
Stapler for endoscopes
Multiple view
endoscopes
Multiple view
endoscopes
USA, Europe, Australia, New
Zealand, S.Africa, Mexico,
Israel, Japan
USA, Europe, Australia, New
Zealand, S.Africa, Mexico,
Israel, Japan, Canada
USA
Fundoplication
apparatus and method
USA, Europe, Australia, New
Zealand, S.Africa, Mexico,
Israel, Japan, Canada
USA, Europe, Australia, New
Zealand, S.Africa, Mexico,
Israel, Japan, Canada
Endoscopic stapler
having camera
USA
21
Commercialization strategy –
inch wide mile deep
Clear regulatory pathway
•
•
US 510(k) in place (MUSE March 2014)
EU CE mark in place (MUSE March 2014)
Develop a scalable commercial model
•
•
•
•
•
Centers of Excellence being trained– 10 in the US and 10 in EU in 2014
Locations identified, KOL’s recruiting patients
Reproducible training program implemented (US & EU)
Training proctors for case support
Initial commercial procedures completed
Achieve clinical and publication milestones
•
•
•
•
5 abstracts accepted YTD and 1 peer review accepted
3 year follow up for MUSE presented at DDW 2014
Registry protocol completed, Primary Investigator selected
Advisory board and Societies engaged
Increase presence in target markets
•
•
US team is prioritizing an additional 30 MD’s in 15 Centers of Excellence
EU team is prioritizing an additional 15 MD’s in 7Centers of Excellence
MUSE revenues
•
•
Increase commercial sales in key markets concurrently with infrastructure and promotion efforts
Expand distribution channels in other markets
22
Overview of camera business
• Smallest video camera in the
world
• Proprietary video technology
NASA ATV-5 – VIPIR robot
23
Goals of camera business
Yield significant partnerships
• Medical applications
• Industrial applications
Incubate next gen Medigus device using miniaturized camera
• Natural orifice surgery
• Digestive disease focus
24
REG
Milestones
US 510k
EU CE Mark
First MUSE
Procedures
COMMERCIALIZATION
MUSE ReBranding
2013
Global MUSE Registry
First MUSE
Orders
US
DDW/SAGES
Global Training Program Established
EU
UEGW/EAES
US
DDW/SAGES
EU
UEGW/EAES
US & EU Team Build Out
US/EU Clinical and Commercial Activity
DE NUB
Submission
2014
US Private Payer
Program
2015
AMA/CPT
Application
25
Summary
Unique single use, surgical platform will re-define natural orifice
surgery (NOS)
Large market opportunity, high gross margin, differentiated,
procedure specific device
Compelling clinical data, less trauma to patient, no incision,
cost effective
Industry-leading investors; OrbiMed and J&J
Scoutcam established with separate division, non dilutive
revenue already recognized
26
Financial summary
•
Cash position as of June 30th, 2014:
•
Number of employees – 42
•
Capital structure (after recent round):
249.9 million shares outstanding
352.7 million outstanding – fully diluted shares
•
Shareholders holdings as of October 31st:
Orbimed
Migdal
Senvest
Founders
Dexxon
Armistice
Sabby
Capital Point
Public
Total
19.4%
12.3%
11.7%
9.7%
7.6%
6.1%
4.99%
1.5%
26.71%
100.0%
~$7.2 mm
Thank you