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s c i e n c e q u a l i t y i n n o v a t i o n
May 2020
Investor PresentationMay 2020SQI
Diagnostics
SQI Diagnostics Inc. (TSXV:SQD)
s c i e n c e q u a l i t y i n n o v a t i o n
This presentation may contain certain statements including, without limitation, the words “may”, “plan”, “will”,“estimate”, “continue”, “anticipate”, “intend”, “expect”, “believe”, “in the process”, “benefits”, “leading to”,“possible”, “is subject to” and other similar expressions which may constitute “forward-looking statements”within the meaning of applicable securities laws.
Forward-looking statements reflect the Company's current expectations and assumptions, and are subject to anumber of risks and uncertainties that could cause actual results to differ materially from those anticipated.Readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements involve risks and uncertainties including, but not limited to: our ability to market and sellour products including our novel multiplexing technologies and detection platforms; our ability to maintain anytechnical or product advantages; the success of our Diagnostic Tools and Services business and our intent tobuild near-term revenue streams from this business; the successful regulatory filing and receipt of regulatoryapprovals for our later stage quantitative diagnostic kits; adverse changes in general economic conditions;international risk and currency exchange fluctuations; competitor activity; technology changes; regulatoryapprovals and the impact of healthcare reform legislation; and, SQI's ability to raise additional funds in thefuture.
Such statements, risks and uncertainties are detailed in the Company’s ongoing filings with the securitiesregulatory authorities, and are available to the public at www.sedar.com. The Company undertakes noobligation to publicly update or revise any forward-looking statements either as a result of new information,future events or otherwise, except as required by applicable securities laws.
Forward Looking Statements
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Investment Summary
Financial growth
Strong customer base
Customer base includes established diagnostics and global biopharma customers with strong qualified pipeline
Key existing customers: imaware and University Health Network
Transitioning from R&D company to commercialization
Revenues expected to grow from both kits sales and services in 2020
High product gross margins resulting in strong cash generation with sales growth
Fully approved and commercializing
SQI is continuing to commercialize our proprietary technologies and research and development to fuel growth in clinical testing
Maximizing recurring revenue through the sale of consumable testing kits used with SQI testing instruments
We provide advanced clinical diagnostics technologies to measure proteins in human blood samples
Active in innovative and fast-growing sectors of clinical diagnostics
Inflammation biomarker tests in acute & chronic disease states– COVID-19
Partnering with world-leading innovators in organ transplantation to address high unmet needs
Leading technology for direct-to-consumer at home testing
Biopharma drug development
SQI Diagnostics: Innovative Tests for Human Health
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The Power of Multiplexing
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mul·ti·plex ---- verb ---- /‘məl-tē -, pleks/-to detect multiple analytes from a single biological specimen
one wellone unit of effortmultiple results
the pain is cost, the cure is multiplexing and automated analyzers from SQI
using only 15 minutes of labor, our products and systems deliver full panels of over 7,000 quantified results
reducing labour costs by > 90%maintaining quality and performance
in every result
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Standard ELISA(semi-manual operation)
sqidliteTM
(fully automated operation)
Blood Samples Required
10 blood samples/patient 1 small blood sample/patient
Duplicates 20 if using duplicates no duplicates needed
# of Kits 20,180 ELISA Kits 1,042 SQI Kits
Days of labour 870 days of labour 34 days of labour on 2 sqidlites
Time per patient 50 minutes/patient 30 seconds/patient
10 biomarker panel100,000 patient samples
SQI products save time and reduce costs, with superior technical performance
SQI advantage over current testing technology
ELISA - Enzyme-Linked Immunosorbent Assay is the commonly used form of blood testing
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SQI Diagnostics: Revenues
Products: drive recurring revenue by selling consumable testing kits used with SQI proprietary testing instruments
Services: state-of-the-art customized testing solutions for biological therapeutic development and clinical innovators
Proprietary Instruments Testing Kits Services
• Custom diagnostics• Custom biopharma• FDA-cleared tests• Drive Recurring Revenue• Portable across instruments
• Rapid kit development• Pharma testing services• CLIA testing services• Co-development for specific
indicators with industry thought leaders
• sqidliteTM
• Benchtop solution for mid-size facility
• sqid-XTM
• Semi-automated solution
• sqid-Xpress• Point of care, <20
min
Product Description Samples per year
For mid-volume labs, benchtop platform processes one plate per run, after only 20 minutes setup.
FULLY AUTOMATED
75k-130k SAMPLES/YR
Semi-automated benchtop for low-volume testing or drug discovery research
semi AUTOMATED
100k SAMPLES / YR
20-minute test at the point of care –where you need the results
POINT of CARE
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Instrumentation scaled to lab needs
sqidliteTM
sqid-XTM
The SQI product portfolio automates the clinical testing process to increase efficiencies up to 40%
sqid-Xpress
SQI Existing Customers and Pipeline
SQI shift in focus from research and development to commercialization underway with a strong qualified pipeline
Consistent growth in test kit sales
Strong existing customer base
Partnerships with established pharma and diagnostic testing facilities
Current Customers Pipeline
Extend pipeline products to COVID-19
Development of new at-home testing kits with existing and new partners
Partnerships with industry thought leaders to support further research and improvement in diagnostic testing
Large pharmaceutical companies that want to streamline testing for new drug development
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Strategy Overview
SQI offers unique expertise in commercializing research and clinical innovation
1. Toronto’s University Health Network partnership
Developed a new point-of-care diagnostic device and multiplex testing kit to assess the suitability of donor lungs for transplantation resulting in immediate revenues of $1.1 million and high potential for recurring revenue upon completion
Translate point of care and multiplexing test kit products to assess severity of respiratory distress, e.g., COVID-19 with CIHR Rapid Research funding
2. Organic growth: Diagnostics and Biopharma
Expand organ transplant testing to donor organ screening; expand from lung to kidney and liver
Focus on key target customers to deliver companion diagnostics solutions for therapeutic targets for COVID-19 (cytokine suppressors)
3. CLIA testing lab
New direct-to-consumer product offering at US-based CLIA testing lab (imaware)
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Global leader
– 701 total organ transplants (2019)
– 212 total lungs (2019) - largest in the world, operative mortality 1.4%
– Named top 10 best hospitals worldwide (#4, Newsweek 2020)
Lung transplantation innovation trailblazers, including world first:
– 1st successful single (1983) and double (1986) clinical lung transplant
– Triple organ (lung, liver & pancreas) transplant (2015)
Partnership with University Health Network (Toronto)
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Organ Health – Lung Transplants
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Average recipient wait time is 6 months, could be years
Of the available 15,000 donor lungs in North America, only 3,000 lungs are transplanted (20%)
Lung quality measurements are subjective
Many rejected lungs are otherwise healthy
SQI’s TORdx test provides quantitative measurement of lung quality, increasing lungs available for transplant
FDA, Health Canada in progress
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MARKET SIZE: ORGAN HEALTH PRODUCTS
Large Transplant
Center USACanada + 10% US Market
Share BLUE Sky
# of Donor Organs
TORdx Lung Panel Tests >250 5,500 800 $3,200,000
Lung POC Tests >1,000 18,000 3,000 $1,200,000
Kidney Panel Tests 1,400 19,800 3,400 $27,000,000
Liver Panel Tests 700 9,900 1,700 $13,500,000
Heart Panel Tests 300 5,500 850 $6,800,000 Patient number based on information from KOLs based on current number of transplants plus an estimate of near-term market expansion caused by TORdx & TLS acceptance criteria for viable organs. Estimates are based on having 1 Large Center and 10% of US Market Share $52,000,000
Large Key Opinion
Leader Center USA 10% US Market ShareBLUE Sky
Lung Cancer Biopsy (BAL) 500 330,000 33,500 $14,000,000
World-wide it is estimated that Olympus sells ~400,000 BAL Needles per year and each needle is used for an average of 2 biopsied samples.
RALI-DX Total # Patients in Market BLUE Sky
Canada USA 10% Market Share @$100 per test
RALI-DX (non-COVID-19) 494,000 5,434,000 590,000 $59,000,000
RALI-DX (COVID-19) 400,000 4,400,000 480,000 $48,000,000
Annual revenue at 10% of the market combined in this focused pipeline of >$
COVID-19 Testing: Respiratory Severity
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3 tests for COVID-19:
• Do you have COVID-19? (nucleic acid)
• How severe will it be? (protein)
• Have you had COVID-19? (antibody)
COVID-19 severity test:
• What is patient prognosis?
• What is patient trajectory?
FDA is highly motivated to make tests available for market:
• Rapid regulatory review following Emergency Use Authorization (EUA)
COVID-19 Prognosis: inflammatory biomarkers
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Inflammation biomarkers indicate patient prognosis and disease progression in COVID-19 patients
CIHR awarded UHN$0.95M rapid research award Mar 2020; UHN awarded some $ to SQI
Apply lung transplant diagnostic test technology to prognosis of COVID-19 patients undergoing respiratory distress
– Mild symptoms → go home and monitor
– Severe symptoms → hospitalize and treat
Rapid assessment (< 1 hour)
Clinical studies initiated April 2020; expected completion June 2020; n=300 subjects
FDA, Health Canada regulatory discussions
SQI: “RALI” inflammatory test panel for COVID-19 prognosis
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SQI inflammatory products:• RALI-Dx: multiplexed cytokine panel• RALI-fast: point of care test
“RALI” = Rapid Acute Lung Injury
Regeneron, Roche-Genentech, Sanofi, Gilead, etc. are assessing IL-6 inhibitor drugs to treat COVID-19
Measurement of IL-6 levels are needed for monitoring and to assess efficacy of treatment
Unique opportunity for SQI Diagnostics cytokine testing technology, as SQI has previously worked with key pharma clients
Diagnostics and COVID-19 therapy
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Strategy Overview – Organic Growth
SQI has consistent growth in sales of diagnostic testing kits and pharmaceutical development testing kits
Focus on transplant portfolio and expand beyond Lung to include Kidney, Liver and associated point of care products
Focus on Lung health and apply “RALI” product technology to broader ER and ICU assessment of Acute Lung Injury are respiratory distress assessment
Continue to establish new partnerships to develop new instruments and the accompanying kits that drive recurring revenue
SQI solutions provide significant opportunities for recurring revenue through the sale of diagnostic and new drug development testing kits
SQI pipeline includes global pharmaceutical companies and further penetration into the highly fragmented diagnostic testing center industry
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Strategy Overview – CLIA Testing Facility
SQI’s CLIA testing facility offers full service diagnostic testing to customers
Installed additional instrument in Buffalo for COVID-19 testing
Our CLIA facility consolidates nation-wide testing volume from all customers creating significant operating efficiencies
NYSDOH validated Direct To Consumer products at CLIA-lab in Buffalo NY for:
Celiac Disease
Rheumatoid Arthritis
Buffalo, NY
CLIA Testing Facility Location
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Future Milestones and Execution
SQI is well positioned to supplement a commercialization aspect to their strong research expertise
TORdx-LUNG
Validation at UHN
H2 2019
Completion of development phase of UHN partnership
FDA/Health Canada filings for TORdx-LUNG
H1 2020RALI-DX product proof
of concept
CLIA lab running > 3 DTC products
July 2020
TORdx-Lung FDA Clearance and widespread Marketing
DTC Cardiac Panel Launch in CLIA Lab
3 sites running TORDx-Lung
H2 2020TORdx portfolio:
Lung, Liver, Kidney
Lung POC
2023
NotesRALI-DX: Rapid Acute Lung Injury Diagnostic test targeted for COVID-19, and more broadly for early diagnosis of Acute Respiratory Distress Syndrome
Eric Brouwer, PhDCEO and Chief Scientific Officer
Russ PeloquinVP Commercial Operations
Expertise in implementing market-leading technologies in FDA and ISO-regulated environments.
Previous Experience:
Experience with biotechnology companies, leading high-level contract negotiations in the clinical diagnostics arena.
Previous Experience:
Morlan ReddockVP FinanceOver 20 years of financial and strategic management experience and holds MBA, CPA and CFA designations.
Previous Experience:
Peter Lea, PhDFounderInvented and patented the multiplexing microarray technology at the core of SQI Diagnostics.
Previous Experience:
SQI leadership team has vast experience ranging from corporate strategy and development to scientific expertise in biotechnology
Executive Team
45 Publications40 Patents
Clive J. BeddoeChairAffiliations:
Gerald R. ConnorBoard MemberAffiliations:
Wilmot L. MatthewsBoard MemberAffiliations:
Claude RicksBoard MemberAffiliations:
Eric ZwislerBoard MemberAffiliations:
Andrew MorrisBoard MemberAffiliations:
Board of Directors
SQI Board of Directors own ~77% of the company and are aligned to maximize shareholder value
Company Snapshot
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Ticker: TSX-V:SQD
Traded on: OTCQ :SQIDF
Shares Outstanding: 277 M
Market Cap: ~$28 M (April 2020)
Number of Warrants
Exercise Price
Maturity
5,330 $0.64 July 16, 2020
7,631 $0.52 December 15 and 21, 2020
22,970 $0.21 March 10, 2022
463 $0.20 December 20, 2020
54,527 $0.20 December 20, 2022 – August 24, 2023
13,429 $0.17 July 12, 2024
32,300 $0.13 September 25, 2024 – October 22, 2024
44,444 $0.12 February 14, 2025 – March 5, 2025
28,200 $0.11 March 1 and 8, 2024
4,117 $0.09 January 30, 2025
623 $0.085 February 20, 2025
214,034
Number of Options Range of Exercise Prices
10,061 $ 0.07 - 0.25
1,802 $ 0.26 – 0.39
205 $ 0.40 – 0.60
12,068
SQI Diagnostics Inc. (TSXV:SQD) – Warrant Information ( 000’s)
SQI Diagnostics Inc. (TSXV:SQD) – Option Information (000’s)
SQI Diagnostics Inc. (TSXV:SQD) – Market Information SQI Diagnostics Inc. (TSXV:SQD) – Capital Structure
Shareholders # of shares %
Insiders 212,606,908 76.81%
Clive Beddoe/Hanover 70,176,207 25.35%
Wilmot Matthews/Marjad 70,271,165 25.39%
Gerald Connor/Cumberland 69,391,738 25.07%
Other Board Members 2,747,798 0.99%
Management 20,000 0.01%
Public Float 64,178,627 23.19%
Total Shares Outstanding 276,785,535 100%
Options 12,067,709
Warrant 214,034,042
Concluding Remarks:
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Timing is everything !!!
SQI is well positioned to capitalize on existing opportunities
Low capex requirements
Potential use of funds raised:
Working capital
Clinical and Regulatory
Scaling up operations
Inventory (kits, instruments)
CONTACT INFORMATION:
SQI DIAGNOSTICS INC.
36 METEOR DRIVE
TORONTO, CANADA M9W 1A4
IR@SQIDIAGNOSTICS.COM / MREDDOCK@SQIDIAGNOSTICS.COM
416-674-9500 /X277
Investor PresentationMay 2020SQI
Diagnostics
SQI Diagnostics Inc. (TSXV:SQD)
s c i e n c e q u a l i t y i n n o v a t i o n
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