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·∙ 2
Forward Looking Statements
This presenta.on includes “forward-‐looking statements” within the meaning of the Private Securi.es
Li.ga.on Reform Act of 1995. These statements include but are not limited to our plans, objec.ves,
expecta.ons and inten.ons and other statements that contain words such as “expects,”
“contemplates,” “an.cipates,” “plans,” “intends,” “believes” and varia.ons of such words or similar
expressions that predict or indicate future events or trends, or that do not relate to historical maJers.
These statements are based on our current beliefs or expecta.ons and are inherently subject to
significant uncertain.es and changes in circumstances, many of which are beyond our control. There
can be no assurance that our beliefs or expecta.ons will be achieved. Actual results may differ
materially from our beliefs or expecta.ons due to economic, business, compe..ve, market, regulatory,
and other factors. A full discussion of our opera.ons and financial condi.ons, including risk factors that
may affect our business and future prospects, is contained in our most recent regulatory filings. For a
complete account of our official corporate documents, you are encouraged to review documents filed
with the securi.es regulators in the U.S. and Canada.
·∙ 3
Investment Highlights
• 1st point-‐of-‐care diagnos.c plaTorm for tears
• Ini.al test for Dry Eye Disease, focused on the most common age related eye disease
• Technology objec.vely diagnoses Dry Eye Disease
• Safe, easy-‐to-‐use plaTorm requiring only 50 nL of tear film
• FDA 510(k) approval and recent CLIA waiver issued on January 24, 2012 opens the door to all U.S. optometry and ophthalmology offices (~50,000 doctors)
• Recurring revenue model with 3-‐year contracts for minimum purchases
• Large IP porTolio built around nanofluidic systems creates barriers to entry
• Na.onal Medicare code 83861 Reimbursement $45.42/pa.ent ($22.71/ eye); growing base of reimbursement from private insurance companies
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Breakthrough Technology
• Accuracy – < 2.33% coefficient of varia.on (“CV”) @ 50 nanoliters – Glucose ≥ 5.0% CV @ 5 microliters – Cholesterol > 4.0% CV @ 20 microliters
• Safe, simple collec.on – No reports of corneal or conjunc.val trauma in 468 eyes
TearLab™ FDA 510(k) submission
• 2009 Winner of the Medical Design Excellence Awards (“MDEA”) award for In Vitro Diagnos.cs
20 µL 5 µL 50 nL
Sources: Kimberly MM et. al., Clinica Chimica Acta 364 (2006); Volles DF et. al. Pharmacotherapy 18:1 (1998)
·∙ 6
Intellectual Property
• Large IP porTolio on tear collec.on – 9 patents issued: 7,017,394; 7,051,569; 7,111,502; 7,129,717; 7,204,122;
7,574,902; 7,810,380; 7,905,134; 7,987,702; 8,020,433 – Several pending (around design, manufacturing and other tests)
• Electrochemical plaTorm that has broken the nanoliter volume barrier – Enables standard tes.ng methodologies on this plaTorm for many different
diagnos.c tests for a variety of markers – Patents pending on other analytes (proteins, genes) and methods to
measure
• Core claims around lab-‐on-‐a-‐chip in the U.S. and selected key countries
·∙ 7
• DED is a disease of the tears and ocular surface resul.ng in fluctua.ng vision, tear film instability and increased osmolarity that can cause serious damage to the ocular surface
• Tears are a sophis.cated 3-‐layer film, each with a specific func.on – The front layer is oil and it keeps tears from
evapora.ng; – Middle (aqueous layer) gives it the thickness
and uniformity to ensure a clear image; and – The back layer is a polish that fills in any
irregulari.es in the corneal surface
Introducing the First Test: Dry Eye Disease
·∙ 8
Large PaDent PopulaDon (and Growing)
Dry Eye Syndrome To Become Most Common Eye Disease in Baby Boomers
Dry eye expert Dr. David Kisling reports that Dry Eye Syndrome will be the most prevalent eye disorder the Baby Boomer genera;on faces in the future. Shi?ing demographics in an aging popula;on will result in a ;dal wave of dry eye problems by 2030.*
• Survey by Harris Interac.ve on behalf of Allergan, Inc., found that nearly
half of all U.S. adults (48%) experience one or more dry eye symptom(s) regularly
• TearLab Osmolarity Prevalence Study found the overall incidence of
hyperosmolarity amongst the study popula.on was 43.4%
* PRWeb (June 2, 2011)
·∙ 9
SIGNS + SYMPTOMS do not correlate with DISEASE
• Not all pa.ents who present with symptoms of ocular irrita.on have Dry Eye Disease – According to a 2012 study* only 47.7% have DED – Infec.ons, allergies, etc. present with similar symptoms
• Conversely, pa.ents may be asymptoma.c due to diminished sensory func.on, but have elevated osmolarity that causes irreversible damage – According to study* 40.2% have mild or moderate DED
Tear Osmolarity is objecDve and sensiDve enough to be used to both diagnose and manage DED
Clinical Importance of TearLab
*Study presented at ASCRS 2012 - GLOBE NEWSWIRE, April 23, 2012
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Current Diagnosis Paradigm
• The main test for dry eye is the Schirmer test
– Requires repeated examina.ons at up to five minutes per examina.on
• Unfortunately, this test misses detecDng many paDents with dry eyes
• Other tests should also be done before ruling out a diagnosis of dry eyes
(hJp://www.uic.edu/com/eye/LearningAboutVision/EyeFacts/DryEyes.shtml) Schirmer Test
1. Report of the Diagnosis and Classification Subcommittee of the Dry Eye Workshop (DEWS).” The Ocular Surface 5(2): 75-92, 2007
2. Tomlinson A., McCann L., Pearce E.I. Comparison of OcuSense and Clifton Nanolitre Osmometers. IOVS ARVO Abstract, 2009
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Becoming Standard of Care
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TearLab in the PracDce
General PracDce – Properly diagnose pa.ents with ocular irrita.ons and measure the effec.veness of DED therapies
Laser Vision CorrecDon – Iden.fy pa.ents with DED and guide pre-‐ and post-‐surgical treatment to significantly improve refrac.ve outcomes and reduce complaints of dry eye symptoms
Cataract Surgery and Premium IOLs – Improve refrac.ve outcomes and pa.ent sa.sfac.on while appropriately managing expecta.ons following surgery
Glaucoma Management – Improve compliance and manage the impact of chronic preserva.ves used in glaucoma pa.ents which is known to cause DED
·∙ 14
TearLab® Osmolarity Market
Size and Economics
Card Revenue Economics based only on U.S. Doctor UDlizaDon
There are approximately 20,000 ophthalmologists + 30,000 optometrists in the U.S. Market PotenDal based on U.S. (only) Doctor Access Assuming 50,000 Doctors, seeing an average of 6 dry eye paDents per day tesDng both eyes, assuming a $10 card cost and working 250 days per year.
$1.5 Billion market based only on rouDne examinaDons
AddiDonal opportuniDes for TearLab in … • Refrac.ve surgery pre-‐ and post-‐opera.ve tes.ng • Cataract Implantable lens fixngs
• Clinical trials
• Rest of the World
·∙ 15
U.S. Sales Strategy Direct sales in the U.S. with 4 regions and 40 territories 53 members currently in our sales group • 1 VP • 4 Regional Sales Directors
• 4 Professional Rela.ons Coordinators • 4 Implementa.on Specialists • 27 dedicated TearLab Territory Managers • 13 independent sales reps and sub reps
MarkeDng Strategy • Trade shows • Focus on Key Opinion Leaders and Medical marke.ng programs • Peer-‐reviewed clinical trial studies u.lizing TearLab technology
• Clinical trials with Big Pharma • Introducing Prac.ce Management programs and Accredited DED prac.ce program
U.S. Sales and MarkeDng Strategy
·∙ 16
1. Purchase Purchase the System for $9,500 with no minimum card commitment
2. USE Agreements Free use of the system with a minimum 3 year commitment to purchase cards
• 1,500 cards per year at $12.50 per card • 2,400 cards per year at $10 per card
3. MASTERS MulD Unit Program Many eye care prac.ces in the U.S. are comprised of mul.ple doctors servicing several loca.ons. As these prac.ces see thousands of pa.ent visits annually, produc.vity is cri.cal to their opera.ons, requiring access to a device for every lane in the prac.ce in order to maximize efficiency and flow. While there are no minimum card guarantees in Masters agreements, a detailed analysis of pa.ent volumes and clinic protocols provide an outline of volume expecta.ons that are in line with revenue expecta.ons for all the instruments.
Program OpDons
·∙ 17
Understanding Profitability
Each TearLab unit opera.ng in the U.S. is expected to produce average revenue of $15,000 to $20,000 per year Market PotenDal
If we assume that the average MD buys 2 devices while the average OD buys only 1 device: 10% of U.S. market alone is 7,000 units; ~ $100-‐ $140 million of recurring revenue
Bocom Up Economics
·∙ 18
Installed Base
03/31/13 06/30/13
Ac.ve Purchased Devices 232 238
Ac.ve Devices Under Use Contracts 508 701
Ac.ve Devices Under Masters Contracts 148 417(1)
Total AcDve Devices 888 1,356
Devices Not Yet Ac.vated 212 298
Total Devices 1,100 1,654
Devices with Educa.onal Ins.tu.ons/Research 38 44
Devices Sold Outside the U.S. 445 460
(1) 57 Masters accounts
·∙ 19
System Orders Drive Recurring Revenue Growth
Quarterly System Orders
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Management Team Elias Vamvakas, CEO and Chairman of the Board 20+ years of public company leadership focused in eye care (CEO/founder TLCVision)
Benjamin Sullivan, Ph.D., CSO Harvard Medical School, University of California San Diego
Michael Lemp, M.D., F.A.C.S., CMO Clinical Professor of Ophthalmology, Georgetown & George Washington University
David Eldridge, OD, F.A.A.O., V.P. Clinical and Professional Development Adjunct professor, NSUCO, EVP TLC Vision, Occulogix
Michael Berg, V.P. Clinical & Regulatory 25+ years experience in CLIA waived IVD, Hemocue
Steve Zmina, V.P. Manufacturing 25+ years experience, developed over 100 products, Thermoscan, Tandy
Bob Walder, P.A.-‐C., V.P. OperaDons 30+ years experience in healthcare, manufacturing & opera.ons, AbboJ Labs
Tracy Puckec, V.P. MarkeDng 25+ years experience in healthcare marke.ng, McCann-‐Erickson, Alimera Sciences, Novar.s Ophthalmics
Bill Dumencu, CFO 25+ years experience in Eye care industry and manufacturing, TLCVision, Occulogix
Duane Morrison, V.P. Sales 25+ years of Sales, Business Development and Management experience, TLCVision, The Technology Source.
Delanu Ligu MSc., V.P. InformaDon Technology 16+ Years of HealthCare and IT, TLC Vision, Occulogix
·∙ 21
Chief Science Officer
http://execrank.com/?s=tearlab&x=0&y=0
·∙ 22
Surgical Leadership Group • Eric Donnenfeld, MD, FACS -‐ Founding Partner of Ophthalmic Consultants of Long Island, President
American Academy of Cataract and Refrac.ve Surgeons. Editor and Chief Cataract and Refrac;ve Surgery Today.
• Marguerite McDonald, MD, FACS, OCLI -‐ Clinical Professor of Ophthalmology at NY University and Adjunct Clinical Professor of Ophthalmology at Tulane Medical School, Staff Physician ManhaJan Eye and Ear, Island Eye Surgicenter and Mercy Medical Center. Past President of ASCRS, President of the Int’l Society of Refrac.ve Surgery and President of the Int’l Society for Contact Lens Research.
• Terrence O’Brien, MD -‐ Bascom Palmer Eye Inst., Asst. Editor-‐in-‐Chief Journal of Refrac;ve Surgery.
• David Shcanzlin, MD -‐ Gordon Weiss & Schanzlin Vision Ins.tute. Past Professor and Director Shiley Eye Center, USCD Dept. of Ophthalmology. Past Professor and Chairman St. Louis University, Dept. of Ophthalmology.
• John Sheppard, MD -‐ President of Virginia Eye Associates, Ophthalmology Research Program Director, Eastern Virginia Medical School and Clinical Director Thomas R. Lee Center of Ocular Pharmacology. Medical Examiner for the American Board of Ophthalmology.
• Christopher Starr, MD, FACS -‐ Assoc. Professor, Director of Ophthalmic Educa.on, Director of the Cornea, Cataract Surgery Fellowship and Director of Refrac.ve Surgery Service, Weill Cornell Medical College. Editor Refrac;ve Eyecare, Advanced Ocular Care, Cataract Refrac;ve Surgery Today, Current Ophthalmology Reports. Host Eyetube Journal Club and Ocular Surface Series.
• R. Doyle StulDng, MD, PhD -‐ Director Stul.ng Research Center, Woolfon Eye Inst. Past President of ASCRS. Past Editor & Chief Cornea.
·∙ 23
Clinical Leadership Group • Charles Aldridge, Jr. OD, FAAO -‐ Founder of Aldridge Eye Ins.tute. Founder of The Dry Eye Center of
the Carolinas. • Marc R. Bloomenstein, OD, FAAO -‐ Director of Optometric Services at the Schwartz Laser Eye Center,
President and founding member of the Optometric Council on Refrac.ve Technology. Member of the ASCRS Integrated Eye Care Delivery Task Force. Adjunct Assistant Professor at the Southern California College of Optometry and Arizona College of Optometry.
• Douglas K.Devries, OD, FAAO -‐ Co-‐founder and managing partner of Eye Care Associates of Nevada. Past President of the Nevada Optometric Associa.on and the Great Western Council of Optometry (GWCO).
• David I. Geffen, OD, FAAO -‐ Weiss Schanzlin Vision Ins.tute. Contribu.ng Editor Optometry Times. • Paul Karpecki, OD, FAAO -‐ Director of Ocular Disease Research, Koffler Vision Group, Chair of the
Refrac.ve Surgery Advisory CommiJee to the AOA. TearLab Board Member. • Jerry Nolfi, OD, MBA -‐ Prac.cing optometrist. Has served as a clinical and strategic consultant to
Johnson & Johnson Vision Care, Alcon, Allergan, AMO and TLC Laser Eye Centres. • Jim Owen, OD, FAAO, MBA -‐ Optometric Director for Coronado Eye Associates. • James Thimmons, OD, FAAO -‐ Co-‐founder of Ophthalmic Consultants of Connec.cut. • William Townsend, OD, FAAO -‐ Dis.nguished Visi.ng Clinician in Residence at the University of
Houston College of Optometry, adjunct professor. • Walter Whitley, OD, FAAO -‐ Virginia Eye Associates. Dr. Whitley serves on the Board of Trustees for
the Virginia Optometric Associa.on and was recently recognized as the VOA 2012 Young Optometrist of the Year. VOA 2012 Young Optometrist of the Year.
• Derek Cunningham, OD, FAAO -‐ Director of Optometry at Dell Laser Consultants.
·∙ 24
• Michael Lemp, MD, FACS -‐ Clinical Professor of Ophthalmology, Georgetown Univ. and George Washington Univ., CMO TearLab Corp.
• Christophe Baudouin, MD, PhD -‐ Dept. Head Ophthalmology Univ. of Versailles, Dept. Head of Quize-‐Vingts Na.onal Ophthalmoloy Hospital, Paris, President of the Ophthalmology Society Paris, Editor in Chief French Journal of Ophthalmology.
• Anthony Bron, FRCS -‐ Dept. Head Nuffield Laboratory of Ophthalmology, Oxford, England. Past President Ophthalmic Sec.on of the Royal Society of Medicine, London.
• Gary Foulks, MD, FACS -‐ Arthur and Virginia Keeney Chair at University of Louisville School of Medicine. Director of Cornea Service and Medical Director, Contact Lens Service.
• Kelly Nichols, OD, MPH, PhD, FAAO, Dipl PH -‐ Associate Professor Ohio State University College of Optometry.
• Jay S. Pepose, M.D., Ph.D. -‐ Professor of Clinical Ophthalmology at Washington University School of Medicine.
• Alan Tomlinson, MSc, PhD, FC Optom, CCLP, D Orth, FAAO -‐ Prof. Vision Sciences Glasgow, Caledonian University.
• Gerd Geerling, MD -‐ Professor Doctor University of Dusseldorf Moorfields Hospital trained ophthalmic surgeon.
Academic Research Group
·∙ 25
Summary
• 1st point-‐of-‐care diagnos.c plaTorm for tears
• Ini.al test objec.vely diagnoses Dry Eye Disease
• Safe, easy-‐to-‐use plaTorm requiring only 50 nL of tear film
• Recurring revenue model
• Large IP porTolio
• Medicare reimbursement $45.42/pa.ent ($22.71/eye)
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