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2015 Full Year Results Transatlantic Healthcare Technology Group Focused on value creation through execution François R Martelet, M.D. Chief Executive Officer Mark Nanovich Interim CFO 7 April 2016

2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

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Page 1: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

2015 Full Year Results

Transatlantic Healthcare Technology GroupFocused on value creation through execution

François R Martelet, M.D.Chief Executive Officer

Mark NanovichInterim CFO

7 April 2016

Page 2: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

This presentation is not an offer or solicitation of an offer to buy or sell securities. It is solely for use at this investor meeting and is provided for information only. This presentation does not contain all the information that is or may be material to a prospective investor (such as risk factors). By attending the presentation or by reading the presentation slides you agree to be bound as follows:

This presentation has been prepared by NetScientific plc (the “Company”), is strictly confidential and is not, and should not be construed as, a prospectus or listing particulars relating to the Company. This presentation does not constitute or form part of, and must not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, or a recommendation regarding, any securities of the Company, nor should it or any part of it form the basis of or be relied on in connection with (i) any contract to purchase or subscribe for any securities of the Company, or (ii) any other contract or commitment whatsoever. Nothing in this presentation shall be deemed to be binding against, or to create any obligations or commitment on the part of, any prospective investor or the Company. The contents of this presentation should not be considered to be legal, tax, investment or other advice, and any prospective investor considering the purchase of any securities of the Company should consult with its own counsel and advisers as to all legal, tax, regulatory, financial and related matters concerning an investment in such securities and as to their suitability for such prospective investor.

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Disclaimer

Page 3: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

NetScientific Group PLC New Group CEO Francois R. Martelet, M.D – 20 years industry experience Realign focus on healthcare Digital Health, Diagnostics & Therapeutics Portfolio rationalisation Divested non-core investments with significant savings Reorganisation High calibre CEO’s recruited for Wanda, ProAxsis, Vortex, Glycotest Fundraising £18.2m fundraising Finance £23.2m available cash resource, divestment of non-core assets

Portfolio Vortex Critical patent granted. Manufacturing partners selected to support placements Wanda Significant team scale up, new software releases ProAxsis Commercial launch of first lab-based immunoassay in Q3. New data released Glycotest Continued development of HCC panel and added board member Glucosense Development of the alpha prototype PDS Biotechnology Positive preliminary data showing strong T-cell responses in pre-cervical cancer

Full year results: highlights

2015 was a turnaround year for the Group3

Page 4: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

NetScientific Group PLC Additional Board member Professor Stephen Smith – distinguished clinician, ex-CEO and entrepreneur New CFO Ian Postlethwaite to join, ex-FD at Allergy Therapeutics. Lean PLC team in London

Portfolio Vortex VTX-1 instrument to be shipped to leading US researches in Q2 for Beta testing Wanda Two new commercial agreements in Q1 – HRS & Dignity Health (Oncology) ProAxsis World class Scientific Advisory Board appointed Glycotest Medical Advisory board appointed PDS Biotechnology Signed a Cooperative Research and Development Agreement with the US National

Cancer Institute to co-develop novel cancer immunotherapies through Phase II clinical trials

Post period-end highlights

4

Page 5: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Vijay Barathan, MDChief Investment Officer

Ian PostlethwaiteCFO (start date TBD)

Francois Martelet, MDCEO

Healthcare Investment Banker Peel Hunt and Piper JaffrayMedical Doctor NHS

Ernest SchneiderCommercial-Legal Director

Partner Reynolds Porter Chamberlain and Mishcon De ReyaFounder Schneider Page

FD Allergy TherapeuticsSenior finance positions as AFS, Ericsson, Philips Electronics

CEO TopotargetCEO Avax TechnologiesSenior positions at Merck & CO, Novartis, Schering-Plough and Eli Lilly

PLC Group management team strong and focused

CEO, Chairman of GSK Chairman NHS LondonRector Imperial CollegeFellow Royal Society & Academy of Medical Sciences

President of MedtronicPresident of LederlePresident of BMS Europe

Jonathan PaisnerNED

Barry WilsonNED

Sir Richard Sykes Chairman

Founder LMN CapitalLawyer Mathias Gentle Page HassanBoard Shore Capital

Prof. Stephen SmithNED

CEO Imperial College TrustDean Medicine, Dentistry and health science University of MelbourneFounder Metris Therapeutics and GNI Group

PLC Boardsignificant experience to leverage and build value

Strong and focused management team and Board

5

Page 6: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

San Francisco & Philadelphia offices /36 Employees

USA UK

Digital Health Diagnostics Therapeutics Digital Health Diagnostics London HQ/8 employees UK/12 Employees

Listing AIM (NSCI)

Funds raised c.£48m

No. of Shares 51,075,695

Share price (6/4/2016) 72.5p

Market Cap (6/4/2016) £37m

Shareholders (>3%) 45.1% Woodford Investment Management18.1% Invesco Asset Management 9.2% JO Hambro20.4% Azima Family Trusts

NetScientific’s mission is to change the paradigm of care in chronic diseases

6

Page 7: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Commercial stage Development stage

Gene Walther Steve Curd David Ribeiro Larry Cohen

Leadership Deputy Director Gates FoundationChairman GenturaDxPresident diagnostics Novartis and Chiron

CIO United HealthCOO WebMDCOO NANTHEALTHCEO CareinSync

Business Manager EU PharmaxisUnit Director PfizerGlobal product Director Solvay

CEO Exalenz BioscienceCEO SenGenixCEO IVD SolutionsPresident ITCVP J&J

Product Cancer diagnostic instrument for isolation and collection of circulating tumour cells

Advanced chronic disease management platform based on machine learning

Respiratory diagnostic test for monitoring patients with Cystic Fibrosis and COPD

Blood tests for liver diseases

Business modelInstrument and consumable cartridge sales

Clinical research labs

Software as a service

Providers/payors/pharma

Test kits and point of care device sales

Pharma/clinics/home

Lab sales

CLIA labs

Grant funding £1.6m £7.7m £1.0m £5.9m

NetScientificInvestment as at 31 Dec 15

£5.6m (£6.9m as at 31 Mar 16) £5.1m (£6.0m as at 31 Mar 16) £0.1m (£0.6m as at 31 Mar 16) £1.2m (£1.5m as at 31 Mar 16)

NetScientific shareholding 95% 71.3% 56.5% 87.5%

7

Game changing portfolio with new management teams

Page 8: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

2016 / 2017 – building value in PLC

Exit

Priority Portfolio

Growth CapitalPipeline

Capital returned to shareholders

Series A financings

IPO / M&A

H2 20162017

Global institutions, technology incubators, deep healthcare network

8

Page 9: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Financials – results for the year

9

2015£’000

2014£’000

Loss from Continuing operations 11,229 6,179

Loss from Discontinued operations 1,517 948

Loss for the year 12,746 7,127

Loss from Continuing operationsR&D 7,256 3,098

G&A 3,182 2,495

Other costs 1,077 717

Tax credit/Income (286) (131)

11,229 6,179

Page 10: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Financials – balance sheet & cash flow

10

2015£’000

2014£’000

Balance Sheet - highlightsCash at bank ** 23,239 16,867

Investment in PDS 1,757 1,757

Net assets 24,583 18,696

** Balance as at 31 March 2016 - £19.5m

Cash flowNet proceeds Capital raising 17,147 -

Funds used in operations (10,714) (6,631)

Other (273) (2,189)

Increase/(decrease) in cash 6,160 (8,820)

Page 11: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

PLC has completed its turnaround Re-structured, re-focused, portfolio rationalised – divested non-core assets Highly experienced lean management team in London in place Positive momentum in lead portfolio companies – talented CEOs in place to lead the next phase of

value creation with game-changing assets

PLC is working on building shareholder value Renewed IR/PR effort to broaden the shareholder base in UK and US Goal is to deliver value enhancing news flow in 2016 : commercial traction and external valuation

from portfolio company financings Actively managing current portfolio to value realization including Series A for Wanda, ProAxsis and

Glycotest

Summary and outlook

11

Page 12: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Vortex & Wanda

Page 13: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare
Page 14: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Executive summary• Research tools and diagnostics company developing a novel liquid biopsy

technology that could revolutionize cancer research, drug development, diagnosis, monitoring and treatment

• $22B market opportunity*

• Patented microfluidic technology yields intact circulating tumor cells (CTCs)

• Outperforms competitors in key fields – purity (specificity) and collection efficiency (sensitivity)

• Significant growth opportunities as the product pipeline expands from research to also providing clinical information from CTCs

* J.P. Morgan Liquid Biopsy Report – May 27, 2015 14

Page 15: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

The Company

• Formed in 2012 based on research done by PECASE (Presidential Early Career Award for Science and Engineering) winner Dino Di Carlo at UCLA

• Late stage development phase – placing Beta & KOL units in 2016

• Exciting R&D presents near-term growth opportunities in the rapidly growing liquid biopsy market

• Placement of VTX-1 with key opinion leaders (KOLs), onboarding of sales and marketing staff and critical publications will drive demand

• New CEO appointed – Gene Walther experienced leader in diagnostics and medical devices

15

Page 16: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Leadership team

Elodie Sollier-Christen, Ph.D

CSO & VP R&D

MichaelKocherspergerCTO & VP Engineering

• President Chiron/Novartis Diagnostics

• CEO Gentura Dx• Deputy Director Bill & Melinda

Gates Foundation

• Ph.D Microfluidics• UCLA, Stanford• Expertise in microdevices

for blood sample prep.

• Director Orchid Biosciences• VP New Brunswick Scientific • VP BioNanomatrix• J&J

Gene Walther, MBA

CEO

Steven Crouse, MBA

CCO

• SVP FreeSlate• Director BioRad• Invitrogen• Biosource

Bob Englert, MBAVP Manufacturing

• Abbott Laboratories• Biomedtrics• Pelikan Technologies

16

Page 17: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Circulating tumor cells (CTCs) detach from a solid tumor and enter the blood stream playing a crucial role in cancer metastasis.

Challenges to CTC isolation

• Extremely rare: 1-100 CTCs per mL of blood

• Other cells: millions of WBCs and billions of RBCs per mL of blood

Vortex liquid biopsy captures circulating tumor cells…

17

Page 18: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Technology

Cells enter the device and are ‘focused’ into an equilibrium position

CTCs selectively enter the ‘Vortex’

Red and white blood cells flow out of the system

Intact CTCs released for further analysis in cytopathology,propagation, drug development, treatment selection/effectivity and next generation sequencing

• 12 patents, 3 granted, 6 licensed – starting internal IP

• 10 publications

18

Page 19: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

VTX-1 Workflow

19

Page 20: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

CTC Analysis (Viability, Purity, Automation)

• Cancer Research

• Patient Prognosis

• Personalized Therapy

• Drug Development & Testing

CTC Enumeration (Efficiency, Cost)

• Early Stage Diagnosis

• Patient Prognosis

• Treatment Outcome Monitoring

• Residual Disease* JP Morgan liquid biopsy report – May 27, 2015

CTC potential$22B market by 2020*

Cancer Research Personalized Medicine

Drug Development Cancer Diagnostic Cancer Monitoring

20

Page 21: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Opportunities – focused growth

CTCsctDNA

• Enabling key applications beyond cancer research

• Combining CTC isolation with new platforms

21

Page 22: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Cell affinity Filtration Active forces Inertial microfluidics

Marker independent

Most cancers

No pre-processing Depends

High-purity

Rapid processing Depends

Large input volume

Live cells

Flexible collection

Other body fluids

Companies J&J CellSearch,

Biocept,Cynvenio

Rarecell, Creatv Microtech

Angle,Apocell

Clearbridge, J&J/MGH

VTX-1 is potentially best in class technology…

22

Page 23: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Product overview

Name Vortex VTX-1 Liquid Biopsy System

Key Dates Soft Research Market Launch, April 2016Global Commercial Launch, Q1 2017

Instrument price ASP ~ $120,000 (TBC – pricing study)

Cartridge priceTarget GP %

ASP ~ $200 (TBC – pricing study)80+%

Key Partnerships

Accel to manufacture first 5 unitsGener8 selected as contract manufacturer for VTX-1 Symbient/Z-Microsystems for cartridge

Sales Strategy Direct to user (US), academic and industryInternationally (TBD) Cartridge bottom

Gasket material

Cartridge top with deep pocket

23

Page 24: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Commercial Milestones

2016 2017

Q1 Q2 Q3 Q4 Q1 Q2-4

Beta placements

AACR soft launch(Research market)

KOL placements

Full commercial launch

VTX-1 contract manufacturing

Cartridge contract manufacturing

Gener8

Z Microsystems

24

Page 25: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare
Page 26: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Executive summary

26

Chronic condition management company that aims to reduce hospitalization costs and improve patient quality of life

New CEO hired – Steve Curd proven digital health leader

$2B initial market opportunity – exponential growth*

Patented systems developed from over 12 years of clinical research at UCLA

Commercialisation underway – 2 new customers

*Investec analyst note

Page 27: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Leadership Team

27

SteveCurd, MBA

CEO

MarkHeinemeyer

CCO

FoadDabiri, Ph.D

CTO

Page 28: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Opportunity: healthcare's trillion $ problem

28

75% of the $3.0 trillion fighting chronic conditions

50% of patients treated for heart failureare re-hospitalized within 6 months

These readmissions cost theU.S. $17 billion/year

Even worse are the human costs. Patients suffering from chronic conditions experience disabling and long-term symptoms. In addition, 7 out of every 10 deaths are a result of these costly and often preventable diseases

Page 29: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Value proposition

29

WANDA aims to reduce this trillion $ burden by preventing hospital admissions and reducing readmissions through a bifurcated consumer and clinical strategy

Predict

CliniciansIntervene based onactionable insights

Reducereadmission

s

Inform & Guide

Reduceadmissions

Engage

Collect data

Page 30: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

How we are different

30

Science and research driven• Technology developed from multiple clinical trials - including 1,500 patient clinical

study• Strong IP position

True predictive analytics and machine learning

Contextual data and real-time vitals

Mobile application• Not typically used by analytics or RMS companies

Patient engagement/adherence driven by the worlds largest, most validated personality database

Revenue generating

Page 31: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Uniquely positioned against competition

31

Analytics RMS

Engagement

MD RevolutionAccoladeTacticoMDLive

SoteraVitalConnect

HealthCatalystMedeAnalyticsCloud-MedXSyTrue

SentrianViterion

VivifyHealthZypherLIFEOmada

Page 32: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Business model – B2B

Enables ubiquitous care

Engage, monitor and prioritize patients with chronic conditions, to improve efficiency& workflow

Reduce hospitalizations and cost

Delegate more care to the patient

Provide clinicians with actionable insight

Patient Engagement – Mobile App

32

Home Health system

Large hospital groups

Payers

Skilled nursing facilities

Target customers:

Page 33: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Sales update - HRS

33

HRSOne call hi-tech nursing & rehab

Health Resource Solutions, Chicago-based home health agency

Works with more than 1,000 patients/month, will be using an app to keep tabs on its patients with CHF and COPD

HRS is among a number of home health agencies turning to digital health to improve the post-discharge process for patients with chronic conditions

$60/month/patient with an upfront $225/patient kit

In production now; estimated ramp up to > 50 patients/month

Page 34: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Business model: growth strategy

34

Targeting customers earlier in the value curve to have more impact

Access pay-for-performance market through growth into population health

Stage A(early onset)

Stage B Stage C

Currently engage patients after they have experienced a hospitalization

D2C

CHF PopulationMax impact

Stage D(late stage)

Econ

omic

impa

ct

Page 35: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

Milestones

35

2016 Goals Drivers

Participants registered 4,000 • B2B sales ex. HRS• D2C early platform adopters

Revenue $800K • Oncoverse and HRS

Commercial agreements 4• Large hospital groups• Payers• Home health systems• Skilled nursing facilities

Wanda Health Management Releases 4 • In-house R&D• Market research

Predictive Modules 3 • In-house R&D

Oncoverse Releases 3 • In-house R&D

Android & Apple iOS Mobile Releases 4 • In-house R&D

Page 36: 2015 Full Year Results - NetScientific · 2017-03-18 · Vijay Barathan, MD. Chief Investment Officer. Ian Postlethwaite. CFO (start date TBD) Francois Martelet, MD. CEO. Healthcare

NetScientific.net