Assurance Investment Pitch Deck 05.27 - Gerstner · PDF fileAssurance Pitch Deck CONFIDENTIAL Property of Gerstner Medical Inc. 2 the management team Patrick West: Acting CEO - 12

Assurance Pitch Deck CONFIDENTIAL Property of Gerstner Medical Inc.


2

the management teamPatrick West: Acting CEO

- 12 years in various divisions of Stryker with focus on sales and marketing. Last position VP Global Sales and Marketing.

- Proven entrepreneur: Founded and successfully exited several companies in the Oil and Gas and Manufacturing space.

- Non-executing director with successful exit history in Europe.

- Advisor and angel investor primarily in the med-surg space.

Jeff Gerstner: Founder

- Mr. Gerstner spent 13 years in the medical device industry as a sales force executive. He was responsible for large geographic areas, which lead to his understanding of how to drive revenue and profitability for his teams.

- Over the years, Jeff interacted with thousands of industry professionals from hospital executives, to thought leading surgeons throughout the United States.

Tim Rasmussen, MD : Founder/Inventor

- General/vascular surgeon: 18 years experience spine access/exposure

- 6000+ cases involving spinal fusion/explant, deformity, oncology

-Thought-leading access surgeon

-Technical advisor and instructor for several of the largest spine companies

Advancements in medical technology are allowing surgical techniques to evolve and improve. Two significant areas represented are:

Minimally Invasive Anterior Spine Fusions (including Anterior Lateral, XLIF, OLIF, etc.)

Robotically Assisted Abdominal Surgery

These are two of the fastest growing surgical procedures (w/ projected 5-year CAGR of 10%) as they significantly reduce surgical trauma:

the environment


3

1

2

- Reducded incision size, OR time, blood loss, hospital stay and cost

- Improved recovery rates, clinical outcomes

MIS Access Port

Davinci Robot

the market


4

- 55,000 procedures- CAGR 4.7% - Estimated that 40% of these will be MIS by 2018 - Growth in ALIF’s will continue to be driven by new MIS techniques

Anterior Lumbar Interbody Fusion (ALIF)

- Increased from 80,000 in 2010 to 205,000 in 2013 - 1,400 systems are installed in US hospitals

Robotic Assisted Abdominal Surgery

- Estimated that 80% of all procedures performed robotically in 2013 - 58,000 in 2008 up to 70,00 in 2011

Robotic Radical Prostotectomy

(1) (2) Ken Research

(3) Lifelong Health, Dr. David Lipschitz 1 May, 2014

(4) Business Insider Nov 8 2013

(5) Oncology, July 15, 2012

(6) NCI Cancer Bullentin Vol. 8/#16 2010

(7) OUC Live, March 23, 2011

the challenge


5

- 2-6% of anterior lumbar surgeries will involve a major vascular injury. - Similar injuries are the most common complication in robotic procedures. - While injuries and complications are significantly under-reported 21 cases of death have been reported in robotic surgeries related to vascular injury.

While these procedures have many positives, they both place the pelvic vasculature at risk. The relatively fragile veins particulary so:

This is exacerbated by the fact that minimally invasive approaches, by definition, do not allow the surgcal exposure to rapidly control and repair these injuries.

“In both MIS spine and robotic surgery, the classic principal of proximal and distal control of vascular injury is often impossible to achieve.”

(1) J Vascular Surgery August 2010

(2) Journal of Healthcare Quality, Aug 27 2013

(3) Dr. Tim Rasmussen

Innovations to address vascular injury have not kept pace with evolving MIS techniques

As a last resort:

THe Opportunity


6

- Vascular Occlusion Pins (aka sterile thumbtacks)

- Oversewing of the major vessels

- Pelvic Packing

*These approaches all have significant morbitity including mortality.

- Repositioning of patient while bleeding

- Extraordinary team expense

- Two or more balloons precisely placed at $2,500 each

- Use of balloons that are designed for arterial applications:

- High durometer design - can burst veins

- Long guide wires - unwieldy in emergency situation

- Single balloon

All of these options add significant cost to the procedure and length of patient recovery.

Current options are:

An endovascular team if available can be brought in to place endovascular ballons which require:

- Specifically designed to address pelvic vascular injury

- Lightweight catheter with multiple low durometer balloons

- Advanced over a single, purpose specific length guide wire

- Addresses multiple specialities: Robotic, MIS ALIF, Spine Revisions, Trauma

- Elementary insertion technique (same as central line catheter) allows placement by any trained medical personnel

- Can be placed prophylactically or in an emergency with limited repositioning of the patient

- Can be used in any surgical setting including out patient centers where there is otherwise limited help (no cell-savers, endovascular teams, etc.)

the soltuion: assurance


Assurance Multi-Balloon Venous Catheter:

the product: assurance


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- Multiple balloons

- Covers the entire anatomy

- Stems flow from above, below and the venous branches

- Low durometer design

- Significantly reduces the risk of damaging fragile veins

- Form fits to enhance barrier capability

- Procedure Specific design

- Appropriate length guide wire and catheter

- Convenient procedure kit that acts as a secondary barrier

- 10-35 mm balloon diameter specific to fit anatomy

Assurance allows the surgeon to quickly stem bleeding, allowing them to access the site and repair the damage in a timely, controlled manner.

Assurance Multi-Balloon Venous Catheter:

current status


9

- Manufacturing Partner Identified - Prototypes manufactured

- Experience “soup to nuts” contract manufacturing with ability to dovetail to production

- To market estimate: $750k - $950k/16 - 20 months

- Regulatory and reimbursement - Have retained expert consultant with extensive orthopedic regulatory and reimbursement experience

- Analysis suggests product is a class II device with solid predicates

- 510K without clinical data

- Regulatory and claims will dovetail with reimbursement code analysis to ensure lowest barrier to entry and highest reimbursement potential

- To market estimate:$65 - $100k/12 - 18 months (Assumes 6 months for review. Application prepared in parallel with manufacturing/validation)

- Intellectual property

- Provisional patent filed 4Q13, with global filing plans in process.

- The initial FTO analysis suggests that there are no signficant blocking patents, and it is believed that the design and application is unique enough that it will clear obvious hurdles.

the Plan


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0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

329.

4

358.

6

379.

9

375.

8 420.

7

444.

7

473.

8

485.

5

514.

6

532.

8

0.036 1.107

4.05 US

D Mill

ions

All Anterior Spine Surgeries Assurance

- Currently no devices are available specifically designed to address venous injury during minimally invasive surgery.

- New surgical approaches are still being developed and have varying degrees of acceptance.

- Having a solution/device that reduces the risk for these approaches will increase uptake and broaden the potential patient population.

commercial strategy


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- Proper surgeon selection and training

- Control product use and feedback loop

- Data collection

- Encourage prophylactic placement

We plan to do a two year targeted launch of the product in key areas with distribution partners that are currently known and trusted:

Two Year Commercial Strategic Plan:

strategy


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Year 1 Commercial Year 2 Commercial

Convert 20 of the top surgeons to use

Convert 20 additional of the top surgeons to use

Collect data, publish, present Continue to collect data, publish, present

Convert 30 -50 regional users

Convert 50 additional regional users with a

of 125 users

Begin developing pull strategy with insurers and

other funding sources

Expand pull strategy with insurers and

other funding sources

Initiate co -marketing/training with major brand players

Continue co-marketling/training with

major brand players

Explore co -op marketing efforts with

robotic surgery mfg

Begin to collect and publish data on use in artifical disk

replacement surgery

Primary Goals:

- Cash Flow Positive - Exit Partners Take Notice

exit strategy


13

2014: Get Acquainted

- Establish key contacts with industry leading companies

- Initiate discussions on technology and training efforts

2015: Progression

- Ensure that targeted thought leaders are closely involved with potential exit partners

- Initiate co-marketing/ training efforts with major players

- Explore marketing efforts with robotic surgery mfg

2016: Validation

- Publications/presentations with thought leaders

- Continue co-marketing/ training efforts with major players

- Begin discussion in earnest about exit

2017: Evaluation

- Narrow interested parties

- Establish bidding situation

- Maximize exit

projected 4 year P&L


14

Assurance Profit and Loss (forecast) 2014 2015 2016

Revenue - 36K 1,107K

COG - 5K 128K

Gross Margin - 31K 979K

Commissions - 9K 277K

Management/Overhead 90K 280K 754K

Operating Income (384K) (1,023K) (243K)

Cash from Financing/Equity 1,500K 750K-

Net Cash 1,116K 93K 601K

2017

4,343K

434K

3,908K

1,086K

1,214K

1,209K

-

1,809K

Development/Expenses 294k 765K 191K 400K

2018

12,060K

938K

11,122K

3,618K

1,749K

5,275K

-

7,085K

480K

Seeking $1.5M with a post money of $4.0M

Secondary close by YE 2014

Funding


15

- Initial close ASAP = minimum of $500K

- Use of Funds

-Product development and validation

- Packaging and sterilization development / validation

- Manufacturing of initial test lots

- Advancing regulatory strategy

- Market research to validate targeting, pricing and reimbursement strategy

- Hire regulatory/reimbursement specialist

- Close IQ15

- Use of Funds

- Complete testing and validation

- FDA application and process through approval

- Manufacture initial commercial lots

- Pre-marketing, training and marketing

- Commercial launch

- 2X regional sales specialists

- Sales director

Documents

Assurance Investment Pitch Deck 05.27 - Gerstner · PDF fileAssurance Pitch Deck CONFIDENTIAL Property of Gerstner Medical Inc. 2 the management team Patrick West: Acting CEO - 12