Titan Medical Inc. AGM 2015 Presentation

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Titan Medical Inc. AGM 2015 Presentation

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  • 1

    Titan Medical Inc.

    Annual General Meeting

    TSX: TMD | OTCQX: TITXF

    June 9, 2015

  • 2

    This presentation contains "forward-looking statements" which reflect the current expectations of management of the

    Company's future growth, results of operations, technological development and implementation, performance and

    business prospects, opportunities, and illustrations and prototypes of the SPORT Surgical Systems. Wherever possible,

    words such as "may", "would", "could", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate" and similar

    expressions have been used to identify these forward-looking statements. These statements reflect management's

    current beliefs with respect to future events and are based on information currently available to management.

    Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors could cause the

    Company's actual results, performance, achievements or technological development and implementation to be

    materially different from any future results, performance, achievements or technological development and

    implementation that may be expressed or implied by such forward-looking statements, including, without limitation,

    those listed in the "Risk Factors" section of the Company's Annual Information Form dated April 4, 2014 and other

    information contained in the Companys public filings (which may be viewed at www.sedar.com). Information contained

    in this presentation is qualified in its entirety by such public filings. Should one or more of these risks or uncertainties

    materialize, or should assumptions underlying the forward looking statements prove incorrect, actual results,

    performance or achievements may vary materially from those expressed or implied by the forward-looking statements

    contained in this presentation. These factors should be considered carefully and prospective investors should not place

    undue reliance on the forward-looking statements. Although the forward-looking statements contained in the

    presentation are based upon what management currently believes to be reasonable assumptions, the Company cannot

    assure prospective investors that actual results, performance or achievements will be consistent with these forward-

    looking statements. This presentation does not constitute an offer to sell any class of securities of the Company in any

    jurisdiction.

    Forward Looking Statements

  • 3

    2014 Ranking

    The 2015 OTCQX Best 50 is a ranking of top performing companies on the

    OTCQX Best Marketplace in 2014 based on one-year share price performance

    and average daily dollar volume growth.

    Source: http://www.otcmarkets.com/content/doc/2015-OTCQX-Best-50.pdf

  • 4

    March 31, 2015

    Share Price (TMD)

    $1.43

    Cash, cash equivalents and

    short-term investments

    $27.4 million

    Shares outstanding 102.6 million (105.2 million FD*)

    Market value 146.7 million ($150.5 million FD*)

    Management ownership (March 31, 2015)

    6.21%

    *Fully diluted includes, under the Treasury Stock method, an additional 2,224,604 options with a weighted-average exercise price of CDN $1.14. In addition, 3,665,900 warrants (@CDN $1.85 expiring December 10, 2015), 5,121,500 warrants (@CDN $2.00 expiring June 21, 2016), 3,484,500 warrants (@CDN $1.75 expiring December 22, 2016), 390,729 warrants (@CDN $1.77 expiring March 14, 2017), 5,300,705 warrants (@CDN $1.25 expiring March 13, 2018), 8,317,856 warrants (@CDN $2.00 expiring February 19, 2017), and an additional 12,346,914 warrants (@CDN $2.75 expiring April 23, 2017).

    Financial Snapshot

    TMD (TSX), TITXF (OTCQX)

    (in US Dollars except warrants and options exercisable in Canadian dollars)

    March 31, 2014

    Share Price (TMD)

    $1.97

    Cash, cash equivalents and short-term investments

    $15.6 million

    Shares outstanding 84.5 million (91.1 million FD*)

    Market value 166.5 million ($179.4 million FD*)

    Management ownership

    (March 31, 2014) 7.39%

  • 5

    Stock performance

    $0.00

    $50.00

    $100.00

    $150.00

    $200.00

    $250.00

    $300.00

    $350.00

    $400.00

    2009 2010 2011 2012 2013 2014

    Titan Medical Inc. - Common Share Price Performance

    Titan Medical Inc.

    S&P/TSX Composite Index

    As at December 31

    31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-14

    Titan Medical Inc. 100.00 355.00 337.50 300.00 237.50 350.00

    S&P/TSX Composite Index 100.00 114.45 101.78 105.85 115.97 124.57

    The following table shows the value of CDN$100 invested in Common Shares on December 31, 2009 compared to CDN$100 invested in

    the S&P/TSX Composite Index*:

    *All amounts in Canadian $.

  • 6

    Based on current customer challenges:

    Problems in delivery of high-quality outcomes

    Issues that de-motivate staff

    Workflow inefficiencies which increase costs, and

    Anything that would diminish patient outcomes

    Value-Based Account Management

    A NEW GAME IN TOWN

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    Capital equipment downtime/utilization

    Surgical scheduling and procedural planning

    Opportunities for surgical indications of general abdominal, gynecologic and urologic procedures

    Staff morale

    Increased patient wait time

    Patient satisfaction scores

    Staff retention and optimization

    Workflow

    Capacity

    Revenues

    Current Challenges

    Clinical Financial Operational

  • 8

    Builds trust in the customer relationship

    Evolves the sales team from the feature-function product approach to value-based Account Management at its best

    Fosters problem solving and trust with customers

    Guides customers to find Clinical, Financial and Operational Mission-aligned solutions, and

    Finally Assists the customer to monetize and thereby designate the value of the robotic solution

    Value-Based Account Management Deliverables

  • 9

    1. GPOs

    2. IDNs

    3. Acute care hospitals

    4. Health systems

    5. Academic medical centers

    6. Ambulatory care centers

    7. DOD/VA Hospitals

    8. Professional Healthcare Organizations

    9. Large healthcare insurers

    10. CMS (Center of Medicare Services)

    11. American Hospital Association

    12. Surgeons in North America, Europe and ROW

    Voice of Customer/Industry Sources

  • 10

    The playing field

    Capital Expense is $2 to $2.5 million

    Service Fees are $170K to 10% of unit purchase price

    Hospital spend is $1000 to $4000 more per robotic case than laparoscopic or open procedures

    The game

    Growth from 1000 procedures in 2000 to 570,000 in 2014

    Growth potential is 4 million procedures

    Estimated 3266 daVinci systems being used worldwide 2014

    2223 systems in United States

    1043 systems in ROW, including 21 systems in Canada

    Total revenue in 2014 was $2.1 Billion

    70% in United States ($1.47 Billion)

    Sport Scouting Report

    Sources: Intuitive Surgical Inc. Annual Report; General Surgery News Doing the Math: Can the Robot Be Cost Effective for General Surgery?

  • 11

    1. A balance of expertise and skills

    2. Ability to build value

    a. Scientific discovery

    b. Solid planning

    3. Capacity to Strategically Work with the right partners

    4. Ability to adapt with the changing environment

    5. A solid track record

    A great technology needs the right team and the right management

    Titan Management Team Assessment

  • 12

    Titan Medical Inc.

    AGM Technology, Training, Regulatory Update

  • 13

    The SPORT Surgical System

  • 14

    THE SPORT SURGICAL SYSTEM

    Technology Development Strategy

  • 15

    Focused on meeting the Customers Needs

    Capital cost too expensive

    Cost per case too high

    Lack of mobility reduces operational efficiency

    Return on investment not realized in many programs

    Efficiency color coding instruments, etc.

    Training programs need improvement

    Customer support and service

    Data collection and analytics

    Titan Medical Inc. Strategy

  • 16

    The SPORT Surgical System delivers

    Next Generation Surgical Robotic Technology

    Innovative Robotic Platform to Enable Computer-assisted surgery

    Automation and Navigation

    Automate tasks and subtasks

    The SPORT Surgical System is NOT

    Just a teleoperation device

    Just a single port device

    THE SPORT Surgical System

  • 17

    THE SPORT SURGICAL SYSTEM

    Technology Update

  • 18

    THE SPORT Surgical System

    Traditional Surgical Robotic Features

    Teleoperation

    3-Dimensional (Stereoscopic) Imaging

    Restores intuitive control

    Enhanced or New Functionality

    Enhanced Ergonomics

  • 19

    State of the Art 3D High Definition 32 display

    Improved Dexterity

    Outstanding Controllability

    Information Delivery 2nd Display

    Automated functionality

    Data collection and analytics

    For surgeon

    For OR Team

    Enhanced Functionality/Features

  • 20

    More comfortable working position

    More comfortable, adjustable

    seat Elbow Support not Forearm

    Support

    Familiar Flat Panel Immersive Interface

    Touch Panel GUI

    Familiar

    Improved Ergonomics

    The machine adapts to the surgeon instead of the surgeon adapting to the machine.

  • 21

    Two Major Components

    CAD Renderings of SPORT Surgical System

    The SPORT Surgical System

    Patient Cart Surgeon Workstation

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    The surgeon interface at which the surgeon sits

    3D High Definition Display

    2nd Display Information Delivery

    2 master controllers

    Foot pedals

    Surgeon Workstation

    CAD Rendering of SPORT Surgical System

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    Looks-Like Workstation

  • 24

    Looks-Like Workstation

  • 25

    Looks-Like Workstation

  • 26

    Looks-Like Workstation

  • 27

    Rolling Cart at Bedside

    Mast and Boom

    Central Unit

    Insertion Tube

    Camera Module

    Insertable Robotic Arms

    Tools

    Patient Cart

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    Patient Cart

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    Central Unit

    Motors Connections for

    Insertion Tube Instruments

  • 30

    Camera Module and Robotic Arms

    19 mm Diameter Insertion Tube

    Stereoscopic Camera Module

    Pan and Tilt

    Digital Zoom

    Two Snake-Like Robotic Arms

    Tools

  • 31

    Single-Patient Use Tool Tips

    Sterile

    No Reprocessing Required

    First Use Quality Every Case

    Reposable Robotic Arms

    More Cases for Each Arm

    Reduces per Case Cost

    Tools

  • 32

    THE SPORT SURGICAL SYSTEM

    Training Update

  • 33

    We believe that adults learn best from experience

    But you cant just throw a simulator at them

    Pyramid of Learning Experiences

    Teach others

    Discussion group

    Demonstration

    Audiovisual

    Reading

    Practice by doing

    5%

    10%

    20%

    30%

    50%

    75%

    80%

    Average

    Retention Rate

    National Training Laboratories, Bethel, Maine, USA

    Lecture

  • 34

    Training Curriculum

    Cognitive pre-training Knowledge Acquisition

    Psychomotor skills training Technical Skills Acquisition

    Team training Choreography & Communication

    Troubleshooting Crisis Mitigation

    Overview of safety Optimal Skills and Teamwork

    The SPORT Surgical System

  • 35

    Training Curriculum

    Cognitive pre-training

    Knowledge Acquisition

    Psychomotor skills training

    Technical Skills Acquisition

    Team training Choreography & Communication

    Troubleshooting Crisis Mitigation

    Overview of safety Optimal Skills and Teamwork

    SAIL Center James and Sylvia Earl Simulation to Advance Innovation and Learning Center

    Post-Training Assessment

    Design assessment tools

    Define: skills, setting, scoring method, scenarios, & train raters

    Validate assessment tools

    Construct Validity, Predictive Validity

    Learning Experiences

    Assessment Tools

  • 36

    THE SPORT SURGICAL SYSTEM

    Regulatory Update

  • 37

    Regulatory Update

    All Regulatory Processes are based on the Development Timeline

    FDA

    CE Mark

    Notified Body

    QMS

  • 38

    Key Milestones

    1Q 2015

    4Q 2015

    3Q 2016

    Mid-2017 4Q 2016

    U.S. Commercial

    Launch (Pending 510(k)

    Market Clearance)

    Pivotal Trial Completed, 510(k) Submitted to FDA

    O.U.S. Commercial

    Launch (Pending CE Mark Approval)

    Design and

    Test of Feasibility Prototype Completed 2Q 2016

    Pivotal Human

    Clinical Trial Commenced

    Early Human Feasibility Report

    Completed

    Audit for CE Mark Commenced

    Units Built and

    Ready for Engineering Verification

  • 39

    Pre-submission meetings Next 9 months

    Animal Study

    Software Validation

    Pivotal Clinical Trial

    Symposium July 2015

    Titan Participating

    Early Feasibility Human Trial

    Contract Research Organization

    Regulatory Update FDA

  • 40

    CE Mark

    Notified Body Summer 2015

    Quality Management System

    Processes Implemented

    Standard Operating Protocols

    Technical Files

    Electronic Documentation and Infrastructure (August 2015)