ld micro main event presentation december 2017 · ticker (nyse mkt) isr price (11/30/2017) $0.45 52...
TRANSCRIPT
LD Micro Main Event Presentation
December 2017
NYSE MKT: ISR
Safe Harbor StatementStatements in this presentation about IsoRay's future expectations, including: the advantages of our products and their deliverysystems, whether interest in and use, awareness and adoption of our products will increase or continue, whether opportunities willbe available to expand the market for our products, whether changes to IsoRay's management and sales team and strategy willresult in growth, whether investments in sales and marketing, production and research and development will result in growth,whether our technical assistance in the brain and gynecological applications will result in a viable commercial product for sale,whether studies and protocols will produce favorable results or lead to publications, whether peer-reviewed publications of treatmentresults using our products will report favorable results, whether our intellectual property will adequately protect our proprietarytechnologies, and all other statements in this presentation, other than historical facts, are "forward-looking statements" within themeaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). This statement is included for the express purpose ofavailing IsoRay, Inc. of the protections of the safe harbor provisions of the PSLRA. It is important to note that actual results andultimate corporate actions could differ materially from those in such forward-looking statements based on such factors as physicianacceptance, training and use of our products, our ability to successfully manufacture, market and sell our products, our ability tomanufacture our products in sufficient quantities to meet demand within required delivery time periods while meeting our qualitycontrol standards, our ability to enforce our intellectual property rights, whether additional studies are released and support theconclusions of past studies, whether ongoing patient results with our products are favorable and in line with the conclusions ofclinical studies and initial patient results, patient results achieved when our products are used for the treatment of cancers andmalignant diseases beyond prostate, successful completion of future research and development activities, whether we, ourdistributors and our customers will successfully obtain and maintain all required regulatory approvals and licenses to market, sell anduse our products in its various forms, continued compliance with ISO standards as audited by BSI, the success of our sales andmarketing efforts, changes in reimbursement rates, changes in laws and regulations applicable to our products, and other risksdetailed from time to time in IsoRay's reports filed with the SEC. Unless required to do so by law, the Company undertakes noobligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events orotherwise.
For more information regarding risks and uncertainties that could affect IsoRay’s results of operations or financial condition reviewIsoRay’s filings with the Securities and Exchange Commission (in particular, it’s most recently filed Form 10-K and Form 10-Qs).IsoRay undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, futureevents or otherwise. This presentation shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of anoffer to buy any securities of IsoRay nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or salewould be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
2NYSE MKT: ISR
OverviewIsoray Medical passionately designs and develops innovative andpersonalized permanent implant brachytherapy products that effectively treatmany forms of cancer. We believe in pioneering solutions for life beyondyour cancer.
Isoray’s Cesium-131 isotope, with a shorter half-life and higher energy than othercommonly used radioisotopes for low dose-rate (LDR) brachytherapy, has beenshown to be a highly effective cancer treatment with limited side effects and quickerrecovery time and as a result, is a potentially disruptive alternative to the globalradiation therapy market.
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Market Data
Ticker (NYSE MKT) ISR
Price (11/30/2017) $0.45
52 Week Range $0.38 - $0.70
Market Cap $24.5 M
Average Daily Trading (3 mos) ~144,000
Common Shares Outstanding 55.0 M
Cash, Cash Equivalents & CD’s* $7.3 M
Trailing 12 Month Revenue $4.89 M* As of September 30, 2017
NYSE MKT: ISR
Tom LaVoyChairman of the Board and
Chief Executive Officer
• Director, IsoRay since 2005 before appointment as Chairman and Chief Executive
Officer in early 2016.
• Over 35 years experience leading and building successful, publicly traded
businesses.
• Improving operational efficiencies and increasing gross profit
• Refining organizational structure
William A.
CavanaghChief Operating Officer and
Chief Scientific Officer
• Appointed Chief Operating Officer, March 2016; previously Vice-President R&D,
2010 – 2016.
• Over 20 year career in cancer treatment technologies including research and
development of brachytherapy for treatment of prostate cancer.
• Guiding product development and clinical strategy and investment in clinical
protocols for prostate, brain, head & neck and other cancers
Michael L.
KrachonVice President, Sales and
Marketing
• Joined Isoray in March 2016.
• Over 20 years’ experience of progressive growth in sales and marketing in the
medical industry, including as leader of international brachytherapy commercial
team.
• Restructured sales and marketing team and helped set focused sales
strategy
• Relaunched website and refined marketing materials and social awareness
programs
Experienced Management Team Executing on New Strategic Plan Since Mid-2016
4NYSE MKT: ISR
Isoray Medical
• Positioned to disrupt markets for treatment of prostate, brain and other significant cancers• Brain, Head and Neck and Gynecological Cancers have been supported by 5 years of clinical trials in multiple institutions
and are supported by multiple publications showing excellent local control and improvement in quality of life versus
competing therapies.
• Long term Prostate cancer results recently published indicating significant QOL improvement using Cesium 131 over other
LDR isotopes
• Working to establish and improve reimbursement and coverage of Cesium-131 in Surgical procedures
• Innovative company that developed a proprietary process to manufacture a new isotope for cancer
treatment: Cesium-131• Significant advancement in cancer therapy from previous LDR Isotopes, faster and more aggressive radiation treatment has
opened up new treatment options for aggressive cancers outside of prostate therapy
• Sole Provider of isotope with significant barriers to entry
• Cesium-131 has been safely used to treat more than 10,000 patients, with long term data support
• Executing on new strategic plan• Significant investments in Sales and Marketing and R&D to develop stronger market position in prostate treatment and
introduction into brain, head and neck and gynecological cancers has turned sales trends
• Revamped sales team has generated growth for three consecutive quarters with increased volume in new and existing
accounts
• Operating leverage from sales increases and ongoing cost and process improvements expanding gross margin
• Strong balance sheet to support growth strategy• $7.3 million cash* and no debt as of September 30, 2017
• Ongoing cost and process improvement programs in place
* Includes cash, cash equivalents and certificates of deposit
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Cesium-131 is Changing the Market
Cesium-131 is a Potentially Disruptive Alternative to the Global Radiation Therapy Market, projected to reach $9.3B1 by 2024
1Data Bridge Market Research, 2017
• Cesium-131 is “next” generation brachytherapy isotope that delivers a faster, more consistent treatment
• Cesium-131 delivers a highly targeted dose of intense radiation treatment, yet limits unnecessary radiation dose to surrounding tissue
• Emerging clinical data demonstrates sustained clinical outcomes with improved Quality of Life and improved side effect profile
• Cesium-131 is delivered in a single-session treatment, avoiding 6 to 8 weeks of external radiation
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More Targeted Delivery of Radiation
Representative Dose Distributions for a Selected Patient for 5 Treatment
Radiation Techniques After Normalizing Doses
Source: Dietmar G, et al, Int J Radiation Oncol Biol Phys, Vol. 88, No. 3, pp. 715e722, 2014 0360-3016
The controlled dose delivered by interstitial Brachytherapy results in less radiation to surrounding tissues when compared to external techniques.
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• Shorter Half Life, Higher Energy Low Dose Rate (LDR) isotope aggressively attacks cancer
• Low impact on critical tissues surrounding treatment site
• Faster radiation deposition for fast growing cancers
• Cost-effective and patient friendly• Single treatment session done at time of surgery or instead of surgery
• Demonstrated enhanced quality of life resulting from low side effect profile
Cesium-131 is Faster Acting
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Cesium-131 Addresses >$1B Market Opportunity
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Disease State Annual Diagnosis*
Potential LDR Patients*
Potential revenuewith Cs131
Prostate cancer 200,000 140,000 $700M
Brain Tumors 300,000 (new + recurrent)
176,0001 $450M
Recurrent Gynecological Tumors
13,000 3,500 $12M
Head & Neck Tumors 61,000 15,000 $150M
Lung Cancer 180,000 10,000 $50M
Total Opportunity 648,000 344,500 Patients >$1B2
1Metastasis (135K); Glioma (21K); Meningioma (20K) – Per NCCN guidelines for surgical candidates (included are 65K with recurrent disease).2Potential market is calculated with ASP’s in line with historical data of $5,000 for prostate, $2,500 for brain, $3,500 for GYN, $10,000 for Head & Neck and $5,000 for lung cases. *Estimates of cases based on internal assessments from ACS data, market reports.
NYSE MKT: ISR
Prostate Brachytherapy Market Opportunity
• Approximately 25,000 annual prostate brachytherapy procedures
• $150 million if all treated with Cesium-131; Isoray has ~3% share*
• Competing therapies have not performed as well as expected**
• ASCENDE-RT randomized clinical trial demonstrates brachytherapy advantage in high risk patients
• Potential for additional 10-15,000 patients annually
• Healthcare economics - MIPS, MACRA, Quality – driving interest back to brachytherapy
• Brachytherapy has economic and patient advantages compared to other treatments
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* $5,000 / Cesium 131 procedure; ** NEJM Study (Hamdy)
ASCENDE-RT Trial Outcomes
Randomized study between combination
therapy and external radiation for high
risk localized prostate cancer
demonstrate benefits of combination
therapy
NYSE MKT: ISR
Positioned to Gain Share in Prostate Market
• No clear industry leader
• Small number of Brachytherapy competitors left, all with reduced sales forces
• Consolidation of market is continuing as companies continue to tighten expenses
• Competition not making significant investments in market development
• Clinical evidence continues togrow supporting Cesium-131
• Recent publications* demonstrate sustained low toxicity following Cesium-131
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*IJROPB Study (Glaser, UPMC)
NYSE MKT: ISR
Isoray is the Only Company Increasing Investment in the Prostate Market
Brain Cancer Opportunity
Growing Number of Leading Institutions
Performing Brain Brachytherapy with
Cesium-131
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• Multiple publications from Weill Cornell Medical College
• Demonstrates high rates of brain cancer control when Cesium-131 brachytherapy is combined with surgery
• Collaborative Partnership in place with GammaTile to develop and commercialize a
custom delivery system
• Gammatile is a physician group affiliated with the Barrows Neurological Institute, Phoenix, AZ
• Among the world's largest neurological disease treatment and research institution
• Consistently ranked as one of the best neurosurgical training centers in U.S.
• Device is a combination of Cesium-131 seeds embedded into collagen “tiles” that are placed onto the
resection margin during surgery
• Process adds less than 10 minutes to brain surgery
• FDA approval and Reimbursement code assignment in process
• ICD 10 code issued, DRG mapping in place after FDA approval
• NTAP application targeted for October 2018
• 510(k) application in process – final biocompatibility testing expected to
be completed in first half of 2018
Opportunities in Other Cancers
• Strategic collaboration with University of Kentucky for Gynecological cancer treatment
• Alternative is exoneration of the pelvis, where all pelvic organs are removed
• Collaborating to develop training and awareness programs
• Expanding experience in Head and Neck cancers
• Strategic collaborations with Thomas Jefferson University, Case Western and Weill Cornell
• Adding sites for expanded protocols
• Reimbursement review underway
• University of Louisville launching clinical study for Retroperitoneal Sarcomas
• Recurs in nearly two-thirds of patients, also often metastasizes to lung and liver
• Patients currently have limited options after surgery
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Perspectives on Emerging Applications
"Use of the Cesium-131 tiles, which are able to be
implanted very quickly at the time of surgery,
and starting radiation therapy at the time of
resection as opposed to weeks after resection
when using external beam radiation, were
advantages of our novel approach. We are
seeing 95% local control of the treated tumors in
our study using surgery and Cesium-131
implants. In addition, we observed a very low
rate of radiation injury, which has been a major
concern in the past, for patients who have
undergone multiple treatments for their brain
tumors."
Dr. David Brachman, Director of Radiation Oncology, Barrow Neurological Institute,
Clinical Professor of Radiation Oncology, University of Arizona
College of Medicine-Phoenix
“These women were facing very radical surgery to
address their recurrent cancers and it turned out
that Cesium-131 therapy offered a much better
solution for them. This is the first study utilizing
Cesium-131 therapy for these gynecologic
cancers and we have followed these women
closely in order to evaluate the effectiveness of
this treatment. We are very pleased with the
results.”
Dr. Jonathan FeddockAssistant Professor of Radiation Medicine
University of Kentucky College of Medicine
“Cesium-131 is a very appealing new isotope for
radiation oncologists and head and neck cancer
patients. I would recommend Cesium-131 to other
physicians… it is a great and safe option to re-
irradiate patients with recurrent resectable
head and neck cancer.”
Dr. Voichita Bar AdAssociate Professor
Thomas Jefferson University - Philadelphia
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Innovative Product Line and Development
• Strong IP portfolio includes proprietary chemical separation methods and construction of device
• Patents issued in U.S., Canada and EU
• Trademark strategy for updated branding
• Delivered through multiple 510(k) cleared products
• Sutured seeds, Seed sutured mesh, Implantable strands
• Single seed applicators
• Product development • Dedicated delivery systems in development for
prostate and brain cancer
• Working to establish reimbursement and coverage for expanded applications
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Executing on Focused Strategy*
• Upgraded commercial team with new members• Increased the number of consistently active customers 40%
• Securing Cesium 131 share with base customers
• Increased focus on identifying new accounts and converting new accounts
• Established marketing programs to communicate benefits of Cesium-131• Bringing resources directly to patients via social and digital channels• Physicians starting to contact us through our website to initiate sales process
• Building to Industry Leadership• Increased investment and support of clinical data and research
• Increased training and education resources for physicians
• Medical Advisory Board Reestablished in 2016
• Partnering to commercialize GammaTile product for brain cancer, including product clearance process and reimbursement
• Ongoing cost and process improvement programs in place to reduce future costs of production
• Reduced staffing requirements
• Installation of manufacturing automation processes during 2017 and 2018
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* Launched mid-2016
Revenue and Gross Profit Are Improving
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Dates represent Isoray fiscal year, which ends June 30, annually
$ 800
$ 900
$ 1,000
$ 1,100
$ 1,200
$ 1,300
$ 1,400
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Product Sales, net
$ (100)
$ 0
$ 100
$ 200
$ 300
$ 400
$ 500
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Gross Profit, net
Balance Sheet Highlights
($/000s)September 30,
2017 (Unaudited)June 30, 2017
Cash, Cash Equivalents & CD’s $7,256 $8,971
Total Current Assets 8,866 10,291
Current Liabilities 1,067 1,106
Long Term Debt* 0 0
Stockholder's Equity 9,146 10,602
Total Liabilities and Stockholder's Equity $10,781 $12,269
Basic & Diluted Common Shares Outstanding 55,017 55,017
Working capital $7,799 $9,185
Current ratio 8.31 9.30
Strong Balance Sheet to Support Growth
* Long-term debt excludes amounts that are not related to cash borrowings or operational debt
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Key Takeaways• Positioned to disrupt markets for treatment of prostate, brain and other significant cancers
• Brain, Head and Neck and Gynecological Cancers have been supported by 5 years of clinical trials in multiple institutions
and are supported by multiple publications showing excellent local control and improvement in quality of life versus
competing therapies.
• Long term Prostate cancer results recently published indicating significant QOL improvement using Cesium 131 over other
LDR isotopes
• Working to establish and improve reimbursement and coverage of Cesium-131 in Surgical procedures
• Innovative company that developed a proprietary process to manufacture a new isotope for cancer treatment:
Cesium-131
• Significant advancement in cancer therapy from previous LDR Isotopes, faster and more aggressive radiation treatment has
opened up new treatment options for aggressive cancers outside of prostate therapy
• Sole Provider of isotope with significant barriers to entry
• Cesium-131 has been safely used to treat more than 10,000 patients, with long term data support
• Executing on new strategic plan
• Significant investments in Sales and Marketing and R&D to develop stronger market position in prostate treatment and
introduction into brain, head and neck and gynecological cancers has turned sales trends
• Revamped sales team has generated growth for three consecutive quarters with increased volume in new and existing
accounts
• Operating leverage from sales increases and ongoing cost and process improvements expanding gross margin
19NYSE MKT: ISR
Positioned to capitalize on new and improving marketsRight Team, Right Isotope, Right Strategy
