2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL
Transcript of 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL
![Page 1: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/1.jpg)
MEDICAL DEVICE TECHNOLOGIES
INNOVATIONS WITH IMPACT
This presentation is a preliminary briefing only. Recipients should undertake their own due diligence.
![Page 2: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/2.jpg)
DISCLAIMER The information in this presentation does not purport to contain all the information that may be required to evaluate the prospects of the Company and in particular only discloses material information within the knowledge of the Company. You should seek independent professional advice in relation to the technical, financial, taxation, legal and commercial matters relating to the information and rely on your own due diligence and analysis accordingly. Other than to the extent required by law (and only to that extent) we disclaim all liability and make no representation, guarantee or warranty (expressed or implied) as to, and assume no responsibility nor liability for, the information provided. The presentation includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "intends", "considers", "expects", "seeks", "target", "strategy", "objective", "aim", "continue", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements relate to matters that are not historical facts. They appear in a number of places throughout the document and include statements regarding the intentions, beliefs or current expectations of the Company and its affiliates concerning, among other things, the investment objective and investment policy, financing strategies, investment performance, results of operations, financial condition, liquidity, prospects and dividend payments and policy of the Company and the markets in which it, directly and indirectly, will invest and the resources available to it from its affiliates . By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The actual investment performance of the Company, its results of operations, financial condition, liquidity, dividend payments and the development of its financing strategies, and the operation of the markets in which it is directly or indirectly invested and the actual resources available to it, may differ materially from the impression created by the forward-looking statements contained in the document. In addition, even if the investment performance, results of operations, financial condition, liquidity and dividend payments of the Company, the development of its financing strategies and the operation of the markets in which it is directly or indirectly invested are consistent with the forward-looking statements contained in the Prospectus, those results or developments or markets or resources may not be indicative of results or developments or markets or resources in subsequent periods.
These forward-looking statements speak only as at the date of this presentation. Subject to its legal and regulatory obligations, the Company expressly disclaims any obligations to update or revise any forward-looking statement contained in the presentation to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. This Presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this Presentation nor anything contained in it shall form the basis of any contract or commitment. Prospective investors should be aware that this Information Memorandum has been prepared pursuant to section 708(1) and section 708(10) and section 708 (11) of the Corporations Law for the purposes of making offers or issues which do not require disclosure within the meaning of Chapter 6D of the Corporations Law. No other offers or invitations are made pursuant to this Information Memorandum. In particular, this Presentation does not constitute an offer to sell, or solicitation of an offer to buy securities in the United States or to any "U.S. Person" as defined in Regulation S under the Securities Act of 1933, as amended (the "U.S. Securities Act"). This Presentation may not be distributed or released in the United States or to, or for the account or benefit of, any U.S. Person. The shares in the proposed offering have not been and will not be registered under the U.S. Securities Act, or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the shares in the proposed offering may not be offered, or sold, directly or indirectly, within the United States or to, or for the account or benefit of U.S. Persons, except in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. By accepting this Presentation, you agree to be bound by the foregoing limitations.
![Page 3: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/3.jpg)
Endogene is an unlisted public company founded in 2002
It has developed and proven four innovative medical devices which deliver simple but effective solutions to unmet medical needs:
◦ Self-advancing gastro-intestinal endoscope
◦ Nitinol-based products for minimal invasive surgery: surgical clip and delivery system; retrieval device; vascular stapling system
All four products present significant global market opportunities, supported by strong IP, low costs bases and identifiable pricing points delivering high margins
Commercialisation plan targeting emerging markets first (Russia, Eurasia, Indian sub-continent, South East Asia, China) prior to North America and Europe, via assembly-based sub-contracted manufacture and third-party distribution
Endogene maintains flexibility to out-licence or partner technologies where appropriate and will crystallise value for stakeholders through trade sales or IPO
ENDOGENE LTD 3
![Page 4: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/4.jpg)
Surgical Stapling system
4 ENDOGENE LTD
2006 2008 2010 2012 2014
Self-Advancing Endoscope
Surgical Clip system
R&D to Basic Prototype
Bench and Animal Trials
Final Base Prototype
Partner Product Development & Regulatory processes; Clinical trials
Emerging Markets’ Launch
Major Markets’ Launch
Retrieval device
2016 2018
![Page 5: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/5.jpg)
Limitations of current endoscopes Current endoscopes are either pushed into Gastrointestinal (GI) tract or
assisted with their advancement by balloons or spiral mechanisms, meaning: ◦ Control and ease of insertion decrease as the scope progresses through bowel due to cumbersome
methods of advancement
◦ Inability to view small bowel effectively and conduct procedures
◦ Instrument can push intestinal wall leading to stretching/perforation
◦ Limited insertion depth – duodenum, cecum
◦ Requires considerable skill and experience to operate
Key players Olympus, Pentax and Fujinon have sought a viable propulsion method for decades but have failed to deliver one.
5 ENDOGENE LTD
![Page 6: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/6.jpg)
Self-Advancing Pan-Endoscope
Solution – Endogene’s endoscope • Simple low-cost hydraulic propulsion mechanism, totally internal to device
(unlike previous third-party attempts which have all been external and at tip of device); device advances like a snake
Enables examination of the entire small (and large) bowel, whilst retaining full functionality and controls of traditional endoscopes
Improves ease and efficiency of standard diagnostic procedures and introduces opportunity to conduct selected procedures internally to the small intestine
Instrument moves itself through GI tract, meaning: Ability to navigate entire GI tract; more likely to follow the natural route of the GI tract
Significantly reduced time of the procedure
Greater ease of insertion bringing increased safety; greater depth of insertion
Non-anaesthetised procedures feasible
Potentially less skilled operators (advantage especially in emerging markets and for screening procedures)
Facilitates single-use disposable device in due course
ENDOGENE LTD 6
![Page 7: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/7.jpg)
Endoscope Comparison
Mouth
End of
Duodenum
Cecum
Anus
Technology
7 ENDOGENE LTD
Current
Technology
![Page 8: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/8.jpg)
Current Status & Development
Prototypes developed and proven in testing
Ready for PPD phase
Bench and animal trials completed successfully
Animal trials in pigs navigated entire small and large intestine. Pathology proved no adverse impact on intestinal tissue
Human testing - Initial trials - safety:
◦ Upper entry - endoscope progressed well (>1.5m) into the post duodenal small intestine
◦ Lower entry - endoscope progressed well (approx. 2.5 metres) into small intestine
Planned multi-site clinical trial
◦ Subject to final arrangements, to be conducted at Royal Melbourne Hospital under Chief Investigator Prof Finlay Macrae. Likely addition of one other Australian site and sites in Taiwan and Russia
◦ Trial procedures likely to include using Endogene self-advancing pan-endoscope and Fujinon double-balloon endoscope in navigating small intestine (enteroscopy) and large intestine (colonoscopy) planned
◦ Aim to demonstrate improved safety, efficacy and time for procedures. Indicative 100-150 patients; duration 6 -9 months.
8 ENDOGENE LTD
![Page 9: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/9.jpg)
Self-Advancing Endoscope Comparison with Traditional Enteroscopes
DISTINGUISHING
FEATURES ENDOGENE
ENDOSCOPE
TRADITIONAL
ENTEROSCOPE
ADVANCING
MECHANISM
Simple internal propulsion:
hydraulic, self-advancing
module internal to the
probe
Push, double balloon &
spiral enteroscopy, have
cumbersome, unreliable
methods of propulsion
EXTENT OF GI TRACT
NAVIGATION
Navigates entire GI tract
(small and large intestines)
Limited reach; inadequate
coverage of small
intestines
QUICKER PROCEDURES
– reduces operating cost,
increases throughput
Complete GI tract
navigation in 30-40 minutes
Up to 6 hours
SAFER CONSTRUCTION
– eliminates bowel perforation,
delivers safer procedures
Softer plastic on outer
envelope
Semi-rigid outer envelope
OPERATOR SKILL LEVEL GPs, trained nurses esp. for
screening procedures
Professional endoscopists
SEDATION REQUIRED? NO YES
![Page 10: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/10.jpg)
Self-Advancing Endoscope Comparison with Pillcam
DISTINGUISHING
FEATURES
ENDOGENE
ENDOSCOPE
PILLCAM*
OPERATOR CONTROL OF
DEVICE
YES, under total operator
control
NO
ABILITY TO INSPECT
INTESTINAL FOLDS
YES, via air and water channels
to expand sections for
inspection. Water ensures
optimal images.
NO
REAL-TIME IMAGING YES, with a state-of-the-art
video imaging
NO, image download upon
retrieval
QUICKER PROCEDURES YES, 30-40 minutes NO, several hours
ABILITY TO CONDUCT
PROCEDURES
YES, selected procedures such
as insertion of intestinal stents
NO, purely an image-taking
device
* The Given Imaging Pillcam has been successful in penetrating the market over a five-year period. The Pillcam is
swallowed by the patient and finds its way naturally through the GI tract, usually emerging within 8-10 hours. On its
journey, the Pillcam takes images as it travels through the GI tract. These are then downloaded upon retrieval and
analysed. Covidien recently announced acquisition of Given Imaging for $860 million.
![Page 11: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/11.jpg)
The limitations of current surgical staplers Current surgical staplers deliver single staples using a hammer & anvil approach, akin to
paper staplers; these are unsuitable for use in vascular applications
Current surgical staplers are also the subject of numerous adverse events
◦ 8-9,000 adverse events per year in US alone (FDA)
◦ 14.3% suture line separations; 32.1% staples not forming and 30% device failures
◦ Patient outcomes include anastomosis failure, sepsis and bleeding, requiring repeat surgery
11 ENDOGENE LTD
![Page 12: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/12.jpg)
*
Solution: Endogene’s vascular surgical stapler
The stapler has been specifically designed to address the problems with existing staplers, by:
◦ Delivering multiple staples simultaneously to seal graft in one action
◦ Using a stapler shaft which allows use of the stapler in keyhole surgery, limiting trauma and reducing the likelihood of bleeding
◦ Using staples that do not require an opposite force and tighten automatically post insertion, which reduce trauma, bleeding and increase seal strength
The stapler delivers stronger seals through the use of
◦ Use of nitinol-based shape memory alloy to design “smart” staples
◦ Improved stapling gun design to reduce trauma and to deliver multiple staples with one shot with precision
*Device IP owned by Endogene. Staples part of joint development with Moscow Institute of Steel & Alloys:60% Endogene: 40% MISIS
12 ENDOGENE LTD
![Page 13: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/13.jpg)
Endogene’s vascular stapler is suitable for a range of procedures including, coronary artery bypass grafts, aortic aneurysm repair, heart valve replacement, vascular anastomosis and bowel surgery
Numerous prototypes for various applications developed
◦ Base versions successfully bench and animal trialled
◦ Versions for specific applications constructed and in development
Next major milestone, cadaver trials 2014
Plan to partner with large medical device group due to extensive and expensive clinical trial regime
13 ENDOGENE LTD
![Page 14: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/14.jpg)
System involves traditional style tweezers applicator and nitinol-based shape memory alloy clips
Instant & simple opening and closing of clips through electrical means
Solves current problem of trauma to blood vessels from over-tightening when clips are applied/removed
Ultra-slim design suits keyhole surgery as well as open surgery
Preliminary human tests completed - 25 patients; clinical trial planned
PPD phase ready
*Part of a multi-product joint venture with the Moscow Institute of Steel & Alloys: 60% Endogene: 40%
MISIS
Surgical Clip Delivery System*
14 ENDOGENE LTD
![Page 15: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/15.jpg)
Foreign Body Retrieval Instrument*
Instrument for retrieving/removing foreign bodies from tubular organs
Traditional stone retrieval uses methods that are not overly reliable
Endogene’s trawl instrument captures stones and removes then with certainty & simplicity by creating a nitinol-based shape-memory trap behind the obstruction
Unique design features suit endoscopic access and retrieval
Applications include removal of gall, bile, kidney & urethra stones, windpipe blockages
Bench tests completed; clinical trials planned; PPD phase ready.
ENDOGENE LTD 15
*Part of a multi-product joint venture with the Moscow Institute of Steel & Alloys: 60% Endogene: 40%
MISIS
![Page 16: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/16.jpg)
Strategy to deliver regulatory approvals for endoscope, clip and retrieval device products in approximately 18-30 months (subject to funding)
◦ Phase 1 Proof of concept/feasibility – completed
◦ Phase 2 Product development – well advanced
◦ Phase 3 Supplier qualification & manufacturing – in planning with several manufacturers under evaluation
◦ Phase 4 Human clinical studies – in planning (not a critical path item for regulatory approval) – trial institutions identified in Australia, Taiwan and Russia
◦ Phase 5 Regulatory approvals – in planning
Implementation
◦ Specialist outsourced service providers to finalise product design, specification, validation preparatory to regulatory filing already providing pre-scoping reports.
◦ Key personnel/services identified
ENDOGENE LTD 16
![Page 17: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/17.jpg)
PARTNERSHIP PRODUCT DEVELOPMENT
Partner with specialist group(s) for product design, specification, validation, testing, component sourcing and costing, preparation of regulatory file
Australian-based Blue Curve Pty Ltd lead product manager supported by Tiller Design Pty Ltd – preliminary scoping reports in train
Plan for completion of PPD program– clip system and retrieval device 12-18 months; endoscope 18-24 months
Regulatory filings on completion of PPD program in emerging markets of Russia, Eurasia, Indian sub-continent, South East Asia but also TGA, FDA and CE marking (which facilitate approvals in a number of other Asian countries)
ENDOGENE LTD 17
![Page 18: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/18.jpg)
COMMERCIALISATION STRATEGY
Take the Endogene’s endoscope, clip delivery system and retrieval device all the way to market, while continually assessing other commercial possibilities, including partnering, joint ventures, licensing or outright sale of technologies
Flexible structuring using third-party manufacturing & distribution; all products have high margin potential from existing comparable price points
Manufacturers identified in Malaysia/Singapore/Taiwan for endoscope, clip delivery system and retrieval device. Manufacturers for nitinol elements of clip system and retrieval device identified in Germany. Component suppliers identified in German and South East Asia
Distribution via experienced specialist groups for each product in target markets
18 ENDOGENE LTD
![Page 19: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/19.jpg)
THE MARKET OPPORTUNITY
Market sizes
◦ Endoscope – US$5.4 billion worldwide in 2009 (iData Res.)
◦ Vascular stapling system - Sutures, stapler and adhesive market US$2.2 billion p.a. worldwide in 2004 (Frost & Sullivan)
◦ Clip delivery system – Clip & clamping market US$1.5 billion (Teleflex)
◦ Retrieval device - US$200 million (company estimate)
First commercial models of clip system and retrieval device for human use targeted for emerging markets 18-24 months; endoscope 24-36 months.
Target markets with
◦ Established networks
◦ Lower regulatory requirements
◦ Similarities to US and EU medical practices
Mature markets launch targeted to follow emerging markets
19 ENDOGENE LTD
![Page 20: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/20.jpg)
ADDRESSABLE MARKET ENDOSCOPE
Endogene’s self-advancing endoscope offers global market opportunities, especially emerging markets, in:
◦ Enteroscopy – small intestinal inspection and conduct of procedures, evidenced by
Given Imaging PillCam annual sales exceeding $100 million
Other capsule endoscopy sales to be added
Fujinon double balloon endoscope sales to be added
Expected market expansion from ability reliably and quickly navigate small intestine & conduct procedures
◦ Colonoscopy – large intestinal screening procedures plus advanced diagnosis and treatment
Ageing populations and recognition of benefits of regular screening
China example: over 20% of population aged 50 years and over, providing 240 million target market for screening colonoscopy
Many other countries have similar demographics
Self-advancing endoscope provides ability to address emerging market opportunities through use of trained technicians on screening procedures, with non-sedated procedures feasible
ENDOGENE LTD 20
![Page 21: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/21.jpg)
Endoscope ◦ Industrial uses - Any pipeline or difficult to navigate spaces e.g. oil/natural gas,
aviation, emergency services, customs, tradesmen
◦ Veterinary uses - Larger animals especially in equine, cattle, sheep, etc.
Clip delivery system ◦ Veterinary uses - as for humans
Retrieval device ◦ Industrial uses - Removing blockages in any pipe-like situations
◦ Veterinary uses – Removing items swallowed by pets, a most common presentation at veterinary premises
Industrial and veterinary opportunities offer the prospect of earlier revenues and are being explored either directly or through partnering/licensing arrangements
ENDOGENE LTD 21
![Page 22: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/22.jpg)
Endogene faces the normal risks associated with the general economic and commercial environment. Additionally, specific areas of risk include the following:
Patents – no guarantee that patents will grant; leading patent attorney firm engaged to manage
Product development – issues may arise in the final PPD process to affect the timing or extent of product success; planning and execution by experienced PPD groups being engaged
Regulatory – no guarantee that regulatory approvals will be obtained within target time-frames; experienced advisor engaged to manage
Clinical trials – no guarantee that clinical trials will be successful; animal testing and preliminary human work provides some confidence & as devices have predicates, this risk is reduced
Key personnel – reliance on key personnel in a small team; service agreements in place & team to be expanded
Funding – implementation of plans dependent on fully funded company; current pre-IPO placements designed to address this
Infringements of Intellectual Property – patent protection & defence insurance to be put in place, subject to availability & cost
ENDOGENE LTD 22
![Page 23: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/23.jpg)
Patents ◦ Endoscope advancement mechanism
Two core patents covering hydraulic propulsion mechanism and structural elements of the device
One already granted in all nominated countries, including USA Second, entered national phase; granted in Japan and Russia
◦ Vascular stapling device Two core patents covering stapling gun, staple design and delivery Both entered national phase; first patent granted in USA, Australia, Russia, China
◦ Surgical clip system PCT patents lodged; entered national phase; granted in Russia
◦ Retrieval device PCT patents lodged; entered national phase; granted in Russia
Trade secrets ◦ All technologies embody important knowhow in addition to patented
inventions
Patent protection insurance planned ◦ Designed to allow both protection of company IP and defense against any
infringement
23 ENDOGENE LTD
![Page 24: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/24.jpg)
Seeking to raise A$10 million through private Pre-IPO placement (discretion to accept up to A$30 million)
Current capital structure: 16.8 million ordinary shares and 14.8 million options (various terms)
Pre-IPO placement terms: One new fully paid ordinary share at $1 plus one free option for each share exercisable at $1 on or before June 30 2016
Working towards Stock Exchange listing in mid-2015 as key element of crystallising value for stakeholders.
Proposed IPO to raise additional funds subject to final raise in pre-IPO phase
Further funding to come from option exercises over time and tax rebates on R&D
Flexibility retained for trade sales/partnering and/or licensing of technologies or outright sale of the company
ENDOGENE LTD 24
![Page 25: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/25.jpg)
Current capital structure
◦ 16.8 million fully paid ordinary shares & 14.8 million options (various terms)
Valuation
◦ Latest placement price $1 per share; implied valuation of existing shares $16.6 million
◦ Minority placements over past two years at this price
◦ Full take-out valuation substantially higher, taking into account the following factors
Factors influencing fair transaction valuation
◦ Corporate
Unique product pipeline generated independent valuation of $250 million (mid-point) assuming fully funded and liquid market
Actual cash spend over $2 million, comprising mostly equity from over 60 shareholders
Conduct of significant R&D overseas at a fraction of Australian cost, estimated to be at least $10 million – covers technical development, prototyping, bench, animal and human testing
Personnel time not charged at commercial rates by founders and advisers estimated at $2 million
◦ Endoscope
Olympus recently paid $70 million to acquire Spirus Medical, a cumbersome and, in our view, not viable corkscrew method of propelling an endoscope
Comparable (but inferior) product PillCam company acquired by Covidien this year for $860 million
◦ Nitinol-based products
Pre-clinical stent company Reva Medical floated with value of $350 million after raising $85 million in IPO; shareholders fund at 30 June 2013 $37 million
ENDOGENE LTD 25
![Page 26: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/26.jpg)
Application of proposed capital raising (assumed $10 million): $’000
◦ Patent portfolio 340
◦ Patent defence insurance 150
◦ Completion of product development & regulatory pathways (excluding stapler) 5,180
◦ Extending management team - personnel remuneration 2,500
◦ Administration & travel – development & commercialisation 415
◦ Legal costs of agreements 210
◦ Fundraising commission 600
◦ Contingency 470
◦ Balance 135
10,000
Targeted milestones (assuming $10 million raising):
◦ Completion of final product designs & specifications & independent component testing for endoscope, clip-holder and trawl, preparatory to seeking regulatory approvals
◦ Completion of human tests of endoscope, clip-holder and retrieval device; completion of cadaver trials of stapler
◦ Sourcing independent market assessments for all technologies (as required)
◦ Readying endoscope, clip-holder and retrieval device for initial market entries
◦ Initiating & progressing potential partnering arrangements for all technologies as appropriate
A detailed Application of Funds document is available on request
ENDOGENE LTD 26
![Page 27: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/27.jpg)
Endoscope Clip delivery system
Stapling system Retrieval device
TARGETED MILESTONES
2014 2015 2016 2017 2018
Product design &
specifications
completed
Independent
testing
Clinical trials;
cadaver trials*
Market
assessments
Regulatory
approvals
Market entry
(medical)
* Surgical stapler
![Page 28: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/28.jpg)
Ron Lewis - Executive Chairman & Director of Strategy and Finance
40 years corporate advisory experience in strategic planning, corporate structuring, IPOs including due diligence; previous public company directorships including former executive director role in implementing start-up latex examination glove manufacturer in Malaysia
Sidney Braginsky - Non-executive Director
Former President Olympus USA Inc. Currently a director on several medical device Boards.
Dr Mikhail Soutorine - CMO, Director, Technical & Product Development
20 years+ experience as endoscopic and general surgeon; qualified practising medical practitioner in Australia, primary inventor of all Endogene technologies and Director of all R&D programs
David Trende - Non-executive Director
Management consultant with 40 years experience & Associate Professor in Melbourne Business School MBA program, with focus on mergers and acquisitions.
Restructure of Board to broaden skills planned.
28 ENDOGENE LTD
![Page 29: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/29.jpg)
• Management team will be expanded as part of the commercialisation process
• Planned structure will include the following key appointments (or outsourced services where appropriate):
• CEO with international medical device sales/marketing/ commercialisation experience (candidate identified)
• Product Development Manager (candidates identified)
• Regulatory & Clinical Affairs (Paul Clark, Paul L Clark & Associates)
• Business Development – candidates identified
29 ENDOGENE LTD
![Page 30: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/30.jpg)
Scientific Advisory Board
Prof Peter Gibson Director of Gastroenterology, Alfred Hospital, Melbourne
Prof Finlay MacRae Head of Colorectal Medicine & Genetics Royal Melbourne Hospital; Professor Department of Medicine Melbourne University
Prof Julian Smith Head Department of Surgery, Monash Medical Centre; Monash University, Melbourne
Prof Bruce Waxman Director Colorectal Surgery, Southern Health, Monash University
Dr Benjamin Wong Chun Yu Consulting Gastroenterologist & Hepatologist, formerly Simon KY Lee Professor in Gastroenterology, University of Hong Kong
Prof Bryan Yan Assistant Professor, Department of Medicine & Therapeutics, Chinese University of Hong Kong; Interventional Cardiologist, Prince of Wales Hospital, Hong Kong
Prof Anthony Yim Specialist in Cardiothoracic surgery; founder Minimally Invasive Thoracic Surgery Centre; formerly Professor Department of Surgery, Chinese University of Hong Kong
Other key opinion leaders in Taiwan, Israel, Russia
ENDOGENE LTD 30
![Page 31: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/31.jpg)
Ron Weinberger Experienced medical device executive and Board Member with more than 20 years experience in transforming intellectual property into approved medical devices for sale globally. Ron has been instrumental in building the IP portfolio, generating global regulatory approvals, establishing manufacturing and a global sales infrastructure for ASX-listed Nanosonics Ltd. Ron has driven or been directly involved in establishing international partnerships for NAN with global companies such as GE Health Care, Toshiba Medical Systems and Miele Professional.
Paul Clark Specialist Regulatory & Clinical Affairs consultant, Principal, Paul L Clark & Associates, formerly Director of Clinical & Regulatory Affairs, NxStage Medical Inc., TGA and TUV Product Service.
Murtaza Esufally Executive Director of Hemas Holdings PLC and Executive Chairman of Hemas Hospitals (Pvt) Ltd Sri Lanka.
ENDOGENE LTD 31
Commercialisation Advisory Board
Warren Bingham Experienced medical device executive who established Given Imaging Australia, the company which pioneered PillCam technology. CEO of Given Imaging Australia until its recent acquisition by Covidien. Leader in product management, domestic & international marketing and business development. Prior to Given Imaging, Warren participated in bringing Pentax Endoscopy to leadership in the Australian market. Currently Chair of AusMedtech National Advisory Group and AusMedtech Health Economics Expert Panel.
Sylvan Browne Patent Attorney and Partner of FB Rice, specialising in medical, electrical and mechanical technologies.
Shirley Giorini-Silfen Regulatory & clinical affairs consultant ex Medtronics Israel.
Legal Advisor to the Commercialisation Advisory Board James Hutton Partner Minter Ellison lawyers, specialises in corporate structuring and governance with an industry focus in bioscience, medical and technology research and pharmaceuticals.
![Page 32: 2014.7.25_ENDOGENE LTD _SlidePresentation_GENERAL](https://reader031.fdocuments.in/reader031/viewer/2022012323/55d0e1d2bb61eb0e538b4708/html5/thumbnails/32.jpg)
ENDOGENE LTD
THANK YOU FOR YOUR ATTENTION
Endogene Ltd ACN 099 748 133
Suite 10, 2 St Andrews Street
Brighton Victoria Australia
Office: +613 95932022
www.endogene.com.au
ENDOGENE LTD 32