Investor Presentation CY 2020 - EnzoInvestor Presentation CY 2020. Enzo Biochem Inc. 1 LEGAL...
Transcript of Investor Presentation CY 2020 - EnzoInvestor Presentation CY 2020. Enzo Biochem Inc. 1 LEGAL...
Enzo Biochem Inc.www.enzo.com527 Madison AvenueNew York, NY 10022
Investor PresentationCY 2020
Enzo Biochem Inc. 1
LEGAL DISCLAIMER
Except for historical information, the matters discussed herein may be considered
"forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements
include declarations regarding the intent, belief or current expectations of the Company and its
management, including those related to cash flow, gross margins, revenues, and expenses are
dependent on a number of factors outside of the control of the company including, inter alia, the
markets for the Company’s products and services, costs of goods and services, other expenses,
government regulations, litigations, and general business conditions. See Risk Factors in the
Company’s Form 10-K for the fiscal year ended July 31, 2019. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve a number of risks
and uncertainties that could materially affect actual results. The Company disclaims any obligations to
update any forward-looking statement as a result of developments occurring after the date of this
presentation.
Enzo Biochem Inc.
An Integrated Diagnostics Company
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Enzo Biochem Inc.
ENZO BIOCHEM INC. – WHO WE ARE
Innovative company driving development of cost efficient and leading edge diagnostic technologies
Pioneers in labeling and detection – from genome to whole cell – transforming the Molecular Diagnostic market
400+ Key Patents; 75+ pending patent applications
Disruptive technology being employed to alternative business model to improve laboratory economics; reducing dependency on diagnostic manufacturers
Unique infrastructure that enables molecular platform development for use in open systems, manufacturing and distribution of reagents and kits, along with global sales and marketing reach
Global Commercial Offices: Switzerland, Belgium, France, England, Germany, Michigan, New York
Headquartered in New York
Revenue greater than $80MM with strong growth opportunity
Strong balance sheet with $57MM in cash, debt free
500+ employees
NYSE listed company for 40 years (Ticker Symbol: ENZ)
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Translating Innovations To Solutions
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ENZO’S VERTICAL INTEGRATION: THREE INTERDEPENDENT BUSINESSES
Unique vertical integration enables innovation/disruption
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CONCEPT TO COMMERCIALIZATION
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COMPETITIVE ADVANTAGE: OTHERS HAVE NOT VERTICALLY INTEGRATED
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EFFICIENT TRANSLATION OF BIOTECH CAPABILITIES TO PLATFORMS
Non-radioactive labeling & detection of nucleic acids
Amplification and quantification of nucleic acids
Proprietary dyes, bleachers, quenchers, and blockers
Enhanced detection of target via poly enzyme compounds
Homogenous assays for nucleic acid detection
Immobilization of nucleic acids to a solid support (array)
AmpiProbe™ real-time amplification & detection(1)
FlowScript™ flow cytometry for RNA expression(1)
Super-CGHTM for genomics studies(2)
Super-sensitive ELISA for immunochemistry(3)
Immunohistochemistry (IHC) with enhanced detection(3)
In-situ Hybridization (ISH) with enhanced detection(3)
Proprietary Technologies Our MDx Platforms
Our Broad Technologies and Focused Platforms Permit Rapid, Efficient Product Development
(1) Incorporates: Non-radioactive labeling, amplification, proprietary dyes, and detection (2) Incorporates: Non-radioactive labeling and arrays(3) Incorporates: Proprietary dyes and detection
ENZO’S PATENTED PROPRIETARY TECHNOLOGIES ARE UTILIZED TO OPTIMIZE OUR MDx PLATFORMS
Enzo Biochem Inc.
WORLD CLASS MANAGEMENT TEAM
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Enzo Biochem Inc.
EXPERIENCED INDUSTRY LEADERS ON BOARD OF DIRECTORS
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Market Dynamics - From Challenges of Industry to Opportunities for Enzo
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TREMENDOUS DEMAND FOR MOLECULAR DIAGNOSTICS
$4.6$4.9
$5.2
$5.6
$6.0
$6.5
$7.1
$3
$4
$4
$5
$5
$6
$6
$7
$7
$8
2012 2013 2014 2015 2016 2017 2018
($ in billions)
Molecular Diagnostics Opportunity
In the span of 25 years, molecular diagnostics(MDx) have burgeoned from a practically non-existent market of approximately $10 millionin product sales to more than $7 billionglobally
MDx is only a small segment within the ~$170billion clinical lab market where Enzo sells itsoverall diagnostics offering
Thousands of labs in the U.S. can be enabled with MDx technologies, but they lack capability
Today’s MDx technologies are expensive
Closed systems, high-cost reagents
Require specially trained med-techs
Inexpensive open systems lack content due to IP barriers
Molecular Diagnostics Market Opportunity
Source: Grand View Research, Public Company Reports.$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500
Infectious Diseases
Women's Health
CT/NG
BV
HPV
HSV
HIV
HBV
HCV
Annual TAM ($ million)
Global North America
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VALUE CREATION & GROWTH EFFORTS
Enzo is making meaningful progress in executing its
“three-pronged” strategy designed to unlock
shareholder value and drive future growth
Form Strategic Relationships for Diagnostic Growth
Build a New Model for the Diagnostic Marketplace
Return to Operating Profitability and Growth in the Lab Segment
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VALUE CREATION & GROWTH EFFORTS
Form Strategic Relationships for Diagnostic Growth
Build a New Model for the Diagnostic Marketplace
Return to Operating Profitability and Growth in the Lab Segment
Actively engaging with several global life sciences, healthcare and medical device companies
Seeking to form strategic relationships or new venture creation across key product platforms
Retained Lazard to assist in forming strategic relationships or new venture creation
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VALUE CREATION & GROWTH EFFORTS
Form Strategic Relationships for Diagnostic Growth
Build a New Model for the Diagnostic Marketplace
Return to Operating Profitability and Growth in the Lab Segment
Rolled out new Labs-to-Labs business model, whereby Enzo will serve as the “central capability” for smaller and mid-size labs, thereby increasing capacity utilization and profitability
Initiated first three Labs-to-Labs relationships and actively forging additional relationships
Capitalizing on scale in high-value, lower-cost operations, proprietary IP and products, decades of
innovation and commitment to medical solutions
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VALUE CREATION & GROWTH EFFORTS
Form Strategic Relationships for Diagnostic Growth
Build a New Model for the Diagnostic Marketplace
Return to Operating Profitability and Growth in the Lab Segment
Aggressively controlling operational costs and improving margins in the labs segment to return labs business to growth and profitability
Implemented initiatives estimated to reduce routine expenses in labs by ~$10 million in the coming calendar year
Objective remains to return to operating profitability in
calendar 2020
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MARKET GROWTH AND CHALLENGES… AND ENZO’S OPPORTUNITY
Problem to Address: MDx Market Margins are Under Intense Pressure
Demand for MDx is rapidly increasing
However, reimbursement for these tests is in long-term decline
Clinical labs have already reduced labor and other expenses and, we believe,
cannot make further significant cuts
Meanwhile, the costs for performing MDx tests are increasing
Inexpensive open systems have recently become widely available, but high-value
content is lacking due to IP barriers – this presents a material opportunity for Enzo
Selling MDx content into this large installed base of open systems presents a
significant opportunity for Enzo to disrupt the closed system market and offset
margin pressures in the market
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ENZO’S COST SAVINGS OPPORTUNITY VIA INTEGRATED WORKFLOW
Even with reimbursement erosion, Enzo can deliver 30-50% cost relief to the market while maintaining healthy margins through its integrated solutions
Enzo’s Solution - Efficient, Self-Generated Development and Commercialization
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Enzo Biochem Inc.
Create Affordable Solutions To Alleviate Market Pressures
Enzo’s integrated structure overcomes cost of goods layering thereby producing affordable products and services needed to combat increasing
reimbursement pressures
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OUR OBJECTIVE
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OUR ASSETS - APPLYING OUR CAPABILITIES TO PROVIDE AFFORDABLE PATIENT CARE WITHIN KEY DIAGNOSTICS SEGMENTS
Enzo Biochem Inc.
ENZO IS CHALLENGING THE NORM TO CREATE ECONOMIC VALUE
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EXAMPLE: AMPIPROBE PLATFORM LEADS TO PRODUCTS THAT WE BELIEVE ARE 30%-50% THE COST OF REAL-TIME AMPLIFICATION DETECTION
Less Sample Allows paneling/reduced reaction volume/lower prep
costs
Multiplex Capability Able to run up to 30 assays simultaneously
Enhanced Sensitivity Compared to Roche and Abbott systems
Zero Background After more than 60 cycles
Competitors have issues
100% Concordance Existing FDA-approved PCR technologies
Flexible, Adaptable & Universal Any open/dedicated system
Adaptive Fits into laboratory workflow seamlessly
AMPIPROBE™NEXT-GENERATION NUCLEIC ACID DETECTION
One of Enzo’s Proprietary Platforms
DISRUPTING A MULTIBILLION REAL-TIME AMPLIFICATION REAGENTS MARKET
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Molecular Diagnostics
Comprehensive assay able to detect 16 common pathogens related to sexual transmitted diseases and vaginal infections from a single vaginal swab NEW AND CURRENTLY BEING RUN BY ENZO IN ITS LABORATORY
WOMEN’S HEALTH
ASSAY PIPELINE• HSV1/2-VZV
• HPV HR screen
AMPIPROBE® Next Generation Nucleic Acid Amplification
Example: AMPIPROBE® Women’s Health Panel
Coming Soon
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LABORATORY DEVELOPED AND MODIFIED IVD ASSAYS- ALL ARE BASED ON ENZO INTERNALLY DEVELOPED TECHNOLOGY
Analyte Approval Date Assay Type
HPV E6/E7 mRNA Oncogene Detection (E-TECT®/FLOWSCRIPT®)March 4, 2015(Conditional Approval)
Laboratory Developed Test
Candida albicans, C. glabrata, C. krusei (qualitative detection) August 5, 2015 Laboratory Developed Test
Hepatitis C Virus (HCV) RNA quantitative detection (AMPIPROBE®) for management of HCV-infected individuals
November 9, 2015 Laboratory Developed Test
HPV (high-risk genotypes 16 and 18) detection (anorectal specimen modification)
November 24, 2015 Modified IVD
Enzyme rate activity-based method for measurement of Lp-PLA2 activity in serum specimens
August 25, 2016Laboratory Developed Test
Real-time PCR-based method for quantitative detection of N. gonorrhoeae, C. trachomatis, and T. vaginalis in Aptima® vaginal swab specimens (ANCT –PCR)
May 2, 2017Laboratory Developed Test
Multiplex real-time PCR-based method for qualitative detection of Candida species (C. albicans, C. glabrata, C. krusei, C. parapsilosis, C. tropicalis) in Aptima® vaginal swab specimens
September 14, 2017Laboratory Developed Test
Real-time PCR-based method for qualitative detection of Bacterial Vaginosis in Aptima® vaginal swab specimens
January 18, 2018Laboratory Developed Test
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LABORATORY DEVELOPED AND MODIFIED IVD ASSAYS- ALL ARE BASED ON ENZO INTERNALLY DEVELOPED TECHNOLOGY
Analyte Approval Date Assay Type
Real-time PCR-based method for qualitative detection of Chlamydia trachomatis/Neisseria gonorrhoeae (CT/GC) in SurePath® vaginal/cervical swab specimens and male/female urine specimens
April 24, 2018Laboratory Developed Test
Real-time PCR-based method for qualitative detection of Ureaplasma spp./M. genitalium/M. hominis (UMM) in Aptima® swab specimens
Oct 15, 2018 Laboratory Developed Test
Real-time PCR-based method for qualitative detection of Chlamydia trachomatis/Neisseria gonorrhoeae (CT/GC) in Aptima® oral/rectal swab specimens
July 11, 2019Laboratory Developed Test
Hepatitis B Virus (HBV) DNA quantitative detection (AMPIPROBE®) for management of HBV-infected individuals
September 9, 2019Laboratory Developed Test
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ENZO HAS A ROBUST MDx PIPELINE
Rapid Roll-Out
Product / Test Availability Platform Opportunity(1)
Available FLOWSCRIPT® GENE EXPRESSION $200mm+ product$500mm service
HCV Viral Load AvailableAMPIPROBE® REAL-TIME AMPLIFICATION AND DETECTION
$300mm product$450mm service
Cardiac Marker Available ENHANCED IMMUNOASSAY$20mm product$30mm service
Fertility Assay Q4 2020 ENHANCED IMMUNOASSAY$15mm product$40mm service
Women’s Health Panel AvailableAMPIPROBE® REAL-TIME AMPLIFICATION AND DETECTION
$500mm product$1bn service
HBV Viral Load AvailableAMPIPROBD® REAL-TIME AMPLIFICATION AND DETECTION
$250mm product$375mm service
HIV Viral Load Q2 2020AMPIPROBE® REAL-TIME AMPLIFICATION AND DETECTION
$600mm product$900mm service
IHC/ISH Detection Available ENHANCED DETECTION $50mm+ (clinical)
TH1/TH2 In development FLOWSCRIPT® GENE EXPRESSION$10mm product$15mm service
FISH Q2 2020 DEEPSEE® FISH DETECTION$60mm product$40mm service
RNA ISH Q3 2020 In situ Hybridization ENHANCED DETECTION$40mm product$10mm service
HPV High Risk Screen Q3 2020AMBIPROBE® REAL-TIME AMPLIFICATION & DETECTION
$150mm product$225mm service
HSV/VZV Q4 2020AMBIPROBE® REAL-TIME AMPLIFICATION & DETECTION
$90mm product$180mm service
1 Company estimates
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Translational Capability
Bridge between product development from MDx platforms and service and product validation
Enzo rapidly adapts its development efforts to the clinical services market through constant feedback
Rapid Clinical Assay Validation (Clinical Trials)
New York State regulation is extremely rigorous, and it allows the tests to be offered on a national basis
Enzo validates all of its assays under actual clinical conditions using real clinical specimens, not just control samples – as a result, our products are evaluated under the same conditions experienced by our customers
The access to thousands of previously characterized specimens allows us to perform validations at a fraction of the cost of others that need to obtain such specimens from outside sources
Our integrated premarketing insights and efforts provide for material efficiencies in development and commercialization of our assays
Accelerated Commercialization
Technical support and service
Market to clinical labs and payors
Enzo’s integrated structure provides unparalleledmarket knowledge and expertise as Enzo’s clinical laboratory is one of its own customers
ENZO’S CLINICAL LABORATORY SERVICES
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ENZO’S NATIONAL AND GLOBAL REACH
NEW YORK STATE LICENSURE ALLOWS FOR A NATIONAL REACH, WHILE ENZO ACCREDITATIONS AND GLOBALFOOTPRINT ALLOW FOR WORLDWIDE REACH
Hawaii
Alaska
Continued expansion of national and worldwide sales and marketing presence
Enzo’s strategy provides optionality to the market
Products with 30%-50% savings
Comprehensive service for less than price of competitors’ product alone
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ENZO’S STRATEGY CAN PROVIDE BENEFIT FOR PATIENTS, PHYSICIANS & PAYORS
Insurance Payors are facing pricing pressure as well
Enzo is currently in-network with a number of major payors
We are well positioned to become the “first-choice” service provider to payors for MDx as the low-cost, high-quality provider
Because of the unique vertically integrated structure which has led to a plethora of self-generated platforms, products and services, Enzo can offer significant savings to payors in return for increases in MDx sample volume nationwide
Sample Volume
New In-Network Partnerships:Pending In-Network Partnership:
Financial / Investor Info
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Enzo Biochem Inc.
FINANCIAL SNAPSHOT
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Current Price of $2.55, Mcap of $121mm and EV of $64mm
Enzo BioChem Financial Info (FYE July) FY 2019 1Q 2020
Revenue $81.2mm $20.2mm
Adj. EBITDA $7.1mm ($7.2mm)
Cash & Cash Equivalents $60mm $57mm
Total Debt $4mm $4mm
Shareholders Equity $86mm $78mm
Shares Outstanding 47.6mm 47.6mm
Market Capitalization $166mm $162mm
Enterprise Value $110mm $109mm
EV / Revenue 1.4x 1.3x
EV / EBITDA 15.7x NM
VWAP $3.50 $3.41
Enzo Biochem Inc.
LAB SERVICES ACCESSIONS
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Consistency despite pricing pressures: +4% in 1Q 2020 in Unit Volume
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100
200
300
400
500
600
700
800
900
1,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Lab Services Accessions(000)
Accessions (000)
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SELF-FUNDED R&D
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Enzo Had 74 Patents Issued in 2019
Enzo Biochem Inc.
R&D INVESTMENT YIELDS RESULTS
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ENZO’S STOCK PERFORMANCE PROVIDES INVESTMENT OPPORTUNITY
Hurdle Solution
Lower PAMA Reimbursements Lab-to-Lab & Strategic Initiatives
Genetic Testing Volume Issues Innovative Testing / Self Testing
Revenue Decline Low Cost Strategy
Operating Loss / EBITDA Accession count increases in stable environment
Recent Highlights & Summary
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RECENT HIGHLIGHTS
On Track To Deliver Meaningful Progress
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MANAGEMENT & BOARD WORKING IN THE BEST INTEREST OF SHAREHOLDERS
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SUMMARY
Developing strategy for low cost diagnostic services and products for enhancing clinical laboratory profitability
The Company evaluated multiple internally generated technologies and platforms and selected those to further advance based on the development of:
Products that could be sold at 30%-50% less than the current market
Products that could perform at or superior to market leaders’ products
Medically relevant information
Products that could fit into existing operations
Products that result in greater margins for Enzo
We have demonstrated that Enzo has the assets and capabilities to engineer a system that can generate products based on these features
We have been able to design proprietary products and protocols that are in lock step with current market operations WITHOUT the need to utilize third-party intellectual property
As a result, we can provide the highest quality services while providing savings from current fee schedule
ENZO’S SYNERGISTIC STRATEGY AND INTEGRATED STRUCTURE ADDRESSES THE CHALLENGES IN MDx MARKET
Company Strategically Positioned for Substantial Growth
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David Bench, CFOEnzo BioChem [email protected]
Barry Weiner, PresidentEnzo BioChem [email protected]