JEFFERIES 2015 GLOBAL HEALTHCARE CONFERENCE2).pdf · Also, certain non-GAAP financial measures as...

N AC H U M “ H O MI ” S H A MI R P R E S I D E N T A N D C H I E F E X E C U T I V E O F F I C E R

J E F F E R I E S 2 0 1 5 G LO B A L H E A LT H C A R E C O N F E R E N C E J U N E 3 , 2 0 1 5

SAFE HARBOR STATEMENT

2 | © Copyright 2015 Luminex Corporation | Breakthrough solutions to improve health and advance science

Certa in statements made dur ing the course o f th is presentat io n may not be purely h istor ica l and conseque nt l y may be forward lo o k ing statements with in the meaning o f the Pr ivate Secur i t i es L i t igat ion Reform Act o f 1995, inc ludi n g but not l imite d to statements made regardin g: o ur partner model and the abi l i ty o f our partners and insta l le d base to dr ive future gro wth; the abi l i ty o f o ur techno lo gy to enhance product iv i t y and ef f ic iency; our f inanc ia l pos i t ion and long-term revenue growth; our molecular d iagno st ic bus ines s model , the markets we are target ing, market segmentat io n, expected growth o f such markets , and the abi l i ty o f o ur products to address tho se markets ; sa les o f our products , thei r technica l capabi l i t i es , and the ant ic ipate d market s i ze and acceptance, demand and regulatory env i ro nm e nt and approva ls therefor ; our d i rect sa les ef forts ; our system placement s; o ur system and assay product p ipel i n e and ant ic ipated t imel i n es for regulatory approva ls and market re leases , inc ludi n g for ARIES instrum e ntat io n and assays; market opportuni ty for ARIES and NxTAG RPP product ; funct iona l i t y and benef i t s o f ARIES and NxTAG RPP and compet i t i v e po s i t io n; re imbu rs e me n t t rends; develop me n t and growth o f our PGx strategy , our abi l i ty to dr ive growth thro ugh investm e nt in R&D and focus on o perat ing leverage and managing operat ing costs ; our long term f inanc ia l targets ; our key steps and strategies fo r gro wth; o ur st rateg ic o ut look and growth p lan for our bus ines s fo r 2015 and beyo nd; operat iona l t rends, inc ludi n g tho se re lated to sa les o f systems, assays , consumables , and roya l ty revenue s; compet i t iv e threats and products o f fered by o ther companies; 2014 revenue guidance; o ur bus ines s out look, f inanc ia l targets and pro ject ions about revenu es, cash f low, system shipme nt s , expense s and market condit io ns , and their ant ic ipate d impact on L uminex for 2015 and beyo nd; and, any statement s o f the p lans , s t rategie s and object ives o f managemen t for future operat ions. These forward look ing statements speak o nly as o f the date hereof and are based on our current bel iefs and expectat ions and are subject to known o r unknown r i sks and uncerta int i es so me of which are beyond o ur co ntro l that co uld cause actua l resul ts or p lans to d i f fer mater ia l l y and adverse l y f rom those ant ic ipated in the forward loo k ing statements . Factors that could cause or contr ibute to such d i f ferenc es are deta i le d in our annual , quarter l y , o r o ther f i l ing s with the Secur i t ie s and Exchange Commiss ion. We undertake no obl igat io n to update these forward lo ok ing statements . A lso , certa in non-GAAP f inanc ia l measures as def ined by SEC Regulat io n G, may be covered in th is presentat io n. To the extent that any no n-GAAP f inanc ia l measures are covered, a presentat io n o f and reconc i l ia t io n to the mo st d i rect ly comparable GAAP f inanc ia l measures wi l l be inc lude d in th is presentat ion may be ava i lable on our websi te at www. luminexcor p.com in accordance with Regulat ion G.

http://www.luminexcorp.com/

OUR BUSINESS


A Foundation Built on Multiplexing - From only one sample, detect and identify up to 500

biological agents - Improves time, cost, and productivity - Distributed by key industry players

Growing Focus on Molecular Diagnostics - Expanding product portfolio with the launch of new,

innovative products - Moving downstream into large, adjacent markets - Direct salesforce

Shifting the Company into a Diagnostics Business

Partnership Channel

Direct Sales

Channel

Accelerating the Transformation into a Diagnostics Business

LMNX

PARTNERSHIP CHANNEL FUNDING GROWTH IN MOLECULAR CHANNEL


Stable, Strong & Profitable Partnership Channel

- 2014 Revenue: ~$117M - 1Q15 Royalty Revenue: ~$11M (+6% Y/Y) - Growth Expectations: mid-single digits - Annualized end-user sales approaching

$500M for 2015

Molecular Diagnostics Drives Future Growth

- 2014 Revenue: ~$88M (+18% Y/Y) - 1Q15 Revenue: ~$25M (+17% Y/Y)

- Significant growth in PGx and infectious disease portfolio

- On Track for ~$100M+ in Assays in 2015

[1] 4-year CAGR based on 2014 revenue over 2010

0

50

100

150

2010 2011 2012 2013 2014

$(M)

Systems Consumables Royalties

0

20

40

60

80

100

2010 2011 2012 2013 2014

$(M)

Assays

CAGR = 5% [1]

CAGR = 28% [1]

POSITIONED FOR ACCELERATING GROWTH


ATTRACTIVE Markets Leadership position in growing multibillion dollar markets with

multiple revenue streams

DIFFERENTIATED Technology

Solution-based product innovation to Lab customers

NEW PRODUCT Launches NxTAG™ RPP

ARIES™

FINANCIAL Leverage Strong gross margins

& profitability

THE ESTABLISHED LEADER IN MULTIPLEX TESTING


Detect and identify up to 500 biological agents • Save time • Decrease cost • Increase productivity

11,200+ Instruments

placed

700+ Assays

Developed

65 IVDs Clearances on

Luminex Technology

325+ Issued Patents

Worldwide

More than 22,000 published scientific studies

cite Luminex technology and/or partner products

RUO Launched

NXTAG™ RPP TIMELINE PROGRESSING TOWARDS COMMERCIAL LAUNCH

Started Clinical Trials

2Q15 Summer 15E

FDA 510(k) Submission

4Q15E

Target Date for FDA Clearance


1Q15

NXTAG™ RESPIRATORY PATHOGEN PANEL (RPP) SCALABLE SOLUTION FOR STREAMLINED RESPIRATORY TESTING


• Many pathogens present with similar symptoms

• Labs are busy and may be understaffed

• Require quick results, even during peak seasons

• Post-PCR contamination can cause false results

• Seasonal demand

Challenges for Labs NxTAG Solution • Single-well assay, 22 pathogens,

comprehensive coverage • Simplified workflow, minimal

hands-on time • Results on up to 96 samples

in ~4 hours

• Closed-tube workflow reduces contamination risk

• Scalable throughput: from

1-96 samples at a time

Completed Development

ARIES™ TIMELINE ADVANCING TOWARDS COMMERCIAL LAUNCH

Started Clinical Trials

2H14 1Q15 Summer 15E

FDA 510(k) Submission/ RUO Launch

4Q15E

Target Date for FDA Clearance

5+ Assays Cleared

2Q16E


Commercial Launch

HSV 1/2 Completed

C. Diff Ongoing

20 systems placed across 10 customer sites

~20 systems placed across 10 customer sites

ARIES™: SOLUTION-BASED PRODUCT INNOVATION


• Contamination and Misdiagnosis

• Varying Testing

Platforms • Scarcity of Personnel

(i.e. Lab Technicians) • High Volume of Reports

• Limited Bench Space

Challenges for Labs ARIES Solution

• Sample-to-Answer, Minimizes User Error

• Compelling Menu Strategy (i.e. Rapid Menu Expansion)

• True Walkaway

Capability • Streamlined Reporting

• Minimal Footprint –

15” Bench Space

LUMINEX CURRENT MDx PORTFOLIO


INFECTIOUS DISEASES

PRODUCTS

GENETICS

PRODUCTS

Respiratory

Gastrointestinal

xTAG® RVP xTAG® RVP Fast

xTAG® GPP

Women’s Health MultiCode® HSV 1/2 Cystic Fibrosis

Pharmacogenetics (Personalized Medicine)

xTAG® CF

xTAG® CYP2D6 xTAG® CYP2C19

MARKETS PRODUCTS MARKETS

Portfolio Performance

2014: ~$88M (+18% Y/Y)

1Q15: ~$25M (+17% Y/Y)

On Track for ~$100M+ in 2015

Total Addressable Market = ~500M

Source: Market Diagnostics International (MDxi), 2013 EMMES and internal estimates

I

AR ES

Full MDx (500)

Moderately Complex MDx

(1000)

Limited MDx (5,000)

No MDx Capability (7,000)

INCREMENTAL MARKET OPPORTUNITY EXPANDING DOWNSTREAM WITH ARIES™

Source: Mdxi Market Diagnostics Int’l, 2013 Emmes: 1,000 U.S. laboratory survey, Scientia Analysis, AHA Registered U.S. Hospitals, CMS CLIA


Luminex 2015 and Beyond Key Positioning

• Access to Attractive, Fast Growing Markets Segments

• Simple, Easy to Use Solutions Drive Adoption

• Offering Complete Testing Solution:

- xTAG® / NxTAG™ RPP (High Multiplex)

- ARIES™ (Real-time PCR)

xTAG NxTAG

Current MDx TAM: ~$500M

MDx TAM with ARIES:

$1.5B+

ARIES™ COMMERCIAL LAUNCH PROGRESS


CUSTOMER ENGAGEMENT • Early Access Program • Clinical Whitepapers • Time in Motion studies • Engaging with KOL’s

REGULATORY • Initiated HSV and C. Diff

Clinical Trials

• On track for FDA submission in Summer ’15

SALESFORCE EXPANSION • ~10 Additional Headcount

• Goal: Strategically position for maximum coverage

• Integrated salesforce

SCALE UP OPERATIONS • Invested in semi-

automation equipment

• R&D resource allocation

ARIES

ARIES™ VISION FOR THE FUTURE LEVERAGING OUR MULTIPLEXING HERITAGE


Multiplexing & RT-PCR

Building a Platform for Sustainable Growth

Additional Plex

Capabilities

Menu Expansion

50

100

150

200

250

2010 2011 2012 2013 2014 2015E

Total Revenue

($M)

CONSISTENT TOP-LINE GROWTH

[1] 5-year CAGR based on mid-point of 2015 guidance range over 2010 [2] 2015 revenue guidance as of 1Q15 earnings call, May 4, 2015


2015 Guidance of $230M - $236M [2]

“Expectation above mid-point of range”

[1] Non-GAAP Operating margin for years 2010-2015 exclude litigation fees, restructuring, severance, and settlement of distributor agreements

STRONG GROSS AND OPERATING MARGINS


0%

4%

8%

12%

16%

20%

2010 2011 2012 2013 2014 1Q15YTD

Non-GAAP Operating Margin [1]

Highlights Industry Leading Gross

Margins Significant Operating

Leverage & Profitability - 1Q15 EPS: $0.18 Strong Free Cash Flow

- No Debt - ~$111M in Cash and

Investments at March 31, 2015

Gross Margin: 68% 68% 70% 67% 70% 70%

EXCITING FUTURE AHEAD


• Utilize brand recognition and reputation while expanding addressable market

• Offer a complete testing solution

• Focus on execution, organizational synergy and becoming market driven

• Leverage a strong balance sheet

• Growing emphasis on diagnostics

THANK YOU

JEFFERIES 2015 GLOBAL HEALTHCARE CONFERENCE2).pdf · Also, certain non-GAAP financial measures as...

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Transcript of JEFFERIES 2015 GLOBAL HEALTHCARE CONFERENCE2).pdf · Also, certain non-GAAP financial measures as...