Sensus Healthcare Award

2016 GlobalNon-Melanoma Skin Cancer Therapy

Technology Leadership Award

2016

BEST PRACTICES RESEARCH

© Frost & Sullivan 2016 2 “We Accelerate Growth”

Contents Background and Company Performance ........................................................................ 3

Industry Challenges .............................................................................................. 3

Technology Leverage and Business Impact .............................................................. 4

Conclusion........................................................................................................... 6

Significance of Technology Leadership .......................................................................... 7

Understanding Technology Leadership .......................................................................... 7

Key Benchmarking Criteria .................................................................................... 8

Best Practice Award Analysis for Sensus Healthcare ........................................................ 8

Decision Support Scorecard ................................................................................... 8

Technology Leverage ............................................................................................ 9

Business Impact ................................................................................................... 9

Decision Support Matrix ...................................................................................... 10

The Intersection between 360-Degree Research and Best Practices Awards ..................... 11

Research Methodology ........................................................................................ 11

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 12

About Frost & Sullivan .............................................................................................. 13



Background and Company Performance Industry Challenges

Skin cancer is the most commonly diagnosed type of cancer in the United States. According to the World Health Organization, one in three diagnosed cancers is a form of skin cancer. The American Cancer Society (ACA) estimates that every year, nearly 5.5 million Americans are diagnosed with skin cancer - over 5 million of whom have non-melanoma skin cancer (NMSC). NMSCs are tumors that originate either in the basal cells (basal-cell carcinoma, BCC) or squamous cells (squamous-cell carcinoma, SCC) of the skin. While NMSCs are malignant and can potentially metastasize to other cells, they are distinct from the far deadlier melanoma skin cancer. Nearly 80% of all skin cancers are BCC, making it the most common type of skin cancer. The silver lining to these grim statistics is that NMSCs have a much better survival rate than other cancers. If detected early, NMSCs present a survival rate of 90% or more. In fact, this type of cancer is eminently treatable, and the number of deaths associated with NMSC is less than 1% of all cancer deaths. Frost & Sullivan consistently tracks several well-established surgical and non-surgical approaches that are available for the treatment of NMSCs. Mohs surgery is widely regarded to be the gold standard for skin cancer therapy. This is a microscopically-controlled procedure that relies on real-time visual examination of tissue during the surgery for informed tissue excision. Mohs surgery is preferred for its ability to operate with very narrow surgical margins (minimal loss of healthy tissue loss) and its high cure rate. Various clinical studies concur that the cure rate of Mohs surgery is above 97%. As such, Frost & Sullivan notes that there is very little doubt about the procedure’s clinical efficacy. Where the procedure stands exposed is in relation to the cost and effort involved. The procedure requires highly skilled technicians working on tissue handling, imaging, and surgery. Hospitals in rural areas and in developing countries of Southeast Asia and Africa, all of which house considerable NMSC populations, may find a shortage of skilled professionals for surgeries. The cost of the procedure (which can run into tens of thousands of dollars) and its duration are both considerable factors, given how commonplace the cancer is. However, what truly ails this approach is the considerable patient discomfort associated with it. Mohs surgery leaves the patient with visible scars, and many patients opt for cosmetic reconstructive surgeries, especially if the scars are on the face. For the rest, the scars are a constant reminder of the trauma of cancer. Frost & Sullivan points out that the recovery time needed after the procedure and the vulnerability of the patients to post-surgical infections also add to the list of limitations of Mohs surgery.



Advances in diagnoses, increasing awareness, and the nature of the disease itself have made the management of NMSC ripe for overhaul. Frost & Sullivan agrees that this creates an urgent market need for a patient-friendly, clinically-effective, and aesthetically-appealing option for the treatment of NMSC. Technology Leverage and Business Impact

Commitment to Creativity The natural alternative to surgical treatment of NMSC is radiation therapy - particularly external beam radiotherapy. High-energy X-rays (6 to 12 mega electron-volt, or MeV) are employed to kill malignant cells. While certainly effective in killing cancerous cells, these devices subject patients to ionizing radiation that is several orders of magnitude stronger than those required to treat NMSC. Understanding this crucial unmet need, Sensus Healthcare (Boca Raton, Florida) has developed a portfolio of products that use low-energy X-rays for the treatment and management of NMSC. Sensus’ products — SRT-100 and SRT-100 Vision — leverage a technique known as superficial radiation therapy (SRT) that delivers X-rays with the optimum energy needed (10 to 100 kilo electron-volts, or KeV) to penetrate the skin to the depth where malignant squamous and basal cells are located (2.5 to 5 millimeters below the skin’s surface). Frost & Sullivan recognizes how SRT bests the competition from radiation therapy and surgery by providing a scar-free, aesthetically-appealing, and clinically-effective therapy. Commitment to Innovation SRT-100, Sensus’ first-generation product was the first cart-based portable radiotherapy system. Since its launch in 2010, SRT-100 has been used to treat over 200,000 NMSC cases. The compact size of the system and its portability make it suitable for use in clinics and smaller hospitals. Instead of referring patients to a separate radiation oncology center or facility, dermatologists can treat patients in their own clinics. Sensus’ latest product, SRT-100 Vision, is a first-of-its-kind product that offers high-frequency ultrasound guidance to radiation treatment. The ultrasound capability helps dermatologists view lesions, accurately map the boundaries of the tumor, quantify tumor volume, and determine the optimum energy required for the procedure. SRT-100 Vision eliminates any lingering doubts regarding over-dosage and helps accurately map the area that has to be irradiated. In effect, the ultrasound capability equips the SRT procedure with the kind of visual confirmation that helps Mohs surgery keep treatment margins to a minimum.



Application Diversity Although SRT is the foremost alternative to NMSC surgery, its true potential lies in the diversity of its application. The SRT platform has been designed and approved to treat and manage several non-oncology skin conditions - such as keloids, actinic keratosis (AK), and warts. Apart from NMSC, keloids are the most significant market for SRT-100 and SRT-100 Vision. Keloids are collagen-based scars that remain behind after events like surgeries and accidents. While keloids do not present any health hazard, their presence is chronic unless treated. Cosmetic surgery is only partially effective, as evidenced by their reappearance in over 90% of the cases. As an adjunct treatment option, SRT has proven to be quite effective and has reduced recurrence to as low as 10%. AK is a skin condition that is commonly associated with UV exposure and manifests as crusty patches on the skin. AK is usually considered to be a pre-cancerous condition. In other words, if left untreated, it can develop into squamous cell carcinoma (SCC). In fact, The Skin Cancer Foundation estimates that over 10% of the 58 million cases of AC in the US can develop into SCC, underscoring the importance of early and effective treatment. Customer Acquisition Sensus Healthcare is clear in their outlook for SRT; despite its numerous patient benefits, it is not intended to replace Mohs surgery as the first-in-line treatment option for NMSC. However, there are several conditions under which SRT may be the optimal choice for patients. For instance, diabetics, cardiac patients, and those considered high-risk for surgery are ideal candidates for SRT. Similarly, for those particular about the cosmetic outcome of therapy (especially if tumors or keloids appear on the nose or the ear, as they tend to do), would find SRT preferable to surgery. SRT offers patients freedom from hospitalization and post-surgical recovery; it also offers physicians and hospitals excellent return on investment. At approximately $200,000, SRT devices are a fraction of the cost of linear accelerators and brachytherapy devices. The time required for a session of SRT is only a few minutes, and the user-friendly build of the device ensures that it can be used by clinic staff with appropriate training and not only by radiologists. Both of these are important factors that are likely to win Sensus patrons - especially in emerging countries and rural hospitals, where radiologists and surgeons may be in short supply. Commercialization Success Frost & Sullivan points out that Sensus’ market growth is remarkable for a less than a decade-old company. Within a short period of time, the company has not only established itself as the foremost technology leader in the market, but it has also expanded its geographic footprint to over 15 countries.



Braving market competition and operating under uncertain economic conditions, Sensus has emerged as a technology leader in the NMSC market. As a grand validation of this leadership position, Sensus recently filed for its initial public offering (IPO). Sensus’ decision to go public is undoubtedly based on the strength of its product portfolio and the market opportunity in dermatology. The IPO is certain to cap what has been a remarkable growth story in a less than decade. Growth Potential Impressed by the superior clinical performance of the SRT-100 device and its positive customer impact, Frost & Sullivan lauded Sensus Healthcare in 2014 as a New Product Innovation Leader. Sensus’s commitment to innovation and its energetic marketing efforts have clearly surpassed the expectations that Frost & Sullivan laid out in the recognition. Within two years, Sensus has expanded the geographic presence of the SRT platform and has launched a new product, the SRT-100 Vision, which is now the company’s flagship offering. Sensus has at least two more products lined up for commercial launch later in the year and a host of incremental innovations planned to further augment the existing products. Given the vast “Blue Ocean” opportunity in front of them and the head start over market competition, Sensus Healthcare will no doubt retain its Technology Leadership position in the NMSC therapy market. Conclusion

Frost & Sullivan joins dermatologists and oncologists in commending Sensus Healthcare for resurrecting a technology that had clearly been overshadowed by surgery and other procedures. Radiotherapy for skin cancer treatment has been an acknowledged option for several years, but the clinical efficacy of surgery had firmly established it as the foremost therapy. Sensus deserves credit for bringing back superficial radiation therapy as a viable option, and in some cases, the only option for treating skin cancers and dermatological conditions. Sensus Healthcare’s SRT platform offers patients numerous benefits, while offering clinical outcomes that are on par with the clinical standard. With its strong overall performance, Sensus Healthcare has earned the 2016 Frost & Sullivan Global Technology Leadership Award.



Significance of Technology Leadership Technology-rich companies with strong commercialization strategies benefit from the increased demand for high-quality, technologically innovative products. Those products help shape the brand, leading to a strong differentiated market position.

Understanding Technology Leadership Technology Leadership recognizes companies that lead the development and successful introduction of high-tech solutions to customers’ most pressing needs, altering the industry or business landscape in the process. These companies shape the future of technology and its uses. Ultimately, success is measured by the degree to which a technology is leveraged, and the impact that technology has on growing the business.



Key Benchmarking Criteria

For the Global Technology Leadership Award, Frost & Sullivan analysts independently evaluated two key factors—Technology Leverage and Business Impact—according to the criteria identified below.

Technology Leverage Criterion 1: Commitment to Innovation Criterion 2: Commitment to Creativity Criterion 3: Technology Incubation Criterion 4: Commercialization Success Criterion 5: Application Diversity

Business Impact Criterion 1: Financial Performance Criterion 2: Customer Acquisition Criterion 3: Operational Efficiency Criterion 4: Growth Potential

Criterion 5: Human Capital

Best Practice Award Analysis for Sensus Healthcare Decision Support Scorecard To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool allows our research and consulting teams to objectively analyze performance, according to the key benchmarking criteria listed in the previous section, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Technology Leverage and Business Impact (i.e., the overarching categories for all 10 benchmarking criteria; the definitions for each criteria are provided beneath the scorecard). The research team confirms the veracity of this weighted scorecard through sensitivity analysis, which confirms that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the interests of all organizations reviewed, we have chosen to refer to the other key players as Competitor 2 and Competitor 3.

Measurement of 1–10 (1 = poor; 10 = excellent)

Technology Leadership Technology Leverage

Business Impact

Average Rating

Sensus Healthcare 9.5 9.5 9.5

Competitor 2 8.0 7.0 7.5

Competitor 3 6.0 7.0 6.5

Technology Leverage Criterion 1: Commitment to Innovation Requirement: Conscious, ongoing development of an organization culture that supports the pursuit of groundbreaking ideas through the leverage of technology

Criterion 2: Commitment to Creativity Requirement: Employees rewarded for pushing the limits of form and function, by integrating the latest technologies to enhance products

Criterion 3: Technology Incubation Requirement: A structured process with adequate investment to incubate new technologies developed internally or through strategic partnerships

Criterion 4: Commercialization Success Requirement: A proven track record of successfully commercializing new technologies, by enabling new products and/or through licensing strategies

Criterion 5: Application Diversity Requirement: The development of technologies that serve multiple products, multiple applications, and multiple user environments

Business Impact Criterion 1: Financial Performance Requirement: Strong overall financial performance in terms of revenues, revenue growth, operating margin and other key financial metrics

Criterion 2: Customer Acquisition Requirement: Overall technology strength enables acquisition of new customers, even as it enhances retention of current customers

Criterion 3: Operational Efficiency Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high quality standard



Criterion 4: Growth Potential Requirements: Technology focus strengthens brand, reinforces customer loyalty and enhances growth potential

Criterion 5: Human Capital Requirement: Company culture is characterized by a strong commitment to customer impact through technology leverage, which in turn enhances employee morale and retention

Decision Support Matrix Once all companies have been evaluated according to the Decision Support Scorecard, analysts can then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which ones are not yet operating at best-in-class levels.

DECISION SUPPORT MATRIX FOR TECHNOLOGY LEADERSHIP AWARD

High

Low

Low High

Bu

sin

ess

Imp

act

Technology Leverage

Sensus Healthcare

Competitor 2

Competitor 3



The Intersection between 360-Degree Research and Best Practices Awards

Research Methodology Frost & Sullivan’s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at best-in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS



Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Frost & Sullivan Awards follow a 10-step process to evaluate Award candidates and assess their fit with select best practice criteria. The reputation and integrity of the Awards are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify Award recipient candidates from around the globe

• Conduct in-depth industry research

• Identify emerging sectors • Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

• Interview thought leaders and industry practitioners

• Assess candidates’ fit with best-practice criteria

• Rank all candidates

Matrix positioning all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

• Confirm best-practice criteria • Examine eligibility of all

candidates • Identify any information gaps

Detailed profiles of all ranked candidates

4 Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

• Brainstorm ranking options • Invite multiple perspectives

on candidates’ performance • Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5 Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

• Share findings • Strengthen cases for

candidate eligibility • Prioritize candidates

Refined list of prioritized Award candidates

6 Conduct global industry review

Build consensus on Award candidates’ eligibility

• Hold global team meeting to review all candidates

• Pressure-test fit with criteria • Confirm inclusion of all

eligible candidates

Final list of eligible Award candidates, representing success stories worldwide

7 Perform quality check

Develop official Award consideration materials

• Perform final performance benchmarking activities

• Write nominations • Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8 Reconnect with panel of industry experts

Finalize the selection of the best-practice Award recipient

• Review analysis with panel • Build consensus • Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform Award recipient of Award recognition

• Present Award to the CEO • Inspire the organization for

continued success • Celebrate the recipient’s

performance

Announcement of Award and plan for how recipient can use the Award to enhance the brand

10 Take strategic action

Upon licensing, company may share Award news with stakeholders and customers

• Coordinate media outreach • Design a marketing plan • Assess Award’s role in future

strategic planning

Widespread awareness of recipient’s Award status among investors, media personnel, and employees



About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

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Sensus Healthcare Award

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