investor presentation 4q 2018 stereotaxis at a glance

Investor Presentation 4Q 2018 Stereotaxis at a Glance Global - PowerPoint PPT Presentation

Investor Presentation 4Q 2018 Stereotaxis at a Glance Global Leader in Endovascular Robotics Focused on the Treatment of Cardiac Arrhythmias Extensive Presence 300+ Physicians | 100+ Active Systems | 31 Countries . Validated &

  1. Investor Presentation 4Q 2018

  2. Stereotaxis at a Glance Global Leader in Endovascular Robotics Focused on the Treatment of Cardiac Arrhythmias Extensive Presence 300+ Physicians | 100+ Active Systems | 31 Countries . Validated & Protected 100,000+ Procedures | 300+ Publications | 100+ Issued Patents. Attractive Market $4B+ Existing Market | 10-15% Annual Growth | No Robotic Competitor * Financial Highlights >$30m Sales | >80% Recurring Revenue | >75% Gross Margin . $12.0m Cash and No Debt Enterprise Value ~$100m * Income statement data reflects full year 2017 results excluding a non-cash inventory- 2 related charge. Balance sheet as of 6/30/2018. Enterprise value as of 10/1/2018.

  3. Surgical Progress Open Laparoscopic Endovascular Open surgical incision used to access patient Use rods with cameras and surgical tools on Catheter inserted into blood vessel through anatomy. Large incisions as surgeon’s hands, the distal ends to perform surgical operations one small incision and navigated through the instruments and light must reach procedure through multiple small incisions. Reduced vascular system to procedure site. Functional site. Significant trauma, risk and recovery. trauma. Increased skill and complexity. capabilities at tip perform procedure. Less Invasive. Less Risk. Improved Patient Care. Technological innovation has enabled various procedures to progress to less invasive surgery. This progress shifts clinical practice but more importantly causes a significant overall increase in the number of patients treated as reduced surgical risk and invasiveness increases access to therapy. 3

  4. Endovascular Surgery Traditional Endovascular Surgery is Widely Utilized Across Broad Clinical Applications. …but with Inherent Limitations. Multi-Billion Dollar Endovascular Surgery Markets Include: Catheter Design Mechanism of Action Clot Aspiration/Retrieval Manipulation of the tip of the In order to allow for the transfer of & Endovascular Coils catheter is accomplished in an force along its length, catheters indirect inelegant fashion. Force is must be designed with rigid shafts transferred from the physician’s and internal pull wires. fingers/hands to the base of the Transcatheter Valves catheter and then over the entire length of the catheter. Limited Catheter Increased Catheter Rigidity Coronary Angioplasty & Stents Precision, Reach and Stability Reduces Patient Safety Cardiac Ablation Reliance on X-Ray Difficult & Complex Navigation and visualization of the Performing endovascular surgeries catheter in the vascular system is requires significant training and accomplished using x-ray imaging. skill. Procedures often take Endovascular Stent Grafts significant amounts of time. Often simple movements are difficult to accomplish. Radiation Exposure to Complex Long Procedures, Peripheral Vascular Stents, Patients, Physicians and Staff Operator Dependent Balloons and Atherectomy 4

  5. Robotics in Surgery The last decade has seen dramatic adoption of robotic technologies that address the limitations of open and laparoscopic surgery. Many other companies spending hundreds of millions of dollars to participate: Laparoscopic Surgery Open Orthopedic Surgery Open Spinal Surgery Hip & Knee Arthroplasty Urology/Gynecology/GI/General Spinal Fusion Intuitive Surgical Mako Surgical (acquired by Stryker) Mazor Robotics (partnered with Medtronic) Pioneered Robotics for Arthroplasty Pioneered Robotics for Laparoscopic Surgery Pioneered Robotics for Spine Surgery • >500 Systems Installed • >4,000 Systems Installed • ~200 Systems Installed • 1,000,000 Procedures in 2018 • Acquired by Stryker in 2013 • Acquired by Medtronic in 2018 • $1.65 Billion Acquisition Value • ~85% of all US Prostatectomy • $1.65 Billion Acquisition Value • ~50% of all US Hysterectomy • ~$100 Million Revenue in 2013 • ~$65 Million Revenue in 2018 • $65 Billion Valuation • >$3 Billion Revenue Two observations • Robotics captured significant market share despite a lack of material clinical superiority data • Robotics provides for ‘Democratization of Skill’: more surgeons enabled to perform more procedures more effectively 5

  6. Endovascular Robotics Three Mechanisms of Action for Robotics in Endovascular Surgery: ‘Robotic-lite’ ‘Push’ ‘Pull’ Description The handle of a standard catheter is placed in a A computer-controlled catheter or sheath is A catheter with tiny magnets at the tip and with mechanical grasper that is computer-controlled. designed with additional pull-wires for no pull-wires or rigidity along the shaft is additional degrees of motion. robotically manipulated by modifying external magnetic fields with a computer interface. Examples Stereotaxis’ V-Drive system for robotic control Hansen’s Sensei system for cardiac ablation. Stereotaxis’ Niobe system for cardiac ablation. of sheaths and ICE or Lasso catheters. Corindus’ CorPath system for coronary stents. Comments Relatively simple and inexpensive system can Increased navigational capabilities compared Control of a catheter directly at the tip allows be used with existing catheters. Does not with traditional catheter. More rigid catheter for unmatched catheter precision, reach and and increased size raises safety concerns. stability. Removal of pull-wires and shaft address the inherent limitations or expand the capabilities of traditional catheters. rigidity creates a very safe catheter. Stereotaxis is the only company that has developed a functional ‘pull’ robotic system. The system is robust with significant validation in >100,000 procedures at >100 hospitals. The ‘pull’ mechanism of action is the most elegant in allowing for the design and control of catheters in ways otherwise unachievable. The benefits of robotics can be combined in an additive fashion with other innovation in the field. 6

  7. Robotic Magnetic Navigation Robotic Magnetic Other Synergistic Physician Computer Disposables & Navigation System Control Station Magnetic Catheter Products External computer controlled Physician sits at a control A disposable device advances Non-magnetic robot for permanent magnets create a station, views procedure data and retracts a cardiac ablation ancillary catheters. Large magnetic field within which a on a large computer screen, catheter with a magnetic tip screen displays for non- catheter with a magnetic tip robotic rooms. Information and uses a mouse/joystick to developed exclusively for our can be precisely controlled. perform the procedure. robot by J&J. Systems. 7

  8. Cardiac Ablation Market Arrhythmia: (n.) a condition in which the heart beats with an irregular or abnormal rhythm . Cardiac Ablation Market (Endovascular Catheter Procedures) Health Risk Mortality Arrhythmias progressively Ventricular fibrillation is the most Large increase the risk of Stroke, common cause of sudden cardiac >850,000 procedures performed per year US/EU/JPN. Congestive Heart Failure, and $4 Billion in annual sales of ablation and mapping products. death in the US, leading to more serious arrhythmias. 300,000 deaths annually. Rapidly Growing Widespread 10-15% annual growth : Consistent, long-term robust growth driven by Atrial Fibrillation alone affects: 5 million in the US (15m US/EU/JPN) clinical evidence, demographic trends and improved technology. Prevalence of other arrhythmias greater than AF (likely by multiples) • Clinical evidence – growth to date has been generated without well Growing Rapidly designed trials measuring mortality. First trial showing significant Demographics: Incidence increases significantly with age and obesity. mortality benefit of cardiac ablation vs drug therapy ( 46% reduction Awareness: Significant efforts to increase awareness, detection and in all cause mortality at 3 years) presented 8/2017 at ESC. diagnosis – Apple watch, mobile patch monitoring, etc. Significant Headroom for Long-term Growth Large growing incidence, prevalence and diagnosis of arrhythmias. Cardiac ablation often performed multiple times per patient. Current market reflects small fraction of patients eligible for therapy. Clinical evidence increasingly supporting cardiac ablation as front-line therapy from clinical outcome and cost effectiveness perspectives. Primary Therapies Available Even Niches of the Market are Large • Pharmaceuticals: beta blockers, calcium channel blockers • Ventricular Arrhythmias: >70,000 procedures performed annually. • Poor compliance, lifetime use, limited efficacy Lower penetration of cardiac ablation despite increased disease • Implantation of Pacemakers and ICDs: severity because of procedure technical difficulty • $7 Billion market. Does not address underlying disease • Congenital Arrhythmias: ~0.3% of children are born with critical • Cardiac Ablation Procedures: surgical and endovascular congenital heart disease and treated with heart surgery. Almost all • Surgical ablation is niche due to invasiveness. Endovascular develop arrhythmias as an adult. ~30,000 incidence (prevalence is relatively new and a significantly growing approach. multiple-fold) in US/EU/JPN. 8

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