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    CSI IR Presentation

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    190 views24 pages

    CSI IR Presentation

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    medtechy
    CSI IR Presentation

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    © All Rights Reserved
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    Cardiovascular Systems, Inc.

    Redefining Interventional
    Vascular Solutions

    William Blair Healthcare Conference


    June 11, 2015

    SAFE HARBOR
    FORWARD-LOOKING STATEMENTS
    Certain statements made in this presentation are
    forward-looking statements within the meaning of
    the Private Securities Litigation Reform Act of 1995
    and are provided under the protection of the safe
    harbor for forward-looking statements provided by
    that Act. In some cases, you can identify forwardlooking statements by terms such as may, will,
    should, could, would, expect, plans,
    anticipates, believes, estimates, projects,
    predicts, potential and similar expressions
    intended to identify forward-looking
    statements. Examples of these statements include,
    but are not limited to, statements regarding
    Cardiovascular System, Inc.s (CSI or the
    Company) future financial performance, product
    sales distribution, industry and market
    expectations, the benefits and uses of the
    Companys products, use of proceeds, results of
    operations, prospects, plans and objectives of
    management, and other statements that are other
    than statements of historical fact.

    These statements involve risks and uncertainties


    which could cause results to differ materially from
    those projected, including those described under
    the heading Risk Factors contained in the
    prospectus filed with the Securities and Exchange
    Commission (the SEC) for our recent public
    offering, and as detailed from time to time in CSIs
    SEC reports, including its Reports on Form 10-K and
    Form 10-Q. As a result of these matters, changes in
    facts, assumptions not being realized or other
    circumstances, CSI's actual results may differ
    materially from the expected results discussed in
    the forward-looking statements presented. The
    forward-looking statements are made only as of the
    date of this presentation, and CSI undertakes no
    obligation to update them to reflect subsequent
    events or circumstances.

    CSI TODAY
    Large, underserved markets

    5,000+

    Highly differentiated products

    Patients enrolled
    in CSI clinical studies

    Strong clinical data

    37%

    Attractive financial profile

    $14B
    Combined PAD
    and CAD U.S. market
    opportunity

    CSIs revenue growth


    YTD fiscal 2015

    Nearly

    200,000
    Orbital Atherectomy
    Systems
    that have been sold

    High-margin,
    high-growth orbital
    atherectomy
    franchises

    CSI ORBITAL ATHERECTOMY SYSTEMS (OAS)


    Power and simplicity for streamlined setup and treatment
    Coronary Approved October 2013
    Crowns
    Offset weight = orbital action
    Small profile for small vessels and
    alternative access sites

    Sleek Electric-Powered Handle


    Simple set-up

    Optimum torque transfer to the shaft and crown


    Short treatment times

    Peripheral

    Instant Response On/Off Switch


    Simple Speed Settings
    Saline Pump
    Mounts on I.V. pole
    Bathes shaft and crown for smooth operation

    Crowns shown are not to scale and for illustrative purposes only.

    CSI: WHY WERE UNIQUE

    Heart

    Heart to heels capability


    We treat 11 vessels.
    Large and small.

    Effective in calcium

    Excellent safety
    Long-term durability

    Above the Knee

    Below the Knee

    Economical
    Alternative access sites

    CSI: WHY WERE UNIQUE


    Brachial

    Radial
    Alternative access sites
    Femoral

    Tibial

    Pedal
    6

    UNIQUE MECHANISM OF ACTION


    Bi-directional and differential sanding

    93% < red blood cell size


    99% < lumen size of capillaries

    Calculation of mean particulate size is based particles larger than 1 micron from a
    representative study using carbon blocks and cadaver model systems.

    OAS DELIVERS OPTIMAL VESSEL PREP AS THE


    PRIMARY TREATMENT FOR CALCIFIED LESIONS
    Smooth Concentric Lumen

    Incomplete Vessel Prep

    Rotablator

    OAS

    Poly-traumatic vessel Injury

    Scoring
    Balloon

    Flow Limiting Dissection

    High
    Pressure
    Balloon

    LARGE AND GROWING MARKETS

    $14B
    Combined
    PAD and CAD U.S.
    market opportunity

    CAD
    1.4 million U.S. interventional procedures
    38% with significant calcium
    $1.5+ billion market opportunity

    PAD
    Affects 18 million people in U.S.
    4.0 million with critical limb ischemia
    Only 300,000 CLI patients receive interventions
    annually (160,000 get debilitating amputations)
    $12+ billion market opportunity

    Innovation for unmet needs driving market


    expansion
    9

    LARGE CORONARY MARKET POTENTIAL


    16 MILLION U.S. CAD PATIENTS DIAGNOSED

    1.4
    MILLION
    Annual U.S.
    CAD procedures

    38%
    % with significant calcium

    Sources: Millennium Research Group Inc 2014., National Hospital Discharge Survey 2009, CSI estimates.

    28%
    400,000

    CSI market potential


    (>$1.5 Billion)

    10

    PAD IS A LARGE AND UNDERSERVED MARKET


    Critical limb ischemia (CLI) is vastly undertreated
    $12B+ CLI market opportunity in U.S. and growing
    18 million people in U.S. with PAD
    4 million people with CLI

    CLI
    (6 Million by
    2030)

    2.5 million
    diagnosed

    600K
    Interventions
    (300K for CLI)

    600K procedural
    interventions

    Amputations
    and Bypass
    (CLI)

    High Pressure
    Balloons and
    Stents

    Plaque
    Removal

    Growth Strategy
    Market expansion (underserved CLI patients)
    Reduce amputation/bypass
    Reduce high pressure ballooning/stenting
    Sources: Sage Group, Millennium Research Group US Markets for Peripheral Intervention Devices
    2014, iData US Market for Peripheral Vascular Devices and Accessories 2014, and Go, et al Heart
    Disease and Stroke Statistics -- 2014 Update, Circulation.

    65% calcified

    11

    OAS TECHNOLOGY EXPANDS PAD MARKET


    Only device to broadly treat the disease
    Industry Procedure Mix

    BELOW
    THE KNEE

    ABOVE
    THE KNEE

    ATK - 40% calcified

    Source: CSI data on file, Millennium Research Group

    CSI mix/disease prevalence

    BELOW
    THE KNEE

    ABOVE
    THE KNEE

    BTK - 80% calcified


    20% require ankle/foot access
    12

    ATTRACTIVE REIMBURSEMENT RATES (2015)


    HOSPITAL
    INPATIENT

    PAD
    CAD

    $10,150 $19,148
    $11,032 $18,985

    OUTPATIENT

    PAD (ATK)
    PAD (BTK)/CAD

    $ 9,624
    $14,841

    Small vessels receive


    higher reimbursement

    NON-HOSPITAL FACILITY
    PAD

    $11,083 $15,175

    1. DRG Codes 246, 247, 248, 249, 250, 251, 252, 253, 254
    2. CPT Codes 37225, 37227, 37229, 37231, 92933
    3. APC Codes 0229, 0319, 083
    4. HCPCS Code C9602

    13

    BACKED BY CLINICAL SCIENCE


    Key PAD Trials
    CSI has studied more than 5,000
    real-world patients, treated 7,000 LIBERTY 360 (enrolling)
    lesions and worked with 600+
    Evaluating acute and long-term
    physicians
    clinical and economic
    outcomes of CSIs OAS vs. any
    OASIS, CONFIRM series, Calcium
    other treatment
    360 and Compliance 360,
    Up to 1,200 patients (no
    demonstrated:
    exclusions) at up to 100 U.S.
    Low rates of adverse events
    sites
    and bail-out stenting
    Study will include claudication,
    High rates of success
    CLI, patients scheduled for
    Durable results
    amputation

    14

    BACKED BY CLINICAL SCIENCE


    Key CAD Trials

    ORBIT II

    COAST (enrolling)

    Beat primary endpoints by significant

    International investigational

    margins in severely calcified lesions

    Two-year data showed 94% freedom


    from target lesion revascularization
    Two-year extrapolated economic
    analysis cost savings of up to $4,946
    per patient from shorter hospital stays
    and lower readmission rates

    study to assess safety, efficacy


    and economic outcomes of new
    micro crown OAS
    Up to 100 patients at up to
    20 sites in the U.S. and Japan

    Japan enrollment completed


    Designed to secure commercial
    approval for second-gen OAS
    device in Japan
    15

    SALES OPTIMIZATION STRATEGY

    Expand sales footprint


    One rep selling two, high-margin, high-growth franchises
    Cover largest procedure accounts
    Deeper penetration into existing accounts
    Hybrid productivity well above PAD- or CAD-only reps

    PAD
    130

    CAD
    10

    December 2013

    PAD
    100

    Hybrid CAD
    5
    100

    Today

    Hybrid
    200+
    December 2015
    16

    ACCELERATING REVENUE GROWTH


    Quality Revenue

    Sales life-to-date
    Nearly 200,000 Devices, 1,700 Accounts
    96% Reorder Revenue

    31%

    $136.6

    $ Millions

    26%

    $120

    $80

    U.S. only, CAD launch in Q2 2014

    $133.1
    37%

    $160

    $131.2

    $19.2
    CAD

    $97.0
    $103.9
    $113.9

    $82.5
    $95.0
    $40

    $0
    FY 12

    FY 13

    FY 14

    PAD

    FY 14 (9 mo.)

    FY 15 (9 mo.)

    CAD
    17

    Quarterly Revenue growth over prior year


    11 Quarters 25% or greater growth

    Growth accelerated with CAD

    37%

    % Year over Year Growth

    40%
    30%

    28% 28%
    25% 28% 25% 26%

    39% 38%

    35%

    31%

    20%
    10%
    0%
    Q1
    13

    Q2
    13

    Q3
    13

    Q4
    13

    Q1
    14

    Q2
    14

    Q3
    14

    Q4
    14

    Q1
    15

    Q2
    15

    Q3
    15

    18

    STRONG, IMPROVING GROSS MARGINS

    80%
    78.5%

    77.3%
    76.5%
    75%

    70%
    FY 13

    FY 14

    FY 15 (9 mo.)

    19

    INVESTING FOR ACCELERATED REVENUE GROWTH


    Future profitability potential
    Upfront CAD investment = long-term growth/operating leverage
    20%-25%

    25%
    20%

    % of Revenue

    15%
    10%

    2%

    5%
    0%
    -5%

    6%

    5%

    (9%)

    (13%)
    (16%)

    -10%
    -15%

    -20%

    FY 13
    Adjusted EBITDA Margin

    FY 14

    FY 15 (9 mo.)

    Future Target

    Adjusted EBITDA Margin (excluding net coronary investment)

    Adjusted EBITDA = EBITDA, excluding stock-based compensation expense. For a reconciliation of this non-GAAP financial
    measure, please refer to the reconciliation tables in our most recent Form 10-K and Form 10-Q.

    20

    SOLID BALANCE SHEET


    Ample cash to implement current strategy

    $100

    $93.5

    $ Millions

    $80

    $68

    $60
    $40
    $20

    $12
    $0.0

    $0

    Jun. 2013
    Debt Principal

    Mar. 2015
    Cash
    21

    WHY CSI?

    Large, underserved markets


    Highly differentiated products
    Strong clinical data
    Attractive financial profile

    22

    DIAMONDBACK 360 Coronary Orbital Atherectomy System


    Indications: The DIAMONDBACK 360 Coronary Orbital Atherectomy System
    (OAS) is a percutaneous orbital atherectomy system indicated to facilitate
    stent delivery in patients with coronary artery disease (CAD) who are
    acceptable candidates for PTCA or stenting due to de novo, severely calcified
    coronary artery lesions.
    Contraindications: The OAS is contraindicated when the VIPERWIRE guide
    wire cannot pass across the coronary lesion or the target lesion is within a
    bypass graft or stent. The OAS is contraindicated when the patient is not an
    appropriate candidate for bypass surgery, angioplasty, or atherectomy
    therapy, or has angiographic evidence of thrombus, or has only one open
    vessel, or has angiographic evidence of significant dissection at the treatment
    site and for women who are pregnant or children.

    The Diamondback 360 and Stealth 360 Peripheral Atherectomy


    Systems
    The Diamondback 360 and Stealth 360 PAD Systems are percutaneous
    orbital atherectomy systems indicated for use as therapy in patients with
    occlusive atherosclerotic disease in peripheral arteries and stenotic
    material from artificial arteriovenous dialysis fistulae. The Systems are
    contraindicated for use in coronary arteries, bypass grafts, stents, or where
    thrombus or dissections are present. Although the incidence of adverse
    events is rare, potential events that can occur with atherectomy include:
    pain, hypotension, CVA/TIA, death, dissection, perforation, distal
    embolization, thrombus formation, hematuria, abrupt or acute vessel
    closure, or arterial spasm. For further information call CSI at 1-877-2740901 and/or consult CSIs website at www.csi360.com .
    Caution: Federal law (USA) restricts this device to sale by or on the order
    of a physician.

    Warnings/Precautions:; Performing treatment in excessively tortuous vessels


    or bifurcations may result in vessel damage; The OAS was only evaluated in
    severely calcified lesions, A temporary pacing lead may be necessary when
    treating lesions in the right coronary and circumflex arteries; On-site surgical
    back-up should be included as a clinical consideration; Use in patients with an
    ejection fraction (EF) of less than 25% has not been evaluated.
    See the instructions for use before performing DIAMONDBACK 360 coronary
    orbital atherectomy procedures for detailed information regarding the
    procedure, indications, contraindications, warnings, precautions, and
    potential adverse events. For further information call CSI at 1-877-274-0901
    and/or consult CSIs website at www.csi360.com .
    Caution: Federal law (USA) restricts this device to sale by or on the order of a
    physician.

    23

    Investor Contact:
    Jack Nielsen
    Senior Director
    Corporate Communications & Investor Relations
    651-202-4919
    [email protected]

    2015 Cardiovascular Systems, Inc.


    All Rights Reserved
    Diamondback 360 and CSI are registered trademarks
    of Cardiovascular Systems, Inc.
    www.csi360.com

    NASDAQ: CSII

    24

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