Novadaq (NVDQ)

[biocqr]

JMP presentation notes...

Spy...
in > 400 U.S. hospitals
75+ new installs per Q
In 12% of U.S. hospitals with > 200 beds

Lifecell...
largest application … breast reconstruction... 9% penetration
expanding into abdominal wall and colorectal and vascular surgery in the future

ISRG...
focusing on partial nephrectomy expanding into colorectal and gynological procedures

KCI...
Going forward - Excited about KCI relationship with new Luna device for vascular assessment...will be launching...reimbursement in outpatient setting should be “pretty significant” (6M procedures/year)

LUNA trial... http://www.prnewswire.com/news-releases/novadaq-announces-initiation-of-luna-system-human-clinical-trials-56582332.html

PINPOINT...
Beginning PILLAR trial this quarter... 150 patients

In colorectal procedures early data shows reduction of necrosis from 15-25% down to 3-4% has “significant implications as to cost of treating patients”

Direct sales & marketing team...looking to hire 80 . Will build up slowly over the next few years.

First hiring on the sales side in Q3 and Q4. Already started hiring on the marketing side.

Reducing necrosis in breast reconstruction and colorectal surgeries to “almost negligible amounts”... when you can reduce complications prevent a surgery that can cost $200K-$300K it’s “very significant for the hospital”

Working on nerve imaging agent and auto-flourescence to detect early stage cancer in hollow organs

Leverage Going forward...
Establish base in breast reconstruction
Leverage breast reconstruction for new applications such as colorectal, abdominal wall or vascular
Use the foundation of ISRG, Lifecell and KCI to drive adoption of new technologies i.e. PINPOINT
Use total installed base to work with new molecules
“We’re constantly approached by companies developing molecules... to target cancer etc. where our devices can be adapted to allow imaging using their agents.”

Q&A Session (could not hear any questions - inaudible)

SPY...
Advantages over other imaging technology... MRI, PET, CT... these technologies require huge infrastructure costs

Main difference is usability, Spy give real-time streaming data... immediate assessment.

Main competition are flow probes. Flow probes measure flow... Spy measures perfusion in an area of tissue.

ISRG...
just over 50% out the door with Firefly option.
70% going on new systems... 30% are retrofits
As data builds up and what’s presented at meetings with users... seeing more retrofitting
started out with partial nephrectomy now seeing good data on colorectal so now seeing uptake in usage there

PINPOINT...
Hired the first marketing people a few weeks ago
Will hire 5 sales reps between Q3 and Q4
Will train reps at PILLAR sites
Will announce data in April 2013.. then “will really start ramping” on the sales reps... about 80 reps
Will hire 5-10 sales reps each Q depending on productivity... (doesn’t want to commit)
In the endoscopic space you want your reps “up to $1M-$2M in sales before you feel they’re successful” “Once they’re trending toward that then we’ll speed it up”

Lifecell...
“What’s exciting... the excitement level has gone up tremendously since the reimbursement on the outpatient side because wound care is such a competitive market”

The feedback is “we’ve got the number one player in that market (Lifecell) with what respect to what they have with wound VAC and their penetration into centers” “They have a very good reputation out there”

Nerve imaging...
“we have developed a way to introduce our imaging agent specifically for nerves” doing small and large animal studies this year. Testing in humans next year - partners showing interest.

Lifecell...
Lifecell learning how to introduce new device..”it’s been a learning curve” .has added more Spy specialists... they have more success stories... “playing out quite well”. “Lifecell is committed to adding resources as needed” The issue with operating rooms is access... Spy is the trojan horse that get’s Lifecell reps into the operating room to market other products.... reps are seen as bringing the latest technology to physicians. Hard to get face time with physicians... “Spy is changing that”

“Spy is changing the way surgeons perform procedures” “Spy is changing the outcomes of procedures”