Investor Presentation January 2015 Exhibit 99.2 |
2 Forward Looking Statements/Non-GAAP Measures This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include statements that address activities, events or developments that AtriCure expects, believes or anticipates will or may occur in the future, such as earnings estimates (including projections and guidance), other predictions of financial performance, launches by AtriCure of new products and market acceptance of AtriCure’s products. Forward-looking statements are based on AtriCure’s experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances and are subject to numerous risks and uncertainties, many of which are beyond AtriCure’s control. These risks and uncertainties include the rate and degree of market acceptance of AtriCure’s products, AtriCure’s ability to develop and market new and enhanced products, AtriCure’s ability to retain and attract key employees, the timing of and ability to obtain and maintain regulatory clearances and approvals for its products, the timing of and ability to obtain reimbursement of procedures utilizing AtriCure’s products, AtriCure’s ability to continue to be in compliance with applicable U.S. federal and state and foreign government laws and regulations, AtriCure’s ability to consummate acquisitions or, if consummated, to successfully integrate acquired businesses into AtriCure’s operations, AtriCure’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings, failure of an acquisition or acquired company to achieve its plans and objectives generally, risk that proposed or consummated acquisitions may disrupt operations or pose difficulties in employee retention or otherwise affect financial or operating results, competition from existing and new products and procedures, including the development of drug or catheter-based technologies, or AtriCure’s ability to effectively react to other risks and uncertainties described from time to time in AtriCure’s SEC filings, such as fluctuation of quarterly financial results, fluctuations in exchange rates for future sales denominated in foreign currency, which represent a majority of AtriCure’s sales outside of the United States, reliance on third party manufacturers and suppliers, litigation or other proceedings, government regulation and stock price volatility. AtriCure does not guarantee any forward-looking statement, and actual results may differ materially from those projected. AtriCure undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. A list and description of risks, uncertainties and other matters can be found in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.. This presentation includes the use of non-GAAP measures. Reference AtriCure’s Form 8-K filings which include the furnishing of our earnings releases for a reconciliation to the related GAAP measures. |
3 Vision AtriCure seeks to develop solutions for and become a leader in the treatment of Atrial Fibrillation (Afib) and left atrial appendage (LAA) management for stroke reduction |
4 Top 10 disease related deaths worldwide Afib is the second leading cause of stroke! |
5 Key Takeaway Messages • Atrial Fibrillation is a health problem of epidemic proportions • Only 27% of all surgical patients with AF are treated leaving a big opportunity for treatment 1 • Many current therapies such as anti-arrhythmic medications are ineffective • The Cox-Maze IV procedure is very effective at treating Afib • Patients with Afib on average 4-6 times more likely to have a stroke 2 • Large, under-penetrated market (10M+ people globally – conservative estimate) • $26 Billion annual health economic burden from Afib in the U.S. alone AND ATRICURE IS POISED FOR SUCCESS … 1 Circulation: Cardiovascular Quality and Outcomes. Estimation of Total Incremental Health Care Costs in Patients With Atrial Fibrillation in the United States. Michael H. Kim et al. 2 .http://www.ninds.nih.gov/disorders/atrial_fibrillation_and_strok e/atrial_fibrillation_and_stroke.htm |
6 • The leading global player in the surgical Afib market Only FDA-approved device for surgical treatment of Afib Broad and deep product portfolio with deepest IP in the field World-class training • Strong and Consistent Revenue Growth and Gross Margins 17% growth in 2014 31% growth in 2014; organic growth of close to 20% Expect 14-16% growth in 2015 - weakening Euro impacting business – guidance would have been higher with a flat exchange rate from 2014 Gross Margins 70% in 2014 and on path to 75% over five years • Growth Short Term = Open Ablation + Clip + International Education, Awareness, Training Long Term = MIS + MIS Clip + New Products Trials Upside = MIS and International AtriCure Is Poised For Growth |
7 How Are We Doing? A look at the last ten quarters: 2014 31% growth Q3 2012 6% growth Q4 2012 9% growth Q1 2013 11% growth Q2 2013 12% growth Q3 2013 25% growth Q4 2013 19% growth Q1 2014 28% growth Q2 2014 30% growth Q3 2014 32% growth Q4 2014 35% growth Includes revenue from 12/31/13 Estech acquisition – organic revenue above 17% |
8 Be the recognized leader in Afib and appendage management Have improved the lives of more than 250,000 Afib patients and treated over 150,000 with Clips By The End Of The Decade We Will… |
9 AF Clinical Hierarchy |
10 Emerging Clinical Paradigm PAROXYSMAL (INTERMITTENT) NON-PAROXYSMAL (CONTINUOUS) OPEN (CONCOMITANT) PULMONARY VEIN ISOLATION (CLAMP or FUSION) COMPLETE MAZE STAND-ALONE PULMONARY VEIN ISOLATION (CATHETER) HYBRID (SURGERY + EP PROCEDURE) |
11 Ablation Global Market Opportunity – Open • Labeling advantage in U.S.* • Best products • High gross margins • Education is key • Competition is large device AtriCure has the only on-label products for the surgical treatment of Afib* Open Ablation $600M $120M Current Market Potential Market Estimated open heart surgeries per year 750,000 Estimated % that have Afib 33% Estimated Afib patients undergoing surgery 250,000 Estimated Market Opportunity – Annual $600,000,000 Source: AtriCure estimates * PMA approved products include our OLL2 and OSL2 clamps., along with the ASU RF generator and ASB switchbox; see AtriCure website for full indication language |
12 Ablation Global Market Opportunity – Stand-alone • High reimbursement • High gross margins • Growing internationally • Development needed • Competition is start-ups Developing Market Trial Key to FDA Approval for Afib treatment MIS / Stand Alone Ablation Estimated Afib patients – E.U. and U.S. Only 8,000,000 Estimated % drug refractory and symptomatic 50% Subtotal 4,000,000 Estimated Persistent and Longstanding Persistent subset 50% Subtotal - Patients 2,000,000 Estimated Market Opportunity – Total $20,000,000,000 Estimated % treated annually 5% Estimated Market Opportunity – Annual $1,000,000,000 $1B $40M Current Market Potential Market Source: AtriCure estimates |
13 LAA Global Market Opportunity – Open • Best in class LAA management • Superior safety - No adverse events • Mechanical & Electrical Solution • Competition includes Tiger Paw, staple, suture, ligature (endo loop) • 2014 Revenue - $8.7M • 2014 Revenue - $12.4M (+44%) 4+ years of clinical experience Over 43,000 clips implanted – well ahead of competitive products Estimated Open heart surgeries per year 750,000 Estimated % that have Afib 33% Estimated Afib patients undergoing surgery 250,000 Estimated Market Opportunity – Annual $250,000,000 $250M $10M Current Market Potential Market UPSIDE: Prophylactic treatment could more than double this market Open Clip Source: AtriCure estimates |
14 LAA Global Market Opportunity – MIS (AtriClip ® Pro) One Product, Two Markets Concomitant with MIS Ablation • Today’s market …will draft MIS growth • Virtually ALL revenue from MIS Clip is for concomitant treatment along with MIS ablation – 90% attach rate Attractive sole therapy market • NEW market for us… • Today only a couple cases have been done with OUR products “sole therapy”… a lot done percutaneous • Competition includes implants and EP closure (without FDA approval) • Stroke trial key to success Estimate of treatment resistant Afib patients 1,000,000 Estimated global revenue per device (all modes) $5,000 Estimated Market Opportunity – Total $5,000,000,000 Estimated % treated annually 10% Estimated Market Opportunity – Annual $500,000,000 Estimated Afib patients – E.U. and U.S. Only 8,000,000 Estimated % drug refractory and symptomatic 50% Subtotal 4,000,000 Estimated Persistent and Longstanding Persistent subset 50% Subtotal - Patients 2,000,000 Estimated Market Opportunity – Total $5,000,000,000 Estimated % treated annually 5% Estimated Market Opportunity – Annual $250,000,000 MIS Clip With Ablation MIS Clip Source: AtriCure estimates |
15 Summary High-Level Plan Market Open is growth in short term LAA Market is here now Clinical data key to MIS growth Short-Term (3-year) Focus on commercial execution Education, Education, Education Cryo enhancements Clip innovation Long-Term (5-year) Stroke trial success DEEP trial success LoLA on beating heart SubX Clip Financial 15%+ growth target (17% in 2014 / 31% in 2014) 75% Gross Margin Target (70% 2014) Strategic Focus |
16 Business Overview - Diversified and Growing Portfolio Focus Areas Preliminary 2014 Growth Global Market Size Keys to Success Current Trials Open Ablation (Concomitant) $44.7M U.S. +18% $600M Annually • Education and awareness • Conversions and add-on sales PMA Post Approval Study (350 Patients; Five Years) Open Clip $16.7M U.S. +54% $250M Annually • Education and awareness • Tie to ablation growth Sponsored Investigator Study Design Underway MIS Ablation $16.0M U.S. +18% $20B total $1B+ Annually • Trial • Collaborative care • Integration of Estech IDE Staged DEEP (Hybrid) Pivotal Approved 220 Patients; 25 sites 1, 2 and 3 year follow-up MIS Clip Included In Open Clip line above $5B total $500M+ Annually • Awareness • Trial Stroke Safety Feasibility Study Approved 30 patients, 7 sites International $27.3M +39% Included above • Market expansion • Reimbursement • Coverage Involvement Above and Several E.U. Studies in Process Overall $107.5M +31% $1B+ Annually $20B+ Total 2015 Revenue Guidance: $122.5 - $124.5 million 14-16% growth (Reflects estimated $1.6 million adverse currency impact due to weakening Euro) |
17 Growth Strategy: Overview Expand Open Heart Sales Penetrate LAA Opportunity Build MIS Platform International Expansion • Leverage Afib indication • Increased training and education • Capitalize on sales force • Afib Program Development • Capitalize on investments in sales team • Geographic expansion and new products • Increase support for distributors • Penetrate concomitant ablations • Validate stroke prevention with trial • Support existing MIS surgeons • Support Staged DEEP AF trial • Integrate Estech Acquisition AtriCure is the only company with FDA approval to surgically treat the Afib disease state and is a leader in the emerging market of LAA exclusion |
18 • Highly experienced sales and marketing team • 45 U.S. sales territories; additional clinical team of 25 – Up from 35 and 12 two years ago respectively – Adding 5+ territories in 2015 • E.U. subsidiary and 30 countries (generate ~25% of revenue) – Direct presence in Germany, France, BENELUX over 10 people – Estech brings strong presence in E.U. – Well-established international network of independent distributors – Japan, China, Eastern Europe, UK, Italy, Russia Robust Commercial Infrastructure AtriCure has established a strong commercial infrastructure which will drive superior growth going forward |
19 Other Key Investments For Long-term Growth Innovation Education Clinical Science AtriCure is a leading Afib solutions partner, passionately focused on reducing the global Afib epidemic and healing the lives of those affected. |
20 Education and Training Focus • Robust training program • Course designed by Dr. James Cox • Leading KOL Education Steering Committee • 700+ unique accounts and more than 1500 surgeons trained on the MAZE IV™ procedure • Over 400 courses completed • International Expansion Underway |
21 Impact of Label and Educational Programs Growth of Open Ablation due to ATRC Educational Programs • FDA Approval of Synergy™ System in December 2011 for the treatment of persistent Afib • Have trained ~62% of cardiac surgeons in the U.S.; 38% more to go! Sources: STS Adult Cardiac Surgery Database - 2006- 2014; Ad 2014 - Ann Thor Surg Vol 96 - 763-769; company estimates |
22 Evidence-Based Benefits of AtriCure Technology • $15M+ annual R&D expense – includes clinical trial expense • Over 100 peer-reviewed publications to date • Post Approval Study – 350 patients; 50 sites; 5 years with 3 year follow-up • EXCLUDE Trial demonstrating safety and efficacy of AtriClip System • Staged DEEP Protocol – FDA-approved hybrid trial • Stroke trial design underway • International trials – reimbursement focus • Combined with Estech, 185 issued and nearly 50 patents pending • Compelling animal and early clinical data with Estech Fusion System Commitment to Clinical Science |
23 Financial Snapshot • Approximately $68.5 million in cash and investments at 12/31/2014 • No debt outstanding • Approximately 27.5 million shares outstanding Revenue and Gross Margin Balance Sheet and Share Statistics • 2014 Total Revenue Growth: 31% • 2014 US Growth: 29% • 2014 OUS Growth: 39% • Four Year CAGR of 16% • Gross Margins 70-73%, with expansion opportunity |
24 Positioned for Success • Strong and growing revenue base • 2014 Revenue: $81.9 million (17% growth) • 2014 Revenue (expected): $107.5 million (31% growth; ~ 20% organic growth) • 2015 Revenue (guidance): $122.5 - $124.5 million (14% to 16% growth, even with a weak Euro) • Accelerating revenue growth • Open only device FDA-approved for surgical treatment of Afib • Minimally Invasive Solutions (MIS) trial, Estech acquisition, education and clinical data key • Left Atrial Appendage (LAA) open and future trial • International Expansion improve share and enter new markets • Opportunity for expanding gross margins path to 75%+ |
26 Atrial Fibrillation Overview Condition Overview Continuum of Care • Abnormal electrical impulses cause the upper chambers of the heart to quiver at rapid rates of 400 to 600 BPM • Frequently associated with cardiovascular disease, in particular hypertension, congestive heart failure, coronary artery disease, etc. Effects • Causes blood in the atria to become static, increasing the risk of blood clot formation, stroke, and other serious complications • Symptoms include heart palpitations, dizziness, fatigue and shortness of breath, and these symptoms can be debilitating / life threatening Types • Paroxysmal: rapid heart rate begins and stops suddenly lasting 24 hours – 1 week • Persistent: abnormal heart rate continuing for more than a week • Permanent: normal heart rhythm can't be restored; often the result of paroxysmal and persistent Afib becoming more frequent • Initial treatments include electrical cardioversion (shock to return heart to normal rhythm) and anticoagulant medicines such as warfarin • If persistent, anticoagulants are augmented by rate- control medicines such as beta blockers • When drugs fail, MIS catheter ablation and open- procedure surgical ablation are used to disrupt the electric impulses that cause Afib |
27 Afib Population: Large, Growing & Undertreated (1)Miyasaka Y, et al. Circulation. 2006;114(2):119-125 (2)Lloyd-Jones D, et al. [published online ahead of print December 17, 2009]. Circulation. doi:10.1161/CIRCULATIONAHA.109.192667. (3)Lloyd-Jones DM, et al. Circulation. 2004;110(9):1042-1046. (4) Fuster V, et al. J Am Coll Cardiol. 2001;38(4):1231-12665 (5) Benjamin EJ, et al. Circulation. 1998;98(10):946-952. (6) Kim M, et al. Circ Cardiovasc Qual Outcomes. 2011; 4:313-320 Afib affects over 5 million in the U.S. (1) Significant costs to healthcare system • U.S. prevalence projected to grow to 12-15 million by 2050 • International prevalence is comparable to the U.S. • Most common sustained cardiac arrhythmia (2) • Lifetime risk of Afib: ~1 in 4 for adults 40 years of age (3) Afib increases 5-fold the risk of stroke (4,5) • Afib is leading cause of stroke – over 15% in U.S. linked to Afib (5) • Afib results in early mortality and cause of stroke in elderly (4) • Afib-related strokes are more severe (5) Issues with non-surgical treatment of Afib • Warfarin drug therapy has complications • Anti-arrhythmic drugs often not well-tolerated and ineffective • <3% of Afib patients are treated with catheter or surgical ablation • Direct medical costs are ~73% higher in Afib patients (6) • Net incremental cost of $8,705 per patient per annum (6) • U.S. annual incremental cost of Afib is ~$26.0 billion (6) |
28 Ablation Procedure Comparison J Thorac Cardiovasc Surg 2012;-:1-6; J Am Coll Cardiol 2012;60:1921–9 |
29 20% 1 procedure 45% 2.44 procedures Catheter Ablation of Long-Standing Persistent Atrial Fibrillation 5-Year Outcomes of the Hamburg Sequential Ablation Strategy |
30 Maze IV |
31 DEEP Pivotal Study (CP2014-1) Surgical Lesion Set Endocardial Lesion Set Cavo-tricuspid isthmus line Study Objective: Establish the safety and effectiveness of a dual epicardial and endocardial ablation procedure for patients presenting with Persistent or Longstanding Persistent Atrial Fibrillation utilizing the AtriCure Bipolar System and AtriClip ® PRO LAA Exclusion System in an endoscopic or open ablation procedure, followed by an endocardial mapping and ablation procedure utilizing commercially available RF based, irrigated, power controlled, ablation catheters for endocardial lesions. The endocardial procedure will be staged to occur after 90 days post epicardial surgical procedure. Number of Subjects/Sites: 220 Subjects, 23 US/2 OUS study locations Lead Principal Investigators: Kenneth Ellenbogen, MD, VCU Vigneshwar Kasirajan, MD, VCU Ali Khoynezhad, MD, Cedars Sinai Paul J. Wang, MD, Stanford Primary Endpoints: Effectiveness: Freedom from any documented AF, atrial flutter, or atrial tachycardia lasting >30 seconds in duration through the 12 month follow-up visit in the absence of Class I or III AADs (with the exception of previously failed AADs at doses not exceeding those previously failed). Safety: Composite endpoint consisting of predefined Adverse Events that are adjudicated by the CEC to be serious adverse events (SAEs) and related to the AtriCure Bipolar System, the AtriClip Pro LAA Exclusion System, within 30 days of the epicardial surgical ablation procedure, or within 7 days of the index endocardial procedure, or within 7 days after a repeat endocardial procedure within the blanking period. Subject Population: Key Inclusion Criteria: • Patient is >18 years of age and < 75 years of age at time of consent. • Patient has symptomatic (e.g. palpitations, shortness of breath, fatigue) Persistent Atrial Fibrillation or Longstanding Persistent Atrial Fibrillation refractory to a minimum of one Class I or Class III AADs. • Patient may have had up to two (2) previously failed catheter ablations to treat atrial fibrillation using catheter ablation are eligible, if they present with symptomatic Persistent or Longstanding Persistent AF. Key Exclusion Criteria: • Patient has a documented history of AF >10 years. • Patient has had an EP catheter ablation procedure to treat atrial fibrillation within 6 months prior to signing consent. |