Oracle Healthcare Acquisition (OHAQ) Inactive
Filed: 6 Feb 08, 12:00am
 CONFIDENTIAL 1 Investor Presentation Exhibit 99.1 |
 CONFIDENTIAL 2 Safe Harbor Statement This presentation may contain statements that are not historical facts and are considered “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by their use of the terms: “expect(s),” “intend(s),” “may,” “plan(s),” “should,” “could,” “will,” “believe(s),” “anticipate(s),” “estimate(s),” or similar terms. Oracle Healthcare Acquisition Corp. (“Oracle” or the “Company”), Precision Therapeutics, Inc. (“PTI”) or their respective representatives may also make similar forward-looking statements from time to time orally or in writing. You are cautioned that these forward-looking statements are subject to a number of risks, uncertainties, or other factors that may cause (and in some cases have caused) actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the risk that the merger transaction described in this presentation may not be consummated in a timely manner, if at all; the inability to obtain the required vote for approval of the Company’s stockholders in order to consummate the merger; the outcome of any legal proceeding instituted against the Company and/or others in connection with the proposed merger; the failure of the conditions to the consummation of the merger to be satisfied; the termination of the merger agreement prior to the consummation of the merger; the businesses of the Company or PTI suffering as a result of uncertainty surrounding the merger, including, but not limited to, potential difficulties in employee retention, adverse effects on client or customer relationships and disruption of current plans or operations, or, if the merger agreement is terminated or the merger otherwise fails to occur, the uncertainties associated with any anticipated, potential or actual subsequent transaction involving the Company or any liquidation of the Company; the diversion of the attention of the Company’s and/or PTI’s management from ongoing business operations; the enactment or imposition of future regulatory or legislative actions that adversely affect the Company, PTI or any industry or jurisdiction in which any of them operates its business; the adverse effects of other economic, business and/or competitive factors; and other risks detailed in the Company’s current filings with the Securities and Exchange Commission, including, without limitation, its most recent filings on Form 10-K or Form 10-Q, which discuss these and other important risk factors concerning the Company’s operations. These factors may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. Oracle and PTI operate in continually changing business environments and new factors emerge from time to time. The Company cannot predict such factors nor can it assess the impact, if any, of such factors on its or PTI’s financial position or their respective results of operations or whether or when the merger will be consummated. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. Many of the factors that will determine the Company’s future results or whether or when the merger will be consummated are beyond its ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, you should not rely on forward-looking statements. Additional factors that may affect the future results of Oracle and/or PTI are set forth in the Company’s filings with the Securities and Exchange Commission, which are available via the Internet at www.sec.gov. Neither Oracle, PTI nor any of their respective representatives undertakes any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise the otherwise. |
 CONFIDENTIAL 3 Precision Therapeutics, Inc. We are a diagnostics services company dedicated to providing physicians, patients, and payors with actionable information to personalize cancer treatment We do this through ChemoFx ®, a proprietary live tumor cell-based platform that measures an individual patient’s tumor sensitivity and resistance to a range of therapeutic alternatives under consideration by the physician The Opportunity Over 1 million cases per year in the U.S. alone are treated with chemotherapy through a “trial and error” based approach This represents an annually recurring $3 billion U.S. opportunity to Precision for our services |
 CONFIDENTIAL 4 Company Highlights Addresses the critical need for personalized treatment in cancer Has the technology platform to capture the market Has established the benefits of the platform Clinically validated Prospective Medicare reimbursement for gynecologic cancers Reproducible, automated and scalable Successful commercial ramp is accelerating Substantial cash will enable multiple growth opportunities |
 CONFIDENTIAL 5 Cancer Treatment is Ambiguous *Guidelines of the National Comprehensive Cancer Network (NCCN) Altretamine Anastrozole Bevacizumab Carboplatin Cisplatin Cyclophosphamide Docetaxel Gemcitabine Ifosamide Irinotecan Letrozole Liposomal Doxorubicin Melphalan Oral Etoposide Oxaliplatin Paclitaxel Tamoxifen Topotecan Vinorelbine And combinations Cisplatin/Vinorelbine Cisplatin/Etoposide Cisplatin/Vinblastine Bevacizumab (in combo with others) Cisplatin Carboplatin Paclitaxel Docetaxel Vinorelbine Gemcitabine Etoposide Irinotecan Vinblastine Mitomycin Ifosfamide Pemetrexed Erlotinib Therapeutic choice is not clear cut in most primary metastatic and recurrent cancers Recurrent Ovarian Cancer Treatments Non-Small Cell Lung Cancer Treatments |
 CONFIDENTIAL 6 Critical Need for Personalized Treatment in Cancer Drug A Drug B Drug C Less than one in four patients respond to any given round of chemotherapy Response is inconsistent from one patient to another Two patients with identical health histories and typed the “same” through standard pathology techniques will respond differently to the same drug ChemoFx helps physicians select drugs that will work Precision has the opportunity to impact this market similar to a blockbuster drug |
 CONFIDENTIAL 7 ChemoFx |
 CONFIDENTIAL 8 Live Cell Platform Live patient tumor cells contain all the information and integrate the effects of all Genomics, Genetics, Proteomics and even unknown factors Single platform/process applicable across multiple classes of drugs and multiple tumor types Faster time to market with new products than pharmacogenomic approach with minimal investment Positions us well to incorporate new technologies and discoveries |
 CONFIDENTIAL 9 Right Approach to Capture the Market We’ve successfully addressed the market needs Provides information on what drug will work for my patient Clinically validated Dependably produces an actionable answer Applicable to the majority of patients – only requires biopsies |
 CONFIDENTIAL 10 ChemoFx Process Isolate and Enrich Tumor Cell Population Challenge Cells with Chemotherapy Control Well Enumerate Surviving Cells Treated Well Sample Response Curve Interpret Results 0 1 2 3 4 5 6 7 8 9 10 Doses 1.25 1.00 0.75 0.50 0.25 0.00 |
 CONFIDENTIAL 11 Different Patients Respond Differently to Same Drug Multiple Patients’ Response Curves Non-responsive Intermediate Responsive Gemcitabine |
 CONFIDENTIAL 12 Personalized and Actionable Results Straight-forward information for physicians Intuitively understandable by patients |
 CONFIDENTIAL 13 Gallion et al; Int J Gynecol Cancer 2006 135 patient subset of 256 ovarian and peritoneal cancer patients Approximately 3X longer PFI for patients treated with drugs classified as responsive vs. non-responsive (p<0.01) Heinzman, et al; Pathology 2007 Cell culture process produced average increase in malignant cell population of 37% (p<0.0001) All 50 specimen resulted in > 60% malignant cells to test (p=0.01) Ness R.B. et al; AntiCancer Research 2002 64% patients predicted to have a response achieved a response 100% patients predicted to have no response did not respond 21 specimens Nickles Fader; ASCO abstract 2005 84 primary ovarian cancer patients Platinum sensitive women had nearly 3X longer PFI than patients treated with drugs classified as non-responsive (p<0.007) Pattern of Response (3 papers) In vitro data was consistent with expected population response rates 276 primary ovarian specimens, 283 ovarian cancer explants and 148 breast specimens Current Clinical Evidence |
 CONFIDENTIAL 14 ChemoFx Predicts Patient Response Patients treated with a drug reported as responsive experienced a median progression-free interval approximately 3 times longer than patients treated with a drug reported as non- responsive - 135 patient subset of 256 patients, p< 0.01 Most Current Clinical Evidence Source: International Journal of Gynecologic Cancer (Jan–Feb 2006) Ovarian Cancer Non-responsive Intermediate Responsive 0 5 10 15 20 25 30 Progression Free Interval (months) |
 CONFIDENTIAL 15 We provide ChemoFx at a list price of $450 per drug or combination Average invoiced price is approximately $3,300 and rising Medicare Prospectively paying for gynecologic cancers upon initial claim submission, since 2Q06 Commercial reimbursement Over 425 private payors have paid on a case-by-case basis Reimbursement: A Success Story |
 CONFIDENTIAL 16 Market |
 CONFIDENTIAL 17 Solid tumor cancers treated with chemotherapy in which: Multiple standards of care exist, or no standard exists Choice of chemotherapy regimen is not clear- common situation in primary metastatic and recurrent cancers Broad Market Opportunity Average over $3,300 billed/test Ovarian market $250 million All four > $3 billion Annual U.S. Market Opportunity for Precision Recurrent Late-stage Ovarian Breast Colorectal Lung $2,000 $1,500 $1,000 $500 $0 ChemoFx has been used in over 30 different types of cancer $250M $625M $650M $1,530M |
 CONFIDENTIAL 18 Strategy |
 CONFIDENTIAL 19 Broaden market adoption via direct sales to physicians Expand market share in tumor types beyond gynecologic cancers Add new drugs and biologics as they are approved Establish ChemoFx as standard of care Continue to grow the number of contracted payors Leverage platform to develop next generation solutions Corporate Strategy |
 CONFIDENTIAL 20 Initial sales focus on gynecologic oncology Establish presence within hospitals Develop relationships with pathology and operating room staffs Expand presence in additional tumor types by leveraging process strengths in hospitals Broaden Market Adoption via Direct Sales 450 400 350 300 250 200 150 100 50 0 20 18 16 14 12 10 8 6 4 2 0 Billed Tests Sales Reps Sales Force Established 450 400 350 300 250 200 150 100 50 0 20 18 16 14 12 10 8 6 4 2 0 Billed Tests Sales Reps 1Q06 2Q06 3Q06 3Q07 2Q07 1Q07 4Q06 450 400 350 300 250 200 150 100 50 0 20 18 16 14 12 10 8 6 4 2 0 Billed Tests Sales Reps 400 350 300 250 200 150 100 50 0 20 18 16 14 12 10 8 6 4 2 0 Billed Tests Sales Reps 1Q06 2Q06 3Q06 3Q07 2Q07 1Q07 4Q06 |
 CONFIDENTIAL 21 Ovarian cancer prospective trial: PT-301 Yale University and various other sites Progression-free survival and response endpoints Physicians blinded to assay results Breast cancer prospective trial: PT-205 Breast cancer prospective trial: PT-302 Breast cancer prospective trial: PT-304 Observational study (The Registry) Establish as the Standard of Care – Ongoing Trials US Oncology Research - 34 patients ChemoFx embedded in clinical trial of new chemotherapy Show preliminary demonstration of predictive value in breast cancer NSABP (B-40) - 1200 patients Neo-adjuvant breast cancer patients, randomized treatment with three chemotherapies and with or without a biologic agent Physicians blinded to results of assay Tumor response endpoint U.S. Department of Defense and University of Pittsburgh Cancer Institute – 224 patients Physicians blinded to the results of the assay Ongoing study collecting clinical outcomes on commercial specimens from participating physicians |
 CONFIDENTIAL 22 Additional Chemos Live Cell Platform Targeted Therapies/Biologics Pharmacogenomic Tests Enhance Diagnostic Product Offering > 30 Tumor Types |
 CONFIDENTIAL 23 Company Uniquely Positioned to be Ideal Development Partner Platform: Our live cell platform can be a “gold standard” for additional test development because it captures active, cycling tumor cell behavior People: We have become experts at sourcing tissue out of facilities Programs: Company has invested in an Observational Study that is collecting consented patient samples and outcomes on a portion of our commercial volume |
 CONFIDENTIAL 24 Sean McDonald President and CEO 17 years experience leading healthcare companies, founder of Automated Healthcare and Group President of McKesson Automation Group David Heilman CFO 27 Years of financial experience with GNC Corp. and First Westinghouse Capital Corporation Sharon Kim V.P., Business Development 17 years in business development and healthcare consulting at McKesson and Deloitte Consulting Michael Gabrin CTO/CIO 21 years in technology and product development, Vocollect, Inc., Westinghouse Matthew Marshall V.P., Sales and Marketing 22 years of sales experience at McKesson, Automated Healthcare, HBO & Company Holly Gallion, M.D. V.P., Clinical Affairs 24 years in gynecologic oncology at Magee-Women’s Hospital/University of Pittsburgh and University of Kentucky Perry Dimas V.P., Payor Relations 10 years of securing reimbursement for proprietary diagnostic products including Cytyc and XDx Alan Wells, M.D., D.M.Sc. CSO 16 years in Pathology at University of Pittsburgh and University of Alabama at Birmingham Management Team |
 CONFIDENTIAL 25 Post-Merger Board of Directors Joel Adams PTI Director since 2003 Founder, President and Managing General Partner of Adams Capital Management, Inc., a venture capital Firm Larry Feinberg Chairman, Oracle Director since 2005 Founder and Managing General Partner of Oracle Partners, L.P.; President of Oracle Investment Management Kevin Johnson PTI and Oracle Director since 2005 Former CEO, President, and Chairman of DIANON Systems, Inc.; Chairman of Aureon Laboratories Inc.; Director of MDdatacor, Inc.; Advisory board member of New Leaf Venture Partners Rich Kollender PTI Director since 2006 Principal and partner of Quaker BioVentures; C.P.A. and Member of American and Pennsylvania Institutes of Certified Public Accountants Stan Lapidus Chairman, PTI Director since 2001 Founder and CEO of Helicos BioSciences Corporation; Founder and former President of EXACT Sciences Corporation and Cytyc Corporation Joel Liffmann President, COO, Oracle Director since 2005 Principal of Oracle Investment Management; Member of Oracle Strategic Capital, LLC Per Lofberg Oracle Director since 2005 President and CEO of Merck Capital Ventures, LLC; Former President and Chairman of Merck-Medco Managed Care, LLC; Director of Cytel, Inc.; Director of Ventiv Health, Inc.; Director of PHT, Inc.; Director of ImpactRx, Inc. Sean McDonald President, CEO and PTI Director since 2001 Director of Respironics, Inc.; Founder of Automated Healthcare and Group President of McKesson Automation Group Ken Weisshaar PTI Director since 2007 Board member of Orthofix International N.V.; Former director of Digene Corporation; Former COO and Strategy Advisor for Sensatex, Inc.; Former CFO of Becton Dickinson & Co. |
 CONFIDENTIAL 26 Financial Overview |
 CONFIDENTIAL 27 Attractive Financial Model Significant revenue growth Attractive gross margins Strong operating leverage Low capital investment requirements |
 CONFIDENTIAL 28 Summary of Historical Financials Years ended December 31, Nine months ended September 30, 2006 2007 2004 2005 2006 (unaudited) (unaudited) (In thousands, except for numbers of tests and per test amounts) Number of tests billed………………………….. 406 285 483 260 977 Average net revenue per test billed……….. $776 $891 $1,064 $896 $1,672 Net revenues from tests billed………………... $315 $254 $514 $233 $1,634 Reversals of Medicare claim denials………… 1,234 1,666 332 161 37 Net revenues 1,549 1,920 846 394 1,671 Laboratory Costs………………………... 984 978 1,078 735 1,327 Gross Profit……………………………………. 565 942 (232) (341) 344 Gross Margin……………………………. 36% 49% -27% -87% 21% Operating expenses: Sales and marketing……………………. $307 $376 $1,801 $999 $3,607 Research and development……………. 3,003 2,814 4,682 3,179 3,576 General and administrative…………….. 2,752 2,282 2,452 1,521 2,729 Depreciation……………….…………….. 243 226 171 137 139 Net losses from Operations…………………. $(5,740) $(4,756) $(9,338) $(6,177) $(9,707) |
 CONFIDENTIAL 29 100 80 60 40 20 0 9.4 119.2 PTI Projected Revenue ($ Millions) 120 0 38.1 82.4 Projected Financials for PTI 2008 revenue growth based upon sales force expansion 2009 revenue growth based upon gynecologic market penetration and moderate increase in contracted payors 2010-2011 reflect minimal market penetration in additional tumor types 40 30 20 10 0 -10 -20 -30 -40 (33.9) 3.9 (26.0) PTI Projected EBITDA ($ Millions) 40 30 20 10 0 -10 -20 -30 -40 29.4 2008 2009 2010 2011 133% CAGR 2011 2010 2009 2008 |
 CONFIDENTIAL 30 September 30, 2007 Assuming Maximum Approval (1) Assuming Minimum Approval (2) (In thousands) Cash and cash equivalents……………………................ $132,386 $108,987 Working capital…………………………………................ 126,322 102,923 Total assets……………………………………….............. 137,946 114,547 Long-term obligations (less current portion)……………. 3,339 3,339 Total liabilities……………………………………………… 10,834 10,834 Stockholders’ equity………………………………………. 127,112 103,713 Selected Pro Forma Condensed Combined Balance Sheet Data (1) Assumes that no Oracle stockholders convert their shares of Oracle common stock into their pro rata share of the amount held in the trust account. (2) Assumes that 19.99% of the issued and outstanding shares of Oracle common stock were voted against the merger and that the holders of such shares of Oracle common stock properly elected to convert such shares of common stock into a pro rata share of the amount held in the trust account. |
 CONFIDENTIAL 31 Company Highlights Addresses the critical need for personalized treatment in cancer Has the technology platform to capture the market Has established the benefits of the platform Clinically validated Prospective Medicare reimbursement for gynecologic cancers Reproducible, automated and scalable Successful commercial ramp is accelerating Substantial cash will enable multiple growth opportunities |
 CONFIDENTIAL 32 Appendix |
 CONFIDENTIAL 33 OHAC is a special purpose acquisition corporation (SPAC) formed in September 2005 March 8, 2006: Raised $113.5M (net) in its IPO – 15M units (1 common share + 1 warrant @ $6.00/share) – 3.75M common shares and 833,334 warrants held by founders December 31, 2007: Held $120M in trust January 25, 2008: Share price: $7.90 Warrant price: $0.37 Unit price: $8.15 PTI is a life sciences company developing and commercializing tests intended to assist physicians individualize cancer therapy December 3, 2007: OHAC signs a merger agreement with PTI, amended on January 24, 2008 Shareholder vote scheduled for no later than March 8, 2008 Oracle Healthcare Acquisition Corporation (“OHAC”) Transaction Summary Precision Therapeutics Background on the Merger |
 CONFIDENTIAL 34 Offering Summary 19.0M shares of Oracle common stock issued for all outstanding PTI shares 4.5M shares reserved for issuance upon exercising of outstanding warrants and options 4.25M upon achievement of one of the following after the closing: Trailing 12 month net revenues of at least $7M from the sale of services or products for use in connection with non-gynecological cancers Trailing 12 month net revenues of al least $40M from the sale of services or products for any use Cumulative aggregate net revenues of at least $10M from the sale of services or products for use in connection with non-gynecologic cancers If market price is less than $7.78 per share 180 days after the closing, Oracle either issues or reserves up to 6,666,667 shares for issuance Prior to March 9 Base Consideration Milestone Consideration Top-up Closing |
 CONFIDENTIAL 35 Transaction Terms Date of Definitive Agreement: December 3, 2007 Market Capitalization: Pro forma capitalization will include: PTI Transaction Value: Conditions to Close: Shareholder approval: less than 20% of Oracle stockholders requesting redemption Customary closing conditions for transactions of this nature (1) Current Oracle shares outstanding does not include outstanding warrants (2) Shares issued to PTI does not include milestone payment of 4.25M shares and top-up consideration of up to 6.67M shares Current Oracle Shares Outstanding Shares Issued for PTI Common Stock (2) Shares Reserved for PTI Options and Warrants Post Merger Fully- Diluted Shares Outstanding Oracle Share Price (1/25/2008) Post Merger Market Capitalization 18,750,000 + 19,000,000 + 4,500,000 = 42,250,000 X $7.90 = $333,775,000 Total Oracle Shares Issued / Reserved (2) Oracle Share Price (1/25/2008) Total PTI Transaction Equity Value 23,500,000 X $7.90 = $185,650,000 (1) |
 CONFIDENTIAL 36 Pro Forma Ownership Note: PTI ownership consists of 19.0M shares; does not include milestone payment of 4.25M shares, top-up consideration of 6.67M shares, and 4.5M shares reserved for PTI options and warrants Note: PTI ownership consists of 23.5M shares; does not include milestone payment of 4.25M shares and top-up consideration of up to 6.67M shares Oracle shares includes exercise of 15.0M warrants SPAC Founders Shares includes exercise of 0.834M warrants PTI Common Shareholders 50.4% Oracle Public Shareholders 39.7% SPAC Founders Shares 9.9% PTI Common Shareholders 40.5% Oracle Public Shareholders 51.6% SPAC Founders Shares 7.9% Assuming No Exercise of Oracle or PTI Warrants Assuming Full Exercise of Oracle or PTI Warrants |