2
Today’s presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the Company’s current expectations and are subject to a number of risks, uncertainties and assumptions which, if they do not materialize or prove correct, could cause the Company’s actual results to differ significantly from those expressed or implied by such forward-looking statements. These risks, uncertainties and assumptions are set forth in the Company’s 424(b)(2) Prospectus Supplement filed December 5, 2012, and in its other filings with the Securities Exchange Commission. The Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Safe Harbor
4
• Multi-modality system with >15 applications in the market or development• Over 7,700 installed systems• Approximately 255 direct global sales reps• Strong partnerships with GE, Philips, Siemens, Medtronic, and Covidien
• Market and product line growth opportunities >$5B• 2011 - $344M revenue; 2012 - $382M revenue• Gross margin leverage from Costa Rica manufacturing• Operating margin expansion from SG&A leverage• Strong financial track record for 6+ years as a public company
• Axsun Medical Applications, Ophthalmology driven• Image Guided Therapy products including IVC Filters• Forward Looking IVUS (FL.IVUS) & ICE (FL.ICE) • Optical Coherence Tomography (OCT)• Sync-Rx software modalities
• Solutions for issues facing healthcare systems today = FUNCTIONAL PCI• Physiology & Intravascular Imaging technology and innovation leader• Rapidly growing physiology business in large underpenetrated market • Global IVI market share leader, growing market share
Volcano Highlights
The Precision Guided Therapy
Leader
Base BusinessGrowth
Pipeline/ Internal
Development
Financial Leverage
5
Volcano’s Winning Growth Strategy
Base Business
1
Pipeline/ Internal Development
2
Business ModelExpansion
3
6
Volcano’s Winning Growth Strategy
• Expand Physiology, IVUS, and Axsun Industrial leadership through innovation
• Expand clinical indications growing penetration & market sizes
• Continue expansion of direct distribution
• Markets currently >$700M, addressable markets >$2.5B
Revenue Growth 11-13% 2013-2017
Base Business
1
7
Volcano’s Winning Growth Strategy
• Develop new products and markets from existing technologies
• Commercialize existing pipeline –FL.IVUS, FL.ICE, OCT, Crux IVCF, Sync-Rx, Axsun Medical
• Addressable markets in excess of >$1.5B
Push Revenue Growth > 13%
Pipeline/ Internal Development
2
8
Volcano’s Winning Growth Strategy
• Target acquisitions meeting Volcano specific criteria
• Invest, in-license and partner
• Build out therapeutic solutions in focused areas- CTOs- Peripherals – arterial & venous- Structural heart
Augment Growth Above Run Rates
Business ModelExpansion
3
9
Volcano’s Growth Strategy to Include 8+ Verticals
Total Addressable Market >$5B
Strategic Expansion Business Model
Expansion
OCT ophthalmology
CTO (FL.IVUS, microcatheters, therapy)Structural Heart (FL.ICE,
Sync-Rx, Crux embolic protection)
Crux IVCF 44556677
>$1.5B >20%Pipeline –Internal Development
Addressable Market Growth
IVI (IVUS, FACT, OCT)
Physiology (FFR, Flow, iFR)
Base Business
Addressable M
arket Size
8+ >$1B >20%
1122 >$2.5B 11-13%
Axsun Industrial 33
Source: Volcano Corporation data on file
10
Building a Formidable Medical Device Company
Expansion add-ons ~$200M in revenue
>8 verticals >$5B addressable markets
#1-2 in each market
Decreased dependence on stable coronary PCI
Base business and pipeline ~$700M in revenue
Crux and Sync-Rx Acquisitions ~$100M in revenue
~$1B in revenue 11-13% growth
Operating leverage
2017
TodayCompany projections
11
Precision Guided TherapyTraditional Non-Invasive Imaging
Delivery Systems & Therapy Devices
Precision Guided Therapy SectorIntra-Body Imaging and Sensing (IBIS)
Medical Device Industry Now
Image Co-reg, AcuNav ICE, Stereotaxis, Mediguide, Hansen
AxiEM EM, PioneerAFIB Ablation
FLIVUS with therapy, Microcatheters, IVCF,
Thrombectomy Catheters, SeeHawkTM, PioneerTM
3D TEE, Corindus, Hansen Traxtal EM, OSS
IVUS, OCT
IGT - SeeHawk
LightLab OCT, Radi FFRMediGuide EM, NavX, ICE
IVUS, ICE, AFIB Ablation
CARTO EM, ICE
Sync RX – Angio+, IVI co-reg, FFR co-reg, Structural Heart aps,
Peripheral aps
Robotics
12
Intra-Body Imaging and Sensing Sector 2006-2021
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2006 2011 2016 2021
Hypertension
Neurovascular Disease
EP - FL.ICE / ICE
Structural Heart
FLIVUS / CTO
Ophthalmology (OCT)
PVD (Imaging)
Coronary IVI (IVUS & OCT)
Coronary FM
~$2,500*
~$1,500*
$864
$332
Rev
enue
s ($
M)
Source: Volcano Corporation data on file
14
Volcano’s Platform Competitive Differentiation
Eagle Eye® Platinum (20 MHz)
Eagle Eye® Platinum ST Catheter Visions® PV .018 (20 MHz) Catheter
Visions® PV .035 (10 MHz) Catheter
PrimeWire® Prestige
FloWire®
ComboWire® XT
Revolution® (45 MHz) Catheter
PrimeWire® Prestige PLUSw/ AcuSense™
Precision Guided Therapy
15
FFR
CFR
iFR™
IVUS
ChromaFLO® VH® IVUS FL.IVUS
Pre-Procedure Peri-Procedure Post-Procedure
MedtronicPioneer™
All from Volcano’s Single Multi-Modality Platform
FL.ICEFL.IVUS
withTunneling
OCTFACT
“FACT”, “FL.IVUS” and “FL.ICE” are acronyms for Volcano Corporation’s focused acoustic computed tomography (FACT), forward-looking IVUS (FL.IVUS) and forward-looking intra-cardiac echocardiography (FL.ICE) technologies. These technologies are currently under development and are not commercially available for sale.
IVCF
IVI Co-Reg
Angio+
Covidien SeeHawk™
17
Winning the Land GrabVolcano vs. Boston Scientific Installed Base (US Only)
792 829 855
19622417
2797
0
1000
2000
3000
4000
12/31/10 12/31/11 12/31/12
Volcano s5 Boston Scientific iLab
Tota
l Uni
ts In
stal
led
Source: Volcano Corporation data on file
Inte
grat
ed a
nd R
oll a
roun
d
Land grab last 2 years:Volcano 835Boston 63
93%
18
Broadest Physiology Product PortfolioCoronary and Peripheral Guidewires, Hardware and Modalities
FFR CFR iFR™
Modalities
PrimeWire® Prestige PLUSw/ AcuSense™
PrimeWire® Prestige
FloWire®
ComboWire® XT
Physiology Guide Wires
ComboMap® Console SmartMap® Console
Hardware
S5i™ Integrated System
4th New Wire in 4 Years
*iFR is not commercially available
19
Physiology Penetration into Coronary PCIProduct Development and Clinical Data Drives Standard of Care
*CathPCI database shows 59% ACS**Every stable PCI procedure needs some objective test of Ischemia per lesion to triage between OMT, PCI and CABG
***Fearon, WF., et al., Cost-effectiveness Analysis of FFR-Guided PCI versus Medical Therapy in Stable Coronary Disease (FAME 2). Presented at TCT 2012, October, 2012 ****77% of patients have visible MVD that will warrant functional assessment based on 42% probability of being intermediate per lesion and 2.7 lesions per patient with MVD [1-(1-42%)^2.7] =
77% *17% of patients with confirmed ischemia but also MVD = 13%. Doesn’t add because of rounding.*****Tonino PA, et al., Fractional flow reserve versus angiography for guiding percutaneous coronary intervention. N Engl J Med. 2009 Jan 15;360(3):213-24
All PCIs100%
Non-acute*41%
ACS*59%
FAME II*** confirms need for PCI and Cost-Effectiveness of FFR Guided PCI
Today’s tools suitable24%
Efficient MVD****Confirmatory non-
invasive test w/ MVD9% (of 17%)
Proof of Ischemia**Missing or
non-confirmatory noninvasive test
24% (of 24%)
FAME***** shows lesion specific guidance improves outcomes and cost-effectiveFrontline Wire, iFR™ make practical
33%
‘Ad-Hoc’ STEMI (Non-Culprit)8% (of 17%)
‘Ad-Hoc’ NSTEMI (Non-Culprit)9% (of 18%)
Confirm UA(Culprit & Non-Culprit)
18% (of 24%)
DEFINE Dx Angio to show FFR / iFR™
Dx is more efficient vs. non-invasiveFrontline Wire, iFR™ make practical
DEFINE ACS goal to show iFR™ guided ‘ad-hoc’ MVD stenting is cost-effective Frontline Wire, iFR™ make possible
51%
60%
68%
DEFINE Family to show iFR™ post stentplacement a measure of successful PCIFrontline Wire, iFR™ make possible
‘PCI Success’Severe Lesions
Measure of Success 80+%
20
Physiology Penetration into Coronary PCIProduct Development and Clinical Data Drives Standard of Care
*CathPCI database shows 59% ACS**Every stable PCI procedure needs some objective test of Ischemia per lesion to triage between OMT, PCI and CABG
***Fearon, WF., et al., Cost-effectiveness Analysis of FFR-Guided PCI versus Medical Therapy in Stable Coronary Disease (FAME 2). Presented at TCT 2012, October, 2012 ****77% of patients have visible MVD that will warrant functional assessment based on 42% probability of being intermediate per lesion and 2.7 lesions per patient with MVD [1-(1-42%)^2.7] =
77% *17% of patients with confirmed ischemia but also MVD = 13%. Doesn’t add because of rounding.*****Tonino PA, et al., Fractional flow reserve versus angiography for guiding percutaneous coronary intervention. N Engl J Med. 2009 Jan 15;360(3):213-24
All PCIs100%
Non-acute*41%
ACS*59%
FAME II*** confirms need for PCI and Cost-Effectiveness of FFR Guided PCI
Today’s tools suitable24%
Efficient MVD****Confirmatory non-
invasive test w/ MVD9% (of 17%)
Proof of Ischemia**Missing or
non-confirmatory noninvasive test
24% (of 24%)
FAME***** shows lesion specific guidance improves outcomes and cost-effectiveFrontline Wire, iFR™ make practical
33%
‘Ad-Hoc’ STEMI (Non-Culprit)8% (of 17%)
‘Ad-Hoc’ NSTEMI (Non-Culprit)9% (of 18%)
Confirm UA(Culprit & Non-Culprit)
18% (of 24%)
DEFINE Dx Angio to show FFR / iFR™
Dx is more efficient vs. non-invasiveFrontline Wire, iFR™ make practical
DEFINE ACS goal to show iFR™ guided ‘ad-hoc’ MVD stenting is cost-effective Frontline Wire, iFR™ make possible
51%
60%
68%
DEFINE Family to show iFR™ post stentplacement a measure of successful PCIFrontline Wire, iFR™ make possible
‘PCI Success’Severe Lesions
Measure of Success 80+%
21
Physiology Penetration into Coronary PCIProduct Development and Clinical Data Drives Standard of Care
All PCIs100%
Non-acute*41%
ACS*59%
FAME II*** confirms need for PCI and Cost-Effectiveness of FFR Guided PCI
Today’s tools suitable24%
Efficient MVD****Confirmatory non-
invasive test w/ MVD9% (of 17%)
Proof of Ischemia**Missing or
non-confirmatory noninvasive test
24% (of 24%)
FAME***** shows lesion specific guidance improves outcomes and cost-effectiveFrontline Wire, iFR™ make practical
33%
‘Ad-Hoc’ STEMI (Non-Culprit)8% (of 17%)
‘Ad-Hoc’ NSTEMI (Non-Culprit)9% (of 18%)
Confirm UA(Culprit & Non-Culprit)
18% (of 24%)
DEFINE Dx Angio to show FFR / iFR™
Dx is more efficient vs. non-invasiveFrontline Wire, iFR™ make practical
DEFINE ACS goal to show iFR™ guided ‘ad-hoc’ MVD stenting is cost-effective Frontline Wire, iFR™ make possible
51%
60%
68%
DEFINE Family to show iFR™ post stentplacement a measure of successful PCIFrontline Wire, iFR™ make possible
80+%‘PCI Success’Severe Lesions
Measure of Success
*CathPCI database shows 59% ACS**Every stable PCI procedure needs some objective test of Ischemia per lesion to triage between OMT, PCI and CABG
***Fearon, WF., et al., Cost-effectiveness Analysis of FFR-Guided PCI versus Medical Therapy in Stable Coronary Disease (FAME 2). Presented at TCT 2012, October, 2012 ****77% of patients have visible MVD that will warrant functional assessment based on 42% probability of being intermediate per lesion and 2.7 lesions per patient with MVD [1-(1-42%)^2.7] =
77% *17% of patients with confirmed ischemia but also MVD = 13%. Doesn’t add because of rounding.*****Tonino PA, et al., Fractional flow reserve versus angiography for guiding percutaneous coronary intervention. N Engl J Med. 2009 Jan 15;360(3):213-24
22
0
1,000
2,000
3,000
4,000
5,000
6,000
2012 2013 2014 2015 2016 2017
Glo
bal A
ddre
ssab
le M
arke
t Pro
cedu
res
(000
’s)
Neuro / Sinus
SFA / BTK / Renal***
CABG Mapping**
Dx Angio w/ Visible CAD*
Pre & Post Confirmation (PCI)
Unstable Angina (PCI)
Stable Angina (PCI)
Matching Anatomy with Function in >5M PatientsOpportunity Beyond Stable PCI for Angiography and Physiology Together
*Assumes 28% of scheduled stable PCI procedures technically Dx Angio with negative FFR (FAME II) and expands to challenge non-invasive alternatives**Assumes 50% of CABG patients will benefit from FFR Dx to reduce graft failure rate***Assumes non-CTO cases benefit from monitoring of physiology gradients throughout stent or atherectomy procedures (50%)
Source: Volcano Corporation data on file
23
0
500
1,000
1,500
2,000
2,500
3,000
2012 2013 2014 2015 2016 2017
Rev
enue
($M
)
Global ProjectedMarket Size ($M)
Global AddressableMarket size ($M)
>$2B Addressable Market in Physiology
Source: Volcano Corporation data on file
24
Broadest IVUS Product Portfolio
Software
Eagle Eye® Platinum (20 MHz) Catheter
Coronary IVUS Catheters
s5™ Console
Hardware
S5i™ Integrated System
IVUS ChromaFLO® VH® IVUS
Eagle Eye® Platinum ST Catheter
Revolution®
(45 MHz) Catheter
Peripheral IVUS Catheters
Visions® PV .018 (20 MHz) Catheter
Visions® PV .035 (10 MHz) Catheter
25
Focused Acoustic Computed Tomography (FACT)
Technology• The NEW intravascular imaging standard • < 50 µm high resolution imaging with similar performance to OCT• Allows visualization of entire plaque and vessel wall without
needing to flush to clear blood
Addressable Market Activities for Commercialization• Finalize catheter and pullback device designs• Complete animal studies and regulatory filings• Complete First in Man cases late 2013• Projected commercially available 2014 and 2015
>$2BBY 2017
“FACT”, “FL.IVUS” and “FL.ICE” are acronyms for Volcano Corporation’s focused acoustic computed tomography (FACT), forward-looking IVUS (FL.IVUS) and forward-looking intra-cardiac echocardiography (FL.ICE) technologies. These technologies are currently under development and are not commercially available for sale.
Source: Volcano Corporation data on file
26
Intravascular Imaging Comparison
Axial
FACT image quality expected to be superior to OCT1
Flushing not required to clear blood with FACT2
FACT allows you to see the entire plaque and vessel wall • FACT and IVUS can see 10 mm into the tissue• OCT can only see the first 2 mm of tissue
3
Resolution Phased Array IVUS Rotational IVUS OCT FACT
Axial (depth) 150 µm 75 µm 15-20 µm < 50 µm
Lateral 200 - 500 µm 100 - 200 µm 20 - 40 µm 50 – 100 µm
Axial
27
Software
Hardware
OCTAVE™ Imaging Catheter
LVOCT™ System (Low Volume OCT)S5i™ Integrated System
Volcano OCT Imaging System
Volcano OCT is currently in development and not commercially available.
s5™ Console
OCT Catheter
28
Volcano OCT Imaging System
Technology• OCT is an optical based high resolution imaging (~15 micron)
- Integrated on our multimodality system- Complimentary to IVUS- Capable of imaging 2/3 the entire coronary in just 2 seconds
• OCT for visualization and differentiation of:- Thin layers of neointimal tissue (fine stent strut coverage)- Red and white thrombus in ACS cases- Fine stent apposition- Small dissections
• A platform technology that will provide us capabilities and differentiation to pursue additional markets and applications
>$500MBY 2017
Addressable MarketActivities for Commercialization• Our design is fixed with integration of third party light source• What we expect in 2013 (assuming no litigation delays):
‒ FIM cases in multiple locations‒ Start of clinical trial cases for regulatory submission‒ Regulatory submissions in EU and Japan in Q4
Volcano OCT is currently in development and not commercially available. Source: Volcano Corporation data on file
29
0
500
1,000
1,500
2,000
2,500
2012 2013 2014 2015 2016 2017
Rev
enue
($M
)
Global ProjectedMarket size ($M)
Global AddressableMarket size ($M)
>$2B Addressable Market in Intravascular Imaging (IVI)
Source: Volcano Corporation data on fileIntravascular Imaging (IVI) is defined as coronary and peripheral IVUS, FACT, OCT, and Hardware
30
Leadership Built on Innovation
2001• First patent issued for intravascular plaque characterization
2002• Eagle Eye® digital IVUS imaging catheter
• SmartMap FFR® system
• Circulation article concludes spectral analysis canpredict plaque characterization
2003• First plaque characterization software integrated into intravascular imaging system
2005• Eagle Eye® Gold digital IVUS imaging catheter
• VH® IVUS software approved for InVision Gold imaging system
2007• Revolution®
45 MHz rotational IVUS imaging catheter
2009• First Clinical testing of Volcano OCT* technology
2004• ComboWire® andComboMap®
first multi-modality pressure and flow guide wire and system
• First patients enrolled in VH®
IVUS registry and PROSPECT study
2006• s5™ tower imaging system with ChromaFlo®
and VH® IVUS
• s5i™ Integrated imaging System with ChromaFlo®
and VH® IVUS
• Innova ® IVUS
2008• FFR and rotational IVUS functionality added to s5™ and s5i™imaging systems
2010• Eagle Eye® Platinum digital IVUS imaging catheter
• PrimeWire PRESTIGE®
pressure guide wire
• FFR Case Manager ™
for s5 ™ and s5i™ systems
• One millionth procedure guided by Volcano technology
• Volcano is U.S. market leader in intravascular imaging
2011• PrimeWire Prestige®
PLUS guide wire
• First iFR®
data at EuroPCR
2012• Eagle Eye® Platinum ST digital IVUS imaging catheter
• Valet® Microcatheter
• IFR® software approval in Japan
• AcuSense™ pressure guidewire technology
• Visions® PV 035 digital IVUS catheter
• CORE™ hardware platform
• Hi-Q™ rotational imaging software
• ReFLOW® aspiration catheter CE/510(k) submission
2013THE LEADING PRECISIONGUIDED THERAPYCOMPANY
32
Axsun Medical
Opportunities- OEM Intravascular Imaging (IVI)- OEM Ophthalmology- Other (Dental, GI, etc.)
Axsun’s Swept lasers enable 2-5X higher speed and image deeper than current Spectral Domain OCT systems
Intravascular OCT Image Topcon Deep Range Imaging (DRI) OCT SSOCT Imaging Range Comparison
33
Axsun Medical Ophthalmology
• The >$500M ophthalmic OCT camera market will transition to Swept Source OCT light sources over the next 3-5 years
• Axsun will support our OEM OCT ophthalmic OCT system customers with customized swept laser solutions as they complete development and obtain FDA Clearance
Eye and OCT Image
Axsun SSOCT Light Source
Projected Market Size is $100M by 2017
Source: Volcano Corporation data on file
34
Sync-Rx Company Overview
• Advanced software application company founded in 2007- Based in Tel Aviv area- Software engineering and algorithm development
• Products and technology optimize and facilitate trans-catheter cardiovascular interventions using automated online image processing- Initial focus on Angio + coronary catheterizations- Development of IVUS and IVI co-registration with Angio- Work done in angio-based FFR measurement
application- Future Peripheral & Structural Heart applications
IVI Co-Registration
Angio+
35
Sync-Rx Opportunity
>$300MBY 2013
Addressable Market
Activities for Commercialization• Angio+
- 510k clearance (Q3 2010)- CE Mark (Q3 2010)
• IVI Co-Registration- Complete software and hardware
development- Submit 510k/CE Mark (Q3 2013)
Strategic RationaleStrategic Rationale
Brings X-Ray to Volcano Platform
Proprietary Volcano Solution
Competitive Differentiation
Increases Utilization
Aligns with Volcano
Mission
Strengthen Physiology
with Pressure MappingExpandable
Platform in Peripheral and
Structural Heart Source: Volcano Corporation data on file
36
Opportunities with Sync-Rx
Image StabilizationQuantitative Coronary Angiography Image Enhancement
1 Current
Co-registration between IVUS and Angiography2 Future
(Near-term)
Co-registration between Angiography and:OCT Structural HeartFFR NeuroPeripheral CT/MRI
3 Future (Long-term)
37
Crux Overview
• Founded 2004 in Menlo Park, CA
• Product portfolio includes:Inferior Vena Cava Filter (novel design)
- Two opposing nitinol helical wireform elements- Flexible ePTFE filter- Two retrieval anchors (bidirectional retrieval),
one femoral & one jugular- Five anchors to prevent migration of the device
IVC Filter Retrieval Kit Structural Heart Embolic Protection Device
• Regulatory StatusInferior Vena Cava Filter
- CE Mark (Q4 2011)- 510k Clearance (Q3 2012)
IVC Filter Retrieval Kit - FDA and CE submittals (2013)
IVC Filter Placement
IVC Retrieval Kit
Embolic ProtectionDevice
38
Crux IVC Filter
>$500MBY 2013
Technology
• Novel helical design
• Self centers, eliminates problem with tilt (in contrast to all other filters on market)
• Bidirectional retrieval – can be removed by femoral or jugular approach (in contrast to most other filters on market)
Addressable MarketActivities for Commercialization• Manufacturing ramp• Regulatory approvals for IVUS-guided placement
at bedside• Development of combination IVCF IVUS catheter
device‒ Tremendous cost and efficiency savings
when performing IVC Filter placements at bedside, rather than angio suite
Source: Volcano Corporation data on file
39
Crux Differentiation
Cook Celect ALNBARD Eclipse
RETRIEVE 2, 3 and 4 Pivotal Clinical Trial Results*Deployment Success 123/125 (98%)Retrieval Success 53/54 (98%)Migration 0%Fracture 0%Embolization 0%
Conventional Tulip Design Drawbacks Crux FeaturesFilter Tilt Self-CenteringMigration 0% Migration in Pivotal TrialFracture 0% Fracture in Pivotal TrialLimited Retrieval Bi-directional Retrieval
Crux
*SIR 2012 - Abstract No. LB04
40
Software
Hardware
FL.IVUS PIMS5i™ Integrated System
The Only Forward Looking IVUS (FL.IVUS) Portfolio
s5™ Console
PreView™ Catheter
“FACT”, “FL.IVUS” and “FL.ICE” are acronyms for Volcano Corporation’s focused acoustic computed tomography (FACT), forward-looking IVUS (FL.IVUS) and forward-looking intra-cardiac echocardiography (FL.ICE) technologies. These technologies are currently under development and are not commercially available for sale.
41
Forward Looking IVUS
>$750MBY 2017
Addressable MarketActivities for Commercialization• CE Mark Device• 510k submitted 2012• Completion of on-going clinical trials in US and EU• Complete integration onto s5 platform by 2H 2013 • Additional features and capabilities being developed
for family of future generation catheters
Technology• Provides real-time, forward looking therapy guidance to improve
treatment of highly stenosed lesions• Over-the-wire support catheter that enables physician to image in
front of catheter and direct wire placement• Goal of making complex cases easier, safer and faster by improving
outcomes, reducing radiation and contrast, and reducing case time
“FACT”, “FL.IVUS” and “FL.ICE” are acronyms for Volcano Corporation’s focused acoustic computed tomography (FACT), forward-looking IVUS (FL.IVUS) and forward-looking intra-cardiac echocardiography (FL.ICE) technologies. These technologies are currently under development and are not commercially available for sale.
Source: Volcano Corporation data on file
42
Forward Looking Intra-Cardiac Echo (ICE)
Technology• Forward-looking echo that provides real time therapy
guidance for structural heart procedures• Imaging plane aligns with working lumen for delivery of
guidewire and devices• Proprietary, platform technology enabling unique imaging
capabilities in wide range of clinical indications• Commercialization 2014 to 2015
Atrial Fibrillation
Guide Transseptal
Crossing
Coronary Sinus Cannulation & Side Branch Selection
PLAATO (LAA Closure) – Watchman (Atritech)– AGA Medical/St. Jude– Coherex
Mitral Valve Replacement or Repair
– MitralClip (Abbott)– CardiAQ (CVT)– Kardium
PFO/ASD Closure >$350M
BY 2017
Addressable Market
Investigational Device, not for human use“FACT”, “FL.IVUS” and “FL.ICE” are acronyms for Volcano Corporation’s focused acoustic computed tomography (FACT), forward-looking IVUS (FL.IVUS) and forward-looking intra-cardiac echocardiography (FL.ICE) technologies. These technologies are currently under development and are not commercially available for sale.
Source: Volcano Corporation data on file
44
Volcano Acquisition CriteriaTwo Profiles
• Existing revenue base and growth• Limited clinical indications – expansion
opportunities• Limited distribution – scale or geography• Limited volumes – manufacturing cost
opportunities• High SG&A relative to sales
Ramping Commercialization
• Limited regulatory, technical or clinical risk• Geographic, commercialization and clinical
indication expansion opportunities
Beginning Commercialization (Crux example)
2
1
• Clinical Vertical‒ Coronary‒ Peripheral‒ Structural Heart‒ CTO
• >$500M Addressable Market• #1-2 Market Position in 2017• Limited dilution• Distribution, geographic,
manufacturing, and G&A leverage
• Strong team and culture
General Acquisition Criteria
45
Volcano’s Strategy Expansion
Diagnostic Therapeutic Integrated Diagnostic + Therapeutic
PROCEDURES
TECHNOLOGIES
CORONARY
NON-CORONARY
46
Volcano’s Non-Coronary PCI Growth
PAD
Diagnostic Therapeutic Integrated Diagnostic + Therapeutic
Venous
Neuro
EVAR/TEVAR
Carotid
Structural Heart
PROCEDURES
TECHNOLOGIES
NON-CORONARY
IVUS (limited) – plaque characterization, stent guidance
IVUS – graft measurement, avoid contrast
IVUS – short tip Eagle Eye
IVUS – stent sizing, avoid advential cuts (UTOPIA)
FFR (limited) – know where to treat, when to stopSync-Rx
Valet Micro Catheter Pioneer image-guided re-entry
IVUS (limited) – adjunctive to fluoro
IVUS – dx central vein stenosis
IVUS – dx of vein compression; thrombus assessment
IVCF
AV FistulaVein Compression/DVT
CTO
Balloon
Stent
DEB
Atherectomy
Current state
Crux – NEW ACQUISITION
47
Volcano’s Non-Coronary PCI Growth
PAD
Diagnostic Therapeutic Integrated Diagnostic + Therapeutic
Venous
Neuro
EVAR/TEVAR
Carotid
Structural Heart
PROCEDURES
TECHNOLOGIES
NON-CORONARY
IVCF
AV FistulaVein Compression/DVT
CTO
Balloon
Stent
DEB
Atherectomy
IVUS (limited) – plaque characterization, stent guidance
IVUS – graft measurement, avoid contrastIVUS – short tip Eagle EyeFL.IVUSIVUS – stent sizing, avoid advential cuts (UTOPIA)
FFR (limited) – know where to treat, when to stopIVUSSync-Rx
Valet Micro CatheterFL.IVUS
Medtronic PioneerFL.IVUS
IVUS (limited) – adjunctive to fluoro
IVUS – dx central vein stenosis
IVUS – dx of vein compression; thrombus assessment
FFR – pressure &flow in sinus/aneurysm; OCT/IVUS apps
FL.ICESync-Rx – NEW ACQUISITION
Crux Embolic protectionNEW ACQUISITION
IVUS-IVCF combo
Covidien SeeHawk
Current state
Product Development
FL.IVUS
Sync-Rx – NEW ACQUISITION
FL.IVUS FL.IVUS
Crux – NEW ACQUISITION
48
Volcano’s Non-Coronary PCI Growth
PAD
Diagnostic Therapeutic Integrated Diagnostic + Therapeutic
Venous
Neuro
EVAR/TEVAR
Carotid
Structural Heart
PROCEDURES
TECHNOLOGIES
NON-CORONARY
IVUS (limited) – plaque characterization, stent guidance
IVUS – graft measurement, avoid contrast
Valet Micro CatheterFL.IVUS
Medtronic PioneerFL.IVUS
IVCF
AV FistulaVein Compression/DVT
CTO
Balloon
Stent
DEB
Atherectomy
FFR – pressure &flow in sinus/aneurysm; OCT/IVUS apps
FL.ICESync-Rx – NEW ACQUISITION
Crux Embolic protectionNEW ACQUISITION
IVUS-IVCF combo
Covidien SeeHawk
IVUS – DEB sizingIVUS – DEB sizing
IVUS – stent sizing, avoid advential cuts (UTOPIA)
FFR (limited) – know where to treat, when to stopIVUSSync-Rx
IVUS – short tip Eagle EyeFL.IVUS
IVUS (limited) – adjunctive to fluoro
IVUS – dx central vein stenosis
IVUS – dx of vein compression; thrombus assessment
Current state
Product Development
New Clinical Data
FL.IVUS
Sync-Rx – NEW ACQUISITION
FL.IVUS FL.IVUS
Crux – NEW ACQUISITION
49
Volcano’s Non-Coronary PCI Growth
PAD
Diagnostic Therapeutic Integrated Diagnostic + Therapeutic
Venous
Neuro
EVAR/TEVAR
Carotid
Structural Heart
PROCEDURES
TECHNOLOGIES
NON-CORONARY
IVUS (limited) – plaque characterization, stent guidance
IVUS – graft measurement, avoid contrast
Valet Micro CatheterFL.IVUS
Medtronic PioneerFL.IVUS
IVCF
AV FistulaVein Compression/DVT
CTO
Balloon
Stent
DEB
Atherectomy
FFR – pressure &flow in sinus/aneurysm; OCT/IVUS apps
FL.ICESync-Rx – NEW ACQUISITION
Crux Embolic protection
IVUS-IVCF combo
Covidien SeeHawk
IVUS – DEB sizingIVUS – DEB sizing
IVUS – short tip Eagle EyeFL.IVUS
IVUS (limited) – adjunctive to fluoro
IVUS – dx central vein stenosis
IVUS – dx of vein compression; thrombus assessment
Partner/M&A oppty
Partner/M&A oppty
Partner/M&A oppty
Current state
Product Development
New Clinical Data
Partner/M&A oppty
Partner/M&A oppty
FL.IVUSIVUS – stent sizing, avoid advential cuts (UTOPIA)
FFR (limited) – know where to treat, when to stopIVUSSync-Rx
FL.IVUSFL.IVUS
Sync-Rx – NEW ACQUISITION
Crux – NEW ACQUISITION
50
Volcano Achieves Diversified Growth of 11-13%
Total Addressable Market >$5B
Strategic Expansion Business Model
Expansion
OCT ophthalmology
CTO (FL.IVUS, microcatheters, therapy)Structural Heart (FL.ICE,
Sync-Rx, Crux embolic protection)
Crux IVCF 44556677
>$1.5B >20%Pipeline –Internal Development
Addressable Market Growth
IVI (IVUS, FACT, OCT)
Physiology (FFR, Flow, iFR)
Base Business
Addressable M
arket Size
8+ >$1B >20%
1122 >$2.5B 11-13%
Axsun Industrial 33
Source: Volcano Corporation data on file
51
$103$131
$172
$228
$294
$344$382
0
50
100
150
200
250
300
350
400
450
2006 2007 2008 2009 2010 2011 2012
Rev
enue
($M
)Revenue Growth 2006-2012
Source: Volcano Corporation data on file
52
Rest of World• 56 direct sales reps in
Western Europe, South Africa, & Asia Pacific
• Distributors in Asia Pacific, Latin America, Middle East and Canada
United States• 133 direct sales employees• CPT physician
reimbursement for IVUS and FFR
Japan• 66 direct sales
employees• Full Reimbursement
47%32%
21%
By Geography
U.S.JapanROW
54%
25%
10%8%3%
By ProductIVUS Disp
FM Disp
Systems
OtherMedicalIndustrial
Worldwide Sales & Distribution
53
Sales Growth1
Gross Margin
Operating Expenses
Operating Margin
EPS
Free Cash Flow2
EBITDA3
~13% - 15% CAGR
70% - 71%
50% - 51%
~19-21.0%
~80% CAGR
~$90-95M
~$170-180M or 40% CAGR
1Excludes the impact of FX.2Cash flow from operating activities less capital expenditures.3Earnings before interest, tax, depreciation and amortization.
LRP 2012 – 2016
Long-Range Plan Objective
54
• Multi-modality system with >15 applications in the market or development• Over 7,700 installed systems• Approximately 255 direct global sales reps• Strong partnerships with GE, Philips, Siemens, Medtronic, and Covidien
• Market and product line growth opportunities >$5B• 2011 - $344M revenue; 2012 - $382M revenue• Gross margin leverage from Costa Rica manufacturing• Operating margin expansion from SG&A leverage• Strong financial track record for 6+ years as a public company
• Axsun Medical Applications, Ophthalmology driven• Image Guided Therapy products including IVC Filters• Forward Looking IVUS (FL.IVUS) & ICE (FL.ICE) • Optical Coherence Tomography (OCT)• Sync-Rx software modalities
• Solutions for issues facing healthcare systems today = FUNCTIONAL PCI• Physiology & Intravascular Imaging technology and innovation leader• Rapidly growing physiology business in large underpenetrated market • Global IVI market share leader, growing market share
Why Volcano Now?
The Precision Guided Therapy
Leader
Base Business Growth
Pipeline/ Internal
Development
Financial Leverage