mindchild medical · ussn 61/550,019, filed 10/21/11 “method and device for filtering, ... 2/6/12...
TRANSCRIPT
MindChild Medical New Investor Information Conference Call
June 12, 2013
2
Agenda
• Market drivers for MindChild • Current status of MERIDIAN™ product
development • Current fetal monitoring multi-center clinical
results MindChild has achieved • Our accomplishments with FDA clearances and
our next steps • Our overall go-to-market business strategy • Strategic exit strategy • Our current financing requirements
Market Drivers for MindChild 1/2
3
National Fetal Monitoring Market Survey1 • Respondents employ a fetal heart (FHR) monitor in 99.2% of deliveries • Over 75% of deliveries utilize some form of non-invasive FHR monitoring • Invasive FHR monitoring occurs in approximately 25% of all labor episodes • Respondents reported that in over 20% of deliveries, an unreliable non-
invasive FHR tracing leads to use of a Fetal Scalp Electrode (FSE) to monitor the fetus’s heart rate
• The vast majority of respondents reported an observed increase in BMI for admitted delivering mothers over the past 5 years
• Respondents reported that nearly 40% of deliveries are to mothers with a BMI greater than 30kg/m2
• Respondents noted that nearly 30% of delivering mothers are at, or above, a BMI that they feel adversely affects accurate FHR monitoring
Market Drivers for MindChild 2/2
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Current status of Meridian product development 1/6 Product Capabilities Development/
FDA Status
MERIDIAN™ 1000 Fetal Heart Rate 1. Clinical trials 2. FDA 510(k) Cleared
MERIDIAN™ 1010
1. Fetal Heart Rate 2. GE/Phillips
interconnectivity 3. Maternal monitoring 4. Fetal ECG display
1. Under development 2. IRB use for clinical
research
MERIDIAN™ 100
1. Fetal Heart Rate 2. Uterine contraction sync 3. GE/Phillips
interconnectivity
1. Under development 2. 510(k) planned for
Q3/2013
MERIDIAN™ 110 1. MERIDIAN™ + Uterine contraction
1. 510(k) planned for Q1/2014
MERIDIAN™ ELECTRODES
1. Single use 2. Fetal Heart Rate + Uterine
Contraction Monitoring
1. Under development 2. No-file 510(k) planned for
Q3/2013
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Current status of Meridian product development 2/6
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MERIDIAN™ 10001
MERIDIAN™ 10102 • Fetal Heart Rate3
• GE/Phillips interconnectivity
• Maternal monitoring • Fetal ECG display
1FDA 510(k) cleared 2IRB research platform 3MERIDIAN 1000 single feature
Current status of Meridian product development 3/6
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MERIDIAN™ 1001
MERIDIAN™ 1102
• Fetal Heart Rate • Uterine contraction
• MERIDAN™ 100 – pass-through
• MERIDIAN™ 110 - integrated
• GE/Phillips interconnectivity
1FDA 510(k) filing planned Q3/2013 2FDA 510(k) filing planned Q1/2014
Current status of Meridian product development 4/6
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MERIDIAN™ Electrode • +4M potential
uses/yr • Single use • Fetal Heart Rate +
Uterine Contraction Monitoring
• Major value driver due to high ASAP and +55% GP
Current status of Meridian product development 5/6
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Licensed IP1 MindChild Filed IP
“Fetal monitoring system” USSN: 61/045,055, Filed: 4/15/08
“Non-invasive Detection of Fetal or Maternal Illness” USSN 61/550,019, Filed 10/21/11
“Method and Device For Filtering, Segmenting, Compressing and Classifying Oscillatory Signals” USSN: 11/470,506, Filed: 9/6/06
“Non-invasive Fetal Monitoring” USSN 61/550,024, Filed: 10/21/11
“Real-time data interface” USSN: 61/128,101, Filed: 5/19/08
“Extraction of fetal monitoring signals” USSN: 61/116,870, Filed: 11/21/08
“Fetal ECG monitoring” USP 7,949,389, Issued 5/24/11
1 Licensors: Tufts Medical Center, Inc., Massachusetts Institute of Technology, E-Trolz, Inc.
Current status of Meridian product development 6/6
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Future Applications: ECG signal analysis → translational medical impact • Example: QT segment analysis → screening for maternal Rx (i.e., anti-
depressants)1
Advocacy for Meridian QT Analysis Capabilities
Zoloft Side Effect Law Firm http://www.zoloftbirthdefectslawyers.com
Baby With Birth Defect? - Birth Defect From Anti-Depressants? http://www.yourbirthdefectlawyer.com
The Importance of Proper Dosing of Antidepressants during Pregnancy
http://www.womensmentalhealth.org/posts/the-importance-of-proper-dosing-of-antidepressants-during-pregnancy/
Women Fearful of Effects of Antidepressants During Pregnancy http://www.medscape.com/viewarticle/723121
Antidepressants During Pregnancy Pose Dilemma for Women
http://www.wingofmadness.com/antidepressants-during-pregnancy-pose-dilemma-for-women-depression-treatment-postpartum-depression-my-health-news-daily-1354
1 Strategic buy side expands to include Rx sector
Current fetal monitoring multi-center clinical results MindChild has achieved 1/2
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R² = 0.9526
120
125
130
135
140
145
150
155
120 125 130 135 140 145 150 155
Min
dChi
ld H
R
Mea
sure
men
t
FSE HR Measurement
FSE vs. Meridian
Current fetal monitoring multi-center clinical results MindChild has achieved 2/2
MERIDIAN Clinical Center Number of Patients Enrolled
Tufts Medical Center 322
Brigham and Women’s 304
Akron Summa 48
Cleveland Fairview 40
TOTAL: 714
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Our accomplishments with FDA clearances and our next steps
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Our overall go-to-market business strategy 1/2
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Controlled MERIDIAN™ 100/110 rollout to select centers
• Diligence Objectives re Strategic Buyers – Demonstrate MERIDIAN™ adoption – Demonstrate electrode acceptance – Validate survey results (i.e., equipment
acquisition process, etc.) – Demonstrate integration w/ GE/Phillips
Our overall go-to-market business strategy 2/2
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CCF/Akron/RP
BW
Duke Emory
CS
JM
Illustrative target institutions Mindchild Key Opinion Leader (KOL) support
$400k required to initiate MERIDIAN™ 100/110 market seeding Target ASP: $8k/MERIDIAN™ $100/Electrode
Strategic exit strategy 1/4
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2012 Accomplishments
Strategic exit strategy 2/4
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Date Mindchild News Flow – Building Awareness
5/1/13 MindChild Medical, Inc. To Present MERIDIAN™ Fetal Monitor at the 61st Annual Meeting for the American College of Obstetricians and Gynecologists (ACOG)
2/4/13
MindChild Medical, Inc. to Present MERIDIAN™ Fetal Monitor, at the 33rd Annual Meeting for the Society for Maternal Fetal Medicine
1/5/13 MindChild Medical Inc. Announces Sponsored Research with Oxford University
9/25/12 MindChild Medical Inc. Announces FDA 510(k) Clearance for MERIDIAN™ Monitor
6/18/12 MindChild Medical, Inc. Announces Appointment of Thomas Garite, M.D. to the Clinical Advisory Board
6/11/12 MindChild Medical, Inc. Announces Results of National Fetal Monitoring Market Survey
2/22/12 MindChild Medical, Inc. Announces Formation of a Clinical Advisory Board
2/6/12 MindChild Medical, Inc. Announces Filing of a 510(k) Application for MERIDIAN™
Strategic exit strategy 3/4
• Analyst communication plan • I-Banker interviews • 1st Tier M&A target communications
• GE/Phillips/Covidien/Hologic
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Strategic exit strategy 4/4 • Model - Market Share Movement via Strategic Buyer • Electrode revenue drives valuation/CAPEX can be discounted w/o NPV impact
DCF 15% 20% 25% Period
NPV $92MM $78MM $67MM 2015-2019
1 Assumed Buyer investment of $9.1M: $4.8M (product development), $4.3M (market development)
Assumed share of new EFM installations by strategic buyer drives MindChild NPV
Post - Acquisition Activity by Buyer ($’000s) 2015 2016 2017 2018 2019 2020 2021 New EFM Installations/yr 4,384 4,427 4,472 4,516 4,562 4,607 4,653
Share of New EFM Installations
5% 10% 15% 25% 30% 30% 30%
EFM Units 219 443 671 1,129 1,368 1,382 1,396 EFM Installed Base Units 219 662 1,333 2,462 3,830 5,212 6,608
Total GP $5,685 $14,977 $27,389 $49,516 $73,236 $94,958 $116,897 Buyer Investment1 $(2,750) $(4,000) $(1,000) $(450) $(300) $(300) $(300)
Cash Flow $2,935 $10,977 $26,389 $49,066 $72,936 $94,658 $116,597
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Our current financing requirements 1/3
• Valuation Growth – PPS growth: $0.90 (2010) → $1.80 (2012) – Post Valuation $4.6M (2010) → $12.4M
(2012) • Budget Management - ± $100k to 2010
spend plan • $1M required to b/e (2014)
– $600k for FDA clearance – $400k for MERIDIAN™ market seeding
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Our current financing requirements 2/3
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$319,320
$100,333
$198,611
$92,000
$26,556
$113,300
$84,903
$201,570
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Spending 4/13-4/14
Marketing/Management
SGA
IP
Corp
FDA
Clinical evaluation
Electrodes
MERIDIAN
Units Placed During Market Seeding
MERIDIAN™ ELECTRODES
12 700
Our current financing requirements 3/3
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Development FDA 2 Phase M&A Phase Apr 2013 May 2013 Jun 2013 Jul 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013 Dec 2013 Jan 2014 Feb 2014 Mar 2014 Apr 2014
Revenue $- $- $- $ - $ - $- $ - $- $ - $ 35,000 $ 40,000 $ 45,000 $ 50,000
GP $- $- $- $ - $ - $- $ - $ (200,000) $ (175,000) $ 30,000 $ 35,000 $ 40,000 $ 45,000
Product Development
MERIDIAN $ 48,320 $ 55,000 $ 55,000 $ 50,000 $ 47,000 $22,000 $ 12,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $5,000 $5,000
Electrodes $ 1,833 $2,500 $ 43,000 $ 7,500 $ 43,000 $2,500 $ - $- $ - $- $ - $- $-
Clinical/FDA
Clinical evaluation $ 25,711 $ 30,400 $- $ 42,500 $ - $15,000 $ 27,500 $ 15,000 $ - $ 42,500 $ - $- $-
FDA $- $- $3,000 $ 23,000 $ 23,000 $3,000 $ - $ 40,000 $ - $- $ - $- $-
Legal
Corp $ 2,556 $2,000 $2,000 $ 2,000 $ 2,000 $2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $2,000 $2,000
IP $ 300 $4,000 $3,000 $ 2,000 $ 2,000 $2,000 $ 2,000 $ 2,000 $ 42,000 $ 5,000 $ 5,000 $ 42,000 $2,000
SGA $ 2,503 $ 16,000 $2,300 $ 2,300 $ 15,300 $2,300 $ 1,400 $ 14,400 $ 1,400 $ 5,000 $ 16,000 $3,000 $3,000
Marketing/Management $ 13,570 $ 27,500 $ 27,500 $ 14,500 $ 14,500 $14,500 $ 14,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 12,500
Monthly $(94,793) $(137,400) $(135,800) $ (143,800) $ (146,800) $(63,300) $ (59,400) $(90,900) $ (62,900) $(72,000) $ (40,500) $(64,500) $(24,500)
CASH $ 329,026 $ 191,626 $ 55,826 $ (87,974) $(234,774) $(298,074) $(357,474) $ (648,374) $(886,274) $ (928,274) $(933,774) $(958,274) $(937,774)
Capitalization Summary • Financing History – Total Cash In: $3,342k as of 5/2013
– $225k Convertible Note (2009) • Converted to Series A at 10% discount
– $1,138k Series A (2010/2011) – $244k IRS Grant (2010) – Non-Dilutive – $767k Series A1 (2011) – $1,212k Series A2 (2012)
Class Shares Options Fully Diluted
Founders 3,360,081 3,360,081 47.8%
Investors 3,070,419 3,070,419 43.7%
Option Holders 541,000 541,000 7.7% Outstanding Options 59,000 59,000 0.8%
6,430,500 600,000 7,030,500 100.0%
1 $0.90/share, pre-money valuation ~$3.5m 23