IMPEDIMED LIMITED — Investor Presentation 2012

Mar 13, 2012

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ASX : IPD
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14 March 2012

ImpediMed Company Presentation

Brisbane, Australia. – ImpediMed Limited (ASX: IPD) refers shareholders to the attached Company update presentation.

For more information: Greg Brown CEO & Director T: +61(7) 3860-3700 M: +61408281127

About ImpediMed

ImpediMed Limited is the world leader in the development and distribution of medical devices employing Bioimpedance Spectroscopy (BIS) technologies for use in the non-invasive clinical assessment and monitoring of fluid status. ImpediMed’s primary product range consists of a number of medical devices that aid surgeons, oncologists, therapists and radiation oncologists in the clinical assessment of patients for the potential onset of secondary lymphoedema. Pre-operative clinical assessment in cancer survivors, before the onset of symptoms, may prevent the condition from becoming a lifelong management issue and thus improve the quality of life of the cancer survivor. ImpediMed has the first medical device with an FDA clearance in the United States to aid health care professionals, clinically assess secondary unilateral lymphoedema of the arm and leg in women and the leg in men. For more information, visit: www.impedimed.com.au

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ImpediMed Limited Investor Update March 2012

1

Disclaimer

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This presentation has been produced by ImpediMed Limited (“ImpediMed”) only and may contain forward-looking statements that are based on management’s current expectations, beliefs and assumptions and are subject to a number of risks and uncertainties. The forward-looking statements contained in this presentation (which may include words such as “expects”, “anticipates”, “plans”, “believes”, “scheduled” or “estimates”) include statements about future financial and operating results, status of our regulatory submissions, coverage, possible or assumed future growth opportunities and risks and uncertainties that could affect ImpediMed’s product and products under development. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from those described. In any forward-looking statement in which ImpediMed expresses an expectation or belief, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. We are not under any duty to update forward-looking statements unless required by law.

This investor presentation update is not an offer of securities.

ImpediMed and its directors, employees, associates, affiliates and agents, make no:

• (a) representations or warranties, expressed or implied, in relation to this presentation or the accuracy, reliability or completeness of any information in it or the performance of ImpediMed; and

• (b) accept no responsibility for the accuracy or completeness of this presentation and the information contained in it.

This presentation is intended to provide background information only and does not constitute or form part of an offer of securities or a solicitation or invitation to buy or apply for securities, nor may it or any part of it form the basis of, or be relied on in any connection with any contract or commitment whatsoever. The information in this presentation does not take into account the objectives, financial situation or particular needs of any person. Nothing contained in this presentation constitutes investment, legal, tax or other advice. This presentation does not, and does not purport to, contain all the information prospective investors in ImpediMed would desire or require in reaching an investment decision.

To the maximum extent permitted by law, none of ImpediMed, its officers, directors, employees, associates, affiliates or agents, nor any other person accepts any liability for any loss, claim, damages, costs or expenses of any nature (whether or not foreseeable), including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it or any errors or omissions in it.

The distribution of this presentation in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. This presentation has not been filed, lodged, registered or approved in any jurisdiction and recipients of this presentation should keep themselves informed of and comply with and observe all applicable legal and regulatory requirements. In Australia this presentation is made only to sophisticated or professional investors under the Corporations Act.

Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended.

Please review financial releases on ImpediMed’s website (www.impedimed.com) for a complete listing of risk factors.

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Clinical Assessment of Unilateral Lymphoedema

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High incidence IP hurdles expanding
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Underserved / early Dx FDA clearance Arm/leg
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Early Dx / prevention Prospective care
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ECF differences of limbs
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ECF/TF measure
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UB500 next generation
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• First mover advantage and category III code in place

• Code, payment and building coverage – critical to drive sales

• Directly commercialising the business globally – R&D, Mfr, Q&R, S&M,MC, IP

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Milestone table – Calender year 2011 / 2012

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News Flow Pipeline:	1H11	2H11		1	H12	H12	2H12	2H12	2H12	2H12
Announcement of first covered lives
Announcement of 20 million covered lives					March 2012
Stanford registry launch and roll out
Publication on health economic paper
Announcement clinical guidelines
Announcement of 50 million covered lives
Key outcomes publication on BIS
Unilateral Limb (arm & leg) FDA - U400
250 placement of L-Dex devices
NCD CED resubmission

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Recent Progress

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1. L-Dex placements in the U.S. marketplace - 178 devices.

2. U.S. FDA notice of clearance for our L-Dex U400 device to aid in the clinical assessment of unilateral lymphoedema of the arm in women, and legs for both men and women (Nov 2011).

3. Key Pennsylvania based health plan (HMO) implemented prospective care and coverage (Dec 2011).

4. Regarding coverage metrics - we announced 1.6 million additional covered lives, bringing the total to 13.8 million; 6.2 million short of the milestone for Dec. 2011.

5. In March 2012 we report just over 23 million lives

6. Reimbursement coverage – payment information continues to be collected from doctors at both the U.S. state and local levels. Coverage continues to build, but at this point is still well short of required levels.

7. Preliminary summary report on five (5) year outcomes data from the NIH study, was presented (Dec 2012). Supports prospective care and early intervention for improving clinical outcomes in lymphoedema.

8. Stanford launched Breast Cancer Lymphoedema Registry ( Nov 2011)

9. The Company expanded its intellectual property by exclusively licensing three U.S. patents for the fields of lymphoedema, oedema and dialysis. Company considers these to be significant hurdles for BIA/BIS (Feb. 2012)

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New Regulatory Claim

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• First FDA cleared device - Indications for use/intended use:

A bioelectrical impedance analyzer/monitor for use on adult human patients, utilizing impedance ratios that are displayed as an L-Dex ratio that supports the measurement of extra cellular fluid volume differences between the limbs and is presented to the clinician on an L-Dex scale as an aid to their clinical assessment of unilateral lymphoedema of the arm and leg in women and the leg in men.

The device is only indicated for patients who will have or who have had lymph nodes, from the axillary and pelvic regions, either removed, damaged or irradiated. The device is not intended to diagnose or predict lymphoedema of the extremity

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Business Model – Reimbursement Critical to Drive Model

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Illustrative Device Economics

Assumptions (based on primary target surgeon)

Per Reading (USD) Reimbursement¹ Up to $400 Consumables¹ Up to $85 Net Clinic/Surgeon Up to $315

 Cumulative readings per patient over 1[st] 3yrs – 8 to 12 [2]

• If a clinician enrols 8 new patients per month

• Readings after 3 years estimated to be 768 to 1,152 per year

 Readings after 5 years estimated to be 960 to 1,632 per year

¹Reimbursement and consumable amounts are targets - indicative only

• 2 Readings per patient can vary from baseline, to 5 in the first year to annually there after; to baseline, quarterly for the first 3 years and 6 monthly years 4 and 5

• Approximately 250 surgeons treat 20% of all breast cancer patients

• IPD estimates top 2,000 US surgeons treat approximately 60% of patients

• IPD estimates around 800 to 1000 US surgeons treat around 40% to 45% of all patients – primary target

• IPD estimates up to 8000 US surgeons operate on the breast

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Targeting Multiple Fluid Status Markets

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Lymphoedema market - Arms

Today & Near Term

Lymphoedema market - Legs

• Arms - female breast cancer

• TGA, FDA, and CE cleared (Uni only)

• TGA, FDA, and CE cleared (Uni only)

• 80% of market, 70% unilateral

• Est. - US$130m to $220m annually

• 5 year market potential estimate

• Targeting $65 to $85 per reading

Dialysis market

• Fluid status monitoring in dialysis patients

• Est. - US$400m to $700m annually

 5 year market potential estimate  Fluid Status Fluid Targeting $65 to $85 per reading Technology Status Market platform Oedema market

• Venous insufficiency

• Pelvic cancers - differentiation of lymphoedema / oedema

Future

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Reimbursement – Critical to drive business model

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1. Coding

• CPT procedure codes

• ICD-9-CM diagnosis and procedure codes

• HCPCS drug, device and durable medical equipment codes

2. Coverage

• National vs. Regional vs. Local coverage policies

• Blue Cross and Blue Shield Technology policies

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Coding Coverage
Payment
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• Private insurers (National/Regional) and managed care coverage policies

3. Payment

• Outpatient hospital Ambulatory Payment Classification (APC) and pass-through payment

• Physician & diagnostic test payment under the resource-based, relative value schedule (RBRVS)

• Durable Medical Equipment payment under DMERC fee schedules

• Market metrics for showing effective reimbursement – coding, payment and coverage

• The best metric is sales - moving forward placements and revenue per placement important

• Early with a new code it is useful to have a metric to show traction, the options are

  • Medical policy – covered lives

  • Managed Care – Membership

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Payment & Coverage – Delivered Through US Healthcare Payers

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US Health insurers by covered lives (2007)

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United Uninsured
Humana 6% 16% others
3% 4%
Aetna
5%
Wellpoint
BCBS
12%
33%
Cigna
3%
CMS
Kaiser
15%
3%
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Approximately 800 plus payers of US Healthcare, multiple delivery systems

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Reimbursement Status

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1. L-Dex testing coverage beginning in the market

• Coverage occurring sporadically– EOB’s showing reimbursement of CPT 0239T

• Examples of major private payers covering at local levels - only seen in certain states at present

• Payment is around an average of $200 presently

2. Covered lives metric - medical policy

• 23.0 million covered lives announced to date

• Advancing private payers & HMO’s

3. Membership metric - managed Care

• 5 PPO signed contracts in place for handling reimbursement claims

• Beech Street – Viant (BSV) – covering some claims (no contract)

• BSV is an at risk PPO with 16 million members - Covering L-Dex clients at a percentage of billed charges or contracted default percentage discount when billing CPT 0239T

4. Key obstacles for building covered lives – medical policy

• Need clinical outcomes data for L-Dex over present conventional methods – key to health economics  Looking for longer term outcomes data comparing conventional intervention vs earlier detection

• Lack of understanding to the limitations of conventional methods for early assessment  Referenced arguments listed on website; Red Journal article in October

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Clinical studies – Payer categories for assessment

Early Dx/Treatment Improved Outcomes

Reactive Care Poor outcomes

  - Referred/Dx at later stage (200ml difference)

• Key studies

• Campisi 2002 (RCT)

• Treatment often starts after irreversible change

• Boccado 2009 (RCT)

• LaComba 2010 (RCT)

• Johansson 2010

• Stout 2008

• Dini 1998

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Clinical Assessment Aid for Doctors - BIS

• Technical Performance

• Van Loan 1993,1999 (RCT)

• Cornish 1996, Czerniec 2010

• Hayes 2008, Czerniec 2009

• Diagnostic performance

• Hayes 2005, 2008, 2011

  • Cornish 1996, 2001

    • Ward 2009

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Prospective Care / Earlier Treatment – Data supporting outcomes

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1 year 2 years 5 years 10 years
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	Stout 2008 • Prospective 5 year observational trial 196 breast cancer patients • Tested preoperative, baseline, 1, 3, 6, 9, and 12 month assessment post surgery with Perometry • 22% (43 pts) developed • Used 3% cut off for subclinical lymphoedema definition • Compression sleeve LaComba 2010 • RCT comparing prophylactic treatment v. education only • 120 patients • 1 year follow up • > 2cm arm difference defined lymphedema • Control 25% develop, treated arm 7% • Difference statistically significant at 1 yr • 72% prevention 1yr Boccado 2009 • 2year follow up– 55pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline & 6mth • Followed up for 3 years by water displacement – 200ml difference defn • Control 33% develop, early dx/treatment arm 8% • 76% prevention 2yrs Campisi 2002 • 5 year follow up– 50pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline 1,3,6mths, 1,2,3yrs • Followed up for 5 years by water displacement – 200ml difference defn • Control 36% develop, early dx/treatment arm 8% • 79% 5yr prevention Johansson 2010 • 10 year treatment F/U • 292 patients at risk – 111 cases develop (ave. - 8% cut off) – 38.2% incidence over study • Treatment after recognition by water displacement - no patient returned to baseline – only slowed further progression • All remained stage II or greater Trials Detection Follow-Up Control Arm Treatment Arm Stout (Observational) Perometry >3% difference 196 patients – 22% (developed subclinical) All returned to near baseline Campisi (RCT) Lymphoscintigraphy 50 patients – 5 years 36% 8% Boccado (RCT) Lymphoscintigraphy 55 patients – 2 years 33% 8% LaComba (RCT) Prophylaxis vs educate 120 patients – 1 year 25% 7% Johansson (Observational) Water displacement (8%) 292 patients – 5 /10yrs treated 111 patients developed 38% Dx (111pts) /no return	Stout 2008 • Prospective 5 year observational trial 196 breast cancer patients • Tested preoperative, baseline, 1, 3, 6, 9, and 12 month assessment post surgery with Perometry • 22% (43 pts) developed • Used 3% cut off for subclinical lymphoedema definition • Compression sleeve LaComba 2010 • RCT comparing prophylactic treatment v. education only • 120 patients • 1 year follow up • > 2cm arm difference defined lymphedema • Control 25% develop, treated arm 7% • Difference statistically significant at 1 yr • 72% prevention 1yr Boccado 2009 • 2year follow up– 55pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline & 6mth • Followed up for 3 years by water displacement – 200ml difference defn • Control 33% develop, early dx/treatment arm 8% • 76% prevention 2yrs Campisi 2002 • 5 year follow up– 50pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline 1,3,6mths, 1,2,3yrs • Followed up for 5 years by water displacement – 200ml difference defn • Control 36% develop, early dx/treatment arm 8% • 79% 5yr prevention Johansson 2010 • 10 year treatment F/U • 292 patients at risk – 111 cases develop (ave. - 8% cut off) – 38.2% incidence over study • Treatment after recognition by water displacement - no patient returned to baseline – only slowed further progression • All remained stage II or greater Trials Detection Follow-Up Control Arm Treatment Arm Stout (Observational) Perometry >3% difference 196 patients – 22% (developed subclinical) All returned to near baseline Campisi (RCT) Lymphoscintigraphy 50 patients – 5 years 36% 8% Boccado (RCT) Lymphoscintigraphy 55 patients – 2 years 33% 8% LaComba (RCT) Prophylaxis vs educate 120 patients – 1 year 25% 7% Johansson (Observational) Water displacement (8%) 292 patients – 5 /10yrs treated 111 patients developed 38% Dx (111pts) /no return	Stout 2008 • Prospective 5 year observational trial 196 breast cancer patients • Tested preoperative, baseline, 1, 3, 6, 9, and 12 month assessment post surgery with Perometry • 22% (43 pts) developed • Used 3% cut off for subclinical lymphoedema definition • Compression sleeve LaComba 2010 • RCT comparing prophylactic treatment v. education only • 120 patients • 1 year follow up • > 2cm arm difference defined lymphedema • Control 25% develop, treated arm 7% • Difference statistically significant at 1 yr • 72% prevention 1yr Boccado 2009 • 2year follow up– 55pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline & 6mth • Followed up for 3 years by water displacement – 200ml difference defn • Control 33% develop, early dx/treatment arm 8% • 76% prevention 2yrs Campisi 2002 • 5 year follow up– 50pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline 1,3,6mths, 1,2,3yrs • Followed up for 5 years by water displacement – 200ml difference defn • Control 36% develop, early dx/treatment arm 8% • 79% 5yr prevention Johansson 2010 • 10 year treatment F/U • 292 patients at risk – 111 cases develop (ave. - 8% cut off) – 38.2% incidence over study • Treatment after recognition by water displacement - no patient returned to baseline – only slowed further progression • All remained stage II or greater Trials Detection Follow-Up Control Arm Treatment Arm Stout (Observational) Perometry >3% difference 196 patients – 22% (developed subclinical) All returned to near baseline Campisi (RCT) Lymphoscintigraphy 50 patients – 5 years 36% 8% Boccado (RCT) Lymphoscintigraphy 55 patients – 2 years 33% 8% LaComba (RCT) Prophylaxis vs educate 120 patients – 1 year 25% 7% Johansson (Observational) Water displacement (8%) 292 patients – 5 /10yrs treated 111 patients developed 38% Dx (111pts) /no return	Stout 2008 • Prospective 5 year observational trial 196 breast cancer patients • Tested preoperative, baseline, 1, 3, 6, 9, and 12 month assessment post surgery with Perometry • 22% (43 pts) developed • Used 3% cut off for subclinical lymphoedema definition • Compression sleeve LaComba 2010 • RCT comparing prophylactic treatment v. education only • 120 patients • 1 year follow up • > 2cm arm difference defined lymphedema • Control 25% develop, treated arm 7% • Difference statistically significant at 1 yr • 72% prevention 1yr Boccado 2009 • 2year follow up– 55pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline & 6mth • Followed up for 3 years by water displacement – 200ml difference defn • Control 33% develop, early dx/treatment arm 8% • 76% prevention 2yrs Campisi 2002 • 5 year follow up– 50pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline 1,3,6mths, 1,2,3yrs • Followed up for 5 years by water displacement – 200ml difference defn • Control 36% develop, early dx/treatment arm 8% • 79% 5yr prevention Johansson 2010 • 10 year treatment F/U • 292 patients at risk – 111 cases develop (ave. - 8% cut off) – 38.2% incidence over study • Treatment after recognition by water displacement - no patient returned to baseline – only slowed further progression • All remained stage II or greater Trials Detection Follow-Up Control Arm Treatment Arm Stout (Observational) Perometry >3% difference 196 patients – 22% (developed subclinical) All returned to near baseline Campisi (RCT) Lymphoscintigraphy 50 patients – 5 years 36% 8% Boccado (RCT) Lymphoscintigraphy 55 patients – 2 years 33% 8% LaComba (RCT) Prophylaxis vs educate 120 patients – 1 year 25% 7% Johansson (Observational) Water displacement (8%) 292 patients – 5 /10yrs treated 111 patients developed 38% Dx (111pts) /no return	Stout 2008 • Prospective 5 year observational trial 196 breast cancer patients • Tested preoperative, baseline, 1, 3, 6, 9, and 12 month assessment post surgery with Perometry • 22% (43 pts) developed • Used 3% cut off for subclinical lymphoedema definition • Compression sleeve LaComba 2010 • RCT comparing prophylactic treatment v. education only • 120 patients • 1 year follow up • > 2cm arm difference defined lymphedema • Control 25% develop, treated arm 7% • Difference statistically significant at 1 yr • 72% prevention 1yr Boccado 2009 • 2year follow up– 55pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline & 6mth • Followed up for 3 years by water displacement – 200ml difference defn • Control 33% develop, early dx/treatment arm 8% • 76% prevention 2yrs Campisi 2002 • 5 year follow up– 50pts • Lymphoscintigraphy (LP) early diagnosis • LP at Baseline 1,3,6mths, 1,2,3yrs • Followed up for 5 years by water displacement – 200ml difference defn • Control 36% develop, early dx/treatment arm 8% • 79% 5yr prevention Johansson 2010 • 10 year treatment F/U • 292 patients at risk – 111 cases develop (ave. - 8% cut off) – 38.2% incidence over study • Treatment after recognition by water displacement - no patient returned to baseline – only slowed further progression • All remained stage II or greater Trials Detection Follow-Up Control Arm Treatment Arm Stout (Observational) Perometry >3% difference 196 patients – 22% (developed subclinical) All returned to near baseline Campisi (RCT) Lymphoscintigraphy 50 patients – 5 years 36% 8% Boccado (RCT) Lymphoscintigraphy 55 patients – 2 years 33% 8% LaComba (RCT) Prophylaxis vs educate 120 patients – 1 year 25% 7% Johansson (Observational) Water displacement (8%) 292 patients – 5 /10yrs treated 111 patients developed 38% Dx (111pts) /no return
	Trials	Detection	Follow-Up	Control Arm	Treatment Arm
	Stout (Observational)	Perometry >3% difference	196 patients –	22% (developed subclinical)	All returned to near baseline
	Campisi (RCT)	Lymphoscintigraphy	50 patients – 5 years	36%	8%
	Boccado (RCT)	Lymphoscintigraphy	55 patients – 2 years	33%	8%
	LaComba (RCT)	Prophylaxis vs educate	120 patients – 1 year	25%	7%
	Johansson (Observational)	Water displacement (8%)	292 patients – 5 /10yrs treated	111 patients developed	38% Dx (111pts) /no return

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Support Building for Prospective care

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1. NAPBC clinical Standard 2.15 “Support and Rehabilitation”

2. Part of the comprehensive breast cancer care program. This standard strongly recommends lymphoedema management and risk reduction practices for the treatment of all breast cancer patients. The NAPBC clinical Standard was updated and published in the “2011 Breast Center Standards Manual”

3. Under this standard, it recommends the National Lymphoedema Network (NLN) supporting guideline document, referenced under the Center Resource section of the site – this supports baseline testing at baseline and every subsequent visit for the life of the patient.

4. Avon Foundation White paper – calls for prospective care

5. Clinical based Economic Model – Gives clinical and economic potential benefits

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Medical Necessity – Does BIS meet this for aiding in the clinical assessment of unilateral lymphoedema of the arm in women?

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• “Medical Necessity” - health care services that a physician, exercising prudent clinical or

• judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing treating an illness or its symptoms, & that are:

	Yes/No	BIS	Perometer	Tape	Water
A) In accordance with generally accepted standards of medical practice NAPBC 2.15 recommends lymphedema mgt & risk redn. • NLN document recommends	Recommends Lymphedema mgt. & risk reduction	+++	+++	+ Minimally acceptable	+ Minimally acceptable
B) Clinically appropriate, in terms of type, frequency & duration, & considered effective for the patient's illness	Yes	+++ ECF only FDA cleared Std./objective	++ Volume only No FDA Std./Objective	- No FDA non-std. subjective	- No FDA non-std. subjective
C) Not more costly than an alternative service at least as likely to produce equivalent diagnostic results or treatment of that patient	Yes	+++ Clinical health economic model	+++ Clinical health economic model	- Clinical health economic model	- Clinical health economic model

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