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NANOSONICS LIMITED AGM Information 2014

Nov 6, 2014

65405_rns_2014-11-06_fbaebbe9-2466-4159-bbb3-d24dee8c1c2b.pdf

AGM Information

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LEADER IN INFECTION CONTROL SOLUTIONS Improving the safety of patients, clinics, their staff and the environment

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ANNUAL GENERAL MEETING 7 November 2014

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Nanosonics Board, Secretaries and Auditor

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Maurie Stang
Maurie Stang
Michael Kavanagh
CEO and Executive Director
Richard England
Non-Executive Director
David Fisher
Non-Executive Director
Ron Weinberger
President Technology Development / Commercialisation
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McGregor Grant
CFO / Company Secretary
Rob Waring
Company Secretary
Mark Nicholaeff
Auditor, UHY Haines Norton
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2

ANNUAL GENERAL MEETING

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Resolution 1

Election of a Director – Dr David Fisher Resolution: That Dr David Fisher, who retires as a Director pursuant to the Company’s Constitution and, being eligible, offers himself for re-election, be elected a Director.

Proxy votes received Votes for : 120,187,812 Against : 24,646,228 Abstained/Excluded : 28,114 Discretion : 1,088,974

4

Resolution 2 Remuneration Report

Resolution: That the Remuneration Report for the financial year ended 30 June 2014 be adopted.

Proxy votes received Votes for : 115,401,669 Against : 498,748 Abstained/Excluded : 28,961,738 Discretion : 1,088,974

5

Chairman’s Address Mr Maurie Stang

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Disclaimer

This presentation is intended to provide a general outline only and is not intended to be a definitive statement on the subject matter. The information in this presentation, whether written or verbal, has been prepared without taking into account the commercial, financial or other needs of any individual or organisation. Certain information may relate to protected intellectual property rights owned by Nanosonics (the “Company”). While Nanosonics has taken due care in compiling the information, neither the Company nor its officers or advisors or any other person warrants the accuracy, reliability, completeness or timeliness of the information or guarantees the commercial or investment performance of the Company. The information does not constitute advice of any kind and should not be relied on as such. Investors must make their own independent assessment of the Company and undertake such additional enquiries as they deem necessary or appropriate for their own investment purposes. Any and all use of the information is at your own risk.

7

Strengthening Case for Increased Investment in Preventing HAIs

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May 2014 NEJM paper recommended increasing surveillance and prevention activities to fight HAIs

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“Our nation is making progress in preventing healthcare-associated infections through three main mechanisms:

  • financial incentives to improve quality;

  • performance measures and public reporting to improve transparency; and

  • and the spreading and scaling of effective interventions.

This progress represents thousands of lives saved, prevented patient harm, and the associated reduction in costs across our nation.”[(1) ]

  1. Patrick Conway, MD, deputy administrator for innovation and quality for the Centers for Medicare & Medicaid Services (CMS), and CMS Chief Medical Officer

8

2014: A Year of Achievements

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Oct 2014 : NHS Wales
guidelines positions trophon Nov 2014 : Miele
EPR as optimal solution
expansion in Europe
Mar 2014 : Miele signed
as non-exclusive
distributor in Germany
Aug 2014 : trophon
EPR approved for
Oct 2013 : Nanosonics
Aug 2013: Updated GE sale in Japan
named as healthcare
agreement signed
industry’s Company of
the Year
Aug 2013 : trophon
EPR approved for
sale in South Korea
Sep 2014 : EU study
shows trophon EPR to
be more effective than
wipes
May 2014:
Aug 2013 : Michael
Winner M&K
Kavanagh appointed CEO May 2014 : trophon
Awards
and President EPR included in
AIUM guidelines
Aug 2013 : Partnership Oct 2013 : study
with Toshiba gains ground presented at ISUOG
with leading hospitals highlights risks of
installing trophon EPR conventional
disinfection methods
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9

FY2014: A Year of Solid Financial Growth

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$21.5
SALES REVENUE

$ million
Solid revenue growth
$14.9
$12.3  Trending to profitability
 Strong cash reserves
$2.2
$0.8
$0.3
CASH
2009 2010 2011 2012 2013 2014
$ million
$24.1
$21.2
-$2.6 -$2.6
-$4.7 -$4.5
-$5.8
LOSS AFTER TAX
$ million
-$11.2 2013 2014
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10

FY14: Strong Market Capitalisation Growth 12 months (1 Nov ’13 – 31 Oct ‘14)

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$1.19 130%
NAN ($) NAN ASX300 HEALTHCARE ASX ALL ORDS
$1.14
$1.09 120%
$1.04
110%
$0.99
$0.94 100%
$0.89
$0.84 90%
$0.79
80%
$0.74
01 Nov 13 22 Jan 14 10 Apr 14 02 Jul 14 17 Sep 14
01-Nov-13 31-Jan-14 02-May-14 01-Aug-14 31-Oct-14
31 Oct 14 30 Jun 14 30 Jun 13
Total shares issued (million) 264.33 263.82 261.99
Share price $0.975 $0.79 $0.61
Market capitalisation (million) $258 $208 $159
Average daily volume (12 mths) 348,000 349,000 198,000
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11

Growing Media Coverage in 2014

  • 59 individual pieces of media coverage in FY14

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  • Top tier coverage across News Ltd and Fairfax publications

  • Strong coverage in healthcare and biotech media

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The Australian
• Company profiled by stock
watch expert Tim Boreham.
• Rated stock as long term buy.
• Story seen by possible 232,000
readers.
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Australian Financial Review

Financial Review on Sunday

Smart Investor

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13

Media Coverage Highlights

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14

FY14: Participated in More Than 40 Major Trade Shows/Conferences

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15

FY15 Coming Conferences

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16

Nanosonics Board and Sub-Committees

R&D and Audit and Risk Remuneration Nomination Innovation Committee Committee Committee Committee (Est. July 2014) Maurie Stang Non-Executive Chairman Michael Kavanagh CEO and President, Managing Director Richard England Non-Executive Director * * * David Fisher Non-Executive Director * Ron Weinberger President Technology Development / Commercialisation

  • Chairman

17

CEO and President Address Mr Michael Kavanagh

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A Year of Transformation and Growth

19

Executive Team

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Michael Kavanagh Ron Weinberger McGregor Grant Gerard Putt
CEO and President President CFO and Company Head of
Technology Secretary Manufacturing &
Development/
Operations
Commercialisation
Michael Potas Vincent Wang Ruth Cremin Kirste Courtney
Head of RD&D Head of Global Head of Quality Human Resources
Services and Regulatory Manager
Ron Bacskai Bryn Ralf Schmähling Julien Laronze
President and CEO Tudor-Owen Country Manager Country Manager
Nanosonics Inc. Country Manager - Germany - France
- UK
20 20
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Corporate Mission

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We improve the safety of patients, clinics, their staff and the environment by transforming the way infection prevention practices are understood and conducted, and introducing innovative technologies that deliver improved standards of care.

Johns Hopkins Photo Credit: American Nurse Project. Does not imply endorsement

21

Core Corporate Objectives

We improve the safety of patients, clinics, their staff and the environment by transforming the way infection prevention practices are understood and conducted, and introducing innovative technologies that deliver improved standards of care.

Customer Experience Product Innovation Operational Excellence

People Engagement Value Creation

22

trophon[®] EPR

23

trophon[®] EPR

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Fast

Fast automated high level disinfection

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Environmentally Friendly

Harmless oxygen and water by-products. More than 70% recyclable components

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Helps protect

Fully enclosed system limits exposure to harmful chemicals

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Cost Efficient

Integrates into HLD process at point of care and improves workflows

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Consistent

Quality assured consistency

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Effective

Clinically validated trophon EPR disinfects both probe shaft AND handle

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Probe friendly

Probe friendly process. Compatible with more than 600 probe models

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Traceability

Best practice documentation solution

24

Current Workflow with Soaking

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25

Delivering Superior Performance and Workflow

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26

“…complete and safer protection for our patients and staff ”

“The trophon EPR has been the biggest thing to hit ultrasound since colour Doppler. “trophon was an answered prayer! It has solved so many high level disinfection (HLD) issues while offering more complete and safer protection for our patients and staff – in half the time. Robert De Jong Jr., RDMS, RDCS, RVT, Radiology Technical Manager, Ultrasound, The Johns Hopkins Hospital, Baltimore, US

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27

Infection Control – a Major Healthcare Issue

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1 in 25

patients will acquire an infection during a hospital stay[1]

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1.7 Million

people are infected in U.S. hospitals every year[1] , more than breast and prostate cancer combined[2]

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HAI’s cost the U.S. up to $147 70[[%]] Billion annually in direct and 1. Connect Deep-dive: Infection Control 24 July 2013 CDC: Centers for Disease Control; HAI: hospital-acquired indirect costs[3] infection

70[[%]] preventable of HAIs are using existing infection prevention practices[4]

Of the 1.7 million infected in the US,

3.2 Million

Million 98,987 people are infected in die each European hospitals every year[1] year[5]

  1. Electronically accessed:

http://www.cdc.gov/nchs/data/nvsr/nvsr61/nvsr61_04.pdf

electronically accessed from the European Centre for Disease Prevention and Control, www.ecdc.eu October 15, 2014

  1. 2013 National Vital Statistics, CDC. Deaths: Final Data for 2010

  2. Marchetti, A et al., Economic Burden of healthcare-associated infection in US acute care hospitals, Journal of Medical Economics 12:1399-404, 2013.

  3. Scott, RD. 2009. Centers for Disease Control and Prevention . Pgs. 1–13. Electronically accessed from the European Centre for 28

Disease Prevention and Control, www.ecdc.eu October 15, 2014

28

Growing Awareness of Imaging Procedure HAIs

0.9 - 9% of barrier sheaths and condoms leak1
A meta-analysis has shown that 12.9% of transducers are
contaminated with pathogenic bacteria following routine
disinfection2
HPV, a known cause of cervical cancer, has been found on up to
7.5% of transvaginal ultrasound transducers following routine
disinfection3
A fatal case of hepatitis B and non-fatal case of hepatitis C have
been attributed to improper ultrasound transducer disinfection4,5
Ultrasound transducer handles are not routinely disinfected and
can harbour pathogens including MRSA6
1. Vickery et al, J Inf Pub Health 2013; in press
5. Medicines and Healthcare products Regulatory Agency (UK), Medical Device Alert
2. Leroy, S. J Hosp Infect 2013 83(2): 99-106.
Ref: MDA/2012/037
3. Ma S et al. Emerg Med J. 2013 30(6):472-5
6. McNally G, Ngu A, ISUOG world congress, Sydney, 2013
4. Ferhi K, et al. Case Rep Urol, 2013: p. 797248.

29

trophon EPR Assists Compliance with Guidelines

  • TJC Quick Safety 2014 identified Infection Control as one of the top five non-compliant TJC requirements[1 ]

  • In addition[1 ]

  • Of 13 immediate threat to life (ITL) discoveries from surveys conducted in 2013, seven were directly related to improperly sterilized or high level disinfected equipment

  • Breaches in equipment sterilization and high level disinfection processes can result in outbreaks of HIV, and hepatitis B and C, as well as the transmission of bacterial infecting agents

  • Customers in the US have achieved uniform high compliance and no known rejections from TJC to date

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1.The Joint Commission Quick Safety May 2014

The Joint Commission (TJC) accredits more than 20,000 health care organizations and programs in the US

30

trophon EPR Positioned to Meet Stricter Reprocessing Controls

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New American Institute of Ultrasound in Medicine (AIUM) guidelines released in May reinforce importance of high level disinfection

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31

trophon EPR Positioned to Meet Stricter Reprocessing Controls

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New NHS Wales Guidelines position automated, validated decontamination systems as the optimal solution for ultrasound probe decontamination

32

New Studies Continue to Demonstrate Superior Clinical Efficacy of trophon EPR

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European study showed trophon EPR to be significantly more effective than manual quaternary ammonium compound wipe disinfection.

Study at The John Hopkins Hospital in the US showed need for disinfection of intracavity and surface probes (heads and handles)

Independent efficacy testing against a range of microorganisms underway at leading laboratory in US. Includes adenovirus, rotavirus, HIV, human hepatitis B (surrogate), norovirus (surrogate), Chlamydia trachomatis and Neisseria gonorrhea. So far showing efficacy against all these organisms

33

Evidence Emerging for Need to Decontaminate Surface Probes

 The recent John Hopkins study showed bacterial contamination on both intracavity and surface probes (heads and handles) prior to disinfection

 In all cases, disinfection in the trophon EPR produced a statistically significant reduction in contaminants

 Study showed there is a need to review the requirements for high level disinfection to reduce transmission risks with surface probes

 Study presented at ISUOG World Congress in September 2014 showed surface probe contamination was a major concern and highlighted need for appropriate disinfection

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34

2014: Sales Revenue up 44%

$ million H1 H2 FY14 FY13
Operating revenue 9.7 11.8 21.5 14.9
Gross Profit 6.0 7.9 13.9 8.5
% 62% 67% 65% 57%
Other Income 0.8 2.6 3.4 1.5
Operating
expenses
(10.3) (9.8) (20.1) (16.4)
EBIT (3.5) 0.7 (2.8) (6.4)
Interest (net) 0.1 0.1 0.2 0.7
Pre-tax loss /
profit
(3.4) 0.8 (2.6) (5.7)
Net loss / profit (3.5) 0.9 (2.6) (5.8)
Cash Balance 21.2 24.1
2.3
1.2
5.1
6.0
2.8
3.2
4.6
3.0
4.2
5.2
4.2
6.3
6.6
12.3
14.9
21.5
6.0
FY12
FY13
FY14
FY15 YTD
Q1
Q2
Total Sales
In Millions

35

Strong Market Capitalisation Growth 12 months (1 Nov ’13 – 31 Oct ‘14)

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$1.19
130%
$1.14
NAN NAN ($)
$1.09
120%
$1.04
110% $0.99
$0.94
100% $0.89
$0.84
90%
$0.79
$0.74
80%
01-Nov-13 31-Jan-14 02-May-14 01-Aug-14 31-Oct-14
01 Nov 13 22 Jan 14 10 Apr 14 02 Jul 14 17 Sep 14
31 Oct 14 30 Jun 14 30 Jun 13
Total shares issued (million) 264.33 263.82 261.99
Share price $0.975 $0.79 $0.61
Market capitalisation (million) $258 $208 $159
Average daily volume (12 mths) 348,000 349,000 198,000
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36

Growing Media Coverage in 2014

  • 59 individual pieces of media coverage in FY14

  • Top tier coverage across News Ltd and Fairfax publications

  • Strong coverage in healthcare and biotech media

Financial Review on Sunday

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Smart Investor Australian Financial Review

The Australian

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37

Media Coverage Highlights

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38

2014 Sales – All Regions Contributing

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FY13 FY14
2% 7%
10%
11%
82%
88%
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North America ANZ Europe / Others

39

Strong Sales Growth in North America

  • FY14 sales of $17.7 million up 34% on FY13

 Trophon now represented in 42 of the top 50 hospitals and in over 1750 sites

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$17.7
Sales
$ million
$13.2
$10.2
2012 2013 2014
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40

Johns Hopkins Study

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  • Confirmed trophon EPR efficacy & Guidelines are justified: cleaning and use of probe covers alone do not sufficiently reduce transmission risk. HLD is required

  • SURFACE TRANSDUCER EVIDENCE – “Cleaning alone does not appear to be sufficient to reduce transmission risk”

  • Handles may present a transmission risk if they are not properly disinfected

  • AIUM abstract submitted

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41

Strategic Partnership established with the Association for Professionals in Infection Control and Epidemiology (APIC)

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~~Provides consistent visi~~ bility through out the year

~~40% growth in APIC me~~ mbership in last 5 years

~~More than 15,000 APIC memb~~ ers

42

Nanosonics US Service and Repair Facility Established

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43

European Highlights

$1.6 Sales $ million $0.4 $0.2 2012 2013 2014

  • FY14 sales of $1.7 million, greater than five fold increase in FY13

  • Validation trials conducted in UK demonstrating efficacy of trophon.

  • Miele Professional appointed as German distributor in March and market development activities underway

  • UK primary driver of sales in the period with adoption of trophon in a number of key hospitals

44

European Market Expanding

45

Strong Growth in the UK … and Ireland

Trophon EPR now present in 27 hospital sites throughout UK and Ireland

46

New Ultrasound Probe Guidance Published in Wales

  • An automated, validated system positioned as optimal solution

  • The decontamination of transvaginal and transrectal probes should take place in the location they are being used, ie, point of care

  • For quality assurance/traceability purposes, a document system must be in place to ensure contamination/decontamination status of each individual probe

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47

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48

Momentum Building in Germany

  • Miele distribution partnership signed

  • Congress of German society of hospital hygiene (DGKH, April 2014)

  • Publications – Heeg/Gauer, VAH negative virucidal efficacy of wipes, first 1yr customer experience

  • M&K Award winner 2014

  • Scientific presentations at expert meetings and number of conferences attended

  • University of Münster study

  • Miele European expansion

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Aufbereitung in der Praxis - 3/2014
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Zentralsterilisation 1/14
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49

Market development in France progressing well

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  • trophon EPR now on a number of Public and Private Hospital Tenders (UGAP, AGEPS, HELPEVIA & CACIC)

  • Presented at a number of Key Conferences and Educational Events

  • KOL program development

  • Local clinical trial plans under development

50

Continued Growth in Australia and NZ

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trophon EPR now present in 520 sites across Australia & NZ

51

Japan Regulatory Approval Granted

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52

Active R&D Program

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  • Manufacturing Engineering

  • Sustaining Engineering

  • Next Generation trophon

 Number of granted/accepted patents has doubled since April 2013 – from 47 to 95

  • New Products

53

Active R&D

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Chemistries Accessories

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trophon EPR

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?
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Future products

54

Identifying New Markets

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55 55

Business Outlook – Positioned for Continued Growth

  • Market fundamentals continue to strengthen

  • Increasing awareness of imaging related healthcare acquired infections

  • Supporting Guidelines for automated HLD solutions

  • Excellent clinical data and customer value propositions

  • Continuing to Expand within existing markets

  • Growth demonstrated in the US, Europe, Australia and NZ with opportunity to expand facilities and sites within facilities

  • Continuing to Expand Regional Operations

  • Entering five new European Markets

  • Entering Korea

  • Approval received and preparations underway for Japanese launch

• Investment in R&D

  • Opportunities for expansion of portfolio under investigation and development

56

Thank You

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