Cardiovascular Systems, Inc. Product Pipeline Update September 26, 2019 ©2019 Cardiovascular Systems, Inc. All Rights Reserved.
Safe Harbor This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Report Act of 1995, which are provided under the protection of the safe harbor for forward-looking statements provided by that Act. For example, statements in this presentation regarding CSI’s strategy; growth; future financial measurements and investments; product development plans, milestones and introductions; geographic expansion; clinical trials and evidence; professional education efforts; and market estimates and opportunities, are forward-looking statements. These statements involve risks and uncertainties that could cause results differ materially from those projected, including, but not limited to, those described in CSI’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent quarterly and annual reports. CSI encourages you to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements contained in this presentation. As a result of these matters, changes in facts, assumptions not being realized or other circumstances, CSI’s actual results may differ materially from the expected results discussed in the forward- looking statements contained in this presentation. The forward-looking statements contained in this presentation are made only as of the date of this presentation, and CSI undertakes no obligation to update them to reflect subsequent events or circumstances. CSI, Diamondback 360, ViperWire Advance, GlideAssist and WIRION are registered trademarks of Cardiovascular Systems, Inc. ViperCath is a trademark of Cardiovascular Systems, Inc. Teleport, Sapphire and ScoreFlex are registered trademarks of OrbusNeich Medical. All other trademark cited herein are owned by their respective owners. © 2019 Cardiovascular Systems, Inc. All rights reserved. 2
Introduction Scott R. Ward, Chairman, President & Chief Executive Officer ©2019 Cardiovascular Systems, Inc. All Rights Reserved. 3
Driving Sustainable Growth Broaden Our Value Streams Financial Goal: FY19-FY23 CAGR of 15% - 18% Revenue of $435M - $500M in FY23 Grow and Protect Innovation Drives Global Expansion Accelerates the Core Business Incremental Growth Growth of Core Business Sustain Market Leadership Launch 20+ New Products OrbusNeich and Medikit 10+% Growth in Core Business $70M - $100M in FY23 $25M - $50M in FY23 Financial strength and the talent to execute 4
Fiscal 2019 Revenue Growth of 14.3% $248 Million New Product Revenue $3.9 million Core OAS Revenue $236.2 million Drivers 10% increase Sapphire II 1.0 mm PTCA Teleport Microcatheter Zilient Peripheral Guidewire International Revenue $7.9 million Drivers Launched OAS in 10 New countries Product, Over 2,000 OAS procedures $3.9 Core OAS New Product International 5
Portfolio Update Rhonda J. Robb, Chief Operating Officer ©2019 Cardiovascular Systems, Inc. All Rights Reserved. 6
Current Market Dynamics Favor Innovation Large Under-Served and Under-Treated Disease States Peripheral Artery Disease Coronary Artery Disease Growing proportion of coronary Significantly under-diagnosed and interventions represented by complex under-treated patient populations or complex high-risk PCIs People living with peripheral 18-20 artery disease in the U.S. with 16-18 People living with coronary million 2 million+ patients suffering million artery disease from critical limb ischemia Deaths annually from coronary >740K Lower extremity PVIs 370,000 artery disease Complex or complex 160K Amputations per year 525K high-risk PCIs • Heart Disease and Stroke Statistics- 2019 Update: A report from the American Heart Association. Circulation. 2019;139:e56–e528 • Millennium Research Group (2018 December) Medtech360 Market Analysis - Interventional Cardiology Devices – US – 2019 • Millennium Research Group (2018 December) Medtech360 Market Analysis – Peripheral Vascular Devices – US – 2019 • Bortnick, et. al. Am J Cardiol 2014;113:573-579; iData Research (2018 March) U.S, CSI Internal Estimates 7 • Allie DE , et al. (n.d.). 24-carat gold, 14-carat gold, or platinum standards in the treatment of critical limb ischemia: bypass surgery or endovascular intervention? J Endovsc Ther. 2009
Diversification Accelerates Growth Broadens Value Streams CSI’s Addressable Markets (US) ~$3.7B Hemodynamic Support Interventional Support Devices Atherectomy Portfolio expansion will drive a >4X increase in CSI’s addressable market $650M FY19 FY23 • Millennium Research Group (2018 December) Medtech360 Market Analysis - Interventional Cardiology Devices – US – • * Coronary markets include device revenue attributed to PTCA balloon catheters, microcatheters / guidecatheters, PTCA 2019 guidewires, CTO / STO devices, and hemodynamics pumps. Peripheral markets include device revenue attributed to lower • Millennium Research Group (2018 December) Medtech360 Market Analysis – Peripheral Vascular Devices – US – 2019 extremity (iliac, fempop, infrapop) endovascular procedures for PTA guidewires, catheters / sheaths, embolic protection • Millennium Research Group (2017 December) Medtech360 Market Analysis – Cardiac Assist Devices– US – 2018 devices, CTO / STO devices, and PTA balloon catheters 8 • CSI Internal Estimates
Differentiated Pipeline of Key Value Drivers Supports Diversified and Sustainable Growth FY19 FY23 FY23 Growth / Value Drivers Portfolio Market Market TAM FY20 FY21/22 FY23+ • CAD ViperWire Advance with • Next gen Coronary OAS Flex Tip • ECLIPSE • PAD Directional Atherectomy • Peripheral Diamondback 360® • Small Vessel (BTA) + Atherectomy $650M $900M+ $1.9B+ • Japan ATK Pivotal Study and Stealth® with GlideAssist Evidence • PAD Post Market Study • Exchangeable OAS Platform • Large Vessel (CFA/iliac) • LIBERTY 360 3-Year Data • REACH-PVI Data Release • Radial toolkit (guide wire, Interventional • CTO Portfolio (CAD/PAD) sheath and balloons) Support $1.6B+ $3.3B+ • PTA Balloons • Specialty Catheters and Wires • Scoring balloons (CAD/PAD) Devices (CAD/PAD) • WIRION Embolic Protection • pVAD Gen 1 for Complex PCI Hemodynamic • pVAD FIH and IDE 1st $1.2B+ $6.0B+ • pVAD Gen 2 for Complex PCI Support enrollments • Cardiogenic Shock Expanding CSI’s TOTAL $650M $3.7B+ $11.2B+ Served Markets • Millennium Research Group (2018 December) Medtech360 Market Analysis - Interventional Cardiology Devices – US – 2019 • Millennium Research Group (2018 December) Medtech360 Market Analysis – Peripheral Vascular Devices – US – 2019 • Millennium Research Group (2017 December) Medtech360 Market Analysis – Cardiac Assist Devices– US – 2018 • Industry Estimates 9 • CSI Internal Estimates
Peripheral ©2019 Cardiovascular Systems, Inc. All Rights Reserved. 10
Radial is a Core Competitive Advantage Enabling a Complete Peripheral Intervention from the Radial Artery Launched Q2 FY19 Launched Q1 FY19 Expected Launch Early FY21 Exclusive route of access for CSI complementary to tibial/pedal Extended length Extended length Radial Expansion in portfolio of Exchange Catheters Access Sheaths Extended Length Orbital Atherectomy radial support devices System with Low 5Fr Profile Expected Launch Early FY21 Expected Launch Early FY21 Radial peripheral interventions expand access to care and can improve procedural recovery time Extended length Extended length PTA Balloons Guidewires 11
Supporting Complete Leg Revascularization Exchangeable Series with GlideAssist® – Our Most Advanced OAS on the Market GlideAssist to facilitate tracking, repositioning and removal of OAD through challenging anatomy Ease-of-Use Enhancements to Handle: Backloadable system facilitating easier wire exchanges and improved tactile feel Exchangeable cartridges with different catheter lengths and crown options to optimally treat patients with multi-level disease (seen ~50% of the time) within the same procedure Patient and economic benefits with more efficient procedures aligned to market dynamics Future Portfolio: New 1.0 mm crown for small vessel / below-the-ankle lesions and a larger crown intended for larger vessels like the common femoral and iliac arteries 12
Exchangeable is a Competitive Advantage Exchangeable Series OAS live case, including feature of Teleport® Microcatheter and Zilient® Guidewire Dr. Fadi Saab, Amputation Prevention Symposium, August 14, 2019 13
Compelling Clinical Evidence Supporting Atherectomy; OAS Short- and Long-Term Safety Atherectomy provides a benefit for CLI Surgical bypass-first treatment was patients—in this study, there were lower associated with worse amputation free rates of 4-year major amputation and survival (AFS) compared to all-cause mortality in atherectomy group endovascular-first treatment (HR, 1.16; compared to PTA, stenting, 95% CI, 1.13—1.20) or surgical bypass. • Mustapha et al. J Endovasc Ther. 2019 Apr;26(2):143-154. • Mustapha. LIBERTY 3-year. AMP 2019. • Mustapha et al. Circ Cardiovasc Interv. 2019 Sep;12(9):e008097 • Lin et al. Circ Cardiovasc Qual Outcomes. 2019 Aug;12(8):e005273. 14
Directional Atherectomy Expanding the Treatment Options for Soft and Fibrotic Mixed Plaque Lesions Broaden value streams in a $300M-$400M existing ATK atherectomy market Extend CSI’s peripheral atherectomy toolkit to Deliver novel cutter design to improve lesion entry, engagement, and treatment, with greater control over better target soft and cutting depth fibrotic mixed plaque Aspiration provides improved procedural efficiency lesions more common over alternative devices on the market in above-the-knee (ATK) vessels Future extensibility to treat larger vessels; potential to pursue additional indications CSI will provide a full product line to address the heterogeneity of Potential to meet unique needs of sites of service and disease burden, sites of service geographical requirements and economic requirements Focus on directional atherectomy. Laser program discontinued. • Millennium Research Group (2018 December) Medtech360 Market Analysis – Peripheral Vascular Devices – US – 2019 • CSI Internal Estimates 15
WIRION® Embolic Protection System Supporting Our Commitment to Complex Patients Protecting Patients During PVIs Share-Taking Differentiated Technology Embolic debris can be associated with all types of peripheral vascular intervention procedures EPDs are typically used when treating vessels located above the knee with long lesions, high plaque burden, and poor run off Can provide additional assurance when treating complex peripheral interventions and lesions • Easier to use and more versatile than competing EPDs with Synergistic with CSI Strategy and Mission clearance for use with any peripheral atherectomy device and any 0.014” guidewire • Demonstrated safety and non-inferiority to pre-specificed Broadens value streams in $50M market, 50,000 devices used in the U.S. performance goals in capturing debris with low adverse event rates in WISE LE study Complements CSI’s future directional atherectomy platform • Platform enables future innovation for potential BTK and Radial applications Provides assurance to physicians not using atherectomy today due to concern of distal emboli Commercialization expected in FY21 following completion of the manufacturing transfer from Gardia Medical • Millennium Research Group (2018 December) Medtech360 Market Analysis – Peripheral Vascular Devices – US – 2019 16 • CSI Internal Estimates
Coronary ©2019 Cardiovascular Systems, Inc. All Rights Reserved. 17
Near-Term Expansion of the Complex Coronary Toolkit Drives Incremental Revenue Opportunity Per Case Launched FY19 Launched FY19 Expected Launches FY20 Adding Essentials of the Complex PCI Toolkit • Sapphire SC II PRO 1.0-4.0mm • Sapphire SC II PRO 1.0mm OTW • Sapphire NC Plus 2.0-4.0mm • Sapphire NC Plus 4.5-5.0mm Coronary Diamondback 360® Sapphire® Balloons Sapphire® Expansion Increasing the Clinical Utility with GlideAssist® of the Sapphire Portfolio in the Near-Term Launched Q3 FY19 Launching Now Expected Launch FY21 Continuing to Innovate around the Complex Patient Long-Term Teleport® Microcatheter ViperWire Advance® with Flex Tip ScoreFlex NC 18
ECLIPSE Trial Generating Level One Evidence to Impact Guidelines Patients with Severely 2000 Primary Endpoints Calcified Lesions Randomize 1:1 Orbital Atherectomy Strategy Conventional Angioplasty Strategy ~500 subjects in OCT cohort 1.25 mm Classic Crown followed by Conventional and/or specialty balloons MSA balloon pre-dilation per operator discretion OAS >1 mm2 superior MSA vs. POBA 2nd generation DES implantation 2nd generation DES implantation and optimization and optimization All subjects TVF 1. Post-PCI in-stent MSA by OCT (N=~500 in imaging sub-study) OAS >5% reduction in TVF vs. POBA 1o Endpoints 2. 1-year TVF (all subjects) 2o Endpoints 1. Procedural Success: Successful stent delivery (all subjects) 2. Strategy Success: Procedural success without crossover Principal Investigators Ajay Kirtane, MD; Philippe Généreux, MD; Study Chairman Gregg W. Stone, MD 19
Percutaneous Ventricular Assist Device (pVAD) System Multi-Generational Platform Highly Synergistic with Our Strategy and Competency Generation 1 Overview Entering a High Growth pVAD Market* $1,800 $1,500 16% CAGR $1,200 $900 • Leverages CSI core Millions $ $600 competency in motor control and spinning cables $300 • Easy setup and use $0 • Flow: 3-5 LPM FY19 FY23 FY27 • Crossing Profile: 10-14 Fr * Includes Complex PCI and Cardiogenic Shock • Catheter Profile: 6-8 Fr • Improved deliverability • Physician control in the Recent Accomplishments / Status sterile field • Simplified touch Multiple animal studies completed successfully screen display IDE clinical studies planned to highlight Pre-submission meetings completed and underway with the FDA procedural safety and perfusion • Compact console design (<15 lbs.) metrics/endpoints First-in-human in FY21 • Millennium Research Group (2017 December) Medtech360 Market Analysis – Cardiac Assist Devices– US – 2018 20
Closing Remarks Scott R. Ward, Chairman, President & Chief Executive Officer ©2019 Cardiovascular Systems, Inc. All Rights Reserved. 21
Platform for Growth Maintain focus on current customer, vessel preparation and procedure support Organic growth and opportunistic portfolio management ~$250M Gross margins in the range of 78%-80% in FY19-FY23 FY21 R&D Investments R&D investments increase to 14%-17% of revenues in FY21 Launch 20 new products by FY23 22
Driving Sustainable Long-Term Growth Product Launches FY19 - FY23 Revenue Growth FY19 FY20 FY21-FY23 5 - Year CAGR: 15% – 18% • Radial OAS • Exchangeable OAS • Radial toolkit • Peripheral • Next generation • Scoring balloons Guidewires OAS with • WIRION embolic $340M - $350M • ViperCath XC GlideAssist protection device Core Orbital Atherectomy Revenue: 10%+ Annual Growth • PTA balloons • Small vessel OAS • Large vessel OAS Peripheral • Directional atherectomy $70M - $100M New Product Revenue in FY23 • Coronary • ViperWire with • Scoring balloons Diamondback Flex Tip • Next generation OAS 360 OAS with • Hemodynamic pump $25M - $50M GlideAssist platform • PTCA Balloons • CTO portfolio International Revenue in FY23 • Teleport (CAD/PAD) Coronary Microcatheter • Specialty wires and (CAD/PAD) catheters $435M - $500M Consolidated Revenue in FY23 6 4 11 23
Cardiovascular Systems, Inc. Creating Shareholder Value Financially Strong Leveraging a A Compelling Creating with the Team and Strong Core Business Growth Strategy Competitive Advantage Talent to Win Sustaining double digit Improving outcomes for Driving market leading Highest quality growth complex coronary and performance in orbital products, services with strong gross margins peripheral artery disease atherectomy and relationships Positive cash flow, strong cash position and no long-term debt Proprietary Expanding into Innovation and robust core technology new geographic markets medical evidence Positioned to invest in organic growth Medical education A Mission driven organization Serving large and Launching an innovative and superior clinical with the leadership and growing markets portfolio of new products support talent to succeed 24