Itamar Medical Ltd.
Transferring Great Science into Patient Care
April 2014
Disclaimer
Itamar Medical Ltd. (the "Company") is furnishing this presentation and any information given during this presentation, solely for the
consideration of eligible investors who have the knowledge and experience in financial and business matters and the capability to
conduct their own due diligence investigation in connection with the investment outlined herein. Prospective investors are urged to
conduct an independent evaluation of the Company.
This presentation does not constitute an offer of securities of the Company, or a solicitation to acquire or sell the Company’s securities or
to participate in any investment in the Company. The statements in this presentation should not be regarded as a basis for an investment
decision of any kind, or as recommendation or opinion, or a substitute for investor discretion.
Statements in this presentation that are not historical facts might be considered as forward-looking statements based on current
expectations of future events, in accordance with the Israeli Securities law, 5728-1968 (the “Securities Law”). These forward-looking
statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or
achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or
implied by such forward-looking statements as a result of different factors including, but not limited to, the market demands for the
Company's products; changes in general economic and business conditions; inability to maintain market acceptance of the Company's
products; inability to timely develop and introduce new technologies and products; rapid changes in the market for the Company's
products; loss of market share and pressure on prices resulting from competition; introduction of competing products by other
companies; inability to manage growth and expansion; inability to attract and retain qualified personnel; and inability to protect the
Company's proprietary technology.
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to update any written or oral forward-looking statement made by us or on our behalf as a result of new information, future events or
other factors.
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Development of Arterial Function Study
Mission
Improving Health
Through the PAT® Signal
Vision
Making the PAT® Signal Standard of Care
Investment Highlights
Development of Arterial Function Study
 Patented platform PAT® technology – Accurate assessment of multiple disease states
 Non Invasive
 Easy to use
 More than a Decade: Pioneering of Science and Technology –
 > 400 Published peer-reviewed outcome studies in multiple disease states
 now ripe for commercialization
 Commercialized proprietary product lines in 2 major growth markets
 CE, MHLW, FDA-cleared
 Sleep apnea and cardiovascular disease
 Reimbursement in most major markets in the world
 Growth drivers
 Favorable healthcare trends and economics for both products
 Newly published outcome studies
 Channel development under way
 Philips Japan – exclusive WatchPAT™ distribution
 Medtronic US – exclusive electrophysiology WatchPAT™ co-marketing agreement
 Experienced management team and board and a solid shareholder base
Investment Highlights
Development
of Arterial
Function
 Patented
platform PAT®
technology
– AccurateStudy
assessment of multiple disease states
 Non Invasive
 Easy to use
 More than a Decade: Pioneering the Science and Technology
 > 400 Published peer-reviewed outcome studies in multiple disease states

Framingham heart study, Prevent IT Guttenberg Heart study, KORA
 now ripe for commercialization
 Commercialized proprietary product lines in 2 major growth markets
 CE, MHLW, FDA-cleared
 Sleep apnea and cardiovascular disease
 Reimbursement in most major markets in the world
 Growth drivers
 Favorable healthcare trends and economics for both products
 Newly published outcome studies
 Channel development under way
 Philips Japan – exclusive WatchPAT™ distribution
 Medtronic US – exclusive electrophysiology WatchPAT™ co-marketing agreement
 Experienced management team and board and a solid shareholder base
Facts and Figures
Development
of Arterial Function Study
• Broad scientific base
• Publicly traded since 2007 (TASE:ITMR)
•
•
•
– 370 peer-reviewed publications,
490 abstracts
2 Product lines
1. WatchPAT™ - home diagnostic device • Broad IP coverage
for sleep disorders
– 72 patents issued, 25 pending
2. EndoPAT™ - the only functional marker
proven to predict cardiovascular risk
• Reimbursement
beyond commonly used risk scores
Dedicated CPT codes:
– WatchPAT™ - 95800
Business indices
– EndoPAT™ 0337T
– > 650,000 patients diagnosed
– > 5,500 WatchPAT™ sold
• Major distribution deals
– > 1,500 EndoPAT™ sold
– Philips Japan
Financial indices
– Medtronic US
– Gross profit >70%
– Thorne
– 2013 Sales: $13.5MM
– Market Cap: ~$120M
– Currently ~50% sales from disposables
Facts and Figures
•
•
•
Development
of2007
Arterial
Function• Study
Publicly
traded since
(TASE:ITMR)
Business indices
– > 650,000 patients diagnosed
2 Product lines
– > 7,000 machines sold
1. WatchPAT™ - home diagnostic device
for sleep disorders
• Financial indices
– Gross profit >70%
2. EndoPAT™ - the only functional marker
proven to predict cardiovascular risk
– 2013 Sales: $13.5MM
beyond commonly used risk scores
– Market Cap: ~$120M
– Razor-Razor blade model
Broad scientific base
– 370 peer-reviewed publications, 490
abstracts
• Broad IP coverage
– 72 patents issued, 25 pending
• Reimbursement
Dedicated CPT codes:
– WatchPAT™ - 95800
– EndoPAT™ 0337T
• Currently ~50% sales from disposables
•
– Major Shareholder – Medtronic (22%)
Major distribution deals / Customers
– Philips Japan
– Medtronic US
– Thorne
– Kaiser Permanente
– VA (Veterans Affairs)
The Scientific Foundations
Development
of Arterial Function Study
Furchgott, Ignarro & Murad
discover Nitric-Oxide’s role
in CV regulation.
Nobel Prize awarded in 1998
Ganz’s group assess
intra-coronary endothelial
function
1980
1986
1992
2004
Celermajer & Deanfield
describe technique of ultrasonic
assessment of Flow Mediated Dilation
Lerman’s group validate
Endo-PAT2000 with
intra-coronary AcetylCholine
The Technology
•
Innovative proprietary technology: PAT® - Peripheral Arterial Tone – a unique signal
•
•
Combination of pulse pneumatic and optical sensors
Detecting changes in and responses of the sympathetic autonomic nervous
system
WatchPAT™
ALGORYTHMS
Sleep
Heart
EndoPAT™
IP Portfolio
WatchPAT™ and EndoPAT™ are both protected by a robust IP
portfolio protecting all aspects of the proprietary platform
Umbrella
Patents
Productspecific
PAT®
WatchPAT™
EndoPAT™
Expiration of Initial PAT patents: 2017
Expiration of major extension patents: 2022
Provisional extensions: >2030
Experienced Leadership and Advisory Team
Management
Gilad Glick
Board of Directors
Martin Gerstel
Chief Executive Officer
Scientific Advisory Board
Prof. Amir Lerman
Assoc. Chair Cardiovascular Division
for Academic Affairs , Mayo Clinic
Shaul Sharoni
Gary Ellis
Prof. Peter Ganz
Chief Financial Officer
SVP & CFO, Medtronic
Chief Division of Cardiology, UCSF, SF General
Hospital
Dr. Koby Sheffy
Dr. Giora Yaron
Prof. Mark Creager
Director Vascular Center, Brigham & Women’s
Hospital, Harvard Medical.
SVP & Chief Technology Officer
Eldad Singer
Dr. Morry Blumenfeld
Prof. Giora Pillar
Vice President, International Sales
Past Managing Director
Head of pediatrics Department, Carmel Hospital,
and sleep laboratory at Rambam Medical Center
Efrat Litman
Prof. Michael Shechter
VP, Research & Development
Regina Ungar
CPA
Shlomo Ayanot
Miri Katz
Dr. Steven Lamm, Internal Medicine; Faculty
VP Engineering & Operations
Past Chairman of Israeli Securities
Authority
NYU School of Medicine
Maya Tal
Ilan Biran
Prof. Peter Collins, Chief Cardiol. Imperial
Director, Global Marketing
Chris Hallett
VP US Sales
Director Clinical Research Unit, Heart Center,
Sheba Medical Center, Tel Aviv
College & Brompton Hospital
EndoPAT®
The EndoPAT® Quiet Revolution
The EndoPAT® Test
The only non-invasive, FDA-cleared
device assessing endothelial
dysfunction– functional test of arterial
health

15 minute

Non-invasive

Office-based diagnostic test

350,000+ tests to date

Can be performed by an AHP

Reimbursed
Animation
The EndoPAT® Test
The only non-invasive, FDA-cleared
device assessing endothelial
dysfunction– functional test of arterial
health

15 minute

Non-invasive

Office-based diagnostic test

350,000+ tests to date

Can be performed by an AHP

Reimbursed
Animation
Published Outcome Evidence
Prevalence in the US
( Million Patients)
Matsazawa et al
2013
Post stenting
32%
16
4% 15.8%
8.9
28%
48%
5.1
8.8%
28.1%
270 pts
Heart failure
Akiyama et al,
2012
8%
213 pts
Chest pain
Rubinstein et al,
2010
PAT Score
Good
Bad
528 pts
CAD patients
Matsue et al,
2014
7.8
Adverse Cardiac Events
320 pts
Current Environment Positions EndoPAT™ for Success
Outcome studies
Published Outcome Evidence
Prevalence* in the US
( Million Patients)
Matsazawa et al
2013
Post stenting
7.8
Adverse Cardiac Events
EndoPAT Score
Good
Bad
8%
32%
528 pts
CAD patients
Matsue et al,
2014
16
4% 15.8%
213 pts
Chest pain
Rubinstein et al,
2010
8.9
28%
48%
5.1
8.8%
28.1%
270 pts
Heart failure
Akiyama et al,
2012
* Not mutually exclusive
320 pts
Current Environment Positions EndoPAT™ for Success
Outcome studies
CPT code Jan 2014
CMS 2-midnight
rule
Personalized
medicine
Affordable care
act readmissions
focus
Cardiac technology
maturing
Current Environment Positions EndoPAT™ for Success
Outcome studies
CPT code Jan 2014
CMS 2-midnight
rule
Personalized
medicine
Affordable care
act readmissions
focus
Cardiac technology
maturing
Strategy Implementation is Underway
The 3 Horizons for Growth
Horizon 3
Cardiology
Primary care
Primary prevention
“Blood-pressure” like test
Horizon 2
Cardiology
Acute care
Horizon 1
Core market
Growth
Primary care
Readmission Mng
Symptomatic & CAD
patients
* US patient population based on AHA statistics
*
Taking on The Underserved Cardiology Market
WatchPAT™
Obstructive Sleep Apnea (OSA)
•
•
•
40 million Americans undiagnosed with OSA*
Costly personal health issues
Adverse OSA outcomes

High blood pressure

Vascular disease and mortality

Arrhythmias

Metabolic syndrome and diabetes

Sexual dysfunction

Cognitive impairment & accidents
* Source: American Academy of Sleep Medicine
Sleep Apnea causes serious illnesses directly increasing medical costs
Confidential
Sleep Disorder Diagnosis
The Old Polysomnography Way
The New WatchPAT® Way
Obstructive Sleep Apnea Product Landscape
Clinical information
>6 parameters
In-lab PSG tests
itamar
Unattended PSG tests
Unique: w/CloudPAT &
Bracelet
Embla, Aura-Grass, Braebon
4-5 parameters
Home Sleep tests
Embletta, ARES, Stardust,
ApneaLink+, Nox
Pulse Oximetry
1-2 parameters
Nonin, Masimo
Simplicity
WatchPAT: best in breed for Home Sleep Testing – easy & informative
Confidential
The Traditional Sleep Market – USA
2010 vs. 2016
Number of Sleep Tests Performed in M
7
6
5
4
Lab
3
2
1
Lab
Home
test
0
Home
test
2010
2013
Sleep Market Structure
2012
other
NeedLab
to emphasis Cardiology
FP 7%
We see positive momentum/ movement
to HST but
10%
have decided to leverage our strength and relationship
ResMed
in Cardiology
.
40%
Home
Goingtestto be Premier Company in cardiology space
Philips
43%
2016
*-Source: BCC Research; www.bccresearch.com/report/HLC081A.html company assessment, and empirical analysis
based upon deployment in Israel www.ibisworld.com/industry/sleep-disorder-clinics.html
27
Itamar’s Potential Market Beyond The Traditional
Sleep Market
Sleep Apnea
Device market ($ Bn)
Drug resistant
hypertension
0.2
Congestive Heart
Failure - CRT
Aririal Fibrillation
Pacemakers
Source: Epidemiological studies, Market reports
Prevalence
83%
86%
2.1
49%
2.6
3
59%
Obstructive Sleep Apnea - Common Comorbidity of AF
OSA occurs when the muscles in the back of the throat fail to keep the airway open
and resulting in brief and repeated breathing interruption during sleep
OSA prevalence in
AF patients1
49%
OSA Prevalence in
the general
population2
9-24%
Anesthesiology Practice Guidelines state that for patients with clinical signs and symptoms
suggesting the possibility of OSA, a sleep study is encouraged prior to surgery3
How are you currently managing your potential AF ablation
candidates that might have OSA?
Evidence and Literature – OSA and AF
Treatment of Obstructive Sleep Apnea Reduced the Risk of Atrial
Fibrillation Recurrence After Catheter Ablation (Fein, Josephson et al. JACC July 2013 )
PVI + no OSA
PVI + CPAP treated OSA
No PVI + CPAP treated OSA
PVI + untreated OSA
Subjects: Retrospective review of 426 PVI patients, of which 62
patients with OSA
Method: During a follow-up period of 12 months after PVI,
CPAP therapy resulted in higher AF-free survival rate (71.9% vs.
36.7%; p = 0.01) .
The authors concluded that “CPAP is an
important therapy in OSA patients
undergoing PVI that improves arrhythmia
free survival. PVI offers limited value to OSA
patients not treated with CPAP.”
The Japanese Sleep Market
Cardiologist
GP
Sleep
specialist
Therapy
GP
SLEEP
study
THERAPY
Cardiologist
SLEEP
study
THERAPY
ENT
SLEEP
study
THERAPY
ENTs
In a market without sleep docs – Philips chose
WatchPAT™ as their flagship product
The 3 Horizons for Growth
Horizon 3
Beyond
Cardiology
Horizon 2
Cardiology
Horizon 1
Core market
Growth
Diabetes
Obesity
 Philips Japan
 MDT Afib US
‒ CRT space
Traditional Sleep market
New studies demonstrating
WP is significantly more
sensitive
Strategic Focus – by Geographic Regions
The largest
medical device market
Ageing population
Center
of
Excellence
USA
Israel
Ageing population
Advanced medicine
Endothelial function
awareness
Japan
Investment Highlights
Development of Arterial Function Study
 Patented platform PAT® technology
 2 Commercialized proprietary product lines in major growth markets
 CE, MHLW, FDA-cleared
 sleep apnea and cardiovascular disease
 Published peer-reviewed outcome studies in multiple disease states
 Reimbursement in most major markets in the world
 Growth drivers
 Philips Japan – exclusive WatchPAT™ distribution
 Medtronic US – exclusive electrophysiology WatchPAT™ co-marketing agreement
 Favorable healthcare trends and economics for both products
 Newly published outcome studies
 Experienced management team and board and a solid shareholder base
Investment Highlights
Development of Arterial Function Study
 Patented platform PAT® technology – Accurate assessment of multiple disease states
 Non Invasive
 Easy to use
 More than a Decade: Pioneering the Science and Technology
 > 400 Published peer-reviewed outcome studies in multiple disease states

Framingham heart study, Prevent IT Guttenberg Heart study, KORA
 now ripe for commercialization
 Commercialized proprietary product lines in 2 major growth markets
 CE, MHLW, FDA-cleared
 Sleep apnea and cardiovascular disease
 Reimbursement in most major markets in the world
 Growth drivers
 Favorable healthcare trends and economics for both products
 Newly published outcome studies
 Channel development under way
 Philips Japan – exclusive WatchPAT™ distribution
 Medtronic US – exclusive electrophysiology WatchPAT™ co-marketing agreement
 Experienced management team and board and a solid shareholder base
Financials
Business Model
Shaul to add tonight
Thank you!
Incumbents are Penalized for Bypassing Specialists
Nobel Biocare tried to do directly to general dentists – and never recovered
Sales, $, Million
Market cap :
13x Revenue
1000.0
900.0
800.0
700.0
600.0
500.0
400.0
Market cap :
1.3x Revenue
Acquired SteriOss
300.0
200.0
100.0
2004
2007
2010
0.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
41
Value-Based Payment Methods of the Federal
Government - CMS
As part of the health reform - Affordable Care Act Hospitals will be compared to
the average so either they continue improving or they will get less funding
* Source: Value based purchasing at a glance, Studer group, CMS
The Problem: cardiology-related readmissions
% Medicare Patients Readmitted to Hospitals
in 2010 within 30-days
•
•
•
Itamar’s strength
Post-stenting
Unexplained chest pain
Heart failure
26.70%
24.70%
19.90%
18.30%
10.40%
Heart
failure
Heart
attack
Pneumonia Circulatory
system
disorders
* Source: Agency for Healthcare Research and Quality WSJ article “Don’t come back.
Hospitals say”
* Source: American Heart Association, 2010
Other
Itamar’s Potential Market Beyond the Traditional
Sleep Market
Drug resistant hypertension
83%
Obesity
77%
Congestive Heart Failure
76%
Diabetes type 2
72%
63%
Stroke
Pacemakers
59%
Arrhythmias
58%
Coronary heart disease
57%
Atrial Fibrillation
49%
45%
Depression
0%
10% 20% 30% 40% 50% 60% 70% 80% 90%
Source: ResMed investor presentation Q3 2013