Mainstay Medical International plc Management Presentation - - PowerPoint PPT Presentation

Confidential

Mainstay Medical International plc

Management Presentation

December 2018

Important Notice and Disclaimer

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References herein to this presentation (the “Presentation”) shall mean and include this document, any accompanying oral presentation and any question and answer session. This Presentation is for information purposes only. The information and opinions contained in this Presentation speak only as of the date of this document. Mainstay Medical International plc (the “Company”) is not under any, and undertakes no, obligation to update or keep current the information contained in this Presentation and any information or opinions expressed therein are subject to change without notice. The information and opinions do not purport to be exhaustive and have not been independently verified. No representation or warranty, express or implied, is made by the Company or any of its directors, officers, employees, affiliates, agents or advisers as to the accuracy, completeness, or fairness of the information or opinions contained in this Presentation and no responsibility or liability whatsoever (in negligence or otherwise) is accepted by any of them for any loss arising, directly or indirectly, for use of this presentation or its contents or otherwise arising in connection therewith. All statements in this Presentation other than statements of historical fact are or may be deemed to be forward looking statements. They appear throughout this Presentation and include, but are not limited to, statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the data from the ReActiv8-B clinical study, the Company’s plans in relation to that data, and the Company’s results of

• perations, financial position, prospects, financing strategies, expectations for product design and development, regulatory applications and approvals,

reimbursement arrangements, costs of sales and market penetration and other commercial performance. By their nature, forward looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward looking statements are not guarantees of future performance and actual results may differ materially from those described in, or suggested by, the forward looking statements contained in this Presentation. A number of factors could cause actual results and developments of the Company to differ materially from those expressed or implied by the forward looking statements including, without limitation, the successful launch and commercialization of ReActiv8, the ability to raise additional capital to fund the Company’s business and the cost of such capital, the outcome of the ReActiv8-B clinical study, the outcome of the Company’s interactions with the FDA on a PMA application for ReActiv8, general economic and business conditions, the global medical device market conditions, industry trends, competition, changes in law or regulation, changes in taxation regimes, the time required to complete clinical trials and to

• btain regulatory approvals, currency fluctuations, changes in its business strategy, and political and economic uncertainty .

The principal risks and uncertainties faced by the Company remain substantially unchanged from the disclosures included in the Company’s Half Year Report for the period ended 30 June 2018 published by the Company on 21 September 2018, which risks and uncertainties should be read in conjunction with the Company’s public disclosures, which are available on the Company’s website (www.mainstay-medical.com). The forward-looking statements herein speak only at the date of this Presentation, and the Company disclaims any obligation to update or revise any such forward-looking statements except as may be required by applicable law. This Presentation is not an offer to sell, or the solicitation of an offer to purchase, the Company’s securities in any jurisdiction.

Important Notice and Disclaimer

Experienced Senior Management Team

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Jason Hannon, CEO NuVasive President/COO, Head of International business Prashant Rawat, Chief Operating Officer 20 years of experience (Mainstay, CVRX, Guidant) Matt Onaitis, Chief Financial Officer 20 years experience (Biogen, Elan, Ignyta, Cidara) Tom Maher, SVP Corporate Affairs and Chief Legal Officer 20 years of experience (Amarin, Elan)

Table of Contents

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I. Executive Summary II. Clinical Data Update III. Commercial Overview IV. Financial Overview

I. Executive Summary

Estimated 2 million ReActiv8 candidates in the US and European Union today Direct sales in Germany

Investment Highlights

Experienced leadership team with global commercialization background US approval anticipated in 2020 Strong R&D capabilities will drive platform evolution Confidential 6

ReActiv8 — Using Neurostimulation to Reactivate Normal Muscle Control for Patients with CLBP

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• Novel implantable neurostimulation device providing

electrical stimulation to the multifidus muscle

• Targets an underlying cause of CLBP, rather than

masking pain

• Potential therapy option for patients taking opioids to

manage pain

• Minimally invasive implantation procedure
• Compelling clinical data demonstrates efficacy
• CE Marked and approved in Europe
• Application for Australian approval anticipated in 2019
• U.S. PMA submission expected in 2019 after pre-

PMA meeting ✓ Initial indication: Chronic Low Back Pain (CLBP) ✓ Focused on patients with non- specific CLBP (those not indicated for surgery)

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Chronic Low Back Pain

Disease Overview

• Characterized by low back pain that has persisted for at least

three months and has resulted in pain on at least half the days in the past six months

• Debilitating condition negatively impacting patient’s ability to

live a normal life

• Often the source of the pain is not known
• ~1% – 6% of population suffers from CLBP

Disease Burden

• Associated costs of ~$100 to $200 billion annually in the US
• Patients often resort to high socio-economic cost pain

management options including opioids Disease Management

• Patients typically cycle through options, often unsuccessfully

~150 million days of work per year are lost due to low back pain in the US and EU

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The Multifidus Muscle and Its Role

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• Deep muscle located along the back of

the spine

• Primary stabilizer of the lumbar spine
• Constrains movements of the facet joints to

reduce stress and avoid injury

• Controlled involuntarily by the brain
• Contracts automatically when the brain senses

that stability of the spine is required

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ReActiv8 Mechanism of Action

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• Initial injury causes stabilizers of the lumbar

spine to become inhibited

• Inhibition of neural signals causes loss of

control of multifidus muscle

• This results in patients experiencing continuing,

debilitating pain and disability

• Ability to restore muscle control with electrical

stimulation

• Treats an underlying cause of CLBP vs.

masking the pain

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The Genesis of ReActiv8 Restorative Therapy

It was hypothesized that targeted electrical stimulation to cause episodic contraction of the multifidus muscle alone could lead to restoration of neuromuscular control of the multifidus muscle, leading to improved functional stability of the lumbar spine and resolution of CLBP Evidence of Electrical Stimulation for Arthrogenic Inhibition

• Knee surgery causes quadricep atrophy due to arthrogenic inhibition
• Transcutaneous NMES can restore neural drive to quadriceps to

reverse atrophy and increase strength, endurance, and tone

• Nerve to quadriceps is close to skin allowing

transcutaneous stimulation

• Transcutaneous stimulation cannot reach motor point of the multifidus

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Implantable Pulse Generator delivers stimulation to contract the Multifidus Muscle Self-anchoring leads placed adjacent to Medial Branch

Our Solution: ReActiv8 Therapy Reactivates the Multifidus Muscle

• Percutaneous placement
• Known implantation techniques and anatomical

target (rhizotomy)

• Minimally invasive procedure; rapid

patient recovery

• 30 Minute patient controlled session twice

daily via remote control

• >5 year longevity
• Patient compliance benefit relative to

physical therapy Confidential 12

Limitations of Current Treatment Options

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CLBP patients are usually poorly served with available treatment options

Conservative Care

• Cognitive Behavioral Therapy: only addresses psychosomatic aspects
• PT: therapists try to teach the patient to voluntarily contract the multifidus –

most unable to do so

Specialist Interventions

• Steroid injections: pain relief is temporary; can have harmful side effects
• Nerve blocks: pain relief is temporary; permanent nerve damage can occur
• Energy application: pain relief is temporary; not an effective treatment for CLBP
• Rhizotomy or nerve ablation: low back pain can return, requiring another procedure

Spine Surgery and Spinal Cord Stimulation

• Surgery: fusion historically tried but no longer supported by guidelines and payors
• SCS: typically used for neuropathic pain

Long-Term Pain Management

• Opioids and anti-depressants: severe side effects, potential for addiction and mortality

Patients typically cycle through the various treatment options,

• ften unsuccessfully

ReActiv8 Indication

CLBP Market Opportunity

CLBP

Candidates

Continuing CLBP despite medical management and without indications for spine surgery or SCS; primarily nociceptive (mechanical) pain Typically used for neuropathic pain

(e.g. Failed Back Surgery)

SCS

≈15%

suitable for spine surgery

Spine Surgery

15% Approx.

8M

Candidates

ReActiv8

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Large Total Addressable Market Opportunity

Chronic Low Back Pain Without Indications for Surgery

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1% - 6% CLBP Sufferers

x

80% Abnormal Multifidus Initial Markets 840M

US EU

x x

50% Therapy Candidates

Estimated 2M Patient Population in US & EU

• II. Clinical Data Update

ReActiv8-A Trial Patient Selection

Key Patient Selection Criteria

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Severe and disabling chronic (axial) low back pain Low Back Pain NRS of ≥6.0 and ≤9.0 Tried physical therapy and medical management No prior back surgery and not indicated for surgery No radiculopathy (leg pain < back pain)

Clinically Proven Solution – ReActiv8-A Trial

Percentage of subjects with clinically important improvement in one or more major endpoints:

94% at 90 Days 87% at 1 Year

Disability (ODI)

90 days (n=52) 1 year (n=47)

52 % 60 %

Quality of Life (EQ-5D)

90 days (n=52) 1 year (n=47)

88 % 81 %

Pain (NRS)

90 days (n=52) 1 year (n=47)

63 % 57 % Confidential 18

ReActiv8-B – The First Sham-Controlled Neurostim Trial For CLBP

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Prospective, randomized, sham-controlled, blinded trial 204 total patients

Sham control with one way crossover after 120 days

Primary outcome: responder analysis “Responder” - ≥30% reduction from baseline in average low back pain VAS without any increase in pain medication or muscle relaxants

Primary efficacy endpoint is achieved if statistically significant difference in Responder rate between treatment and control Primary Endpoint assessed 120 days post randomization Secondary Endpoints include EQ-5D Quality of Life Assessment and ODI

Key patient demographics: Mean age: 46 Mean duration of back pain: ~14 years 80% of patients on pain medication at baseline (37% on opioids)

ReActiv8-B Primary Efficacy Endpoint Outcomes

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• Primary Efficacy Endpoint: Responder Rate comparison

between treatment and control groups:

120 days

N=204

Responders ΔVAS ≥ 30% 56% Control 47%

Results do not demonstrate statistically significant difference at 120 days

ReActiv8-B: Therapy Response Rises Steadily through One Year

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Responder Rate comparison between treatment and control groups:

✓ 44% of patients on opioids at baseline eliminated/reduced use at 1 year as follows: ✓ 28% eliminated opioid use ✓ 16% significantly reduced

• pioid use

*Responder rate data for all time points exclude patients who have increased medication use. If those data points included all patients who experienced >30% VAS pain reduction regardless of medication increase (as it is typically calculated in neuromodulation trials), the response rates for Reactiv8 would be higher for all time points than the data shown. Data beyond 1 year is subject to change as additional patients complete further assessment visits. *n=201 (3 patients lost to follow-up)

120 days

N=204

180 days

N=160

1 Year

N=116

Responders ΔVAS ≥ 30% 56% 63% 72% Control 47% NA NA *Responders ΔVAS ≥ 50% 43% 53% 60% Control 35% NA NA *Remitters (VAS ≤ 2.5) 33% 38% 48% Control 28% NA NA

Responder Rates – ReActiv8-B Treatment Group

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*Responder rate in Control Group

*Responder rate in Treatment Group

Responder Rates – ReActiv8-B Control Group

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*Same definition of Responder used as in primary endpoint, but applied only to patients showing >50% VAS pain reduction with no increase in medications

Responder Rates for Patients >50% VAS Pain Reduction*

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Benchmarking ReActiv8 to Approved Therapies

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6 Months 1 Year Responders ΔVAS ≥ 30% ReActiv8* 63% 72% Responders ΔVAS ≥ 50% ReActiv8* 53% 60% Traditional SCS1 52% 51% HF101 76% 79% Remitters (VAS < 2.5) ReActiv8* 38% 48% Traditional SCS1 37% 43% HF101 60% 69%

1. Kapural, L., Yu, C., Doust, M. W., Gliner, B. E., Vallejo, R., Sitzman, B. T., … Burgher, A. H. (2015). Novel 10-kHz High-frequency Therapy (HF10 Therapy) Is Superior to Traditional Low-frequency Spinal Cord Stimulation for the Treatment of Back and Leg Pain. Anesthesiology, 123(4).

*For ReActiv8-B data points, n=160 patients at 6 months and n=116 patients at 1 year. ReActiv8-B Responder rates exclude patients who have increased medication use whereas the HF10 and Traditional SCS data does not exclude such patients. ReActiv8-B Responder rates would be higher if those patients were not excluded. Data subject to change as additional patients complete further assessments.

• Most recent data from an open label trial comparing HF-10 to Traditional SCS.
• Although ReActiv8 targets a different patient population, both trials involve neurostimulation for

types of chronic low back pain.

• III. Commercial Overview

Commercial Footprint

Approved Under CE-Mark

• Actively selling in Germany
• Select number of high volume

multi-disciplinary spine care centers

• 10 centers have implanted

patients with ReActiv8 Actively Commercializing

• CE Marking allows for

commercialization of ReActiv8 in the European Economic Area (“EEA”)

• Next markets planned are UK

and Switzerland

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Clear pathway to commercialization

Robust Intellectual Property Portfolio

Confidential Broad coverage beyond 2030 in U.S., Europe, China & Australia for Mainstay's system, components and methods 13 U.S. patents (+ 1 pending issue), 41 issued foreign patents; 31 pending U.S. and foreign patent applications and growing

• 58. An electrical stimulation

system for reducing low back pain of a patient, the system comprising:

a plurality of implantable electrodes configured to be implanted at a stimulation site in or adjacent to a medial branch of a dorsal ramus of a spinal nerve; and a fully implantable, internally powered and programmable pulse generator configured to be coupled to the plurality of implantable electrodes, the pulse generator programmed to deliver electrical stimulation via the electrodes to the medial branch of the dorsal ramus of the spinal nerve to rehabilitate motor control of one or more of the multifidus, transverse abdominus, quadratus lumborum, psoas major, internus abdominus,

• bliquus externus abdominus, and

erector spinae muscles, thereby improving lumbar spine stability. (U.S. Patent No. 8,428,728)

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• IV. Financial Overview

Results of Operations

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Year Ended December 31, Six Months Ended June 30, (USD, $ in thousands) 2016 2017 2017 2018 Germany Revenue $0 $330 $232 $267 Other Revenue 18 18 91 Total Revenue $0 $348 $250 $358

YOY Growth NA NA NA 43%

Gross Profit 158 114 187

Gross Margin NA 45% 46% 52%

Operating Expenses: Research and Development 3,582 4,170 1,971 1,987 Clinical and Regulatory 5,599 12,850 5,212 7,205 Selling, General and Administration 7,647 10,857 5,099 6,657 Total Operating Expenses $16,828 $27,877 $12,282 $15,849 Loss from Operations ($16,828) ($27,719) ($12,168) ($15,662)

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Financial Position

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1) Working capital is defined as current assets less current liabilities

(USD, $ in thousands)

As of June 30, 2018 Cash and Cash Equivalents $29,711 Working Capital1 $24,424 Total Assets $33,582 Total Debt $13,173 Total Shareholders’ Equity $15,610

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Initial Public Offering

NASDAQ: MSTY

Clonmel House, Forster Way, Swords, County Dublin, Ireland www.mainstay-medical.com 353.1.897.0270

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