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Disclaimer
This presentation has been produced by ImpediMed Limited (“ImpediMed”) only and may contain forward-looking statements that are based on management’s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements contained in this presentation include statements about future financial and operating results, status of our regulatory submissions, 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, involve certain risks, uncertainties and assumptions 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 what is expressed herein. In any forward-looking statement in which ImpediMed expresses an expectation or belief as to future results, 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 is not an offer of the sale of securities.
ImpediMed and their respective directors, employees, associates, affiliates or agents, make no:
(a) representations or warranties, express or implied, in relation to this presentation or the accuracy, reliability or completeness of any information in it or the
performance of ImpediMed;
(b) accept no responsibility for the accuracy or completeness of this presentation and the information contained in it; and
(c) make no recommendation as to whether you should participate in the proposed ImpediMed capital raising.
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. Potential investors should make their own decision whether to participate in the capital raising based on their own enquiries. Potential investors are advised to seek appropriate independent advice, if necessary, to determine the suitability of this investment. 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 , their officers, directors, employees, associates, affiliates or agents, nor any other person accepts any liability for any loss, claim, damages, costs or expenses of whatever 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. This presentation is made only to sophisticated or professional investors under the Corporations Act.
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Presenters – IPD senior management
Peggy Brooker, Chief Operating Officer and Chief Financial Officer – CPA
Former Partner of E&Y LLP in the US and a Principal of E&Y Australia.
Peggy has been the CFO of an insurance broker in Los Angeles and Vice President of Finance of an aerospace manufacturer.
Bachelor of Science Degree in Business/Accounting from USC and licensed CPA in the State of California. Member of American
Institute of Certified Public Accountants (AICPA).
Greg Brown, Chief Executive Officer (CEO) – B.Sc. / MBA
Director since December 2001, and CEO from February 2004.
Over 25 years of international business experience in the healthcare industry including in Australia, Switzerland, England,
Germany and the US.
Held the roles of Vice President, Global Marketing for Digene Corporation (US & UK); Sales and Marketing Director for Baxter
Diagnostics in the UK; and Senior Global Marketing Manager for Roche Molecular Systems (NY).
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Fir
st
to m
ark
et
• Unmet clinical need
• Lymphoedema arm and legs
• Venous Insufficiency
Inte
llectu
al
Pro
pert
y
• Limit competition
• 31 families Patent / applications
• Building TM collateral L-Dex
Clin
ical V
alid
ati
on
• Fluid status applications
• Strong breast cancer data lymphoedema
• Building data for legs
Reim
bu
rsem
en
t • Unique code reimbursement
• Unique code for limbs
• Target attractive payment and coverage
Re
gu
lato
ry
• Unique and first wave FDA clearance
• Appropriate clearance for assessment supports value creation
Medical device company – First to market opportunity
Hurdles to entry – franchise protection Critical drivers of the business – sales/market share
Hurdles to entry – franchise protection
Targeting a sustainable, protected
and profitable franchise
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Lymphoedema – Major unmet clinical need
Presently diagnosed when patients can already have irreversible changes
Successful treatment and potential prevention can occur with early detection (compression sleeve)
The current ‘gold standard’ for the detection of lymphoedema is water displacement. A 200ml
difference can be too late, as irreversible changes may have already occurred.
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Critical difference – Time of assessment
Identified at a sub-clinical stage
when swelling is not visible
Stage I Stage II Stage III
Sub clinical
Identified at clinically evident
stage (>10% change) when
swelling is visible
L-Dex ® U400 prospective readings
Current standard
ImpediMed’s L-Dex ® U400 can detect lymphoedema at a sub-clinical stage when swelling
is not visible
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IPD platform - Bioimpedance Spectroscopy (BIS)
ImpediMed’s BIS technology directly measures extracellular fluid
At low frequency At high frequency
Cell membrane
Extracellular fluid
Intracellular fluid
ImpediMed’s BIS Technique
ImpediMed utilises BIS technology in its medical devices for the detection of lymphoedema
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ImpediMed’s L-Dex® U400
Direct measure for extracellular fluid (ECF)
differences of the limbs to aid in clinical assessment
Pathophysiology of lymphoedema shows ECF is a
direct measure of early changes. In chronic state
ECF levels can decrease
ImpediMed’s L-Dex® U400 is FDA cleared and can aid a surgeon or radiation oncologist in
clinically assessing the early changes associated with lymphoedema
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True Innovation - Current detection methods are sub-optimal
Detection Method Direct or indirect measurement,
volume or ECW
FDA clearance for
lymphoedema
assessment
Reproducibility/Accuracy
Tape measure
Volumetric calculation of limb by
measuring diameter at prescribed
intervals
No Non-standardised and
subjective measurement
Water displacement
Volumetric calculation of limb using
‘Archimedes’ principal No
Non-standardised and
subjective measurement
Perometer
Volumetric calculation 80% of limb
using an infrared scan No
Standardised and objective
measurement for volume only
BIS
Direct measure of relevant
compartment - the extracellular
fluid differences between limbs
Yes
Standardised and objective
measurement specific for
lymphoedema changes
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Our opportunity and approach – staged target markets entry
Fluid
Status
Market
Breast Cancer market – Entry
TGA, FDA, and CE cleared
Est. - US$120m to $250m annually
Targeting $65 to $85 per reading
Pelvic Cancer - Expansion
TGA, FDA, and CE cleared (Uni only)
Est. - US$400m to $700m annually
Targeting $65 to $85 per reading
Oedema market – New market expansion
Venous insufficiency
Pelvic cancers - differentiation of
lymphoedema / oedema
Dialysis market
Fluid status monitoring in
dialysis patients
Fluid Status
Technology
platform
Today & Near Term
Future
ImpediMed is currently focused on the US breast cancer market with the L-Dex U400.
ImpediMed’s UB500 is targeted for use into the larger pelvic cancer market with legs
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Targeting a consumable based business model
Clinical Protocols
Major HMO recommendations - 8 tests in first 3 years
NAPBC recommendations - 17 tests in first 5 years
First reading may take place during a scheduled consultation with the physician
* Reimbursement and consumable amounts are targets - indicative only
Illustrative Device Economics Illustrative Device Economics Illustrative charge per reading (USD) Doctor supplied device free of charge
Insurance reimburses doctor/clinic for a
reading Average $250*
Doctor bills insurance company a fee
for the reading service
IPD charges doctor/clinic per reading Targeting up to $85* One use consumable is IPD revenue
per reading charged to the doctor
Net doctor/clinic profit per reading Estimate of $165* Doctor’s profit per service
* Reimbursement and consumable amounts are indicative targets
Physician pays ImpediMed for the consumables associated with the test and bills the
patient’s insurance company for reimbursement
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HMO illustration assumptions:
1. Assumes 8 tests in 3 years
2. Assumes 1 new patient/year
3. Assumes 100% compliance
4. Assumes patient has access
to instrument and readings
5. Assume no positive result
Illustrative only - Potential based on adoption of targeted protocols
NAPBC Recommendation:
1. Assumes 17 test in 5 years
2. Assumes 1 new patient/year
3. Assumes 100% compliance
4. Assumes patient has access
to instrument and readings
5. Assumes no positive result
Launch year Year 1 Year 2 Year 3 Year 4 Year 5
No. of tests each year from launch yr 1 cohort 6 1 1 0 0
No. of tests each yr from launch yr 2 cohort 6 1 1 0
No. of tests each yr from launch yr 3 cohort 6 1 1
No. of tests each yr from launch yr 4 cohort 6 1
No. of tests each yr from launch yr 5 cohort 6
Cumulative number of tests /yr 6 7 8 8 8
Launch year Year 1 Year 2 Year 3 Year 4 Year 5
No.of tests each yr from launch yr 1 cohort 4 4 4 3 2
No. of tests each yr from launch yr 2 cohort 4 4 4 3
No. of tests each yr from launch yr 3 cohort 4 4 4
No. of tests each yr from launch yr 4 cohort 4 4
No. of tests each yr from launch yr 5 cohort 4
Cumulative number of tests /yr 4 8 12 15 17
Two possible protocols could be (1) in line with HMO guidelines, or (2) NAPBC recommendations
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Our target markets for driving sales
• Estimate top 1000 targets treat 45% of patients
• Direct sales and marketing
• Coverage critical driver for sales
Breast Surgeons
• Co-marketing strategies with key chains
• Co-market to both payer programs and surgeons
• Positioned for servicing non breast cancer patients
Radiation Oncologists
• Direct Managed Care team
• Medicare local carriers and insurance companies
• Clinical and Economic compendium
Payers
ImpediMed sells to three groups of customers
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US reimbursement overview – Critical to drive sales
CPT codes
I,III or Miscellaneous
Coding
National & local
Medicare & private payers
Coverage
Clinician fee schedule
Payment
A product that can deliver the following key characteristics is well positioned to build unique coding, coverage and
payment support:
True innovation – targeting an unmet need
High economic value
Clinician and patient acceptance and demand
First to market
All three components are critical for reimbursement. Coverage often needs to meet a break-
even point before a doctor introduces testing for all patients in a practice
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Payment and coverage – Delivered through US healthcare payers
Aetna
5%
Wellpoint
12%
Cigna
3%CMS
15%Kaiser
3%
BCBS
33%
Humana
3%
United
6%
Uninsured
16% others
4%
Source: Harvard University, ‘Health Care Delivery Covered Lives – Summary of Findings’, 2007
ImpediMed is targeting major insurance groups in the US
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Our progress – L-Dex placements in the US as of 31 December 2011
15+ L-Dex placements
10 – 14 L-Dex placements
5 – 9 L-Dex placements
1 – 4 L-Dex placements
No L-Dex placements
Key:
ImpediMed has 178 devices placed in the US
Source: ImpediMed data
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Significant risk to cancer patients - Incidence rates
Incidence of Lymphedema in Cancer Survivors
US Breast9
250,000
US breast cancer incidence ~250,000 cases/year (American Cancer Society)
US breast cancer survivors ~2.5 million people
Source: American Cancer Society, Datamonitor, Onkos, ROW - Rest of World (JPN, FRA, GER, ESP, UK)
There are approximately 250,000 new breast cancer patients in the US each year
Expected New Patients
Source: Reference slide page 28 - Numbers 1 to 8 and 16 to 19.
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Third party validation – Early detection/intervention & outcomes
3. Outcomes Data?
Early Treatment:
Campisi 2002 (RCT)
Boccardo 2009 (RCT)
LaComba 2010 (RCT)
Stout 2008
Reactive Care:
Dini 1999 (RCT)
Johansson 2010
2. Diagnostic Performance?
Hayes 2005, 2008
Schmitz/Hayes 2011
Cornish 1996, 2001
Ward 2002, 2009, 2011
Warren 2007
1. Technical Performance?
Van Loan 1993
Van Loan 1999 (RCT)
Cornish 1994,1996, 1998
Ward 2008
Czerniec 2009, 2010
Hayes 2008
Insurers typically review for a new diagnostic test on three principle grounds
Outcome Trials Detection Follow-Up Control Arm Treatment Arm
Stout (Observational) Perometry >3% difference 196 patients – 1.5 years N/A 22% Dx subclinical
All returned 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 N/A 38% Dx (111 pts) /no return
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US 5 Year early detection/intervention trial
National Institutes of Health (NIH) Funded Study – 2008 *
5 year study assessing lymphoedema in breast cancer patients (196 patients)
Preoperative, 1, 3, 6, 9, and 12 month assessment post surgery (Perometer)
22% (43 patients) identified with sub-clinical lymphoedema
* Source: Reference slide page 28 - Number 10.
A NIH study shows that intervention with sleeve resulted in reversal of symptoms in all
patients
NIH 5 Year Preliminary Data At 1 year(NIH) At 5 years(NIH) Armer 2011**
(n=196) (n=86) (n=236)
Sub-clinical: 22% 38% 0%
Stage I/II 11%* 55% (42% to 90%)
** “Post-Breast Cancer Lymphedema: Incidence Increases From 12 TO 30 TO 60 Months” - Lymphology 43 (2010) 118 127. This study
aimed to describe lymphoedema occurrence over time among breast cancer survivors using four diagnostic criteria based on three
measurement techniques.
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Support building for prospective care in US
National Accreditation Program for Breast Centers (NAPBC) clinical Standard 2.15 “Support and
Rehabilitation”
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”
Under this standard, it references the National Lymphedema Network (NLN) supporting guideline
document, which supports baseline testing at baseline and every subsequent visit for the life of the patient
Avon Foundation White paper – calls for prospective care with BIS/Perometry
Key opinion leaders support
Clinical based Economic Model – gives clinical and economic potential benefits
UPMC and Major HMO (Top 7 Insurer) adoption of BIS in prospective care
Support for BIS is snowballing in the US with physicians, advocacy groups and survivors
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Social media – lymphconnect.com and international.l-dex.com
Lymphconnect.com website launched in December 2011 to support lymphoedema sufferers with information
and a space to share their story
L-Dex.com is a Company website helping newly diagnosed breast cancer patients with information about L-Dex
and where the test is offered in their area
Targeting support for prospective care in US market with physicians, advocacy groups and
survivors
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Our progress - Key milestones and events
2010
January 2011 CPT
Category III code
active
November 2011
FDA claim for limbs
cleared
June 2009
45 L-Dex devices in
March 2012
23 million covered lives
December 2011
UPMC covers
NIH 5 year data
2011 2012
September 2010
MCO contracts announced
July 2011
First coverage statement
September 2011
Red Journal article review
paper
February 2012
Stanford registry
starts enrolling
May 2011
NLN position paper
October 2010
IMS health
economic model
July 2011
Avon White Paper
March 2012
Major HMO adopts
clinical guidelines
ImpediMed is focused on building coverage to support effective reimbursement
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Next generation consumable for breast and pelvic cancer
The UB500 will allow ImpediMed to protect and build the larger consumable revenue
potential in the pelvic cancer market
UB500 Beta II prototype
Active electrode system
Consumables model
Commercialisation continues with
pre-production units
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Offer summary
Offer structure
1 for 4 accelerated non-renounceable rights issue to raise up to approximately $13.7 million
Up to approximately 39.1 million new ImpediMed ordinary shares to be issued (25% of existing
shares on issue)
Offer price
$0.35 per share
18.6% discount to ImpediMed’s closing price on 30 April 2012 of $0.43
15.5% discount to theoretical ex-rights price (TERP) of $0.41
Institutional offer Opens at 10am (Sydney time) 1 May 2012 and closes 4:00pm (Sydney time) on 1 May 2012
Retail offer Opens at 9:00am (Sydney time) 10 May 2012 and closes 5:00pm (Sydney time) 24 May 2012
JLMs Wilson HTM and RBS Morgans are acting as Joint Lead Managers
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Expected use of funds
Sales, marketing and training
Expand reimbursement support
Instrument development - continue commercialisation of the UB500
Clinical trial support
Inventory growth
General working capital purposes
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Indicative rights issue timetable
Timetable*
Institutional Offer period (under trading halt) 1 - 2 May 2012
Institutional bookbuild opens 1 May 2012
Institutional bookbuild closes 1 May 2012
Ordinary shares recommence trading 3 May 2012
Record date 4 May 2012
Retail offer opens 10 May 2012
Retail Offer Booklet despatched to Eligible Retail Shareholders 10 May 2012
Institutional settlement 14 May 2012
Institutional Offer allotment and trading date 15 May 2012
Retail Offer closes – 5pm Sydney, Australia time 24 May 2012
Retail Offer settlement date 31 May 2012
Retail allotment date 1 June 2012
Retail trading date 4 June 2012
* Indicative dates only subject to change at ImpediMed’s discretion
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Early stage company with limited revenue
ImpediMed is at an early stage in its commercialisation of it’s L-Dex medical device. To date, it has operated at a loss and has an operating history of losses.
ImpediMed’s ability to generate sufficient revenue in the future depends on a number of factors, including: (i) reimbursement of its L-Dex product, especially in
in the US; (ii) the company meeting its timeline for next generation product launch; (iii) the ability to obtain all necessary regulatory marketing approvals in a
timely manner; (iv) the ability to manufacture sufficient quantities of products to the required standard and at acceptable cost levels; and (v) the success of
ImpediMed’s clinical trials. There is a risk that ImpediMed will continue to incur losses from its operations and may not achieve or maintain profitability.
ImpediMed expects its expenses to increase in the short term in connection with the commercialisation of L-Dex, regulatory approval processes, along with
the continuing of research and development projects and clinical trials. Over the longer term, ImpediMed’s costs will fluctuate, primarily dependant on
commercialisation expenses (direct reimbursement team and sales and marketing), regulatory authorizations, the number, type and size of clinical trials.
Regulatory approvals
The clinical development, testing, manufacturing, sales and marketing of ImpediMed products are subject to extensive regulation by regulatory authorities in
the U.S., the E.U., Australia and elsewhere. To receive regulatory authorisation for the commercial sale of any product, ImpediMed must complete pre-clinical
development and extensive clinical trials to demonstrate safety and efficacy and then apply for clearance/approval to the relevant regulatory authorities. The
process to obtain regulatory authorisation is expensive, complex, lengthy and the outcomes uncertain. ImpediMed may not be able to obtain marketing
authorisations for all its targeted claims, including the approval/clearance of the L-Dex UB500 for bilateral legs or venous insufficiency. Another possibility is
that the targeted claims may be delayed or subject to significant limitations (narrower claims), warnings, precautions or contra-indications with respect to
conditions of use.
Pricing and reimbursement – Payment levels, pricing support and category I code success
The commercial success of ImpediMed’s approved products is substantially dependent on achieving acceptable payment levels to medical providers to
support pricing strategies for L-Dex. Whether acceptable third-party coverage and reimbursement levels are available from government bodies, private health
insurers and other third-parties will be reliant on clinical data and health economic arguments. The company is intending to submit the category III code for
upgrade to category I. The process of obtaining payment for a category I code for L-Dex is time consuming and the outcome is uncertain. Timing of this
process and the outcome of payment for the category I code will relate to how successful the company is in (i) clinical trials, (ii) obtaining regulatory
approvals, (iii) obtaining the direct support for our code from clinical governing society’s around the disorders we target, (iv) supporting an argument for wide
spread adoption of the technology by establishing many users of our products, and v) maintaining a payment under the present category III code to support
our present pricing targets.
Government bodies, national health authorities and other third-parties are increasingly seeking to contain healthcare costs by delaying reimbursement for,
and limiting both the coverage and the level of reimbursement of new products and, as a result, they may not cover or provide adequate payment for
ImpediMed’s products. Even if products receive acceptable pricing and reimbursement, pricing and reimbursement levels are subject to change under
healthcare reforms to reduce costs.
Risk factors
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Risk factors
Sales and marketing
There is a risk that ImpediMed’s direct sales and marketing efforts may not be successful. ImpediMed has a direct sales and marketing capability to Surgeons,
Radiation Oncologists and major insurance companies (Managed Care team). Third party options for distribution maybe limited due to the first to market
nature of the business. Co-marketing programs, with key radiation oncology chains, could have a material impact on pricing if the test is used as a loss leader
to leverage other radiation product billable revenue. Marketing partners that do not pursue the reimbursement strategy of coverage under the technology
code, could impact on our ability to build coverage and to establish appropriate payment levels to support the pricing strategy for the L-Dex U400.
Market acceptance of products and patient population
There is a risk that the L-Dex U400 and future products (UB500) may not gain adequate market acceptance. The degree of market acceptance will depend on
a variety of factors, including: (i) regulatory claims; (ii) the clinical trial outcomes, (iii) the level of support from target markets; (iv) the level of reimbursement
coverage and payment; (iv) the timing of new market introductions; (v) clinical profile of conventional competitive products; and (vi) the success of marketing &
sales efforts. Additionally, there is a risk that market estimates do not accurately reflect the number of patients in the target markets.
Change in laws and healthcare policy
ImpediMed’s business and the business of the third parties with which it operates are subject to the laws and regulations in a number of jurisdictions.
Unforeseen changes in laws and government policy both in Australia, the EU, the U.S. and elsewhere, including material and unforeseen changes to licensing
and approval requirements or regulations relating to clinical trials, manufacturing, product approval and pricing could materially impact ImpediMed’s
operations, assets, contracts and profitability. To date, the Affordable Care Act (Obama Care) in the United States has had a material impact in changing
dramatically how healthcare has been administered/managed (Accountable Care Organisations). Higher entry hurdles in clinical utility validation, outcomes
evidence and code requirements has impacted on coverage development as a result of Obama Care.
Dividends
ImpediMed has never paid a dividend and does not intend on paying dividends in the foreseeable future which means that holders of shares may not receive
any return on their investment from dividends.
Dependence on breast cancer market
Although ImpediMed has a pipeline of market targets for its platform, it’s success is currently substantially dependent on completion of development,
regulatory approval and successful commercialisation of L-Dex for secondary lymphoedema and other applications in all key markets in a timely manner.
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Risk factors
Ongoing regulatory issues
Even after medical devices receive regulatory clearance, ImpediMed may still face developmental and ongoing regulatory compliance difficulties. Regulatory
agencies subject a marketed device, its manufacturer and the manufacturer’s facilities to continual review and periodic inspections. Potentially costly follow-
ups or post-marketing clinical studies may be required and previously unknown problems may result in restrictions on the marketing of the device and could
include product withdrawal. If ImpediMed fails to comply with applicable regulatory requirements, a regulatory agency may: (i) issue warning letters; (ii) impose
civil or criminal penalties; (iii) suspend ImpediMed’s regulatory authorisation or restrict or change the approved indications for use or impose additional safety
reporting requirements; (iv) suspend any of ImpediMed’s ongoing clinical trials; (v) refuse to approve pending applications or supplements to approved
applications filed; (vi) impose restrictions on ImpediMed’s operations, including closing ImpediMed’s or its contract manufacturers’ facilities or terminating its
licenses to manufacture Good Manufacturing Practice; or (vii) seize or detain devices or require a product recall.
In addition, the law or regulatory policies governing medical devices may change. New regulatory requirements or additional regulations may be enacted that
could prevent or delay regulatory approval of ImpediMed’s products or that may otherwise impact on ImpediMed‘s ability to market, distribute and sell devices
and or consumables. ImpediMed cannot predict the likelihood, nature or extent of adverse government regulation that may arise.
Clinical trials
To receive regulatory approvals for the commercial sale of products, ImpediMed must complete pre-clinical development and clinical trials to demonstrate
safety and efficacy of the device on humans. Clinical trials are expensive, time consuming, subject to delay and their outcome uncertain. There are numerous
factors that could affect the timing of the commencement, continuation and completion of clinical trials which may delay the clinical trials or prevent ImpediMed
from completing these trials successfully. Due to our reliance on contract research organizations, hospitals and investigators to conduct clinical trials,
ImpediMed is unable to directly control the timing, conduct and expense of our clinical trials. Ongoing and future clinical trials may not show sufficient safety or
efficacy to obtain regulatory and reimbursement acceptance. Success in pre-clinical and early clinical trials is not a guarantee of future results nor does it
ensure that later large scale trials will be successful. Additional clinical trials of UB500 for the diagnosis of leg lymphoedema in men and women may also be
required in order to obtain FDA approval. The outcome of these trials are uncertain and there is a risk that they may not be successful and may not
demonstrate sufficient safety or efficacy to obtain regulatory clearance.
Clinical development
ImpediMed cannot be certain that the clinical development of any of its product in pre-clinical testing or clinical development will be successful. Significant
delays in clinical development could materially increase costs, delay receipt of revenue or allow competitors to bring products to market before ImpediMed.
ImpediMed uses third parties to provide research and development services and may therefore be unable to directly control of the timing, conduct and
expense of certain research. If development activities are unsuccessful, significant monies and time invested may be rendered unproductive and worthless
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Risk factors
Manufacturing
ImpediMed, or its contract manufacturers and suppliers, may fail to achieve and maintain required manufacturing standards which could result in device
recalls or withdrawals, product shortages, delays or failures in product testing or delivery or other problems that could seriously harm ImpediMed’s business.
ImpediMed may be impacted by industrial action or operating equipment and facilities may not operate as intended or be available as a result of unanticipated
failures or other events outside of ImpediMed’s control such as fires or catastrophic breakdowns or deliberate acts of destruction which may restrict
ImpediMed’s ability to supply product, profitability and ability to operate. ImpediMed’s and its contract manufacturers may not be able to obtain and maintain
all licenses and approvals required to maintain manufacturing operations. Any interruption to ImpediMed’s manufacturing capability could result in the
cancellation of shipments and loss of product, resulting in delays and additional costs.
Competition
ImpediMed conducts business in a highly regulated industry. The medical device industry there are a number of well established companies that could
develop a competing product. There can be no assurances given in respect of ImpediMed’s ability to compete.
Product liability claims and insurance
ImpediMed faces product liability exposure with respect to its devices and consummables. This exposure is likely to increase as ImpediMed increases
commercial sales. Regardless of merit or eventual outcome, liability claims may result in: (i) decreased demand for ImpediMed’s products; (ii) injury to
ImpediMed’s reputation; (iii) withdrawal of clinical trial participants; (iv) costly litigation; (v) substantial monetary awards to physicians or patients and others;
(vii) loss of revenues; and (viii) an inability to commercialise ImpediMed’s products. ImpediMed may not be able to maintain insurance coverage at a
reasonable cost nor obtain suitable or reasonable insurance coverage in respect of any liability that may arise and any claim for damages could be
substantial.
Patents and trade secrets
ImpediMed uses patents or trade marks to try and protect its technology and applications from unauthorised use by third parties. The term of patents may
expire or may be challenged, invalidated or circumvented. There can be no assurances that ImpediMed’s patents will afford it significant commercial
protection for its devices.
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Risk factors
Enforcement and infringement of intellectual property
Third parties may own or control patents or patent applications that ImpediMed may be required to license to commercialise product, that IMpediMed may
infringe, or, that could result in litigation that would be costly and time consuming. As a result of intellectual property infringement claims, or to avoid potential
claims, ImpediMed might be: (i) prohibited from selling or licensing a product; (ii) required to expend considerable amounts of money in defending the claim;
(iii) required to pay substantial royalties or license fees; (iv) required to pay substantial monetary damages; or (v) required to redesign a product so it does not
infringe, which may not be possible or could require substantial funds and time.
Litigation
There has been substantial litigation and other proceedings in the biotechnology and medical device industries. Defending against litigation and other third
party claims would be costly and time consuming and would divert management’s attention from our business, which could lead to delays in our development
or commercialization efforts. If third parties are successful in their claims, ImpediMed might have to pay substantial damages or take other actions that are
adverse to the ImpediMed business.
Resources
The loss of services of one or more of our members of key personnel or the inability to recruit and retain high calibre staff could delay or compromise the
successful commercialisation of products. ImpediMed will need to increase the size of its organisation, and it may experience difficulties in managing growth.
Capital requirements
ImpediMed may require substantial additional funds which may be dilutive or that may not be available to ImpediMed on favourable terms or at all. If
ImpediMed is unable to obtain additional funds when required, ImpediMed may be forced to delay, reduce the scope or eliminate one or more clinical trials or
research and development programs or future commercialisation efforts.
General economic factors
Material adverse changes in the general domestic and international economic climate may have an adverse effect on ImpediMed’s performance. These
factors may include fluctuations in foreign exchange rates ( ImpediMed has no formal hedge policy, uses a natural hedging process), does business in many
countries and most overheads are now in USD. inflation, interest rates, rate of economic growth, taxation laws, consumer spending, unemployment rates,
government fiscal, monetary and regulatory policies and consumer and business sentiment. Any of these factors have the potential to cause costs to increase
or revenues to decline.
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Risk factors
Share price
The market price of ImpediMed’s shares historically has been, and ImpediMed expects will continue to be, subject to significant fluctuations over short periods
of time. These fluctuations may be due to factors specific to ImpediMed, to changes in analysts’ recommendations and earnings estimates, to changes in
exchange rates or to factors affecting the biopharmaceutical industry or the securities markets in general. These factors include: (i) adverse or inconclusive
results or delays in clinical trial programs; (ii) unforeseen safety issues or adverse side effects resulting from clinical trials or the commercial use of any
ImpediMed products; (iii) regulatory actions in respect of any ImpediMed products or the products of any of its competitors; (iv) failure or delay of any of
ImpediMed products obtaining regulatory authorisations in key markets or limitations on the indications or other conditions on any regulatory authorisations
given; failure to obtain and maintain satisfactory pricing, payment and reimbursement coverage for L-Dex; (v) failure of any ImpediMed products to achieve
commercial success; (vi) inability to manufacture sufficient products to the necessary standard and disruptions to supply arrangements; (vii) announcements
of the introduction of new products by ImpediMed or possible competitors; (viii) market conditions, including market conditions in the Biotech and medical
device sectors; (ix) increases in the Company’s costs or decreases in revenues due to unfavourable movements in foreign currency exchange rates; (x)
developments or litigation concerning patents, licenses and other intellectual property rights; (xi) litigation or public concern about the safety of potential
products; (xii) changes in recommendations or earnings estimates by securities analysts; (xiii) actual and anticipated fluctuations in ImpediMed’s quarterly
operating results; (xiv) deviations in operating results from the estimates of securities analysts; (xv) additions or departures of key personnel; and (xvi)
changes in third-party reimbursement policies.
ImpediMed may experience a material decline in the market price of its shares, regardless of operating performance. No assurances can be given that the
New Shares will trade at or above the Offer Price. None of ImpediMed, its Board or any other person guarantees the market performance of the New Shares.
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Reference Information
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