Building a Company around unmet market needs

1
Preserving Human Vision

• Building a Company around unmet market needs
• A Case Study

2
Market Opportunity Question

• Can SOLX raise capital to launch a new glaucoma
  treatment system aimed at replacing the current
  gold standard for glaucoma surgery?
• What is the potential adoption rate for the
  technology if it can gain FDA approval?
• How does this affect the competitive landscape of
  competition?
• What will the technology need to deliver in terms
  of safety, effectiveness and reimbursement?

3
Why Glaucoma?

• Compelling demographic trends
• Economic impact of age related eye diseases
• Current surgical interventions are used as
  treatment of last resort, physicians are looking
  for safer and more predictable surgical options
• Well documented cost/compliance issues with
  patients on multiple medications
• Preference for surgical/procedure type
  interventions by ophthalmologists and glaucoma
  specialists
• Large under-served markets

4
6,000 Americans Turn 65 Each Day
The leading causes of vision impairment and
blindness in the US are age-related eye diseases.
The aging baby boomers will double the current
number of blind and visually impaired Americans
over the next 30 years. (ameyehealthy)
5
What is Glaucoma?

• A group of age-related eye diseases characterized
  by elevated intraocular pressure (IOP), which
  causes optic nerve damage and subsequent loss of
  eyesight
• At first, peripheral vision is lost if not
  treated, vision loss may continue, leading to
  total blindness over time
• Worldwide prevalence is 67 million in the US,
  affects 2.2 million people age 40
• Current treatment includes drugs plagued by
  low patient compliance and limited long-term
  efficacy and surgical procedures hampered by high
  (30) failure/complication rates

Simulation of Vision with Glaucoma
6
Glaucoma Treatment Algorithm
Ocular Implant
Laser Surgery
Filtration Surgery
Drugs
- Prostaglandins - Miotics - Beta
Blockers - Carbonic Anhydrase
Inhibitors
SOLX TARGET MARKET
Trabeculectomy (requires a bleb)
Tube Shunt (requires a bleb)
Laser Trabeculoplasty

• Multiple Side Effects
• Inconvenient
• Costly 1-3k /y
• Less effective over time
• Poor compliance
• 175,000 new US starts/yr

• Laser treatment of trabecular meshwork
• Can only be done 2x in each eye
• 50 failure rate
• 260,000 US proc./yr

• Multiple post procedure visits
• High complication rates
• Lasts 2-5 years
• 106,000 US proc./yr

• Procedure of last resort
• Infection, bleeding swelling, loss of vision
• 15,000 US proc./yr

7
The SOLX Opportunity
Laser Surgery
Filtration Surgery
Ocular Implant
Drugs
- Miotics - Beta Blockers - Carbonic
Anhydrase Inhibitors
- Miotics - Beta Blockers - Carbonic
Anhydrase Inhibitors
Tonometry Ophthalmoscopy Perimetry Goniscopy
Laser Trabeculoplasty
Tube Shunt
Trabeculectomy
Goal Become the standard of care after
non-responding drug treatment

• Replace existing shunts
• Replace trabeculectomy
• Replace trabeculoplasty
• Replace all glaucoma surgeries that utilize a
  bleb

8
Why will Ophthalmologists embrace the Gold Shunt
vs. trabeculectomy?

• Safety
• No bleb/ bleb related complications
• Minimal complications overall
• Quality combination procedure with cataract
• Outcomes
• At minimum equal to other surgeries in pressure
  reduction
• Small incision/ faster healing/ better visual
  acuity/ less pain
• Higher patient satisfaction/ less follow-up
• Process
• Ophthalmologists traditionally fix problems
  with surgery
• Reproducible technique takes less than 15
  minutes
• Cataract-like procedure attractive to MDs who
  traditionally refer out glaucoma patients
• Economics
• Extremely profitable procedure
• Makes glaucoma a high profit center for the
  practice/ ASC
• 15 25 of cataract patients have glaucoma
  significant combined procedure opportunity for
  cataract surgeons

9
Exit-What the buyer getsSOLX Treatment Platform
Wireless IOP Sensor
Active Shunt Valve
SOLX 790Laser
GSTTitratableShunt
SOLX Gold Shunt
confidential
10
Global Ophthalmology Market

• Ophthalmology Market Overview

11
US Ophthalmology Market Size

• US Ophthalmology Market Size
• 2004

Ophthalmology Market 6.70 Billion (2004)
Medical Device Market 0.92 Billion (2004)
12
US Medical Device Growth Rates
US Medical Device Market 0.92 Billion
(2004) 1.61 Billion (2011) 8.5 CAGR (2005-2011)
Drivers

• Custom Procedures and New Technology
• Economic Recovery
• Gaining Consumer Confidence

• Aging Population
• Active Baby Boomers
• IOL and Viscoelastic Diversification

• Low Pharmaceutical Compliance
• Increased Awareness and Diagnosis
• Positive Clinical Results

• Aging Population
• Poor Nutrition
• Increased Awareness and Diagnosis

• Aging Population
• Changing Characteristics of Population
• New Technology

13
Age-Related Vision Problems
Leading eye diseases affecting older Americans
In U.S. Millions (for age listed and above) 2004
Projections
Source National Eye Institute, 2002, Vision
Problems in the U.S. (based on 2000 census data)
14
Glaucoma - Procedure

• The majority of glaucoma sufferers will first be
  treated with up to three pharmaceutical products
  before surgical options are investigated
• Laser trabeculoplasty A photocoagulation
  procedure that targets cells in the trabecular
  meshwork that are responsive to laser light. By
  applying short pulses to an area that usually
  surrounds the top 180? of the circumference of
  the cornea, cells in the meshwork are shrunk,
  thereby increasing the area available for fluid
  to flow from and increasing drainage.
• Trabeculectomy The creation of an internal
  escape route that allows fluid to exit through a
  space between the conjunctiva and the sclera
  where it is eventually absorbed by blood vessels.
  
• Glaucoma Shunt Implantation Functioning similar
  to the drainage route formed during a
  trabeculectomy, a shunt is placed in the sclera
  of the eye with an opening that drains into the
  anterior chamber. Today shunts are used as the
  last effort to maintain vision. The market is
  about 50,000 per year in the US and Europe.

15
Glaucoma Procedure Drivers Limiters

• Drivers
• Changing Demography Age and African descent are
  risk factors for glaucoma. Populations are aging
  and the proportion of people of African-descent
  are growing in the US and Europe
• Obesity and Diabetes Diabetes is associated
  with higher rates of glaucoma and bulging obesity
  rates in the US, and now Europe, are driving the
  prevalence of Type 2 diabetes.
• Increased Awareness/Regular Testing Due to the
  increasing awareness of glaucoma, most
  ophthalmologists/optometrists now regularly check
  their patients for glaucoma
• Low Compliance with Pharmaceuticals
  Side-effects of glaucoma pharmaceuticals
  discourage patients from taking them regularly,
  causing them to be less effective.
• Limiters
• Pharmaceuticals The first-line treatment to
  glaucoma is pharmaceuticals. Only after this has
  failed will the physician choose other options,
  such as surgery.

16
Glaucoma Market OpportunityU.S. 2004
Therapies 0.58 Million
U.S. Glaucoma Market Millions, 2004
Diagnosed 1.16
Prevalence 2.28
Treated 0.58
Source Research to Prevent Blindness, NISE, NSF.
17
Glaucoma - Devices

• Photocoagulation Lasers Photocoagulation is
  used to shrink melanin-containing cells within
  the trabecular meshwork in order to free the
  drainage of aqueous fluid from the eye and
  stabilize intraocular pressure. This procedure
  typically slows or halts the diseases
  progression.
• SLT Lasers These lasers are used to perform
  trabeculoplasty for the treatment of open-angle
  glaucoma. The introduction of SLT lasers, instead
  of argon lasers, has accounted for a number of
  significant improvements into trabeculoplasty.
  These lasers are able to exclusively target
  specific cells, which recruit the bodys own
  immune response to reduce IOP. Because this
  product was introduced only in 2001, sales remain
  strong, and ophthalmologists are becoming more
  and more convinced of the virtues of this laser,
  resulting in sustained sales.
• Glaucoma Shunts An emerging treatment, shunts
  are implanted in order to maintain artificial
  drainage pathways. This is generally done as a
  third-line procedure after both laser
  trabeculoplasty and trabeculectomy or, as a
  first-line procedure in younger patients. The
  shunts can be made out of silicone or
  polypropylene and differ in terms of size and
  implantation technique.

18
Glaucoma Market - Drivers

• Low Pharmaceutical Compliance The
  pharmaceuticals for the treatment of glaucoma can
  lead to a number of side effectsboth ocular and
  systemic. Further, many glaucoma medications
  require multiple administrations throughout the
  day, which are often forgotten by patients. These
  issues lead to low compliance, essentially
  rendering glaucoma treatment ineffective in these
  patients. Physicians will then treat immediately
  through surgical means, resulting in increased
  demand for medical devices

19
Glaucoma Market - Limiters

• Pharmaceutical Treatments The most common
  first-line treatment for glaucoma is
  pharmaceuticals. Often a glaucoma sufferer is on
  up to 4 medications on a daily basis before other
  alternatives are even considered.
• Fear of Surgery Many patients are still afraid
  and uninformed of the potential benefits of the
  surgical procedures over traditional
  pharmaceutical treatment. Most patients would
  rather be on several pharmaceuticals than undergo
  surgery.
• Lack of Focus from Ophthalmic Companies
  Ophthalmic companies have not focused on
  developing or marketing surgical glaucoma
  products. Had there been more products on the
  market from large companies with greater
  marketing budgets, there would be greater
  awareness of the procedure, thus increasing
  demand by both physicians and patients.

20
Market Opportunity Question

• Can SOLX raise capital to launch a new glaucoma
  treatment system aimed at replacing the current
  gold standard for glaucoma surgery?
• What is the potential adoption rate for the
  technology if it can gain FDA approval?
• How does this affect the competitive landscape of
  competition?
• What will the technology need to deliver in terms
  of safety, effectiveness and reimbursement?
• What are your thoughts regarding the opportunity?