CBMX investor presentation

1. CombiMatrix Corporation (NASDAQ:CBMX)
Business Update – January 2014

2. Safe
Harbor
This
presenta,on
and
our
discussion
contains
forward-­‐looking
statements
within
the
meaning
of
the
"safe
harbor"
provisions
of
the
Private
Securi,es
Li,ga,on
Reform
Act
of
1995.
These
forward-­‐looking
statements
are
based
on
the
Company’s
current
expecta,ons,
es,mates
and
projec,ons
about
the
Company,
management’s
beliefs,
and
certain
assump,ons
made
by
the
Company,
and
events
beyond
the
Company’s
control,
all
of
which
are
subject
to
change.
Forward-­‐looking
statements
can
oKen
be
iden,fied
by
words
such
as
“an,cipates,”
“drive,”
“focus,”
“expects,”
“intends,”
“plans,”
“predicts,”
“believes,”
“seeks,”
“es,mates,”
“may,”
“will,”
“should,”
“would,”
“could,”
“likely,”
“poten,al,”
“con,nue,”
“ongoing,”
similar
expressions,
varia,ons
or
nega,ves
of
these
words.
These
forward-­‐looking
statements
are
not
guarantees
of
future
results,
and
they
are
subjected
to
risks,
uncertain,es
and
assump,ons
that
could
cause
actual
results
to
differ
materially
and
adversely
from
those
expressed
in
any
forward-­‐looking
statement.
The
risks
and
uncertain,es
referred
to
above
include,
but
are
not
limited
to,
market
acceptance
of
the
Company’s
test
offerings,
the
Company’s
ability
to
grow
and
expand
its
business,
success
in
launching
new
strategic
partnerships
and
alliances,
the
Company’s
ability
to
raise
addi,onal
capital
on
a
,mely
basis,
or
at
all,
or
to
improve
its
opera,ng
results
in
the
near
future;
and
such
other
factors
described
in
the
Company’s
filings
with
the
Securi,es
and
Exchange
Commission.
The
forward-­‐looking
statements
in
this
presenta,on
speak
only
as
of
the
date
they
are
made.
The
Company
undertakes
no
obliga,on
to
revise
or
update
any
forward-­‐looking
statement
for
any
reason.
2

3. CombiMatrix
–
A
Healthcare
Services
Company
Strategy
Technology
Management
Team
Provide
data
and
clinical
support
to
clinicians
and
pathologists
in
the
areas
of
prenatal
gene,cs,
pediatric
developmental
disorders
and
oncology
Microarray
plaTorms,
karyotyping,
and
FISH
for
elucida,ng
gene,c
anomalies
in
the
cytogene,c
arena
Leadership
has
extensive
experience
in
diagnos,c
industry
• Strategic
refocus
in
2012
to
prenatal
and
pediatric
segments
• A
leader
in
microarray
tes,ng
with
over
25,000
tests
performed
• New
commercial
and
medical
leadership
in
2012
• Building
sales
force
and
strategic
partnerships
to
drive
volume
• Provides
informa,on
on
specific
disease
and
clinical
manifesta,ons
for
improved
pa,ent
care
• Headquarters
in
Irvine,
CA
• LTM
revenue:
$5.9M
(as
of
6/31/13)
Comprehensive
Service
Solu;ons
for
Clinicians
MFM*
Clinics
•
Ob-­‐Gyn
Clinics
•
Oncologists
•
Payer
Systems
•
Reference
Labs
!
!
!
Apply
cuRng
edge
technologies
to
g
enerate
gene,c
data
Timely
transmission
of
reports
in
an
easy-­‐to-­‐read
format
Provide
best-­‐in-­‐class
post-­‐test
support
to
health
care
providers
*
MFM
stands
for
Maternal
Fetal
Medicine
3

4. Management
Team
Mark
McDonough
–
President
&
CEO
! Served
as
VP
of
U.S.
Sales,
Customer
Service
and
Training
at
Pathwork
Diagnos,cs
! Served
various
roles
including
District
and
Regional
Manager,
and
VP,
Sales
of
U.S.
LABS,
Inc.,
which
was
acquired
by
Laboratory
Corp.
of
America
Holdings
(NYSE:LH)
for
$155.0
million.
He
earned
the
dis,nc,on
of
being
named
District
Manager
of
the
Year
and
Regional
Manager
of
the
Year
in
consecu,ve
years
prior
to
his
promo,on
to
Vice
President.
! Served
in
various
Management
and
Specialty
Sales
posi,ons
at
Ventana
Medical
Systems,
a
healthcare
equipment
company
that
was
acquired
by
Roche
Holding
AG
(SWX:ROG)
for
$3.4
billion;
and
EMC
Corpora,on-­‐Hopkinton,
MA.
! B.S.
in
Finance
from
Miami
University
(Ohio)
Rick
HockeL,
M.D.
–
Chief
Medical
Officer
! Served
as
Vice
President
and
Chief
Medical
Officer
at
Affymetrix
! Served
as
Director
of
Genomic
Medicine
at
Eli
Lilly
! M.D.,
University
of
Minnesota
ScoL
Burell
–
Chief
Financial
Officer
! Has
held
various
roles
at
the
Company
including
Secretary,
Treasurer,
Vice
President
of
Finance,
and
Controller
! Served
as
Controller
for
Network
Commerce,
Inc.
! Served
at
Arthur
Andersen's
Audit
and
Business
Advisory
prac,ce
for
9
years.
! B.S.
in
Accoun,ng
and
Finance
from
Central
Washington
University.
4

5. Recent
Highlights
Summary
of
Recent
News
Events
Date
Milestones
• ACOG
recommends
Microarray
analysis
as
first-­‐line
gene,c
tes,ng
over
Karyotyping
• Launch
of
Sequenom
/
CombiMatrix
partnership
to
market
Prenatal
microarray
tes,ng.
• 3rd
Quarter
2013
results:
2013:
Q4
− Quarterly
growth
in
prenatal
microarray
tes4ng
volumes
and
revenues
of
140%
&
129%
for
Q3-­‐2013
over
Q3-­‐2012
− Quarterly
revenue
of
$1.5
million,
up
16%
from
Q3-­‐2012
2013:
Q3
• 2nd
Quarter
2013
results:
− Quarterly
growth
in
prenatal
microarray
tes4ng
volumes
and
revenues
of
156%
&
152%
for
Q2-­‐2013
over
Q2-­‐2012
− Quarterly
revenue
of
$1.5
million,
up
15%
from
Q2-­‐2012
2013:
Q2
• 1st
Quarter
2013
results:
₋ Quarterly
growth
in
prenatal
tes4ng
volumes
and
revenues
of
124%
&
158%
for
Q1-­‐2013
over
Q1-­‐2012
₋ Quarterly
revenue
of
$1.6
million,
up
9%
from
Q4-­‐2012.
2013:
Q1
• Fiscal
Year
2012
results:
− Revenue
increased
15%
to
$5.4
million
over
FY
2011
− Prenatal
tes4ng
revenue
increased
by
more
than
101%
vs.
FY
2011
• Mark
McDonough
appointed
as
new
CEO
2012:
Q4
2012:
Q1
–
Q3
5
• Two
ar,cles
published
in
the
New
England
Journal
of
Medicine
document
favorable
clinical
u,lity
from
using
microarrays
over
tradi,onal
tes,ng
in
both
the
prenatal
and
miscarriage
management
markets.
• Mark
McDonough
joins
CombiMatrix
as
Chief
Commercial
Officer
to
lead
and
build
sales
team
to
grow
its
prenatal
and
pediatric
businesses.
• Richard
Hockeu,
Jr.,
M.D.
joins
CombiMatrix
as
Chief
Medical
Officer,
providing
cri,cal
microarray
exper,se
and
leadership
to
the
Company’s
leadership
team.

6. Market
Drivers
Professional
Society
Practice
Guidelines
Peer-to-Peer
Influence
High Profile
Publications
Increased
U;liza;on
by
Key
Customers
MFM
Clinics
•
Ob-­‐Gyn
Clinics
•
Partner
Labs
6

7. Poten;al
Prenatal
Market
Opportunity
236,600
Pa;ents
Prenatal (42%):
98,200 patients
Miscarriage (58%):
138,400 patients
7

8. Prenatal
Diagnos;c
Tes;ng
Customers
Medical
Benefits
Maternal
Fetal
Medicine
specialists
(MFM)
!
!
OB/GYNs
!
!
Gene,c
Counselors
!
!
Provides
high
resolu,on
diagnosis
of
cytogene,c
disorders
Allows
parents
to
make
informed
decisions
on
pregnancies
Recently
published
NICHD
study
supports
microarrays
over
karyotyping
for
prenatal
tes,ng
Compe;;ve
Advantages
!
!
!
!
!
8
A
pioneer
of
direct
microarray
analysis
of
amnio,c
fluid
and
CVS.
Rapid
7-­‐day
turn
around
,me
All
tests
performed
in
one
loca,on
CombiCounsel™
Gene,c
Counseling
Program
Unique
counseling
and
physician
summary
reports

9. Jim
Goldberg
–
MFM
Key
Opinion
Leader
“The
NIHCD
study
clearly
demonstrated
the
superiority
of
microarrays
over
tradi,onal
karyotyping”,
said
Jim
Goldberg,
MD
of
San
Francisco
Perinatal
Associates.
“Due
to
the
strength
of
the
data
in
that
study,
we
now
counsel
pa,ents
on
the
availability
of
microarray
tes,ng
and
offer
this
op,on
to
them
as
a
first
,er
test.”
Dr.
Goldberg
reiterated
“ The
clinical
u,lity
of
microarrays
are
their
ability
to
detect
chromosomal
copy
number
abnormali,es
that
are
missed
by
tradi,onal
karyotyping.
The
accuracy
of
microarray,
coupled
with
the
test’s
fast
turn-­‐around-­‐,me,
helps
reduce
pa,ents’
anxiety
by
providing
comprehensive
results
as
we
move
toward
this
new
standard
of
care.”
9

10. Comprehensive
Prenatal
Tes;ng
Solu;on
Microarray
is
Complementary
to
NIPS
Chromosomal
Microarray
• ACOG
recommends
all
posi,ve
NIPS
screens
receive
invasive
tes,ng
• Microarray
is
proven
to
be
test
of
choice
aKer
invasive
procedure
(NIHCD
study,
Dec
2012
NEJM)
10
Non-­‐Invasive
Prenatal
Screening
(NIPS)
• Screening
test
for
aneuploidies
of
chromosomes
13,
18,
21,
X
&
Y
• Expect
over
375,000
NIPS
tests
to
be
run
in
2013;
run
rate
is
growing
at
480,000
• Reflex
to
invasive
tes,ng
an,cipated
to
be
~5%

11. Executed
Payor
Contracts
Date
Payor
Group
Covered
Lives
2013:
Q4
• FedMed
Na4onal
Provider
Network
• America’s
Choice
Provider
Network
• Blue
Cross
and
Blue
Shield
of
Kansas
City
• Three
Rivers
Provider
Network
• 40
million
• 14
million
• 800,000
• 15
million
2013:
Q3
• Blue
Shield
of
California
• 3
million
• Mul4plan
• 57
million
2012
11

12. Sequenom
Partnership
–
Press
Release
! We have established several key partnerships in the past year, most notably with Sequenom, Inc., where we jointly
announced in August 2013, that we entered into a collaboration agreement to market and promote chromosomal
microarray analysis (or “CMA”) to broaden and confirm the results of NIPS for physicians and their patients. Under
this agreement, our two companies will collaboratively use our respective marketing channels and sales forces to
promote the use of NIPS and CMA and work together to provide technical training to physicians and counseling,
education and support services to expectant parents. Our two companies plan to provide, when clinically
appropriate, a comprehensive test results report for physicians and parents.
! “The collaboration with Sequenom is a significant validation of the rapidly expanding acceptance of CMA as a
standard of prenatal care as well as an endorsement of the services CombiMatrix provides,” noted CombiMatrix
CEO Mark McDonough.
! “We are focused on establishing CombiMatrix as the premier specialty laboratory for chromosomal microarray
analysis for prenatal testing,” McDonough said. “The fact that Sequenom has joined forces with us and selected us
for this collaborative testing relationship demonstrates that we have made great strides in reaching our goal.”
12

13. Miscarriage
and
S;llbirth
Tes;ng
Customers
!
Maternal
Fetal
Medicine
specialists
(MFM)
!
OB/GYNs
!
Pathologists
!
Reproduc,ve
Endocrinologists
Medical
Benefits
!
!
!
Microarray
provides
high
resolu,on
diagnosis
of
gene,c
disorders,
which
account
for
50%
of
miscarriages
occurring
prior
to
20
weeks
gesta,on.
Avoid
costly
evalua,ons
of
mother,
if
chromosomal
e,ology
uncovered,
saving
$500
-­‐
$1,200
per
pa,ent*.
Allows
parents
to
make
informed
decisions
on
future
pregnancies
by
enabling
the
refinement
of
risk
for
addi,onal
pregnancy
loss
Compe;;ve
Advantages
!
!
!
!
!
!
Mul,ple
plaTorms,
to
enable
analysis
of
fresh
and
FFPE
POC
samples
Rapid
turn
around
,me
(7-­‐10
days).
All
tests
performed
in
1
loca,on
High
success
rates:
95%
from
fresh
POC
and
93%
FFPE
POC
Unique
extended
counseling
and
physician
summary
reports
Ready
access
to
medical
staff,
to
answer
technical
and
clinical
inquiries.
*Foyouzi,
et
al.
Fer,l
Steril
2012;98:151-­‐155
Bernardi,
et
al.
Fer,l
Steril
2012;98:156-­‐161
13

14. Growing
Prenatal
Microarray
Services
Business
Volumes
$1,000
273%
Volume
Increase
546
500
387
300
213
200
145
168
225
271%
Revenue
Increase
$836
$836
$847
$800
461
400
#
of
Tests
541
$
in
Thousands
600
Revenues
($
in
‘000s)
$660
$600
$400
158
$313
$331
$370
$228
$232
$200
100
0
Q3'11
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Refocused
commercial
strategy
$0
Q3'11
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Q2'13
Q3'13
Refocused
commercial
strategy
Management’s
strategic
shiW
in
mid-­‐2012
to
focus
company
resources
on
its
prenatal
services
has
resulted
in
record
tes4ng
volumes
and
rapid
revenue
growth
14

15. Financial
Summary
Summary
Income
Statement
(in
thousands)
Q3
2013
Q3
2012
FY
2012
FY
2011
$1,502
$1,295
$5,350
$4,658
16.0%
4.6%
14.9%
31.1%
$847
$370
$1,675
$892
128.9%
62.3%
87.8%
117.6%
($1,226)
($1,420)
($5,940)
($6,542)
Q3
2013
Q3
2012
FY
2012
FY
2011
Cash
&
Equivalents
$4,007
$1,709
$2,372
$6,385
Total
Assets
$6,971
$4,103
$5,180
$9,448
Total
Warrants
&
Preferred
Stock
$1,090
-­‐
$4,598
-­‐
Total
Liabili,es
$2,579
$1,362
$5,905
$1,298
Stockholders’
Equity
(Deficit)
$4,392
$2,741
$(1,119)
$8,150
Total
Revenue
YOY
Growth
Prenatal
Microarray
Revenue
YOY
Growth
Cash
Used
in
Opera,ons
Summary
Balance
Sheet
(in
thousands)
15

16. Near-­‐Term
Catalysts
for
Growth
&
Profitability
Fast
Growing
Molecular
Diagnos;cs
Market
! New
tes,ng
algorithms
driven
by
molecular
tes,ng
! Data
published
suppor,ng
microarray
technology
as
superior
(NIHCD
study
in
NEJM)
Consolida;ng
Market
Creates
Opportuni;es
in
the
Industry
! Disrup,on
of
exis,ng
client
rela,onships
! Mul,ple
recent
transac,ons
Revenue
Cycle
Management
! Internalized
Billing
/
Collec,on
solu,ons,
thus
driving
faster
revenue
capture
Three
Pronged
Commercial
Strategy
to
op;mize
Prenatal
Market
Growth
! Direct
sales
force
! Industry
partners-­‐
Plan
to
leverage
industry
partners
to
lower
cost
of
sales,
drive
adop,on,
and
complete
the
offering
! Regional
and
na,onal
pathology
lab
partners-­‐
Plan
to
leverage
them
to
lower
cost
of
sales,
drive
adop,on
quickly
16

17. Plans
to
Deploy
Recent
Capital
Investment
! Sales
force
expansion
! Test
menu
and
new
market
expansion
! Managed
care
team
expansion
! Partnership
opportuni,es
! Interna,onal
distribu,on
17

18. Summary
! CombiMatrix
provides
valuable
molecular
diagnos,c
solu,ons
that
include
advanced
DNA-­‐based
assays,
and
comprehensive
clinical
support
and
customer
service
for
the
highest
quality
of
care
–
specializing
in
miscarriage
management
on
POCs,
prenatal,
and
pediatric
healthcare
! Execu,ng
on
the
expanding
Prenatal
tes,ng
market
that
has
followed
the
publishing
of
the
recent
NICHD-­‐sponsored
study
endorsing
microarray
tes,ng
! Op,mizing
and
expanding
the
Sales
organiza,on
! Implemented
cost
control
measures
and
efficiency
improvements
! Experienced
management
team
! Mul,-­‐specialty
DNA-­‐based
genomic
tes,ng
services
addressing
large
and
growing
prenatal,
pediatric
and
oncology
markets
18

19.
CombiMatrix
Corpora;on
(NASDAQ:CBMX)
Mark
McDonough
CEO
&
President
CombiMatrix
300
Goddard,
Suite
100
Irvine,
CA
92618
www.combimatrix.com
19