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| 8-K - 8-K - BIOLASE, INC | d658407d8k.htm |
 BIOLASE,
Inc. Federico Pignatelli, Chairman and CEO
Alexander K. Arrow, President and COO
NASDAQ: BIOL
www.biolase.com
Investor Update
January 2014
PAGE 1
Exhibit 99.1 |
 Safe Harbor
Statement PAGE 2
This presentation may contain forward-looking statements that are based on our
current expectations, estimates and projections about our industry as well as
management’s beliefs and assumptions. Words such as “anticipates,”
“expects,” “intends,” “plans,”
“believes,” “seeks,” “estimates,” “may,” “will,” and variations of these words or similar
expressions are intended to identify forward-looking statements. These statements
include projections about our future earnings and margins and speak only as of
the date hereof. Such statements are based upon the information available to us
now and are subject to change. We will not necessarily inform you of such changes. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict. Therefore our actual results could
differ materially and adversely from those expressed in any forward-looking
statements as a result of various factors. The important factors which could cause
actual results to differ materially from those in the forward-looking
statements include, among others, a downturn or leveling off of demand for our products
due to the availability and pricing of competing products and technologies, adverse
international market or political conditions, a domestic economic recession, the
volume and pricing of product sales, our ability to control costs, intellectual
property disputes, the effects of natural disasters and other events beyond our control and other factors
including those detailed in BIOLASE’s filings with the Securities and Exchange
Commission including its prior filings on Form 10-K and 10-Q. |
 DIAGNOSIS:
The BEST 2D &
3D Imaging.
RESTORATION:
The BEST digital
impressions.
DESIGN:
The BEST
design tools.
MILLING:
The BEST chair-
side milling.
TREATMENT:
The BEST laser
technology.
THE TOTAL
TECHNOLOGY
SOLUTION FROM
BIOLASE
PAGE 3 |
 With WaterLase,
BIOLASE has: •
Invented,
•
Developed,
•
Patented, and
•
Been granted FDA clearance
PAGE 4
for a fundamentally different kind
of revolutionary tissue-cutting tool. |
 •
Water molecules in tissue absorb laser energy
from WaterLase and vaporize, resulting in an
atraumatic ablation of the tissue.
–
Very little trauma or bleeding,
–
No heat or vibration, and
–
Little or no pain
–
Significantly reduces cross contamination
WaterLase All-Tissue Lasers
PAGE 5
•
Extensive patent protection
•
Multiple other medical applications
•
A medical breakthrough that has been used
already on approximately 8 million people |
 Patient
Testimony PAGE 6 |
 How It Works:
WaterLase High Speed Cutting PAGE 7 |
 WaterLase
Atraumatic
Pediatric
Tooth
Extraction
The aiming beam
does not cut the
tissue nor
generate heat.
The tissue is cut
biologically, with
little or no pain,
when the laser
energizes water
at the molecular
level.
PAGE 8 |
 PAGE
9 |
 Other Hard Tissue
Laser Systems compared to the Waterlase iPlus Waterlase iPlus
Fiber Delivery
Fotona Lightwalker
Articulated Arm
Er:YSGG,
Latest Technology
Er:YAG,
25-year old Technology
PAGE 10
An articulated arm is
awkward to use
Fiber delivery is
ergonomic and natural
for the dentist to use |
 Soft-tissue medical lasers:
The EPIC-S (surgical & ENT) and
EPIC-V (veterinary).
Soft-tissue
dental
diode
lasers:
The
EPIC
10
Soft Tissue laser, which in June 2013 won the
MDE gold medal in medical device design, and
the iLase, a portable diode laser with no foot
pedal, power cord, or external controls.
All-tissue dental lasers:
The WaterLase iPlus, our
flagship all-tissue laser, and the MDX and MD Turbo.
Laser Products
PAGE 11 |
 Digital
Radiography and CAD/CAM Products NewTom 3D
CBCT cone
beam:
•
Medical grade
imaging
technology.
•
Less cost, less
radiation
exposure.
•
Exclusive U.S.
& Canada
distribution
agreement
through Feb
2015.
PAGE 12
TRIOS CAD/CAM
intra-oral
scanner: •
Digital
impression
taking.
•
Hand held
scanner,
operator's
control cart,
and software.
•
North American
distribution
agreement
through Aug
2017. |
 The Galaxy
BioMill completes the CAD/CAM
segment of BIOLASE’s
Total Technology Solution.
GALAXY BioMill System
PAGE 13 |
 •
A $500 million market in 2013, growing at approximately 20%
•
Historical CAD/CAM Systems for the Dental Office are Obsolete compared
with Laptop Scanners and Tabletop Milling Modules
Chair-Side Milling Market
PAGE 14 |
 GALAXY BioMill
System •
Developed in conjunction with imes-
icore and 3Shape.
•
Open architecture.
•
Introduced at the Greater NY Dental
Meeting in December 2013.
•
Expected to be ready to ship by end
of Q1 or beginning of Q2 2014.
•
High quality at two-thirds the price of
the industry leader in a $500M
annual market.
PAGE 15 |
 Feature
Comparison: GALAXY BioMill System PAGE 16 |
 Why Should
Dentists Buy a WaterLase iPlus? Monthly Finance Payment
New Monthly Revenue Generated
Approx. $1,300
$5,000 –
$15,000
A dentists’
return on investment
can be 500% to 1,500%
Return on Investment
PAGE 17
•
WaterLase
enables
dentists
to
perform
procedures
that
they
would
otherwise
refer
to
specialists,
for example:
•
Gingivectomy = $160-$200
•
Perio Treatment = $375-$1,000
•
Hard-tissue Crown Lengthening = $500-$700
•
Herpetic
or
Aphthous
Ulcer
=
$300-$500
•
Frenectomy = $400-$600
•
These procedures are easy to learn and training is included in the cost.
•
With no anesthesia, the WaterLase also increases efficiency and allows the dentist to work in
multiple quadrants in a single visit., equating to $250-$750 per day in additional
revenue. |
 •
WaterLase
dentists
offer
their
patients
more
procedures
and
they
have
a
higher
rate
of
acceptance
from
their
patients.
This
is
because
patients are more likely to accept treatment when it
does not hurt them.
•
Case
Study:
Doctor
David
Peck
(Springfield,
MA)
–
Practice running at approximately $1M per year in
2010; purchased a WaterLase iPlus in January 2011.
–
Grew practice to approximately $1.7M in 2011; for
example, Dr. Peck performed ~75 frenectomies in 2011
which generated about $35,000 in a few hours of work.
–
Purchased second WaterLase iPlus in Sept 2012; grew
practice to approximately $2.0M in 2012.
Value Proposition of WaterLase
PAGE 18 |
 PAGE 19
|
 Telephone versus
Smart Phone PAGE 20
•
Phone calls
•
Phone calls
•
Texting
•
Web browsing
•
Navigation
•
Photos and videos
•
Scheduling
Telephone
Smart Phone |
 Conventional
Dental Drill versus WaterLase PAGE 21
Dental Drill
Waterlase
•
Cutting (hard tissue)
•
Cutting (hard and soft tissue)
•
Polishing
•
Surface modification
•
Coagulation
•
Disinfection
•
Bio
stimulation
•
Desensitization
- |
 Scalpel versus
the EPIC diode PAGE 22
Scalpel
Epic Laser
•
Cutting
•
Cutting
•
Teeth whitening
•
Coagulation
•
Disinfection
•
Bio
stimulation
•
Desensitization
- |
 Annual Net
Revenue and Stock Price $20
$15
$10
$5
Projected revenue guidance of
$57-$59 million, last updated
November 12, 2013.
PAGE 23
$
-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 |
 Quarterly
Net
Revenue
and
Influencers
in
Turnaround
Launched
Cefla’s NewTom
Cone Beam
Imaging products
Introduced iLase
hand-held soft-
tissue diode
laser
Launched
WaterLase
®
iPlus™
all-tissue laser
Launched 3Shape’s
TRIOS™
intra-oral
scanner
CE Mark & FDA
clearance for EPIC 10
New management
with F. Pignatelli as
Chairman and CEO
ends exclusive
global distribution
Introduced
WaterLase
®
MDX™
all-
tissue lasers
PAGE 24
$4.4
$5.9
$6.2
$9.7
$10.6
$12.1
$13.1
$13.2
$12.3
$12.2
$13.8
$19.1
$14.6
$14.2
$12.3
$0.0
$5.0
$10.0
$15.0
$20.0
Q1 10
Q2 '10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Q3 12
Q4 12
Q1 13
Q2 13
Q3 13 |
 Filling our Open
Territories 3Q 2013
1Q 2014
PAGE 25 |
 Reasons for
Optimism in 2014 •
We believe the low point of our restructuring cycle is behind us
•
New sales leadership and open territories are filled
•
Imaging specialist force means that our reps will no longer be distracted
from selling Waterlase
•
Galaxy
BioMill
System;
entry
into
new
$500
million
yearly
market
growing
at
20-25%
•
Cone Beam and CAD/CAM positioned for high growth in 2014
•
Now present in the three most exciting fields of high-tech dentistry:
–
Lasers
–
High-End Imaging
–
Chairside Milling
PAGE 26 |
 •
160,000
dentists
in
US
&
Canada.
1
•
Approximately 1.5 M dentists
–
rapid
growth
in
emerging
economies.
2
•
Current market penetration.
–
approx.
3%-5%
of
dental
practices
in
US.
–
approx. 1% worldwide.
•
Each incremental 1% market penetration is $600M revenue.
•
Dental laser market opportunity may > $50B in 20 years.
BIOLASE’s Market Opportunity
Est. total global market
BIOLASE systems sold worldwide 1998-present
1
American Dental Association.
2
World Federation of Dentistry.
PAGE 27
1,500,000
24,000+ |
 Dominant Market
Position •
WW Hard-tissue Dental Laser Market
•
WW Total Dental Laser
Market
80%
45%
BIOLASE Market Share
PAGE 28 |
 Otolaryngology
(ENT) opportunity •
9,000 otolaryngologists in the U.S.
•
700,000 nasal turbinate reductions per
year
•
30% of them need revisions
•
600,000 sinuloplasties per year
•
The EPIC-S is the most precise, ergonomic,
and newest laser available for
otolaryngologists
•
Launched in 4Q 2013
PAGE 29 |
 Veterinary
opportunity •
52,000 veterinarians in the U.S.
•
The EPIC-V is a versatile tool for
veterinary dental, dermatological, and
surgical procedures on virtually every
mammalian and bird species
•
In use by KOL veterinarians
•
Launched in 3Q 2013
PAGE 30 |
 WaterLase
Technology Substantially Reduces the Risk of Cross Contamination and
Contagion Burs
and
Endo
Files:
WaterLase
Tips:
•Complex and rugged bur surface
difficult to sterilize. •Smooth tip surface does not harbor debris or
bacteria like abrasive surface of burs or files.
•YSGG
laser
energy
is
bacteriacidal.
3
•Disposable
tips
work
without
the
need
to
contact
tissue.
Also eliminates accidental sticks with contaminated burs.
•15%
of
“sterilized”
burs
and
up
to
76%
of
“sterilized”
endodontic
files
carry
pathogenic
micro-organisms.
1,
2
•Autoclaving fails one out of
every seven times to decontaminate
burs.
1
PAGE 31
1. Dental Burs and Endodontic Files: Are Routine Sterilization Procedures Effective?: Archie
Morrison, DDS, MS, FRCD(C); Susan Conrod, DDS JCDA • www.cda-adc.ca/jcda • February 2009, Vol. 75, No. 1. 2. Contaminated dental instruments: Smith
A, Dickson M, Aitken J, Bagg J.J Hosp Infect. 2002 Jul;51(3):233-5. 3. The
antimicrobial efficacy of the erbium, chromium:yttrium-scandium-gallium-garnet laser with radial emitting tips on root canal dentin walls infected with Enterococcus faecalis:
Wanda Gordon, DMD, Vahid A. Atabakhsh, DDS, Fernando Meza, DMD, Aaron Doms, DDS, Roni Nissan,
DMD, Ioana Rizoiu, MS and Roy H. Stevens, DDS, MS JADA 2007; 138(7): 992-1002 |
 Changing
Attitudes Toward Cross-Contamination •
Cross-Contamination
beginning to appear
in mainstream
dental ads to
dentists
•
Expected that this
will soon begin
targeted to patients
as well
Page 32 |
 •
Over 310 patents issued & pending.
•
70% are related to WaterLase technology & medical lasers.
Extensive Patent Portfolio
Issued &
Active
Pending
Total
U.S.
80
45
125
International
80
105
185
Total
160
150
310
PAGE 33 |
 •
Sustained, consistent top line growth
•
Non-GAAP profitability, GAAP profitability, becoming cash flow positive
•
Launching 1-2 major new products per year
•
Entering one new non-dental market per year
•
Alleviating working capital constraints that have been hurting our
operating margins and our progress
•
Return to our reputation as a product-driven company
Corporate Goals
PAGE 34 |
 BIOLASE Corporate Headquarters in Irvine, California
•
Sales offices in Floss (Germany), Madrid (Spain),
Shanghai (China), and Mumbai (India); expansion
planned in Dubai (UAE), and Rio de Janero (Brazil).
•
Floss also has service and manufacturing capabilities.
•
Training facilities through the United States with the
main one at corporate HQ in Irvine.
BIOLASE Europe in Floss, Germany
•
57,000 sq. ft. facility in Irvine, California, includes
manufacturing and development facilities.
•
Can accommodate growth to $250 million.
•
Over 225 employees worldwide.
BIOLASE Facilities & Employees
PAGE 35 |
 A Growth Story
with Proof-of-Concept
PAGE 36
•
The “big story” potential of pipeline products in at least six new markets (orthopedics,
ophthalmology, ENT surgery, podiatry, pain therapy, and veterinary surgery) •
The stability and risk-reduction of an established growing business in its first
market: dentistry
•
With BIOLASE, you get both advantages in one company: –
(1) potential upside from a deep pipeline, and –
(2) an established growth business – at a very low multiple of revenues |
 •
Federico Pignatelli, Chairman
•
Alexander Arrow, MD
•
Samuel Low, DDS
•
Frederic Moll, MD
•
Norman Nemoy, MD
•
Jim Talevich
Management and Board of Directors
PAGE 37
Management
Board of Directors
•
Federico Pignatelli, CEO
Salary $1, ownership position 5.5%
•
Alexander Arrow, President & COO
Ownership position: 1.5%
•
Frederick Furry, CFO
Ownership position: 0.7%
•
Dmitri Boutoussov, VP R&D
•
Bill Brown, VP Bus Dev & Intl. Sales
•
Brian Jaffe, VP NA Sales & Marketing
•
Colleen Boswell, VP RA/QA
–
–
– |