Empowering Physicians with

Imaging at the Point of Care

January 2016

Forward Looking Statements

NASDAQ:NVDQ, TSX:NDQ
The statements and discussions contained in this presentation that are not historical facts
constitute forward-looking statements, which may be identified by the use of forward-looking
words, including but not limited to, believes, expects, may, intends, anticipates, plans,
estimates and analogous or similar expressions intended to identify forward-looking
statements. These forward-looking statements and estimates as to future performance,
estimates as to future valuations and other statements contained herein regarding matters that
are not historical facts, are only predictions, and that actual events or results may differ
materially. We cannot assure or guarantee you that any future results described in this
presentation will be achieved, and actual results could vary materially from those reflected in
such forward-looking statements due to numerous known and unknown risks and uncertainties,
including the Risk Factors described in our filings with the Ontario Securities Commission and
the U.S. Securities and Exchange Commission. Information contained in this presentation has
been compiled from sources believed to be credible and reliable. However, we cannot
guarantee such credibility and reliability. The forecasts and projections of events contained
herein are based upon subjective valuations, analyses and personal opinions. All forwardlooking statements are qualified in their entirety by this cautionary statement, and Novadaq
undertakes no obligation to revise or update this presentation to reflect events or
circumstances after the date hereof.
This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any
securities. Such an offer or solicitation, if made, will only be made pursuant to an offering
memorandum and definitive subscription documents.
NOVADAQ, SPY, PINPOINT and LUNA are registered trademarks of Novadaq Technologies
Inc. DermACELL is a registered trademark of LifeNet Health.

SPY Fluorescence Imaging

SPY Imaging Transforms Surgical Intervention and

Therapy Delivery in Complex High Risk Open Surgery
Breast Reconstruction

Colorectal Surgery

Assess tissue perfusion, segment

healthy from abnormal tissue

Assess tissue perfusion, guide

transection margins

Head and Neck Surgery

Colorectal Surgery
Vascular Surgery

SPY Elite System

Assess microvascular blood flow,
anastomotic patency and perfusion

Assess blood inflow and outflow

and tissue perfusion

SPY Imaging Transforms Surgical Intervention and Therapy

Delivery in Complex, High Risk Minimally Invasive Surgeries
Colorectal Surgery

Lap Cholecystectomy

Assess tissue perfusion,

healthy versus unhealthy tissue

Visualize critical anatomy, such

as bile and cystic ducts

Gynecological Cancer*

Bariatric Surgery

SLN

PINPOINT System
*Not yet cleared of approved by the U.S. FDA

Visualize lymph nodes*,

improve cancer staging

Visualize tissue perfusion

and critical anatomy

SPY Imaging Transforms Outpatient Assessment of Wounds

Limb Salvage

Visualize hyperemia for better

staging of wound disease

LUNA Score

15
5

LUNA System
Serial Functional Imaging and Analysis
6

Single Technology Platform Creates a Continuum of Care Ecosystem

NOVADAQ is the only company that can provide a comprehensive
fluorescence imaging solution to all hospital departments
NOVADAQ Surgery

Operating RoomOperating Room

Today
PINPOINT

NOVADAQ Diagnostics

Outpatient
Clinic
Outpatient
Clinic

Tomorrow
Next molecule

Minimally Invasive

Today

Primary Care
Care Physician
Physician
Primary

Tomorrow

LUNA

Laser Doppler

Wound Care

SPY Elite

Open
Firefly

Robotic

DermACELL PRS

DermACELL WH
7

SPY Imaging Proven Across Multiple Specialties

200,000
+

650+
Standalone Systems

175+

75

1700+
FireFly Systems

Documented
Applications

Peer Reviewed
Publications

SPY Technology
Procedures

SPY Hospitals

Includes SPY technology licenses to ISRG

Data as of Dec 2015
8

Top 50 Cancer Hospitals* Use SPY

University of Texas M.D. Anderson
Cancer Center
Houston, TX

Memorial Sloan-Kettering Cancer Center

New York, NY

Johns Hopkins Hospital

Baltimore, MD

Mayo Clinic
Rochester, MN

Dana-Farber/Brigham and Women's

Cancer Center
Boston, MA

University of Washington Medical Center

Seattle, WA

Massachusetts General Hospital

Boston, MA

UCSF Medical Center

San Francisco, CA

Cleveland Clinic
Cleveland, OH

Ronald Reagan UCLA Medical Center

Los Angeles, CA

Duke University Medical Center

Durham, NC

Stanford Hospital and Clinics

Palo Alto, CA

University of Michigan Hospitals and

Health Centers
Ann Arbor, MI

University of Chicago Medical Center

Chicago, IL

Hospital of the University of Pennsylvania

Philadelphia, PA

Barnes-Jewish Hospital/Washington
University
Saint Louis, MO

City of Hope
Duarte, CA

Moffitt Cancer Center

Tampa, FL

New York-Presbyterian University

Hospital of Columbia and Cornell
New York, NY

Ohio State University James Cancer

Hospital
Columbus, OH

Northwestern Memorial Hospital

Chicago, IL

University of Maryland Medical Center

Baltimore, MD

University of Minnesota Medical Center

Minneapolis, MN

Yale-New Haven Hospital

New Haven, CT

NYU Langone Medical Center

New York, NY

Vanderbilt University Medical Center

Nashville, TN

Roswell Park Cancer Institute

Buffalo, NY

University of Iowa Hospitals and Clinics

Iowa City, IA

University of Wisconsin Hospital and

Clinics
Madison, WI

UPMC-University of Pittsburgh Medical

Center
Pittsburgh, PA

Thomas Jefferson University Hospital

Philadelphia, PA

Cedars-Sinai Medical Center

Los Angeles, CA

Beth Israel Deaconess Medical Center

Boston, MA

University of Colorado Hospital

Aurora, CO

Shands at the University of Florida

Gainesville, FL

University Hospitals Case Medical Center

Cleveland, OH

Emory University Hospital

Atlanta, GA

Fox Chase Cancer Center

Philadelphia, PA

University of California, Davis Medical

Center
Sacramento, CA

Rush University Medical Center

Chicago, IL

Mount Sinai Medical Center NYU

New York, NY

Hackensack University Medical Center

Hackensack, NJ

Wake Forest Baptist Medical Center

Winston-Salem, NC

University of Kansas Hospital

Kansas City, KS

Magee-Womens Hospital of UPMC

Pittsburgh, PA

Mayo Clinic
Jacksonville, FL

UC San Diego Medical Center

San Diego, CA

University of Virginia Medical Center

Charlottesville, VA

USC Norris Cancer Hospital

Los Angeles, CA

University of California, Irvine Medical

Center
Orange, CA

*U.S. News and World Report Rankings 2015

Financial and Corporate Performance

Total Revenue

Recurring Revenue

$22.0

$6.5
$20.0 *

$20.0

$14.0

$13.0
$12.1

$12.0

$11.7

$11.2

$5.0

$4.9

Q4
2014

Q1
2015

$5.0

$15.1

$16.0

$5.7

$5.5

$17.0

Millions $

Millions $

$18.0

$6.1

$6.0

$4.3

$4.5
$4.0

$3.7
$3.4

$3.5

$10.3

$10.0

$3.0

$8.0

$2.5

$6.0

$2.0
Q1
2014

Q2
2014

Q3
2014

Q4
2014

Q1
2015

Q2
2015

Q3
2015

Q4
2015

Q1
2014

Q2
2014

Q3
2014

Q2
2015

Q3
2015

Q4
2015

* Preliminary Unaudited

Install Base

Gross Margin
$12.6

$13.0

630

$10.7

$11.0
$10.0

$9.1

$8.0
$6.7

$7.5

575

550
530

$6.9

591

559

570

$9.0
$7.8

581

590

Units

Millions $

611

610

$12.0

$7.0

647

650

$14.0

528

510

$6.0

490

$5.0

470
450

$4.0
Q1
2014

Q2
2014

Q3
2014

Q4
2014

Q1
2015

Q2
2015

Q3
2015

Q4
2015

Q1
2014

Q2
2014

Q3
2014

Q4
2014

Q1
2015

Q2
2015

Q3
2015

Q4
2015

10

Value Based Healthcare Defined

1.

Improving clinical outcomes that result in true, realizable economic benefit

E.g. reductions in anastomotic leaks in colorectal surgery

2.

Enabling new surgical procedures not possible without physiologic imaging

E.g. single stage and nipple sparing mastectomy and breast reconstruction

3.

Delivering more effective life saving surgeries

E.g. statistically reducing the probability of cancer reoccurrence and repeat
surgeries
..NOVADAQs value proposition

1. Improving Clinical Outcomes, Realizable Economic Benefit in

Colorectal Surgery
PILLAR II: 11-center U.S. prospective trial of perfusion assessment
during left-sided colectomy and LAR in 139 patients
1.4%

represents the anastomotic leak rate in resections

performed in the PILLAR II trial1

12.6%

of low anterior resections performed in the

BSLR study resulted in an anastomotic leak2

Use of PINPOINT led to a change in operative plan in 8% of procedures,

resulting in a 0% anastomotic leak rate in patients where a change was made1

1. Jafari et al. JACS. Submitted 2014

2. Senagore A, et al. Dis Colon Rectum. 2014 Mar;57(3):32430
12

2. Enabling New Surgical Procedures Not Possible Without

Physiologic Imaging

SPY Enables Single Stage Reconstruction

Eliminates a second surgery and multiple post-operative follow-ups

13

2. Enabling New Surgical Procedures Not Possible Without

Physiologic Imaging
Excellent Perfusion to Nipple Area

Poor Perfusion to Nipple Area

Nipple sparing mastectomy is overwhelmingly in demand because the technique

allows for a more aesthetically and emotionally pleasing outcome for patients
Images Courtesy of Geoffrey Gurtner, MD, Stanford, CA

14

1., 2. Improving Clinical Outcomes and Enabling New Surgical

Procedures
Breast Reconstruction 2011-2013

Without SPY

With SPY

Total

No. of Patients

590

352

942

Any Complications

100 (17%)

21 (6%)

121 (12%)

Skin Necrosis

32 (6%)

2 (1%)

34 (4%)

Nipple Sparing

28%

32%

60%

Single Stage Direct Implant

7%

23%

30%

Authors Conclusions:

The average cost of a necrotic event was $14,441.

Modeling these results demonstrate a potential avoidance of 59 episodes of skin necrosis
through the use of SPY.
At an average cost of $14,441 per necrotic event, use of SPY would result in a total cost
savings of $852,019 over a 5 year period.

The Clinical Efficacy and Financial Impact of Laser-assisted Indocyanine Green Angiography on Implant-based Breast
Reconstruction at a Large Academic Medical Center Abstract presented by Christian A. Harless, MD; Sue Visscher, PHD;
Steven R. Jacobson, MD, Mayo Clinic, Rochester, MN, at the Plastic Surgery Research Council Meeting, May 15, 2015
15

3. Delivering More Effective Lifesaving Surgeries

Sentinel Lymph Node (SLN) Identified in Gynecological Cancers
Technique

SLN identified

Bilateral SLNs Identified

Technetium Only

83%

19%

Blue Dye Only

79%

50%

Blue Dye + Technetium

87%

54%

PINPOINT Imaging Only

96%

88%

5-year survival in stage II- IV in ovarian cancer at best case is 70% and the worse
case is 17%. 85% of patients with these types of cancers are in stage II- IV.

Plante et al., Gyn Onc, 2015 (n=50)

Howe et al., Gyn Onc, 2015 (n=100)
16

Changing the Healthcare Delivery Paradigm- Medicare

Readmission Reduction Program
The Hospital Readmissions Reduction Program is part of the CMS effort to aggressively
move toward paying for high performance rather than paying for volumes of services
30-day
Readmission
Rates

Est. # of
Patients
Readmitted

Est.
Annual
Cost

Cholecystectomy

9.5%

53,065

$3.9B

Colorectal Resection

14.8%

23,184

$2.2B

Open, Heart Bypass Surgery

15.1%

26,200

$0.4B

Debridement of Wound

19.1%

416,000

$5.0B

Amputation of Lower Extremity

22.8%

26,400

$4.2B

Procedure

758 U.S. hospitals were penalized in 2015, 54% were teaching institutions
Medicare is expected to reduce spending by $364M
Hospital and physician performance data is made public and easily searchable
Weiss, et al., AHRQ Pub. No. 10 (11)- EHC009-2-EF. Agency for Healthcare Research and Quality, Rockville, MD 2013,
Centers for Disease Control, 2015, Modern Healthcare December 10 2015, www.CMS.gov

Guaranteed By SPY

When SPY is used in the first surgery and a

revision is still necessary, well pay for the tissue.

18

Opportunity > 2 Million Complex, High Risk

Procedures / Year in U.S.

Opportunity Associated with Complex, High

Risk Segment of Key Applications
Application

Pts. /Year (U.S.)

Surgery Type

Device

Breast Reconstruction

100,000

Open

SPY

Other Reconstruction

250,000

Open

SPY

Vascular

100,000

Open

SPY

50,000

Open

SPY

Maxillofacial / Head & Neck

100,000

Open

SPY

Gastrointestinal

200,000

Open or MIS

SPY / PINPOINT (50:50)

Lymphatic

400,000

Open or MIS

SPY / PINPOINT (25:75)

Gynecological Oncology

100,000

MIS

PINPOINT

Cholecystectomy

100,000

MIS

PINPOINT

Wound Healing

600,000

Outpatient

LUNA

Abdominal Wall

ASPS and SAGES Procedure Statistics, 2015

Medtech Insight Report, U.S. Surgical Volumes 2014-2020
20

Procedure Opportunity per System

70% Surgery, 30% Wound Healing

40%

30%

Open Surgery

30%

Wound Healing

Additional commercial relationships: LifeNet Health, Arthrex, ISRG

MIS Surgery

21

Growth Drivers
1.

Expanded, Focused Sales Channels

2.

International Expansion

3.

New Product Introductions 2016

4.

Outcomes Based Level I Clinical Studies

(FILM Trial)
(PILLAR III)

5.

New Imaging Molecules

1. Expanded, Focused Sales Channels

70%

60%

50%

% Opportunity 40%
30%

20%

10%

Surgery

Wound Care

23

2. International Expansion

Key Markets

Europe: United Kingdom, Germany and the Nordics

Asia: China, Japan, Korea

Sales Channels

Regional distributors in place

NOVADAQ direct management and subsidiary companies in place in
Europe and in Asia

24

3. New Product Introductions 2016

Color Segmented Fluorescence Imaging

5.0mm PINPOINT Endoscopes

15
5

Handheld SPY Imaging

LUNA Score Functional Imaging and Analysis

25

4. Outcomes Based Level I Clinical Studies

FILM Trial

PILLAR III

Obtain FDA Indication for SLN Mapping

Obtain Outcomes-Based FDA Label

A Prospective, Open Label, Multicenter Study of

PINPOINT in Gynecological Oncology (n=150)

Randomized multicenter trial of PINPOINT in

Colorectal Surgery (n=500-900)

6-8 U.S. and Canadian Centers

25 U.S. centers

Recruitment on-going

Recruitment on-going

Results expected Q4-2016

Interim results report expected at SAGES 2017

Images Courtesy of Nadeem Abu-Rustum, M.D., NY,NY and Michael Stamos, M.D. Irvine, CA

26

5. New Imaging Molecules

Cancerous tumor fluorescing, the normal tissue is not

Image courtesy of Eben L. Rosenthal, MD, Stanford, CA

27

Summary of Growth Drivers

Drivers

2016

1. Expanded, Focused
Sales Channels

Add 40 Sales Pros

2. International Expansion

NVDQ Direct Team

3. New Product Introductions

2017

2018

Hardware/Software

4. Level I Clinical Studies

FILM

Clinical Trial and Results

PILLAR III

Clinical Trial and Results

5. New Imaging Molecules

Submission to FDA

Molecule Identified, Clinical Trial Phases I and II

Submission to FDA

Phase III & NDA or PMA Submission

28