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Page 1: Safe Harbor Statementcontent.stockpr.com/wafergen/media/64a94d19155b7f986cbecb443… · Factors" contained in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports
Page 2: Safe Harbor Statementcontent.stockpr.com/wafergen/media/64a94d19155b7f986cbecb443… · Factors" contained in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports

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Safe Harbor Statement This presentation contains “forward-looking statements” within the meaning of applicable securities laws, including without limitation financial projections and statements regarding WaferGen’s ability to exploit commercialization opportunities. The statements and discussions contained in this presentation that are not historical facts constitute forward-looking statements, which can be identified by the use of forward-looking words such as "expects," "anticipates," "plans," "estimates" and analogous or similar expressions intended to identify forward-looking statements. Although the forward-looking statements reflect our good faith judgment, based on currently available information, they involve known and unknown risks, uncertainties and other factors that may cause actual results, or achievements to be materially different from any future results or achievements expressed or implied by these forward-looking statements. The forward-looking statements, estimates and projections herein are inherently uncertain and there can be no assurance that the projected results will be realized or that actual results will not be significantly lower than projected. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the "Risk Factors" contained in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other SEC filings.

In this document, we refer to information regarding potential markets for products and other industry data. We believe that all such information has been obtained from reliable sources that are customarily relied upon by companies in our industry. However, we have not independently verified any such information.

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Financial Snapshot

Exchange / Symbol / Stock Price(1) NASDAQ / WGBS / $4.53

Market Cap(1) $28.0 million

Shares Outstanding(1) 5,653,283

Warrants, Options and RSU’s(1)(2) 5,043,344

Revenue Guidance 2015(3) $8-8.5 million

Cash(4) $14.3 million

Debt(4) $1.9 million

(1)  As of 03/11//2015 (2)  Includes 4,600,000 warrants with an exercise price of $5.00; 120,000 warrants with an exercise price of $6.25; 224,412 RSU’s; 98,932 options with an

exercise price of $4.60; Excludes 1,020,526 warrants with a weighted avg. price of $25.65 and ~95,000 options with a weighted avg. price of $53.12 (3)  As of 03/16/15 (4)  As of 12/31/14

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Validated Technology Targeting Unmet Need

§  WGBS provides innovative genomic solutions for clinical testing and research §  Next Generation Sequencing (NGS) moving from “bench to bedside”; diagnostic test

accuracy becomes key issue with unmet needs §  WGBS products outperform the competition in terms of clinical test accuracy and

flexibility, reduced time and cost

Fast Growing $Multi-Billion NGS Market

§  Next Generation Sequencing (NGS) market is expected to reach $7.6 billion in 2018 from $511 million in 2013 (CAGR of 71.6%)(1)

Rapidly Growing Revenues

§  > 350% projected revenue increase in FY 2014 to $6.0 million vs. FY 2013 revenue of $1.3 million

Recent Acquisition §  Added a portfolio of highly synergistic library prep products in Q1 2014

Single Cell Analysis Opportunity

§  Targeting $600 million market by 2016 §  Proof of concept work has shown promising results §  Company plans commercial product launch in 2nd half 2015

Experienced Team §  Solid track-record of successful execution in prior executive roles

Key Investment Highlights

(1) Next Generation Sequencing: Emerging Clinical Applications and Global Markets; July 2013 BCC Research

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The NGS Opportunity

n  What is Next Generation Sequencing (NGS)? −  A high-throughput method of deciphering the exact order and position of “letters” in the “DNA alphabet” thus

reading the complete “story” of genes −  Offers a much better insight into medically relevant genetic information than standard molecular diagnostics −  The fastest-growing new segment of DNA testing

n  Why is NGS important? −  Allows genomic analysis to be applied beyond research labs to clinical diagnostics / personalized medicine −  Personalized Medicine: NGS clinical diagnostics will analyze each person’s key genetic information and

permit physicians to tailor therapies to each patient −  Applications of NGS in clinical settings:

o  Cancer o  Reproductive and genetic health

o  Bacterial and viral resistance

o  Immune system monitoring

n  How do WaferGen’s products and tools enhance NGS? −  A suite of products that improve sample preparation for NGS −  Enables NGS to be more accurate, faster and cost-effective

o  Boosts accuracy to ~100% from 92-95%

−  Cover the whole spectrum of needs pre- and post-NGS

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Clinical Sequencing Diagnostic Testing

2012 - $100M 2015E: >$1,000M

The fastest-growing new segment of DNA testing is Next Generation Sequencing (NGS)

Market for all Workflow Prior to Sequencing

NGS Sample Prep & Clinical NGS Markets M

illio

ns

§  The SmartChip TETM System and Apollo 324 Platform address the rapidly growing Library Prep market

§  The Library Prep market is expected to grow on average 15% per year to over $900 million by 2016

§  Applications of Next Generation Sequencing to the clinical testing market will exceed $1 billion by 2016

§  Targeted diagnostic panels are projected to dominate the clinical NGS market à WaferGen's technology will be used in this targeted panel segment

Source: DNA Sequencing: Emerging Tech. & Applications, BCC Report, March 2012

Source: DeciBio, March 26, 2013

Targeted Panels

Other

Targeted Panels

Other

Exome

Whole Genome

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Annual Revenues Quarterly Revenues

Revenue Growth

(1)  Apollo was acquired in January 2014

§  During Q1-2014, WaferGen saw significant revenue growth in its core operations and has begun to capitalize on its Apollo platform acquisition (Jan 2014)

§  Approximately 100 instruments installed base

§  Revenue for FY 2014 is $6M

$0.6 $1.3

$6.0

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

FY 2012 FY 2013 FY 2014E

Mill

ions

900% increase

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Company / Institute Company Overview / WGBS Relationship Qiagen N.V. (NASDAQ:QGEN) § Qiagen offers over 500 core consumable products

§ Co-markets WGBS products in Japan

Beijing Genomics Institute (BGI) § BGI is the world’s largest genetic research center with over 187 machines to

sequence molecules of DNA § Employs WGBS for a wide range of applications and distribution in China

Quest Diagnostics Inc. (NYSE:DGX) § Provides diagnostic testing information services globally

§ Utilizes WGBS technology for certain clinical diagnostics

Pathway Genomics Corporation § Provides genetic tests in the U.S and internationally

§ Launched a commercial diagnostic test utilizing WGBS technology

RUCDR Infinite Biologics § World’s largest university-based biorepository § Performs services for pharma and other clients requiring WGBS’s technology

Siemens (DB:SIE) § Major developer of innovative healthcare systems and technologies

§ Developing companion in diagnostics

Major Customers & Strategic Partners

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WaferGen’s Products

Innovative Products Diversified Product Uses Top Tier Customers Steady & Growing

Revenue Stream

SmartChip MyDesignTM

Systems Genetic Research Clinical Diagnostic

Labs Instruments

Revenue

SmartChip TETM System Biomarker Discovery Academic Research

Institutions Consumables

Revenue

Apollo 324TM System Diagnostic Testing Pharma / Ag /

Biotech Companies Razor / Razor Blade

Business Model

PrepXTM Reagents NGS Sample Prep

SmartChipsTM Personalized Medicine

The Company’s business model generates revenue from instrument sales, and recurring revenue from consumables

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Broad NGS Product Portfolio

Covering the whole spectrum of needs pre- and post-NGS

Pre- & Post- NGS Spectrum DNA / RNA Extraction

Library Prep

Target Enrichment

PCR Clean-Up

DNA Normalize QC Seq Variant

Verification

Apollo 324™ SmartChip TE™ & SeqReady™ TE

Apollo 324™ SmartChip MyDesign™ SmartChip MyDesign™

Single Cell Capability

SmartChip MyDesign™

qPCR

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5,184 nanowell SmartChip

SmartChip MyDesignTM & SmartChip

§  Flexible §  Cost-Effective §  Patented 100 nanoliter reaction “smart volume” provides optimum performance §  Proprietary liquid dispensing know-how makes the SmartChip possible

SmartChip MyDesignTM System performs direct PCR measurement of mutations (“typos” in genes) and quantitative gene expression (level of activity of genes)

§  “PCR chemistry” is effective “copy machine” for genetic information, making millions of copies of particular genes (strings of DNA sequences), thereby allowing them to be more easily tested and analyzed

SmartChip MultiSample NanoDispenser (MSND) & SmartChip PCR Instrument §  Can analyze thousands of genes or samples at a time §  PCR chemistry well established and understood §  Flexibility allows for a rapid experiment design and content modification in

an optimal and cost-effective way

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Add Sample

Amplify (copy) genes

Extract Sample with proprietary method

Ready for Sequencing

SmartChip TETM and SeqReady TETM §  SmartChip TE System (for Target Enrichment) prepares the sample for sequencing by

copying only relevant genes, thus separating them from the vast rest of the genome

§  Offers a unique advantage in terms of accuracy and diagnostic test development speed −  Clean chemical reaction in each well, which enhances accuracy −  Allows for changing content (assays) rapidly −  Proven superior performance vs. competition in head-to-head studies −  Low throughput configuration - No major capital equipment expenditure required and a small lab footprint −  High throughput configuration - SeqReady™ enables use in large clinical labs

or

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Apollo 324TM Platform The Apollo324TM platform is a compact, walk-away automation platform offering library preparation kits for analysis on popular NGS platforms

Advantages:

§ Ideal for clinical labs market: targets diagnostic “sweet spot” throughput of 1-48 samples and automation significantly lowers risk of sample contamination

§ Faster turnaround time, less hands-on-time

§ Very low sample input needed

Sales Success in Key Accounts: § Significant total installed base (>50 systems)

Utilization: § Strong sales of reagents and consumables

Intuitive user interface with step-by-step instructions

Robotic arm with eight-nozzle pipette head and built-in magnetic particle separation

Two 96-well Peltier temperature control units

Reagent plate, racks for disposable tips and waste bin

Optimized, simple-to-use reagent kits for DNA, RNA and

ChIP-Seq

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WaferGen’s SmartChip system and chips deliver significant advantages in terms of clinical test accuracy, flexibility, speed and cost versus Fluidigm

Key Competitor Comparable

Comparison

Cost / Complexity of Chip: § Lower / Much Lower § Higher / Much Higher

Flexibility to design experiments: § Yes § No

Need for pre-amplification: § Low § Essential

Reagent savings vs. 384 well plate: § 99% § 99.9%

Example of top customer: § RUCDR (largest academic biobank wordlwide)

§ RUCDR (largest academic biobank wordlwide)

Phase of commercial launch: § Early § Established leader

Single Cell Capability: § Plan to enter market § Yes

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SCA Market (2010 – 2016E)

$0

$100

$200

$300

$400

$500

$600

2010 2011 2012 2013 2014E 2015E 2016E

Single Cell Analysis (SCA) Market Opportunity

Source: Enal Razvi’s (SelectBio) Oct 2013

Mill

ions

Single cell analysis presents an attractive opportunity for providers of genomic solutions §  Tissue samples are heterogeneous §  Cause of disease can be better understood by studying changes at the single cell level §  SCA market is expected to be over $600 million in 2016

§  80% of revenue from single cell analysis products

WaferGen developing a superior product to enter this market in 2015

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§  Single Cell Genomics is major growth opportunity for WaferGen −  “#1 New life science area in 2013 −  High barrier to entry without a proper technology platform −  WaferGen technology has unique advantages vs. Fluidigm −  Target launch: 2nd half 2015 −  Increases the demand for and the pull-through of WaferGen's existing product portfolio

§  Establish Smart Chip as the Solution of Choice for Clinical NGS −  Focus on early adopter clinical labs, translational research centers and game-changing customers −  Continue generating and publishing favorable comparative data vs. competition −  Meet regulatory requirements as the market evolves

§  Expand Apollo Platform (Library Prep products) −  Launch additional RNA/DNA applications −  Launch fully integrated whole exome solutions −  Leverage synergies between Apollo and SmartChip

§  Strong Balance Sheet −  Recent $20 million equity offering gives the Company ability to fund Single Cell development while expanding

sales of current product lines

Growth Strategy

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Team Prior Company Company Status

Ivan Trifunovich, Ph.D. President and CEO

Acquired by Hologic for $580M

Srini Maythreyan Chief Technology Officer Former Head of R&D at Agilent

Jude Dunne Vice President, Product Development Acquired by Perkin Elmer for $600M

Syed Husain Senior Vice President, Engineering Acquired by Perkin Elmer for $600M

Keith Warner Chief Operating Officer Acquired by Luminex for $50M

Mike Henighan CFO

Former CFO, acquired by ProteinSimple

Paul R. Schimmel, Ph.D. Chair of Scientific Advisory Board

Founder or co-founder of 7 public biotechnology companies with value of >$12 billion

WaferGen’s Experienced Leadership Team

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Recent Achievements

n  Proof-of-concept in single cell development l  Demonstrated successful cell processing and RNAseq in the SmartChipTM

–  Independently confirmed by BGI l  Demonstrated directed cell deposition coupled with successful RNAseq

–  Joint work with the Broad Institute presented at 2015 AGBT l  Targeting launch for 2nd half of 2015

n  Major launches by clinical customers l  Admera Health l  Pathway Genomics l  OHSU Eye Institute

n  Collaboration with U. of Toronto on BRCA1/2 testing

n  Successful $20M raise and uplisting on Nasdaq (Aug) l  Major milestone for the Company

n  Three important papers presented at the largest genomics conference ASHG (Oct) l  Convincing validation by third parties – a major commercial clinical lab (GeneDx/BRL) and an

academic lab (U. of Chicago)

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Upcoming Milestones

n  Launch of the Early Access Program for single cell l  Q2 2015

n  Commercial launch for single cell l  2H 2015

n  Launch of a commercial cancer-related NGS test by a top-tier clinical reference lab using WaferGen’s technology l  Q2/Q3 2015

n  Launch of a WaferGen’s whole exome solution l  Convert SureSelectTM customers and capture consumable revenue l  2H 2015

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Validated Technology Targeting Unmet Need

§  WGBS provides innovative genomic solutions for clinical testing and research §  Next Generation Sequencing (NGS) moving from “bench to bed”; accuracy becomes

key issue with unmet needs §  WGBS products outperform the competition in terms of clinical test accuracy and

flexibility, reduced time and cost

Fast Growing $Multi-Billion NGS Market

§  NGS market is expected to reach $7.6 billion in 2018 from $511 million in 2013 (CAGR of 71.6%)(1)

Rapidly Growing Revenues

§  > 350% projected revenue increase in FY 2014 to $6.0+ million vs. FY 2013 revenue of $1.3 million

Recent Acquisition §  Added a portfolio of highly synergistic library prep products in Q1 2014

Single Cell Analysis Opportunity

§  Proof of concept work is proceeding currently §  Targeting $600 million market by 2016 §  Company plans product launch by 2nd half 2015

Experienced Team §  Solid track-record of successful execution in prior executive roles

Key Investment Highlights

(1) Next Generation Sequencing: Emerging Clinical Applications and Global Markets; July 2013 BCC Research

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Corporate Headquarters: 7400 Paseo Padre Parkway Fremont, CA 94555 Dr. Ivan Trifunovich – CEO & President 510.651.4450 [email protected]

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§  Superior results confirmed in two independent studies −  Ghent and Leuven Univ. −  Major US Teaching Hospital

§  Both graphs show what percentage of the targeted genes are detected (“covered”)

§  Missing parts of the genes can lead to unacceptable mistakes in diagnostic tests

§  WaferGen’s key competitive advantage is that each PCR reaction is performed separately (singleplex) in the SmartChip, whereas the competition mixes many PCR reactions in one tube (multiplex)

SmartChip TETM Outperforms Competition

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Coverage of Medically Relevant Genes

Accuracy – Coverage and Uniformity