Imaging In The Operating Room

August 2015

NASDAQ:NVDQ TSX:NDQ
Forward-Looking Statements
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 forward-looking 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

Blood Flow, Tissue Perfusion & More

SPY Imaging Products

SPY ELITE

FIREFLY

PINPOINT

LUNA

Open Surgery

Robotic Surgery

Endoscopic Surgery

Wound Healing

Launched 2013

Launched 2013

Launched 2006

Launched 2011

Startup

Partnered
Market Creation

Direct
Market Penetration

SPY ELITE
Open Surgery
Tissue perfusion, in real time in the

operating room
Q2 installed base ~ 400
Most advanced application to-date is

breast reconstruction surgery

Plastic Reconstructive

Colorectal & General

FIREFLY
Robotic Surgery
SPY Fluorescence imaging

technology integrated into the

Intuitive Surgical da Vinci Xi
surgical robotic system as
standard
Q2 FireFly installed base ~ 1300

PINPOINT
Minimally Invasive Surgery Platform

Designed for complex surgeries

Continuous surgery, on-demand SPY

Fluorescence imaging
HD best in class image quality

LUNA
Wound Healing
Perfusion assessment system

designed specifically for the wound

clinic
Drives clinical treatment decisions

and enables serial follow-up

Reimbursement coverage; generates

clinic revenue through increased

patient referrals and compliance

Market Opportunity

Significant Unmet Need

Data From AHRQ
Accountable Care Organizations: 2013 Program Analysis
Readmission following an acute care hospitalization is a costly and

often preventable event

Research shows that nearly one in five Medicare patients were

readmitted within 30 days and 90% of these were unplanned

Cost of Medicare readmissions exceeded $17 Billion
Affordable Care Act mandates readmission reductions - excessive

readmissions reduces hospital payments

Weiss, et al., AHRQ Pub. No. 10 (11)- EHC009-2-EF. Agency for Healthcare Research and
Quality, Rockville, MD 2013

Answering the Call

SPY Imaging Value Proposition
The Clinical Efficacy and Financial Impact of Laser-Assisted IndoCyanine Green Angiography Implant Based Breast Reconstruction
Steven R. Jacobson, MD et al study

presented in Q2-2015
Based upon an analysis of 942 patients
Patients whose breast(s) were reconstructed

using SPY Elite had 83% lower necrosis rate

Authors determined worth over $850,000 if

used routinely over a five-year period

A SPY In Every Operating Room

Primary Imaging For Complex Surgery
Application

Patients/Year (U.S.)

Surgery Type

Device

Breast Reconstruction

100,000

Open

SPY

Abdominal Wall

50,000

Open

SPY

Cholecystectomy

100,000

MIS

PINPOINT/Firefly

Gastrointestinal

200,000

Open or MIS

SPY/PINPOINT/Firefly

Gynecological Oncology

100,000

MIS

PINPOINT/Firefly

Lymphatic

400,000

MIS or open

PINPOINT/Firefly

Maxillofacial/Head &
Neck

100,000

Open

SPY

Other Reconstruction

250,000

Open

SPY

Vascular

100,000

Open

SPY

Wound Care

600,000

Outpatient
Open

LUNA

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Significant Market Opportunity

No Current Competition
Estimated U.S. Complex Surgery Volume
Per Year By Device

29%

34%

Pinpoint
SPY

37%

LUNA

Estimated Annualized Revenues @ 25% of Addressable U.S.

Complex Surgery Market = $500 Million
Potential Worldwide Revenues = 2X of U.S.
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Growth Strategy

Additional Clinical Studies: Level 1 Data

PILLAR III

FILM Trial

Obtain Outcomes-Based FDA Label

Obtain FDA Indication for SLN Mapping

Randomized multicenter trial (n=500-900)

A Prospective, Open Label, Multicenter Study

Investigating the use of PINPOINT in SLN
Mapping (n=150)

Establish evidence to promote standard of

care in assessing perfusion in anastomosis

Confirm a significant reduction in

anastomotic leak rates

Reduce patient complications and health

care costs

Objectives: To determine safety and efficacy of

ICG fluorescence imaging in lymphatic mapping
Long-term Goals: Adoption of ICG-fluorescence
guided SLN mapping for all surgical oncology
applications

Continuous Innovation

Our development efforts fit into 3 general categories

1. Performance improvements to existing technologies
2. Innovation designed to address gaps in the continuum of care
3. Functional innovation that delivers additional clinical benefit

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Build On Strong Proprietary Position

50+ patent families including granted patents and applications
Hardware, software, methods - vascular flow, perfusion, perforators,

ingress/egress, simultaneous display, quantification

Recent additions surgical scintigraphy imaging, fluorescent marker,

lymph node and nerve localization, erythrocyte loading, Laser Doppler

Strategic Expansion of Product Offering

Proven clinical and call point synergy between the use of tissue
matrices and the ability to assess the quality of tissue perfusion

NOVADAQ is now the exclusive worldwide distributor of LifeNet

Healths DermACELL tissue products

LifeNet is the worlds largest provider of organs, tissues and cells

for transplantation

Committed to maximizing the gift of donation

Vertically integrated from Recovery through Distribution

Distribute 440,000+ implants/year in U.S.

48 method and/or use patents

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Continuum of Care Ecosystem

NOVADAQ is the only company that can provide a comprehensive
fluorescent imaging solution to and across the entire hospital
NOVADAQ Surgery

Operating
Room
Operating
Room

Today
PINPOINT

Minimally Invasive

NOVADAQ Diagnostics

Outpatient
Outpatient Clinic
Clinic

Tomorrow
Radiopharmaceutical

Today
LUNA

Primary
Primary Care
Care Physician
Physician

Tomorrow
Laser Doppler

Wound Care

SPY Elite

Open
Firefly

Robotic
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Corporate Performance

Strong Growth
Installed Base

Procedures
10,000
Estimated Procedures

1,750
1,500
1,250
1,000
750
500
250

8,000
6,000
4,000
2,000

$16,000

Q4-14

Q3-14

Q2-15

Q2-14

Revenue

$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000

Q4-14

Q3-14

Q2-15

Q2-14

Q1-15

$0
Q1-14

Revenue (US$ 000s)

Q1-15

Q1-14

Q4-14

Q3-14

Q2-15

Q2-14

Q1-15

0
Q1-14

Total Installed Devices

2,000

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Quarterly Metrics
Q1-2015

Q2-2015

Change

Recurring

$4.9

$5.7

+15%

Capital

$3.6

$6.5*

+82%

Total Direct

$8.5

$12.2

+43%

Partnered/International

$3.2

$2.9

-9%

Total

$11.7

$15.1

+29%

Gross Margin

62%

71%

+9 points

575

611

+6%

$8,566

$9,251

+8%

REVENUES (millions)

INSTALLED BASE
Direct Systems
Recurring Revenue/Direct System

Sold 42 devices of all types (SPY Elite, PinPoint and LUNA) in the quarter;
average ASP $154,800

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In Conclusion

Moving Forward
Transition phase from partnered business to direct sales business is

complete. 80% of revenues in 2015 are from direct sales

Building and maintaining a clinical ecosystem offers several

embodiments of SPY technology for use within the operating room

and outside of it
Well defined, significant market opportunities both at home and

abroad
Strong IP position
Combination of capital sales and recurring revenues; both revenue

components will grow in tandem as SPY technology installed base

expands, device utilization grows and tissue gains sales traction
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