Healthcare Investment Banking Q2 2020 Update

Telehealth Focus

Member FINRA | SIPC OUR DEDICATED HEALTHCARE TEAM Healthcare Investment Banking

Dr. Aghib leverages 26 years of executive experience, broad scientific knowledge, and significant international expertise to develop long-term, cross-border and inter-industry strategies for business development, licensing, spinoffs, and mergers and acquisitions. Deborah F. Aghib, Ph.D. Managing Director, Previous Experience: Chief Business Officer, Stellar Biotechnologies; Vice President of Business Development and Strategy, Neuro-Zone; Chief Business Development and Strategy Officer, Dianax; Founder & Managing Healthcare Director, DFA Advisors; Consultant, CRG, LP. [email protected] Board Involvement: Neuro-Zone, CellPly, ImmunGene, OpenWorm Foundation, Open Commons Consortium, 305-438-7817 SF Art and Film, Stellar Biotechnologies – Strategic Investment, M&A, Audit, and Corporate Governance Committees (Prior). Ph.D., University of Milan; Ph.D., University of Pavia; B.S./M.S., University of Milan.

Ms. Fischbein has a long track record of successfully advising clients in the healthcare industry on M&A, licensing transactions, public and private equity, and debt financings, as well as providing strategic advisory services. Margery Fischbein Managing Director, Previous Experience: Managing Director and Head of Healthcare Investment Banking, Seaport Global and FBR Healthcare & Co.; Managing Director and Head of East Coast Biotechnology, JMP Securities; Vice President Business Development, Human Genome Sciences; Vice President Business Development, ImClone Systems; Managing [email protected] Director Investment Banking, Citigroup and JP Morgan Chase; Senior Vice President, Lehman Brothers. 305-438-7816 Board Involvement: Cytodel, EcoHealth Alliance, Inhibrix (Prior).

M.B.A, Harvard Business School; B.A. Harvard University.

Mr. Leiderman has successfully led numerous transactions, as well as conducted strategic advisory work for companies in the healthcare and life science sectors. Ira Z. Leiderman Managing Director, Previous Experience: Founder & Managing Director, Long Trail Advisors, LLC; Co-Head – Healthcare Group, Healthcare Ladenburg Thalmann & Co. Inc.; Head of Investment Banking, Punk Ziegal & Co.; Member, The Palladin Group; Senior Healthcare Banker, Gerard Klauer Mattison; Co-Founder & Founding CEO, Futuragene Ltd. [email protected] 305-438-7813 Board Involvement: Apthera – Executive Chairman, Collplant, MargineSurgical, Camp Ramah. B.A., CUNY (Brooklyn).

1 ABOUT OUR FIRM Healthcare Investment Banking ¡ Cassel Salpeter & Co. is a boutique investment banking firm focused on providing independent and objective advice to middle-market and emerging growth companies. We can help.

Mergers & Acquisitions Capital Raising Other Services

¡ Financial advisory ¡ Financial advisory ¡ Fairness opinions ¡ Sales to strategic and private ¡ Equity and debt private ¡ Solvency opinions equity buyers placements ¡ Valuations ¡ Divestitures to strategic and ¡ Growth capital ¡ Restructuring, refinancing, and private equity buyers ¡ PIPEs distressed M&A transactions ¡ Buy-side acquisition programs ¡ Recapitalizations ¡ Debtor and creditor ¡ Leveraged & management representations buyouts ¡ 363 sales & plans of ¡ Going private transactions reorganization

James Cassel Scott Salpeter Philip Cassel Ira Leiderman Deborah Aghib Margery Fischbein Joseph Smith Chairman President Managing Director Managing Director Managing Director Managing Director Director

Marcus Wai Chris Mansueto Laura Salpeter Julian Astrove Edward Kropf Tahz Rashid Vice President Vice President Vice President Associate Associate Analyst

2 Healthcare Investment Banking

I MARKET REVIEW

II M&A & PRIVATE PLACEMENTS REVIEW

III PUBLIC MARKETS REVIEW

3 TELEHEALTH OVERVIEW Healthcare Investment Banking Telehealth and telemedicine are broad terms that have been used interchangeably for years. The terms have become synonymous to describe the electronic connection between a healthcare consumer or patient and their healthcare provider. These terms cover the delivery of healthcare services electronically in real-time or the collection of clinically relevant data transmitted either synchronously (in real-time) or asynchronously (batched and transmitted at a later time) to a healthcare provider. Some of these services can be in the form of a video visit in place of an in-office visit with a healthcare provider, or can be used to collect patient data to be utilized by the healthcare provider to evaluate and possibly diagnose a medical condition.

The electronic transmission of healthcare data has evolved since its infancy in the 1980s. The early days saw the transmission of text data such as medical records and laboratory results. But as electronic bandwidth increased, larger amounts of data with greater fidelity were able to be transmitted. It is now routine to transmit radiographic images and studies to radiologists to be read remotely. The same is true for pathology images which may be transmitted to a pathologist or a group of pathologists to obtain their opinions and diagnosis. These capabilities have also enabled the remote monitoring of some clinical trial subjects to help advance clinical trial studies.

The Covid-19 pandemic has seen an explosive growth of telemedicine. Many physicians closed their offices to all but emergency visits. IQVIA has reported that office visits have decreased by greater than 60%1. However, a great number of patients still needed to be “seen” by their care providers. Frost and Sullivan reports that the number of virtual visits this year has grown by greater than 64% in a year-over-year comparison and is expected to have a five-year compound annual growth of greater than 38%2. In April of this year, one large corporate provider of telehealth solutions reported a spike in the number of video requests of over 200%3. A study from NYU Langone Health, a large New York City based health system, reported a 683% increase in virtual visits for the March 2nd to April 14th period4. In total, it is estimated by Forrester Research that virtual health-care interactions will top 1 billion by year’s end5. Although not a full substitute for a “hands on” physical exam, video assisted visits do offer a feasible substitute for many in-person patient-doctor encounters. As said by Sir William Osler6 over a hundred years ago “Just listen to your patient, he is telling you the diagnosis.”

1. IQVIA 2. Frost & Sullivan, “Telehealth - A Technology-Based Weapon in the War Against the Coronavirus, 2020”, May 2020 3. CNBC Health and Science. April 4, 2020 4. Journal of the American Medical Informatics Association 27(7), 2020 5. CNBC Health and Science. April 4, 2020 6. Sir William Osler (1849-1919) was a Canadian physician and is deemed to be the father of internal medicine 4 FUTURE TRENDS Healthcare Investment Banking The popularity of virtual visits has waned somewhat since its rapid growth several months ago7 due to a somewhat tepid response by patients due to the lack of personal and hands-on interaction with their care provider and some technical challenges faced by patients, particularly the elderly.

Telehealth Weekly Visits as a Percentage of Total FFS Medicare Primary Care Visits in Urban and Rural Counties

One survey of seniors found that only 52% of those polled were comfortable using telehealth8. These technical challenges are rapidly being addressed by a number of companies who are developing easy-to-use solutions for the elderly who may lack manual dexterity in addition to having auditory and vision deficits9. With that said, we believe that telemedicine has found a permanent place in many areas of clinical practice and clinical research.

7. STAT News June 25, 2020 8. Fierce Healthcare May 27, 2020 9. Fierce Healthcare July 27, 2020

5 OUR THOUGHTS Healthcare Investment Banking Our thoughts are based on several key points. In the face of the pandemic, the Centers for Medicare & Medicaid Services (CMS) of the US Department of Health and Human Services (HHS) had eased and increased reimbursement to physicians for on-line visits10, thus allowing care providers to see more patients per hour with lower overhead. It has been publicly stated that this new reimbursement plan will probably stay in place after the pandemic ends11 12. Private insurers are expected to follow suit. Blue Cross of Tennessee has already announced that the new reimbursement for telehealth will be permanent13. Cigna and Blue Cross of North Carolina have stated that their pandemic level of reimbursement for telehealth will remain in place through at least the end of the year14. Also, to assist medical practices to adopt and provide expanded telehealth services, the Office of Civil Rights at DHS announced that it was using its “enforcement discretion” and would not impose penalties on those using HIPAA-noncompliant private communications technology15 16. In addition, medical practices have made investments in technology and practice members are now up-to-speed on its use and utility. Furthermore, the “Zoomification” of telephone calls and meetings has made people much more comfortable with using teleconference technology.

Also, the accelerated utilization of telemedicine has carved a growing niche in clinical research. The pandemic has disrupted many clinical trials, so to save these studies, sponsors and investigators have had to find solutions to protect the trials. Institutional Review Boards are meeting online and rapidly approving study protocols as well as monitoring ongoing studies. The exchange of data between investigators has accelerated along with the urgency in exchanging drug protocols and their clinical experience in treating Covid-19 patients. In addition, many, if not all conferences and international congresses have gone virtual, enabling many more to attend these meetings. Going forward, particularly with the addition of artificial intelligence (AI), online clinical research studies and patient monitoring will only grow in scope and effectiveness17.

10. Centers for Medicare & Medicaid Services (CMS) Medicare Telemedicine Provider Fact Sheet March 17, 2020 11. Centers for Medicare & Medicaid Services (CMS) Press Release August 3, 2020 12. POTUS Executive Order on Improving Rural Health and Telehealth Access issued August 3, 2020 13. BCBST News Center, Press Release May 14, 2020 14. New York Times, Health – Is telemedicine Here to Stay? August 3, 2020 15. N Engl J Med 2020 382:e82 (June 4, 2020) 16. Centers for Medicare & Medicaid Services (CMS) Medicare Telemedicine Health Care Provider Fact Sheet March 17, 2020 17. JACC Case Reports 2:9 2020

6 OUR THOUGHTS (CONT.) Healthcare Investment Banking The current pandemic has seen a rapid adoption of telehealth. We are now seeing the rapid adoption of technology that was only in its infancy a short time ago. The accelerated growth of this new way of delivering patient care will drive technological innovation. Innovation will drive deal activity in both funding and M&A. We anticipate that companies will be on the hunt to acquire competitors and companies with technology, that will enable them to develop and maintain dominant positions in their respective industries. In time, the current health crisis will subside, reimbursement will be secure, and telehealth will become one of routine standards of care.

7 SELECTED TELEHEALTH MARKET PERFORMANCE Healthcare Investment Banking

Relative Trading Performance (Apr 1, 2020 to Aug 21, 2020)

600 Indices CS Telehealth Index ______70.2% S&P 500 ______37.5% NASDAQ Composite ------53.7%- - 500 Nasdaq HC ______35.4% S&P 500 HC Services …...... 13.0% S&P 500 HC Tech. ------18.3%- -

CS Telehealth Index Components 400 Teladoc Health, Inc. ______37.5% Livongo Health, Inc. …...... 404.9% 1Life Healthcare, Inc. ______63.9% Allscripts Healthcare Solutions,- - - Inc.------36.5%- - 300 BioTelemetry, Inc. ______14.5% Ontrak, Inc. ______363.9% Welltower Inc. …...... 41.9% MTBC, Inc. ______100.2% SHL Telemedicine Ltd. …...... 4.3% 200

100

On August 5 Teladoc announced its pending acquisition of Livongo

0 Apr-20 Apr-20 Apr-20 May-20 May-20 Jun-20 Jun-20 Jul-20 Jul-20 Aug-20 Aug-20

Sources of information: S&P Capital IQ.

8 SELECTED PRIVATE TELEHEALTH COMPANIES Healthcare Investment Banking

Selected Private Telehealth Companies

Company Name Parent Co. Principal Location Website 98point6 Inc. Seattle, WA www.98point6.com AMD Global Telemedicine, Inc. Chelmsford, MA www.amdtelemedicine.com Amwell (1) Boston, MA www.amwell.com CentriHealth, Inc. UnitedHealth Group Incorporated Nashville, TN www.centrihealth.com Citra Health Solutions Cedar Gate Technologies, LLC Morrisville, NC www.citrahealth.com Critical Signal Technologies, Inc. Best Buy Co., Inc. Novi, MI www.cstltl.com Doctor on Demand, Inc. San Francisco, CA www.doctorondemand.com Education Networks of America, Inc. Nashville, TN www.ena.com Epic Systems Corporation Verona, WI www.epic.com Kareo, Inc. Irvine, CA www.kareo.com MDLIVE Inc. Sunrise, FL welcome.mdlive.com Ontario Telemedicine Network Inc. Toronto, ON www.otn.ca Physician 360, Inc. Mckinney, TX physician360.co PlushCare, Inc. San Francisco, CA www.plushcare.com ScImage, Inc. Los Altos, CA www.scimage.com Secure Medical, Inc. Tempe, AZ www.securemedical.com SOC Telemed Reston, VA www.soctelemed.com Zipnosis, Inc. Minneapolis, MN www.zipnosis.com (1) Amwell has reportedly filed for an IPO.

9 Healthcare Investment Banking

I TELEHEALTH MARKET REVIEW

II M&A & PRIVATE PLACEMENTS REVIEW

III PUBLIC MARKETS REVIEW

10 M&A OVERVIEW Healthcare Investment Banking

U.S. Healthcare M&A by Sector Count of M&A Transactions 400 23 20 350 22 31 16 19 23 17 300 153 131 14 26 19 20 123 137 250 20 118 109 121 134 8 116 123 132 127 45 200 97 37 40 61 27 37 28 150 44 30 40 54 51 54 39 25 52 64 61 31 43 36 45 39 100 56 49 39 52 47 93 48 93 91 66 58 94 66 56 50 46 53 64 43 27 45 30 25 23 24 32 30 34 36 35 39 38 0 20 17 21 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 2020 Biotechnology Pharmaceuticals Health Care Technology Health Care Equipment Health Care Services Life Sciences Tools and Services

Aggregate M&A Transaction Value ($ in millions) $60,000 $160,000

$140,000 $50,000 $120,000 $40,000 $100,000

$30,000 $80,000

$60,000 $20,000 $40,000 $10,000 $20,000

$- $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 2020 Biotechnology Pharmaceuticals Health Care Technology Health Care Equipment Health Care Services Life Sciences Tools and Services Total M&A Value

Note: Q1 2018 total transaction value for Health Care Services was $71,655 and Q1 2019 total transaction value for Biotechnology was $116,936. Sources of information: S&P Capital IQ. 11 PRIVATE PLACEMENT OVERVIEW Healthcare Investment Banking

U.S. Healthcare Private Placements by Sector Count of Private Placement Transactions 1,000

900 31 36 38 40 91 42 800 76 43 31 62 36 29 39 77 34 37 63 37 69 61 71 70 74 700 65 68 56 154 156 156 167 27 148 162 137 161 128 600 192 126 59 169 180 116 500 181 186 156 157 180 176 157 159 158 162 400 152 173 150 130

300 183 174 160 190 212 198 192 184 189 166 124 131 129 138 200

100 215 203 195 232 232 238 220 216 215 226 208 223 218 201 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 2020

Biotechnology Pharmaceuticals Health Care Technology Health Care Equipment Health Care Services Life Sciences Tools and Services

Aggregate Private Placement Transaction Value ($ in millions) $18,000 $7,000 $16,000

$6,000 $14,000

$5,000 $12,000

$4,000 $10,000 $8,000 $3,000 $6,000 $2,000 $4,000

$1,000 $2,000

$0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 2020 Biotechnology Pharmaceuticals Health Care Technology Health Care Equipment Health Care Services Life Sciences Tools and Services Total Private Placement Value

Sources of information: S&P Capital IQ. 12 Healthcare Investment Banking

I TELEHEALTH MARKET REVIEW

II M&A & PRIVATE PLACEMENTS REVIEW

III PUBLIC MARKETS REVIEW

13 SELECTED MARKET INDICES Healthcare Investment Banking

Relative Trading Performance (Apr 1, 2020 to Aug 21, 2020)

200 Indices CS Telehealth Index ______70.2% S&P 500 ______37.5% 180 NASDAQ Composite ------53.7%- - Nasdaq HC ______35.4% 160 S&P 500 HC Services …...... 13.0% S&P 500 HC Tech. ------18.3%- -

140

120

100

80

60

40

20 On August 5 Teladoc announced its pending acquisition of Livongo

0 Apr-20 Apr-20 Apr-20 May-20 May-20 Jun-20 Jun-20 Jul-20 Jul-20 Aug-20 Aug-20

CS Telehealth Index is market capitalization weighted index of TDOC, LVGO, ONEM , M DRX, BEAT, OTRK, WELL, M TBC, and SHLTN.

Sources of information: S&P Capital IQ.

14 EQUITY OFFERINGS OVERVIEW Healthcare Investment Banking

U.S. Healthcare IPO & Follow-On Equity Offerings by Sector Count of IPOs and Aggregate Equity Raised ($ in millions) 4 $4,500

$4,000

$3,500 3 $3,000

$2,500 2 $2,000 # # of IPOs Volume $ $1,500 1 $1,000

$500

0 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 2020 Health Care Technology Health Care Equipment Health Care Services Life Sciences Tools and Services Total IPO Value

Count of Follow-Ons and Aggregate Equity Raised ($ in millions) 35 $9,000

$8,000 30 $7,000 25 $6,000 Ons - 20 $5,000

15 $4,000 $ Volume $

# # of Follow $3,000 10 $2,000 5 $1,000

0 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 2020 Health Care Technology Health Care Equipment Health Care Services Life Sciences Tools and Services Total Follow-On Value

Sources of information: S&P Capital IQ. 15 CONTACT INFORMATION Healthcare Investment Banking

James S. Cassel Deborah F. Aghib, Ph.D. Margery Fischbein Ira Z. Leiderman Chairman Managing Director, Healthcare Managing Director, Healthcare Managing Director, Healthcare [email protected] [email protected] [email protected] [email protected] 305-438-7701 305-438-7817 305-438-7816 305-438-7813

801 Brickell Ave. Suite 1900 Miami, 33131 www.casselsalpeter.com

The accuracy or completeness of such information and discussion within this report was prepared by Cassel Salpeter & Co., LLC (“CS”) and is meant to provide general information regarding the subject matter. The information has been obtained from sources that are considered reliable, but CS makes no guarantee or representation of this information. This report reflects information known at the time the report was written and is subject to change.

The discussion reflects the author’s current judgement as of the date of this report and does not necessarily reflect the judgements of CS, and furthermore, are subject to change without notice. CS has no obligation to update, modify, or amend this report, or to otherwise notify a reader thereof, in the event that any matter stated herein, or any opinion, estimate, forecast, or analysis set forth herein, changes or subsequently becomes inaccurate.

This report does not constitute investment advice with respect to the securities of any company discussed herein, is not intended to provide information upon which to base an investment decision, and should not be construed as such. Professional advice should be obtained before taking any action based on any information or discussion contained herein.

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