CombiMatrix Corporation (NASDAQ:CBMX)

Unique Insight, Better Outcomes

RedChip Global Online CEO ConferenceJuly 23, 2015

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Safe Harbor

This presentation and our discussion contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company’s current expectations, estimates and projections about the Company, management’s beliefs, and certain assumptions made by the Company, and events beyond the Company’s control, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “drive,” “focus,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “likely,” “potential,” “continue,” “ongoing,” similar expressions, variations or negatives of these words. These forward-looking statements are not guarantees of future results, and they are subjected to risks, uncertainties and assumptions that could cause actual results to differ materially and adversely from those expressed in any forward-looking statement. The risks and uncertainties referred to above include, but are not limited to, market acceptance of the Company’s test offerings, the Company’s ability to grow and expand its business, success in launching new strategic partnerships and alliances, the Company’s ability to raise additional capital on a timely basis, or at all, or to improve its operating results in the near future; and such other factors described in the Company’s filings with the Securities and Exchange Commission. The forward-looking statements in this presentation speak only as of the date they are made. The Company undertakes no obligation to revise or update any forward-looking statement for any reason.

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What We Do and How It Saves Lives41 y/o female presented for prenatal care at 11 weeks of gestation

• Nuchal thickness is within normal range

• Risk of a chromosomal abnormality based on maternal age is 1 in 53

• Patient choose non-invasive prenatal screening (NIPS) over invasive testing (CVS, Amniocentesis)

• Results indicated a high likelihood of trisomy 18

• Babies with trisomy 18 typically have multiple congenital abnormalities and severe intellectual disabilities; most die in utero or shortly after birth from these anomalies

NIPS

• Choroid plexus cysts (CPC) and no other abnormalities

• CPCs can be seen more often in babies with a trisomy, but are also commonly identified in chromosomally normal babies

Fetal Ultrasound

• Being too late in gestation for CVS, the patient waited 3 more weeks for amniocentesis

• Patient scheduled termination of pregnancy

Amnio-centesis

• No evidence of aneuploidies involving 13, 18, 21, X or Y

Amnio-centesis:

CombiFISH

• Normal male profile

• Patient received results 2 days before scheduled pregnancy termination

Amnio-centesis:

Microarray

• Delivery of healthy infant

• Cord blood demonstrated a normal karyotype

Cord blood:Microarray

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Prenatal Diagnostic Testing is a Powerful Tool

• Direct microarray analysis provided definitive evidence• Because of our laboratory’s efficiency and patient/physician focus, we

quickly and thoroughly analyzed the direct amniotic fluid sample and provided crucial information to a family in need precluding a misdiagnosis from a NIPS result

• The work we do has a HUGE impact on people’s lives• A wrongful termination was averted

• The physician indicated that she would be counseling her patients differently with regard to NIPS versus diagnostic testing through an invasive procedure

• The patient was ecstatic that her baby had normal chromosomes and that we were able to provide a definitive answer in under 7 days

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Why invest today in CombiMatrix?

We are in a burgeoning Prenatal diagnostic market at the right time• Market Size: $500M market conservatively and growing

• Growing patient demographic: Mothers are getting pregnant later in life More high risk pregnancies equates to greater demand for high risk DX testing Advanced Maternal age women are more likely to be victims of RPL (multiple miscarriage)

• Superior technology for the application supported by data • NIHCD study in NEJM• ACOG Committee Opinion

We are executing on the commercial plan• Volumes

• We are delivering record volumes and revenues in our prenatal business• Influx of new customers have started to use the service offering• New tests starting to contribute to top and bottom line

• Revenue and Reimbursement- We continue to deliver record cash collections

We are delivering new products that complement the offering• Launched CombiPGS for IVF market, Buccal swab for Pediatric Neurology market,

and targeted array for MFM/Genetic Counselor customer base

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Potential Annual Market Opportunity

342,000 Patients – $500M

Re-cur-rent Preg-nancy Loss:132,0

00

Prenatal: 100,000

IVF:10,00

0

Postna-tal:100,000

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Prenatal Diagnostic Testing-$200M MarketCustomers

Maternal Fetal Medicine specialists (MFM)

OB/GYNs

Genetic Counselors

Medical Benefits Provides high resolution diagnosis of cytogenetic disorders Allows parents to make informed decisions on pregnancies Published NICHD study and ACOG Committee Opinion support

microarrays over karyotyping for prenatal testing Comprehensive reflex to confirm NIPS results-avoid wrongful

terminations due to incomplete information and provide parents peace of mind

Competitive Advantages A pioneer of direct microarray analysis of amniotic fluid and CVS Rapid 7-day turn around time CombiCounsel™ Genetic Counseling Program Unique counseling and physician summary reports

Commercial strategy to develop the market Direct sales organization (outside and insides sales) Partnership with Sequenom contributes 75 incremental FTEs Leverage the support of SMFM and ACOG

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Comprehensive Prenatal Testing Solution

Non-Invasive Prenatal Screening (NIPS)• Screening test for aneuploidies of chromosomes 13,

18, 21, X & Y• Run rate for NIPS tests in 2015 to exceed 700,000• Reflex to invasive testing anticipated to be ~5%• High false positivity rate a concern with NIPS

Microarray is Complementary to NIPS

Chromosomal Microarray• ACOG recommends all positive NIPS

screens receive diagnostic testing• Microarray is proven to be test of choice

after invasive procedure (NIHCD study, Dec 2012 NEJM)

Have new prenatal tests been dangerously oversold?

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Recurrent Pregnancy Loss Testing-$150M Market

*Foyouzi, et al. Fertil Steril 2012;98:151-155 Bernardi, et al. Fertil Steril 2012;98:156-161

Commercial Strategy to Develop the Market Direct sales organization (outside and insides sales) Partnerships with regional reference labs contributes over 100

incremental Sales Reps in field

Competitive Advantages Leading expertise in the ability to analyze FFPE samples Rapid turn around time All tests performed in 1 location High yield success rates: 86% for fresh and FFPE

Medical Benefits Microarray provides high resolution diagnosis of genetic

disorders, which account for 50% of miscarriages occurring prior to 20 weeks gestation.

Avoid costly evaluations of mother, if chromosomal etiology uncovered, saving over $3000 per patient*.

Allows parents to make informed decisions on future pregnancies by enabling the refinement of risk for additional pregnancy loss

Customers Maternal Fetal

Medicine specialists (MFM)

OB/GYNs

Pathologists

Reproductive Endocrinologists

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Pre-implantation Genetic Screening-$25M Market

*Hodes-Wertz, et al. Fertil Steril 2012;98(3):675-680 Yang, et al. Molecular Cytogenetics 2012;5(24):1-8

Medical Benefits PGS by microarray provides high resolution screening for

aneuploidy in in-vitro fertilization (IVF) derived embryos prior to implantation.

Avoid multiple embryo implantations and decreased multiple rate*. Increased implantation rates and decreased miscarriage rates from

IVF

Commercial strategy to develop the market Direct sales organization (outside and insides sales) Leverage the references from MFMs and OBs to the RE doctors All cash pay-minimal reimbursement risk

Competitive Advantages Leading expertise in microarray 24-hour turn around time Barcoded Samples for quality assurance Dry-Ice free shipping Genetic Counseling services Ready access to medical staff

Customers Reproductive

Endocrinologists

IVF Centers

Embryologists

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Postnatal Diagnostic Testing-$125M Market

1. Manning M and Hudgins L. Genet Med. 2010; 12(11):742-745.2. Michelson DJ, et al. Neurology. 2011 Oct 25;77(17):1629-35.

3. Ellison JW, et al. Pediatrics. 2012;130e:e1085-e1095

Customers Pediatric Neurologists

Clinical Geneticists

Behavioral Pediatricians

Child Psychologists

Children’s Hospitals

Medical Benefits The American College of Medical Genetics (ACMG)1, American Academy

of Pediatrics (AAP)2, and the American Academy of Neurology (AAN)3 all recommend chromosomal microarray testing for individuals with one or more of the following:

Developmental delays or intellectual disability Birth defects Unusual physical features Autism spectrum disorders.

Commercial strategy to develop the market Direct sales organization (outside and insides sales) Established reputation in postnatal with multiple leading children’s

hospitals as clients

Competitive Advantages Leading expertise and well-published in postnatal microarray Rapid turn around time Testing can be performed on blood or buccal cheek swab, allowing ease

of use for the client

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Microarray Testing for Prenatal and RPL Diagnosis

• Data supports microarray superiority over karyotyping

• The College (ACOG) recommends*:• Microarray as first tier test for stillbirths

• Microarray as first tier test for diagnostic procedures

• All positive NIPS results get reflexed to an invasive procedureo High false positivity rate with NIPS (B.J. Evans, Ph.D., J.D., Gen. in Med., 15: 915-920, 2013)

o Array the best Dx test for invasive procedures (R.J. Wapner, M.D., et al., New Eng. J. Med., 367: 2175-2184, 2012)

o 5% positive call rate on a rapidly expanding NIPS market

• High-touch service model is critical for complicated cases• Physicians require information to help patients’ family planning decision making

• Patients require fast turnaround time to reduce anxiety

*Obstet. Gynecol., 122: 1374-1377, 2013.

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Leveraging Market TailwindsPositive Data and Recommendations

Increased Utilization by Key Customers

MFM Clinics • Ob-Gyn Clinics • Partner Labs

Professional Society Practice

Guidelines

High Profile Publications

Peer-to-Peer

Influence

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Results: Growing Prenatal Microarray BusinessVolumes Revenues ($ in ‘000s)

Management’s strategic shift in mid-2012 to focus company resources on its prenatal services has resulted in record testing volumes and rapid revenue growth

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Commercial Approach to Driving Volumes

• Direct sales (90%)• Two pronged approach

− Physician offices IVF clinics, Ped Neuro practices, MFM/OB offices

− Hospital systems Target the largest community-based hospital birthing centers

• 18 sales personnel in field as of today including the vice president− All personnel focused on entire product line− 6-9 month ramp time for typical sales representative

• Industry and laboratory partners (10%) • Sequenom: sales team assists in driving prenatal array demand • Pathology partners-regional relationships help drive RPL array demand

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Reimbursement, Revenue, and Collections

• Reimbursement Expertise• Billing team led by Kim Leroux, Billing expert• Payer Relations headed up by Karen Warner, hired in Jan 2015• Lale White, CEO and Chair of Xifin, is on our Board of Directors

• Results• Record Collections in Q1 2015 and 2014 • Secured three contracts in Q1 2015 at pricing targets

• Strategy• Thought Leader Involvement

− Education efforts initiated for key members of ASRM and SMFM− Current NCDs are based off old data; education plan is gaining traction

• Patient Advocacy-initiated a patient call to action plan• Team maintains pricing integrity when deciding whether to contract with

payors

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New Technologies that Leverage Our Sales Channel

• Launched three new assays over past several months

• New tests leverage current sales team and call points

• R and D pipeline:• Goal is to launch two new assays in the next 9-12 months• Plan to enhance current offering and expand into NGS

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Recent Highlights of Business ExecutionQuarter Milestones

2015: Q2

• Favorable Court ruling in D&O Insurance case; Settlement with Plaintiff to end all future litigation• Announced launch of Buccal Swab DNA Collection effective May 1st • New England Journal of Medicine article Supports Importance of Invasive testing following NIPT• 1st Quarter and 2015 Results:

• Quarterly record for prenatal microarray volumes and revenues• Quarterly growth in prenatal microarray testing volumes and revenues of 64% & 39%• Quarterly total revenue of $2.3M, up 27.8% from Q1 ‘14

2015: Q1

• Lale White, CEO of Xifin and noted reimbursement expert, joins Board of Directors• Hired Karen Warner as Vice President of Payer Relations• Secured payor contract with Fortified Provider Network (over 4 million covered lives)• Secured $4.9M in gross proceeds from successful Registered Direct Offering w/existing

shareholders• Quarterly and Annual records in terms of prenatal microarray volumes and revenues

2014: Q4• Entered IVF market with launch of CombiPGS• Launched Targeted Array for Prenatal Analysis• Quarterly records in terms of prenatal microarray volumes and revenues

2014: Q3

• Contract signed with BCBS-IL• Conditional approval from NYDOH for both CombiSNP recurrent pregnancy loss and pediatric

tests• Contract signed with Stratose Networks Division• Quarterly records in terms of prenatal microarray volumes and revenues

2014: Q2• Partnership announced with LI Path • Named Trilohan Sahoo, M.D., FACMG, as director of cytogenics• Quarterly records in terms of prenatal microarray volumes and revenues

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Financial SummarySummary Income Statement and Cash Flows (in thousands)

Q1 2015 Q1 2014 FY 2014 FY 2013

Total Revenue $2,329 $1,822 $8,042 $6,367

YOY Growth 27.8% 13.1% 26.3% 19.0%

Prenatal Microarray Revenue $1,554 $1,122 $3,551 $3,551

YOY Growth 38.5% 34.2% 42.8% 112.0%

Cash Used in Operations ($1,179) ($1,569) ($8,640) ($5,605)

Summary Balance Sheet (in thousands)

Q1 2015 Q1 2014 FY 2014 FY 2013

Cash & Equivalents $ 8,730 $12,496 $5,240 $14,036

Total Assets $12,524 $15,598 $8,632 $16,832

Derivative Warrant Liability $ - $ 433 $ - $ 568

Total Liabilities $ 2,232 $ 2,503 $1,512 $ 2,168

Stockholders’ Equity $10,292 $13,095 $7,120 $14,664

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Miscarriage at 10 weeks of gestation• 31 year-old G2P0 presents at

ER with vaginal bleeding• ER sends tissue to pathology;

path tech puts tissue in formalin

Karyotype not possible microarray!• OB notified, requests karyotype • Cannot perform karyotype on

formalin-fixed tissue• Pathologist suggests microarray

Cause of miscarriage identified• Results show a 12.6 Mb loss of

1p36.22 and a 1.1 Mb gain of 2q37.3

• Suggests unbalanced translocation – recommend parental studies

Patient carries a balanced translocation• Karyotypes done on both parents• Patient has the balanced form of the

baby’s rearrangement• Increased risk for miscarriage and/or

fetal anomalies in future pregnancies

ParentalTesting

New pregnancy• Patient is counseled regarding risks• Prenatal diagnosis by CVS or by

amniocentesis is offered

ParentalMicroarray

& cFISH

Fetus has balanced translocation• Normal microarray; cFISH

identifies the same translocation seen in mom

• Normal ultrasound at 19 weeks plus these results are very reassuring

POCTestingOrdered

AbnormalFetal

Microarray

Microarray testing of the miscarriage enabled:1) Identification of the cause of the miscarriage2) Specific counseling regarding recurrence risks for future pregnancies3) Accurate prenatal diagnosis and reassurance in subsequent

pregnancy

12.6 Mb LOSS of 1p36.22

1.1 Mb GAIN of 2q37.3

The Power of Microarray for RPL

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The CombiMatrix Way

• We are a specialty, patient focused clinical genetics laboratory committed to delivering accurate and meaningful diagnostic results both quickly and compassionately to physicians and their patients.• We deliver on a personal, high touch value proposition

• Focus on customer service and physician relationships− Our model is in direct contrast to the model of big-box lab competition

• Execution on the commercial strategy• Direct sales channel that understands the market

• Established industry partners distribute product lines in their area of expertise (MFM, IVF, etc)

• Proven Mol Dx Reimbursement strategy-Evidence based approach

• Delivery of new products in symbiotic markets• Experience of a veteran diagnostic management team

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Experienced Management Team

Network Commerce, Inc.

Scott Burell – CFO, Secretary and Treasurer

Kim Leroux – VP, Reimbursement and Billing

Trilohchan Sahoo, M.D., F.A.C.M.G. – VP ,Clinical Affairs

Mark McDonough – CEO & President

Karine Hovanes, Ph.D. – VP, Scientific Advancement

Karen Warner RN, BSN-VP, Payer Relations

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CombiMatrix Corporation (NASDAQ:CBMX)

Mark McDonoughCEO & President

CombiMatrix

300 Goddard, Suite 100

Irvine, CA 92618

www.combimatrix.com

The information provided herein speaks only as of May 7, 2015 and CombiMatrix makes no commitment to subsequently update the information.  You are encouraged to read our most recent reports on Form 10-K and Form 10-Q for a full explanation of our business, data and results.