andré-michel ballester, ceo jefferies global healthcare ... · crt optimization system reduces the...

SORIN GROUP Presentation 1

André-Michel Ballester, CEO

Jefferies Global Healthcare Conference

London - November, 2014


DISCLAIMER

This presentation contains management preliminary estimates and forward-looking statements,

including information related to Sorin projected financial performance and the expected

development of the med-tech industry, in particular in the cardiovascular segment. These

statements are based on estimates and assumptions made by management of the company

and are believed to be reasonable, as of this date, though by their nature future estimates are

uncertain and difficult to predict. Actual results or experience could differ materially from the

information contained herein. This communication does not constitute an offer or solicitation

for the sale, purchase or acquisition of securities of any of the companies mentioned in any

jurisdiction.


SORIN

AT-A-GLANCE

FY 13 Revenues - €738.5 million

65%

35%

By

business

Cardiac Surgery

Cardiac

Rhythm

Management

67.9%

18.9%6.6%

4.6%

Threadneedle (2%) Bios

Equinox Two

UnipolSai

Free float

52%

27%

9%

12%

By

geography

Note: Percentages may not add up to 100 due to roundings.

Shareholders’ structure

Global reach

Europe

North America

Japan

RoW


WHERE WE WERE AND WHERE WE WANT TO BE:

“FROM VALUE TO GROWTH”

2008 2009 2010 2011 2012 2013 2014 2015 2018

Reorganize &

restructure

Drive profitability De-leverage

Opportunistic acquisitions

New growth strategy

Identify & executeIdentify technology platforms

Trigger geographic expansion

Consolidate & Re-allocateGrow base business

Invest in growth platforms and

Emerging markets

Accelerate growthMarket launch of new technologies

Emerging markets penetration

EXECUTION PHASE

2016

Today

2017


CARDIAC SURGERY – CARDIOPULMONARY

GLOBAL LEADER

Revenues Products

* Underlying growth (at comparable FX rates & perimeter )

Data in €m

Full recovery of Oxygenators and ATS devices from 2012 earthquakes

Continuous geographic expansion

Record revenues in HLM

Successful Inspire-Heartlink-Connect launches

Cannulae growth: Estech, CalMed & BEL acquisitions

Acquisition of Alcard, Brasilian leading player in HLM

Greenfield project for CPB products in China

481.8

96.3

196.7

60.1

Cardiac Surgery

HLM

Oxygenators

ATS systems

+12.1%

+16.6%

+18.6%

+11.5%

FY13 Growth*

Key achievements

9m 14 Growth*

364.4

73.8

151.5

46.8

+5.6%

+16.7%

+5.1%

+7.7%

Heart-lung machines

Oxygenators Autotransfusion systems


CARDIAC SURGERY GROWTH DRIVERS

INSPIRE-HEARTLINK-CONNECT: INNOVATIVE SOLUTION IN PERFUSION

New family of oxygenators: 6 & 8 lpm, integrated arterial filter, dual chamber reservoir

Increase oxygenator profitability

• Lower average manufacturing cost per unit

• Design-to-cost and lean manufacturing

Improved performance and best-in-class product

Gain at least 5 points of market share by 2018 leveraging system sell with Connect, Heartlink/GDP Monitor

Sorin’s IHC systemInspire key features

-2,00

-1,00

-

1,00

2,00 Oxy range

Set-up

Brackets

Ease of use

Safety

Gas exchange Heat Exchange

Reservoir perf,

Priming volume

Biocompatibility

Air handling

INSPIRE 6 AFFINITYCOMPETITOR

First and only perfusion system changing the standard

of care

• Link between HLM and disposables

• Innovative and unique functionalities

• Continuous and on-line monitoring of metabolic

parameters

• Improves ease of use and safety


CARDIAC SURGERY - HEART VALVES

40 YEARS OF LEADING INNOVATIONS

Revenues Products

Key achievements

#2 Heart Valve global player in mechanical valves and #2 Heart Valve player in Europe

10% market share in aortic tissue valves in the US

Perceval growth: €12.1m in revenues in 2013

Supply agreement with Boston Scientific for the manufacturing of certain components of LotusTM Aortic Valve System

Key regulatory approvals and product launches in 2014:

• CE mark of CROWN PRTTM and MEMO 3D ReChord

• FDA approval for Mitroflow PRT and Solo SmartTM

* Underlying growth (at comparable FX rates & perimeter )

481.8

52.6

63.9

+12.1%

-4.9%

+6.2%

Cardiac Surgery

Mechanical Valves

Tissue Valves

Data in €m Growth*FY13 Growth*9m 14

364.4

36.1

47.2

+5.6%

-7.7%

+1.5%

Mechanical valves

Tissue valves

Annuloplasty rings

Sutureless valves


CARDIAC SURGERY GROWTH DRIVERS

INNOVATION IN HEART VALVES

PercevalTM CROWN PRTTM Solo SmartTM

Sorin’s new generation of stented

valve

State-of-the-art hemodynamic and

durability performance

Phospholipid Reduction Treatment

Short rinse time

Enhanced ease of implant through

visible markers

Improved radiographic

visualization through dedicated X-

ray markers

The biological solution of choice

for aortic valve replacement

Over 6,000 implants in 250

centers world-wide and 32

countries

Over 7 years of clinical experience

Reimbursement in growing

number of countries (i.e., Belgium,

Germany, Czech Republic)

IDE trial on track

Evolution of the Freedom Solo

valve

• Over 4,000 implants and up to

8 years of clinical experience

Closest bioprosthesis to the native

aortic valve

• Removable Ni-Ti alloy stent

• Single suture line implant

technique

• No rinsing before implantation


CARDIAC RHYTHM MANAGEMENT

FOCUS ON HEART FAILURE

ProductsRevenues

* Underlying growth (at comparable FX rates & perimeter)

253.9

92.0

150.9

-6.8%

-2.3%

-10.0%

CRM

High Voltage

Low Voltage

Data in €m Growth*FY13

Key achievements

Recent successful launches

• SonRTM in Europe & selected intercontinental countries

• Reply 200TM featuring Sleep Apnea Monitoring in Europe

• Kora 100TM MRI compatible pacemaker in Europe

• Intensia ICD and CRT-D with DF-4 connector

SonRTM IDE ongoing (RESPOND CRT)

JV with MicroPort to enter CRM Chinese market fully operational

Acquisition of Oscor leads business (including manufacturing facility in Dominican Republic) for $20m

Growth*9m 14

184.1

65.5

109.3

-2.2%

-3.2%

-3.0%

Pacemakers CRT-DDefibrillatori

High VoltageLow Voltage


CARDIAC RHYTHM MANAGEMENT GROWTH DRIVERS

PRODUCT INNOVATION DRIVES PERFORMANCE

SonRTM Reply 200TM

The only weekly, self-adjusting

CRT optimization system

Reduces the need for time

consuming and expensive echo

procedures

Increases CRT responder rates

Potentially reduces HF

hospitalizations

FDA approval expected in 2016

Sleep Apnea: unmet clinical and

economic need

REPLYTM 200 automatically

screens patients for the risk of SAS

• Screening with high specificity

(85%) and high sensitivity (89%)

• Correlated with gold standard

Apnea-Hypopnea Index

• 6-month trend data

• Easy to program

FDA expected in 2015/16

KORA 100TM

MRI compatibility, automatic

switch and sleep apnea

• One flexible cardiology visit

• Limited time in asynchronous

mode

• Automatic switch to normal

mode

Japan approval expected by

end 2014

FDA expected in 2017


EMERGING MARKETS

ACCELERATE GROWTH AND EXPAND LOCAL FOOTPRINT

Action plan & targets

Emerging markets and BRIC growing, respectively, by 20% and 25% at constant FX (FY2013)

Opening of branch in Russia (January 2013)

Alcard acquisition in Brazil (February 2013)

Joint Venture with MicroPort to enter Chinese CRM market (January 2014)

(*) The mix is calculated on sales of Base Business

Note: Emerging markets include: Medaf, Metip, China, Other Asia, Latin America, Eastern & Central Europe

Revenue target (FY 2018)

Recent achievements

Emerging markets

~25%

RoW

~75%

Key market opportunities: China, Brazil and Russia

Expand local footprint by establishing manufacturing presence and

performing R&D for local markets

China: CPB Greenfield operations and local partner

(MicroPort) in CRM

Brazil: Leverage Alcard acquisition and search local partner

to enter CRM

~25% of 2018 sales* from Emerging Markets


EMERGING MARKETS

ACCELERATE GROWTH AND EXPAND LOCAL FOOTPRINT

Cardiac Surgery Greenfield CRM Joint Venture

Local manufacturing of Cardiopulmonary products

Total investment of approx. €18m over 7 years

Located in Suzhou Industrial Park (SIP)

• Top-tier international economic and

development zone

• Focus on high-tech and life sciences

Chinese domestic JV: MicroPort Sorin CRM

(Shanghai) Co. Ltd.

• Ownership: MicroPort (51%), Sorin (49%)

• Corporate governance: equal partners

• Registered capital: $20m cash injection

Business activity

• Import, sale and service of Sorin’s CRM

devices

• R&D and manufacturing of local CRM products

for the Chinese market

Operations started in June 2014

Leveraging complementary strengthes

Aligned vision, culture and strategy


Enopace Equilia Intense

Aortic Baroreceptor Activation

(BAT)

Intra-Aortic Scaffold w/ Wireless

Transmission

$12m invested, 29% ownership

FIH in 2015

Expected launch 2016

Vagus Nerve Stimulation (VNS)

Implantable Stimulator plus Cuff

Lead

Around €10m invested, including

cash-out for Neurotech acquisition

FIH in 2014/2015


Generation 2 VNS

Automaticity, Selectivity,

Personalized Therapy

Approximately €3m

Expected launch 2017/2018

NEW VENTURES GROWTH PLATFORMS

HEART FAILURE PROGRAMS

Large market to be created and developed

• Estimated market size of €0.2m in 2018 and €1bn in 2023

SORIN GROUP Presentation

Cardiosolutions HighLife Caisson

Mitral Spacer System

Transapical delivery

$13.1m invested, 32% ownership

FIH in 2015


Mitral Replacement

Trans-atrial delivery

€4.5m invested, 27% ownership


Mitral Replacement

Transfemoral delivery

$8m invested, 33% ownership


14


PERCUTANEOUS MITRAL PROGRAMS

Large market to be created and developed

• Estimated market size of €0.6m in 2018 and €1.2bn in 2023



PARTNERSHIP WITH RESPICARDIA

Transaction details

Deal signed on October, 2014

$20.0 million investment for a minority stake

Option-to-buy Respicardia in the future

Exclusive distribution right in selected European

countries; commercialization starting beginning

2015

Large and underserved market

First CE approved implantable device for treating

CSA

Familiar technology to Sorin

Significant operating synergies

Same implanter as for CRM (EP and HF physician)

High quality management and Scientific Advisory

Board

Deal terms

Use of

funds

Investment

rationale

On-going clinical validation of the

remedē® System

Founded in 2006 and headquartered near

Minneapolis (Minnesota, US)

Developer of implantable therapies to improve

Respiratory Rhythm ManagementTM

First fully implantable device for the treatment of

central sleep apnea (CSA)

Pacemaker-like device that delivers electrical pulses

via an implantable transvenous lead to the phrenic

nerve which restores a more natural, less disrupted

breathing pattern

CE Mark approved in 2010

Positive clinical results from

pilot study

FDA approved randomized,

controlled IDE pivotal trial

ongoing

The remedē® System


STRATEGY

ACCELERATING LONG TERM GROWTH

Grow Base Business

Faster than Market

Base Business New Product

Geographic Expansion: Emerging Markets

New Ventures Growth

Platforms

Manufacturing Cost Reduction

& Operating Leverage

Bolt-on

Acquisitions

Accelerating long term growth

andré-michel ballester, ceo jefferies global healthcare ... · crt optimization system reduces the...

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