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TRANSCRIPT
CORPORATE PRESENTATION
MAY 2017
DEPLOYING SYSTEM-BASED TECHNOLOGY FOR PERSONALIZED SPINAL CARE
5/16/171
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SAFE HARBORThis document has been prepared by MEDICREA International (the “Company”) whose shares are admitted to trading on the Alternext market of Euronext in Paris, solely for information use as part of a roadshow presentation. By receiving this document and attending this meeting, you acknowledge having read the following restrictions.
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The information contained in this document (the “Information”) has not been independently verified and no representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information or opinions contained herein. The Information is provided as at the date of this document and may change materially. The Company is under no obligation to keep current the information contained in this document and any opinions expressed in this document are subject to change without notice. Neither of the Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document or its contents, or otherwise arising in connection with this document. It is not the purpose of this presentation to provide, and you may not rely on this document as providing, a complete or comprehensive analysis of the Company’s financial or commercial position or prospects.
This document includes forward-looking statements that involve risks and uncertainties. The forward-looking statements are based on management’s current expectations or beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Given the uncertainty of the forward-looking statements, readers are advised that they do not constitute a guarantee, by the Company or anyone, to achieve the objectives and projects of the Company. Neither the Company nor any other person assumes liability for the accuracy and completeness of such forward-looking statements. The forward-looking statements contained in this document apply only to this document. Even if the Company’s financial condition, results of operations and cash flows and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in future periods. The Company does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this document.
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THE FUTURE IS NOW
A NEW ERA IN SPINE SURGERY
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“Personalized Spine Care” is the convergence of adaptive healthcare information technology and FDA-cleared outcome-centered spinal implants to scientifically deliver improved clinical results while providing system-wide cost reductions.
UNiD™ systems technology leverages proprietary, industry-leading data sets, predictive analytics and patient-specific implants and frees the company of antiquated product revenue streams and legacy manufacturing methods to refine global inventory requirements with in-house 3D printing
Medicrea believes each surgeon and patient is innately different. Thoughtful machine learning science must account for all of these variances. We provide each unique surgeon with personalized 21st Century Scientific Intelligence, enabling them to treat each patient individually with optimized, comprehensive, personalized procedural and implant solutions every day.
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• HEADQUARTERED IN LYON, FRANCE AND NEW YORK CITY
• COMPREHENSIVE PERSONALIZED TECHNOLOGIES FOR COMPLEX SPINE MARKET
• FIRST TO MARKET PATIENT-SPECIFIC IMPLANTS FOR THE SPINE WITH UNID™ RODS
• COMPREHENSIVE 3D-PRINTED PATIENT-SPECIFIC PLATFORM IN-HOUSE
• CENTRALIZED HEADQUARTERS AND MANUFACTURING FACILITIES
• 2015 €27.8M. 2016 REVENUE OF €29.4M WITH 81% H1 GROSS MARGIN
• PUBLICLY TRADED ON ALTERNEXT: ALMED TICKER
• RAISED €20 MILLION WITH LEADING U.S. INVESTORS IN AUGUST LED BY ATHYRIUM CAPITAL
• RICK KIENZLE, FOUNDING MEMBER OF GLOBUS MEDICAL, APPOINTED CHIEF COMMERCIAL OFFICER
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• INNOVATIVE SERVICE-ORIENTED APPROACH TO COMPLEX SPINE
• PATIENT SPECIFIC IMPLANTS DRIVE OPTIMAL PATIENT OUTCOMES
• DIFFERENTIATED UNiD TECHNOLOGY BENEFITS ALL KEY STAKEHOLDERS
• SIGNIFICANT GLOBAL MARKET OPPORTUNITY WITH LIMITED COMPETITION
• EXPERIENCED MANAGEMENT TEAM FOCUSED ON COMMERCIAL EXECUTION
• ATTRACTIVE FINANCIAL PROFILE
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Denys SOURNACFounder, Chairman& CEO
Successful entrepreneur in the medical supply and
orthopaedics industry with over 30 years’ experience
creating, building and managing companies.
Pierre OLIVIERCEOMedicrea USA
Over 25 years’ experience in Marketing and Project
Management, mainly in the United States, particularly in
sales launches of new innovative products.
Fabrice KILFIGERChief Financial Officer
Over 25 years’ experience in finance,
including over 10 years heading the finance
divisions of listed companies.
Richard KIENZLEChief Commercial & BusinessDevelopment Officer
Co-founder of Globus Medical with over 25
years of Executive Sales Management
experience in the medical device industry.
David RYANVP Product Dev & Marketing
Biomechanical Engineer with more than 11 years’
experience in orthopedics. Former
R&D Director, Scient’x (Alphatec Spine).
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IBD16%
CervicalFixation
15%
Bone Graft Extenders
17%Vertebral Compression Fracture
10%Spinal Electrical Stimulation
3%
Non Fusion4%
Thoracolumbar Fixation
35%
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UNID TECHNOLOGIES U.S. MARKET OPPORTUNITY
NEARS $6B
1. 2015 Instrumented Thoracolumbar Procedures annually (409,100). 2013 Millennium Research Group, Inc., Table 87 “Thoracolumbar Fusions, by Indication.”
PATIENTSPECIFICUNiD 3D IBD & VBR
SYNTHETICBIOACTIVEBONE GRAFTEXTENDER
ANNUAL COMPLEX SPINE CASES1
116,000
ANNUAL DEGEN CASES1
221,000
AVG REVENUEPER DEGEN CASE
$11,200
AVG REVENUEPER COMPLEX CASE
$30,000
PATIENTSPECIFICDUAL-DIAMETER ROD
PATIENTSPECIFICROD
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• Growing payer pressure on doctors to follow a measurable & systematic treatment plan with penalty charges applied for incurring revision surgery in the USA
• Increased legal liability concerns in achieving a successful outcomeand documenting the treatment plan in patient file
• Implant choices rely more now on hospital value-based strategy vs surgeon preference
• Achieving sagittal alignment for a patient post operation delivers the best clinical results
• The UNiD Lab / Surgeon relationship delivers far greater company / surgeon control with a new commercial sales paradigm that is much more cost effective than traditional sales rep structures.
• Medicrea’s Software system enables a huge reduction in intra op inventory creating a massive systemic efficiency and $ reduction (ex. 400-500 screws per case / reduced to 75).
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Cone of Economy
1. Duval-Beaupere G, Schmidt C, Cosson PH (1992) A barycentremetric study of the sagittal shape of spine and pelvis. Ann Biomed Eng 20: 451–462
4 natural curves to spine in sagittal plane
PELVIC INCIDENCE IS UNIQUE TO
EACH PATIENT AND SET FOR
LIFE1
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VARIABILITY IN NORMATIVE SPINE
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INCREASING INCIDENCE OF IATROGENIC
SPINAL DEFORMITY3
OF AGING ADULTS PRESENT SPINAL DEFORMITY260%
1. Glassman SD, Bridwell K, Dimar JR, Horton W, Berven S and Schwab F, The Impact of Positive Sagittal Balance in Adult Spinal Deformity. Spine. 20052. Schwab F, Dubey A, Gamez L, et al. Adult scoliosis: prevalence, SF-36, and nutritional parameters in an elderly volunteer population. Spine 2005;30: 1082–53. Yousef A, Orndorff DO, Patty CA, et al. Current Status of Adult Spinal Deformity. Global Spine J 2013;3:51–62.
“You are either treating deformity, creating
deformity or ignoring deformity.” –SRS 2016
AGING SURGERY
SAGITTAL RE-ALIGNMENT & CLINICAL OUTCOMES ARE DIRECTLY LINKED1
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Source: Iyer, Lenke, et al., 2016
1. Iyer S, Lenke LG, Nemani VM, Albert TJ, Sides BA, Metz LN, Cunningham ME, Kim HJ (2016) Variations in sagittal alignment parameters based on age: a prospective study of asymptomatic volunteers using full-body radiographs. Spine
Chain of correlation linking alignment of the lower extremitiesto the pelvis, spine, and occiput as well as global alignmentparameters.1
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ALIGNMENT PARAMETERS
VARY BASED ON THE PATIENT’S
AGE AND COMPENSATORY
FACTORS.1
Source: Barrey et al., 2011
COMPENSATORY MECHANISMS FOR SAGITTAL
MALALIGNMENT
COMPLEX ALIGNMENT CONSIDERATIONS
125/16/17
7. Rod bending lab organized in 2012 included 8 spine surgeons and fellows from major US teaching institution
High Variability: Qualitative comparison between the real shape and the bending obtained by the attending and fellow groups.7
Post-op X-RayAttending Surgeons Fellows
ONE SIZE DOES NOT FIT ALL… HIGH VARIABILITY IN BENDING
131. Moal B, Schwab F, Ames CP, et al. Radiographic Outcomes of Adult Spinal Deformity Correction: A Critical Analysis of Variability and Failures Across
Deformity Patterns. Spine Deform. 2014.2. Rothenfluh DA, Mueller DA, et al. Pelvic incidence-lumbar lordosis mismatch predisposes to adjacent segment disease after lumbar spinal fusion. Eur Spine J
(2015) 24:1251-1258
CURRENT SHORTCOMINGS IN TREATMENT
LONG-TERMREPORTEDREVISION RATE437%
3. Smith JS, Shaffrey CI, Klineberg E, et al. Prospective multicenter assessment of risk factors for rod fracture following surgery for adult spinal deformity. J Neurosurg Spine 21:994–1003, 2014.4. Frymoyer JW, Matteri RE, Hanley EN, et al: Failed lumbar disc surgery requiring second operation. A long-term follow-up study. Spine 3:7-11, 19785. Jang J-S, Lee S-H, Min J-H, Kim SK, Han K-M, Maeng DH. Surgical treatment outcomeof failed back surgery syndrome due to sagittal imbalance. Spine (Phila. Pa. 1976). 2007
OF PATIENTS AREMALALIGNEDPOST-OP1
62%
OF MANUALLYBENT RODSFRACTURE39%
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OF REVISIONS FAIL TO ACHIEVE ADEQUATE LUMBAR LORDISIS5
63%
22%FRACTURE-RATE WITH PSO3
INCREASED RISK OF ADJACENT LEVEL DISEASE2
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MANUALCONTOURTime-consuming, intra-operative bending of straight rod to fit sagittal profile of patient using rudimentary instrument.
CURRENT STANDARD UNiD™ APPROACH
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PATIENTSPECIFICData-driven, predictive Systems Technology with computer-assisted contouring of rods and machine-learning feedback loop.
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BONE GRAFT SOLUTIONS
SPECIALIZED SYSTEMS FOR
COMPLEX SPINE
CUSTOMSAGITALLY
ALIGNEDRODS
CUSTOMINTERBODY
DEVICES
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TWENTYFOUR / SEVENSUPPORTNo matter where you are in the world, experienced biomechanical engineers work with you to simplify your life, utilizing empirical, precise and accurate surgical planning
medicrea.com leading personalized spine
ONE-TO-ONE ENGINEERING COLLABORATION§ DIGITAL ANATOMICAL MEASUREMENTS
§ SURGICAL PLAN SIMULATION
§ PER-OPERATIVE CASE MEMO
§ PATIENT-SPECIFIC IMPLANT
§ STATISTICAL ANALYSIS
§ INTEGRATED REPORTING
DEDICATED EXPERTS
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24/7 SUPPORT
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A New Relationship & Cohesion Paradigm Between The Company & Surgeon
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PATIENT MEDICREA3RD PARTY PAYERHOSPITALSURGEON
IMPROVED OUTCOMES
TIME SAVINGS
REDUCED COST
OPTIMIZED INVENTORY
POSITIVE DIFFERENTIATION
PATIENT SELECTION
CONSTITUENTS
BEN
EFIT
S
INTRA-OPCONFIRMATION
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10. McCarthy IM, Hostin RA, Ames CP, et al. Total hospital costs of surgical treatment for adult spinal deformity: an extended follow-upstudy. Spine J. 2014
SUBSTANTIAL LONG-TERM SAVINGS FOR ALL STAKE-HOLDERS
Increase in the overall average costs of adult spinal deformity surgery for patients
requiring revisions and reoperations10
70%
Costs associatedwith hospital readmission10
$80,000
REDUCED RISK OF REVISION AND TIME-SAVING TECHNOLOGY
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13. Range of $22/min to $133/min, across 100 hospitals in the U.S. Shippert RD. A Study of Time-Dependent Operating Room Fees.The American Journal of Cosmetic Surgery, 2005 Vol. 22, No. 1.14. Survey of U.S. Spinal Surgeons on Rod Bending Time. Medicrea Survey Results. 2015.
ASSOCIATEDTIME & COST REDUCTION
BENEFITSUS spinal surgeons, on national
average, spend 15 minutes manually bending spinal rods in the O.R.13
$100 / minute national average cost in the O.R.14
Potential savings by procedure by minimizing manual rod
bending in the O.R.
$1,500
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1 MORE SURGEONS USING UNiD PLATFORM AND RODS
2 CONVERTED SURGEONS INCREASING UNiD UTILIZATION
3 MORE REVENUE PER PROCEDURE
UNID RODs UNID IBDsPROPRIETARY
BIO-ACTIVE BGE
PEDICLE SCREWS
Least commoditized
Low conversion sensitivity
Most commoditized
Higher conversion sensitivity
ENGAGE FULLY CONVERT
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RAPID MONTHLY INCREASE IN UNiD™ PATIENT-SPECIFIC SURGERIES SINCE RELEASE
FDACLEARED
USED WITH MEDICREA FIXATION
74%
TOTAL US UNiD CASE REVENUE
(15% PREMIUM ONPATIENT-SPECIFIC)
$13.0M
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PATIENTS TREATED AS OF 30 APR ‘17
H22014
H12015
H22015
H12016
H22016
April'17
1355GLOBAL
693EUROPE
662U.S.A.
225/16/17
• 2016 revenue of €29.4M
• High gross margin in the 80 % range
• Significant capex spendings in 2016 & 2015 to increase in-source of production and manufacturing efficiency
• EBITDA positive since 2010
• 160+ Headcount
• Transformative € 20M fundraising in August 2016, including € 15M from Athyrium Capital Management in US and € 5M from multiple US investors & Executive team
AT A GLANCE
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MANUFACTURING• IN-HOUSE TITANIUM 3D PRINTING PATIENT-SPECIFIC IBD & VBR
• U.S. UNiD ROD MANUFACTURING FOR DEGENERATIVE DEFORMITY MARKET
• BRING STERILIZATION CAPABILITIES IN-HOUSE
• SIGNIFICANT COST REDUCTION AND INCREASED EFFICIENCY IN INVENTORYMANAGEMENT VIA UNiD PLATFORM PREDICTIVE TECHNOLOGIES
SALES AND MARKETING• RICK KIENZLE APPOINTED TO LEAD COMMERCIALIZATION EFFORTS • DRIVE REVENUE WITH INTEGRATED PRODUCT SOLUTIONS THROUGH UNiD
TECHNOLOGY ADOPTION• BUILD BODY OF EVIDENCE FOR PATIENT-SPECIFIC UNiD ROD
• INCREASE PRESENCE WITH KOLS IN STRATEGIC HOSPITALS AND CENTERS
• INCREASE AWARENESS WITH UNiD WARRANTY PROGRAM
• EXPAND ONLINE MARKETING CAMPAIGN AIMED AT US PATIENTS
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Q1 ‘17
NEW TECHNOLOGY DEVELOPMENT
• PREDICTIVE, MACHINE LEARNING THRU BIG DATA COMPILATION AND MINING
• COMPLETE UNiD MIS DEVELOPMENT• FDA FILE SUBMISSION FOR PATIENT-SPECIFIC 3D-PRINTED
• UNiD LAB ONLINE INTERFACE • UNiD 3D BIPLANAR ROD DEVELOPMENT, MARKET RELEASE
• FDA CLEARANCE OF PATIENT-SPECIFIC 3D-PRINTED INTERBODY & VERTEBRAL BODY REPLACEMENT DEVICES
Q2 ‘17
Q3 ‘17
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• INNOVATIVE SERVICE-ORIENTED APPROACH TO COMPLEX SPINE
• PATIENT SPECIFIC IMPLANTS DRIVE OPTIMAL PATIENT OUTCOMES
• DIFFERENTIATED UNiD TECHNOLOGY BENEFITS ALL KEY STAKEHOLDERS
• SIGNIFICANT GLOBAL MARKET OPPORTUNITY WITH LIMITED COMPETITION
• EXPERIENCED MANAGEMENT TEAM FOCUSED ON COMMERCIAL EXECUTION
• ATTRACTIVE FINANCIAL PROFILE
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UNiD : A New Era In Patient Carehttps://www.youtube.com/watch?v=jRwrDg_bca4
UNiD in the NEWS : New Frontiershttps://www.youtube.com/watch?v=OaOccVBrJpk
FDA Approved : Medicrea Announces UNiD Cervical Rodhttps://www.youtube.com/watch?v=Z55zvgtqvVs
Patient-facing websitewww.personalizedspinalimplants.com
Medicrea US Website Newsroomhttp://www.medicrea.com/usa/newsroom-usa/
VIDEOS
PATIENT-FACING
PRESS RELEASES
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QUOTES
“The patient-specific rod is very much ahead of its time. When we finish the operation, we’ve left them with the best possible appearance for the rest of their lives. The curve is not going to worsen and there is less likelihood of them having pain.”
- Dr. Andrew King, Children’s Hospital New Orleans
“We now realize how important it is to provide a specific alignment of the spine that is unique to each patient. If we do not achieve the optimal alignment during surgery, then we are too-often revising that patient later. UNiD™ is using precision technology and analysis to solve this clinical issue for patients as well as providing an invaluable support service and feedback loop for surgeons.”
- Dr. Evalina Burger, University of Colorado Hospital
“Understanding and restoring sagittal alignment is key towards providing better patient outcomes and preventing the need for reoperations, a major factor in rising health care costs. By providing rod customization, UNiD™ allows surgeons to precisely execute their preoperative plan and frees them from the antiquated technique of freehand bending, ensuring individual patients receive the most accurate and effective treatment. Having a more precise, personalized rod ready before even stepping foot in the operating room is a game-changer for spine surgery.”
– Dr Schwab, HSS, New York
275/16/17
RICK KIENZLE FULL BIO
Mr Richard Kienzle, also known as Rick, has been Chief Commercial & Business Development Officer at Medicrea since August 2016. Mr Kienzle is a successful spine executive with a deep network in the World-Wide Spine Markets. He is a Founder and served as the Executive Vice President Global Sales and Marketing of Globus Medical, Inc. (Ticker symbol GMED) from 2003 to 2011. His responsibilities included all global sales, marketing, training and commercial functions of Globus including the development of an exclusive national distribution network. During Mr Kienzle’s tenure, Globus was widely noted as the fastest growing company in orthopedic history. GMED closed a $110M private placement with Goldman Sachs and Clarus Ventures in 2007 and an IPO with Goldman and BOA in 2012. Prior to Globus, he served for 5 years as Area Vice President; Synthes Spine where he was responsible for all sales and marketing functions at this top-performing enterprise with over $90M in annual revenue (30% compounded growth rate). Mr Kienzle’s experience also includes 8 prior years with United States Surgical Corp working side-by-side in the OR with surgeons of all surgical specialties, followed by a series of promotions and culminating as the National Business Director. He has additional experience in the banking field working for The Equitable Financial Companies and Mellon Bank. He has been a Director at Medicrea since August 2016. Mr Kienzle received his Bachelor of Arts from Denison University. Mission: to oversee the commercial expansion of Medicrea’s patient-specific UNiD technology and personalized treatment modalities.
Chief Commercial & Business Development Officer, Director
SPINOPELVIC PARAMETERS PRE-OPERATIVE CASE PLAN POST-OPERATIVE
Pelvic Tilt (PT,˚) 25 10 12
Pelvic Incidence (PI,˚) 35 35 35
Sacral Slope (SS,˚) 10 25 23
Lumbar Lordosis (LL,˚) 21 43 43
PI-LL (˚) 14 -9 -9
Thoracic Kyphosis (TK,˚) 42 42 42
T1 Pelvic Angle (TPA,˚) 21 6 6
Sagittal Vertical Alignment (SVA,mm) 38* 17 -15.2
Detail Information
Surgery Date 2 / 2 / 2015
Levels T10-Pelvis
Type of Rod Standard
Rod Material CoCr
Rod Diameter 6.0
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ADULT DEFORMITY CASE
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