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Overview of Our Businesses

June 26, 2019

Japan Lifeline Co., Ltd.

This briefing material is used to explain our businesses for general shareholders after the 39th General Shareholders’ Meeting held on June 26, 2019.

１．Business OverviewSenior Executive Vice President and COO

Atsuhiro Suzuki２．Mid-term Outlook by Segment

(1) Cardiac Rhythm ManagementVice President Executive Manager of CRM Business Unit

Osamu Watanabe(2) EP/Ablation

Vice President Executive Manager of EP Business UnitKazuhiko Nogami

(3) Cardiovascular SurgeryVice President Executive Manager of CV Business Unit

Toru Takamiya(4) Transvascular Intervention

Vice President Executive Manager of CV Business UnitToru Takamiya

(5) Development and ProductionVice President Executive Manager of R&D and Manufacturing Department

Kenji Yamada

３．Mid-Term PlanSenior Executive Vice President and COO

Atsuhiro Suzuki４．Q&A

Today’s Agenda

1. Business Overview

Senior Executive Vice President and COOAtsuhiro Suzuki

Business Field

42013/5/15

リズムデイバイ

EP/Ablation

・EP Catheter・Ablation Catheter・Radiofrequency Transseptal Needle・Esophageal Temperature Monitoring catheter


Cardiac Rhythm Management

・Cardiac Pacemaker

・ICD

・CRT-D

・AED

Arrhythmia Treatment

Transvascular Intervention


Cardiovascular Surgery・Guidewire

・Balloon Catheter

・Coronary Stent

・ASD Closure Device

・Vascular Graft

・Open Stent Graft

・Stent Graft

・Tissue Valve, Annuloplasty Ring

Cardiovascular Surgery Treatment

(aortic aneurysm, heart valve disease)

Ischemic Cardiac Disease Treatment

（cardiac infarction, angina pectoris）

Revenue Composition FY3/19

52013/5/15

12.9%

50.7%

25.8%

10.7%

Cardiac Rhythm Management

EP/ablation

Cardiovascular Surgery

Transvascular Intervention

FY3/19Consolidated

Sales

45,525(¥ million)

YoY

+7.6％

In-house Ratio (Non-consolidated)

62013/5/15

FY3/19 In-house Ratio (revenue)

In-house54.9％

Third-party’s45.1％

・EP Catheter・Ablation Catheter・Internal Atrial Cardioversion

Catheter・Esophageal Temperature

Monitoring Catheter

Main in-house products

EP/AblationEP/Ablation

・Vascular Graft・Open Stent Graft

Cardiovascular SurgeryCardiovascular Surgery

・Guidewire・Balloon Catheter

Transvascular InterventionTransvascular Intervention

24,971(¥ million)

20,512(¥ million)

Track Record of Revenue from In-house Products(non-consolidated)

72013/5/15

0.0%

25.0%

50.0%

75.0%

0

10,000

20,000

30,000

40,000

50,000Third-party's

In-house

In-house ratio

(¥million)

1.1%

54.9%

In-house ratio has leveled off due to increase in third-party products

Sales Offices

82013/5/15

Provide service through all-Japan sales network

47Sales Offices

As of April 2019

Sales Offices

Logistics Bases

FY3/20 Plan Cosolidated Sales

92013/5/15

30,540 37,181

42,298 45,525

54,059

0

10,000

20,000

30,000

40,000

50,000

60,000

FY3/16Actual

FY3/17Actual

FY3/18Actual

FY3/19Actual

FY3/20Plan

Intervention

Surgery

EP/ablation

CRM

Continuously expect high growth in FY3/20

+18.7%（¥ million）

10

FY3/19 Actual vs. FY3/20 Plan

12.9%

50.7%

25.8%

10.7%Intervention CRM

EP/Ablation

Surgery 45,525（¥ million）

Contribution of CRM will expand

FY3/19Consolidated Sales

20.9%

50.0%

19.0%

10.1% CRMIntervention

Surgery

EP/Ablation

54,059（¥ million)

FY3/20Consolidated Sales

Cardiac Rhythm Management• A major turning point: Change to BSC*1 products

EP/Ablation• With number of AF cases continuously growing, AF-related

products are expected to increaseCardiovascular Surgery

• Ended the valve business• Concentrate on aorta therapeutic area

Transvascular Intervention• Drug-eluting stent gained a certain market share• Enter into new therapeutic area

Development & Production• Investment with a mid-to-long term perspective• Initiatives as a Japanese manufacturer

Initiatives by Business Category

11

*1 BSC: Boston Scientific Corporation *2 AF: Atrial Fibrillation

2. Medium-term Outlook by Business Category

1. Cardiac Rhythm Management

Vice President Executive Manager of CRM Business Unit

Osamu Watanabe

CRM Medium-term Outlook

14

1. Scale CRM business with BSC products

2. Aim to expand market share swiftly with superior tachycardia treatment devices

Exclusive Distribution Agreement regarding CRM-related products

15

Establish exclusive sales channel– Payment of fixed amount for BSJ due to Sales Support Agreement– All BSJ’s CRM sales reps to be temporarily transferred to JLL from

September 1, 2019

Establish a long-term partnership

Counterparty

Contract Date

Product

Nature of Contract

Contract Period

Upfront Payment

︓Boston Scientific Japan

︓November 2, 2018

︓BSC’s CRM-related products

︓Exclusive Distributorship in Japan

︓10 years from September 1, 2019

(automatic renewal every 2 years thereafter)

︓¥3.0 billion

CRM Exclusive Distribution Agreement

16

CRM About Boston Scientific Corporation

– Started in 1979, USA. Headquarters located in Massachusetts

– About 29,000 employees in global

– 13 manufacturing bases

– Established firm positions in as many as 125 countries

– Broad business sphere with more than 13,000 kinds of products

17

No. Name Sales(＄B)1 Medtronic 29.62 Johnson & Johnson 26.23 Fresenius 21.74 GE 18.85 Philips 17.1 6 Siemens 16.67 Cardinal Health 14.08 Abbot 12.39 Stryker 12.110 Becton, Dickinson 12.1

No. Name Sales(＄B)11 Baxter 10.412 Boston Scientific 8.813 Essilor 8.514 Zimmer Biomet 7.815 Novartis 5.916 3M 5.717 Olympus 5.218 Terumo 4.919 Smith & Nephew 4.720 Cannon 3.9

Source: Economy, Trade and Industry Ministry

Worldwide major medical device company

CRM About Boston Scientific Corporation

18*1 as of April 1, 2019

CRM Partnership with BSJ

Best & strongest sales team ever

・Strong product portfolio

・Sales reps with high expertise& skills

・Competitive edge in R&D as a global player

・Experience in arrhythmia therapeutic field

・All-Japan sales network

・As many as 242 sales reps with high expertise*1

Product Sales

19

Brady44.2 billion

56%

Tachy34.3 billion

44%

Brady（Pacemakers） Tachy（ICD-related）

CRM Domestic Market 2017

(R&D CY2017)

In the amount, Brady/Tachy leads are included.

5,674 6,4635,169

724584

496

6,617 7,247

5,862

0

2,500

5,000

7,500

10,000

FY3/17 FY3/18 FY3/19

JLL’s CRM sales

Brady(Pacemakers) Tachy(ICD-related) Others

(¥ million)

• JLL’s CRM business has been highly weighted on brady

• Tachy area occupies a high ratio in domestic CRM market

CRM Market

Initiated sale of S-ICD in advance of the full-release– JLL’s exclusive EMBLEM MRI S-ICD– Accumulating sales know-how since April ’19 to prepare for the

full-launch from September of this year• Much less risk of complications related to leads

20

Tap into tachy treatment market with strong products swiftly

EMBLEM MRI S-ICD SystemS-ICDConventional ICD

Implanted subcutaneously(No contact with cardiovascular system)

Implanted via venous(Lead left in heart)

CRM Main Product in Tachy Treatment Area

21

Make a big leap in CRM market

CRM Our Message

2 EP/Ablation

Vice PresidentExecutive Manager of EP Business Unit

Kazuhiko Nogami

EP/ABL Medium-term Outlook

1. AF*1 ablation cases growing at double digits

2. Increase penetration of Endoscopic laser ablation catheter

3. Address continuous development, improvement and expansion of in-house products

23*AF: Atrial Fibrillation

EP/ABL Forecast of AF ablation cases

• AF cases continuously growing at double digits to reach more than 130,000 cases in FY3/24

• Products for treatment to contribute more as well as currently well-received products for diagnosis

5,122 6,181 9,019

11,448 14,371

17,528 20,364

23,060

27,047

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

0

25,000

50,000

75,000

100,000

125,000

150,000

FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/24

EP/ABL Sales AF Cases

（cases）（¥ million）

*Number of AF cases are JLL’s estimates

24

Estimate

25

*Products for diagnosis/operative use include internal atrial cardioversion catheter, esophageal temperature monitoring catheter, radiofrequency transseptal needle and etc

Products for treatment only account for 5.9% of the whole EP/ABL (FY3/19 actual）

5,122 6,191

9,019

11,448

14,371

17,528

20,364

23,060

0

5,000

10,000

15,000

20,000

25,000

'12/3 '13/3 '14/3 '15/3 '16/3 '17/3 '18/3 '19/3

EP/ABL売上⾼For diagnosis/operative use (EP catheter etc)

94.1％

5.9%

JLL’s EP/ABLSales (FY3/19)

For diagnosis/operative use (EPcatheter etc)For treatment use (ABL catheter)

（¥ million）

Ramp up products for treatment use

EP/ABL Sales Composition by Use of Product

EP/ABL HeartLight

Concentrate on products for treatment for further growth

– Endoscopic laser ablation catheter– HeartLight by CardioFocus– Launched in July 2018

• Ablation with a direct vision of PV (pulmonary vein) through endoscope

• Applicable to various anatomies of PV

26

Endoscopic Laser Ablation SystemHeartLight

Left: catheter Right: consoleWorking for an early launch of the next generation

– X3 shortens procedure time greatly– Anticipate to launch in FY3/22

Aim for further penetration of endoscopic laser ablation with highly competitive products of next generation

EP/ABL In-house New Product Variations

27

BeeATVia IVC*Approach

Steerable SheathFor Left-handed

Full launch in Feb. 2019 To be launched in July 2019

Via IVC approach

*IVC: inferior vena cava

28

Via IVC approach

Strengthen JLL-exclusive product while no competitors can beat to it

The conventional product was not suitable to be inserted from vessels at groin (IVC

approach)

Change made to the tip of the curve enabled it to be inserted from groin

Tap into the unmet needs of doctors who adopt IVC approach

EP/ABL In-house New Products IVC BeeAT

29

Developing efforts realized super user-friendly products that no other competitors have

The conventional product required operations by both hands and thus

procedure took many steps

Improvements on the handle have enabled doctors to use in one-hand

Address various unmet needs

EP/ABL In-house New Product Guidee Leftee

30

EP/ABL Our Message

1. Tap into AF treatment market with HeartLight

2. Endless developing efforts to strengthen the firm position of in-house products even more

3. Cardiovascular Surgery

Vice PresidentExecutive Manager of CV Business Unit

Toru Takamiya

Surgery Medium-term Outlook

1. Valve business ended at the end of May 2019

2. Concentrate on aorta therapeutic area

3. Early launch of thoracic stent graft

32

33

780 1,448

773

9,133

0

2,500

5,000

7,500

10,000

FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 FY3/19

JLL’s sales of tissue valve & vascular graft

Tissue valve-related Vascular graft-related

(¥ million)

Surgery End of Valve Business

Ended valve business with the expiration of the distribution agreement with LivaNova

Open Stent Graft

Thoracic Stent Graft

Abdominal Stent Graft

Concentrate on growing vascular graft-related area

34

Surgery Aorta Therapeutic Area

Only JLL has all these variations of products

JLL’s exclusiveOpen Stent Graft Frozenix

In-houseVascular Graft

Thoracic

ENDOLOGIXStent Graft AFX2

Abdominal

In-houseVascular Graft

Aorta

35

Unique company that has full-lineup in aorta therapeutic area

Surgery Aorta Therapeutic Area

Surgery Introduction Plan of Stent Graft

Re-entry to thoracic stent graft market

– Branched thoracic stent graft NEXUS

– Manufactured by Endospan (Israel)

– Simplification of procedure and

reduction of the complication risk

– Aim to launch in FY3/24

36

Branched Thoracic Stent GraftNEXUS

Based on broad experience, planning to introduce attractive products

37

Surgery Our Message

Stay in the top share in aorta therapeutic area with rich product variations

4. Transvascular Intervention

Vice PresidentExecutive Manager of CV Business Unit

Toru Takamiya

Intervention Midium-term Outlook

1. Expand sales of drug-eluting coronary stent

2. Enter into diagnostic devices for ischemic cardiac diseases

3. Enrich the product lineup for structural heart disease area

39

Intervention Drug-eluting Coronary Stent

Drug-eluting coronary stent Orsiro– World’s thinnest strut (60μm*)

– Gained 7% of market share after 1 year of the launch

Initiated CASTLE Study* in May 2019– Establishing clinical evidence based on Japanese patients’ cases (more

than 50 institutions joining all over Japan）

– Verify the non-inferiority in terms of long-term clinical capabilities

*Randomized Comparison “All-Comers” Study of Ultra Thin-Strut and Thin Strut Drug-Eluting Stents40

Drug-eluting Coronary Stent Orsiro

*60μm: less than 3.00 mm in the diameter of the stent

Intervention Diagnostic Devices

Aim to enter into intravascular imaging devices– IVUS*/OCT*hybrid catheter Novasight Hybrid

– Aim to launch in the 1st half of FY3/21

– Both imaging modalities of IVUS & OCT can be utilized in a single catheter

simultaneously

41

Introduce diagnostic devices for PCI treatment– Optowire; a guidewire installed with a special optical

fiber sensor for measuring intravascular pressure

– Launched in Oct. 2018

– Examination has become mandatory* since Apr. 2018

for more appropriate PCI treatment

* In cases of stable angina, evaluation of functional ischemia was added to insurance calculation requirements for PCI treatment

*IVUS: Intravascular Ultrasound *OCT : Optical Coherence Temograghy

FFR Pressure GuidewireAbove: OptoMonitor

Below: OptoWire

42

Intervention Structural Heart Disease Therapeutic

Increase presence in ASD* treatment area– ASD closure device Figulla FlexⅡ

– Launched in Feb. 2016. Top share in the market.

Aim to launch new devices– PLD (Paravalvular Leak Device)

– PFO (Patent Foramen Ovale)

– VSD (Ventricular Septal Defect)

Strengthen product lineup in structural heart disease therapeutic area

Image of treatment

*ASD: Atrial Septal Defect

43

Intervention Our Massage

1. Accelerate sales of drug-eluting stent2. Early introduction of new products in

structural heart disease therapeutic area

5. Development and Production

Vice PresidentExecutive Manager of R&D and Manufacturing Department

Kenji Yamada

Development and Production Mid-term Outlook

45

1. Development and production in mid-to-long term

2. Reflect needs in clinical practice into product development

Development and Production Facilities

46

リサーチセンター（⼾⽥市）

Ichihara Factory（Ichihara City, Chiba）

Vascular Graft & OSG(development & production)

Malaysia Factory（Penang Province, Malaysia）

Overseas Factory 2

To start operation from Jan. 2020

Shenzhen Factory（Shenzhen, China）

Overseas Factory 1

Core Factory

Toda Factory（Toda City, Saitama）

R&D

Research Center（Toda City, Saitama）

Oyama Factory（Oyama City, Tochigi）

Mass Production

SynexMed JLL Malaysia

Name ︓Medical Technology Park (MTP)

Facilities ︓North Square (Research Center)

South Square (Toda Factory)

47

Development and Production Medical Technology Park

482013/5/15

North Square (Research Center)(Since April 2018)

Base facility for R&D

Land space ︓Total floor space ︓Location ︓

3,655㎡4,590㎡ (five-story bld.)Toda City, Saitama

Development and Production R&D Facility

492013/5/15

South Square (Toda Factory)(Since Dec. 2011)

Mother factory for domestic production

Land SpaceTotal floor spaceLocationProducts manufactured

︓2,917㎡︓5,802㎡ (four-story bld.)︓Toda City, Saitama︓EP catheter, ABL catheter

Development and Production Production Base

502013/5/15

Oyama Factory(Since Oct. 2014)

Manufacture mainly EP/Ablation products

Land spaceTotal floor spaceLocationProducts manufactured

︓ 22,504㎡︓ 4,414㎡ (two-story bld.)︓ Oyama City, Tochigi︓ EP catheter, ABL catheter


512013/5/15

Oyama Factory’s 2nd Facility(To start operation from Apr. 2020)

Land spaceTotal floor spaceLocation

︓ 22,504㎡︓ 5,903㎡ (two-story bld.)︓ Oyama City, Tochigi

1st Facility 2nd Facility

Rendering CG


522013/5/15

Ichihara Factory(Since Dec. 2010)

Manufacture mainly surgery-related products


︓7,467㎡︓5,469㎡ (two-story bld.)︓Ichihara City, Chiba︓Vascular Graft, Open Stent Graft,

Blood Purification Equipment


532013/5/15

Shenzhen FactorySynexMed

(Since Oct. 2010)

Manufacture mainly intervention products

Total floor spaceLocationProducts manufactured

︓ 3,256㎡ (two floors)︓ Shenzhen, China︓ Balloon Catheter,

Guidewire etc.

Development and Production Production Base (overseas)

542013/5/15

Positioned as a mother factory overseas

Rendering CGProgress


︓ 16,000㎡︓ 9,124㎡ (three-story bld.)︓ Penang Province, Malaysia︓ EP Catheter etc (TBD)

Development and Production Production Base (overseas)

Malaysia FactoryJLL Malaysia Sdn. Bhd.(To start operation from Jan. 2020)

55

Development and Production Reflect Needs in Clinical Practice

Clinical settings

Toda Factory(manufacture)

Research Center(R&D)

Sales offices & HQ marketers

New needs

Mass produce products

Find unmet needs

Put into product design

Collect information for development of new products

56

Set up many opportunities for exchanging opinions such as speaking engagements and experiments

Lecture by KOL* Evaluation of a product with a prototype

*KOL: Key Opinion Leader

Development and Production Reflect Needs in Clinical Practice

57

1. Maintain high quality and stable supply (delivery) of in-house products

2. Develop medical devices with high novelty

3. Overseas manufacturing and marketing

Development and Production Our Massage

3. Mid-term Plan

Senior Executive Vice President and COOAtsuhiro Suzuki

Our Basis for Growth

592013/5/15

医療現場のニーズを反映した⾃社製品の開発

海外の最先端の医療機器の探索・商権獲得

Strong sales network covering all over Japan

Early introduction of medical devices backed by regulatory strategy

Expand scale and increase profitability to achieve high growth

＋Manufacturer Trading Company

Our mid-term plan adopts the annual rolling method

• Plan excludes products for which the time of launch

has not been specified as of the date of planning

• Plan factors in status of distribution contracts, latest

development and results of clinical studies

• Plan factors in NHI price revisions Expect revisions in Oct. 2019 concurrently with the

consumption tax hike

Expect revisions in April of each year of 2020, 2021*, 2022 &

2023. (*From 2021, revisions would take place annually in our assumption)

Premises

60

Adjust to ever-changing business circumstances

Mid-Term Plan – Financial Goals

61

FY3/2023

Consolidated Sales

¥77.7BOP Margin

25％

Previous PlanAnnounced on May 29, 2018

FY3/2024

Consolidated Sales

¥89.4BOP Margin

23％

New PlanAnnounced on May 22, 2019

Mid-Term Plan – Sales Highlight

6.6 7.2 5.8 11.217.5 20.3 23

2710.2 11.4 11.7

10.22.7

3.2 4.85.4

37.1 42.2 45.554

63.571.7

84.4 89.4

0

25

50

75

100

125

FY3/17Actual

FY3/18Actual

FY3/19Actual

FY3/20Plan

FY3/21Plan

FY3/22Plan

FY3/23Plan

FY3/24Plan

Cardiac Rhythm Management EP/ABL Cardiovascular Surgery Transavascular Intervention

(¥ billion)

Arrhythmia therapeutic field will be the solid base for growth

62

Revenue from arrhythmia

therapeutic field is likely to account for

70%

Mid-Term Plan – Outlook & Challenges

1. Expansion of arrhythmia therapeutic filed

2. Tap into new market other than cardiovascular

3. Tackle overseas expansion with respect to in-house products

63

64

#1 Outlook & Challenges Expansion of Arrhythmia Therapeutic Field

Increase our presence in CRM market even more with top-class sales force specialized in arrhythmia

Competitive

BSC products

CRMSuperior products

including JLL’s exclusive

EP/ABL

• Solely Japan-made colonic stentLeverage the stent-weaving technology for in-house Open Stent Graft

65

Enter into gastrointestinal therapeutic area

Leverage unique and exclusive technology in a cross-sectoral manner to tap into other

new market

• Radio-frequency ablation system for liver cancer

Leverage the ablation technology of which we have accumulated know-how

Colonic Stent JENTLY

Radio-frequency ablation system arfa

#2 Outlook & Challenges Tap Into New Market

#3 Outlook & Challenges Overseas Expansion of In-house Products

66

Tackle overseas marketing ever more

Aiming to accelerate overseas strategy

• Asian PacificIn April 2019, a new sales office in South Korea.

Regulatory approval for BeeAT has been completed.

• EuropeWork for CE mark for Open Stent Graft

• North AmericaPreparing for exportation of half-finished EP catheters (limited

models) for North America

Mid-Term Plan – Financial Highlight

67

Anticipate to scale business and improve OP margin

5463.5

71.7

84.489.4

19.4%20.6%

21.4%

22.9% 23.0%

15.0%

20.0%

25.0%

30.0%

0

25

50

75

100

FY3/20 FY3/21 FY3/22 FY3/23 FY3/24

Sales OP Margin

15.0%

20.0%

25.0%

30.0%

0

25

50

75

100(¥ billion)

Sales In-house OP Margin

68

Robust base for arrhythmia therapeutic field

FY3/24

Consolidated Sales ¥89.4B

Operating Margin 23%

Scale business with new third-party’s products

Solid growth for in-house products

Mid-Term Plan Our Massage

…for patient comfort.

Thank you for your attention

70

Among the descriptions in this document, the matters that are not historic fact are the forecast concerning the future of our company and the future prospects based on forecasts. Particularly, the matters concerning clinical trials, regulatory approval and launch timing, which are involved in introduction of products, are our company’s prediction obtained from past experiences and available information. Since the actual result may be different from the forecast described in this document, due to the influences of various risks and uncertain factors, please do not depend on these forecasts excessively.

Precautions

Contact:

Japan Lifeline Co., Ltd.Corporate Planning Section

TEL:03-6711-5214E-Mail:[email protected]

URL:http://www.jll.co.jp

overview of our businesses - ir pocketpdf.irpocket.com/c7575/uxy1/bwj8/mc1o.pdf · cardiac rhythm...

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