Goldman Sachs MedTech Conference London September 7 th, 2006

Transcription

1 Goldman Sachs MedTech Conference London September 7 th, 2006 September April

2 Overview & Strategy Marco Chiadò Piat, VP Corporate Development

3 Sorin Group: the largest European cardiovascular medical device company World leader in Cardiac Surgery; growing player in Cardiac Rhythm Management and Vascular Therapy Cardiac Surgery 56% Revenue by Business Unit Competitive position in a large natural growth and technology-driven sector Proprietary technology platform across product portfolio Global footprint: global production, R&D, sales & marketing mm change Vascular Therapy 5% Cardiac Rhythm Management 25% Europe 61% Renal Care 14% Revenue by Geography Net Revenues % EBITDA EBIT Net debt % n.m.* * -16.9M in FY04 Japan 7% ROW 9% North America 23% September April

4 Sorin Group today: a full range player in a 16 bn cardiovascular market Cardiac Surgery (CS) Vascular Therapy (VT) Cardiac Rhythm Management (CRM) Physician Cardiac surgeon and team Interventional cardiologist Cardiologist / electrophysiologist Pathology - procedure Coronary diseases (bypass), valve dysfunction Coronary occlusions (Angioplasty) Arrhythmia, Heart Failure Market size 2005 ( bn) Market CAGR Market share (value) Main players % 4.5% 10% Oxys: ~40% WW HLM: ~50%WW Mech.Valves: ~45% EU ~16% US Tissue Valves: ~15% EU IDE in US Medtronic, Edwards, St. Jude, Terumo Coated (non DES): ~4% EU DES (Janus): ~2% EU J&J, Guidant, Boston Sc., Medtronic, Abbott, Terumo Pacemakers: ~12% EU ICDs: ~ 3% EU CRT-D: ~ 3% EU Medtronic, Guidant, St. Jude, Biotronik September April

5 A broad and rich product pipeline (main launches) Approvals EU US US (IDE) Japan CS Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 CPB/HLM/ATS HLM S5 APOPS (New Extracorporeal Circulation System) New Generation ATS Heart Valves Tissue Percutaneous:- Open Heart - MIS VT - Interv. Appr. Chrono 2 nd generation DES CRM Ovatio CRT-D Ovatio ICD Hi Perf Brady Hi Perf ICD Hi Perf CRT-D September April

6 Integrating a global presence by manufacturing and by branding into one Sorin Group with strong worldwide product brands September April

7 Cardiac Surgery Wide, best-in in-class product offering for the cardiac surgeon and team

8 Cardiac Surgery current product portfolio Mechanical HV Tissue HV Annuloplasty Rings Oxygenators Autotransfusion Heart Lung Machine September April

9 Sorin percutaneous heart valve project Same valve for Surgical (MIS) and Percutaneous implant techniques Minimally Invasive Surgical Approach Beating heart approach Transcatheter approach Use of a proven and well known biological stentless valve (Sorin Pericardial Stentless, in clinical use since 1985 with 30K implants and zero structural failures) All non-biological surfaces coated with Carbofilm Securing structures made by super-elastic alloys for self securing Retrograde positioning Apical puncture Retrograde positioning with antegrade positioning Double tissue structure allows optimal sealing September April

10 Double-structure armature Securing structure independent from valve supporting system The valve consists of two functionally independent structures (patent pending): Expandable securing structure matching the anatomy of the aortic root and Valsalva sinuses Valve support (non expandable) Strength of securing stent and flexibility of valve support can be controlled independently Optimal positioning in the anatomical geometry Self-securing without stressing the valve September April

11 Project strategy 1 Valve 4 Different Techniques 4 Systems Interventional approach (Interventional Cardiologist) Transcatheter approach (femoral artery/vein) Beating heart approach (apical/aortic puncture) MIS procedure (thoracotomy) Open heart procedure (sternotomy) Surgical approach (Cardiac Surgeon) September April

12 MEMO 3D: the most innovative semirigid annuloplasty ring MEMO 3D TM semirigid annuloplasty ring is the latest result of Sorin Group s research into advanced, high-tech biomaterials and technologies for better patients outcomes: The 1st Sorin Group Branded HV Product soon to be launched in North American & International Market Innovative cell-structure design, capable of mimicking the physiological three-dimensional motility of the native mitral annulus and accommodating the anatomical saddle shape Shape memory and super-elastic alloy core, aimed at restoring the native shape and function Sorin Group s exclusive Carbofilm TM coating for enhanced haemo- and biocompatibility Ease of implant, according to a pre-defined line and thanks to a particular configuration of the silicon filler September April

13 S5: ready to meet any challenge Stöckert S5, the latest heart-lung machine generation of Sorin Group, just received US market clearance (launched in Europe in Oct. 05) 30 yrs of experience in developing and marketing HLM more than 5600 HLM produced up today global market leader: >50% market share worldwide S5 is expected to help hospitals achieve new industry standards for safety, functionality, flexibility and quality, thanks to: reducing line lengths and the possibility of hemodilution no boot-up time, pumps are operable 3secs after turning the system on (vs 180secs of competitors boot time) acoustically differentiated alarms and information displayed on the highresolution touch screens LCD display to be replaced during operation September April

14 Vascular Therapy A leader in vascular therapy through development and marketing of innovative systems

15 VT current product portfolio DES Non DES Peripheral September April

16 JANUS: unique targeted drug delivery Resolve major limitations of DES, such as late stent thrombosis (thanks to fast endothelialization) Superior performance in specific disease segments (e.g. AMI: Acute Myocardial Infarction*): - 0% Late stent thrombosis - 2.2% all TLR - 3.0% all MACE Literature associated increasing risks of late stent thrombosis with polymers on DES platform. No polymeric carrier for the drug. Carbofilm coated surface in contact with blood. Janus elutes drug (Tacrolimus) only toward the vessel wall, with pure drug loaded into reservoirs on the external surface of the stent. Quick vessel healing. Suitable for direct stenting. MASTER randomized clinical trial: PI Dr. Colombo + Dr. Garcia; focus on AMI patients, non inferiority trial vs another DES; first patient to be enrolled in Q3 06. Non-targeted drug delivery Stent strut cross section Other DES with polymer coating Effective release Ineffective release in the blood VS Targeted drug delivery Stent strut cross section JANUS * 6-month data from e-janus registry: results in higher risks AMI sub-group patients (133 out of 587) September April

17 2006 Clinical strategy: Key Points Janus outstanding outcomes in high-risks AMI patients Focused clinical approach in AMI Janus excellent safety profile and clinical benefits in real-world population Long-term follow-ups in real-world Unmatched clinical efficacy and angiographic outcomes of Tecnic-Chrono: 0% stent thrombosis, low clinical events, low LLL and angiographic data in clinical trials Tecnic is the best BMS on the market with low LL and excellent thromboresistance MC Morice High Tech January Marseille Re-launch of benefits of Tecnic-Chrono platform September April

18 CHRONO and 2 nd generation DES CHRONO, the new Cobalt Chrome Coronary Carbostent new stent design engineered to provide superior stent flexibility unique Carbofilm coating best-in-class deliverability: the new delivery system PTS (Progressive Transition System) provides improved pushability and trackability precise positioning higher mechanical strength and radiopacity than stainless steel CE mark approval obtained in March nd generation DES CHRONO Cobalt Chrome stent platform unique drug reservoirs technology coated with the well proven haemocompatible Carbofilm enhanced drug release kinetics CE mark approval expected 1H 08 September April

19 Cardiac Rhythm Management Pacing Leadership to invest in future innovation in Heart Failure André-Michel Ballester, President CRM BU

20 CRM current product portfolio Brady ICD Leads CRT-D September 2006 April

21 Sorin Group CRM strategy Leverage strength in Pacing technology across all market segments (AAISafeR in Tachy, PEA in CRT) Establish presence as a rapid innovator in Tachy Become the Innovative Leader in Hemodynamic management of Heart Failure Defend margins by unique features (pricing) and industrial cost reduction (including cycle time reduction) Expand field coverage and competencies to improve our market position Focus on the introduction of system s (Leads, Programmers) which address the total therapy delivery requirements of our customers The turnaround phase initiated in 2004 is well on its way with some early tangible results in 2005 and very promising in H1 2006: Growth > 50% in Tachy globally (05vs04) accelerated in H Growth > 35% in the US (05vs04) confirmed in H Ovatio launch in EU and US Investment in Sales and Marketing (US focus) September April

22 CRM strategy: US focus Build on existing infrastructure: Carbomedics/COBE (Sorin Group): 40+ years of CS history in US Ela Medical (Sorin Group): 20+ years of CRM history in US New Management Team with solid CRM experience New and enlarged sales organization focused on large metropolitan centers Research partnership with leading teaching institutions Faster time to market, shortly after Europe (AAISafeR2, Ovatio) Encouraging initial results: >35% growth in 2005, >50% targeted growth in 2006 September April

23 Symphony Pacemaker/AAISafeR: Natural Rhythm Symphony avoids unnecessary ventricular pacing and restores the natural rhythm of the heart AAIsafeR 2 virtually eliminates deleterious V pacing (< 0.2%) Reduction of HF, AF and mortality risks +1% V pacing = +1% AF risk, +10% V pacing = +20% HF risk Longevity is increased by 28 months Unique comprehensive management for all paroxysmal AV blocks and permanent 1st degree AV block Solution adapted to more patients than ANY other device available on the market Solution adapted to exercise Solution adapted to night variations First to offer AAI pacing with complete dual chamber memorized data (AIDA + programmer) Build knowledge on AV conduction Diagnostic information will help choose the appropriate programming September April

24 Ovatio family: Best-in-Class size and therapy Ovatio, the smallest devices in the market: 29cc ICD mm thin, 30cc CRT-D to improve patient comfort and safety A cutting edge innovation that improves patient s quality of life with the three best in class algorithms in the market: AAIsafeR, PARAD+, BTO Literature shows 50% of patients implanted with pacemakers receive unnecessary pacing of ventricle which may lead to atrial fibrillation and/or heart failure Ovatio with AAIsafeR pacing algorithm reduces unnecessary Ventricular pacing to 0.2% and allows the use of Dual Chamber ICDs without compromising patient safety Literature shows up to 35% of ICD patients and 50% of young ICD patients receive inappropriate, painful shocks Ovatio with PARAD+ the best overall specificity at 99% (1/100) avoids painful shocks*, and promotes painless anti-tachycardia pacing therapy (ATP) Literature shows necessity to analyze slow VTs (which may need immediate therapy) at rates that can be achieved during exercise, and maintain ventricular resynchronization during exercise OVATIO CRT with BTO (Brady-Tachy Overlap) zone, distinguishes slow VTs down to rates of 100 beats per minute but is still able to maintain resynchronization support to rates above this during exercise * Comparison of the specificity of implantable dual chamber defibrillator detection algorithms F Hintringer, M Deibl, T Berger, O Paghinger, F X Roithinger PACE July 2004 September April

25 New CRM platform devices (Hi Performance) Key basic features Single platform for ELA & SORIN BIOMEDICA encompassing the Best Of product features of the two brands (AAIsafeR, PARAD+,PEA) Improve gross margin: reduced production costs & low energy and high energy common platforms. Automaticity: implant & forget Flexible platform to address all patient and customer needs Fully downloadable software for quick clinical update Low power features Builds on Symphony proven features: AAIsafeR, AIDA+, AF prevention algorithms The smallest pacemaker in the market: more integrated electronics lowering device size with an increased longevity Large Holter memory capacity (about 30-min EGMs) High power features High energy output to address all patients needs Atrial therapies delivery PEA (Peak Endocardial Acceleration) heart contractility sensor: monitoring the heart as a pump Heart failure algorithms Ease-of-use September April

26 CRM milestones Low power Symphony Europe: AAIsafeR launched in September 2003 AAIsafeR2 launched in March 2005 US: AAIsafeR2 launched in May 2005 Japan: Regulatory submission in process High power Ovatio Ovatio ICD launch dates: Q Europe and Q USA Q for Japan Ovatio CRT-D launch dates: Launched in Europe in October 2005 Mid 2007 in USA (patients enrolment completed in IDE study), Mid 2008 in Japan Hi Performance 1H 07 Europe 1H 08 US Hi Performance 2H 07 Europe 2H 08 US September April

27 Financials 5-year plan

28 P&L targets Revenues %* %** EBITDA %* %** EBITDA margin 9.9% 13%-14% 15%-17% Revenue growth strongly accelerates in 2008 Continuous EBITDA growth over planning horizon 2006 revenue growth consistent with 2005 trends * 3yr CAGR ** 5yr CAGR September April

29 Revenues key growth drivers - by Business Unit CRM US: Increase ICD market share Ovatio ICD approval EU: Increase Tachy (ICD+CRT-D) market share Ovatio family launched Hi perf Brady approval US: Increase CRT-D market share Ovatio CRT-D approval Hi perf. ICD and CRT-D approval VT EU: Increase DES & non-des market share Focus on AMI patients for Janus Repositioning of Tecnic/Chrono EU: launch Janus 2nd generation CS US: launch tissue valve Mitroflow valve approval EU: Increase tissue valve market share EU: launch percutaneous valve PVT valve approval September April

30 Revenues key growth drivers - by geographic area Revenues growth in CRM and CS will be driven mainly by US, followed by Europe CRM CS ex CPB cagr geographic mix cagr geographic mix US % 13% 30-35% US % 19% 30-35% Europe % 71% 50-55% Europe + 4-6% 49% 40-45% September April

31 CRM and VT as main growth drivers CRM and VT expected to grow rapidly RC VT CRM 100% 14% 5% 25% 100% 10-15% 15-20% 30-35% CS 56% 35-40% BU contribution to total revenues thus leading to a significant improvement in profitability September April

32 Profitability key growth drivers Volume Improvement in Gross Margin thanks to a more profitable geographic mix (US vs EU), a more profitable BU/product mix (tachy, tissue valve and DES), and lower COGS Cost reduction/manufacturing rationalization projects product mix 5-10% geographic mix 10-15% COGS 5-10% cost reduc projects 10-15% volume 60-65% TOT PROF. GROWTH 100% September April

33 Balance Sheet targets WC/Revenues Net debt/equity 55% 50-52% 46-48% revenues geographic mix improvement receivable mix improvement integration plan implementation and supply chain rationalization inventory level improvement September April

34 Final remarks Healthy Growth Focused growth in the fastest developing segments of the CV market (CRM and VT) Balanced geographic growth focusing on US, Europe and Japan Improved Profitability Richer Product mix improving Gross Margins Significant cost savings via manufacturing & organization restructuring Relentless pursuit of Innovation DES Percutaneous valves CRM: Ovatio and Hi-perf platforms September April

35 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 and renal care segments. 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. For more information please contact Sorin Investor Relations Department: Telephone September April