Q Investor Presentation

Transcription

1 Global Leaders in Sleep and Respiratory Medicine Q Investor Presentation 1

2 Forward Looking Statements Statements contained in this release that are not historical facts are forward-looking statements as contemplated by the Private Securities Litigation Reform Act of 1995.These forward-looking statements, including statements regarding the Company s future revenue, earnings or expenses, new product development, and new markets for the Company's products are subject to risks and uncertainties, which could cause actual results to materially differ from those projected or implied in the forward looking statements. Additional risks and uncertainties are discussed in the Company's Annual Report on Form 10- K for its most recent fiscal year and in other reports the Company files with the U.S. Securities & Exchange Commission. Those reports are available on the Company's Web site. 2

3 Global Leader in SDB and Respiratory Medicine Global leading developer, manufacturer and distributor of medical devices to treat sleep-disordered breathing and other respiratory conditions. 3

4 What We Do Improve quality of life for people with sleep-disordered breathing or respiratory failure through: Innovative products and technology Raise the benchmark for effective diagnosis, therapy, patient comfort and compliance. Education, awareness, screening Help the medical community and public to understand sleep-disordered breathing. Provide tools to identify people at risk. Ventilation solutions Provide temporary or long-term ventilatory assistance. Monitoring systems Ensure therapy meets clinical requirements. 4

5 Market Opportunities Market Size 20% sleep apnea in the adult population. 13% Mild; 7% Moderate to Severe 7% 13% 2002 Young T, Peppard E, and Gottlieb D. Epidemiology of obstructive sleep apnea: a population health perspective. Am J Respir Crit Care Med 2002; 165:

6 What is Sleep-Disordered Breathing? Abnormal respiration during sleep (e.g. snoring, apneas, reduced airflow). Most prevalent is obstructive sleep apnea a collapse of the upper airway despite ongoing breathing efforts. Other types include central sleep apnea characterized by the lack of breathing effort and mixed apneas (combination of obstructive and central sleep apnea). Healthy upper airway Partially obstructed upper airway Obstructed upper airway 6

7 Visible and Hidden Impacts of Sleep-Disordered Breathing SDB Externally Choking arousals Fragmented sleep Nocturia Unrefreshed on wakening Morning headaches Impaired concentration Daytime sleepiness Internally Hypoxemia Hypercapnia Sympathetic activation Endothelial dysfunction Metabolic dysregulation Hypertension Arrhythmias Myocardial infarction Stroke 7

8 Sleep Apnea is Prevalent in Patients with Other Serious Conditions Drug-Resistant Hypertension 83% Logan et al. J. Hypertension 2001 Obesity Congestive Heart Failure Type 2 Diabetes 72% 77% 76% O Keefe and Patterson. Obes Surgery 2004 Oldenburg et al, Eur J Heart Failure, 2007 Einhorn et al. Endocrine Prac 2007 Pacemakers Acute Coronary Syndrome 59% 57% Garrigue et al. Circulation 2007 Yumino et al. Am J Cardiology 2007 Atrial Fibrillation 49% Gami et al. Circulation 2004 All Hypertension 37% Sjostrom et al. Thorax 2002 Coronary Artery Disease 30% Schafer et al. Cardiology 1999 * Apnea-Hypopnea Index 5 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 8

9 Links Between OSA and Chronic Disease FIGURE Possible mechanistic links between obstructive sleep apnea, obesity, metabolic syndrome, and type 2 diabetes Obstructive Sleep Apnea Intermittent Hypoxia Oxidative Stress Sleep Fragmentation / Sleep Deprivation Neurohormonal Changes Type 2 Diabetes Obesity Insulin Resistance Inflammation Hypertension Dyslipidemia Metabolic Syndrome Reproduced with permission from Tasali E, p MSM, Obstructive sleep apnea and metabolic syndrome: Alterations in glucose metabolism and inflammation. Proc AM Thorax Soc. 5: (2008). Official journal of the American Thoracic Society. Copyright American Thoracic Society. 9

10 Our Five Strategic Initiatives 1. Sleep-disordered breathing (SDB) and its association with and impact on cardiovascular and cerebrovascular diseases. 2. SDB and its association with and impact on type 2 diabetes mellitus. 3. SDB and its association with and impact on perioperative risk. 4. SDB and its association with and impact on occupational health and safety. 5. Ventilatory support for respiratory failure due to chronic obstructive pulmonary disease (overlap syndrome) and neuromuscular diseases. 10

11 Our Commitment to Ventilation Developing innovative and effective mechanical ventilation solutions to improve the quality of life for patients and providing assistance to care-givers. We provide: Mechanical ventilation for congenital defects, illness, trauma, obesity, cardiac arrest, neuromuscular disease, pulmonary disease and sometimes sepsis and shock. Non-invasive ventilation solutions with the best-in-class leak algorithms to support temporary or long-term ventilation. Invasive ventilation solutions for dependant patients with value or leak ventilators providing both pressure and volume ventilation. 11

12 Acquisitions / Partnerships Grundler home / hospital humidification. BiancaMed for RVI; non-contact SDB device (radio frequency / Doppler technology). Carefusion 5 year exclusive for US ventilation; NIV is largest and fastest-growing segment in US subacute market. 12

13 OSA and Cardiovascular Disease 13

14 Why Sleep Apnea and Cardiovascular Disease? 1 Logan et al. J. Hypertension 2001; Schafer et al. Cardiology Gottlieb et al, Circulation July Hypertension: Journal of the American Heart Association July Becker et al. Circulation Kaneko et al. NEJM 2003, Maisel et al. UCSD VA Hospital Case Study Data (2002), Teschler et al. AJRCCM 2001 Sleep apnea is highly prevalent in cardiovascular disease patients 1. 30% to 80% of patients for common CVD states. Obstructive sleep apnea increases risk of incident heart failure 2. Men ages with AHI >30 were 68% more likely to develop heart disease than those with AHI <5. Sleep apnea can cause changes in blood vessel function that reduces blood supply to the heart in people who are otherwise healthy 3. Benefits of CPAP treatment: Continuous positive airway pressure treatment reverses blood vessel abnormalities. Sleep apnea therapy lowers blood pressure 4. 4mm Hg to 10mm Hg reduction with CPAP therapy. Sleep apnea therapy improves cardiovascular health 5. Left ventricular ejection fraction, six-minute walk, VO 2 max, afterload, BNP. 14

15 SERVE-HF Clinical Trial Aim: Demonstrate that adaptive servo-ventilation therapy over two years can improve morbidity and mortality in patients with predominant central sleep apnea and heart failure. Design: randomized controlled trial evaluable subjects. Control arm - optimal medical care. Active arm - optimal medical care plus ASV. Status: Actively enrolling in Europe. Progress: Currently enrolled over 800 patients in 60 centers. Main Sub-study: Demonstrate that ASV therapy improves heart failure outcomes such as left ventricular ejection fraction and quality of life metrics (n=300). 15

16 OSA and Diabetes 16

17 Type 2 Diabetes & OSA Clinical Connections 72% of patients with type 2 diabetes suffer from obstructive sleep apnea (OSA) 1. 86% of obese diabetics have OSA. OSA may have a causal role in the development of diabetes 2. OSA is associated with insulin resistance (independent of obesity) 3. Obese patients with sleep apnea are more insulin resistant than patients with simple obesity 4. 30% of patients presenting to a sleep clinic have impaired glucose tolerance or diabetes, of which 40% are undiagnosed 5. 1 Einhorn et al. Endocr Pract Reichmuth et al. Am J Respir Crit Care Med Ip et al Am J Respir Crit Care Med 2002, Punjabi et al. Am J Respir Crit Care Med Tassone et al. Clin Endocrinol Meslier et al. Eur Respir J

18 OSA and Obesity 18

19 Global Obesity Forecast In 2008, 9.8 percent of the world s male population were obese, as were 13.8 percent of women. In 1980, these rates were 4.8 percent and 7.9 percent 1. The World Health Organization predicts there will be 2.3 billion overweight adults in the world by 2015 and more than 700 million of them will be obese. 1 Majid Ezzati, MD et al, of the Imperial College of London 19

20 Peri-operative Risk 20

21 Sleep Apnea Epidemic = Peri-operative Risk More than 60+ million US adults suffer from sleep-disordered breathing 1. More than 85% remain undiagnosed 2. Increase in prevalence of obesity has led to increase in obstructive sleep apnea 3. High prevalence of undiagnosed obstructive sleep apnea in the surgical patient population (24%) 4. 1 Redline et. al Young et al. Sleep Newman et al. Arch Intern Med Chung et al. Anesthesiology

22 Sleep-Disordered Breathing and Occupational Health and Safety 22

23 Transportation Agencies Recognize Link between Sleep-Disordered Breathing and Accidents US UK In October 2009, the National Transportation Safety Board wrote to the US Coast Guard and Federal Motor Carrier Safety Administration recommending screening of all ship pilots, bus and truck drivers for sleep apnea. US Federal Motor Carrier Safety Administration recommended standards for sleep apnea screening in Dec meeting. Truck driver with undiagnosed sleep apnea killed a 26-year old driver. Coroner in the case and father of dead man call for UK professional drivers to be tested. 23

24 Health Plan and Disability Cost Benefits of OSA Treatment Waste Management s Experience 37% reduction in total medical costs for those treated in 1 st year. 79% reduction in short-term disability costs for those treated in 1 st year. 72% reduction in short-term disability days absent in 1 st year. 0% -10% -20% -30% -40% -50% All Medical Costs % Reduction Short-term disability costs Short-term disability absences Short-term disability leaves 52% reduction of employees with a short-term disability leave in 1 st year. -60% -70% Commercial motor vehicle operators with obstructive sleep apnea and treated with positive airway pressure therapy (N=156) Hoffman, et al., Journal of Occupational & Environmental Medicine, vol. 52, no. 5 (2010) -80% -90% -100% 24

25 Health Plan and Disability Cost Benefits of OSA Treatment Schneider Trucking s Experience Results 12 months post-cpap treatment % reduction in total medical expenses = $6,456/year. 91% reduction in hospital admissions. Does not include savings from accidents. Results from original 6-month follow up study. Improved retention by 229%. 73% reduction in accidents. 0% -10% -20% -30% -40% -50% -60% -70% -80% Total Medical Costs % Reduction Hospital Admissions Accidents 1 Berger, et al., CHEST % -100% 25

26 Superior Product Innovation 26

27 New Mask Offerings Considered Best in Class Quattro FX Mirage FX Swift FX The FX Trilogy 27

28 For Her 28

29 PRICE S9 Series Delivers More Comfort, More Compliance, More Connectivity High $ VPAP Adapt Bi-Level Med $ Premium Segment - Elite Low $ Value Segment Escape FEATURES ResMed 2006 Climate control Wireless monitoring Sleep quality indicator Climate control Wireless monitoring Sleep quality indicator Comprehensive data (AHI tracking, mouth leak, central sleep apnea detection) Ultra quiet Easy-Breathe Easy-Breathe waveform makes breathing more comfortable Simple menu settings Seamless integration with optional H5i heated humidifier with Climate Control Simple menu settings Seamless integration with optional H5i heated humidifier with Climate Control Enhanced Vsync technology provides superior patient ventilator synchrony 29

30 Skinit Skins allow a patient to fit the device into their lifestyle. Skins present an opportunity for cash revenue for HMEs. Personalization has been immensely successful across multiple industries. Personalization will lowering the emotional barriers to accepting therapy, which will drive therapy adherence. Therapy adherence drives customer revenue and patient health. Skins create a unique way to reconnect with patients who have abandoned therapy and potentially bring them back in to using a device. 30

31 Stellar 100 Easy Access to Quality Therapy Feature-rich, premium noninvasive ventilator that can also be used invasively. Light, compact and portable. Packed with exciting innovative features. Improved leak management system (VSync), which makes breathing more natural for the patient. 31

32 Financial Results 32

33 68 th Consecutive Quarter of Revenue Growth Q Revenue (Constant Currency) $332.7M +9% (+9%) Net Income $62.9M +8% EPS $ % 33

34 Sales by Region & Product Q Masks & Accessories 46% Flow Generators 54% Americas 55% Europe 36% Asia-Pacific 9% 34

35 US$ '000 Annual Revenue Performance 1,400,000 15% 5YR CAGR 1,200,000 1,000, , , , , YTD 2012 Net revenues 35

36 US$ '000 % of Revenue Net Income Growth 250,000 21% 5YR CAGR 20.0% 200, % 150, , % 14.0% 12.0% 50, % - * YTD % Net Income Net Income as % of Revenue * 2007 Net Income excludes the impact of a voluntary product recall expense of $59.7 million, $41.8 million net of tax. 36

37 Sustained EPS Growth $1.60 $1.40 $1.20 $ % 5YR CAGR $1.44 $1.00 $0.95 $0.80 $0.60 $0.58 $0.69 $0.70 $0.75 $0.40 $0.20 $0.00 * YTD 2012 * 2007 EPS excludes the impact of a voluntary product recall expense of $59.7 million, $41.8 million net of tax. 37

38 Balance Sheet USD '000 Dec-11 Jun-11 Cash/ Marketable Securities 723, ,267 Accounts Receivable 238, ,352 Inventory 184, ,777 Other Current Assets 100,350 82,056 PP&E 441, ,107 Patents/ Goodw ill 322, ,398 Other Assets 30,957 30,965 TOTAL ASSETS 2,041,478 2,068,922 Accounts Payable 45,763 55,194 Accruals 112, ,787 Incom e Taxes Payable 29,814 7,988 Current portion, long term debt 1, Deferred Revenue 57,595 62,362 Long Term Debt 225, ,000 Deferred Incom e Tax 8,495 8,691 TOTAL LIABILITIES 480, ,185 Com m on Stock 834, ,068 Retained Earnings 1,225,252 1,111,862 Treasury Stock -739, ,625 Other Com p Gain (Loss) 240, ,432 STOCKHOLDERS EQUITY 1,561,075 1,730,737 38

39 Global leader in sleep medicine. Committed to increasing education and awareness of sleep-disordered breathing. Complete solutions from screening to support and monitoring. Advancing ventilation for respiratory care. Creating new benchmarks in ventilation to meet the challenges of respiratory care. Innovative homecare solutions to improve quality of life. Trusted track record, poised for greater success. Strong leadership and globally-diversified team of over 3,300 personnel with diverse expertise. Continuous innovation and investment in research and product development. Ongoing journey of growth, leadership and excellence. Strong balance sheet. 39