2015 Investor Conference

Transcription

1 2015 Investor Conference ACCELERATING PROFITABLE GROWTH Jill Schaaf President, Renal Care Teeramanas Tanaekakarapong, ESRD Patient, Bangkok, Thailand

2 Becoming The Global Leader In Renal Care Our Global Vision: Provide renal patients the best possible life by elevating the standard of care 2

3 Key Takeaways Strong global demand driven by increasing dialysis patient population and rise in cases of acute kidney injury Combined chronic and acute portfolio allows us to meet diverse patient needs, creating synergies and broader market opportunities Core positions in peritoneal and hemodialysis (PD and HD) provide a platform for sustainable growth Investing to capitalize on the potential of our next $1B+ businesses in home HD and acute care Robust pipeline of innovative products across the entire renal care continuum Well Positioned To Drive Sustainable And Profitable Growth In Renal Care 3

4 Baxter Renal Business By Franchise By Region $4.2B 2014 Revenue 9% 5% 29% 22% 34% 52% 13% 36% Peritoneal Dialysis (PD) Acute (CRRT) 1 Hemodialysis (HD) Therapy Services US and Canada EMEA 2 Latin America Asia Pacific Diversified, Global Portfolio Of Products And Therapies 1 Represents Continuous Renal Replacement Therapy; 2 Includes Europe, Middle East and Africa 4

5 Global Prevalence Of Renal Disease 1 in 10 adults will have some form of chronic kidney disease (CKD) 3.6M patients 1 worldwide have stage 5 CKD or End Stage Renal Disease (ESRD) Diabetes and hypertension are the leading causes of CKD 10% of adults have diabetes, 1 in 3 also have CKD 20% of adults have hypertension, 1 in 5 also have CKD However, treatment for ESRD is costly and options are limited ESRD patients make up less than 1% of CMS 2 patients but approximately 6% of the budget 3 Significant Opportunities Exist To Elevate The Standard Of Care And Provide Cost-Effective Renal Treatment 1 Frost & Sullivan proprietary report (2014), 2015 Estimates; 2 Represents Centers for Medicare & Medicaid Services; 3 USRDS 2014 Atlas of CKD & ESRD Figure 9.5 5

6 Global Renal Patient Growth Treated ESRD Patient Growth 2015 Dialysis Therapy Composition 6 +5% CAGR # of Patients (Millions) M M 3.6M Transplant Patients Dialysis Patients 87% 12% Peritoneal Dialysis (PD) Hemodialysis (HD) 1% Home Hemodialysis (HHD) Solid And Sustained Growth Expected In Renal Replacement Therapy 6

7 Emerging Markets Represent An Underserved Patient Population 1 Global ESRD Prevalence And Potential Untreated Emerging Markets Driving Growth China India Brazil 33% of the ESRD population Treated (3.6M) Untreated (1M+) Other 45% of patient growth Global ESRD rates continue to increase Treatment lags due to access and affordability Often, treatment offered is suboptimal 45% of patient growth will be driven by China, Brazil, India and other emerging markets over the next five years; by 2020, these markets will account for 33% of the dialysis population Governments must balance cost and access Increased Market Access And Infrastructure Expansion Fuels Growth 1 Data on file 7

8 Strong Market Fundamentals 2015 Global Dialysis Product Revenue 1 Global Dialysis Product Revenue Growth 100% $3B $0.7B $11B 4%-5% CAGR 80% 60% ~$0.7B ~$3B ~8% CAGR ~6% CAGR ~$1B ~$4B 40% 20% ~$11B ~4% CAGR ~$13B 0% PD CRRT HD Baxter Fresenius Other HD PD CRRT Leadership position in PD and CRRT Expand penetration in HD Favorable trends in the overall market PD and CRRT markets growing faster than market Estimated Product Revenues 8

9 Renal Growth Aspiration Baxter Renal Sales Growth 1 Strategic Priorities 5%-6% CAGR Aspiration PD Accelerate PD momentum through new product launches HD Grow HD through product innovation and geographic expansion 2015 Expectation 2020 Objective CRRT Drive growth in CRRT through education and innovation Well Positioned To Expand Renal Leadership In The Marketplace 1 Assumes current foreign exchange rates 9

10 Executing Our Strategy Optimize Core Franchises Broaden Therapeutic Portfolio Launch Robust Pipeline Advancing portfolio to address patient needs Accelerating PD adoption and re-establishing HD leadership Expanding geographic penetration; creating Public-Private Partnerships Increasing PD and HD capacity to support profitable growth Leveraging home therapy leadership to build leading Home HD position Driving penetration and utilization of higher-margin Acute business Delivering new solutions to patients through successful launch of multiple new products and treatment options - Next Gen PD systems - HD systems and dialyzers - New Home HD system - New Acute systems Defined Strategic Objectives Provide Clear Path To Achieve Success 10

11 Executing Our Strategy Optimize Core Franchises Broaden Therapeutic Portfolio Launch Robust Pipeline Advancing portfolio to address patient needs Accelerating PD adoption and re-establishing HD leadership Expanding geographic penetration; creating Public-Private Partnerships Increasing PD and HD capacity to support profitable growth Defined Strategic Objectives Provide Clear Path To Achieve Success 11

12 Optimize Core Franchises Augmenting The Renal Portfolio With Gambro Acquisition Moving From Therapy Maximization. To Portfolio Optimization Patient Care Continuum Comprehensive portfolio Competitive product offering HD CRRT PD Home HD Revenue/Cost Synergies Cross-selling/tenders Operational efficiencies Targeting R&D/Manufacturing more than: $300M in Revenue Technical Synergies competencies Knowledge sharing $200M in Synergies Comprehensive Renal Portfolio That Meets The Needs Of Patients Across The Care Continuum 12

13 Optimize Core Franchises Chronic Overview Baxter Chronic Revenue 4%-5% CAGR 2%-3% CAGR Accelerate PD Adoption And Maintain Home Leadership History of innovation Established presence in the home Government support increasing for PD due to therapy cost effectiveness 5%-6% CAGR Accelerate Profitable Growth To Re-establish ICHD 1 Leadership History of innovation 2015 Expectation 2020 Objective PD ICHD 1 Robust portfolio and pipeline Gambro acquisition unlocks incremental cross-selling opportunities Increased dialyzer capacity supports new monitor launch Sustaining And Growing PD And HD Businesses Through New Product Launches, Capacity Expansion And Increased Market Access 1 Represents In-Center HD; Excludes HHD revenue 13

14 Optimize Core Franchises PD: Strong Momentum Across the Globe Market Dynamics Rising number of patients Nursing shortages Clinics at capacity Successful Partnerships Incentivizing Home Care PD First Partnerships Emerging market access Affordability/cost of care Better patient outcomes Increasing Access and Developing Guidelines Success Drivers Home Expertise Credibility With Payers PD Value Proposition PD/HD Cost Ratios US China Mexico UK India PD costs significantly less than HD in most markets and provides increased flexibility Uniquely Positioned To Help Address Market Challenges And Expand Home Therapy Adoption 1 Karopadi. Nephrol Dial Transplant 2013:28(10):

15 Optimize Core Franchises HD: Integral Component Of The Patient Journey Market Dynamics Consistent patient growth Favorable reimbursement Successful Commercial Initiatives Significant Cross-Selling High provider familiarity Established infrastructure Key Tender Wins Success Drivers Comprehensive Portfolio Competitive product portfolio designed for wide range of market and reimbursement profiles Existing Operations Leveraging existing Baxter commercial operations to participate in new tenders Therapy Expertise History of innovation and deep understanding of customer and market requirements Continuing To Leverage Portfolio And Expertise To Unlock Opportunities In Existing And New Markets 15

16 Optimize Core Franchises HD And PD Capacity Expansion Strategic Investments Increased Production Capacity US Germany China Dialyzer capacity expansion will support the launch of new monitors Thailand Singapore Additional PD capacity for new and existing products to ease supply constraints Philippines HD PD Increased capacity will support growth in current markets and geographic expansion Investing To Enable Profitable Growth In Key Strategic Markets 16

17 Executing Our Strategy Optimize Core Franchises Broaden Therapeutic Portfolio Launch Robust Pipeline Advancing portfolio to address patient needs Accelerating PD adoption and re-establishing HD leadership Expanding geographic penetration; creating Public-Private Partnerships Increasing PD and HD capacity to support profitable growth Leveraging home therapy leadership to build leading Home HD position Driving penetration and utilization of higher-margin Acute business Defined Strategic Objectives Provide Clear Path To Achieve Success 17

18 Broaden Therapeutic Portfolio Home HD: New Standard In Dialysis Care Survival Among High Dose Hemodialysis Is Better vs. Patients On Conventional HD Alan, Home HD Patient When compared to conventional HD, High Dose HD studies show a reduction in mortality ranging from 36% to 66% I can t tell you how much better I feel! My blood pressure is much more stable than before and the best of all is that I have so much energy! And I need it to look after my grandchildren Emerging Clinical Evidence Demonstrates Wide Range Of Potential Clinical Improvements Enabled By High Dose HD 1 Blagg CR, Kjellstrand CM, Ting GO, et al. Comparison of survival between short-daily hemodialysis and conventional hemodialysis using standardized mortality ratio. Hemodialysis Int. 2006;10:371-74; 2 Kjellstrand CM, Buoncristiani U, Ting G, et al. Short daily haemodialysis: survival in 415 patients treated for 1006 patient-years. Nephrol Dial Transplant. 2008;23: ; 3 Johanson KL, Zhang R, Huang Y, et al. Survival and hospitalization among patients using nocturnal and short daily compared to conventional hemodialysis: a USRDS study. Kidney Int. 2009;76: ; 4 Marshall MR, Hawley CM, Kerr PG, et al. Home hemodialysis and mortality risk in Australian and New Zealand populations. Am J Kidney Dis. 2011:58: ; 5 Nesrallah GE, Lindsay RM, Cuerden MS, et al. Intensive hemodialysis associates with improved survival compared with conventional hemodialysis. J Am Soc Nephrol. 2012;23:

19 Broaden Therapeutic Portfolio Home HD: Extending Our Home Leadership With Innovation Core Competency Strategic Approach Baxter Sales Leadership in home renal therapies Deep knowledge of patient needs and market dynamics Selecting markets with an established Home HD footprint Educating the medical community on safety, efficacy and convenience of Home HD ~$0.2B $1B Expectation 2020 Objective 2025 Aspiration Expanding Home HD Adoption Leveraging Favorable Reimbursement Differentiating Our Innovative Platform $1B Revenue Leader In Home Dialysis With Expertise To Be Successful In Emerging Home HD Market 19

20 Broaden Therapeutic Portfolio Acute: CRRT Market Opportunity Global Growth in AKI Cases 2015 CRRT Market Opportunity 0.8M ~8% CAGR Multi-Organ 1.7M CRRT Potential Opportunity Support ~$0.7B $1B+ ~$0.2B 1.1M CRRT is underutilized in patients with Acute Kidney Injury (AKI) due to lack of awareness and education 0.8M 1.1M 1.7M High-margin business with an opportunity to leverage Baxter channel and core competencies Barriers to CRRT adoption: Complexity of therapy Reimbursement Baxter Fresenius Nikkiso Awareness of benefits Opportunity Exists To Grow CRRT Share In High Margin AKI Market Source: Data on file 20

21 Broaden Therapeutic Portfolio Acute: Accelerating Profitable Growth Strategic Approach Baxter Sales Building continued knowledge of therapy Increasing adoption and utilization 10%-11% CAGR Educating healthcare professionals $1B+ Launching novel, next generation monitor Expanding into new markets ~$0.7B Exploring opportunities in multi-organ support ~$0.4B 2015 Expectation 2020 Objective 2025 Aspiration Maintaining Current Double Digit Growth Expanding Geographically Exploring Opportunities In Multi-Organ Support $1B Revenue Leveraging Gambro Expertise With Existing Baxter Capabilities And Footprint To Bolster Acute Business 21

22 Broaden Therapeutic Portfolio A History Of Pioneering Novel Treatments PD Treatments With Homechoice 30 $1.5B+ Homechoice Treatments (in Millions) Experienced In Commercializing Platforms That Generate Long-Term Sustained Growth 22

23 Executing Our Strategy Optimize Core Franchises Broaden Therapeutic Portfolio Launch Robust Pipeline Advancing portfolio to address patient needs Accelerating PD adoption and re-establishing HD leadership Expanding geographic penetration; creating Public-Private Partnerships Increasing PD and HD capacity to support profitable growth Leveraging home therapy leadership to build leading Home HD position Driving penetration and utilization of higher-margin Acute business Delivering new solutions to patients through successful launch of multiple new products and treatment options - Next Gen PD systems - HD systems and dialyzers - New Home HD system - New Acute systems Defined Strategic Objectives Provide Clear Path To Achieve Success 23

24 Launch Robust Pipeline Pipeline Will Deliver On Renal Growth Targets Initial Launch Geographic Expansion Home Therapies ICHD CRRT New Products Will Significantly Accelerate Growth, Contributing More than $2 Billion By

25 Launch Robust Pipeline Strengthening Core Businesses With New Product Launches Growing Core HD AK98 will reach new customers and grow HD Easy-to-use touch screen Reliable, quality-assured HD system that helps healthcare professionals reach treatment targets for patients Improvement in customer efficiency and reduces total cost of ownership due to an open system aligned with clinical procedures Strengthening Core PD AMIA is a next generation PD cycler targeted at premium customers Easy-to-use touch screen with a graphical user interface and voice guidance Automatic transfer of data between patient and clinic through Sharesource technology More compact size and modern design 25

26 Launch Robust Pipeline New Products Will Strengthen Core Businesses Developing Home HD VIVIA Home HD monitor is specifically designed for patient use in the home Easy-to-use due to the wireless touch screen, device automation, and extendeduse blood set Unique safety features such as our access disconnect sensor, simplified troubleshooting and hot water disinfection Automatic transfer of data between patient and clinic through Sharesource technology Building Acute Care PrisMAX CRRT will reach new customers and grow extracorporeal technologies Reduction in nurse interventions and cost footprint in ICU Intuitive platform with touch screen and step-by-step automated instructions enhance ease of use Improvement in usability through optimized ergonomics 26

27 Summary Strong global demand driven by increasing dialysis patient population and rise in cases of acute kidney injury Combined chronic and acute portfolio allows us to meet diverse patient needs, creating synergies and broader market opportunities Core positions in peritoneal and hemodialysis (PD and HD) provide a platform for sustainable growth Investing to capitalize on the potential of our next $1B+ businesses in home HD and acute care Robust pipeline of innovative products across the entire renal care continuum Well Positioned To Drive Sustainable And Profitable Growth In Renal Care 27

28 2015 Investor Conference ACCELERATING PROFITABLE GROWTH Jill Schaaf President, Renal Care Teeramanas Tanaekakarapong, ESRD Patient, Bangkok, Thailand