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Rivers Club Pmd 091108

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Renal Solutions-a western Pennsylvania success story.

Renal Solutions-a western Pennsylvania success story.

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  • 1. Introductory Remarks Bob Dickson CFO-CardiacAssist [email_address] 724-272-1527
  • 2. The Renal Solutions Story Pete DeComo, CEO Life Sciences Executives Rivers Club September 11, 2008
  • 3. In Appreciation
    • No successful entrepreneur does it alone!
    • My deepest appreciation to all who have supported me
      • My wife Kate and my daughters Nicole and Kristen
      • The Renal Solutions team
      • My investors:
        • Gary Glausser – Birchmere Ventures
        • Mike Stubler – Draper Triangle Ventures
      • The many other individuals and organizations
  • 4. The Renal Solutions Vision
    • To develop and commercialize a hemodialysis system suitable for the institutional and home settings.
    • In the home setting the goal is to facilitate;
      • Self Administration – More Dialysis!
      • Improved clinical, quality of life and cost outcomes
      • Improved dialysis center performance metrics
  • 5. Renal Solutions History
    • Incorporated in August 2000
    • Moved the Company from Lafayette IN to Pittsburgh in 2001
    • Corporate headquarters & distribution in Warrendale, PA
    • Sorbent manufacturing in Oklahoma City, OK
      • Acquired SORB ™ in April 2001 ( RSI Had no cash or value at the time! )
    • Currently 65 employees
    • FDA clearance in June of 2005 and April 2006
    • CE Marking received in November 2005
    • Initiated a controlled product launch January 2007
    • Basically pre-revenue through 2007
    • RSI Acquired by Fresenius in November, 2007
  • 6. The Allient ® System - Benefits
    • Treatments anytime & anywhere
    • Freedom from water purification hassles, installation cost and maintenance
    • 1 piece of equipment for multiple treatment options
    • Exceptional dialysate purity
    • Gentle, customized, patient-driven therapy
    • Closed fluid circuit
    • No internal disinfection/sterilization
    • Simple single- or dual-lumen vascular access choice
    • Competency easily achieved
  • 7. Sorbent Cartridge – Heart of RSI Technology
    • Four Layers ( Bottom to Top) :
    • Activated Carbon & Purification
    • Organics, Middle Molecules
    • Urease Layer
    • Urea --> (NH 4 ) 2 CO 3
    • Zirconium Phosphate
    • Cation Exchange
    • Zirconium Oxide
    • Anion Exchange
    • Regenerates >100L of high purity dialysate from 6L tap water
    • No need to be connected to water or drain source
    • Base technology for true portability and wearability
  • 8. Renal Solutions Value Proposition
    • There is a pent-up demand based upon a need for:
      • Better clinical & quality of life outcomes
      • Reduced cost of care
      • Less technological complexity
      • More dialysis center capacity & improved financial metrics
    • Disruptive & Transformational Technology
      • Only 1 ½ gallons of tap water w/o tethered to water supply or drain
      • Short or Long duration, Higher Therapeutic Dose (Dose per $)
      • Inherent Safety – single lumen, small dialysate volume, etc.
      • Ease of Use – Human factor considerations, i.e., GUI, training tools
      • No patient investment or changes to home required
      • Enabler for home therapy – improved outcomes
      • Low Risk Investment – Established acute market while home shifts
  • 9. Renal Solutions - Investment Considerations!
    • $50 Billion Worldwide Dialysis Market
    • Patient dialysis dose is inadequate – 24% mortality rate in the US
    • Home Dialysis is an underserved market with <1% at home
    • We’ve solved the water access challenge!
    • Domain Experienced Management Team
    • Reimbursement is Well Established
    • Low Risk FDA Regulatory Pathway
    • Current Traction in the Marketplace
  • 10. Financing History
    • Initiated a Series A financing in Sept. 2001
    • Public and Private Equity Markets crashed
      • Tech bubble had burst
      • 9/11 terrorist attack
      • Major accounting scandal’s
    • Initial target of $7.5 MM for the Series A
    • Had raised $3.0 MM in seed money
  • 11. Financing Results
    • Raised a total of $23.2 MM in the Series A (11/02)
    • 15 months to close vs. the pre-bubble 6 months
    • Also secured (while still pre-revenue):
      • $1.0 MM equipment term loan with GE
      • $1.0 MM line of credit with SVB
      • $5.0 MM in venture debt
    • Raised $17.1 MM the Series B (3/05)
    • Additional $20 MM with a unique debt structure (2/07)
    • TOTAL of $40 MM in equity capital & $25 MM in debt
  • 12. Financing Perspective
    • A steady increase in VC backed deals from 1995 thru 2000.
    • 2001-2003, private equity $$ down significantly along with M&A’s & IPO’s.
    • Recovery in 2 nd half of 2003 though less than 2002 total.
    • Q1-04 investments 5% greater than Q4-03 & up 25% over Q1-03 but deal flow was down 15%.
    • IPO activity has followed the same general pattern thru Q1-04 but has tailed off while private equity has remained robust.
    Year # Deals VC $ 1995 1,313 $6.9 B 2000 6,101 $94 B 2001 3,194 $36 B 2002 2,269 $22 B 2003 1,973 $18 B
  • 13. So What Happened??
    • Raised a total of $40MM in Private Equity & $25MM in debt financing
    • Completed development of the Allient ® Sorbent Hemodialysis System
    • Commenced a controlled market launch & clinical study in early 07’
    • Was acquired for $200MM in November 07’
      • 200X 2007 revenue of $1.0MM
      • 5X return for investors
  • 14. Why $200MM for a Pre-Revenue Co.?
    • A large market of $2 billion plus with unmet needs.
    • A disruptive & transformational technology solution.
    • A strong pipeline of future products.
    • Significant patent & trade secret portfolio.
    • A strong foundation in place in order to commercialize.
    • The potential of $200MM in revenue within 5 years and a $500MM market cap within 2 years post launch.
    • Think Big, Act Big, Be Big!
  • 15. Benefits for the Region
    • In the beginning I was told many times; don’t do it in Pittsburgh!
    • The success of Renal Solutions enhances the credibility and visibility of the region re; economic development & future start-up funding/growth.
    • Renal Solutions will remain in the region:
      • As a wholly owned subsidiary of FMC
      • Employment will continue to grow
      • Pete DeComo will remain as the CEO
  • 16. Pete’s “ TOP TEN LIST” of Start-up Fallacies:
    • You have a great idea and raising money will not be a problem.
    • You can get it done faster and cheaper than the competition.
    • Dilution is a bad thing.
    • You have the best talent on the street.
    • You do not need patent protection, the trade secrets are significant.
    • Success in the market is totally based upon technology superiority.
    • It is a low risk and expedited regulatory pathway.
    • Scientific founders are all wonderful and should stay forever.
    • Management and VC Boards are strategically aligned.
    • Venture Capitalists like risk.
  • 17. The Moral of the Story for Entrepreneurs
    • Believe when others Do Not
    • Persevere when others Would Not
    • Know the market, the problem and the solution; others Will Not
    • Take calculated risk when others say you Should Not
    • Be humble when others Cannot
    • Focus, Focus, Focus …. Competitors Forgot
        • Foot Note: Spend Less than 5% of your time thinking Exit!!!
    • Have fun, love your family, friends & employees … It’s only a job and Worry Not!
  • 18. The Allient ® Sorbent Hemodialysis System Questions & Answers Thank you! Peter M. DeComo Renal Solutions Inc. [email_address] 724-772-6900 x104
  • 19. Future Presentation
    • Charlie Smith
    • Chief Investment Officer
    • Fort Pitt Capital
    • October 16, 2008
    • 7:45am
    • Rivers Club