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Tsg Poc Dx Introductory Overview March2009 D
 

Tsg Poc Dx Introductory Overview March2009 D

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POC Dx Global MarketPlace

POC Dx Global MarketPlace

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    Tsg Poc Dx Introductory Overview March2009 D Tsg Poc Dx Introductory Overview March2009 D Presentation Transcript

    • This presentation and the material provided within is for informational purposes only and is not meant to be viewed as definitive strategic advice or investment advice. TSG reserves the right, in its sole discretion and without notice, to correct any errors or omissions in any portion of this report, or to update this report due to changes in the market or our methodology. Strategic Opportunities in Point of Care Diagnostics March 2009 C O N T A C T S :: Jerry Choate Vice President jerry@tsg-partners.com +1-404-607-6953 Laura White Analyst laura@tsg-partners.com +1-404-607-6954 Panna Sharma CEO & Managing Partner panna@tsg-partners.com +1.404.607-6955 Confidential & Proprietary, Do Not Distribute
    • In vitro diagnostics (IVD) is uniquely positioned at the convergence of the life science and healthcare sectors 2007 Global Life Sciences Mkt * 2007 Global Healthcare Spend $960Bn $1,900Bn Diagnostic information is driving an increasing proportion of the 11% 3% healthcare spend. 24% – 4% 16% 37% 62% 10% 7% In point of care (POC) diagnostics, this effect is even more pronounced due 26% to the highly actionable, Medical Devices near-patient nature of POC Hospital Care information. Physician/Clinical Services Includes reference Diagnostics lab revenues Nursing Home Care Discovery Tools & Svcs Other Personal Care* Therapeutics Other Health Spending^ Home Health Care Source: TSG Analysis, Roche Investor Presentation, NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group. Kaiser Family Foundation, Siemens, WHO World Health Statistics 2008. TSG & The Sharma Group – Copyright 2001 - 2009 -2- Do Not Distribute Without Explicit Permission
    • The IVD market is growing at 9% annually and is expected to double its share of the global healthcare spend GLOBAL IVD GROWTH IS ….DRIVING AN INCREASE IN IVD’s SHARE OF ACCELERATING… GLOBAL HEALTHCARE SPENDING $Bn 80 IVD $69.5 Bn 4% 70 IVD 3% IVD 60 2% CAGR: 9% 50 40 $37.5Bn 30 2007 2014 2020 20 $1900Bn $1900Bn $2650Bn 10 $3526Bn 0 2007 2014 KEY TAKEAWAYS  IVD is expected to increase to $69.5Bn in 2014.  Diagnostics provide 70+% of all the information doctors use worldwide, but make up just 2% of global healthcare spending.  TSG expects IVD’s share of global healthcare will increase to 3% in 2013, and continue to carve out a larger share of global healthcare spend.  As IVD’s share of global healthcare spending increases, TSG expects to see more players from healthcare, information technology, and other peripheral markets entering the diagnostics space. Source: TSG Analysis, Roche Investor Presentation , NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group. Kaiser Family Foundation , Siemens quot;Pictures of the Future,” WHO World Health Statistics 2008. TSG & The Sharma Group – Copyright 2001 - 2009 -3- Do Not Distribute Without Explicit Permission
    • Point of Care is an $11.3 billion market growing at 10-12% annually – this category can be further subdivided by end user setting  Although user needs are still evolving, no single platform is likely to adequately address the needs of all four POC user segments. POC Global Market Breakdown $1.1Bn Acute Care Time to result is the most important factor for critical by revenue CAGR 10% / Hospital care users, followed by multiplexing capabilities. 3% Physician office labs prefer results in <30m, and 36% $4.1Bn CAGR 9.9% POL place a higher value on sensitivity, accuracy, and integration with existing systems. 84% 10% Self Test / The retail push for consumer Dx is increasing – $9.4Bn these products must be simple to use, low-cost, CAGR 13% Consumer and produce relatively rapid results. Self Test/Consumer (Primarily Home Glucose Tests) Acute Care / Hospital Retail and corporate health clinic users favor fast, POL $0.3Bn Retail easy-to-use, and inexpensive tests for common, Retail Clinic CAGR 24% Clinic non-critical conditions. *Source: Cambridge Consultants, Kalorama Information, Clinica’s Complete Guide to the Diagnostics Market 2007 TSG & The Sharma Group – Copyright 2001 - 2009 -4- Do Not Distribute Without Explicit Permission
    • The POC market’s attractive growth rates of 10-12% are grounded in 7 key macro themes that are driving growth and opportunity  TSG has performed detailed reviews of these 7 drivers through surveys, discussions with subject Cost-Efficient, matter experts, and conversations Distributable with leading diagnostic companies Detection Technologies Consumer / Retail Needs of Emerging Empowerment Economies POC ILLUSTRATIVE GROWTH Aging Populations in Maturing DRIVERS Evolving Physician / Clinician Attitudes Economies Theranostics and Rise of Higher Personalized Value Testing Medicine ILLUSTRATIVE TSG & The Sharma Group – Copyright 2001 - 2009 -5- Do Not Distribute Without Explicit Permission
    • TSG’s portfolio research surveys where POC leaders have invested in their franchises, as well as opportunities for expansion /collaboration Company / POC Application J&J Ortho Clinical Roche Abbott Siemens Quest Inverness Medical Meridian Cepheid (molecular) Quidel Abaxis Axis Shield Response Biomedical Medmira Jant Source: TSG Analysis, Company reports, Clinica’s guide to diagnostics TSG & The Sharma Group – Copyright 2001 - 2008 -6- Do Not Distribute Without Explicit Permission
    • TSG has identified several high-growth subcategories of interest to POC companies looking to expand their portfolios Oncology - ILLUSTRATIVE Infectious Disease - ILLUSTRATIVE Companion Dx - ILLUSTRATIVE Endocrinology - ILLUSTRATIVE TSG & The Sharma Group – Copyright 2001 - 2009 -7- Do Not Distribute Without Explicit Permission
    • POC diagnostics will be a primary beneficiary of the ongoing convergence of medical devices, IT, and life science research TRENDS DRIVING KEY COMPETITIVE POC CONVERGENCE DEVELOPMENTS In January, Inverness Medical Innovations announced it was acquiring health enhancement program provider Matria Healthcare in a deal worth $900M Continued consolidation of IVD market – large players build out diagnostic portfolios Philips Medical Systems’ magnetic nanoparticle-based prototype, the Magnotech handheld reader, hopes to bring complex IVD testing to home and bedside settings Quest acquired HemoCue for $420M in Feb. 2007 as part of a strategy to enable integrated POC testing in the clinical lab setting TSG & The Sharma Group – Copyright 2001 - 2009 -8- Do Not Distribute Without Explicit Permission
    • What does the future hold for point of care? Scenarios to consider… KEY OBSERVATIONS & QUESTIONS • AT T R A C T I V E L O N G - T E R M N E E D S The long term growth rates in POC diagnostics will be supported on an ongoing basis for the next 5-7+ years due significant increase key demographic developments and a need for more efficient medical delivery. What key convergences will drive sector growth, and “SUBSUMED INTO “BEST CASE how will the category evolve and change? Patient Value Increases THE NEEDS OF SCENARIO for Global Dx Customers and Companies” Clinicians” • AREAS OF OPPORTUNITY TSG has identified multiple POC markets that we believe contain attractive “white space” opportunities for a continued technology shift to the Point of Care. Which areas should category leaders consider for future growth and expansion? “ROAD TO “TECHNOLOGY COMMODITIZATION” DRIVEN” • S I G N I F I C A N T F R A G M E N TAT I O N minimal increase The POC sector has a high degree of fragmentation; established companies are looking to develop beachheads and migrate existing assays and tests to a more compelling Technology Changes / Increases technology base and closer to the patient. minimal change significant change How can POC companies protect their existing business as the sector becomes more consolidated? TSG & The Sharma Group – Copyright 2001 - 2009 -9- Do Not Distribute Without Explicit Permission
    • TSG’s POC Dx Leaderboard TM Market & competitive view of point of care diagnostic companies Market Position of The Leading 34 POC Dx Companies 10 FOCUS NEEDED ON WELL POISED LEADERS GO TO MARKET GENZ 9 IMA Atlas 8 LMNX ROCHE Genetics Axela ChemBio SIE CPHD 7 JNJ Alverix Handy Labs NGEN DxTech Qualigen Developed Vision (1) 6 TRIB DGX BIM BDX Pria Dx Atonomics QDEL 5 OSUR VIVO TOSOH Spectral Dx ABT LifeAssays 4 BEC THOR ASD ABAX 3 COMMODITIZED LEGEND: Circle Size & Revenue 2 < $20 MM LEGEND: Response GenBio > $20 - $125 MM Colors & Company Type Biomedical 1 > $125 - $1 BN Public (Pure Play Provider) FOCUS NEEDED ON Public (Division of Larger Co.) > $1 BN DEVELOPING DIFFERENTIATION Private 0 0 1 2 3 4 5 6 7 8 9 10 Market Traction (2) * Source: TSG analysis, (1) Formation of products and services that meet dual needs of portability and information integration; Ability to handle multiple sample types; Ability to Company reports and multiplex; Ability to integrate into needs of personalized medicine; Management focus on future needs of Dx and Healthcare presentations, Company interviews with management (2) Customer base; Strength of partnerships and alliances; IP position (issued and published); Revenue growth rate; Product launch rate TSG & The Sharma Group – Copyright 2001 - 2009 - 10 - Do Not Distribute Without Explicit Permission
    • A quick overview of TSG  Specialty, high-impact corporate advisors with unique combination of strategy, corporate finance, and operational expertise  Transaction-oriented strategic consulting with deep sector expertise in growth markets Shareholder Value Creation  Financial advice without the deal-hungry bias, yet informed by prolific deal experience: M&A, private placements and strategic investments/divestitures Operational Insights  Operating experience feeding financial and strategic advice Corporate Finance Growth Strategy  Deep sector-specific knowledge focused exclusively on growth opportunities in:  Life Sciences & Biotechnology (e.g. Proteomics, Cell-based Assays, High Content Screening, RNAi, Biomarkers, Molecular Diagnostics, IVD, Flow- cytometry, Bioinformatics, etc.)  Discovery Tools, Diagnostics & Devices  Environmental Sciences (e.g. Environmental sensing, Food Diagnostics, Water and Waste Water Treatment, IAQ, etc.)  Nutrigenomics, Functional Foods & Beverages & Wellness Atlanta Boston  Experience with emerging firms as well as established New York companies allowing us to stay ahead of the curve in Silicon Valley technological innovation and market timing TSG & The Sharma Group – Copyright 2001 - 2009 - 11 - Do Not Distribute Without Explicit Permission
    • TSG has identified 5 macro market themes that are shaping the future of the Life Sciences industry and market dynamics Cross Sector 1. Renewed convergence activity between Discovery and Diagnostics Convergence - Becton Dickinson & Tripath & GeneOhm - Qiagen & Digene - Fisher & Apogent - Beckman & DSL & Olympus - Fisher & Athena - ABI & Agencourt Industrial Co’s. 2. Industrial companies reviewing MedTech-&-Healthcare Growth options Enter - GE & Biacore - Siemens & DPC - Philips & Witt Biomedical - Siemens & Bayer Diagnostics - GE & Amersham - Reliance & Healthcare Initiatives Emerging Economies 3. Increasing importance of Emerging Economies (supply and demand) China  Thermo, Qiagen, Millipore, Adaltis, GE India  Millipore, GE, Quintiles, Bayer, Siemens, Waters, Thermo / Customer Demand Russia  Biomarker research & Algorithim development / Customer demand Consumer’s Awareness & Role 4. Consumers demanding increased visibility and information ( 20% of GDP) - HPV campaign (other D2C for both Dx and Therapeutics) - Demand for visibility into clinical trial successes and faillures - Focus on wellness and wellness products (dollars shifting to alternative therapies) Adjacent & 5. Core Life Science Technologies being applied to Adjacent Markets Applied Mkts. - Biodetection - Environmental detection - Water, Mold, IAQ - Food, Forensics, Animal TSG & The Sharma Group – Copyright 2001 - 2009 - 12 - Do Not Distribute Without Explicit Permission
    • Dedicated To Building Sector Leaders In Life Sciences, Healthcare & Wellness TSG The Sharma Group, LLC ATLANTA CORPORATE STRATEGY 1230 Peachtree St. • Growth Advisory 24th Floor • Market Analysis Atlanta, GA 30309 • Category & Market Entry +1-404-254-1660 • Portfolio Strategy & Analysis BOSTON CORPORATE FINANCE One Broadway • Buy-Side Advisory 14th Floor • Sell-Side Advisory Kendall Square • Mergers Cambridge, MA 02142 • Divestitures +1-617-500-3362 • Special Situations NEW YORK 300 Park Avenue TRANSACTION SUPPORT 17th Floor • Due Diligence New York City, NY 10022 • Fairness Opinions +1-212-572-6448 • Valuations • Market Assessments • Capital Markets Analysis INTERNET www.tsg-partners.com TSG & The Sharma Group – Copyright 2001 - 2009 - 13 - Do Not Distribute Without Explicit Permission