Advanced Medical Solutions Group Plc · LSE:AMS
Advanced Medical Solutions — Investor Day (June 2015)
70 slides from Advanced Medical Solutions's investor day presentation, Jun 24, 2015
Slide 1: Creating growth, innovation and value
Capital Markets Day Full bleed image TBC Presentation 24 June 2015 Chris Meredith Chief Executive Officer Guy Miller Technical Manager: Glues and Sealant Jeff Willis Business Unit Director, Branded Distributed Business Unit Dr Bernhard Dauser Assistant Professor at Department of Surgery at St John o
Slide 2: Introduction
Chris Meredith Chief Executive Officer Introduction 2
Slide 3: A leading developer and manufacturer for surgical and advanced woundcare markets
A leading developer and manufacturer of products for the global surgical and advanced woundcare markets Established proprietary brands GROWTH DRIVEN BY: Sales to best in class partners Pipeline and new products Quality outcomes for patients FOCUS ON: Value for payors Manufacturing EXPERTISE IN: Rese
Slide 4: 10 year historical financial share price
10 year historical financial share price AMS: an attractive growth stock 180 160 140 2005 ActivHeal® launched in the 120 UK 1-Oct-2009 Completes 100 acquisition of remaining 1-Feb-2009 8-Feb-2005 50.6% of 510 (k) Silver alginate Corpura B.V. 80 approval for approval LiquiBand® by FDA. 60 29-May-2014
Slide 5: Growth potential from existing products and markets: Woundcare
Significant growth potential from existing products & markets: Woundcare Launched 2005 ActivHeal®: £6m UK brand, medium term target £10m <5% market share Launched 2005/6 Silver Alginate: £13m global technologies, medium term target £20m <25% market share Acquired 2009 Foam: £10m technology platform,
Slide 6: Growth potential from existing products and markets: Surgical
Significant growth potential from existing products & markets: Surgical First US approval 2009 LiquiBand® US: £4m US brand, medium term target £10m 7% market share CE mark 2014, first year of sales LiquiBand® Fix8®: US market entry to be explored Acquired 2011 Suture portfolio: £9m technology portfo
Slide 7: Historic core themes
Historic core themes: Innovation and technology development Solid growth performance to date but plenty still to go Small number of key competitors in each segment Strong proposition balancing quality, performance and value 7
Slide 8: Changing market dynamics
Changing market dynamics Clinical Procurement Clinical v procurement balance of power Increasingly difficult regulatory Lack of harmonisation process for new products = slow adoption Cost pressure increasing – negating quality differentiation 8
Slide 9: Corporate growth strategy
Corporate growth strategy Increase direct Focus on Add value to distribution innovation to through deliver high payors in broadened AMS quality clinical advanced sales forces woundcare and outcomes. in target surgical markets surgical markets. Drive geographic expansion 9
Slide 10: Jeff Willis: LiquiBand and Topical Skin Adhesives in the U.S.A.
Jeff Willis Business Unit Director, Branded Distributed LiquiBand® and Topical Skin Adhesives in the U.S.A. LiquiBand® Fix8® Laparoscopic Hernia Mesh Fixation Device 10
Slide 11: Background – Jeff Willis
Background – Jeff Willis • Joined AMS in 2005 leading U.S. commercial efforts • Lived in the U.K. for 3 years (2009-2012) leading and building global marketing function • Relocated back to the U.S. in 2012 and now leads our branded product offering worldwide except for the Branded Direct territories
Slide 12: LiquiBand and U.S. Topical Skin Adhesive Market
LiquiBand® and U.S. Topical Skin Adhesive Market 12
Slide 13: Why Topical Skin Adhesive? / Why the U.S.?
Why Topical Skin Adhesive? / Why the U.S.? The world’s biggest medical device and wound closure market U.S. Wound Closure Market 3000 • $2+ Billion Category growing 2-3% (Units) 2500 • Topical Skin Adhesive (TSA) portion is approximately $200M and growing 7-8% in units 2000 • Only 8-10% of total wou
Slide 14: Market Pricing: Declined with increased competition, now stabilising
Market Pricing: Declined with increased competition, now stabilising at two tiers Average Selling Price, Major Brands, Q2 2012 - Q1 2015 24 22 20 18 16 14 12 10 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 DERMABOND MINI DERMABOND ADVANCED LIQUIBAND (RANGE AVERAGE) LIQUIBAND Mini’s po
Slide 15: Topical Skin Adhesives
Topical Skin Adhesives All products sold in U.S. have similar primary indications • For topical application only. To hold closed easily approximated skin edges of wounds from surgical incision and simple clean trauma wounds. Can be used with, but not in place of, deep dermal sutures • Many topical s
Slide 16: Dynamic Market – with AMS as momentum player
Dynamic Market – with AMS as momentum player • AMS’ share at 7% (Hospital) and 19% (Non-hospital) and growing • Several smaller players, but Ethicon maintains the clear, market lead position • Ethicon has been growing units with new products, but at the expense of price. Recent unit sales are down.
Slide 17: US Market Is Rapidly Changing
US Market Is Rapidly Changing COMPETITOR POSITIONING LIKELY STRATEGY HOW WE WIN ‘14/15 TREND Premium Up market with Advanced, Channel Leverages; Value Recovery w/newer Strawdog Cost saving with with Cost Savings; version, but now quarterly Mini; New applicators Alliance to hit all fronts units taili
Slide 18: Evolving and Diversified Portfolio Back to 2009
Evolving and Diversified Portfolio Back to 2009 Total North American TSA AMS Sales to Partners (Units) LiquiBand® Butyl LiquiBand® Flex® Premium Butyl New LiquiBand® Hospital and New Acute Partner Acute Partner Exceed® Premium Non-Hospital Octyl Launch Launch 18
Slide 19: Introducing LiquiBand Exceed - new formulation
Introducing LiquiBand® Exceed® - new formulation HIGHER VISCOSITY Applies more predictably OCTYL-2 FORMULATION NOVEL MOISTURE DRIVEN Maximizes durability and flexibility INITIATOR Provides intimate skin contact CLEAR BODY Allows visualization during application 19
Slide 20: Introducing LiquiBand Exceed - Novel Applicator
Introducing LiquiBand® Exceed® - Novel Applicator APPLICATOR TIP DESIGN Provides even, consistent & wide coat application INTUITIVE APPLICATION ELLIPTICAL SURFACE INTERFACE Allows for versatility in application Ensures coverage and prevents stuttering Can apply wide or narrow strips POROUS FELT TIP
Slide 21: Introducing LiquiBand Exceed - Clear Benefits
Introducing LiquiBand® Exceed® - Clear Benefits • Maximises Coverage & Yield • Minimises Stuttering • Provides Consistent Coat Weight Exceed Dermabond Advanced 21
Slide 22: U.S. Market Dynamics
U.S. Market Dynamics Premium Dist + High Price Strong OR Sales Channel Influence Clinical Influence Value Partner Sales/ Distribution Low Frills Partner Price + Dist Low Price 22
Slide 23: LiquiBand portfolio uniquely positioned for TSA growth
LiquiBand® portfolio uniquely positioned for TSA growth LiquiBand® LiquiBand® Butyls Exceed® / Octyls Fast Drying LiquiBand® Flex Flexible ER/URGENT Precision Application Winged Applicator Durable LONG CARE Scalp Indication Premium Tips Film Forming SURGICAL SMALLER Strong Quality Formulations Visco
Slide 24: What LiquiBand Product Works for You?
What iPhone and Network works for You? 24
Slide 25: What LiquiBand Product Works for Your Health System?
What LiquiBand® Product Works for Your Health System & Health Professional? 0.8g 0.5g 0.4g 25
Slide 26: Summary
Summary • Our diversified product and partnership approach is working • Our team is driving success often at an account level along with our partners • We will continue to incrementally innovate and lead in this space • We are a leader in topical skin adhesives and continue to see promise in this sp
Slide 27: LiquiBand Fix8: New Laparoscopic Device for Hernia Mesh Fixation
LiquiBand® Fix8® New Laparoscopic Device For Glue-based Hernia Mesh Fixation 27
Slide 28: Understanding Hernias
Understanding Hernias • Hernia is a term used to describe the protrusion of an internal organ or tissue through a week portion of a muscle or connective tissue • Most hernias occur in the abdomen, where they are caused by a combination of an increased abdominal pressure and a weakness in a particula
Slide 29: Hernia Procedure Volume
Hernia Procedure Volume Asia- USA Asia-P N-USA P950k 775k 320k 265k *Europe 665k *Europe 225k Hernia repair market is Laparoscopic hernia repair is growing at 1.2% per approx 34% of total hernia repair annum procedures Market size is 2.4 M Laparoscopic hernia repair is procedures per annum growing a
Slide 30: Hernia Procedure Volume
Hernia Procedure Volume Asia-P N-USA 105k N-USA Asia-P 840k 194k 200k Europe 734k Europe 154k Inguinal hernia Other hernias contribute 38% of contributes 62% of total total laparoscopic hernia repair laparoscopic hernia repair Ref: Med Market diligence, Global data source, WHO and country specific h
Slide 31: Principal Competitor - Tacks
Principal Competitor - Tacks Covidien Covidien Bard Ethicon ProTack™ AbsorbaTack™ SorbaFix™* SecureStrap™* Tack Geometry Length 3.8 mm 5.1 mm 6.7 mm 7.2 mm Bioavailability Permanent Absorbable Both Absorbable Price £210 (30) £290 (30) £305 (30) £250 (25) Key considerations include: • Tacks are an “i
Slide 32: Secondary Competition - Glues
Secondary Competition - Glues Cryolife Baxter Peter Surgical GEM Bioglue Tisseal Ifabond Glubran Focused on Hernia NO NO YES NO Fast Dry Time NO NO YES YES 2 min 3-5 MIN Easy to Operate NO NO NO NO Precise and NO NO NO NO Controlled Price £200 (35) £230 (35) £140 (20-25) £160 (20-25) Whilst we take
Slide 33: AMS Strategy – Introducing The Fix8 Solution
AMS Strategy – Introducing The Fix8® Solution Comments Identify Opportunity Hernia repair with mesh fixation is a frequent surgical procedure with well defined needs. Laparoscopic technique is both higher value and growing at a faster rate than open technique. Estimated to be a €50 million market in
Slide 34: Principal Indications / Mechanism of Action
Principal Indications / Mechanism of Action • Laparoscopic surgical mesh fixation of all abdominal hernias including: - Inguinal hernia - Ventral hernia - Incisional hernia • Approximation of the Peritoneum (applicable in about 60% of laparoscopic hernia repairs) • When applied to surface of the her
Slide 35: Glue Competition - updated
Glue Competition - updated LiquiBand® Cryolife Baxter Peter Surgical GEM ® Fix8 Bioglue Tisseal Ifabond Glubran Focused on YES NO NO YES NO Hernia Fast Dry Time YES NO NO YES YES (10 sec) 2 min 3-5 min Easy to Operate YES NO NO NO NO Precise and YES NO NO NO NO Controlled Price £180 - £200 (33) £200
Slide 36: Go To Market - Approach
Go To Market - Approach • Initial focus on Europe – but discussion ongoing for broader global reach • Regulatory process could be long in some regions (U.S. / Japan) • Selling directly in the UK and Germany • Selling via value-added distributors in other regions – often with players already in the “
Slide 37: Working with Top Surgeons to Educate and Drive Interest
Working with Top Surgeons to Educate and Drive Interest Fix8® has now been used in over 1,000 procedures “LiquiBand® Fix8® delivers precise, individual drops of cyanoacrylate glue, this resulting in good fixation of the mesh used in laparoscopic surgery for inguinal hernias. This method of fixation
Slide 38: Future Opportunities
Future Opportunities VASCULAR PROCEDURES Abdominal Aortic Aneurysm Peripheral Arterial Aneurysm Pseudoaneurysm Varicose Veins HERNIA PROCEDURES Inguinal Hernia, Abdominal Wall Hernia, Open Hernia Ophthalmic Procedures UROLOGICAL / GYNECOLOGICA GALL L NEUROLOGICAL BLADDER PROCEDURES Rectoplasty, Proc
Slide 39: Guy Miller: R&D Presentation
Guy Miller Technical Manager: Glues and Sealants R&D Presentation 39
Slide 40: Glues & Sealants R&D Team
Glues & Sealants R&D Team The team, based in Plymouth, are responsible for: 1. Supporting Branded Distributed Business Unit 2. R&D on glues and sealants technology 3. Experts on cyanoacrylate chemistry 4. Experts on applicator design Ampoule Housing Plymouth R&D core skills: Chemistry - Synthesis Pu
Slide 41: The team at Plymouth
The team at Plymouth: External experts regularly consulted: • Chemists x 3 • 3 global experts on cyanoacrylates • Engineers/ designers x 2 • 2 universities (Plymouth and Exeter) • Analytical chemist x 1 • 1 design house • 3 x MSc, 6 x BSc, 2 publications • Multiple KOL’s globally • >20 years Combine
Slide 42: Branded Distributed R&D performance
Branded Distributed R&D performance • 8 product launches in last 3 years • Range of topical skin adhesives in Europe and US market, Fix8®, skin protectants • 50% 2014 turnover generated by new products launched in last 5 years • 3 510(k) cleared in last 3years • 3 patent applications on new products
Slide 43: Topical Skin Adhesive
Topical Skin Adhesive rv Advanced Medical Solutions Group plc =
Slide 44: Topical Skin Adhesive - TSA
Topical Skin Adhesive - TSA • Key global competitor remains as Ethicon’s Dermabond® • Pure Octyl cyanoacrylate • Two key devices: Demabond® Advanced and Mini/ HV • The biggest single market remains as USA (approx $200M) • To date AMS have been competing using technologies based around a Butyl cyanoa
Slide 45: Butyl vs Octyl cyanoacrylate
Butyl vs Octyl cyanoacrylate Attribute Butyl cyanoacrylate Octyl cyanoacrylate Chemistry Tensile strength High High Set time V. Fast Fast Flexibility Flexible V. Flexible Durability Durable V. Durable Microbial barrier Barrier whilst remains intact Barrier whilst remains intact Application areas Sma
Slide 46: Octyl formulation
Octyl formulation • Ethicon have been able to protect their Dermabond® position in the market due to patent coverage • AMS developed a formulation that avoids Dermabond’s® IP • Dermabond® has to be used within 2 – 3 minutes, otherwise it does not work • LiquiBand® Exceed® can continue to be used for
Slide 47: LiquiBand Exceed
LiquiBand® Exceed® • The Exceed® tip was developed to provide a consistent coverage of adhesive without blocking (advantage over Dermabond®) • The foam was specifically selected to provide the correct delivery • The tip is constructed in-house • Allows for easy application and control • The devices
Slide 48: Other adhesives under investigation
Other adhesives under investigation • Beyond n-Butyl and 2-Octyl cyanoacrylate • AMS has collagen technology that has good sealant properties • Other cyanoacrylate materials with different properties • Evaluate more blue sky technologies: • Gecko's feet • Mussel proteins 48
Slide 49: Internal Adhesive
Internal Adhesive > Advanced Medical Solutions Group ole 49
Slide 50: LiquiBand Fix8
0 LIQUIBAND’ FLX8" Surgical Adhes e for Hernia Mesh Fixatio
Slide 51: LiquiBand Fix8 – the History
LiquiBand® Fix8® – the History • Project identified by working with surgeons and reviewing clinical publications • Project initiated combining the internal expertise on adhesive, with external expertise on laparoscopic instruments • Project helped develop AMS capability and reputation into a new are
Slide 52: LiquiBand Fix8 Technology
LiquiBand® Fix8® Technology • The adhesive is a formulation specific to AMS able to withstand e-beam sterilisation • The adhesive is housed inside a glass ampoule which is positioned inside the applicator • The glass ampoule provides advantages on ambient storage • The applicator is designed to extr
Slide 53: LiquiBand Fix8 Performance
LiquiBand® Fix8® Performance Drop delivery demonstrated to be very Adhesive resistance to shear has been accurate and repeatable demonstrated to be greater than AbsorbaTack (Covidien), a key competitor 0.0125mg ± 0.0025mg Force required to separate a single application (tack or drop) from porcine t
Slide 54: The Fix8 Technology – the Future
The Fix8® Technology – the Future • Since the launch (May 2014) the claims of the intended use have expanded to increase the area of application: • Fixation of mesh to abdomen wall - Incorporates ventral and incisional hernias • Approximation of peritoneum - A tissue membrane that gets incised durin
Slide 55: The Fix8 Adhesive – the Future
The Fix8® Adhesive – the Future • As well as laparoscopic repair, hernias are also repaired through open surgery. • AMS are developing a device for open hernia repair, mesh fixation. • Same adhesive as Fix8®, but new applicator • Continue the Fix8® strategy of competing against the other prosthetic
Slide 56: Open Hernia Fixation Device
Open Hernia Fixation Device Market size : Approximate 1 Million procedures are performed yearly Competitors : Absorbable sutures, Securestrap tackers Target users : General surgeons Design concept: Keep feel of Fix8® VOC Design Freeze Launch Q3 2015 Q1 2016 H2 2016 56
Slide 57: Other applications under investigation
Other applications under investigation Other areas where cyanoacrylate is currently used off label: • Gastric varices • Gynaecological mesh fixation • Coloplasty & Rectoplasty repair 57
Slide 58: AMS Innovation
AMS Innovation • AMS is actively developing new devices for topical and internal applications • AMS has a culture of ensuring innovation drives growth • Remains at forefront on applicator design • Novel applications for current technologies are being pursued: • Alternative internal applications for
Slide 59: AMS growth opportunities & Summary
Chris Meredith Chief Executive Officer AMS growth opportunities & Summary 59
Slide 60: Multiple growth drivers
Multiple growth drivers LiquiBand® US Silver Alginate LiquiBand® Fix8® Sutures Next generation LiquiBand® Haemostats ActivHeal® Dental 60
Slide 61: Objectives and priorities to augment the business
Objectives and priorities to augment the business Innovate to drive growth and Innovation across the growth portfolio will protect existing positions in established markets market penetration and facilitate new market entry Customer is changing and Increased emphasis on cost savings have increasingl
Slide 62: Innovation
Innovation • Separate R&D teams focusing on different technologies • Winsford, foams, fibres and antimicrobials • Plymouth, tissue adhesives • Nuremberg, haemostats & sutures • 20 people across Group: 3 PhDs, 5 MScs, 10 BScs • Collaborations with 14 universities, Key Opinion Leaders, surgeons, Tissu
Slide 63: Innovation
Innovation • Woundcare – fibre reinforced collagen dressings – in co-operation with the University Medical Centre Leipzig • Haemostasis – collagen implants, and antibiotic protection Production of impregnated collagen sponges/ cones & membranes in laboratory 63
Slide 64: Innovation
Innovation • Dental surgery - specialist cones, membranes and sutures Reinforced dental cones • Wound Closure - Surgical sutures, sealants 64
Slide 65: Innovation
Innovation • Tissue regeneration – absorbable hernia meshes & adhesion barriers • Surgical dressings – orthopaedic post operative dressings Microscopic views Biodegradable hernia mesh 65
Slide 66: Value delivery objective
Value delivery objective • Launch of new foam variants H2 2015 • Continued development of ActivHeal® product offering • Geographic expansion of suture sales strategy – UK and US • Geographic expansion of haemostat sales strategy • Geographic expansion of dental sales strategy and product offering 66
Slide 67: M&A delivery objective
M&A delivery objective: The right momentum Growth avenues • Supportive investors • Enhanced product pipeline • Strong balance sheet - net • Expand sales force into new geographies cash • Leverage current infrastructure • Well positioned for growth • Diversification eg into new technologies / • Track
Slide 68: Strong financial performance with multiple growth routes available
Strong financial performance with multiple growth routes available Outstanding historical track record..... • Strong presence in US and EU markets • Reinforced partnerships with large healthcare companies • Investment in direct sales force in core markets • Selective acquisitions successfully integr
Slide 69: Strong financial performance with multiple growth routes available
Strong financial performance with multiple growth routes available .....and a clear strategy • Continued expansion in the US and newer territories • Move towards more value added partnerships • Development of specialised sales teams to serve new segments • Explore opportunities for synergistic acqui
Slide 70: End and Questions
End and Questions ivanced Medical Solutions Group ple 10
Advanced Medical Solutions Group — Investor Day (June 2015) on 6ix