Orthovita — Investor Presentation (July 2010)
36 slides from Orthovita's investor presentation, Jul 26, 2010
Slide 1: Corporate Presentation
Corporate Presentation : VITA Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements by Orthovita regarding our current expectations of future events that involve risks and uncertainties, including without limitation, our VITOSS ™ , VITAGEL ™ , VITASURE ™ and CORTOSS ™ products and other aspects of our busin
Slide 3: Positioned to be a leading provider of Orthobiologics and Biosurgery technologies
Positioned to be a leading provider of novel, well researched Orthobiologics and Biosurgery technologies for patients, surgeons and hospitals.
Slide 4: Biosurgery and Orthobiologics product areas
Biosurgery Hemostats Fixation Fusion Orthobiologics Products and technologies related to the management of inter-operative bleeding and soft tissue healing Products and technologies related to the fusion, fixation and regeneration of the human skeleton
Slide 5: Vitoss Bone Graft Substitute
¢ Vitoss’ Bone Graft Substitute Bioactive Bone Graft Substitute
Slide 6: US Bone Grafting Market 2008 – 1,450,900 procedures
US Bone Grafting Market 2008 – 1,450,900 procedures Autograft DBX – Synthes Grafton – Osteotech Allomatrix – Wright Medical Etc… Allograft Chips Stem Cells DBMs InFuse – Medtronic Op-1 – Stryker Spine Trinity Evolution – Orthofix Osteocel – Nuvasive Mastergraft – Medtronic Healos – J&J Depuy Spine E
Slide 7: US Synthetic Bone Graft Substitute Market 2008 – ~$150mm
16% US Synthetic Bone Graft Substitute Market 2008 – ~$150mm JJ Depuy Spine Healos Medtronic Spine *Millennium Research Group: US Markets for Orthopedic Biomaterials Mastergraft All Other Synthetic BGSs 33% 16% 35%
Slide 8: Vitoss Bone Graft Substitute – Value Proposition
Eliminates risks associated with autograft, allograft and BMPs Broadest product range in category Vitoss Bone Graft Substitute – Value Proposition Provides all three key components for bone regeneration * : Scaffold – Cells - Signals Vitoss Bioactive speeds bone regeneration vs standard Vitoss Equiv
Slide 9: Vitoss Comparative Effectiveness
Vitoss Comparative Effectiveness The most pre-clinical and clinical research of any product in its class
Slide 10: Slide 10
Slide 11: Vitoss Franchise Market Leadership
Vitoss Franchise Market Leadership Early Market Entry – January Over 300,000 implantations Most extensive bibliography in its class Covers majority of non- structural bone grafting indications 20 studies in spine with 745 patients Extend Reach into BMP Market Demonstrated effectiveness with lower pr
Slide 12: Orthovita
j ORTHOVITA’
Slide 13: Orthovita Hemostat Market 2008 – $460 Million
Orthovita Hemostat Market 2008 – $460 Million *2008, Millennium Research Group “ US Market for Surgical Hemostats, Internal Tissue Sealants and Adhesion Barriers, 2008"; Cryolife 2008 Year End Earnings; Floseal ® Tisseel ® Coseal ® Surgiflo ™ Evicel ™ Bioglue ® Hemostase ™ Baxter Cryolife Ethicon Pl
Slide 14: Hemostasis Franchise – Value Proposition
Vitagel Surgical Hemostat Vitasure Absorbable Hemostat Hemostasis Franchise – Value Proposition Safety: Plant based technology eliminates many of the safety issues associated with thrombin based competitors (FloSeal, Baxter) Ease-of-Use: Always ready, easy-to-use, and inexpensive Controls Bleeding,
Slide 15: Strategic Role of Biosurgery 2010
Strategic Role of Biosurgery 2010 Synergistic and complementary soft-tissue product offering to ORTHOBIOLOGICS product platform Opportunistic surgical sale Supports account penetration in new and developing geographies Wide and diverse call pattern allows business development in major ORTHOBIOLOGICS
Slide 16: Orthovita
& ORTHOVITA’
Slide 17: Treatment Options
Treatment Options Surgical Intervention Conservative Care – Analgesics, Bed Rest, Bracing Vertebroplasty (VP) Kyphoplasty (KP) Catheter inserted percutaneously through pedicle into body of vertebra using AP and lateral fluroscopic images to guide placement Balloon inflated to provide some restoratio
Slide 18: Cortoss Bone Augmentation Material – VCF System
Cortoss Bone Augmentation Material – VCF System • An injectable, bioactive composite that mimics the mechanical properties of human cortical bone • First FDA-cleared alternative to polymethylmethacrylate (PMMA) cement for use in vertebral augmentation procedure • Indicated for the fixation of pathol
Slide 19: Axial View
Axial View
Slide 20: Cortoss Bone Augmentation Material – Value Propositions
Cortoss Bone Augmentation Material – Value Propositions Therapeutic Flow and Fill Material flow promotes an non- intrusive diffuse, symmetric fill pattern Physiological load transfer through treated vertebra(e) Safety No MMA monomer release Lower injection volumes Unparalleled Control Material prepa
Slide 21: FDA IDE Clinical Trial – Pain Results
70 800 Time point (days) FDA IDE Clinical Trial – Pain Results Cortoss PMMA At 3-months: Cortoss patients had a statistically significant reduction in pain versus PMMA patients
Slide 22: FDA IDE Clinical Trial – Function Results
FDA IDE Clinical Trial – Function Results At 24-months: A statistically significant, greater proportion of Cortoss patients maintained or improved function (97% vs 88%) compared to the PMMA patients Time (Days)
Slide 23: FDA IDE Clinical Trial – Additional Benefits
FDA IDE Clinical Trial – Additional Benefits The CORTOSS population experienced measurable clinical and cost benefits over the PMMA cohort in the following outcomes: 43.4% fewer adjacent fractures in ‘first-fracture’ Cortoss patients Fracture related re-hospitalizations: 2.9 % Cortoss vs. 11.4 % PMM
Slide 24: Medicare 2010 Facility Reimbursement
Medicare 2010 Facility Reimbursement Procedure Levels Treated In-patient Out-patient ASC Physician Vertebroplasty $7,028 – 16,219 $2,141 $1,275 $489 - $7,028 – 16,219 $3,211 $1,913 $718 - Kyphoplasty $7,028 – 16,219 $5,979 $3,551 $546 - $7,028 – 16,219 $8,964 $5,327 $803 - Reimbursement range depend
Slide 25: Cortoss Account Growth
Cortoss Account Growth July Sep Nov Jan Mar May Accounts
Slide 26: External Challenges 2010
External Challenges 2010 Recent controversies surrounding vertebroplasty have led to a reduction in procedures, a movement from inpatient to outpatient treatment, greater scrutiny by insurance providers and, subsequently, a very challenging environment for CORTOSS.
Slide 27: Cortoss Challenges 2010
Cortoss Challenges 2010 Publication of NEJM articles Temporary(?) reduction in referrals Market size smaller than projected Payment of fines for inappropriate overnight stays Accelerated shift from hospital to outpatient procedures Distraction sales force focus from Vitoss/Vitagel business Passing o
Slide 28: Impact to Sales Force
Impact to Sales Force The environment is increasingly requiring our reps maintain a perpetual, physical presence within the hospitals to: - Gain product access - Develop key relationships - Secure case continuity - Defend current business The sales process is increasingly more time and labor intensi
Slide 29: Orthovita and the target audience – Integrating Cortoss
Orthovita and the target audience – Integrating Cortoss $460MM $1.2BN $500MM ~ $1.75B Market Orthopedics/Spine Our unique portfolio of biomaterials provides for sizeable value creation in the current spine and orthopedic markets. We are adjusting our distribution and call patterns to address the new
Slide 30: Recent Events: Noridian LCD Review
Recent Events: Noridian LCD Review Noridian is a CMS contractor that administers Medicare reimbursement for 8 western states On May 11 , Noridian announced it was considering the non- coverage of reimbursement for vertebroplasty and kyphoplasty Prompted by two small studies published in New England
Slide 31: Orthovita Response to Noridian LCD Review
Orthovita Response to Noridian LCD Review Industry Develop advocacy by major industry groups (MDMA/ADVAMED) Work collectively with key players to develop a concerted industry response Physicians and surgeons Offer to coordinate efforts with medical societies and KOLs to respond to Noridian Develop p
Slide 32: Financial Overview
Financial Overview
Slide 33: Strong Growth, Improving Margins
Strong Growth, Improving Margins 2007 2008 2009 Q1 2010 Net loss includes a $16.6mm charge for the repurchase of a royalty obligation Dollars in Millions Sales $58.0 $76.9 $92.9 $24.1 Gross Margin 65% 66% 68% 69% SG&A Expense $44.6 $53.5 $57.2 $15.8 R&D Expense $6.4 $6.7 $6.8 $1.3 Operating Loss $(1
Slide 34: Point Plan – Manage to the Environment
4 Point Plan – Manage to the Environment Expense reductions implemented in Q2 2010 Develop specialized distribution channels Hospital Inpatient Market – Spine/Neurosurgeon Outpatient Market – Interventional Radiologist Continue to develop product pipeline to leverage each specialty Manage reimbursem
Slide 35: Going Forward - Core Strategies and Tactics
Going Forward - Core Strategies and Tactics Maximize Growth in Existing Products Pipeline Development Goals Potential to Fill Gaps via Licenses & Acquisitions Tight focus on profitable sales growth – manage to environment Maximize cross-sell of all products to each hospital customer Develop IR/INR s
Slide 36: Architects of the New Biomaterials Age
Architects of the New Biomaterials Age