Cochlear Limited · ASX:COH
Cochlear — Investor Day (May 2019)
55 slides from Cochlear's investor day presentation, May 10, 2019
Slide 1: Cochlear Capital Markets Day media release
ASX / MEDIA RELEASE 10 MAY 2019 Cochlear Capital Markets Day Cochlear Limited, Sydney, 10 May 2019 (ASX:COH): Cochlear Limited is today hosting analysts to its annual Capital Markets Day at its global headquarters at Macquarie University. A copy of the management presentations is attached and includ
Slide 2: Strategic priorities
Strategic priorities Dig Howitt CEO & President Cochlear Capital Markets Day – 10 May 2019 Agenda: Focus on adults & seniors Overview of strategic priorities Dig Howitt Cochlear’s innovation pipeline Jan Janssen Remote check Craig Sharp Building a market access capability Fernando Gonzalo Strengthen
Slide 3: Cochlear's mission
Cochlear’s mission We help people hear and be heard. We empower people to connect with others and live a full life. We transform the way people understand and treat hearing loss. We innovate and bring to market a range of implantable hearing solutions that deliver a lifetime of hearing outcomes. 3 G
Slide 4: Strategic priorities: commitment to technology leadership
Strategic priorities Retain market leadership Market-leading technology I World-class customer experience Grow the hearing implant market Awareness I Market access I Clinical evidence Deliver consistent revenue and earnings growth Invest to grow I Operational improvement I Strong financial position
Slide 5: Market-leading product portfolio
Market-leading product portfolio Cochlear implants (88% of revenue) Cochlear™ Nucleus®Plus Cochlear™ Nucleus® Cochlear™ Nucleus® 7 Cochlear™ Nucleus® Profile™ Plus with Slim Kanso® Sound Sound Processor Smart App Modiolar Electrode (CI632) Processor (CP950) (CP1000) Retain Bone conduction implants m
Slide 6: Cochlear implant growth drivers
Strategies to improve awareness and access vary by segment Adults & seniors Developed markets Increase penetration Current penetration*: 3% Children Developed markets Grow share Grow the hearing Current penetration : 60% * implant market Children Emerging markets Increase penetration, funding and af
Slide 7: Building a clear referral pathway for adults and seniors
For adults & seniors, the goal is to build a clear and consistent referral pathway Candidate Non-CI professional Goal: Motivated to treat Goal: Understands the hearing loss with the best indications for CI available solution candidacy and when to refer Initiatives: Initiatives: - DTC - CPN, Sycle -
Slide 8: Direct to consumer marketing
Direct to consumer marketing DTC builds awareness of cochlear implants directly with consumers • Target market: highly motivated CI candidates seeking a better hearing solution than high powered hearing aids • Provides a clear pathway to care: information, links candidates to surgeons, clinicians an
Slide 9: Standard of care
Standard of care Standard of care initiatives aim to establish a consistent process for diagnosing and referring CI candidates by all healthcare professionals • Challenge – There is no consistent treatment pathway for adults with severe to profound hearing loss – Low awareness of indications amongst
Slide 10: Cognition benefits and effectiveness versus hearing aids
Cognition benefits In this study, >90% of recipients with mild cognitive impairment pre surgery, stabilised or improved cognition* Increase penetration in adults & seniors * Mosnier et al, The American Geriatrics Society, 2018 17 Effectiveness of cochlear implants relative to hearing aids 65% point
Slide 11: Quality of life improvements and cost effectiveness
Quality of life improvements >10x improvement in satisfaction with hearing performance with cochlear implants over hearing aids* Bilateral Hearing Aids Smart Bimodal (Appropriately fit HAs) (Nucleus CI + Resound HA) HEARING PERFORMANCE Satisfied or Very Satisfied 9 % 95 % % % Increase Ability to und
Slide 12: Building consensus on the treatment pathway
Building consensus on the treatment pathway • Progress in establishing a consistent CI pathway: – In March 19, a Steering Committee and Panel of 25 audiologists and ENT surgeons across 13 countries, chaired by Dr Craig Buchman, Washington University, reached a consensus that lays the foundations for
Slide 13: Investing operating cash flows to drive growth
Cochlear is investing operating cash flows to drive growth Invest to grow • Building awareness and access to our products requires multi-year investment in sales, marketing and R&D activities • Through disciplined investment, we will aim to maintain the net profit margin Operational improvement Deli
Slide 14: References
References 1. Livingston G, Sommerlad A, Orgeta V, Costafreda S, Huntley J, Mukadam N, et al. The Lancet Commissions: Dementia prevention, intervention, and care. The Lancet [serial on the Internet]. (2017, Dec 16), [cited July 2, 2018]; 3902673-2734. 2. Hsu W, Hsu C, Wen M, Lin H, Tsai H, Hsu Y, et
Slide 15: Cochlear's innovation pipeline
Cochlear’s innovation pipeline Jan Janssen Chief Technology Officer Cochlear Capital Markets Day – 10 May 2019 Cochlear’s benchmark cochlear implant portfolio Nucleus® ProfileTM Plus Series Nucleus® Kanso® Sound Processor Nucleus® 7 Sound Processor cochlear implant (CI632) Benchmark in OTE hearing p
Slide 16: Future focus areas
Future focus areas Hearing Outcomes Lifestyle Hearing Indications Connected Care Future focus areas Hearing Outcomes Lifestyle Hearing Experience Hearing Indications Connected Care 2
Slide 17: Cochlear Nucleus implant history
Cochlear Nucleus implant history 2009 / 1985 1997 2000 2005 2019 2014 CI22M CI24M CI24R CI24RE CI500 / Profile CI600 / Profile Plus World’s first World’s first CI Released with World’s most Thinnest implant. Thinnest implant. commercial with removable perimodiolar implanted Offers ease of use & MRI
Slide 18: Nucleus Profile Plus Series implant
Cochlear™ Nucleus® Profile™ Plus Series implant Designed for simpler MRI More convenient MRI scans at 1.5 and 3.0 Tesla without the need for magnet removal. No need to apply a bandage and splint for 1.5 and 3 T MRI scan Our dedication to implant reliability 1,2,3 Built on Cochlear’s unrivalled relia
Slide 19: Closing the gap: hearing outcomes
Closing the gap … Hearing outcomes Word Understanding Rehabilitation Sound Time & Quality Effort Hearing in challenging Listening Listening Effort Environments Hearing Outcomes Timbre Music Percpetion Speaker Sound Identification Localisation How to maximise hearing outcomes High number Closest to t
Slide 20: Slim Modiolar (CI532) key features
Peri-modiolar electrodes deliver electrical stimulation closer to the hearing nerve Lateral Wall Peri-Modiolar electrode position electrode position Basilar Membrane Spatial patterns of simulated neural Spatial patterns of simulated neural excitation: 100 activated neurons excitation: 100 activated
Slide 21: Better hearing performance with 22 electrodes
Better hearing performance and sound quality with 22 electrodes (22) (22) (22) (22) Coghran et al, JASA 2017(*) Berg et al, JASA 2019(**) * Croghan et al., Re-examining the relationship b/w number of cochlear implant channels and maximal speech Intelligibility, Journal of the Acoustic Society of Ame
Slide 22: Hearing better faster with CI532 and Nucleus 7
Hearing better faster with CI532 electrode & Nucleus 7 Sound Processor At 3 months, more people are hearing better faster by combining earlier implantation with CI532 and Nucleus 7 The thin form factor of the Slim Modiolar electrode facilitates atraumatic insertion and provides closer and more consi
Slide 23: Closing the gap: hearing in noise
Closing the gap … Hearing in noise Word Understanding Rehabilitation Sound Time & Quality Effort Hearing in challenging Listening Listening Effort Environments Hearing Outcomes Timbre Music Percpetion Speaker Sound Identification Localisation New ForwardFocus feature activated with Nucleus Smart App
Slide 24: ForwardFocus for Nucleus 7 Sound Processor
NEW for Nucleus 7 Sound Processor: ForwardFocus - reduces noise from behind 4 TB roving recommended ForwardFocus in the in rear half; n=24 2.9 dB 88% in cafes and restaurants mean SRT improvement satisfied with ForwardFocus 75% for listening in noise Better recommended ForwardFocus 52% for use in th
Slide 25: Nucleus 7 binaural audio streaming
Nucleus 7 Sound Processor: Binaural Audio Streaming Nucleus® 7 Sound Processor Linx 3D or Enzo 3D Nucleus® 7 Hearing Sound Processor Aid Phone Clip Nucleus 7 Sound Processor: Binaural Audio Streaming Nucleus® 7 Sound Processor Linx 3D or Enzo 3D Nucleus® 7 Hearing Sound Processor Audio Streaming for
Slide 26: Hearing satisfaction with CI532 and Nucleus 7
Hearing satisfaction with CI532 electrode and Nucleus 7 Sound Processor Bilateral Hearing Aids (Appropriately fit HAs) Smart Bimodal >10x (Nucleus cochlear implant + Resound hearing aid) improvement HEARING PERFORMANCE Satisfied or Very Satisfied 9 % 95 % in hearing performance Ability to understand
Slide 27: Structural preservation with Slim Modiolar electrode
Structural preservation with Slim Modiolar electrode (CI532) • Aschendorff et al (n=44)1 Multiple studies indicate consistent • No intracochlear trauma atraumatic placement with • 100% scala tympani placement Slim Modiolar electrode (CI532) • Consistent and close modiolar proximity CI532 insertion i
Slide 28: Cochlear Research Platform ECochG
NEW – CochlearTM Research Platform ECochG “unblinding” the electrode insertion process • High responsiveness ( ~ 3/second ) • No need for extra recording hardware • No external acoustic equipment • Easy to use, integrated system Pending CE, FDA, TGA regulatory approval Future focus areas Hearing Out
Slide 29: Making life easy: Nucleus Smart App
Making life easy Nucleus 6 system MiniMic 2 MiniMic 2+ Nucleus 7 Nucleus system Smart App Nucleus® Smart App 15
Slide 30: Nucleus Smart App and totally implantable cochlear implant
First for iPhone. First for Android. With the Nucleus Smart App patients can control their Nucleus 7 Sound Processor directly from a smartphone. iPhone – iPad – iPod Touch Now also for Android. Why develop a totally implantable cochlear implant (TICI)? • Recipients and Professionals ask for it! Why?
Slide 31: TICI research devices
1st generation TICI research device (2005-2006) • Hearing performance in quiet and in noise significantly degraded when using invisible hearing • Usability strongly affected by the presence of body noise (breathing, swallowing, eating, ...) • Due to these issues the Melbourne recipients do not use t
Slide 32: Product innovation focus areas summary
Summary Product innovation focus areas • Nucleus Profile Plus Series cochlear implant (CI600): enhanced MRI compatibility • Hearing Outcomes – Slim Modiolar (CI532/632) + Nucleus 7 Sound Processor: hearing better faster – Nucleus 7 ForwardFocus: hearing better in noise – Nucleus 7 Audio Streaming: A
Slide 33: Connected Care – Remote Check Pilot - UK
Connected Care – Remote Check Pilot - UK Craig Sharp Group Product Manager, Connected Care Cochlear Capital Markets Day – 10 May 2019 Remote Check Overview About Remote Check Remote Check* is designed to be a convenient, at-home testing tool that allows patients with a Cochlear™ Nucleus® 7 Sound Pro
Slide 34: How It Works
How It Works Remote Check activities are designed to take as little as 15 minutes for patients to complete, and about 10 minutes for a health care professional to assess.* *Based on internal Cochlear data. Some users may take longer than 15 minutes and 10 minutes, respectively. Data on file. How It
Slide 35: UK Pilot Study – Remote Check
UK Pilot Study – Remote Check • NHS operates on a capitated funding model – Fixed price for annual maintenance of patients after initial cochlear implant surgery – Fee is static regardless of number of visits • UK recently expanded eligibility criteria for cochlear implants – New NICE criteria doubl
Slide 36: Potential Clinic Impact of a New Care Model
Potential Clinic Impact of a New Care Model Possible Impact of Remote Check on Post-Surgical Audiological Aftercare* 12 • Facilitates category growth 10 – Helps mitigate impact of new CI candidates on clinic capacity 8 – Extends reach of existing care providers Hours 6 • Helps with follow-up care co
Slide 37: Building a market access capability
Building a market access capability Fernando Gonzalo Head of Global Market Access and Health Economics Cochlear Capital Markets Day – 10 May 2019 Topics • The impact of untreated hearing loss • Market Access at Cochlear • Building the capabilities • Recent access outcomes and future opportunities 2
Slide 38: Hearing loss is the fourth largest cause of disability
Despite its low awareness, hearing loss is now the fourth largest cause of disability Years lived with disability Years lived with disability Global rank (2017) Global rank (2017) All ages Age 70+ 1 Low back pain 1 Age-related hearing loss 2 Migraine 2 COPD 3 Diabetes type 2 3 Low back pain 4 Age-re
Slide 39: Impact of hearing loss and improved market access
The impact on SP SNHL on the individual is real and often tragic 1980s – 1990s: Trying to live “normally” knowing that things are only getting harder Progressive hearing loss continues 2001: 80dB loss in her best ear Late 1970s: Progressive hearing loss as a result of ototoxic drugs 2002: Lost her j
Slide 40: Market access addresses non-clinical decision makers
Market Access addresses the needs of non- clinical decision makers Change in healthcare decision makers Product development, Clinicians clinical studies and real world experience addressed Market Access the needs of clinicians Hospitals works to meet the needs of non-clinical (economic) decision Pay
Slide 41: Access capabilities and winning value propositions
Access capabilities are needed at global, regional and country level Global Market Access Local country market builds evidence to access teams are demonstrate the ‘value experts on local for money’ of CI and reimbursement increases awareness process and utilize the among payers and frameworks and to
Slide 42: Economic evaluation and cost effectiveness
Economic models allow for comparison of different interventions Premise: Scarce (health care) resources What is Economic Evaluation Aim: To maximise health gain Method: Compare the cost and effectiveness of therapies Balance: about costs and effects • “Health” is measured in utilities (0 = death; 1
Slide 43: Advocacy and recent improvements in market access
Advocacy activities will continue to be key to ensuring access Advocacy goal is aligned to Cochlear’s Mission “Help people hear and be heard” Partnerships with patient and professional advocacy organisations, universities, NGO’s, well regarded influencers. • Awareness of CI and hearing loss as a maj
Slide 44: Future access opportunities
Future access opportunities: success will rely on payers’ understanding the overall impact of hearing loss Opportunity Broadening of reimbursement indications Increase funding / reduction of waiting lists Emerging markets Leverage - Connected care - Standard of Care for adults Acoustics 15 Reference
Slide 45: Strengthening links to the hearing aid channel
Strengthening links to the hearing aid channel Increasing access and awareness Michele Fusco VP, Strategic Growth Channels, Cochlear Americas Cochlear Capital Markets Day – 10 May 2019 Dante: Introduction • Longstanding hearing loss since childhood • Using high-powered hearing aids • Daughter is get
Slide 46: Why now?
In their own words… “I would have liked to have the choice presented to me 20 years ago…” ~Dante B Why now? Changing Landscape Third OTC Big Box Party Consolidation Products Companies Payers Enhance Practice Alt. Patient Portfolio Revenue Differentiation Referral Expansion . Sources Channels 2
Slide 47: Cochlear Provider Network
Top reasons audiologists do not recommend hearing implants • I don’t think patient’s hearing loss is severe enough for an implant • My patients are generally satisfied with hearing aids • I don’t have enough formal training and experience to feel comfortable recommending or offering implants PSB Mar
Slide 48: CPN audiologist profile
CPN audiologist profile Open to revenue streams other than hearing aids Desires to be known as the community hearing health care expert Wants to offer all hearing solutions other than just hearing aids Practice has been established for at least five years Patients want audiologist to be involved in
Slide 49: CPN education and business training
CPN education and business training • 2 Day training workshops • Monthly webinars that include relevant Training topics (i.e. How to include CIs on your website, tools billing and reimbursement, etc…) • Toolkit to get started–outlined protocols-easier candidacy identification • Outlined billing prac
Slide 50: Benefits of bimodal hearing
Benefits of bimodal hearing 1 1 2 Potential benefits: ➢ Better hearing performance in background noise1 ➢ Music appreciation3 1 - Ching T, van Wanrooy E, Dillon H. Binaural-bimodal fitting or bilateral implantation for managing severe to profound deafness: a review. Trends Amplif. 2007:11;161-192. 2
Slide 51: How the CPN works and its growth
How the CPN works Loyal database of long term customers CPN Audiologist has Focus on what is best for key to unlock patient patient - convenience, quality service, provider access Patient trust means provider is decision consistency “tipping point” CPN Audiologist Recipient returns to evaluates for
Slide 52: Sycle helps identify and educate
Cochlear Provider Network today - FY19 - Prior to FY19 *Star size indicates CPN location density Sycle – Helps identify and educate The Continuum of Care through Sycle software aims to build awareness, support patient education, and facilitates efficient referrals for patients who can benefit from c
Slide 53: Sycle software workflow
Sycle software uses current practice workflow to educate Test Identify Recommend Connect Sycle Flags potential Creates a Physician Embedded Educational AutoFill Referral Form Report for the CI surgeon candidates Tools Dedicated microsite contains further educational instruction https://web.sycle.net
Slide 54: In Summary
Sycle portals provide professional awareness campaigns & industry KOL interviews Case studies, myth-busters, educational webinars and patient counseling guides empower audiologists to feel confident in their decisions to refer patients for treatment In Summary……. The CPN, together with Sycle, are dr
Slide 55: Notes
Notes Forward looking statements Cochlear advises that these presentation slides contain forward looking statements which may be subject to significant uncertainties outside of Cochlear’s control. No representation is made as to the accuracy or reliability of forward looking statements or the assump