Mitesco, Inc. · OTC:MITI
Mitesco — True Nature Holding — Investor Presentation (August 2016)
20 slides from Mitesco's investor presentation, Aug 31, 2016
Slide 1: True Nature Holdings, Inc. (TNTY) Investor Presentation
True Nature Holdings, lnc. (TNTY) DISCIPLINE. | perio tole Se Investor Presentation August 2016
Slide 2: Information Regarding Forward-Looking Statements
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Slide 3: Executive Summary
Executive Summary @ True Nature Holdings, Inc. (TNTY) is a public, development stage company acquiring US-based compounding pharmacies to create network of quality-focused, profitable, efficient businesses through: — Consolidation of local markets and production to regional hubs — Leveraging economi
Slide 4: Market Overview
Market Overview @ Over 4,000 compounding pharmacies in US, generating roughly $8B in revenue (March 2016 IBIS report) — Typically 10-20%+ profit margins — Represents only 30-40M of estimated 3.6B prescriptions/year (IBIS January 2015); receives less attention than other specialty pharmacy sub-segmen
Slide 5: Market Overview (cont'd)
Market Overview (cont'd) m Compounding pharmacy industry projected to grow at 5.7%/year from 2015-2021 (Future Market Insights, May 2016), driven by: — Population growth with increasing chronic illness, MD visits = May require personalized dosage forms, flavors or medications that comply with allerg
Slide 6: Source of Prescriber Demand
Source of Prescriber Demand m Functional Medicine — Systems-oriented approach to medicine vs. traditional disease-state management — Many drugs that treat natural systems not patentable thus not commercially available; must be made in compounding pharmacies — Many functional medicine MD's prefer to
Slide 7: Compounders: Value-Add in Healthcare Market
Compounders: Value-Add in Healthcare Market @ Healthcare Savings = Compound pharmacy industry historically focused firmly on mission of saving money for prescribers — LE: for many years compounders made hydroxyprogesterone injections to avoid short- term pregnancies for $10/dose; Makena debuted for
Slide 8: Recent History of Increasing Regulation
Recent History of Increasing Regulation m@ 1998: Congress exempted compounding pharmacies from FDA oversight, making regulation shared responsibility of state and federal agencies @ 2012: outbreak of fungal meningitis sickened over 800 individuals, caused death of 64 — CDC traced outbreak to contami
Slide 9: Recent History of Increasing Regulation (cont)
Recent History of Increasing Regulation (cont) @ Regulation has increased significantly: — USP 795: Governs non-sterile compounding — USP 797 (updated 2014): Governs wide range of pharmacy policies/procedures with respect to sterile preparations; designed to prevent contamination, protect workers —
Slide 10: Reimbursement Environment
Reimbursement Environment @ Medically-necessary compounded medicines were generally reimbursable by insurers, Medicare, Medicaid @ In 2014, pharmacy benefit managers focused on compounded pharmacy claims and narrowed ingredients covered in response to abuses by compounders, reducing reimbursements d
Slide 11: Competition
Competition @ 503As-Little direct at present, highly fragmented industry — Approximately 4,000 independent compounding pharmacies — 99% Under $10M in revenue — No significant multi-site networks — Wedgwood Pharmacy (New Harbor Capital), primarily focused on pet @ 503Bs-Several large players entered
Slide 12: Why Consolidate Now
Why Consolidate Now = Compound pharmacy owners fatigued, highly motivated to sell due to: — Increased regulation; more cost, hassle — Insurance reimbursement almost extinguished @ Current buyers market will keep acquisition multiples low @ Limited competition for 503As at present due to negative ind
Slide 13: Strategy
Strategy @ 503A (retail) Hub and Spoke Acquisition Approach * Target large compounding pharmacies (over $2M in revenue) or groups of smaller compounding pharmacies in single metropolitan area to form "hubs" on state-by-state basis = Ensure compliance with new and existing regulations * Share cost ef
Slide 14: Strategy (cont'd)
Strategy (cont'd) @ Acquire 503Bs, Create Platform and Sales Synergies * Target 1-2 geographically strategic 503Bs to support 503A roll up * 503As can only make patient-specific prescriptions for procedures with prescription received in advance - extremely inefficient * MD offices, hospitals can pur
Slide 15: Pipeline
Pipeline @ At present: Name Integrity (closed) Target #1 (Q3 closing) Target #2 (Q3 closing) Target #3 (Q4 closing) Target #4 (Q4 closing) Total Pipeline of Deals Pending and Under Negotiation/Diligence (pending available financing) Annual Revenue $1,000,000 $5,000,000 $4,200,000 $6,000,000 $4,000,0
Slide 16: Management Bios
Management Bios
Slide 17: Management
Management @ Jim Driscoll, Director and CEO Currently also CEO of Channels Terminals, a combination refinery and terminal operation in Houston, Texas. In the final stages of a sale process. 2011-2013: President of Method Holdings LLC, a holding company established to aggregate wealth management firm
Slide 18: Management (cont'd)
Management (cont'd) @ Steve Keaveney, Board Chairman and CFO Currently CFO of Connectivity Wireless, an in-building wireless network company 2013-2014: CFO of Innotrac Corporation, a rapidly growing ecommerce fulfillment business * Helped engineer $114 million take private leveraged buy-out backed b
Slide 19: Management (cont'd)
Management (cont'd) m Casey Gaetano, Director of Corporate Development | Responsible for * Sales and marketing in the Atlanta metro area, and * Strategy, identification and vetting of acquisitions and development of national sales and marketing plan to promote the formulation set from all True Natur
Slide 20: Management (cont'd)
Management (cont'd) m@ Gary Meyer, Director of Compliance 2 Responsible for state and federal regulatory compliance for True Nature Aug 2015-June 2015: Pharmacist in Charge, CRC Pharmacy Apr 2015-July 2015: Pharmacist in Charge, Physicians Rx Pharmacy 1995-Feb 2015: Co-Owner and Pharmacist in Charge
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