Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — New Zealand Shareholders' Association Conference 2013
25 slides from Fisher & Paykel Healthcare's conference presentation, September 2013
Slide 1: Improving Care and Outcomes
Improving Care and Outcomes NZSA September 2013 Michael Daniell MD/CEO 1
Slide 2: The Challenge
The Challenge Fisher &.Paykel HEALTHCARE
Slide 3: Health Spending Growing 5% - 7% Per Year
Health Spending Growing 5% - 7% Per Year OECD Health data 3
Slide 4: Health Spending Per Capita (US$)
Health Spending Per Capita (US$) Public Health Information and Geographic Information Systems. National Health Account series, 2007, updated 2010. World Health Organisation. 4
Slide 5: Demographics Driving Increases
Demographics Driving Increases • Population age and weight both increasing – US pop. 65yrs+ to grow ~80% over next 20 years1, 60% of US healthcare cost is after age 65yrs3 – US males 60 -74 yrs, av. weight increased 0.4kg/yr since 19602 • Developing markets increasing healthcare spending – China hea
Slide 6: Typical Healthcare Cost Breakdown
Typical Healthcare Cost Breakdown Utilities, Depreciation Drugs, Devices, Supplies & Food Hospital Costs Labour Source: Massachusetts Hospital Association, “An Update to Hospital Costs in Context Report” July 2010 6
Slide 7: Lower Care Intensity = Lower Cost
Lower Care Intensity = Lower Cost $50,000 $40,000 Mean cost (2008 US$) $30,000 $20,000 $10,000 $0 Outpatient cohort Urgent outpatient ED cohort Standard admission ICU cohort cohort cohort Anand A Dalal, Laura Christensen, 2 Fang Liu, and Aylin A Riedel. Direct costs of chronic obstructive pulmonary
Slide 8: Some Cost Control Measures
Some Cost Control Measures • Diagnosis related group (DRG) payment e.g. USA Medicare, Germany • Group purchasing organisations (GPO’s), e.g. USA - Premier, Novation, MedAssets NZ - Pharmac • Competitive bidding e.g. USA - CMS Medicare • USA medical device excise tax • US Medicare reduced payment for
Slide 9: The Opportunity
The Opportunity Fisher &.Paykel HEALTHCARE
Slide 10: Improve patient care and outcomes
Improve patient care and outcomes • Increase – effectiveness of care – efficiency of care • Reduce – intensity of care 10
Slide 11: Chronic Obstructive Pulmonary Disease (COPD)
Chronic Obstructive Pulmonary Disease (COPD) • 6% of US adults have been diagnosed with COPD1 (~15 million people) • 4% - 10% COPD prevalence worldwide2 (~400 million people) • 18% of US COPD patients visit ER or admitted to hospital each year1 (~3 million patients) 1. Nicole M Kosacz, Antonello Pun
Slide 12: Obstructive Sleep Apnea (OSA)
Obstructive Sleep Apnea (OSA) • 2% - 7% adult prevalence1 • Prevalence increases with age and obesity • 70%–80% of those affected remain undiagnosed • Estimate >50 million people in developed countries 1. Naresh M. Punjabi. The Epidemiology of Adult Obstructive Sleep Apnea. Proceedings of the Americ
Slide 13: FPH began with Improving Patient Care
FPH began with Improving Patient Care Collaboration • Motivated clinician Dr Matt Spence Alf Melville Auckland Hospital DSIR • Innovative designer • Company with funding, long term view Agee Jar Dave O’Hare Prototype Humidifier Fisher & Paykel 13
Slide 14: Takes Time To Change Practice
Takes Time To Change Practice FPH Revenue NZ$M 10 years to first $1M 14
Slide 15: FPH Today
FPH Today • A leader in respiratory and OSA treatment devices • Consistent growth strategy • Estimated US$5+ billion and growing market opportunity • High level of innovation • Global presence, >2800 employees, 1,800 in NZ • Strong financial performance: FY13 - Revenue MZ$556M - NPAT NZ$77M NZSX:FPH
Slide 16: Markets and Products
Markets and Products • Respiratory & Acute Care (RAC) – Heated Humidification – Respiratory Care – Neonatal Care – Surgery • Obstructive Sleep Apnea (OSA) – Masks – Flow Generators – Humidifiers Consumable and accessory products Revenue by Product Group represent approx. 76% of core product 12 mon
Slide 17: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or O2 therapy • Mucociliary transport system operates less effectively • Need to deliver gas at physiologically normal levels – 37 oC body core temperature – 44mg/L 100% saturated 17
Slide 18: Respiratory & Acute Care
Respiratory & Acute Care Non-Invasive Invasive Ventilation O2 Therapy Humidity Therapy Ventilation 18
Slide 19: Obstructive Sleep Apnea
Obstructive Sleep Apnea • Temporary closure of airway during sleep • Can greatly impair quality of sleep, leading to fatigue; also associated with hypertension, stroke and heart attack • Estimated US$2.5 billion + worldwide market, growing ~ 6-8% • Potentially 50-60 million affected worldwide • Most
Slide 20: Research & Development
Research & Development • 8.2% of operating revenue, NZ$45.7M1 • Product pipeline includes: – Humidifier controllers – Masks – Respiratory consumables – Flow generators – Compliance monitoring solutions • 107 USA patents, 159 USA pending, 442 ROW, 260 ROW pending1 1 at 31 March 2013 20
Slide 21: New Products
New Products • Pilairo™ nasal pillows mask • Eson™ nasal mask • Simplus™ full face mask • ICON™+ flow generator range • Optiflow™ Junior oxygen therapy • Evaqua™2 breathing circuits • AIRVO™2 & myAIRVO™2 flow generator humidifiers 21
Slide 22: Manufacturing & Operations
Manufacturing & Operations • Vertically integrated – COGs improvements; Mexico, Lean, supply chain • Ample capacity to grow Auckland, New Zealand Tijuana, Mexico – Two buildings: 51,000m² / – 18,000m2/200,000ft2 550,000ft² total – Consumables capacity ramping up – 32,000m2 building 3 completed Novem
Slide 23: Global Presence
Global Presence • Direct/offices – Hospitals, home care dealers – Sales/support offices in North America, Europe, Asia, South America, Middle East and Australasia – 16 distribution centres – 600+ staff in 33 countries – On-going international expansion • Distributors – 100+ distributors worldwide Ot
Slide 24: Consistent Growth Strategy
Consistent Growth Strategy • Experts in humidification, respiratory care, and obstructive sleep apnea • Provide innovative devices which can improve patient care and outcomes • Continuous product improvement • More devices for each patient • Serve more patient groups – Invasive ventilation, NIV, oxy
Slide 25: Improving Care and Outcomes
Improving Care and Outcomes NZSA September 2013 Michael Daniell MD/CEO 25
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