Slide 1: M3, Inc. Presentation Material
M3, Inc. Presentation Material July 2015 Copyright © 2015 M3, Inc. All rights reserved.
Slide 2: Forward-looking statements disclaimer
The following presentation contains forecasts forecasts, future plans plans, management targets and other forward-looking projections relating to M3, Inc. and/or its group. These statements are drawn from assumptions p of future events based on data currentlyy available to us,, and there exist possi
Slide 3: Current Business Situation and Outlook
Current Business Situation and Outlook Copyright © 2015 M3, Inc. All rights reserved. 2
Slide 4: MR-kun Family
MR k F MR-kun Family il M3’s M3’ Platform Linked Growth Business Copyright © 2015 M3, Inc. All rights reserved. 3
Slide 5: Doctor Demand for On-Line Detailing
Doctor Demand for On-Line Detailing What is the ideal ratio of on-line and off-line promotional information (“details”) from drug companies? 100% 100% 4.7% On-line 80% 20% 14.4% 60% 40% 20.0% 75% 50% 50% 35.9% 40% 60% 12.4% 20% 80% 11.1% 100% Off line Off-line 100% 1.5% According to 400 physicians H
Slide 6: Doctor's Time Allocation vs Pharma's Budget Allocation
Doctor’s Time Allocation vs Pharma’s Budget Allocation Doctors spend the most time collecting information via the Internet. However, pharmaceutical firms spend the majority of their marketing b dget on off budget off-line line MR related costs. costs Time Allocation Budget Allocation of doctors coll
Slide 7: MR-kun Family's Growth Potential in Japan
MR-kun Family’s Growth Potential in Japan Currently Growth Potential (approx.) Pharma 30 30~35 CLIENTS Companies Companies Growth Potential ¥1 bn ~ ¥1.5 bn 3~4 times current levels SALES (approx.) per client drivers: per ¥400 mn # off products d t CLIENT # of member MDs Added value of contents
Slide 8: MR-kun Family Fee Structure (annual)
MR-kun Family Fee Structure (annual) MR-kun Contents Other MR-kun Detail fee Base & Operation fee Production fee Family Services ¥100 per detail sent Production of Web Symposiums, Symposiums customized detail One Point eDetails, etc contents (one product)) ¥70 ~ 80 ¥20 ~ 40 ¥30 ~ ¥10 ~ Entrry Level
Slide 9: Launch of eMarketing to Pharmacists
Launch of eMarketing to Pharmacists For Doctors EXISTING Reach 100,000+ pharmacists in addition to the ~250,000 MR-kun physician members via MR- kun ~250,000 physicians Promote patient adherence and provide marketing supportt targeting t ti pharmacists h i t For Pharmacists Contracts with 4 dr
Slide 10: Platform Linked Growth Business
MR-kun Family M3’s M3’ Platform Pl tf Linked Li k d Growth Business Copyright © 2015 M3, Inc. All rights reserved. 9
Slide 11: Consolidated Sales Trend
Consolidated Sales Trend (million yen) FY15 FCT 51,346 63,000 36,887 26,007 , 19,040 15,528 11,811 14,646 3,854 5,729 7,475 8,534 1,563 2,276 22% MR-kun 30% 25% 43% 38% Family 54% 49% 73% 68% 65% 83% Platform 95% 90% 54% 56% Linked 52% Business 41% 46% 36% 40% 17% 21% 26% 15% 18% 21% 22% Overseas 10
Slide 12: Business Segment Breakdown and Type
Business Segment Breakdown and Type Business Business Segments Services FY14 Sales Type MR-kun Family 12 bn yen MR-kun Family Career 6 bn yen Medical Portal Research 2 bn yen Other Oth 2 bn yen (Mr. Finder, AskDoctors, others) Platform Evidence Solution 13 bn yen Linked Business Clinical Platform 3
Slide 13: Platform Linked Business Development
Platform Linked Business Development CLIENT BASE Business Size Scale Pharma Hospital, Doctor Consumer (FY2015 Forecast) ¥10 bn 3 QOL-kun, etc. M3 Research AskDoctors M ¥5 bn panies 1 2 ¥3 bn C Career up Comp Evidence Solution ¥1 bn iTicket Grou CSO EMR Detailed slides Others available Total revenue
Slide 14: Power of Mr. Finder in Drug Development
Power of Mr. Finder in Drug Development １ Evid Sol “Making use of the Internet to increase, as much as possible, ibl theh number b off peoplel who h can live li longer l and d healthier lives, and to reduce as much as possible, the amount of unnecessary medical costs.” Past MR-kun triggered a paradi
Slide 15: Patient Enrollment in Large-Scale Trials
Patient Enrollment in Large-Scale Trials １ Evid Sol Case study M3.com doctors exceeded by number and speed in collecting cases versus other SMOs for a particular Endocrinology and Metabolism trial 1,500 1 400 1,400 Number of patient enrollment N 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 20
Slide 16: Shift to Internet-Based Clinical Trials
Shift to Internet-Based Clinical Trials １ Evid Sol Theme Operation M&A Timing 2011 160 Site Selection 2009 80 Feasibility F ibilit Study, St d etc t 2015/4 470 Group-wide approach to promoting 2014 850 and g accelerating Monitoring 2009 80 internet EDC, etc based drug 2012 320 development
Slide 17: Number of CRAs by Company (CRO)
Number of CRAs by Company (CRO) １ Evid Sol # CRO Companies # of ＣＲＡ ＣＲＡss M3 Group 1 EPS 855 2 M3 Group 841 3 Cimic 780 4 Quintiles Q i til 600 5 Parexel 550 6 MEDISCIENCE DISCI C PLANNING I G 494 7 A2 Healthcare 380 8 ＭＩＣ Medical 282 9 Linical 170 10 Intellim 90 11 Bell Medical Solutions 80 12 Mebi
Slide 18: Sales and Profit Trend of Evidence Solution
Sales and Profit Trend of Evidence Solution １ Evid Sol (mn yen) IFRS basis Sales Segment Profit FY15 FCT Orders backlog at 19 bn yen 22bn yen, with corresponding increases in 13,195 headcount as upfront investment. Growth 19 bn yen 6,650 in top line expected f FY15 for 4,862 4,283 Absorbed 60 mn
Slide 19: Sales and Profit Trend of M3 Career
Sales and Profit Trend of M3 Career 2 Career (mn yen) JGAAP basis Sales Ordinary Profit FY15 FCT 7 bn yen 5,712 Successful integration of newly-hired staff 4,594 has improved productivity 3,235 FY2015 should see 2,387 continued traction 2 191 2,191 f from job j b placement l t 1,714 1,433 for doct
Slide 20: NEW: Private Practice M&A Advisory
NEW: Private Practice M&A Advisory 3 QOL-kun, etc. Matchingg ⇒ Optimal matching realized through Japan’s largest physician p y network Valuation ⇒ Private Potential Expert consultants valuate for Practice Buyer Owner proper pricing i i Execution ⇒ Financial legal Financial, legal, tax tax, and
Slide 21: Platform Linked Growth Business
MR-kun Family M3’s M3’ Platform Linked Growth Business Copyright © 2015 M3, Inc. All rights reserved. 20
Slide 22: Number of Physician Members and Panelists (Global)
Number of Physician Members and Panelists (Global) (thousands) 2.5+ million members worldwide 3 500 3,500 Other Nations 3,000 （M3 Global Research, MDLinx Russia） MDLinx, 2,500 Korea (MEDIGATE) 2,000 China 1,500 U.K. (Doctors.net.uk) 1,000 U S A (MDLinx U.S.A (MDLi + PDR) 500 Japan (m3.com) 0 FY08 FY
Slide 23: Development in the US
Development in the US Expanding services in the U.S. via MDLinx, operated by M3 USA ((100% subsidiary) y) - Over 600,000 US physician members through partnership with PDR, resulting in coverage topping 80% - #1 player in the U.S. for marketing research targeting physicians as a p result of superio
Slide 24: Development in China
Development in China Number of Physician Members (thousand) 1,250 , 1,154 1.25+ million in members covers over 1,096 50% of the doctor 1,019 population in China 953 Marketing support and research services 828 expanded in line with platform development Chinese MR-kun is developing steadily FY13 FY
Slide 25: Sales and Profit Trend of Overseas
Sales and Profit Trend of Overseas (mn yen) IFRS basis Sales FY15 FCT Segment Profit 14 bn yen 10,980 Broader business scope in China, US and UK MR-kun launched in the UK, contracts t t signed i d with ith severall 6,661 drug companies Wrongful “spam” classification of 4 069 4,069 M3USA e-mail
Slide 26: M3 Group's Business Strategy
M3 Group’s p Business Strategy Copyright © 2015 M3, Inc. All rights reserved. 25
Slide 27: Strategy Change in Business Development
Strategy Change in Business Development IInternet-Powered t tP d Investment I t t Business Development Strategy in Healthcare in Healthcare-Internet Sector Sector （2000～2010） （2011～） Approach Internet Internet + Real Operations Service Web-based Coverage Entire Value-Chain eTools Potential Business
Slide 28: FY2015 Q1 Results
FY2015 Q1 Results Copyright © 2015 M3, Inc. All rights reserved. 27
Slide 29: FY2015 Q1 Consolidated Results
FY2015 Q1 Consolidated Results (million yen) IFRSベース Sales Operating Profit Pre tax Profit Pre-tax Net Profit +27% +27% +28% +37% 3,418 15,528 5,001 5,078 12 276 12,276 3 941 3,941 3 971 3,971 2 502 2,502 FY2014 FY2015 FY2014 FY2015 FY2014 FY2015 FY2014 FY2015 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q Copyright © 201
Slide 30: FY2015 Q1 Consolidated Results by Segment
FY2015 Q1 Consolidated Results by Segment IFRS basis (mn yen) FY2014 Q1 FY2015 Q1 YoY S l Sales 5 734 5,734 6 378 6,378 +11% 11% Medical Portal Profit 3,457 4,015 +16% Evidence S l Sales 3 181 3,181 4 862 4,862 +53% Solution Profit 267 909 x3.4 Sales 2 237 2,237 3 130 3,130 +40% Overseas Profit 231
Slide 31: Special Upfront Investment Costs for Future Growth
Special Upfront Investment Costs for Future Growth (mn yen) 346 Total 195 300~ 600 60 mn yen 44 M&A Recruiting Productivity y Neues N Due & Training Time Lag of Losses Diligence Fees New Staff Upfront investment costs in anticipation of future growth is expected to dampen profits by 300 ~ 600 mn yen
Slide 32: Annual Results & Forecast for FY2015
Annual Results & Forecast for FY2015 Sales Operating Profit & Net Profit (mn yen) (mn yen) 19,000 63,000 Net Profit Operating profit 16,063 51,346 Extraordinary 13,738 profit from acquisition of 12,000 MPI* 12,704* 36,769 10,426 10 426 9,294 8,878 26,007 7,648 6,031 7,844* 19,040 5,598 4,803 4,492 1
Slide 33: Creating New Value in Healthcare
Creating New Value in Healthcare M3 Medicine Media Metamorphosis Healthcare sector is enormous… ・ Japanese national spending on medical services is approximately ¥33tn (¥50tn including peripheral businesses) ・ Equivalent to 10% of Japanese GDP ・ Sector controlled by only 290,000 physicians (0 2% of