Organogenesis Holdings Inc. · NASDAQ:ORGO
Organogenesis — Avista Healthcare Public Acquisition — SPAC Merger (August 2018)
56 slides from Organogenesis's SPAC merger presentation, Aug 17, 2018
Slide 1: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared solely for, and is being delivered on a confidential basis to, persons considering a possible business relationship with Organogenesis Inc. (“Organogenesis” or the “Company”) in connection with a potential transaction with Avista He
Slide 2: Disclaimer (Cont.) Use of Projections
Disclaimer (Cont.) Use of Projections The financial and operating projections contained herein represent certain estimates of Organogenesis as of the date hereof. Organogenesis ‘ independent public accountants have not examined, reviewed or compiled the projections and, accordingly, do not express a
Slide 3: Disclaimer (Cont.) Use of Non-GAAP Financial Measures
Disclaimer (Cont.) Use of Non-GAAP Financial Measures This Presentation has not been prepared in accordance with, and does not contain all of the information that is required by, the rules and regulations of the SEC. EBITDA, Pro Forma Adjusted EBITDA, Adjusted Revenue and the related pro forma infor
Slide 4: Transaction Overview
Transaction Overview Avista Healthcare Public Acquisition Corp. (“AHPAC”) and Organogenesis Inc. (“Organogenesis”), a leading regenerative medicine company operating in the Advanced Wound Care and Surgical & Sports Medicine markets, agreed to merge on August 17th 2018 (the “Transaction”) Related to
Slide 5: Transaction Overview (Cont.)
Transaction Overview (Cont.) Key assumptions include: $92.0 million Private Placement issued to affiliates of Avista Capital Partners Full redemptions from the SPAC trust $28.7 million of existing ownership group’s Affiliate Loans and Accrued Interest is paid down $45.7 million of Affiliate Loans ar
Slide 6: Recent Avista-Affiliated Healthcare IPOs
Recent Avista-Affiliated Healthcare IPOs AHPAC’s management has experience executing financial structuring solutions in both private and public markets Extensive experience managing companies in public markets Completed strategic, accretive M&A deals including both tuck-in acquisitions and transform
Slide 7: Key Investment Highlights
Key Investment Highlights Advanced Wound Care Market (AWC) Surgical & Sports Medicine Market (S&SM) 2 Products 5 be launched in next 2 years Deep Pipeline Publications reviewing Organogenesis products Supporting Products Ongoing studies(1) 5 Direct Sales Representatives Square feet across Healthcare
Slide 8: Experienced Management Team
Experienced Management Team 25+ years in senior leadership positions in both public and private organizations Served as President and CEO of Organogenesis since 2014 16 years at Organogenesis; also served as COO and CFO Recognized as one of Ernst & Young’s 2009 “Entrepreneur of the Year“ Earlier car
Slide 9: Comprehensive and Differentiated Product Portfolio
Comprehensive and Differentiated Product Portfolio manufacturing complexity, and robust commercialization infrastructure and relationships Product portfolio protected by a range of barriers, including IP, know-how, trade-secrets, clinical data, market reputation, supply chain, Diabetic foot ulcers t
Slide 10: Attractive End Markets Benefitting from Secular Tailwinds
Attractive End Markets Benefitting from Secular Tailwinds Key drivers of market growth include: Aging population Greater incidence of co-morbidities such as diabetes, obesity, cardiovascular and peripheral vascular disease Increasing acceptance of advanced technologies to treat complex wounds 1 1. 2
Slide 11: Skin Substitutes is a Fast-growing, Under-penetrated Segment of the Advanced Wound Care Market
Skin Substitutes is a Fast-growing, Under-penetrated 1 Segment of the Advanced Wound Care Market Other Adv. Dressings, 43% Biologics, 18% ~$1,150mm Skin Substitute 2015 2016 2020E Antimicrobial Dressings, 19% Devices, 21% Organogenesis’ products are generally considered “skin substitutes” Market has
Slide 12: Our Advanced Wound Care Products Address Patient Needs Across the Continuum of Care
Our Advanced Wound Care Products Address Patient 2 Needs Across the Continuum of Care… 1 3 Organogenesis has a broad portfolio of skin substitutes to address wounds across the wound care continuum, resulting in better patient outcomes Incidence of chronic wounds is on the rise due to an aging US pop
Slide 13: And Now Cover the Full Spectrum of Addressable Wounds
… And Now Cover the Full Spectrum of Addressable Wounds… Prior to PuraPly AM launch (2016)(1) and NuTech acquisition (2017), Organogenesis’ product portfolio only covered ~17% of addressable wounds - Apligraf (VLUs and DFUs) and Dermagraft (DFUs) are PMA-approved, supported by robust clinical data,
Slide 14: With Accelerating Growth of Amniotic Portfolio
… With Accelerating Growth of Amniotic Portfolio… 2 Ability to include Affinity and NuShield “in the bag” of Advanced Wound Care sales reps is driving robust sales growth ($ in mm) Organogenesis(1) NuTech $9.0 $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 – Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Notes:
Slide 15: Through Increasing Account Reach and Penetration
… Through Increasing Account Reach and Penetration… A complete product offering enables reps to better reach and penetrate accounts - Potential to fully address physician needs; strengthen relationship and drive convenience of “one-stop shop” Active account results demonstrate complete Advanced Woun
Slide 16: And Facilitating Early Wins in Market Share Agreement Opportunity
… And Facilitating Early Wins in Agreement (MSA) Opportunity Large Market Share 2 Organogenesis is continuing to grow its commercial presence, expanding the number of agreements signed with GPOs and IDNs 25 20 15 10 5 0 - More than 4,000 facilities now covered by contracts(1) The company’s broad pro
Slide 17: Our Product Offering is Broad and Innovative Relative to Peers: Advanced Wound Care
Our Product Offering is Broad and Innovative Relative to 2 Peers: Advanced Wound Care Enzymatic PDGF, 18 Products Skin Sub Skin Sub Skin Sub Honey TCC (cast) Dressings NPWT Collagen Dressing Skin Graft Device Skin Sub Skin Sub Skin Sub Skin Sub Skin Sub Debrider, Dressings Human Cellular Bioengineer
Slide 18: Organogenesis has Continued to Penetrate Surgical & Sports Medicine Market Since NuTech Acquisition
Organogenesis has Continued to Penetrate Surgical Sports Medicine Market Since NuTech Acquisition & 2 ($ in mm) Addressing a ~$4.7bn market, growing ~10% annually Product set includes orthobiologics that support the healing of musculoskeletal injuries, including chronic degenerative conditions such
Slide 19: Our Product Offering is Broad and Innovative Relative to Peers: Surgical & Sports Medicine
Our Product Offering is Broad and Innovative Relative to 2 Peers: Surgical & Sports Medicine Multiple Multiple Tendon Membrane 20 Products Amniotic Membrane, Amniotic Suspension, Xenograft Amniotic Membrane, Amniotic Suspension Dermal Template, Amniotic Membrane, Amniotic Suspension, Tendon Reinforc
Slide 20: Proven R&D Engine Supporting Several Recent and Expected Near-term Product Launches
Proven R&D Engine Supporting Several Recent and 3 Expected Near-term Product Launches 12+ Key Products Pipeline Notes: 1. 2. 3. Acquired through Shire in 2014; Dermagraft originally launched in 2001. PuraPly AM was launched in 2016, while PuraPly was launched in 2015. Acquired from NuTech in 2017; p
Slide 21: TransCyte – Approved Product in an Attractive Market with Limited Competition
TransCyte – Approved Product in an Attractive Market with Limited Competition 3 TransCyte is a bioengineered tissue scaffold that promotes burn healing - Provides bioactive dermal components an outer protective barrier - Increases re-epithelialization and pain relief PMA-approved product supported b
Slide 22: ReNu — Expected BLA Approval Opens Up Large and Growing Market Opportunity
ReNu™— Expected BLA Approval Opens Up Large and Growing Market Opportunity 3 ReNu is a cryopreserved suspension of amniotic fluid cells and morselized amnion tissue from the same donor ~30mm Americans with OA driven by aging, obesity and sports injuries(1) ~$2.0bn Market opportunity for HA injection
Slide 23: Additional Products in Near-term Pipeline
Additional Products in Near-term Pipeline 3 (except 3rd degree burns) wounds (except 3rd degree burns) wounds Notes: 1.Expect to out-license. 24 Product Pipeline Product Product Description Clinical Application Expected Launch Regulatory Pathway Version of PuraPly Antimicrobial with enhanced thickne
Slide 24: Robust Clinical Data Supporting Products: Advanced Wound Care
Robust Clinical Data Supporting Products: 4 Advanced Wound Care Notes: 1.Currently in planning / start-up stages. 25 Investment enhances sales efforts and reimbursement dynamics Product Indication Design Anticipated Completion Acute and Chronic Wounds 40 patient, Single Center Controlled Prospective
Slide 25: Robust Clinical Data Supporting Products: Surgical & Sports Medicine
Robust Clinical Data Supporting Products: 4 Surgical & Sports Medicine 26 Investment enhances sales efforts and reimbursement dynamics Product Indication Design Anticipated Completion Lumbar Spine Vertebral Fusion 60 patient Prospective, Efficacy Study of NuCel in patients Undergoing Fusion for One,
Slide 26: Well Established Commercial Capabilities
Well Established Commercial Capabilities… 5 ~200 Experienced Direct Sales Reps Nationwide - Oppor tuni ty t o s c al e to 3 5 0 w i thi n Demonstrated Product Launch and Product Management Success National Account and Market Access Team - Customer Service Field-Based Medical Science Liaison Team Sal
Slide 27: Supported by High-Quality Manufacturing Facilities
… Supported by High-Quality Manufacturing Facilities 5 Organogenesis has three facilities, including two manufacturing facilities (Canton, MA and La Jolla, CA) which produce its non-amniotic products - Proven large-scale commercial cell manufacturing company - Multiple levels of quality control and
Slide 28: Well Positioned for Continued Growth
Well Positioned for Continued Growth 6 intense focus on market share agreements BLA approval of office channel sales Notes: 1.PuraPly AM was launched in 2016, while PuraPly was launched in 2015. 2.Facilities currently under contract, but not necessarily ordering products in 1H 2018. 29 Historical Ev
Slide 29: Well Positioned for Continued Growth
OWell Positioned for Continued Growth Product Suite Historical Evolution Apilgraf and Dermagraft indicated for only "17% of addressable ‘wounds, but are supported by robust Advanced Wound Care sales force and commercialization infrastructure = PuraPly AM introduced in 2016" and amniotic portfolio (N
Slide 30: Pro Forma Revenue Growth
Pro Forma Revenue Growth ($ in mm) PF for pass-through status PuraPly PF Organogenesis, ex-PuraPly $292 2016PF (2) 2017PF (2) 2018E 2019E Notes: PuraPly was approved for pass-through status on 7/22/2015 and reverted to bundle payment status on 12/31/17. PuraPly pass-through status expected to be res
Slide 31: 2017PF to 2019E Net Revenue Bridge
2017PF to 2019E Net Revenue Bridge A Reflects benefit of selling amniotic portfolio through established, scaled Advanced Wound Care commercialization infrastructure Additional growth in Surgical & Sports Medicine channel expected given continued sales investment and leveraging broader Organogenesis
Slide 32: PuraPly Reimbursement Dynamics
PuraPly Reimbursement Dynamics PuraPly expected to benefit from a two-year reinstatement of pass-through reimbursement status effective 10/1/18 Management plans to utilize this favorable reimbursement dynamic over the next two years to refine the PuraPly go-to-market strategy in advance of pass-thro
Slide 33: Detailed Historic and Projected P&L
Detailed Historic and Projected P&L ($ in thousands) $86,057 7,851 $66,114 12,967 93,908 79,081 (15.8%) (31,821) (28,711) (61,669) (4,005) (79,395) (4,872) (4,057) 6,839 (5,437) (55) 2,306 863 (42,498) – 1.7% (36.4%) $52,307 $23,389 Notes: 34 1. 2. PuraPly expected to benefit from a two-year reinsta
Slide 34: Long-Term Financial Targets
Long-Term Financial Targets Mid-to-high teens CAGR Revenue Growth 11%(1) 10%+ Gross Margin 64% Low-to-mid 70’s 80%+ R&D (% of Net Revenue) 7% 8 – 9% 7% SG&A (% of Net Revenue) 79% High 60’s 50% Adjusted EBITDA Margin NM Breakeven 20%+ Notes: 1.Pro forma for PuraPly Pass-Through and the acquisition o
Slide 35: Peer Benchmarking
Peer Benchmarking 31% 22% 13% 12% 10% (1) (3) Avg = 5.3x Avg = 6.7x 11.7x 4.2x 3.8x(2) 6x (3) 79% 79% 72% 71% 74% 69% 69% 66% (3) Source: Company Filings and Factset as of 8/15/18. 1. 2. 3. Pro forma for the acquisition of NuTech. Financials and estimates as of 2/16/18 to reflect investor sentiment
Slide 36: Appendix: Technologies, Reimbursement, & Customer Support
Appendix: Technologies, Reimbursement, & Customer Support
Slide 37: Experienced Management Team (Cont.)
Experienced Management Team (Cont.) MD, MPA with 19 years in Medical industry Leadership position in Product Safety, Medical and Clinical Affairs for 10 years 1 year at Organogenesis 10 years with Organogenesis Previously held executive positions in Quality and Regulatory Affairs at RenaMed Biologic
Slide 38: Multiple Product Technology Platforms
Multiple Product Technology Platforms Organogenesis’ breadth of technology is unique amongst Advanced Wound Care companies Incorporates patented tissue cleaning processes to bioengineer products for specific applications by controlling 39 Platform Product Technology Description Bioengineered Cellula
Slide 39: Reimbursement Overview – Advanced Wound Care
Reimbursement Overview – Advanced Wound Care Established reimbursement for Organogenesis Advanced Wound Care products Positioned our innovative PuraPly line to benefit from limited duration reimbursement benefit - Limited duration reimbursement benefit ended December 31, 2017, but is expected to be
Slide 40: PuraPly Reimbursement Background
PuraPly Reimbursement Background PuraPly AM is a purified native porcine type I collagen matrix embedded with polyhexamethylene biguanide, or PHMB, a localized broadspectrum antimicrobial for the management of multiple wound types - Product is differentiated in that it helps manage bioburden while a
Slide 41: Reimbursement Overview – Surgical & Sports Medicine
Reimbursement Overview – Surgical & Sports Medicine Most payers (Medicare, Medicaid and commercial) include the payment for surgical products in the overall payment for the procedure Medicare reimburses hospital inpatient stays based on the Medicare Severity Diagnosis Related Group (MS-DRG) MS-DRG a
Slide 42: Comprehensive In-House Customer Support
Comprehensive In-House Customer Support Reimbursement Support Center Benefit verification/ Prior authorization Assurance Program Claims review support Coding, coverage and payment tools Customer Care Center Dedicated and trained staff Direct Purchase Program Return goods and cancellation policy Stan
Slide 43: Comprehensive Healthcare Compliance Program
Comprehensive Healthcare Compliance Program To help ensure compliance with the laws and regulations governing the provision of health care goods and services, we have implemented a comprehensive compliance program based on the HHS Office of Inspector General’s Seven Elements of an Effective Complian
Slide 44: Pro Forma Revenue Reconciliation
Pro Forma Revenue Reconciliation Year ended December 31, ($ in mm) 2016A 2017A 2018E 2019E Reported Revenue NuTech Medical PF Adjustment(1) PuraPly PF Adjustment(2) $138.7 24.9 – $198.5 5.7 – $198.7 – 28.1 $292.3 – – Pro Forma Revenue $163.7 $204.2 $226.7 $292.3 Notes: 1. 2. Amount reflects the reve
Slide 45: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Year ended December 31, Six Months ended June 30, 2015 2016 2017 2017 2018 ($ in thousands) Net income (loss) attributable to Organogenesis Inc. Interest expense, net Income tax expense (benefit) Depreciation Amortization ($24,261) 3,348 (177) 6,063 1,622 ($16,987) 5,4
Slide 46: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ‘Year ended six Months ended December 34, June 30, (Sin thousands) 2015 2015 2017 2017 zor Net income (loss) attributable to Organogenesis Inc. ($24,261) ($26,987) (58,388) $1,443 ($42,498) Interest expense, net 3348 5,474 8,020 3,550 5,192 Income tax expense (benefit)
Slide 47: Apligraf
Apligraf keratinocytes and human dermal fibroblasts We believe Apligraf is the first and only wound- Apligraf provides living cells, growth factors & cytokines known to stimulate healing PDGF-A PDGF-B TGF-1 TGF-3 IL-6 IL-8 IL-11 IGF-2 FGF-1 FGF-2 FGF-7 TGF-PDGF-A PDGF-B FGF-1 IL-8 IL-1 Keratinocytes
Slide 48: Apligraf’s Proven Clinical Efficacy
Apligraf’s Proven Clinical Efficacy Complete Wound Closure 60% Complete Wound Closure 60% 57% 56% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 4 Weeks 8 Weeks 12 Weeks 24 Weeks 4 Weeks 8 Weeks Time in Study 12 Weeks Time in Study Control (n=100) Apligraf (n=140) Conventional Therapy Alone (n=96) Ap
Slide 49: Dermagraft
Dermagraft facilitate healing factors which support the healing response in Contains a temporary mesh fabric that is dissolvable Human fibroblasts distributed throughout the naturally secreted collagen matrix and polyglactin strands (x200, H&E) Collagen Matrix Mesh Scaffold Fibroblast health care co
Slide 50: Dermagraft Percent of Patients Healed
Dermagraft Percent of patients Healed In the Phase III pivotal trial, Dermagraft plus conventional therapy resulted in significantly more patients with DFUs >6 weeks duration achieving complete wound closure by 12 weeks vs conventional therapy alone (30% vs 18%, P=0.023)(1,2) Patients reported being
Slide 51: PuraPly Antimicrobial (AM)
PuraPly Antimicrobial (AM) polyhexamethylene biguanide (PHMB) antimicrobial agent and surgical treatment of open wounds a wide variety of wound types, regardless of severity or 52 Clinical Update Patient enrollment and follow-up completed for: - 43 patient, single center controlled prospective obser
Slide 52: Affinity Clinical Update
Affinity 53 Clinical Update Two clinical trials currently in process: - 100 patient RCT: Affinity vs. standard of care for DFUs - 20 patient prospective study: Closure time for chronic VLUs treated with Affinity Key Attributes We believe Affinity is one of only a few amniotic tissue products contain
Slide 53: NuShield
NuShield healing of acute and chronic wounds across a range of sizes for the treatment of diabetic foot ulcers 54 Clinical Update 100 patient, randomized clinical trial vs. the standard of care Key Attributes Effective adhesion barrier Biological characteristics support healing of soft tissue defect
Slide 54: NuCel
NuCel characteristics of the tissue 55 Clinical Update Two retrospective lumbar spinal fusion studies of 159 patients published (one with prospective follow-up and CT) Two additional prospective lumbar studies, including multi-center, are in process Retrospective studies in long-bone non-union and i
Slide 55: ReNu
ReNu™ degenerative conditions such as OA and joint and tendon biologic characteristics of the tissue multiple applications 56 Clinical Update 200 patient multi-center RCT with interim data being prepared for publication Robust pre-clinical and clinical program on-going across Currently seeking BLA a
Slide 56: ReNu
ReNu™ Description / Clinical Application Technology Key Attributes Cryopreserved suspension of amniotic fluid cells and morselized amnion tissue from the same donor Regulated as a 361 HCT/P healing of soft tissues, particularly in degenerative conditions such as OA and joint and tendon injuries such
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