The Oncology Institute, Inc. · NASDAQ:TOI
The Oncology Institute — DFP Healthcare Acquisitions — SPAC Merger (June 2021)
44 slides from The Oncology Institute's SPAC merger presentation, Jun 28, 2021
Slide 1: The Leader in Value Based Oncology Care
The Leader in Value Based Oncology Care June 2021
Slide 2: Disclaimer and Forward Looking Statements
Disclaimer: This presentation is provided for informational purposes only and has been prepared to assist interested parties in making their own evaluation with respect to a potential business combination (the “Potential Transaction”) involving TOI Parent Inc. (“TOI” or the “Company”) and a special
Slide 3: No Offer or Solicitation; Additional Information
No Offer or Solicitation: This presentation shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction. This presentation shall also not constitute an offer to sell or the solicitation of an offer to buy any secur
Slide 4: The Oncology Institute of Hope & Innovation (TOI) and DFP Healthcare Acquisitions Corp
The Oncology Institute of Hope & Innovation (TOI)DFP Healthcare Acquisitions Corp Brad Hively Chief Executive Officer 20+ years of executive leadership and healthcare investing experience Previously President of Health Essentials and Senior VP at Heritage Provider Network Dr. Daniel Virnich Chief Op
Slide 5: Introduction and Proposed Transaction
Introduction and Proposed Transaction
Slide 6: Transaction Summary and Valuation Overview
Transaction SummaryValuation Overview The Oncology Institute of Hope & Innovation (TOI) is the largest(1) scaled provider of value-based oncology care in the US TOI to combine with DFP Healthcare Acquisitions Corp (DFP) to become a NASDAQ-listed value-based oncology care services platform Brad Hivel
Slide 7: Sources and Uses; PF Capitalization
Sources and UsesPF Capitalization(1) $ in mm Sources $ $ in mm PF Capitalization New PIPE Shares (incl. Deerfield)$275 Shares Issued to TOI 503 Trust Cash (ex Deerfield) 180 DFP Existing IPO Shares 50 Total$1,008 Uses $ Existing Debt$7 Existing Cash19 Cash from SPAC Transaction207 Net Debt($218) PF
Slide 8: Combination of High Caliber Teams and Complementary Capabilities
Combination of High Caliber Teams and Complementary Capabilities Deerfield provides execution certainty, powerful endorsement in the public markets and access to significant resources Highly successful with AdaptHealth and CareMax transactions Top notch management team at TOI highly experienced in o
Slide 9: Deerfield SPAC track record
$250mm SPAC IPO in February 2018 $143mm SPAC IPO in July 2020 $230mm SPAC IPO in March 2020 Completed $1bn business combination in November 2019 Announced $800m business combination in December 2020 Leader in Home Medical Equipment Leader in Risk-Based Primary Care Leader in Risk-Based Oncology Care
Slide 10: Who We Are
Who We Are
Slide 11: Who We Are
Who We Are Our Growth 50+ Locations in Four States 9 Current Markets 80+ Oncologists and Mid-levels (Revenue, $ millions) 30% CAGR $345 ~1.3M Lives Served Under Capitation ~200K Patient Visits in >50% Revenue Generated from Value Based Agreements ~46K Unique Patient >25% Reduction in Healthcare Cost
Slide 12: Healthcare is Unaffordable and Inefficient in the U.S.
Healthcare is Unaffordable and Inefficient in the U.S. U.S. Oncology Spend Growth Continues to Accelerate 18% of U.S. GDP and rising $200bn+ estimated 2020 U.S. oncology spend 2x spent per person compared to OECD average 11 – 14% CAGR U.S. Oncology drug spending growth in the next four years Yet, U.
Slide 13: Traditional Fee-for-Service vs. Value Based Oncology Care
Today’s Traditional Fee-for-Service Oncology Care ×Incentivized by volume ×Incentivized to use high-cost therapies ×Physician compensation model aligned to high cost ×Practice tailored to profit ×Supported by drug manufacturers and distributors ×No incentives to utilize appropriate care transitions
Slide 14: Primary Care Leading the Charge in Transition to Value Based Care
Primary Care Leading the Charge in Transition to Value Based Care Value based payments comprised of 36% of healthcare spending in 2018 vs. 20% in 2014 Since 2013, Humana has increased PCPs within value based arrangements by 145% Primary / preventative care only encompasses less than 3% of Medicare s
Slide 15: TOI is the Leading Value Based Oncology Care Practice
TOI is the Leading Value Based Oncology Care Practice that is Aligning both Physicians and Payors with Incentives to Simultaneously Enhance Quality and Lower Costs Traditional Care Physician Practices Benefit Managers Aligned with physicians, practice-based models are incentivized to over prescribe
Slide 16: Illustrative Cost Savings and Gross Profit
Illustrative Cost Savings and Gross Profit Save payors over 25%(1) 1 2 TOI captures 20% – 40% gross margins 3 1 Payors are challenged with high and escalating medical oncology costs Driven by misaligned incentives of fee for service providers 2 Payors engage with TOI to lower their medical oncology
Slide 17: Massive Whitespace Opportunity in Oncology Care Market
Massive Whitespace Opportunity in Oncology Care Market 9 Current Markets in 4 States ~25mm Commercial and Medicare Advantage Lives ~$6bn Opportunity High Priority Expansion Markets ~23mm Commercial and Medicare Advantage Lives ~$11bn Opportunity Secondary Target Markets ~32mm Commercial and Medicare
Slide 18: Clinics and Hospital Affiliations by State
(Lancaster) California 46 Clinics & 75+ Hospital Affiliations (Rancho Mirage) Arizona NevadaFlorida 5 Clinics & 6 Hospital Affiliations 3 Clinics & 12 Hospital Affiliations 5 Clinics & 9 Hospital Affiliations
Slide 19: Leadership Team
Leadership Team Brad Hively Chief Executive Officer Dr. Matt Miller Chief Administrative Officer Diona Simoneit Controller Dr. Daniel Virnich Chief Operating Officer Irene Lustria VP RCM Crystal Peterson VP Talent Mgmt Dr. Yale Podnos Chief Medical Officer Scott Dalgleish Chief Financial Officer Mit
Slide 20: What We Have Built
What We Have Built
Slide 21: Treatments Where We Focus Savings
Treatments Where We FocusSavings Reduce practice pattern variability Access to clinical trials in the community Vertical integration of pharmacy Palliative Care Symptom Management Providers trained in advanced care planning Close coordination between network providers Algorithm driven action plan 24
Slide 22: Highly Specific and Difficult to Replicate Capabilities
TOI has Developed Many Highly Specific and Difficult to Replicate Capabilities that Collectively Comprise our Competitive Moat Physician Recruiting Clinical Culture Tech-enabled Care Pathways Care Management Delivered in Community Setting Integration of Palliative Care and Hospice Clinical Trials Co
Slide 23: Highly Effective in Delivering Quality, Value Based Oncology Care
Highly Effective in Delivering Quality, Value Based Oncology Care 30% Lower inpatient admissions 75% Fewer Emergency Department visits in the last month of life 40% Fewer acute care facility deaths > 25% Lower median total healthcare costs from diagnosis to death 14% Improvement in Patient Satisfact
Slide 24: Highly Satisfied Patient Base Supports Care Delivery Model
Highly Satisfied Patient Base Supports Care Delivery Model While Strengthening Payor Relationships(1) Satisfaction Rating (0 – 5 Scale) 4.54.54.54.54.34.64.54.64.44.5 Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21 ~3,000 88% 93% patients surveyed of Oncologists Rated 4.0 or Above of Lo
Slide 25: Custom-Built Care Pathways Deliver High Quality, Evidence-Based Care
Custom-Built Care Pathways Deliver High Quality, Evidence-Based Care at the Optimal Value Possible Treatment Plans ABCDE FGHIJ Possible Treatments Approvable by Compendia Full range of options includes on-and off-label uses of drugs Recommendations and interpretations inconsistent across Compendia A
Slide 26: Our Technology Platform is Purpose Built for Oncology Care
Our Technology Platform is Purpose Built for Oncology Care Collect Work with health plans and primary care doctors on front-end collection of extensive patient data sets Patients ProvidersPayors Analyze Leverage proprietary algorithms and data science to refine relevant clinical care pathways Apply
Slide 27: New Market Entry Playbook
New Market Entry Playbook with Track Record of Success Designed to Scale Efficiently 123 Market Identification Market Prioritization Market Entry
Slide 28: How We Are Growing
How We Are Growing
Slide 29: Existing Markets Continue Driving Growth and Partnership Expansion
Existing Markets Continue Driving Live Growth and Partnership Expansion New contracts Expand covered lives New clinics & providers Improve unit economics Medicare direct contracting New Markets Well-Honed TOI Model Enables Quick Scaling in New Markets Establish presence in new markets Highly attract
Slide 30: ~3.5M Total Lives in Pipeline
~3.5M Total Lives in Pipeline ~1.5M Late Stage Lives Late Stage ~1.5M 43% Other Markets ~1M 29% Florida ~500K 14% ~120 New Account Leads in Existing and Priority Markets with Large Portion of High Certainty Opportunities to Support Late Stage Growth Targets Note: Pipeline as of April 15, 2021.
Slide 31: Actionable M&A Pipeline in Place
Actionable M&A Pipeline in PlaceHuge and Fragmented Independent Provider Base Reimbursement, regulatory and payor pressures driving independent practices to consolidate NY NV CA TN~12,700 AZ Oncologists TX ~1,720 Oncology practices Priority M&AFL Target Markets 21 Acquisition Targets with ~240 Provi
Slide 32: Financial Overview
Financial Overview
Slide 33: Revenue Growth
Revenue Growth Growth driven by continued scaling in existing markets as well as expansion into new markets Existing market growth driven by adding capitated / VBC lives in CA, AZ and NV via new contract wins o ~18% Revenue CAGR from 2020A to 2024E New market growth driven by expanding in FL, TX, an
Slide 34: Target Steady State Gross Margin of ~30% and Adjusted EBITDA Margin of ~15%
We Target Steady State Gross Margin of ~30% and Adjusted EBITDA Margin of ~15% Note: Projected financials are subject to assumptions and uncertainties and there is no assurance that they will be achieved in the times or amounts indicated; (1) Represents lives at year end.
Slide 35: Embedded Gross Margin Expansion as TOI Scales
Embedded Gross Margin Expansion as TOI Scales 30.0%+ ~20.0% 12 Provider 3 Market Dynamics Value-Based Volume Mix Utilization CurrentSteady State Margin Expansion DriversTOI Pod(2) Gross Margin vs. % Value-Based Visits 40% 1Value-Based Volume Mix: As our mix of value-based revenue increases our margi
Slide 36: Organic growth from new capitated and FFS lives
($ in millions) Organic growth from new capitated & FFS lives and visits in existing CA, AZ and NV markets 40K new capitated / value based care MA lives 10K new capitated / value based care MA lives Note: Projected financials are subject to assumptions and uncertainties and there is no assurance tha
Slide 37: Current EV / 2022 Revenue Multiples
Current EV / 2022 Revenue Multiples Previous Deerfield-sponsored dealsTOI 8.3x 6.9x6.7x (3) 6.4x5.9x (4) 5.1x5.0x4.8x (5) 4.5x (6) 2.9x2.8x 2.4x 1.2x IPO Pricing / SPAC Merger Ann. Date Oct-19 Apr-21 Aug-20 Jan-20 Feb-21 Apr-21 Jun-21 Jun-21 Mar-21 Nov-20 May-21 Dec-20 EV / 2022 Revenue Multiple at
Slide 38: Appendix
Appendix
Slide 39: We Deliver Value to Stakeholders Across the Ecosystem
We Deliver Value to Stakeholders Across the Ecosystem ` Patients Dedicated care team overseeing all aspects of care delivery Individualized care plans that align with patients’ wishes Access to sub-specialized care in convenient community locations Reduced financial burden, improving overall experie
Slide 40: High Value Cancer Care Program (HVCC)
High Value Cancer Care Program (HVCC) Designed to Reduce Cost While Improving Patient Outcomes Introduction of Care Team, Ongoing Measurement Protocols EAS(1) and PHQ-9(2) performed at beginning of program, and repeated periodically Rapid Response Symptom Control 24/7 Health Care Coach to reduce Eme
Slide 41: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation ($ in mm, except noted otherwise)2019A2020A Net Income($4)($14) (+) Depreciation & Amortization33 (+) Interest and Income Tax Expense (Income), net1(0) (+) Add-Backs to Adjusted EBITDA(1) 417 Adjusted EBITDA$5$6 (2) % Margin3%3% Note: (1) Comprised of leg
Slide 42: Summary Risk Factors
Summary Risk Factors
Slide 43: Summary Risk Factors
All references to “TOI,” “we,” “us,” “our” or the “Company” refer to the business of TOI Parent, Inc. and its affiliates. The risks presented below are certain of the general risks related to the business of the Company, and such list is not exhaustive. The list below has been prepared solely for pu
Slide 44: Summary Risk Factors (continued)
With respect to Innovative Clinical Research Institute, if we fail to perform our clinical trial services in accordance with contractual requirements, government regulations and ethical considerations, we could be subject to significant costs or liability and our reputation could be adversely affect
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