Diasorin S.p.a. · MIL:DIA
Diasorin — Investor Day (June 2019)
67 slides from Diasorin's investor day presentation, Jun 11, 2019
Slide 1: Test the future - Investor Day
Test the future Investor Day June 11 Turin th
Slide 2: Disclaimer
Disclaimer These statements are related, among others, to the intent, belief or current expectations of the customers base, estimates regarding the future growth in the different business lines and the global business, market share, financial results and other aspects of the activities and situation
Slide 3: Agenda
A genda 1 DIASORIN AT A GLANCE 5 MAIN BUSINESS ACHIEVEMENTS 7 HEALTHCARE SECTOR TRENDS 17 DIAGNOSTIC SECTOR TRENDS 27 DIASORIN POSITIONING AS A CONTENT SPECIALIST 44 GROUP STRATEGIES FOR MAIN GEOGRAPHIES 59 GUIDANCE 2019-2022 61 BUSINESS DEVELOPMENT OPPORTUNITIES 63 MAIN TAKEAWAYS
Slide 4: DiaSorin at a glance
DiaSorin at.a glance DiaSorin tne Diagnostic Specialist
Slide 5: Who are we?
W ho are we? DiaSorin is a Company committed to develop products that require complex technologies and high risk research spending. In other words SPECIALTY PRODUCTS 2
Slide 6: DiaSorin WorldWide
D iaSorin WorldWide WITH OVER 50 YEARS OF EXPERIENCE GERMANY - Dietzenbach USA - Stillwater USA - Cypress ITALY - Saluggia UK - Dartford ITALY - Gerenzano Manufacturing sites R&D centers SOUTH AFRICA - Kyalami Direct presence Countries served via distribution 3
Slide 7: Growth through acquisitions & partnerships
G rowth through acquisitions & partnerships 2008-2009 2010-2012 2013-2014 2015-2016 2017-2018 PA RT NE RS CONNECTIVITY FOR LAB HI STOOL AUTOMATION HEPATITIS & RETROVIRUS QFT P M& A ELISA HEPATITIS MOLECULAR ELISA PARVOVIRUS & RETROVIRUS DIAGNOSTICS BUSINESS CASH FLOW SERVING OUR GROWTH, EXPANSION AN
Slide 8: Main business achievements
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Slide 9: Main business achievements from 2017 long term guidance
M ain business achievements from 2017 long term guidance TARGETS STATUS HDV ANDROSTENEDIONE C. DIFFICILE BABESIA ANAPLASMA PHAGOC. GROUP B STREP. 5-6 new Immunodiagnostic VITAMIN B12 DEVELOPMENT tests/year MYCOPLASMA PRODUCT QFT LTBI FGF 23 CBFB-MYH11 BCR-ABL PNEUM. GROUP C FOLATE SHBG CHLAMYDIA PNE
Slide 10: Healthcare sector trends
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Slide 11: Main challenges for companies working in the healthcare industry
M ain challenges for companies working in the healthcare industry 01 02 Increase cost as the result Society overall expects of more expensive us to deliver services technologies, broader and products that will access to the welfare system help people live longer and the demographic trend Increase ef
Slide 12: Challenges in Healthcare
C hallenges in Healthcare HEALTH SPENDING PER CAPITA (IN USD PPP) 2017 data estimated by the Secretariat for those countries that were not able to provide this information. PPP stands for Purchase Power Parity and adjusts health expenditure for differences in price levels between countries. Source:
Slide 13: Challenges in Healthcare: costly
C hallenges in Healthcare $6.0 MACROECONOMIC FORCES ON THE US ECONOMY 19.7% Current health spending TRILLION Under current law, national health spending is projected to grow at an average rate of 5.5% share in GDP is expected per year for 2018-27 to reach 19.7% by 2026 The average US and to reach ne
Slide 14: Challenges in Healthcare: demography Italy 2018
C hallenges in Healthcare THE ROLE OF DEMOGRAPHY: ITALY IN 2018 MALE 5 4 3 2 1 0 1 2 3 4 5 FEMALE % VALUES Source: ISTAT, national demographic forecasts 11
Slide 15: Challenges in Healthcare: demography Italy 2050
C hallenges in Healthcare THE ROLE OF DEMOGRAPHY: ITALY IN 2050 MALE 5 4 3 2 1 0 1 2 3 4 5 FEMALE % VALUES Source: ISTAT, national demographic forecasts 12
Slide 16: Individual expense for healthcare
C hallenges in Healthcare THE ROLE OF DEMOGRAPHY IN HEALTHCARE SPENDING – ITALY Individual expense for healthcare Source: SISSI project, SIMG-CEIS Tor Vergata 13
Slide 17: What is the conclusion?
What is the conclusion?
Slide 18: We need to be innovative, adaptive to changes
WE NEED TO BE Innovative Adaptive to changes WE ARE ALL MOVING TO VALUE BASED CARE
Slide 19: VBC (Value Based Care)
VBC (Value Based Care) Diagnostic companies A model in which providers, are not just providing including hospitals & physicians, a test result, but a viable are paid based on patient information associated to an health outcome algorithm that will support the medical decision 16
Slide 20: Diagnostic sector trends
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Slide 21: Consolidation and decentralization
opposite forces are reshaping 2 the laboratory space and the IVD Industry 1 2 CONSOLIDATION to drive efficiency of routine laboratory services DECENTRALIZATION to drive efficiency of patient management as part of value based care (VBC) initiatives 18
Slide 22: Consolidation: Key Factors
C onsolidation: Key Factors 1,833 926 Multi-hospital health systems Independent hospitals 19
Slide 23: Consolidation: New Models
C onsolidation: New Models FRANCE (BALLERAU LAW) 4,000 891 14 UH and GH Blood Banks Private Labs Labs Labs Market consolidation 2013-2018 139 135 4 Regional platforms GHT + 12 APHP GH Blood Banks (562 Labs) (295 Labs) Labs 20
Slide 24: Decentralization: decentralized testing
D ecentralization: decentralized testing MEDICAL EFFICIENCY • Increasing worldwide prevalence DECENTRALIZATION • Alleviate seasonal spike of infectious diseases to POCs in testing volumes • Reduce time from Diagnosis • Bring Testing closer to Patients to Treatment • Reduce labor costs • Provide more
Slide 25: How technology affects decentralization
H ow technology affects decentralization Blood draw Testing Result HOW HOSPITAL IT ALL STARTED PATIENT COLLECTION CENTER HOSPITAL Improved TODAY PATIENT PHARMACY DEPARTMENT STORE PRIVATE LAB Logistics Improved testing PHARMACY technology HOUSEHOLD PATIENT WEARABLE TOMORROW PATIENT The Future
Slide 26: Decentralization: what technology can deliver today
D ecentralization: what technology can deliver today DIABETES FERTILITY HOME COLLECTION SELF TESTING (Traditional technologies) Glucose Pregnancy Monitoring Testing Info to POINT OF CARE be certified by Lab which acts a key role RESPIRATORY CARDIAC MAKERS HOSPITAL ACQUIRED PROFESSIONAL INFECTIONS TE
Slide 27: What does it mean for DiaSorin?
What does it mean for DiaSorin?
Slide 28: How do we support consolidation?
H ow do we support consolidation? HIGH VOLUME AUTOMATION CONNECTIVITY TO EXISTING PLATFORMS PLATFORMS DEDICATED SPECIALTY PLATFORM 25
Slide 29: How do we support decentralization?
H ow do we support decentralization? 1HUB AND SPOKE MODEL + PLATFORMS 2 EASE OF USE NO EXTRACTION + 3 MOLECULAR POC Results < 15’ STRATEGIC FOCUS 26
Slide 30: DiaSorin positioning as a content specialist
DiaSorin positioning as a content specialist
Slide 31: A new path forward as a content specialist
A new path forward as a content specialist + LAUNCH OF CLIA LAUNCH OF MDX SPECIALTY TESTS SPECIALTY TESTS EXISTING LATENT TURBERCULOSIS LYME NEW VALUE BASED CARE Diagnostic algorithms (VBC) CALPROTECTIN H.PYLORI STOOL ANTIGEN 28
Slide 32: A new path forward as a content specialist: CLIA specialty tests
A new path forward as a content specialist LAUNCH OF CLIA SPECIALTY TESTS EXISTING 29
Slide 33: Our Specialist Menu
O ur Specialist Menu HIGH VOLUME DIFFERENTIATING INNOVATIVE ME-TOO SPECIALTIES SPECIALTIES SPECIALTIES Specialized tests, broadly Specialized tests, growing New tests of unique clinical Common tests, known use known clinical acceptance value Usually prescribed by Usually prescribed by Mainly prescri
Slide 34: Specialty tests differentiation vs. competition
S pecialty tests differentiation vs. competition 2016 2 24 2 42 29 43 62 today 2 2 4 63 44 42 32 29 3 45 2 41 3 32 3 INNOVATIVE DIFFERENTIATING HIGH VOLUME SPECIALTIES ME-TOO SPECIALTIES SPECIALTIES Tests of the main competitor within the area New DiaSorin tests in 2019-2022 31
Slide 35: Sustaining innovation: DiaSorin specialties R&D pipeline
S ustaining innovation: DiaSorin specialties R&D pipeline CALPROTECTIN US ELASTASE H. PYLORI US VITAMIN B12 FOLATE HEV IgG & IgM LAUNCH OF CLIA SPECIALTY TESTS VITAMIN K PCT US TRAb 45 41 32 3 CELIAC PANEL 32
Slide 36: A new path forward as a content specialist: MDX specialty tests
A new path forward as a content specialist LAUNCH OF MDX SPECIALTY TESTS EXISTING 33
Slide 37: Molecular Strategy - Overview
M olecular Strategy - Overview cCMV EXPANSION CONTENT MENU MYCOPLASMA GEN. & ANTIBIOTIC RESISTANCE ATYPICAL PNEUMONIAE DEVELOP TARGETED ASSAY PANELS VZV SWAB VZV CSF 34
Slide 38: A new path forward as a content specialist: value based care
A new path forward as a content specialist LATENT TURBERCULOSIS LYME NEW VALUE BASED CARE Diagnostic algorithms (VBC) CALPROTECTIN H.PYLORI STOOL ANTIGEN 35
Slide 39: Value Based Care: new initiatives through diagnostic algorithms
V alue Based Care: new initiatives through diagnostic algorithms LYME VBC LATENT New Key initiatives TUBERCULOSIS through CALPROTECTIN diagnostic algorithms H. PYLORI STOOL ANTIGEN 36
Slide 40: QuantiFERON Lyme: addressing unmet and unanswered needs
Q uantiFERON Lyme: addressing unmet and unaswered needs LYME DISEASE: CAUSED BY BORRELIA BACTERIA SPREAD BY TICKS TESTING MARKET QFT LYME ESTIMATED POTENTIAL (POTENTIAL) MARKET 35,000/year confirmed cases 1 12-14 M tests/year3 $400-600 M 30,000/year 5M confirmed tests/year4 cases 2 1 https://ecdc.eu
Slide 41: QuantiFERON Lyme: diagnosis and treatment
Q uantiFERON Lyme: addressing unmet and unaswered needs DIAGNOSIS TREATMENT Current algorithm based on IgG, Treatment with antibiotics IgM & WB confirmation If untreated loss of facial mobility, joint low sensitivity in acute infection, pains, severe headaches with neck stiffness, risk of delayed or
Slide 42: Inflammatory bowel disease (IBD) patient treatment
I patient treatment nflammatory bowel disease (IBD): IBD PATIENTS REQUIRE TESTING AND MONITORING THROUGH DIFFERENT CLINICAL MOMENTS MONITOR DIAGNOSIS TREATMENT REMISSION Colonoscopy Inflammatory markers (Calprotectin) Steroids or Biologics Symptoms, Diet, Lifestyle CALPROTECTIN TESTING IS AN UNDERUT
Slide 43: Irritable bowel syndrome (IBS) vs. Inflammatory bowel disease (IBD)
I rritable bowel syndrome (IBS) vs. Inflammatory bowel disease (IBD) CROHN’S DISEASE TESTING MARKET CALPROTECTIN ESTIMATED POTENTIAL & ULCERATIVE COLITIS (POTENTIAL) MARKET 2.5 M 10-13 M tests/year3 patients 1 $200-300 M 3M 7M patients 2 tests/year3 1 Burisch, Johan, et al. “The burden of inflammato
Slide 44: Helicobacter pylori: diagnosis & treatment
H elicobacter pylori: diagnosis & treatment DIAGNOSIS TREATMENT INVASIVE (ENDOSCOPY) PROTON PUMP INHIBITORS (PPI) + ANTIBIOTICS Needs specialized personnel, high (Clarithromycin & Amoxicillin) patient impact, high cost, can miss low level infection NON INVASIVE (UREA BREATH TEST) Needs specialized p
Slide 45: Helicobacter pylori clinical need
H elicobacter pylori clinical need OPTIMIZED DETECTION & ANTIBIOTIC RESISTANCE TESTING UREA BREATH TEST STOOL POSITIVE POSITIVE SAMPLE UREA BREATH TEST STOOL EXTRACTION CLARITHROMYCIN RESISTANCE DIASORIN COMBINED IMMUNODIAGNOSTIC + MOLECULAR DIAGNOSTIC SOLUTION STOOL POSITIVE SAMPLE STOOL EXTRACTION
Slide 46: Helicobacter pylori
H elicobacter pylori 4.4B people carrying H. Pylori WW1 ESTIMATED POTENTIAL MARKET 3 20 M annual H. Pylori testing volume 3 10-20% risk of developing peptic ulcers 2 7M $400 M potential yearly H. Pylori antibiotic 1-2% resistance testing risk of volume 4 acquiring stomach cancer 2 1 Hooi JKY et al.
Slide 47: Group strategies by main geographies
Group strategies by main geographies
Slide 48: United States
Slide 49: US strategy
US strategy COMMERCIAL HOSPITALS CLIENTS POLs NETWORK BASE 46
Slide 50: US commercial clients base strategy
US commercial clients base strategy NEW COMPLETE MOLECULAR HEPS + HIV SPECIALTY MENU KITS COMMERCIAL CLIENTS BASE NEW MOLECULAR NEW IMMUNO SPECIALTY SPECIALTY TESTS ASRs 47
Slide 51: US LIAISON XS and POLs strategy
US LIAISON XS and POLs strategy # POLs IN THE US PER TEST VOLUMES (2017 DATA) SMALL SIZE MEDIUM SIZE BIG SIZE WAIVER/PPM <50k tests/year 50-500k tests/year >500k tests/year Market segment stable over next 5 years (slowdown of 1-2%). Lower exposure to PAMA effects vs. rest of the market. DiaSorin Tar
Slide 52: US hospitals network strategy
US hospitals network strategy EXPANSION IN THE HOSPITAL MARKET: STRATEGIC FOCUS ON INTEGRATED HEALTH NETWORKS AND MAJOR MEDICAL CENTERS Leverage innovative product launches/ strategic partnerships to drive sales cycles IMMUNO in the strategic Hospital account segment SPECIALTY TESTS New dedicated re
Slide 53: Europe
Slide 54: European strategy
E uropean strategy EXISTING ELISA CUSTOMER CONVERSION BASE TO CLIA 51
Slide 55: European strategy
E uropean strategy NEW NEW IMMUNO MOLECULAR SPECIALTY TESTS SPECIALTY KITS EXISTING CUSTOMER BASE VBC NEW MOLECULAR (Value Based SPECIALTY Care) ASRs 52
Slide 56: Europe: LIAISON XS enabling QFT and Siemens ELISA conversion to CLIA
E urope: LIAISON XS enabling QFT and Siemens ELISA conversion to CLIA for mid-to-big ELISA testing volumes conversion ELISA CONVERSION TO CLIA for mid-to-small volumes conversion ELISA Detection 53
Slide 57: China
Slide 58: Chinese strategy
C hinese strategy CHINA CLASS III CLASS II MANUFACTURING HOSPITALS HOSPITALS 55
Slide 59: China: Class III hospital strategy
C hina: Class III hospital strategy #HOSPITALS 44% OF MARKET QFT CLASS IIIA VOLUMES NEW SPECIALTY 1,308 TESTS FRANCHISE ESTIMATED GROWTH: 2-3%, CLASS IIIB ALTHOUGH 924 SLOWING CLASS IIA ~ 70% OF TOTAL DIASORIN CLASS IIB REVENUES OVERCROWDING CLASS I PROBLEMS AND COSTS NOT CLASSIFIED MAINTENANCE OF L
Slide 60: China: Class II hospital strategy
C hina: Class II hospital strategy #HOSPITALS 43% OF MARKET QFT VOLUMES NEW SPECIALTY CLASS IIIA TESTS FRANCHISE ESTIMATED GROWTH: CLASS IIIB +10% 1,580 CLASS IIA 6,364 CLASS IIB POLITICAL FUTURE SUPPORT TO CLASS I MARKET AS ENCOURAGE FOR BUSINESS GROWTH AND REDUCE OVERCROWDING EXPANSION IN CLASS II
Slide 61: China manufacturing: from export to high quality local CLIA developer
hina manufacturing: from export C to high quality local CLIA developer JV TO ACCESS TO MANUFACTURE TENDERS KEY SPECIFIC FOR DOMESTIC TESTS IN CHINA MANUFACTURERS (LOCAL FOR ONLY LOCAL) Percentage of Chinese manufacturing products= 70% in 2025 in 10 key sectors, including Medical Devices INCREASED OP
Slide 62: Guidance 2019 - 2022
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Slide 63: Guidance 2019 - 2022
G uidance 2019 - 2022 REVENUES 2019 - 2022 EBITDA GROWTH CUMULATIVE MARGIN CAGR FCF @ @ 2018 CER @ 2018 CER 2018 CER COMPARABLE MID-TO-HIGH TO 2018 EBITDA €700 - 750 M SINGLE DIGITS MARGIN RESULT 60
Slide 64: Business development opportunities
Business development opportunities
Slide 65: Business development opportunities
B usiness development opportunities 2019-2022: continuous focus on Business Development opportunities NEW ALLIANCES AND/OR M&A PARTNERSHIPS VBC (Value Based Care) 62
Slide 66: Main takeaways
ain takeaways DiaSorin tne Diagnostic Specialist
Slide 67: Main takeaways
M ain takeaways Technology & platforms serving needs of all labs Pursue size of new alliances and/or partnerships CONTINUOUS Continuous STRENGTHENED FOCUS launch of specialty SPECIALTY ON BUSINESS tests POSITIONING DEVELOPMENT ON VBC Use of cash for M&A as an VBC additional driver key initiatives to