Slide 1: M3, Inc. Presentation Material
M3, Inc. Presentation Material October 2017 Copyright © 2017 M3, Inc. All rights reserved.
Slide 2: Forward-looking statements disclaimer
The following presentation contains forecasts, future plans, management targets and other forward-looking projections relating to M3, Inc. and/or its group. These statements are drawn from assumptions of future events based on data currently available to us, and there exist possibilities that such a
Slide 3: Current Business Situation and Outlook
Current Business Situation and Outlook Copyright © 2017 M3, Inc. All rights reserved. 2
Slide 4: Overview
Overview Expansion of marketing support business for pharmaceutical and Medical medical device companies Platform Sales: 14.0 bn yen (+19% yoy), Op. Profit: 6.6 bn yen (+14% yoy) Sales of IDA and a dip in projects at SMO Neues resulted in sales of 10.7 bn yen, in line with previous year levels
Slide 5: FY 2017 H2 Results
FY 2017 H2 Results Copyright © 2017 M3, Inc. All rights reserved. 4
Slide 6: FY2017 H1 Consolidated Cumulative Results
FY2017 H1 Consolidated Cumulative Results (million yen) IFRS Sales Operating Profit Pretax Profit* Net Profit +23% +22% +26% +26% 42,849 13,582 13,679 9,035 34,874 11,100 10,825 7,149 FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17 H1 H1 H1 H1 H1 H1 H1 H1 Copyright © 2017 M3, Inc. All rights reserved. 5
Slide 7: FY2017 H1 Consolidated Results by Segment
FY2017 H1 Consolidated Results by Segment IFRS (unit: million yen) FY2016 FY2017 YoY H1 H1 (cumulative) Service utilization by healthcare Medical Sales 11,859 14,089 +19% companies Platform accelerated in Q2. Profit 5,815 6,640 +14% Q2 alone: Evidence Sales 10,732 10,712 0% * Sales: +23% Solution Pr
Slide 8: Consolidated Sales Expansion and Business Breakdown
Consolidated Sales Expansion and Business Breakdown (unit: million yen) 78,143 21% Overseas Platform 44% Linked 14,646 35% 3,854 FY05 FY10 FY16 Medical platform has shown sound growth, while platform linked and overseas have expanded rapidly. Copyright © 2017 M3, Inc. All rights reserved. 7
Slide 9: Medical Platform
Medical Platform M3’s Platform Linked Growth Business Copyright © 2017 M3, Inc. All rights reserved. 8
Slide 10: 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 operating in Japan spend the majority of their marketing budget on off-line sales rep related costs. Time Allocation Marketing Budget Allocation o
Slide 11: Medical Platform Growth Potential in Japan
Medical Platform Growth Potential in Japan Currently Full Potential (approx.) Main 50 100 CLIENTS Companies Companies Growth Potential ¥0.8 bn ~ ¥1 bn of 4~5x SALES per client current levels (approx.) drivers: per ¥500 mn # of products CLIENT # of opt-in MDs Added value of contents Broadening
Slide 12: Medical Platform Services
Medical Platform Services UNDISTRIBUTED MR-kun Marketing Process at Healthcare Related Companies MR-kun Family Strategy Content Message Extended Services Deal Closing Planning Production Delivery Pharma Product strategy Key message Efficient message Product sales Company development identifi
Slide 13: Platform Linked Business
Medical Platform M3’s Platform Linked Growth Business Copyright © 2017 M3, Inc. All rights reserved. 12
Slide 14: Power of Mr. Finder in Drug Development
Power of Mr. Finder in Drug Development “Making use of the Internet to increase, as much as possible, the number of people who can live longer and healthier lives, and to reduce as much as possible, the amount of unnecessary medical costs.” Evolution via MR-kun for pharmaceutical ~ 2010 e-Marketing
Slide 15: Patient Enrollment in Large-Scale Trials
Patient Enrollment in Large-Scale Trials Case study Mr. Finder dramatically outpaced competitors both by number and speed in enrolling cases for a particular Endocrinology trial 1,500 Number of Patients Enrolled 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0 m3.com A B C D E F G
Slide 16: Sales and Profit Trend of Evidence Solution
Sales and Profit Trend of Evidence Solution (million yen) IRFS Sales Segment Profit FY17 FCT 22,313 24 bn yen 19,992 Orders backlog remained around 29bn 13,195 yen, with 10,712 corresponding increases in headcount as upfront 6,554 investment 5,328 Sales stayed flat due 4,283 3,908 to a dip in pr
Slide 17: Evidence Solution profit bridge FY16 H1 to FY17 H1
(unit: million jpy) 2,343 +455 -405 2,393 ・Healthy sales ・Temporary dip in and profits as projects at SMO expected. Neues Jul-Sep sales ・Deconsolidation of +23% yoy IDA; expected to also impact H2 by -140 mil yen. Full collection of invested capital, with profit of 85 mil yen. FY16 CRO SMO, FY17 1H
Slide 18: Sales and Profit Trend of M3 Career
Sales and Profit Trend of M3 Career 2 Career (million yen) IFRS Sales Ordinary Profit FY17 FCT 10.5 bn yen 8,631 Sales and profit 6,925 expansion from increase in staff 5,712 5,620 and productivity 4,594 FY17 should see 3,235 continued traction 2,191 2,264 2,503 from job placement 1,757 1,766 for
Slide 19: M3's Growth
Medical Platform M3’s Platform Linked Growth Business Copyright © 2017 M3, Inc. All rights reserved. 18
Slide 20: Number of Physician Members and Panelists (Global)
Number of Physician Members and Panelists (Global) (thousand) 4,500 Other Nations 4,000 4+ million (M3 Global Research, MDLinx, Russia) 3,500 members worldwide Korea (Medigate) 3,000 India 2,500 China (Medlive) 2,000 1,500 France, Germany, Spain (VidalGroup) 1,000 U.K. (Doctors.net.uk) 500 U.S.A (MD
Slide 21: Sales and Profit Trend of Overseas
Sales and Profit Trend of Overseas (million yen) IFRS Sales FY17 FCT Segment Profit 22 bn yen 16,338 Profitability in the US 13,810 and UK improved 10,757 dramatically led by the 10,980 research business (+75% yoy) 6,661 Profit margin 4,069 expansion from 2,983 operation 1,105 1,585 1,043 1,430 1,
Slide 22: Overseas Segment Profit Breakdown
Overseas Segment Profit Breakdown (unit: million yen) Profitability improved led by research business 1,454 Both sales and +118 profit healthy as +93 expected +219 Launched the career business. +571 Research business also 3.3x healthy YoY 453 Healthy expansion in China MR-kun, with profits increasin
Slide 23: China: Membership Expansion
China: Membership Expansion Number of Physician Members in China Marketing services 1,985 for drug companies (thousands) 1,908 starting with MR- 1,838 kun, and marketing 1,753 1,680 research services 1,617 showed steady 1,561 1,490 growth 1,362 1,250 MR-kun is now 1,154 being utilized for 1,096 35
Slide 24: M3 Group's Business Strategy
M3 Group’s Business Strategy Copyright © 2017 M3, Inc. All rights reserved. 23
Slide 25: Strategy Change in Business Development
Strategy Change in Business Development Internet-Powered PE Style New Service Development in Business Expansion in the Medical Internet Sector Healthcare Industry (2000~2010) (2011~) Approach Internet Internet + Real Operations Service Web-based Entire Value-Chain Coverage eTools Potential Business
Slide 26: Evolution of M3 Growth Drivers
Evolution of M3 Growth Drivers Added Value Creation Main Initiatives Seeds Rocket / M3i Various solutions within cancer specialties M3 AI Labo Genome Diagnosis / G-TAC e-Clinical Trials M3 Career (Job placement for physicians) MR-kun Family Web Surveys 2000 2010 2020 Full-scale entry
Slide 27: Businesses Supported by the Advanced Medicine Platform
Businesses Supported by the Advanced Medicine Platform Organic M&A Tama Bio COSMOTEC α β γ ・・・ Support Support Support Support Support Clinical Market Business Marketability Regulatory Web Trial Channel Administration Evaluation Strategy Marketing Execution Expansion Enhancement Advanced Medicine Pl
Slide 28: Seeds Rocket Development: TamaBio
Seeds Rocket Development: TamaBio TamaBio Co.,Ltd: ・Established: April 2016 ・M3 ownership: 88% (as of July 26) ・Technology seed originated by RIKEN Product Description: ・ Polymer resin processed surgical sheets ・ Lack of need for minute sutures dramatically reduces both operation time and risk o
Slide 29: Pipeline, Market Size, Development Schedule
Pipeline, Market Size, Development Schedule Application Scale Table Areas ① DuraBeamTM (Artificial Dura Mater) ⑥Trigeminal Neuralgia Treatment Device Head $161M $80M ⑦ Artificial Heart Valve $100M Chest $275M $971M $1,450M $100～300M Abdomen ② PeribeamTM (Pericardium Sheet) ③ Cardiac Repair Patch ④ V
Slide 30: Advanced Medical Device Platform: COSMOTEC
Advanced Medical Device Platform: COSMOTEC Approx. 1,000 transactions with medical institutions annually. Track record of transaction with 98% (approx. 500 sites) of institutions conducting cardiovascular surgery Top class in domestic market share of major devices for cardiac surgery Focus als
Slide 31: Transfer of Business from M2Plus
Transfer of Business from M2Plus Business Overview – Industry leader in medical e-book services – Widely recognized with 86,000 users, of which 55,000 are paid users Expected Synergies – Business expansion benefiting from m3.com’s strength as a media platform – New search engine linked business
Slide 32: M3 is Just Getting Started
M3 is Just Getting Started Copyright © 2017 M3, Inc. All rights reserved. 31
Slide 33: Upfront Investment Costs for Future Growth
Upfront Investment Costs for Future Growth (Unit: Million Yen) 582 1,159 537 Ttotal 0.6~1.2 mn yen 40 Special costs incurred in anticipation of 0.6~1.2 bn yen. Aggressive upfront investment to continue. Copyright © 2017 M3, Inc. All rights reserved. 32
Slide 34: Annual Results & Forecast for FY2017
Annual Results & Forecast for FY2017 Sales Operating Profit & Net Profit (mn yen) (mn yen) 29,000 90,000 Operating Profit Net Profit 25,050 78,143 64,660 20,022 19,500 16,938 51,346 16,061 13,738 13,493 36,759 12,704* 10,428 9,294 8,878 26,007 7,648 19,040 6,031 5,5987,844* 14,646 4,803 4,492 11,811
Slide 35: New Segments
Segment Definition Changes Previous and New Segment Correspondence Chart Original Segments Medical Portal Solution Evidence Platform Clinical Platform Sales Overseas Others Family MR-kun /Data Research Career M3 Doctors Ask Combined all related businesses into this Medical Platform segment given the
Slide 36: 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