Alphatec Holdings, Inc. · NASDAQ:ATEC
Alphatec — Corporate Update (January 2021)
29 slides from Alphatec's corporate update, Jan 12, 2021
Slide 1: Revolutionizing the Approach to Spine Surgery
REVOLUTIONIZING THE APPROACH TO SPINE SURGERY January 2021 Exhibit 99.2
Slide 2: Forward-Looking Statements
This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could caus
Slide 3: The New ATEC
3 THE NEW Transformed organization to create clinical distinction Launching innovation that compels surgeon adoption and revitalizes the salesforce Delivering industry leading U.S. organic revenue growth* * Source: Spine-market.com, company reports
Slide 4: Q4 2020 Scorecard
4 Q4 2020 SCORECARD* The momentum we are building is STRONG Consecutive quarter of double-digit YoY growth YoY growth in average revenue per case; 36% vs. Q4 of 2018 YoY U.S. revenue growth New product revenue contribution vs 48% in Q4 2019 and <10% in FY2018 Average product categories sold per case
Slide 5: The spine-focused, share-taking opportunity is clear
The spine-focused, share-taking opportunity is clear… $8B* U.S. SPINE MARKET *Source: Spine-Market.com. U.S. 2019 market share 5 share* 66% Comprehensive portfolios, strategic sales teams, strong hospital access GLOBAL CONSOLIDATORS 33% share* SMALL, MOSTLY PRIVATE PLAYERS Incented to innovate share
Slide 6: Our Vision for the New ATEC Has Begun to Materialize
OUR VISION FOR THE NEW ATEC HAS BEGUN TO MATERIALIZE 6 A decade of results has shown… Spine focus and organic innovation drive double-digit growth Consecutive quarters of double-digit YoY growth 9 Legacy * Management estimates. Illustrative only. K2M acquired by SYK in November 2018. Our focus on di
Slide 7: EOS imaging acquisition rationale
7 ACCELERATES REVENUE GROWTH & REDUCES COST TO SERVE Monetizes information by creating more pull-through opportunities Provides immediate access to U.S. installed base with minimal overlap Facilitates global expansion via established infrastructure Improves inventory efficiency IMPROVED DEAL ECONOMI
Slide 8: SafeOp and EOS: informing the clinical experience
SafeOp founded our conduit for delivering unprecedented information into the O.R. WITH EOS, WE CAN BETTER INFORM THE CLINICAL EXPERIENCE FROM END TO END SURGEONS YEARN FOR INFORMATION THAT DRIVES BETTER OUTCOMES 8 EMG ACTIVITY EMG ACTIVITY
Slide 9: EOS Imaging Technology
EOS IMAGING TECHNOLOGY RAPID, CALIBRATED, STANDING FULL-BODY SCAN BIPLANAR SPINE IMAGING & ANATOMICAL MODELING Academic influence units installed globally 380 Customized care Technological foundation Advances our Core Information-Based Competency 9
Slide 10: How We Monetize Information
HOW WE MONETIZE INFORMATION 10 AVERAGE PRODUCT CATEGORIES/ CASE AlphaInformatiX (SafeOp) has driven adoption across our portfolio *Q4 2020 preliminary, subject to revision *
Slide 11: Surgical Case Planning
SURGICAL CASE PLANNING EOS reduces the cost to serve & drives incremental pull-through EOS EXPANDS THE OPPORTUNITY 11 OPERATIONS Pre-surgical implant planning - sends only required inventory into surgery $ ALIGNMENT Predictive analytics & rod bending technologies BONE DENSITY Customized implants spe
Slide 12: Better Informed From End to End
BETTER INFORMED FROM END TO END PRE-OP PLANNING SURGERY POST-OP ASSESSMENT FOLLOW-UP FULL-BODY BIPLANAR IMAGES More accurate understanding of patient alignment Elevates likelihood of surgical goal fulfillment by integrating fully informed plans into surgery Correlates post-operative image against or
Slide 13: Top U.S. Hospital Penetration
TOP U.S. HOSPITAL PENETRATION Expands ATEC’s reach into academic institutions 90% of the top 10* 80% of the top 25* * US News & World Report Best Orthopedic Hospitals list (2019-2020) 5 * US News & World Report Best Orthopedic Hospitals list (2019-2020) 13 4 3 2 1 1 1 1 3
Slide 14: Prestigious OUS Footprint
PRESTIGIOUS OUS FOOTPRINT 40% of installed base N America 44% 16% A foundation to support future global expansion of installed base EMEA of installed base AsiaPac 14
Slide 15: Our Commitments
OUR COMMITMENTS COMPEL SURGEON ADOPTION CREATE CLINICAL DISTINCTION Advance toward exclusive U.S. distribution Build an organic product development machine & advance our information-based core competence Accelerate growth by prioritizing key initiatives 2 Increase revenue and products sold per case
Slide 16: Creating Clinical Distinction: 2018 Strategic Pivot
16 CREATING CLINICAL DISTINCTION Assembled the Organic Innovation Machine, creating powerful in-house capabilities for increased knowhow & speed to market 2018 Strategic Pivot to Found Meaningful, Differentiated Spine Innovation 1
Slide 17: Creating Clinical Distinction: 2019
17 Released SafeOp technology, the initial reflection of the AlphaInformatiX platform and spine’s first system capable of automating both monitoring objectives in surgery (EMG & SSEP) Introduced a full suite of approach-based titanium implants, which incorporate proprietary material and manufacturin
Slide 18: The Delivery of Integrated, Approach-Based Procedures
The Delivery of Integrated, Approach-Based Procedures 2020 Enhancing platform capabilities and procedural applications with navigation, comprehensive alignment and targeting Acquired rapid, calibrated, standing, full-body scanning technology to complement AIX with biplanar spine imaging & anatomical
Slide 19: Strong ROI from investment areas
Strong ROI from investment areas – sizable opportunity ahead 19 Q3 2020 U.S. Sales PHASE 1 INVESTMENT: Information, lateral, posterior fixation +145% Growth Q3 2017 vs Q3 2020 1 ~$40M CREATING CLINICAL DISTINCTION
Slide 20: Compelling Adoption: the currency of spine surgery
20 >80% the “currency” of spine surgery HOW INDUSTRY MAKES DECISIONS. HOW SURGEONS SERVE PATIENTS. * Management estimate of procedural revenue * We invest where others won’t to improve surgical outcomes 2 CUSTOMIZED ACCESS COMPELLING ADOPTION
Slide 21: Compelling Adoption: Confidence and Proceduralization
21 CONFIDENCE Convoyed sales = more products per procedure COMPELLING ADOPTION 2 Increasing surgeon confidence = more complex procedural surgeries PROCEDURALIZATION
Slide 22: Expanding to Exclusivity
VAST opportunity to increase our strategic sales footprint EXPANDING TO EXCLUSIVITY 22 Most geographies are significantly under or even unrepresented 103% Growth in U.S. revenue / distributor since 2018* 3 ~in line with peer averages 2019 90% Revenue contribution from strategic sales network, with ~
Slide 23: Financials
FINANCIALS
Slide 24: Preliminary Revenue Results
PRELIMINARY REVENUE RESULTS Growth driven by surgeon adoption & expanding strategic distribution Revenue per case expanding on strength of new products Numbers may not add and percentages may not foot due to rounding. * Q4 2020 and full-year 2020 revenue results are preliminary, unaudited, and subje
Slide 25: EOS P&L Impact
EOS P&L IMPACT 25 *From Oct 1, 2019 to Sept 30, 2020.
Slide 26: EOS Pro Forma Revenue Profile
EOS PRO FORMA REVENUE PROFILE 26 ATEC STAND-ALONE FY2019 ATEC + EOS PRO FORMA FY2019 $113M *For illustrative purposes only. ^ This is not intended to be guidance. | 2019 Pro Forma = $22.1M EOS imaging (Rx = 1.1) + $113.4M for ATEC. 20E First Call Consensus = $28.4M (Rx = 1.22) for EOS imaging + $144
Slide 27: Immediate capital access to fund purchase
Immediate capital access to fund purchase & runway for combined business CASH + EOS FINANCING 27 Credit available upon ATEC request $30M credit-to-equity conversion reduces existing debt, post-deal, from $75M to $45M Reduces annualized cash interest by ~$3.5M Extends debt maturity from May ‘25 → Jun
Slide 28: Multi-Faceted Growth: A Sustainable Strategy Building Momentum
MULTI-FACETED GROWTH LEGACY HEADWINDS DISSIPATING A Sustainable Strategy Building Momentum 28 CONTINUED MARKET SHARE TAKING Legacy reputation Legacy salesforce Final year of legacy international supply agreement Reverberating OUR PATH TO
Slide 29: We are just getting started
29 Our transformation required strong execution against commitments to accelerate growth. We remain committed to advancing the clinical experience in spine. WE ARE JUST GETTING STARTED!