Zimmer Biomet Holdings, Inc. · NYSE:ZBH
Zimmer Biomet — Zimmer Holdings — Merger or Acquisition (January 2004)
37 slides from Zimmer Biomet's merger presentation, Jan 27, 2004
Slide 1: Zimmer Holdings, Inc.
Zimmer Holdings, Inc. Ray Elliott Chairman, President & CEO Zimmer Holdings, Inc.
Slide 2: Disclaimer
Disclaimer Zimmer has filed a registration statement, including a proxy statement/prospectus and other relevant materials with the SEC, for the issuance of its shares in connection with the proposed acquisition of Implex. Shareholders of Implex are urged to read the relevant materials when they beco
Slide 3: Today's Presentation
Today's Presentation 1. Strategic Direction Innovation and Education Investment and Expansion 2. Centerpulse Integration
Slide 4: Arthritis - Latest Statistics From the CDC
Arthritis - Latest Statistics From the CDC Arthritis is the leading chronic condition Arthritis is the U.S.'s leading disability 63% of patients are working age Arthritis affects 1 out of 6 individuals In 2003, 43 M Americans have arthritis In 2020, 60 M Americans will have arthritis arthritis arthr
Slide 5: Zimmer Growth Goals 1998-2003
New Markets Spine, Sports Med, Pain Mgmt. and IGS New Products "New Patient" Strategies New Geographies Europe Zimmer Growth Goals 1998-2003
Slide 6: The 2004-2006 Strategies Reflect Fine-Tuning
But the 2004-2006 Strategies Reflect Fine-Tuning New Geographies New Products New Markets Become Innovation & Education Investment & Expansion Innovation & Education Integration
Slide 7: And the Tactics Too Are More Targeted
And the Tactics Too Are More Targeted Innovation & Education Investment & Expansion Integration But always dedicated to sales and cashflow excellence. New Patient's Continuum of Care MIS Zimmer Institute Spine Orthobiologics Centerpulse Implex
Slide 8: Zimmer Innovation & Education Review
Innovation & Education Investment & Expansion Integration New Patient's Continuum of Care MIS Zimmer Institute Spine Orthobiologics Centerpulse Implex Zimmer Innovation & Education Review
Slide 9: Hip Innovation and Education Focus
Hip Innovation and Education Focus on the New Patient's Continuum of Care Innovative, new technologies MIS Implants and Techniques Hip Resurfacing Trabecular Metal, EPOCH Alternate Bearing Computer Assisted Surgery DTC with the surgeon TV, Radio and Magazines pacewithlife.com Public Forums Public Fo
Slide 10: Knee Innovation and Education Focus
Knee Innovation and Education Focus on the New Patient's Continuum of Care Innovative, new technologies MIS Implants and Techniques Focus on Interpositional, CR, Revision, and MB Trabecular Metal New Polyethylene Computer Assisted Surgery Cartilage and Meniscus DTC with the surgeon TV, Radio and Mag
Slide 11: MIS Innovation and Education Outcomes
MIS Innovation and Education Outcomes Less blood loss Less rehab Less hospital time Less scar Min. blood donation or loss 50% - 60% less rehab Min. tissue disruption and scar Home the same day "Painless" Image-Guided Less cost Yesterday Today
Slide 12: 2-Incision Hip for 2004
2-Incision Hip for 2004 2-Incision Hip for 2004 Image-guided software Procedure tracking DTC with patients EVA beta-site analysis Outcomes publishing Patents issuance
Slide 13: Potentially Five More MIS 2-Incision Patents
Potentially Five More MIS 2-Incision Patents MIS(tm) 2-Incision Hip MIS(tm) 2-Incision Hip MIS(tm) 2-Incision Hip TITLE NUMBER OF CLAIMS STATUS Lit Anterior Retractor 28 Pending Ligametum Teres Femoris Cutter 42 Pending Method and Apparatus for Performing Total Hip Arthroplasty (broad technique) 17
Slide 14: The Sad Story of Hip Fixation
The Sad Story of Hip Fixation 4% of patients die during initial hospitalization 25% of patients die within one year of surgery 40% of patients require long- term care 50% of patients never walk unassisted 90% of hip fractures are associated with osteoporosis Source: AAOS, "Hip fracture epidemic requ
Slide 15: Zimmer's Transformational MIS Hip Fixation
Zimmer's Transformational MIS Hip Fixation First patient surgery trial - March 2004, Australia
Slide 16: Potentially Five More T2 MIS Hip Fracture Patents
Potentially Five More "T2" MIS Hip Fracture Patents Hip Fracture Transformation Technologies Hip Fracture Transformation Technologies Hip Fracture Transformation Technologies TITLE NUMBER OF CLAIMS STATUS Contoured Polymer Filled Implant 13 Issued Polymer Filled Hip Fracture Fixation Device 9 Issued
Slide 17: Zimmer MIS Quad-Sparing Total Knee
Zimmer MIS "Quad-Sparing(tm)" Total Knee Zimmer MIS "Quad-Sparing(tm)" Total Knee Mini Medial Parapatellar 9-14 cm 2- 4 cm Quad Snip Standard Knee 20-30 cm Quad incision Mini Sub- Vastus 9-12 cm No Quad Snip Zimmer MIS Quad Sparing(tm) 7-10 cm No Quad Snip Release at AAOS, March 2004
Slide 18: Potentially Seven MIS Knee Patents
Potentially Seven MIS Knee Patents MIS Knee MIS Knee MIS Knee TITLE NUMBER OF CLAIMS STATUS Minimally Invasive Total Knee Arthroplasty Method & Instrumentation 47 Pending Knee Arthroplasty Prosthesis & Method 62 Pending Patella Resection Guide 36 Pending Femoral Saw Guide & Method 47 Pending Minimal
Slide 19: Zimmer MIS Requires World Class Education
Zimmer MIS Requires World Class Education 2003 Total Surgeons Trained in Zimmer MIS Institutes MIS 2-Incision MIS "Mini" Hip MIS "Mini" Knee All Other TOTAL 493 1162 1030 687 3372
Slide 20: Trabecular Metal Innovation From Implex
Trabecular Metal(tm) Innovation From Implex "Best Thing Next to Bone" 7 new development projects Recon, Spine and Sports Med Acquiring 100% of Implex stock Anticipated close Qtr. 1, 2004 (r)
Slide 21: Zimmer Investment and Expansion Review
Innovation & Education Investment & Expansion Integration New Patient's Continuum of Care MIS Zimmer Institute Spine Orthobiologics Centerpulse Implex Zimmer Investment and Expansion Review
Slide 22: Zimmer Spine Will be a Primary Investment
Integrate Trabecular Metal spine Leverage MIS programs Optimize salesforce leverage Merge disc / nucleus discovery Invest in targeted biologics Expand Non-Fusion Zimmer Spine Will be a Primary Investment North America Europe Japan Growth Strategies GeoMix
Slide 23: Zimmer Dental Will Provide Diversification
Zimmer Dental Will Provide Diversification Attractive Market Growth Rate 12-15% Low implant penetration rates Potential positive reimbursement Drive demand with DTC Utilize Zimmer R&D critical mass Transfer "Recon" technologies
Slide 24: And Zimmer Orthobiologics for the Future
And Zimmer Orthobiologics for the Future Orthobiologics is a fast growing, fragmented market Market Size $500+ MM - projected CAGR 30% Orthobiologics strategy needs to be time phased Short-term: Bone products are prerequisite for Spine Mid-term: Soft tissue products Long-term: Regeneration of cartil
Slide 25: Zimmer Orthobiologics Product Strategies
Zimmer Orthobiologics Product Strategies Cartilage Regeneration Complement to Isto Program Bone Graft Distribution of Allograft (Tutogen) Distribution License for Structural Acquire Human Growth Factor Tech Soft Tissue Attach and Replace Leverage ReGen/CMI opportunity Launch TSL rotator cuff patch T
Slide 26: The New Zimmer 2004-2006 R&D Focus
The "New" Zimmer 2004-2006 R&D Focus New Zimmer Orthobiologics group Trabecular Metal applications "MIS friendly", conservative implants Reconstructive joint kinetics applications Transformational hip fracture and spine Creation of "Lifestyle Designs" Image Guidance integration Unique Alternate bear
Slide 27: Centerpulse Integration Review
Innovation & Education Investment & Expansion Integration New Patient's Continuum of Care MIS Zimmer Institute Spine Orthobiologics Centerpulse Implex Centerpulse Integration Review
Slide 28: Perfect Fit: Our Deal Remains
Perfect Fit = + Our Deal Remains . . .
Slide 29: Premier, Innovative, Global Orthopaedics Company
Premier, Innovative, Global Orthopaedics Company Leading Technology MIS Alternate Materials CAS Biologics Disc / Nucleus Leading Scale 100,000+ SKUs 2,000+ sales people 1,000,000+ ft2 mfg 1,000+ patents 100,000+ outcomes Leading Positions #1 Reconstructive #1 Hips #1 Knees #1 Europe #1 US & Japan An
Slide 30: And With the Right Outcome
And With the Right Outcome . . . JNJ Stryker Zimmer Biomet Centerpulse Smith & Nephew Wright Exactech Other Market Share 23.2 21.4 30 11.4 0.103 7.7 2.6 0.8 3.8 The $6.4 Billion Reconstructive market growing at 13%
Slide 31: Where Are We in the Process?
Where Are We in the Process? Guiding principles Team appointments Team charters and customized kickoff document Master integration project document (schedule, output by meeting, etc) Customized templates Day One stabilization checklist Chartered, trained teams Starting baselines Financial Operationa
Slide 32: Centerpulse Salesforce Integration Update
Centerpulse Salesforce Integration Update US Sales Force Distributor negotiations & re-alignments complete Inventory & asset verifications in progress Combined sales force effective January 1st, 2004 Single billing system to go live April 1st, 2004 1,000 attendees to first National Sales Meeting Pro
Slide 33: Centerpulse Distributor Status
Centerpulse Distributor Status Successful completion* Completion is unlikely IMPLANT SOLUTIONS INTERWEST ORTHOPEDICS PROJOINT MEDICAL ORTHO SOURCE H & H GREAT LAKES INNOVATIVE CSA Z-CAROLINA JET STREAM ADVANCED ORTHOPEDICS INLAND ZIMMER ROCKY MTN. CAROLINA SURGICAL WILKINS MEDICAL PRECISION JOINT VE
Slide 34: Targeted Synergies - $'s and Timing
Targeted Synergies - $'s and Timing 2004 2005 2006 2007 2008 Sales Dis-Synergies $ (50) $ (25) - - - Op Profit from Sales Dis-Synergies (20) (10) - - - Expense synergies: COGS 2 8 30 30 30 R&D 6 15 15 15 15 Selling 2 5 5 5 5 Marketing and Distribution 3 15 15 15 15 G & A 8 23 25 25 25 Total Expense
Slide 35: Growth From Integration: Next Steps
Growth From Integration: Next Steps Realization of Recon cross-selling opportunities Integrate Implex business Spine strategy and "bolt-ons" program Orthobiologics and SportsMed focus Zimmer-Centerpulse MIS strategy alignment Global pricing strategy Innovative Trauma products expansion
Slide 36: The Scoreboard
Zimmer (+162.46%) S&P HC Equipment & Supplies (+36.18%) S&P 500 (4.40%) Peer Index (+51.51%) (BMET, SNN & SYK) The Scoreboard
Slide 37: Thank You
Thank You Thank You
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