Slide 1: Investor Presentation
NEUROMODULATION Investor Presentation 2018 June 6, 2018GERY CARDIAC SURGERY
Slide 2: Safe Harbor
Safe Harbor Certain statements in this presentation, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as ame
Slide 3: Intellectual Property
Intellectual Property This report may contain references to our proprietary intellectual property, including among others: Trademarks for our Neuromodulation systems, the VNS Therapy® System, the VITARIA® System and our proprietary pulse generator products: Model 102 (Pulse®), Model 102R (Pulse Duo®
Slide 4: We are a $1.0B focused medical innovator
We are a $1.0B1 focused medical innovator Improving quality Strong leadership Targeting of patients’ lives position in underserved and Neuromodulation high-growth & Cardiac Surgery market segments 1Full-year 2017 net sales 4
Slide 5: Leading positions in Neuromodulation and Cardiac Surgery
Leading positions in Neuromodulation and Cardiac Surgery 80% Cardiopulmonary (CP) First Quarter 2018 Net Sales Heart-Lung Machines (HLM) Drug-Resistant Epilepsy (DRE) $250M Oxygenators Autotransfusion Systems (ATS) Treatment-Resistant Depression (TRD) Cannulae Obstructive Sleep Apnea (OSA) Advanced
Slide 6: Our portfolio is focused on "Head & Heart"
Our portfolio is focused on “Head & Heart” CARDIAC SURGERY NEUROMODULATION CARDIOPULMONARY HEART VALVES Creator, leader of Only sutureless valve on Market-leading positions VNS Therapy the market Global Market (2017) $4.1B $3.0B $1.7B Market Growth Low-double-digit Mid-single-digit Low-single-digit
Slide 7: Near-term Growth Drivers
Near-term Growth Drivers
Slide 8: Our portfolio is focused on "Head & Heart"
Our portfolio is focused on “Head & Heart” NEUROMODULATION CARDIAC SURGERY Perceval sutureless S5 HLM reduces Inspire oxygenator TandemLife simplifies SenTiva advances valve optimizes the transfusions and provides advanced circulatory the ease-of-use of surgical approach to improves personalized sup
Slide 9: SenTiva advances the science of VNS Therapy
SenTiva advances the science of VNS Therapy Next-generation programmer with wireless wand and new user interface Strong initial adoption rate (35% in 1Q18) Senses bradycardia and tachycardia Monitors patient sleeping position Provides scheduled dosing FDA approval in October 2017 CE Mark approval in
Slide 10: Our HLM is the market leader
Our HLM is the market leader 70% global market share Robust, proven reliability and safety 100% customizable, flexible and easy to use Executing commercial upgrade program Developing next-generation HLM device 10
Slide 11: Inspire ignited the fastest adoption of oxygenators
Inspire ignited the fastest adoption of oxygenators 30% global market share; market leadership Fastest adoption ever, over 1 million patients 100% customizable, flexible and easy to use Focused on commercial execution and leveraging HLM footprint Developing next-generation oxygenator and pediatric l
Slide 12: Perceval: the only sutureless fast-deployment valve in the market
Perceval: the only sutureless fast-deployment valve in the market Strong double-digit growth Largest component of heart valve portfolio Enabler for minimally invasive procedures Strong economic benefits 10+ years of clinical use and data; over 200 studies published 12
Slide 13: Advanced Circulatory Support
Advanced Circulatory Support Versatile platform built around a common pump & controller ExtraCorporeal Life Support (ECLS) Veno-Arterial ECLS Veno-Venous ECLS CARDIOPULMONARY • Veno – Arterial bypass • Veno – Venous bypass RESPIRATORY SUPPORT SUPPORT Components: Components: • Pump • Pump • Oxygenato
Slide 14: Strategic Portfolio Initiatives (SPIs)
Strategic Portfolio Initiatives (SPIs)
Slide 15: Differentiated pipeline targeting medical conditions with high unmet needs
Differentiated pipeline targeting medical conditions with high unmet needs TRANSCATHETER MITRAL TREATMENT-RESISTANT OBSTRUCTIVE SLEEP VALVE REPLACEMENT HEART FAILURE (HF) DEPRESSION (TRD) APNEA (OSA) (TMVR) Novel delivery of VNS Therapy may provide Implantable pulse Autonomic Regulation Unique trans
Slide 16: Treatment-Resistant Depression: VNS Therapy may provide better outcomes
Treatment-Resistant Depression: VNS Therapy may provide better outcomes and symptom improvement Received CE Mark in 2001 and FDA approval in 2005 4,000 devices implanted over ~18-month period following FDA approval In 2007, CMS implemented non-coverage decision In May, 2017, CMS published a tracking
Slide 17: Implantable therapy for Obstructive Sleep Apnea
Implantable therapy for Obstructive Sleep Apnea Opportunity to fill significant unmet clinical need for new therapy in a $5B market Stimulation Current state: opens • Current standard of care is CPAP the airway • 40-50% of OSA patients stop or refuse CPAP • Large patient pool that could benefit from
Slide 18: TMVR is giving new hope to patients with limited options
TMVR is giving new hope to patients with limited options Potential to exceed the size of Transcatheter Aortic Valve Replacement (TAVR) market Completely transvenous percutaneous approach with a fully retrievable and repositionable device Plans to complete PRELUDE feasibility study in 3Q18 First pati
Slide 19: Heart Failure is a leading cause of morbidity and mortality
Heart Failure is a leading cause of morbidity and mortality Pilot study started in 2012; 6- and 12-month data has been published; 30- and 42-month data will be submitted for publication in 2H18 CE Mark approval received in 2015 FDA granted Expedited Access Pathway designation and unconditionally app
Slide 20: Financials
Financials
Slide 21: Building a strong future through top-line growth
Building a strong future through top-line growth Mid- Mid- to High- single-digit high- single-digit single-digit 5-Year CAGR* M&A SPI* Neuromodulation High-single-digit Cardiac Surgery Mid-single-digit SPI = Strategic Portfolio Initiatives, which include Transcatheter Mitral Valve Replacement (TMVR)
Slide 22: Improving margins and delivering on our commitments
Improving margins and delivering on our 2016 commitments 2017 +4.1% on constant-currency $3.31 basis 65.7% $1.01B 65.1% $3.03 $965M 22.0% 21.6% Net sales Adjusted gross margin* Adjusted operating Adjusted EPS* margin* * Net sales on a constant-currency basis, gross margin, operating margin and dilut
Slide 23: Full-year 2018 Guidance from Continuing Operations
Full-year 2018 Guidance from Continuing Operations Favorable changes in guidance, resulting from TandemLife acquisition & tax law changes Guidance as of February 28, 2018 Guidance as of May 2, 2018 Worldwide net sales growth (1) 4% - 6% 6% - 8% Gross margin (1) 66% - 68% 66% - 68% R&D (1) 11% - 13%
Slide 24: Focused capital allocation strategy
Focused capital allocation strategy PRIORITIES Organic growth Liquidity to support the strategy Investment Capital enhancements Capital structure that adapts to business needs Focused M&A on core Operating CF competencies Drive increased shareholder returns Share repurchase program Target leverage*
Slide 25: Summary: advancing our strategic objectives
Summary: advancing our strategic objectives • $1B focused medical innovator • Strong leadership position in Neuromodulation and Cardiac Surgery Performing • Targeting ~$9B global market opportunities • Increasing sales and growing margins • Three acquisitions in the past 18 months – Caisson, ImThera
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations The preceding tables reconcile the most comparable U.S. Generally Accepted Accounting Principles (GAAP) measures to the non-GAAP financial and operating measures presented in LivaNova’s first-quarter 2018 press release and during the conference call held in conjuncti
Slide 27: LivaNova
| ivaNova Health innovation that matters 27