2010 Investor Relations

Transcription

1 KBB COMPANY 2010 Investor Relations

2 Contents Korea s Top Musculoskeletal Biosimilar Company Strong Business Foundation Becoming a Global l Biotechnology Company Appendix

3 Korea s Top Musculoskeletal Biosimilar Company Company Identity Key Milestones Key Business Areas Vision 2015

4 Company Identity KBB Company Specializing in Musculoskeletal Biosimilars Country s largest tissue bank New product development combining medicine + biotechnology + engineering Diversified global and local distribution network (dominates 60% of local market) Ortho biology Bio-Similar Developed recombinant protein drugs Independent self-reliant technology (rhbmp-2, biosimilars) i il Owns mass-production system (2 nd largest in the world) Lab tests scheduled early this year. To generate revenues by year-end Bio Medical Device 4 Maker of spine medical devices / Importer of artificial joints Secured artificial joints technology through acquisition of Endotec Established the country s first artificial knee joint R&D Center Leader in the local development of artificial joints currently under process for approval as local product To expand into the global market for artificial joints

5 Key Milestones KBB Pioneer and Leader in the Korea s Biomaterial Market Foundation and Establishment Investment and Technology Advancement Growth and Take-off Management /Investment Company founded as Korea Bone Bank [Paid-in capital KRW 1,474,380,000] Incorporation o of Korea Bone Bank Inc. Granted import license for tissue bank [KFDA Art.11] [KFDA Art. 11] Established company R&D Center [Korea Industrial Technology Association Art ] Granted license to manufacture medical devices [KFDA Art.2514] ISO : 2003, Quality Mana gement System of Medical Devi ce (I, II) FDA registration of medical device (I), No CE certification of medical device (I, II), No EOS Spinal System certification of 510(K), No. K Acquired US maker of artificial joints ENDOTEC Selected for Industrial Core Technology Project worth 1.5 BW for 3 years (Ministry of Knowledge Economy) Opened Endotec R&D Center Signed contract for export and local sale of Rafugen-BMP2 reagent Completed construction of 2 nd E ndotec factory y( (Orlando, FL) Registered for back door listing i n KOSDAQ Decision made on company merger Awards/ Certification Certified as venture company [Small and Medium Business Administration, Art ] Certified as INNO-BIZ company [Small and Medium Business Administration Art ] Venture Company Grand Prize (in venture company category), Prime Minister s Award 2009 Minister of Strategy and Finance Award - Model Tax Payer Granted MKE Minister s Award in the 10 th SME Technology Innovation Show 5

6 Key Business Areas Integrated Musculoskeletal System Biosimilar Company Powered by State-of-the-art Technology and a Diversified Product Portfolio Orthobiologics i Bio Medical Device Biosimilar i il / Cell Medicine i Build solid market driven by grafting material business Shift from imports/distribution towards R&D based manufacturing Build Medicine + Bio+ Engineering Competencies Secure various new products using biomaterials Medical device business using biocompatible metals Acquisition of US artificial joints maker Endotec Operate US manufacturing center and local R&D center Local development of artificial joints based on advanced technology Recombinant protein business targeting musculoskeletal diseases Develop most effective and quickest treatment for bone diseases Integrate with current Orthobiology products Sales of pharmaceutical ingredients Allograft Xenograft Rafugen TM -DBM 3 rd generation Total Knee System BP Knee Artificial Hip, Shoulder, Ankle System Spinal fixation screw Rafugen TM -BMP2-DBM BMP2 pharmaceutical ingredients BMP2 coated tissue graft Stem cell medicine 6

7 Product Images - I Orthobiologics MA Graft Bone Sponge Lumbar spacer Laminar spacer < Korean & US Patent No & US 12/359,125 > Dental Graft Cervical spacer < Korean oea Patent tno > Bone powder Bone chip 7

8 Product Images - II Medical Device Spinal Implant Lumbar SYSTEM Artificial Joint System FEMORAL COMPONENT POLY BEARING INSERTER TIBIAL COMPONENT Cervical SYSTEM < Korean & US Patent No & US 12/359,103 > 8

9 Product Images - III Bio-Similar Rafugen TM -BMP2-DBM At 37 for 16hr Rafugen TM -BMP2 < Korean Patent t No > 9

10 Product Images - III Stem Cell Medicine Culture cell-scaffold grafting materials in conditions similar to the human body Cell : Patient s autologous stem cell Scaffold : Allograft ligament tissue Tissue Bio Reactor Build sterile culture system Mechanical Stimulation Identical to human joint s movement 10

11 Vision 2015 To become a leading musculoskeletal biotechnology company by 2015 through outsourcing and R&D Orthobiologics Medical device Bio-similar Cell therapy Medical Device High value-added d products developed through R&D Orthopedic medical device (orthopedic, neurological, dental) using medical metal material Outsourcing Manufacturing Tissue grafts rhbmps Stem cell treatments (Cell & Tissue) Combined medical device 11

12 Strong Business Foundation Orthobiologics Biomedical Device Biosimilar Sustainable High-growth g

13 Orthobiologics Capture blue ocean market Korea s top orthobiologics company Country s number one tissue bank Began tissue bank business in 1997 when it was a blue ocean market Handles bone, cartilage, ligament, tendon etc. allograft, xenograft and synthetic material More than 60% of local market (orthopedic, neurological, dental) Quickly secured leading market position. Focus in development of alternative materials Approval of safety and effectiveness about products by patent on packing tech. Bio-clearant Technology Has the only tissue bank in Korea and Asia with 100% sterile certified technology Operates Asia s largest clean room Achieved zero side-effects from tissue graft material by removing immune rejection factors before bio-clearant processing Ensures strict quality management by abiding with regular KFDA, FDA quality management and controls Local : 700 hospitals Diversified local including Seoul and global National University Medical Center distribution Global : 3 countries in Asia, America, 3 countries network in Europe etc. Expanding sales network to nation-wide orthopedics, neurological, and dental clinics Reliable and diversified distribution network based on time-tested competencies Customers in around 700 hospitals in Korea and abroad 13

14 Biomedical Device Go beyond just localizing artificial a joints technology ogy Grow as a global medical device company KBB is strengthening its leading position in the artificial joints business through the acquisition of Endotec and the Company s own R&D efforts Maker of high quality spinal fixation screw and artificial joints Artificial joint market to expand with aging society Acquired US artificial joint R&D center/maker Endotec in April 2009 Apply current technology and database to localize li technology and cut costs Established the country s first artificial knee joint R&D center Expand annual production capacity to 15,000 sets following site expansion Develop artificial knee joint locally instead of relying on imports Expect annual revenues of 100 billion won after expansion into US market Buechel-Pappas TM Tricompartmental Knee System The First Mobile Type The First Ti Raw Material Develop 3 rd generation artificial joints (mobile bearing) resembling the human ankle increasing average lifespan and enabling patient to walk 2 weeks after procedure Use titanium -> Decrease weight and abrasion compared to existing TKR Increasing market share The First TIN Ceramic Coating Increase lifespan and decrease need for reoperation using surface TiN ceramic coating 14

15 Biosimilars New growth engine e biosimilar, bos a, rhbmp-2 Bone Growth Factor Recombinant protein related to tissue growth and the promotion of new bone growth Related mainly to recombinant protein bone morphogenetic protein (BMP-2), demineralized bone matrix (DBM) graft, xenograft using foreign tissue, stem cell treatments using homogeneous ligament tissue KBB s goal for BMP Products Develop product line related to allograft BMP-2 A type of biosimilar Con s: lengthy R&D period and complicated process to get approval for sale Pro s: Can capture dominate market share, high value-added R&D on bone powder transmitter for dental bone graft material and graft scaffold for orthopedic surgery Develop pproduct for the treatment of musculoskeletal disease Build BMP-2 Mass production system Localize Now November 10 BMP-2 Lab test Cost savings BMP-2 Commercialization Develop product line related to xenograft Develop artificial tissue based on tissue engineering 15

16 Becoming a Global Biotechnology Company Back-door Listing of Korea Bone Bank Mid to Long-term Strategy Bio Medical Device Bio-Similar Stem Cell Medicine Revenue Forecast by Product Product Development Roadmap

17 Back-door Listing Towards becoming a truly global musculoskeletal system biosimilar company Purpose of Listing Increase brand awareness in local and global market and secure human and physical resources needed to strengthen production capacity Secure resources to support new product development and mass production facility expansion Maximize shareholder value by strengthening competitiveness and management efficiency Overview Surviving Company Donga G&L.,Ltd ( Korea Bone Bank Ltd.) Merged Company Korea Bone Bank Ltd. Merger ratio Donga G&L.,Ltd 1: Korea Bone Bank Total shares issued 73,375, shares (Common shares 66,074, / Preferred shares 7,301,272) Face value KRW 500 Schedule Sign contract for merger Declaration of Merger becomes effective (Financial Supervisory Service) Special resolution at extraordinary shareholders meeting approve merger contract Company name change: Donga G&L.,Ltd Korea Bone Bank Ltd Completion of merger reported in general shareholders meeting and merger announcement made public Merger (extinction) registration Listing and start of trading 17

18 Mid to Long-term Management Strategy Korea s top musculoskeletal system bio-similar company with independent technological competencies Stem cell treatment - Improve healing after allograft procedure Future business leveraging tissue engineering technology The world s first system that cultures autologous stem cell + allograft material in a tissue incubator for a certain period of time before being supplied to patient Biosimilar - Speed up healing of existing graft materials Market leader on the back of Company s own rhbmp2 technology Reduce patient s financial burden through h increased price competitiveness Secure patents through continuous R&D Target 10% of US market share by 2012 Bio Medical Device - Next-generation upgraded product Acquired US artificial joint maker Endotec in 2009 Enlarge market with 3 rd generation products that are differentiated from 2 nd generation products Maximize patient convenience with improved product Target 2% of US market share in 4 years Ortho biologics - Capture market share Patented sterilization technology Build an accessible transplantation system for both patient and doctor through continuous R&D Launch new product with improved stability and effectiveness than current products Increase revenues through new product exports Increase revenues by expanding into new dental markets 18

19 Bio Medical Device Medical Device Market Size and Forecast (In USD billion) Korea s Artificial Joints Market Trends (In KRW million) CAGR 5.1% Global medical device market size 2005 : USD billion 2010 : USD billion (expect average annual growth of over 5.2%) Unlike other industries, the medical device market is forecast to show stable growth with little fluctuation Ref. Espicom Business Intelligence, World Market Report Korea s artificial joint market size 2005 : KRW 41 billion 2010 : KRW 82 billion (estimate over 15% average annual growth) Striking increase in artificial knee joints the Company s key focus of development Ref. Espicom Business Intelligence, World Market Report 19

20 Biosimilars US BMPs Market Forecast (In USD millions) Current Status of Korea Bone Bank Rafugen_BMP-2 Reagent Launch Freeze drying 1ml -70 deep freezer Store at 4 KBB s Competitive Edge Treatment applications Competitor KBB 2 nd in the world to succeed in BMP2 mass production Average annual market growth rate of 28% Applicable to spinal, Higher productivity than current methods Limited to spinal treatment fractures, head and face, Improved product convenience dental Price High (7,000$/ea) Half that of existing products Graft method Death due to excess production of bone tissue Uses syringe injection method to reduce sideeffects Supplier to Israel s company P Supplier to Singapore s N Sales contract with W, Korea s largest Growth Factor company 20

21 Stem Cell Medicine KBB s Future Business Stem Cell Medicine e Stem cell treatment Leverages tissue engineering technology In the stem cell medicine production system, stem cells (autologous stem cell) extracted from the patient s bone marrow are mass cultured. Then, a scaffold-cell complex attached to the scaffold (ligament allograft) is cultured under the same growth environment as the human body. Thus the graft procedure is performed through promoting the patient s own tissue generation. In this production system, after coating the autologous stem cell, the tissue grafting material is cultured in a bio incubator with physical stimulation, to promote the division of the patient s own tissues. Culture cell-scaffold material in a human body-like environment Government funded project [2007 ~ 2014], Amounting to KRW 3 billion Development of tissue engineering medicine using stem cell for next generation. Government funded project [2009 ~ 2011], Total KRW 500 million Develop stem cell treatment for the regeneration of ligaments using allograft scaffold 21

22 Product Development Roadmap Category Main Product Status Spine Orthobiologics Artificial joints Other medical devices Lumbar DBM, Cage, Sponge TKR Cervical Export to US from January 09 Export to US from March 09 To generate revenue from 2 nd half of 10 following production To export to US from 2 nd half of 10 Category Main Product Status Artificial joints TKR Start product sales in November 08 Orthobiologics DBM Generated revenues since May 08 Category Main Product Status Orthobiologics Ligament, cartilage, bones Generated revenues since June 07 Spine Lumbar Generated revenues since July 07 Other medical devices Generated revenues since July

23 APPENDIX Message from CEO Company Overview List of Government Projects Financial Statement Summary

24 Message from CEO Since its establishment in 1997, Korea Bone Bank (KBB) has grown to be the top musculoskeletal system bio-similar company in Korea. KBB s business areas cover tissue grafting with biomaterials, recombinant proteins that mass produce growth factors using genetic recombination, tissue engineering using a complex of scaffold, cell, and growth factors, and the development of artificial joints and orthopedic devices using various medical materials. In 2006, KBB opened its own R&D center where the Company s research teams perform independent research projects. KBB houses a tissue processing clean room - Asia s largest GTP facility. Using safe and state-of-the-art tissue processing and sterilization methods, the Company is delivering grafting material to patients around the world suffering from musculoskeletal ailments. KBB s high-tech research facilities and medical devices support its research in biomaterial, synthetic material, growth factors, individually tailored stem cell etc. KBB has also built a GMP facility for the production of pharmaceuticals. The Company s research teams are not only occupied with R&D and new product development but are also active in the process of securing approval from the relevant authorities in Korea and abroad. KBB prides itself for its ability not only to develop technology but to transform such technology into high value-added commercial opportunities. So it s not surprising that KBB has become the first company in Asia to succeed in the mass production of rhbmp-2, a recombinant protein using animal cells. KBB is also making a valuable contribution to the advancement of Korea s medical field and the building of global academic networks through the Asia Pacific Cadaver Training Center (APTC), where clinicians from Korea and Asia can take part in general and surgical training. An advisory committee revolving around Korea s most reputable clinical professors was formed to support surgical training, and workshops are being held in a quarterly basis. In the first half of 2009, KBB acquired a US maker of artificial joints, thus paving the way for localizing artificial joints technology. The Company is channeling significant investments in the expansion of its US presence and in the establishment of a local manufacturing company. KBB is no doubt set to grow as a truly global bio-venture company. As a leader in medical devices and biotechnology, we are committed to the improvement of human health and the quality of life. Our doors are always open to your questions and comments. We will continue to strive towards our goal of putting smiles on our patients faces as they recover their health and look forward to a better life. Thank you. 24 Daniel Shim Chief Executive Officer, Korea Bone Bank Ltd.

25 Company Overview Overview Company Korea Bone Bank Co.,ltd. CEO Daniel Shim Date established August 1997 Capital KRW 30.85billion (post-merger) Revenues KRW 17.9 billion (as of end of 3Q 2009) Industry Medical device manufacturing, medical device import and sales etc. Product Line HQ/Factory location Subsidiary Homepage Tissue grafting material including biomaterial and artificial joints, BIOLOGICS, medical device manufacturing, import, sales, R&D #402 Acetechno Tower 9, Gasan-dong, Geumcheon-gu, Seoul, Korea ENDOTEC (Artificial joints maker) / 60% Equity share Organization Chart Shareholder Composition 25

26 KBB s On-going and Completed Government Projects No. Project Value Date 1 Development of artificial bone using BMP2-based bioactive ceramic scaffold 100 MW Development of low-density 3-dimensional structure of demineralized substrate grafting material using ceramic processing technology 100MW Development of bioactive DBM-CP complex with tissue growing function 40 MW Development of bone filler using bovine extracted demineralized substrate 70 MW Development of next generation tissue engineering product using stem cells 2 BW Nano-bio convergence industry innovation cluster 50 MW ~ Development of nano-bio hybrid material-based treatment and diagnostic imaging technology 600 MW ~ Development of tissue regeneration coating material using bioactive protein 2.4 BW ~ Development of hybrid organic/inorganic bone grafting material using biopolymer synthetic material 400 MW ~ Low temperature composite coating-based intelligent bioceramic material technology bioactive coating ceramic material technology for implants 4 BW ~ Development of Global Artificial Knee Joint System suitable for patients in all countries 1.5 BW ~ Development of stem cell treatment for ligament reconstruction using allograft scaffold 500 MW ~