The Midwest and the Medical Device Industry. Michael S. Rosen Sr. Vice-President, New Business Development Forest City Science + Technology Group

Transcription

1 The Midwest and the Medical Device Industry Michael S. Rosen Sr. Vice-President, New Business Development Forest City Science + Technology Group

2 U.S. Healthcare Demographics 2013 U.S. Average Life Expectancy - years % of Population 65 Years+ 13.9% Healthcare Spend/capita $9,075 Healthcare Expenditure -% of GDP 17.9% Number of Physicians 878,194 Number of Hospitals 5,724 Total of Patient Admissions 36.6 MM Source:

3 U.S. Health Spending Vs. Key Countries

4 U.S. Healthcare Procedures Vs. Key Countries

5 U.S. & European Medical Device Market 2011 (Ernst & Young) $331.7 Billion (U.S. + Europe: Public Companies) +6% Growth

6 Key Medical Device Market Segments Woundcare Orthopedic Infusion Systems Opthalmology Urology Neurology Respiratory Renal Dental Homecare Cardiovascular Stents Cardiac Rhythm Management Valves In Vitro Diagnostics Imaging Radiation (several modalities)

7 U.S. & European Medical Device Market 2012 (Ernst & Young) 411public companies 254 U.S. 157 Europe Employees: 725,900 Market Cap: $436.1 B

8 Leading Global Device Companies (Medical Product Outsourcing 8/13) Company Country 2012 Sales - B Key Areas 1. J & J U.S. (Part Midwest) $27.43 Surgical, orthopedic, diagnostics 2. GE Healthcare MIDWEST $18.29 Imaging, Diagnostics 3. Siemens Healthcare Germany/ Part Midwest $17.54 Imaging, Diagnostics 4. Medtronic MIDWEST $16.2 Cardiac, spine 5. Baxter International 6. Phillips Healthcare MIDWEST $14.2 Hospital, infusion systems, dialysis, blood Holland $13.19 Imaging, diagnostics 7. Covidien Bermuda $9.85 Surgical 8. Abbott Labs MIDWEST $9.79 Diagnostic, Spine, Cardiovascular, Optic 9. Cardinal Health MIDWEST $9.6 Medical supply, surgical 10. Stryker MIDWEST $8.66 Orthopedic, surgical, spine

9 Leading Global Device Companies Company Country 2012 Sales-B Key Areas 11. Danaher U.S. $8.51 Dental, imaging, diagnostic 12. Becton Dickinson U.S. $7.8 Surgical, diagnostics, cell anaylsis 13. Boston Scientific Part Midwest $7.25 Cardiovascular 14. B. Braun Germany $6.67 Surgical, dialysis 15. Essilor France $6.59 Opthalmic/optic 16. St. Jude Medical Midwest $5.5 Cardiovascular 17. Novartis(Alcon) Swiss $5.48 Opthalmic M Healthcare Midwest $5.16 Surgical, lab 19. Zimmer Midwest $4.47 Ortho, surgical 20. Terumo Japan $4.27 Cardiac & vascular

10 Leading Global Device Companies Company Country 2012 Sales-B Key Areas 21. Olympus Medical Japan $4.24 Surgical, endoscopy 22. Smith & Nephew UK $4.14 Woundcare 23. Hospira Midwest $4.1 Hospital, infusion systems 24. Toshiba Medical Japan $3.97 Cardiovascular, blood 25. Getinge Group Sweden $3.72 Intensive Care, surgical 26. CareFusion Part Midwest $3.6 Hospital, infusion systems 27. Bayer Germany $3.5 Imaging, diagnostic 28. Fresenius Germany $3.31 Dialysis 29. C.R. Bard U.S. $2.96 Surgical 30. Dentsply U.S. $2.93 Dental

11 Getting to the U.S. Market Step 1: Regulatory Approval Process Step 2: Reimbursement (how to get paid)

12 U.S. Regulatory Process Class I Device Non-life sustaining Low risk GMP and post-market surveillance Class II Device Presents more risk than Class I Subject to Performance Standards and Inspection Class III Device Sustains/supports life Failure life-threatening Need to demonstrate safety and efficacy

13 U.S. Regulatory Process (FDA) Investigational Device Exemption (IDE) Permission to initiate Clinical Trials 510k De Novo 510k Substantially Equivalent to Similar Device on Market 90 Day Review TIme Requires clinical trials Pre-Market Approval (PMA) < 2% of all submissions Extensive clinical trials Labeling 180 day review time U.S. MARKET

14 U.S. Pricing & Reimbursement Hospitals Reimbursement Price Already Approved Device NO Existing Device Existing CPT Code Health Economic Study Needed! No CPT Code

15 Market Challenges Positives Obamacare 35 million new patients in the system over 5 years increased volume for hospitals Aging population requiring greater healthcare expense Emergence of blockbuster devices: $1+ billion annual sales Convergence of Drugs, Devices & Diagnostics Glucose monitoring/insulin pumps Drug-eluding stents New Forms of Radiology/Imaging Growth Proton Beam therapy for Cancer, Gamma-Knife, etc. MRI/PET/CT/Ultrasound

16 Market Challenges Negatives: Industry Consolidation: M&A Increased Regulatory Scrutiny Longer Product Development Times Re-look at 510K/PMA by FDA FDA concerns on radiation reduction Reimbursement process New CPT code Excise Tax: 2.3% Short product life-cycle: Need for Continuous Product Innovation

17 Device Industry Consolidation ( ) >$90 B in M&A Activity Novartis/Alcon J&J/Synthes ThermoFisherScientific/Life Tech. Merck/Millipore Apax/Kinetic Concepts ThermoFisher Scientific/Phadia Abbott/Advanced Med. Optics Covidien/ev3 TPG Capital/Immucor Agilent/Varian Cinven/Sebia BeckmanCoulter/Olympus Diagnostics Ethicon(J&J)/Acclarent Medtronic/CoreValve = $41.2 B = $19.7 B = $18.8 B = $7.2 B = $6.3 B = $3.5 B = $2.9 B = $2.6 B = $2.0 B = $1.5 B = $1.4 B = $0.8 B = $0.8 B = $0.7 B