Global Wellness Technology Business. High Potential for Future Success. Pasi Sorvisto

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1 Global Wellness Technology Business High Potential for Future Success Pasi Sorvisto

2 What kind of Business we are talking about? Spending on healthcare in U.S. is 14% and in Europe 8,5% of GDP. In 2002 spending on healthcare in EU was 780 billion euro. In U.S billion euro. In 2001 global health technology market was approximately $170 billion. U.S. $75 billion EU $40 billion Japan $25 billion Rest of World $30 billion Healthcare IT market is growing very fast, estimated growth 10% annually. In U.S. healthcare IT market was estimated to be (in 2003) $23,6 Billion. European market is half of the U.S. market, but growth rate is similar. Source: Tulevaisuuden terveysteknologiat ja järjestelmät raportti. Tekes, Pasi Sorvisto

In U.S. healthcare IT market was estimated to be (in 2003) $23,6 Billion. European market is half of the U.S. market, but growth rate is similar.

3 The values of companies, comparison Medicine companies >US$ 1000 Billion Healthcare technology companies US$ Billion Mobile technology companies US$ 90 Billion Telecommunication networks companies US$ 30 Billion Source: Modified by Jouni Ihme, Innokas Medical Ltd Pasi Sorvisto

companies US$ 90 Billion Telecommunication networks companies US$ 30

4 Venture Capital Investments in 2004 Venture Capitalist s set their bets on 5-7 year scope. Source: Renewal and New Frontiers - Global Private Equity: Venture Capital Insights Report (Ernst&Young) Pasi Sorvisto

5 Medical Technology Industry Market 2003 World market: 184 Billion EURO Europe: Billion EURO USA:...79 Billion EURO Japan:...20 Billion EURO The European market, valued at about 55.2 billion Euro and representing 30% of the global market, is among the top three markets for medical technology. U.S. represents 43% of the Global Market. European market: 55.2 Billion EURO Germany: Billion EURO France:... 9 Billion EURO Italy: Billion EURO UK: Billion EURO The four biggest European markets - Germany, France, Italy and the UK - account for more than 72% of the European market. Pasi Sorvisto

2 billion Euro and representing 30% of the global market, is among the top three markets for medical technology. U.S. represents 43% of the Global Market.

6 Finnish Health Technology Industry Examples of Revenues medical/health technology (approximately 2 billion EURO) GE Healthcare (ent. Instrumentarium Oyj) 1,2 B Planmeca Group 420 M Thermo Electron (ent.labsystems) 96 M Orion Diagnostica 40 M Innokas Medical 5 M export from Finland approximately 680 M software TietoEnator Public&Healthcare 239 Million pharmaceutical Orion Pharma 514 Million Leiras 68 Million Pasi Sorvisto

labsystems) 96 M Orion Diagnostica 40 M Innokas Medical 5 M export from Finland approximately 680 M software

7 U.S. Assistive Technology Sales by Type ($ Millions) Segment AAGR% Daily living aids 2, , , Mobility aids 2, , , Communication aids (except computers) 1, , , Others* 1, , , Subtotal (excluding eye glasses and contacts) 8, , , Eye glasses and contacts 20, , , Total (including glasses and contacts) 29, , , If U.S. Market is approximately 45% of global market, total global market for assistive technology is approximately $68 Billion. Pasi Sorvisto

0 8,675.3 11,310.7 5.4 Eye glasses and contacts 20,940.0 21,995.8 28,132.3 5.0 Total (including glasses and contacts) 29,196.0 30,671.1 39,443.0 5.2 If U.S.

8 Sporting Goods Industry Revenues Sporting goods, Apparel and Athletic Footwear $52,2 Billion Sports Equipment $18,2 Billion Sports Apparel $24 Billion Athletic Footwear $10 Billion Sports Instruments not included Finnish Sporting Goods Industry Total revenue in Finnish based or owned companies 2,5 Billion euros (e.g. Amer-Salomon Acquisition) More than 2/3 is equipment and electronics Finns are Market Leaders in many categories: Polar Electro: #1 Heart Rate Monitors Suunto: #1 Diving Instruments Amer Group: #1 Sporting Goods Exel: #1 Nordic walking Raita Sport: #1 Ice Hockey Rinks (Year 2003, not included Amer Group total revenue) Source: etc. Pasi Sorvisto

Goods Industry Total revenue in Finnish based or owned companies 2,5 Billion euros (e.g.

9 Public & Private R&D-funding Available Tekes: FinnWell Healthcare Technology Program Program duration: Program volume: approx. 150 M of which Tekes provides 50% Allocation: Research 30 M Public service providers 20 M Companies R&D 100 M Sitra Health technology and healthcare is one of the six strategic programs Corporate Finance typical investment focus on early growth companies, 0,5-1 M product or service should represent Best Practice concept of healthcare interest also in changes in healthcare structure, processes, quality, and efficiency separate Life Science -portfolio Sources: Tekes (Kalevi Virta) and Sitra (Timo Haikonen), 2005 Pasi Sorvisto

strategic programs Corporate Finance typical investment focus on early growth companies, 0,5-1 M product or service should represent Best Practice concept of healthcare

10 The Competitive Advantages of Our Health Technology Industry (by Hannu Ahjopalo, FiHTA) Finnish education system has proven to be Top Class availability of versatile engineering skills at a moderate cost availability of scientifically top-notch, still pragmatic medical experts straightforward and unbureaucratic cooperation between the industry, universities and hospitals Finland is one of the safest and least corrupted countries a small country and small home markets have taught humility, and forced the industry to networking Finland has always been at it s best under severe challenges we have been able to perform when needed Pasi Sorvisto

between the industry, universities and hospitals Finland is one of the safest and least corrupted countries a small country and small home markets have taught

Views from FinnWell Programme

Views from FinnWell Programme FinnWell Healthcare Technology Programme 2004-2009 Programme coordinator Kalevi Virta kalevi.virta@ewell.fi www.tekes.fi/ohjelmat/finnwell Tekes, Funding Agency for Technology