Test the future Investor Day - June 11th Turin - Diasorin
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Test the future
Investor Day
June 11 Turin
th
Disclaimer These statements are related, among others, to the intent, belief or current expectations of the customers base, estimates regarding the future growth in the different business lines and the global business, market share, financial results and other aspects of the activities and situation relating to the Company. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those expressed in or implied by these forward-looking statements as a result of various factors, many of which are beyond the ability of DiaSorin S.p.A. to control or estimate precisely. The Company does not undertake to update or otherwise revise any forecasts or objectives presented herein, except in compliance with the disclosure obligations applicable to companies whose shares are listed on a stock exchange. Piergiorgio Pedron, the Officer Responsible for the presentation of corporate financial reports of DiaSorin S.p.A., in accordance with the second subsection of art. 154- bis, part IV, title III, second paragraph, section V-bis, of Legislative Decree February 24, 1998, no. 58, declares that, to the best of his knowledge, the financial information included in the present document corresponds to book accounts and book-keeping entries of the Company.
A genda 1 DIASORIN AT A GLANCE
5 MAIN BUSINESS ACHIEVEMENTS
7 HEALTHCARE SECTOR TRENDS
17 DIAGNOSTIC SECTOR TRENDS
27 DIASORIN POSITIONING AS A CONTENT SPECIALIST
44 GROUP STRATEGIES FOR MAIN GEOGRAPHIES
59 GUIDANCE 2019-2022
61 BUSINESS DEVELOPMENT OPPORTUNITIES
63 MAIN TAKEAWAYS
DiaSorin at a glance
W ho are we?
DiaSorin is a Company
committed to develop products
that require complex technologies
and high risk research spending.
In other words
SPECIALTY PRODUCTS
2
D iaSorin WorldWide
WITH OVER 50 YEARS OF EXPERIENCE
GERMANY - Dietzenbach
USA - Stillwater
USA - Cypress ITALY - Saluggia
UK - Dartford
ITALY - Gerenzano
Manufacturing sites
R&D centers
SOUTH AFRICA - Kyalami
Direct presence
Countries served via distribution
3
G rowth through acquisitions & partnerships
2008-2009 2010-2012 2013-2014 2015-2016 2017-2018
PA
RT
NE
RS CONNECTIVITY FOR LAB
HI STOOL AUTOMATION
HEPATITIS & RETROVIRUS QFT
P
M&
A ELISA HEPATITIS MOLECULAR ELISA
PARVOVIRUS
& RETROVIRUS DIAGNOSTICS BUSINESS
CASH FLOW SERVING OUR GROWTH, EXPANSION AND INNOVATION TO PROVIDE RIGHT SOLUTIONS TO OUR CLIENTS
4
Main business achievements
M ain business achievements from 2017 long term guidance
TARGETS STATUS
HDV ANDROSTENEDIONE C. DIFFICILE BABESIA ANAPLASMA PHAGOC. GROUP B STREP.
5-6 new Immunodiagnostic VITAMIN B12
DEVELOPMENT
tests/year MYCOPLASMA
PRODUCT
QFT LTBI FGF 23 CBFB-MYH11
BCR-ABL PNEUM. GROUP C
FOLATE SHBG CHLAMYDIA PNEUM.
1.5 STREP.
PROCALCITONIN BORDETELLA DIRECT
2 new molecular kits + EHRLICHIA
HSV 1 PNEUMOCYSTIS
4 new ASRs/year ELASTASE-1
ZIKA IGM GROUP G STREP.
CALPROTECTIN VZV DIRECT HSV 2 LEGIONELLA SPECIES JIROV.
QFT franchise: launch of Latent Tuberculosis test September 2018 Summer 2019 by 2020
Partnerships
Expansion of T-cells response to other new applications
DEVELOPMENT
Gastro-intestinal franchise: sale of H. Pylori SA on CLIA October 2018
BUSINESS
Hepatitis & HIV franchise: launch on CLIA in the US
ELISA business acquisition Conversion of Siemens’ ELISA clients to DiaSorin’s CLIA solutions
DEVELOPMENT
TECHNOLOGY
Development/launch
May 2019 by 2020 by 2021
of LIAISON XS
INDUSTRIAL
EFFICIENCY
Supply chain efficiencies
EBITDA Margin safeguarding initiatives Operational excellence
Rationalization of manufacturing footprint
6
Healthcare sector trends
M ain challenges for companies working
in the healthcare industry
01 02
Increase cost as the result
Society overall expects
of more expensive
us to deliver services
technologies, broader
and products that will
access to the welfare system
help people live longer
and the demographic trend
Increase efficiency
in the way we conduct
our business 03 04 Tough competition
cannot miss any business
decision or we are taken
out of the market
8C hallenges in Healthcare
HEALTH SPENDING PER CAPITA (IN USD PPP)
2017 data estimated by the Secretariat for those countries that were not able to provide this information. PPP stands for Purchase Power Parity and adjusts health expenditure for differences
in price levels between countries. Source: OECD Health Statistics 2018 9C hallenges in Healthcare
$6.0
MACROECONOMIC FORCES ON THE US ECONOMY
19.7%
Current health spending
TRILLION
Under current law,
national health spending
is projected to grow
at an average rate of 5.5%
share in GDP is expected per year for 2018-27
to reach 19.7% by 2026 The average US and to reach nearly
family pays ~30% of annual $6.0 trillion by 2027 The healthcare system
household income in health in America is costly
insurance premium and costs and not sustainable
(2019). The cost is expected
to be 50% of household
income by 2021
~30% COSTLY
10C hallenges in Healthcare
THE ROLE OF DEMOGRAPHY: ITALY IN 2018
MALE 5 4 3 2 1 0 1 2 3 4 5 FEMALE
% VALUES
Source: ISTAT, national demographic forecasts 11C hallenges in Healthcare
THE ROLE OF DEMOGRAPHY: ITALY IN 2050
MALE 5 4 3 2 1 0 1 2 3 4 5 FEMALE
% VALUES
Source: ISTAT, national demographic forecasts 12C hallenges in Healthcare
THE ROLE OF DEMOGRAPHY IN HEALTHCARE SPENDING – ITALY
Individual expense
for healthcare
Source: SISSI project, SIMG-CEIS Tor Vergata 13What is the conclusion?
WE NEED TO BE
Innovative
Adaptive to changes
WE ARE ALL MOVING TO VALUE BASED CAREVBC (Value Based Care)
Diagnostic companies
A model in which providers, are not just providing
including hospitals & physicians, a test result, but a viable
are paid based on patient information associated to an
health outcome algorithm that will support
the medical decision
16Diagnostic sector trends
opposite forces are reshaping
2 the laboratory space and the IVD Industry
1
2
CONSOLIDATION
to drive efficiency of routine
laboratory services
DECENTRALIZATION
to drive efficiency of patient
management as part of value
based care (VBC) initiatives
18C onsolidation: Key Factors
1,833
926
Multi-hospital health systems Independent hospitals
19C onsolidation: New Models
FRANCE (BALLERAU LAW)
4,000 891 14
UH and GH Blood Banks
Private Labs
Labs Labs
Market
consolidation
2013-2018
139 135 4
Regional platforms GHT + 12 APHP GH Blood Banks
(562 Labs) (295 Labs) Labs
20D ecentralization: decentralized testing
MEDICAL EFFICIENCY
• Increasing worldwide prevalence DECENTRALIZATION • Alleviate seasonal spike
of infectious diseases
to POCs in testing volumes
• Reduce time from Diagnosis
• Bring Testing closer to Patients
to Treatment
• Reduce labor costs
• Provide more precise treatment
ACCESSIBILITY TO NEW SOLUTIONS
Increasing number of tests and instruments
proposed by Molecular Manufacturers
21H ow technology affects decentralization
Blood draw Testing Result
HOW HOSPITAL
IT ALL
STARTED
PATIENT
COLLECTION CENTER
HOSPITAL Improved
TODAY PATIENT
PHARMACY
DEPARTMENT STORE
PRIVATE LAB Logistics
Improved testing
PHARMACY
technology
HOUSEHOLD
PATIENT
WEARABLE
TOMORROW
PATIENT
The FutureD ecentralization: what technology can deliver today
DIABETES FERTILITY HOME COLLECTION
SELF
TESTING
(Traditional technologies) Glucose Pregnancy
Monitoring Testing
Info to
POINT OF CARE be certified
by Lab which
acts a key role
RESPIRATORY CARDIAC MAKERS HOSPITAL ACQUIRED
PROFESSIONAL INFECTIONS
TESTING
(Molecular technologies)
23What does it mean for DiaSorin?
H ow do we support consolidation?
HIGH VOLUME AUTOMATION
CONNECTIVITY TO EXISTING PLATFORMS
PLATFORMS
DEDICATED SPECIALTY PLATFORM
25H ow do we support decentralization?
1 HUB AND SPOKE MODEL +
PLATFORMS
2 EASE OF USE
NO EXTRACTION +
3 MOLECULAR POC Results
< 15’
STRATEGIC FOCUS
26DiaSorin positioning as a content specialist
A new path forward as a content specialist
+
LAUNCH OF CLIA LAUNCH OF MDX
SPECIALTY TESTS SPECIALTY TESTS
EXISTING
LATENT TURBERCULOSIS
LYME
NEW
VALUE BASED CARE Diagnostic
algorithms
(VBC)
CALPROTECTIN
H.PYLORI
STOOL ANTIGEN
28A new path forward as a content specialist
LAUNCH OF CLIA
SPECIALTY TESTS
EXISTING
29O ur Specialist Menu
HIGH VOLUME DIFFERENTIATING INNOVATIVE
ME-TOO
SPECIALTIES SPECIALTIES SPECIALTIES
Specialized tests, broadly Specialized tests, growing New tests of unique clinical
Common tests, known use
known clinical acceptance value
Usually prescribed by Usually prescribed by
Mainly prescribed by GPs Education needed
specialists specialists
Available from most Offered by a limited number Offered by a very limited
Single market provider
providers of providers number of providers
44 42 32 2
30S pecialty tests differentiation vs. competition
2016
2
24
2
42
29
43
62
today
2
2
4 63
44
42
32 29
3
45
2
41 3
32 3
INNOVATIVE DIFFERENTIATING
HIGH VOLUME SPECIALTIES ME-TOO
SPECIALTIES SPECIALTIES
Tests of the main competitor
within the area New DiaSorin tests in 2019-2022 31S ustaining innovation: DiaSorin specialties R&D pipeline
CALPROTECTIN US
ELASTASE H. PYLORI US
VITAMIN B12
FOLATE HEV IgG & IgM
LAUNCH OF CLIA
SPECIALTY TESTS
VITAMIN K
PCT US TRAb
45 41 32 3
CELIAC PANEL
32A new path forward as a content specialist
LAUNCH OF
MDX SPECIALTY TESTS
EXISTING
33M olecular Strategy - Overview
cCMV
EXPANSION
CONTENT MENU MYCOPLASMA GEN.
& ANTIBIOTIC RESISTANCE
ATYPICAL PNEUMONIAE
DEVELOP TARGETED
ASSAY PANELS
VZV SWAB
VZV CSF
34A new path forward as a content specialist
LATENT TURBERCULOSIS
LYME
NEW
VALUE BASED CARE Diagnostic
algorithms
(VBC)
CALPROTECTIN
H.PYLORI
STOOL ANTIGEN
35V alue Based Care: new initiatives through diagnostic
algorithms
LYME
VBC
LATENT New Key initiatives
TUBERCULOSIS
through CALPROTECTIN
diagnostic algorithms
H. PYLORI STOOL
ANTIGEN
36Q uantiFERON Lyme:
addressing unmet and unaswered needs
LYME DISEASE: CAUSED BY BORRELIA BACTERIA SPREAD BY TICKS
TESTING MARKET QFT LYME ESTIMATED POTENTIAL
(POTENTIAL) MARKET
35,000/year
confirmed
cases 1
12-14 M
tests/year3
$400-600 M
30,000/year 5M
confirmed tests/year4
cases 2
1
https://ecdc.europa.eu/sites/portal/files/media/en/healthtopics/vectors/world-health-day-2014/Documents/factsheet-lyme-borreliosis.pdf
2
https://www.cdc.gov/lyme/datasurveillance/index.html 3 EDMA Market Data & proprietary market intelligence 4 US healthcare insurance reimbursement data 37Q uantiFERON Lyme:
addressing unmet and unaswered needs
DIAGNOSIS TREATMENT
Current algorithm based on IgG, Treatment with antibiotics
IgM & WB confirmation If untreated loss of facial mobility, joint
low sensitivity in acute infection, pains, severe headaches with neck stiffness,
risk of delayed or missed and heart palpitations can develop.
diagnosis and long term medical In absence of early antibiotic treatment,
complication cases. 10 to 20% of people develop joint pains,
memory problems, and tiredness for at
least six months.
QIAGEN QUANTIFERON TECHNOLOGY AND DIASORIN SEROLOGY TESTING COMBINED TO PROVIDE:
Lyme IgG
EXISTING
+ Increased
sensitivity in acute Effective monitoring
Lyme IgM = infection driving of treatment
antibiotic therapy of infected patients
+ decision
NEW
Lyme QFT
38I nflammatory bowel disease (IBD):
patient treatment
IBD PATIENTS REQUIRE TESTING AND MONITORING THROUGH DIFFERENT CLINICAL MOMENTS
MONITOR
DIAGNOSIS TREATMENT
REMISSION
Colonoscopy
Inflammatory markers (Calprotectin) Steroids or Biologics Symptoms, Diet, Lifestyle
CALPROTECTIN TESTING IS AN UNDERUTILIZED TOOL
10% 2% 2%
DIFFERENTIAL MONITOR
TREATMENT
DIAGNOSIS REMISSION
Monitoring of Therapy
Correctly identify IBD Prediction of Relapse
to improve success & optimize
(vs IBS & other GI can improve patient
therapy costs
afflictions) life quality
Reduce Colonoscopy LTBI test required:
EURECA Study
where possible QuantiFERON
DiaSorin
39I rritable bowel syndrome (IBS)
vs. Inflammatory bowel disease (IBD)
CROHN’S DISEASE TESTING MARKET CALPROTECTIN ESTIMATED POTENTIAL
& ULCERATIVE COLITIS (POTENTIAL) MARKET
2.5 M 10-13 M
tests/year3
patients 1
$200-300 M
3M 7M
patients 2
tests/year3
1
Burisch, Johan, et al. “The burden of inflammatory bowel disease in Europe.” Journal of Crohn’s and Colitis 7.4 (2013): 322-337
2
https://www.cdc.gov/ibd/data-statistics.htm 3 Proprietary market intelligence 40H elicobacter pylori: diagnosis & treatment
DIAGNOSIS TREATMENT
INVASIVE (ENDOSCOPY) PROTON PUMP INHIBITORS (PPI)
+ ANTIBIOTICS
Needs specialized personnel, high (Clarithromycin & Amoxicillin)
patient impact, high cost, can miss
low level infection
NON INVASIVE (UREA BREATH TEST)
Needs specialized personnel,
!
affected by diet, false negatives
after treatment
RAISE OF ANTIBIOTIC RESISTANCE
DRIVES NEED FOR TESTING BEFORE
NON INVASIVE (STOOL ANTIGEN TEST) TREATMENT START
15% Automated, does not require
SHARE specialized personnel, reduced false Testing suggested on all patients if
negatives and diet effect local population resistance >15-20%
41H elicobacter pylori clinical need
OPTIMIZED DETECTION & ANTIBIOTIC RESISTANCE TESTING
UREA BREATH TEST
STOOL
POSITIVE POSITIVE
SAMPLE
UREA BREATH TEST STOOL EXTRACTION CLARITHROMYCIN RESISTANCE
DIASORIN COMBINED IMMUNODIAGNOSTIC + MOLECULAR DIAGNOSTIC SOLUTION
STOOL
POSITIVE
SAMPLE
STOOL EXTRACTION STOOL ANTIGEN TEST CLARITHROMYCIN RESISTANCEH elicobacter pylori
4.4B
people carrying
H. Pylori WW1 ESTIMATED POTENTIAL
MARKET 3
20 M
annual H. Pylori
testing volume 3
10-20%
risk of
developing
peptic ulcers 2
7M $400 M
potential yearly
H. Pylori antibiotic
1-2% resistance testing
risk of volume 4
acquiring
stomach
cancer 2
1
Hooi JKY et al. Global prevalence of Helicobacter pylori infection: Systematic review and meta-analysis. Gastroenterology 2017 Apr 26
2
Pathogenesis of Helicobacter pylori Infection, Johannes G. Kusters, Arnoud H. M. van Vliet, Ernst J. Kuipers, Clin Microbiol Rev. 2006 Jul; 19(3)
3
Proprietary confidential market data 4 Based on US and Europe H.pylori incidence rates
43Group strategies by main geographies
US strategy
COMMERCIAL
HOSPITALS
CLIENTS POLs
NETWORK
BASE
46US commercial clients base strategy
NEW
COMPLETE MOLECULAR
HEPS + HIV SPECIALTY
MENU KITS
COMMERCIAL
CLIENTS
BASE
NEW
MOLECULAR
NEW IMMUNO SPECIALTY
SPECIALTY TESTS ASRs
47US LIAISON XS and POLs strategy
# POLs IN THE US PER TEST VOLUMES (2017 DATA)
SMALL SIZE MEDIUM SIZE BIG SIZE WAIVER/PPM
500k tests/year
Market segment
stable over next
5 years
(slowdown of 1-2%).
Lower exposure
to PAMA effects
vs. rest
of the market. DiaSorin
Target
“ME-TOO”
1M
IMMUNO TESTS
Tot POLs ~ 15,000 ~ 2,200 ~ 200
Tot tests ~ 140M ~ 300M ~ 220M ~ 220M
% tests ~ 16% ~ 34% ~ 25% ~ 25%
volumesUS hospitals network strategy
EXPANSION IN THE HOSPITAL MARKET: STRATEGIC FOCUS ON INTEGRATED HEALTH NETWORKS AND MAJOR MEDICAL CENTERS
Leverage innovative product launches/
strategic partnerships to drive sales cycles
IMMUNO in the strategic Hospital account segment
SPECIALTY TESTS
New dedicated resources to call on the top
Health Networks and Group Purchasing
Organizations to remove barriers to entry
HOSPITALS
NETWORK
(1,100 hospitals) Sales organization efforts focused in the
strategic segment with new value based
messaging
VBC
(Value Based
Care)
Additional sales resources to accelerate
the uptake in the segment
49E uropean strategy
EXISTING ELISA
CUSTOMER CONVERSION
BASE TO CLIA
51E uropean strategy
NEW
NEW IMMUNO MOLECULAR
SPECIALTY TESTS SPECIALTY
KITS
EXISTING
CUSTOMER
BASE
VBC NEW
MOLECULAR
(Value Based
SPECIALTY
Care)
ASRs
52E urope: LIAISON XS enabling QFT
and Siemens ELISA conversion to CLIA
for mid-to-big
ELISA testing volumes conversion
ELISA
CONVERSION
TO CLIA
for mid-to-small
volumes conversion
ELISA Detection
53C hinese strategy
CHINA
CLASS III CLASS II
MANUFACTURING
HOSPITALS HOSPITALS
55C hina: Class III hospital strategy
#HOSPITALS
44%
OF MARKET
QFT
CLASS IIIA VOLUMES NEW SPECIALTY
1,308 TESTS FRANCHISE
ESTIMATED
GROWTH: 2-3%,
CLASS IIIB ALTHOUGH
924 SLOWING
CLASS IIA
~ 70%
OF TOTAL
DIASORIN
CLASS IIB REVENUES
OVERCROWDING
CLASS I PROBLEMS
AND COSTS
NOT CLASSIFIED
MAINTENANCE OF LIAISON XL
+ LAS INSTALLED BASE
56C hina: Class II hospital strategy
#HOSPITALS
43%
OF MARKET
QFT
VOLUMES NEW SPECIALTY
CLASS IIIA TESTS FRANCHISE
ESTIMATED
GROWTH:
CLASS IIIB +10%
1,580 CLASS IIA
6,364 CLASS IIB
POLITICAL
FUTURE SUPPORT TO
CLASS I MARKET AS ENCOURAGE
FOR BUSINESS GROWTH AND REDUCE
OVERCROWDING
EXPANSION
IN CLASS III
NOT CLASSIFIED
New distribution network LIAISON XS
to address the segment to penetrate
with LIAISON XL this new segment
57hina manufacturing: from export
C to high quality local CLIA developer
JV TO
ACCESS TO
MANUFACTURE
TENDERS
KEY SPECIFIC
FOR DOMESTIC
TESTS IN CHINA
MANUFACTURERS
(LOCAL FOR
ONLY
LOCAL)
Percentage of Chinese
manufacturing products= 70%
in 2025 in 10 key sectors,
including Medical Devices
INCREASED
OPPORTUNITY
OPPORTUNITY TO
TO EXPAND
ACCESS HUNDREDS
IN CLASS II
HOSPITALS IN MOST
HOSPITALS
RELEVANT
PROVINCES
DiaSorin positioning as a high quality “made in China” CLIA diagnostic manufacturer
through a new Joint Venture with a recognized Chinese academic institution 58Guidance 2019 - 2022
G uidance 2019 - 2022
REVENUES 2019 - 2022
EBITDA
GROWTH CUMULATIVE
MARGIN
CAGR FCF @
@ 2018 CER
@ 2018 CER 2018 CER
COMPARABLE
MID-TO-HIGH
TO 2018 EBITDA €700 - 750 M
SINGLE DIGITS
MARGIN RESULT
60Business development opportunities
B usiness development opportunities
2019-2022: continuous focus
on Business Development opportunities
NEW ALLIANCES
AND/OR M&A
PARTNERSHIPS
VBC
(Value Based Care)
62Main takeaways
M ain takeaways
Technology
& platforms
serving needs
of all labs
Pursue
size
of new alliances
and/or
partnerships
CONTINUOUS
Continuous STRENGTHENED FOCUS
launch
of specialty SPECIALTY ON BUSINESS
tests
POSITIONING DEVELOPMENT
ON VBC
Use of cash
for M&A as an
VBC additional driver
key initiatives to growth
driving a new
specialty
positioning
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