AEP CMD Karen West.pptx
Transcription
AEP CMD Karen West.pptx
AEP Capital Markets Day 12 June 2014 Solesis Medical Technologies Karen West, Divisional Managing Director Fenner PLC Board Away Day 2014 1 Introduction to Solesis Medical Technologies § Newest division of Fenner, focused on developing and manufacturing state of the art medical materials, components and devices. § Secant Medical is a high growth company, generating 75% of division sales with strong margins and cash generation. § Xeridiem is a medical device manufacturer. We are currently investing to increase its proprietary products focus Fenner PLC AEP Capital Markets Day June 2014 2 Karen West Work experience 2012 – Present Divisional Managing Director, Solesis Medical Technologies 2011 – 2012 Divisional Director, Strategy, Solesis Medical Technologies 2010 – 2011 Sr. Vice President, Secant Medical, Inc 2005 – 2010 General Manager, Secant Medical, LLC 2000 – 2005 Other roles at Secant Medical Education 2008 MBA, Lehigh University Bachelor of Science Degree in Textile Design, Philadelphia University Fenner PLC AEP Capital Markets Day June 2014 3 Solesis Medical Technologies – overview Fenner PLC AEP Capital Markets Day June 2014 4 Solesis Medical Technologies - overview $32.8 M Fenner PLC AEP Capital Markets Day June 2014 5 § Collaborates with clients to develop biomedical textile components for human implant using plastic polymers, bioresorbable polymers and metals Endovascular stent graft made from PET fabric § Manufactures developed components under long term supply contracts for medical device manufacturers § Expanding its technology platform into resins and other forms of biomaterials Hernia repair Fenner PLC AEP Capital Markets Day June 2014 6 Temperature sensing catheters § Contract product design and manufacturing of single use disposable or short term devices § Manufactures under long term supply agreements Silicone balloon Gastronomy tube for enteral feeding § Focus on products used in minimally invasive and/ or endoscopic procedures § Primary market areas include: gastroenterology, urology and cardiology Fenner PLC AEP Capital Markets Day June 2014 7 Solesis Medical Technologies – revenue breakout Solesis accounts for 12% of AEP revenue 3% 9% PA 88% AZ Secant Medical AEP other Xeridiem Fenner PLC AEP Capital Markets Day June 2014 8 US healthcare environment – current issues § Competition § Regulatory standards § Emerging markets innovation markets § Funding § Reimbursement § Approval cycles Opportunities for Solesis § Backwards integration for supply chain control § Development of proprietary products (outsourced R & D) manufacturing § Minimally invasive technology focus selling § The face of the customer is changing § Cost vs. value § Outsourced R&D § Supply chain risk § Margin pressure § Broader technology platform for enhanced value add features (cost vs. value) § Ageing population a strong growth driver Fenner PLC AEP Capital Markets Day June 2014 9 – case study Developing polymer technology for the medical industry Fenner PLC AEP Capital Markets Day June 2014 10 – timeline Company founded by two professors from Philadelphia College of Textiles & Science 1960’’s Medical textile development started in key implant areas. Prodesco develops early implantable fabric structure for vascular grafts 1970’’s Prodesco incorporates – develops first resorbable mesh Fenner PLC AEP Capital Markets Day June 2014 11 – timeline Mid – 1990’s Development of Endovascular stent* grafts with early stage start up company Late – 1990’s Prodesco, Inc., establishes the Medical Products Division * Product is largest part of commercial business today. Fenner PLC AEP Capital Markets Day June 2014 12 – timeline 2000 Karen West joins Prodesco, Inc. 2002 Secant Medical, LLC launches as a wholly owned subsidiary of Prodesco, Inc, reflecting increased emphasis on medical products Fenner PLC AEP Capital Markets Day June 2014 13 – timeline 2008 Fenner PLC acquires Secant Medical, LLC and Prodesco, Inc., thereby entering the medical market § Increased investment, partly funded by internal cash generation § Revenue growth rates accelerate Fenner PLC AEP Capital Markets Day June 2014 14 – timeline Secant Medical and Prodesco merge to form Secant Medical, Inc. Secant Medical, Inc.® § Transforming Biomaterials for Life™ Fenner PLC AEP Capital Markets Day June 2014 15 – timeline Launches new strategic plan Establishes the Emerging Technology Group to focus on expansion in key technology areas Fenner PLC AEP Capital Markets Day June 2014 16 – timeline Commences significant facility expansion in preparation for future growth Planned $25 million facility expansion – keeping pace with the fast changing market and the evolving needs of the industry Fenner PLC AEP Capital Markets Day June 2014 17 – financial performance Since acquisition by Fenner § Revenue growth: ~ 20% p.a. CAGR § Operating margin: above AEP average margin (17.3% in FY13) § Free cash-flow conversion ~ 90% (average) Medical revenue has grown faster and is more profitable than the AEP average Fenner PLC AEP Capital Markets Day June 2014 18 – key characteristics of the business today Mission critical applications Unique core technology Small piece of overall device cost Strong customer relationships Minimal competitor base High margins Growing demand Fenner PLC AEP Capital Markets Day June 2014 19 – Cardiovascular product example Video Endovascular Stent Graft AAA § Repair of AAA- Abdominal Aortic Aneurysm § One in 250 people over age 50 will die from a ruptured AAA § 4 times more prevalent in men § There are no symptoms – “silent killer” § US Market is valued $650M, equal to half the WW Market § CAGR – 8% § Secant manufactures products for the leading device manufacturer § This is a minimally invasive procedure Fenner PLC AEP Capital Markets Day June 2014 20 – flow diversion stent Video Endovascular repair of cerebral aneurysm using flow diversion stent § One in 50 people have an unruptured brain aneurysm § Annually, 30,000 people suffer from ruptures in the US, 40% die and 66% of survivors suffer permanent neurological damage § There are 500,000 deaths worldwide annually § Most prevalent in people ages 35-60 § Global Market for repair devices is valued at $980M, CAGR – 5% § This is a minimally invasive procedure and a growth area for Secant Fenner PLC AEP Capital Markets Day June 2014 21 – robust pipeline Devices for minimally invasive surgical techniques Neurovascular Cerebral aneurysm Pipeline Projects by Market Segment Cardiovascular Distal Protection 7 36 Cardiovascular Transcatheter Heart Valve Orthopedic Cranial Cruciate Ligament GENERAL ORTHO OTHER 3 9 24 NEURO EVAR/CAR Robust pipeline is necessary to ensure future growth and provides strong visibility Fenner PLC AEP Capital Markets Day June 2014 22 – research into emerging technologies § Partnerships with leading academic institutions § Sophisticated polymer synthesis capabilities § Biodegradable polymer development § Coatings & surface modifications Partnerships Massachusetts Institute of Technology Fenner PLC AEP Capital Markets Day June 2014 23 Strategic development and growth drivers Fenner PLC AEP Capital Markets Day June 2014 24 – developing market presence ECM SECANT has met enough needs across multiple vertical markets to have gained a presence Collagen Films Fibers PGS* ? Medical Textiles ? Specialty Polymers Coating Vertical Markets General Surgery *PGS –Poly Glycerol Sebacate Orthopedics Cardiovascular Neurology Wound Care Platform Technology Focus TRANSFORMING BIOMATERIALS FOR LIFE™ Fenner PLC AEP Capital Markets Day June 2014 25 – strategic development § Emphasis being placed on the development of adjacent platform technologies § Developing a synthetic and bioresorbable, fiber extrusion platform § Currently under development - other Biomaterials* for regenerative medicine § Acquisition targets include companies with relevant platform technologies serving medical device manufacturers *A biomaterial is any matter, surface, or construct that interacts with biological systems Fenner PLC AEP Capital Markets Day June 2014 26 Vision Fenner PLC AEP Capital Markets Day June 2014 27 Solesis Medical Technologies – our vision § Medical has been identified as offering the potential for superior revenue growth and margin § Growth will be generated by reinvesting in Secant Medical’s expertise and strong pipeline supplemented by appropriate acquisitions § Enhanced prospects for Xeridiem from developing proprietary devices § Opportunities to internationalise the business outside the USA § Medical should therefore represent increasing proportions of AEP revenue and profit, benefitting Fenner’s reported margins Fenner PLC AEP Capital Markets Day June 2014 28
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