"In Touch – Leading & Succeeding In Renal Therapy Worldwide"
Dr. Ben Lipps, CEO & Chairman of the Management Board
Capital Markets Day Luton, September 1–2, 2010
SAFE HARBOR STATEMENT
This presentation includes certain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S.Securities Act of 1934, as amended. Actual results could differ materially from those included in the forward-looking statements due to various risk factors and uncertainties, including changes in business, economic competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in ligitation or investigative proceedings and the availability of financing. These and other risks and uncertainties are discussed in detail in Fresenius Medical Care AG & Co. KGaA's (FMC AG & Co. KGaA) reports filed with the Securities and Exchange Commission (SEC) and the German Exchange Commission (Deutsche Börse).
All the slides of the Capital Markets Day Presentation (CMD) 2010 are subject to copyright law.
CMD - 2010
Agenda
Company Today
Market Potential
Growth Strategy
Summary
Company Today
2010 LTM Strong Revenue Growth in All Regions
Impressive Growth Continued
Company: Management Structure
|
Ben Lipps
Chairman & Chief Executive Officer |
|
|
Emanuele Gatti
Chief Executive Officer
Europe, L. America,
Middle East & Africa &
Global Chief Strategist |
Rice Powell
Chief Executive Officer
North America & Deputy Chairman
Fresenius Medical Care |
Michael Brosnan
Chief Financial Officer |
|
Roberto Fusté
Chief Executive Officer
Asia Pacific |
Kent Wanzek
Global Manufacturing Operations |
Rainer Runte
General Counsel &
Chief Compliance Officer, Labor
Relations Director Germany &
Corporate Business Development |
|
•
Proximity to patients and customers
•
Awareness of local environment and needs
•
Focused activities
•
Local production & distribution facilities with global coordination
•
Combination of more than 150 years in the dialysis industry |
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World Leader in Dialysis Services
World Leader in Dialysis Products
Hemodialysis (HD)
= ~ 90% of all treatments
= ~ 10% of all treatments
Industry's Only Vertically Integrated Provider
Market Potential
Global Prevalence of ESRD
Development of Dialysis Patient Population
- Dialysis is the primary treatment modality on a global scale
- The number of global dialysis patients is expected to double by 2020
Market Opportunity by Region
Growth Strategy
FME's Growth Strategy
Components of Growth Strategy
Product
Services
Renal Pharma / Therapy
• Combine membrane, drug delivery and laboratory technology with proven dialysis drugs to provide superior outcomes
Integrated Care Looking Ahead to ACO
Global Strategy – Adapted Locally
ESRD Clinical Treatment Goals Are Similar on a Global Basis, However:
FME's overall growth strategy must be implemented on a regional basis due to varying reimbursement and health care systems
FME's Products and Services by Region
Growth Strategy Implementation 23 Countries Account for > 92% of Revenue
| North America |
Services |
Products |
| Canada |
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| Mexico |
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| USA |
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| EMEA |
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| Czech Republic |
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| France |
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| Germany |
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| Italy |
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| Portugal |
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| Spain |
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| United Kingdom |
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| Turkey |
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| Poland |
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| Russia |
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| Romania |
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| Asia Pacific |
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| Australia |
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| China |
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| Hong Kong |
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| Japan |
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| Korea |
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| Taiwan |
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| Latin America |
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| Argentina |
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| Brazil |
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| Colombia |
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Growth Strategy – Products – Best-in-Class Global Manufacturing
High Product Quality
Platform-based Technology & Systems
Competitive Advantage (quality, cost, productivity) -
-
-
Growth Strategy - Products – Market Introduction 2009-2012
- 5008S OnLine Hemodiafiltration
- 4008 Classic
- 2008 T+ Computer Interface / Venofer Pump
- 2008 Sorb Systems
- Liberty Cycler
- Neutral ph PD Solutions (Delflex Nph)
- Body Composition Monitor & Enhanced Hydration Management
- Portable Artificial Kidney (PAK)
- Needle Disconnect
- New Blood Cassette
- Therapy Monitor
- Plasma Filter
- Multifiltrate Pro
- Online HDF Dialyzers
Sorbent Cartridge and Ion Rejecting Membrane
Sorbent
- •Tap water for initial dialysate
- •Regenerate diaslysate
- Reduces dialysate volume from ~ 140L to 12L per treatment)
- •Remove bacteria and endotoxins from dialysate
Ion Rejecting Membrane
•Reduces amount of Ca++, Mg++ and Na+ reacting sorbent
- Reduces Sorbent size
- No reinfusion of Mg++, Ca++
- Simplifies System
Sorbent Products
Features
- 6 12 L tap water
- No water treatment
- Standard electrical hookup
- Conventional 3x per week
- Every other day dialysis therapy
Features
- Compact
- Disposable circuits
Device not Approved in the US Portable Artificial Kidney (PAK)
Global Strategy - Services – Areas to Improve Dialysis Outcomes
Global Strategy – Renal Pharma/Therapy – Hydration Management
Global Strategy – Renal Pharma/Therapy – Anemia Management
Global Strategy – Renal Pharma/Therapy – Bone Mineral Management
Global Strategy - Integrated Care Model
ESRD Demonstration Project / FME Cost Model
Summary
Conclusion
Very successful performance toward Goal 10 objectives.
Our global presence, growth and profitability is market leading
Vertical integration is and will be the best business model
There are many opportunities as well as challenges
We will confidently continue to pursue our growth strategy, and we will remain vigilant with respect to:
| Quality |
Innovation |
Corporate Ethics |
| --------- |
------------ |
------------------ |
Thank You!
"In Touch – Leading & Succeeding In Renal Therapy Worldwide"
Rice Powell CEO, Fresenius Medical Care North America & Deputy Chairman, FMC Management Board AG
Fresenius Medical Care North America
Agenda
Agenda
1. FMCNA 2010 - Market Position -FMCNA Financial Metrics
2. 2011 - The Bundle, Final Rule -Action Plans / Task Forces
FMS Provider Market Share
Market Share Development
FMS Market Position June 30, 2010
FMS Clinic Network (JUNE, 2010)
Renal Therapies Group Market Share
Machines Market Share - 2009
PD Market Share by Patient Count - 2009
North America Manufacturing and Distribution Network
Renal Therapies Group New Products 2009 - 2012
Optiflux 250 Dialyzer
Renal Therapies Group New Products 2009 - 2012
Agenda
1. FMCNA 2010 - Market Position -FMCNA Financial Metrics
2. 2011 - The Bundle, Final Rule -Action Plans / Task Forces
FMCNA Revenue June 2010 YTD (in millions)
Revenue 2010 from Prior Year: 9.2%
FMS June 2010 YTD Organic Growth
FMS June 2010 YTD Patient Care Expense Per Treatment
RTG Revenue June YTD (in millions)
FMCNA DSO June 2010
54
Agenda
1. FMCNA 2010 - Market Position -FMCNA Financial Metrics
2. 2011 - The Bundle, Final Rule -Action Plans / Task Forces
New ESRD Prospective Payment System
- ESRD Final Rule Issued: July 26, 2010
- Generally positive result
- Base rate increased from \$198 to \$229 per treatment
- Estimated case-mix, outlier and budget neutrality adjusted average of \$239 per treatment
- Oral-only Part D drugs delayed until 2014
- Vitamin D in bundle 2011
- Calcimimetics / phosphate binders in bundle 2014
- CMS will establish pricing by future rule making
- Case mix adjusters
- Co-morbidity adjusters reduced from 11 to 6
- 120 day adjuster for new patients remains in bundle (~1.5x base rate)
- Lab tests
- Specific list of tabs included in bundle
- All other labs unrelated to ESRD remain separately billable
New ESRD Prospective Payment System
Transition – disappointing result
- 3.1% penalty for all facilities (whether phasing in or opting in day one)
- CMS assumed only 43% would opt in
- FMCNA and DVA ~ 66%
- November 1 election deadline
- CMS suggested it might revisit adjustment in 2012
- We are exploring feasibility of changing adjustment prior to 2012
Home dialysis
- Same reimbursement rate as in-center treatment
- New \$33 per treatment add-on for home training post 120 days
Quality
- Proposed rule for Quality Improvement Program also issued July 26
- 2% penalty for non-conforming facilities
- Two measures
- Anemia management (HB < 10 g/dL; Hb > 12 g/dL)
- Dialysis adequacy (URR ≥ 65%)
Agenda
1. FMCNA 2010 - Market Position -FMCNA Financial Metrics
2. 2011 - The Bundle, Final Rule -Action Plans / Task Forces
FMCNA Task Force - Bundle Team
| Executive Sponsors |
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| Project Facilitator |
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Managed Care
Lab
FMS Ops
Product |
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| Team Members |
Medical
Education / Human Resources
Information Technology
Clinical Services
Finance |
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FMCNA Task Force - Bundle Success Factors
- 1. Revenue and margin ≥ current state
- 2. Quality ≥ current state
- 3. FMCNA P&L (one company)
- 4. Volume growth
- 5. Maintain / improve Physician relationships
- 6. External market is part of this process, opportunities will be available to them
FMCNA Task Force Home Therapy Team
| Executive Sponsors |
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| Project Facilitator |
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| Team Members |
Managed Care
FMS Ops
R&D / Manufacturing
Medical
Education / Human Resources
Information Technology
Finance
Case Management
Clinical Services |
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FMCNA Task Force Home Therapy Success Factors
- 1. Greater than 10-12% of census at home (current penetration 7– 8 %)
- 2. 80% of new patients go through TOPS (currently at 15 - 20 %)
- 3. P&L integrated with ≥ current state
- 4. Active process for capturing Stage 3 & 4 patients
- 5. Our technology offering must mimic the "consumer market"
- 6. Quality ≥ current state
FMS – PD Growth
Liberty Growth – FMS ONLY
65
FMCNA Task Force - Pharma Team
| Executive Sponsors |
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| Project Facilitator |
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RTG Pharma |
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Medical |
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Clinical Services |
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Information Technology |
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| Team Members |
Education / Human Resources |
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FMS Ops |
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Lab |
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Finance |
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FMCNA Task Force - Pharma Success Factors
- 1. Anemia management and bone mineral metabolism
- 2. Evaluate CKD opportunity Stage 3 & 4
- 3. Cost management and revenue / margin ≥ current state
- 4. Quality ≥ current state
- 5. FMC Rx growth
Patient Centric Renal Therapy
Summary
Patient-Centric Renal Therapy
Integral part of our 2011 Action Plans and 2012 Quality Incentive Program
Creates the opportunity to participate in ACO's and ultimately integrated care
Thank You!
"In Touch – Leading & Succeeding In Renal Therapy Worldwide"
Ron Kuerbitz Executive Vice President Market Development & Administration
Healthcare Reform Opportunities
Agenda
1. ESRD-PPS Final Rule
2. Affordable Care Act (ACA) / Accountable Care Organizations (ACOS)
ESRD-PPS Final Rule
Transition Adjustment
CMS assumed 43% of dialysis facilities would opt-in to ESRD-PPS in 2011
•Based on that assumption, CMS will apply a -3.1% transition adjustment to all payments in CY 2011
- "We are considering whether to prospectively correct for over or understatement of the number of facilities that choose to opt out of the transition when we update the adjustment for 2012. We would address this issue in rulemaking for the CY 2012 ESRD PPS." – Centers for Medicare and Medicaid Services, (ESRD-PPS Final Rule, 7/26/2010)
- Precedent for prospective correction in LTCH-PPS
- We estimate that if all FME and DaVita facilities opt-in to ESRD-PPS in 2011, the required budget-neutrality transition adjustment would be -0.64%
ESRD-PPS Final Rule
Oral ESRD Drugs
•Pricing
• Stakeholders will monitor phosphate binder and calcimimetic utilization and pricing in advance of their inclusion to ESRD PPS in 2014
•Dispensing
- GAO required to report by March 2011 on the impact on Medicare beneficiaries of including oral-only drugs in the bundled ESRD PPS
- Oral Vitamin D represents de facto pilot program; FMCRx is capable of servicing all of its Medicare patients taking oral vitamin D
•Quality
• FMCRx has experienced a significant drug utilization review frequency reflecting the high acuity of the ESRD patients it serves
Affordable Care Act (ACA)
Accountable Care Organizations (ACO) Language in the ACA:
Medicare Shared-Savings Program starts on January 1, 2012
•Requirements to qualify as an Accountable Care Organization
- Accountable for quality, cost, and overall care for a minimum of 3 years
- Formal legal structure to receive and distribute shared savings
- Primary care for at least 5,000 assigned Medicare beneficiaries
- Report on quality, cost, and care coordination measures and meet patient centeredness criteria
- May initially focus on one-sided shared savings models
Accountable Care Organizations (ACOS)
FME has experience with all major components of ACO model
CKD in Medicare Population - Population and Spending by CKD Stage
Sources: American Health and Drug Benefits Nov/Dec 2009, Am J Kidney Dis. Jan 2003, USRDS 2009 ADR, Milliman, Inc., and FMC estimates Note: Stage 4-5 = ± 3 months the onset of ESRD 78
CMS ESRD Demonstration FME Clinical Pathways
FMC Experience with ACO-Type Models
FMC Health Plan Acheived Statistically Significant (Case Mix Adjusted) Improvements in the Following Areas:
- Mortality
- Hospital Admissions
- Cardiovascular Hospitalization
- Hospital Readmissions
- Skilled Nursing Facility Stays
- Physician Visits
- Care Costs
The above results are being validated by Arbor Research Collaborative (CMS Evaluation Contractor) against a case mixed matched FFS Medicare Cohort. Final Demonstration Report with specifics for the above outcomes improvements likely will be issued by the end of 2010.
Clinical Strategy #1: Catheter Reduction
Potential annual Medicare savings of ~\$500mm from reduction in incident catheter rate to 50% from 81%
Clinical Strategy #2: Fluid Management
Avoidable fluid overload episodes represent ~\$130mm annual Medicare savings opportunity (in 2004-06 dollars)
Clinical Strategy #3: Oral Nutrition Supplements
% of FME Patients w/3-month Albumin > 4.0 g/dL
Integrated Care Market Opportunity in ~2020
Thank you!
"In Touch – Leading & Succeeding In Renal Therapy Worldwide"
Dr. Emanuele Gatti Chief Executive Officer Europe, Latin America, Middle East & Africa & Global Chief Strategist
Europe, Latin America, Middle East & Africa
Agenda
1. FME EMEALA Today
2. FME EMEALA Strategic Growth Opportunities
Strong Geographic Business Expansion
Market Leader in Dialyzer and HD Machine Business
|
Dialyzer Sales 2010 E |
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Machine Sales 2010 E |
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| FME Sales units |
EMEA
31m |
LA
4m |
EMEALA
35m |
EMEA
10,000 |
LA
3,000 |
EMEALA
13,000 |
| FME Market Share* |
44% |
44% |
44% |
53% |
55% |
53% |
Largest Competitor
Market Share* |
23% |
23% |
21% |
24% |
25% |
21% |
* Market Shares based on 2009 Market and Competitor Survey
Strongly Expanded Provider Business and Provider Revenue Share
Majority of Provider Growth Achieved Through De Novo and Same Store
Growth Spilt EMEALA Patients in FME Clinics Same Store / De Novo vs. Acquisitions
Balanced Business Portfolio and Regional Revenue Split
* Including internal product sales
Latest News - Products, Provider, Geography
- Agreement to acquire Gambro's worldwide PD business; approximately + \$40 million in annual revenue in EMEALA
- Private Public Partnerships (PPP) in several countries
- Acquisition of KNC (Kraevoy Nefrologicheskiy Centr), a private operator of dialysis clinics in Russia's Krasnodar region; approximately + \$25 million in annual revenue in EMEALA
- More than 1,000 patients in FME clinics in Germany
- 45% patients on online HDF in FME clinics in EMEA
- Increased flow of scientific publications showing benefits of our therapies
Summary - FME EMEALA Today
- -Full geographic coverage
- -Product market leader
- -Provider business established where feasible
-Provider expansion achieved mainly through Same Store / De Novos
- -Balanced business portfolio
- -EBIT margin in historical target range
- -Very attractive ROIC
1. FME EMEALA Today
2. FME EMEALA Strategic Growth Opportunities
FME EMEALA Operates in a Diverse and a Dynamic Health Care Environment
Introduction of performance-based reimbursement
* WHO world health statistics 2008
Introduction of quality-driven bundling
Strategic Growth from the Present 14% Market Share
Large Opportunity to Grow Through Privatization in EMEALA
* Based on 2009 FME Market and Competitor Survey
Market Accessibility Increasing
Dialysis Market Value by Region 2010 / 2020
* Accessible market in % of total market
Growth Opportunities in Four Dimensions
Vertical Integration Allows for a Superior Approach to Tackle Medical and Social Needs
P3 : Integrated Concept in PD
Fresenius Medical Care Reliable partner for PD, committed to best products, service and therapy quality
Protect patients from infection and improve patient compliance
Preserve patients´ essential PD functions
Prolong through new medical standards
FME is Setting New Standards for Continuous Quality Improvement
Innovative Products, Therapies and Services = Better Outcomes
|
Improved Treatment Quality |
|
|
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In % of FME
patients |
|
EMEA Q1
2007 |
EMEA Q2
2010 |
|
Kt/V ≥
1.2 |
|
95% |
95% |
Maintained |
| Hemoglobin = 10-13 g/dl |
|
73% |
77% |
Improved |
Albumin ≥
3.5 g/dl |
|
86% |
86% |
Maintained |
| Phosphate = 3.5-5.5 mg/dl |
|
58% |
61% |
Improved |
| Patients on online HDF |
|
33% |
47% |
Improved |
Innovative Reimbursement Models = Better Outcomes
Introduction of Quality-Driven Bundling in Portugal
In % of FME
patients |
EMEA Q2
2010 |
Portugal Q2
2010 |
|
Kt/V ≥
1.2 |
95% |
97% |
|
| Hemoglobin = 10-13 g/dl |
77% |
80% |
|
Albumin ≥
3.5 g/dl |
86% |
90% |
|
| Phosphate = 3.5-5.5 mg/dl |
61% |
64% |
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| Patients on online HDF |
47% |
83% |
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Introduction of Next Generation System for CQI
More than 10,000,000 treatments available by the end of 2010
Additional Potential of >\$500m in 2020 for DSM Services
Franchising Brazil
- Brand label "NephroCare"
- Driven by legal situation in Brazil
- Fee per treatment
- FME's quality control, policies and procedures
- Facility and equipment investments to be covered by franchisee
Strategic Growth Opportunities New Business Model
Expansion in Italy
- First PPP in Northern Italy: 200 patients, 6 dialysis centers
- 9 year management contract
- Comprehensive price: HD treatment labs, renal drugs, vascular access management, nephrological services
- Impact of business model change: from € 1.5 million product revenue per year to € 7.0 million service revenues per year
- Revenue 30% higher than in standard "fee for service" setting
- Role model for Italy and other countries
Strategic Growth Potential in All Strategic Dimensions
Strategic Business Segment Expansion Targeting \$8 Billion in 2020
Dialysis Products
3
rd
Party |
Renal Pharma
3
rd
Party |
Vertically integrated
Renal Care |
Extracorporeal
Care |
|
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Base |
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•HD products/therapies
•PD products/therapies |
•EPO with partnerships
•Iv iron
•Phosphate binders
•Vitamin D |
•In-center dialysis service
•Dialysis products HD/PD
•Renal pharma
•Lab services |
•Renal intensive care
•Liver replacement therapy
•Therapeutic apheresis
•Congestive heart failure |
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•Portable/Wearable Dialysis
Therapies
•Customer-oriented
logistical, technical and
commercial services
•Therapy-related IT solutions
•Management of fluid
overload (BCM) |
•Pharma Tec
•Therapy-related pharma
ceutical and IT solutions in:
- Anemia management
- Bone mineral metabolism
- Potassium management
•Prescription support
•Internet Pharmacies |
•Transportation
•CRO
•Pre-dialysis care (vascular
access, patient preparation)
•CKD solutions (diagnostics,
renal protective treatment)
•Disease management |
•Additional cross-therapeutic
inpatient and outpatient
services
•Sepsis
•Regenerative medicine
•Other non-renal |
|
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| ESRD |
ESRD
CKD |
ESRD
CKD |
Acute renal failure,
Other non-renal
therapies |
|
Thank You!
"In Touch – Leading & Succeeding In Renal Therapy Worldwide"
Roberto Fuste Chief Executive Officer, Asia Pacific
Agenda
1. Macroeconomic View Of Renal Care in Asia-Pacific
2. FMC Asia-Pacific Today's Market Position
3. Future Growth Opportunities and Strategic Drivers
Population Today 56% of World Population in Asia
- Asia Pacific Population 3,700 m out of World Population 6,600 m
- China has more than 4 times the population of the USA
Source: MCS 2007 and Census Bureau of the U.S. Department of Commerce
Population Growth 1998 vs. 2008
Source: Census Bureau of the U.S. Department of Commerce
Healthcare Spending as % of GDP Ranking
ESRD Patients Growth 2008 – 2020 Average Growth Rate Over 11yrs
- China and India more than twice the World AGR
- Total Asia Pacific AGR at 9% (which is 50% higher than World AGR)
ESRD Prevalence Trend 2008
- Current Global ESRD Prevalence is 300 pmp
- Emerging Countries expected to gradually move up the line
AP Indicators Moving to Strong Growth with Still Limited Financial Availability
1. Macroeconomic View Of Renal Care in Asia-Pacific
2. FMC Asia-Pacific Today's Market Position
3. Future Growth Opportunities and Strategic Drivers
Products Ranking 2009
Excluding Japan
Nephrocare Asia-Pacific #1 Largest Renal Care Network
125
Asia-Pacific Employees
Asia-Pacific Strong Revenue Growth
Revenue more than doubled in 5 years
Agenda
1. Macroeconomic View Of Renal Care in Asia-Pacific
2. FMC Asia-Pacific Today's Market Position
3. Future Growth Opportunities and Strategic Drivers
Strategic Drivers - Products
- New 5008 Dialysis System with Full Options
- Complete portfolio of F-series and FX-series to accommodate diverse markets of single use and reuse
- More Asian produced products
- Trending toward Full Customer Solutions
Market Development
Reuse Low Flux High Flux India Pakistan Indonesia Vietnam Malaysia Philippines Australia Single Use % of Patients China MLY Thailand Taiwan Korea Japan ° New Zealand Singapore Treatment 2005 Treatment 2008
Strategic Drivers - Services
New Dialysis Care Markets
- •Korea
- •Malaysia
- •Philippines
- •China
- •Thailand
Services / Drugs
FIDN Renal Nurse Education
Delivering comprehensive, competent, quality dialysis care since 2007
First Dialysis Nurse Institute in the World
- Best Renal Nurses become certified to the highest FMC standards
- 440 RNs entered program; majority now in clinical attachments in Philippines
- Certified RNs deployed to lead NephroCare clinics around the world
- Sister FIDN campuses to be built in China
Therapy Strategy
FMC Asia Pacific strives to:
- Set Benchmark of Clinical Quality Standards in Asia Pacific
- Provide Market-appropriate Cost Efficient Solutions for Developing Countries
- Execute Evidence-based Therapy and Best Clinical Practices
Vision
From a single therapeutic element to Full Customer Solutions
India: The Country
| Key Economic Indicators 2009 (in USD) |
|
|
|
|
| Population 2009 |
1.165 Billion |
+1.4% |
|
|
| GDP/Capita |
\$3,100 |
+7% |
|
|
| CPI |
10.9% |
|
|
|
| Prime Rate |
11% |
|
|
|
HealthCare Expenditure as % of
GDP |
6.1% |
|
|
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| Dialysis Market Statistics |
|
|
|
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| Total Dialysis Units |
1,350 |
|
|
|
| ESRD Prevalence pmp |
44 |
|
|
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| ESRD Incidence pmp |
160 |
|
|
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| ESRD Patients |
50,956 |
|
|
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| HD to PD Ratio |
86 to 14 |
|
|
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| Transplants |
22.2% |
|
|
|
FMC in India
India High Growth & Opportunities
Products - Market Growing >25% Year-Over-Year
•Increased dialysis accessibility from Tier 1 to Tier 2 and Tier 3 cities
•Heavy investments from large corporate hospital chains (Appollo, Fortis, Max) to expand operations across India; FMC India growing with them as partners
•Regional and local government strongly promoting PPP partnership model
Services - Preparing Market with PPT & PPT Plus Model
•Expected to sign 5 to 7 years PPT, PPT plus contracts with large hospital chains and PPP's directly with large government hospital on a regional and city level
•30% of these contracts could be transformed/acquired and expanded to become NephroCare clinics in 3 to 5 years
•50 dialysis clinics service business base for FMC in 3 to 5 years with revenues of USD 30 mio plus
•Imminent reimbursement from private and public funding to kick in; Best estimate of USD 30 to 50 per treatment
Japanese Strategic Plans
Products
Strong Partnership: FMC and Nikkiso
•Long-term exclusive distribution alliance with Nikkiso
•Combines FMC's innovative and efficient manufacturing technologies with Nikkiso's strong domestic distribution network with >50% dialysis machine market share in Japan
•Focusing only in Japan for strong market penetration
Services
Expansion through offering Professional Renal Services
•Huge market potential with \$15 billion dialysis service market value
- •Reimbursement squeeze demands scale of economies and efficiency
- •Private clinic owners reaching retirement age
China: The Country
| Key Economic Indicators 2009 (In USD) |
|
|
|
| Population 2009 |
1.343 Billion |
+0,7% |
|
| GDP/Capita |
\$3,603 |
+10% |
|
| CPI |
4.0% |
|
|
| Prime Rate |
5.31% |
|
|
| HealthCare Expenditure as % of GDP |
5.75% |
|
|
| Dialysis Market Statistics |
|
|
|
|
| Total Dialysis Units |
2,101 |
|
|
|
| ESRD Prevalence pmp |
104 |
|
|
|
| ESRD Incidence pmp |
37 |
Beijing
156 pmp
Shanghai 74 pmp |
|
|
| ESRD Patients |
140,104 |
Rank 3 |
|
|
HD to PD Ratio
86 to 14 |
|
|
|
|
| Transplants |
4.3% |
|
|
|
China Healthcare Reform Increased Dialysis Accessibility
82,712 Medical Institutions
Consisting of:
- •19,712 Hospitals
- •24,000 Community Centers
- •39,000 County/Town Clinics
Outlook
•More Coverage
•Price Evaluation and Control
•Preventive Healthcare
2007
Medicare Pilot commenced in 79 cities Urban Coverage Target: 42 mio additional
2008 Medicare Pilot expanded Urban coverage target: 59 mio additional
2010
Basic primary care medical system ready Total urban coverage target: 467 mio
2011
Three Medical Insurance Schemes target 90% coverage of total pop by 2011 •365m (80%) urban pop. by 2 urban schemes •835m (95%) rural population by rural scheme
2020
An universal public medical system to the whole population for both primary care & secondary / specialty care
ESRD Patients Projection in China
140
Product Market Value in China
China Opportunities & Strategy
Products
Fastest Growing Business in Asia Pacific
•Invest in production plants in China
•Facilitate more efficient registration of products
•Continue to expand market share in machines and dialysers despite influx of local Chinese competitors
Services
Pilot on Track for initiating private dialysis clinics
•Establishing legitimate service platform NephroCare China Ltd.
•Acquisition of Pharma. Wholesale Co. expected mid Sept. 2010
•Venture into Home Therapies and expand coverage
•Continue successful partnerships with clinics/hospitals through NCDCs
Summary
- The strong economic development and high population in Asia-Pacific makes this region an attractive high potential for dialysis business.
- In spite of the global financial crisis, we see that the economic development allows higher government funding on healthcare in general, and in dialysis care in particular.
- FME in Asia-Pacific is strategically positioned as the leading renal care company in products and services, and will capitalize the most on the region's high growth potential and opportunities.
Thank You!
"In Touch – Leading & Succeeding In Renal Therapy Worldwide"
Capital Markets Day Luton, September 1–2, 2010
"In Touch – Leading & Succeeding In Renal Therapy Worldwide"
Capital Markets Day Luton, September 1–2, 2010