INTERNAL FIXATION SYSTEMS, Inc. (OTC.QB IFIX)
Bringing Superior Value to Orthopedic Implants
Forward Looking Statements This presenta,on contains projec,ons and forward-‐looking informa,on that involve various risks and uncertain,es regarding future events. Such forward-‐looking informa,on can include without limita,on statements based on current expecta,ons involving a number of risks and uncertain,es and are not guarantees of future performance of Internal Fixa,on. There are numerous risks and uncertain,es that could cause actual results and Internal Fixa,on’s plans and objec,ves to differ materially from those expressed in the forward-‐looking informa,on, including: (i)Internal Fixa,on’s inability to remain current in its repor,ng obliga,ons with the SEC; and (ii) Internal Fixa,on’s inability to secure the financing necessary to con,nue its opera,ons. Actual results and future events could differ materially from those an,cipated in such informa,on. These and all subsequent wriMen and oral forward-‐looking informa,on are based on es,mates and views of management on the dates they are made and are expressly qualified in their en,rety by this no,ce. Except as required by law, IFS does not intend to update these forward-‐looking statements.
Superior Value
Quality, U.S.-‐made Orthopedic Implants sold for 40-‐50% less
than the compeMMon.
Value is created through innovaMve set design, flexible distribuMon pathways, responsible inventory management, and standardizaMon of instruments and components across
mulMple products.
IFS Product Development Process
Iden:fy Product
Evaluate Compe::ve Products
IFS Na:onal Advisory Panel
Suggests Enhancements , Improvements
Manufacture Redesigned Product
Currently FDA Approved Products
• 2.0 / 2.4 cannulated screw system • 3.0 cannulated screw system • 4.0 cannulated screw system • 5.0 cannulated screw system • 6.5 / 7.3 cannulated screw system • Phalangeal Fixation Systems 1.5/2.0/2.7
cortical screws
Modular Locking Small Fragment System Basic Ankle System – Bi-Malleolar Set Comprehensive rear foot reconstruction system Pilon Fracture plate system Volar Distal Radius / Forearm FX System Clavicle Fx System Proximal Shoulder Plating System Elbow Fx Plating System Acetabular FX and Plating System MPJ Fusion System Lapidus Plating System Midfoot Fusion System
These products will cover over 70% of the Orthopaedic Fixation Market
• Locking Large Fragment System Periarticular FX and Plating System – Proximal Tibia Periarticular FX and Plating System – Distal Femur
• Locking Mini Fragment System Metacarpal FX and plating system Metatarsal FX and plating system
Market Overview
Healthcare Reform and ExisMng Industry Trends PosiMon the Othopaedic Implant
Market for Change
Current Market Leaders
61.3%
11.2%
8.2%
7.9%
4.3% 3.4% 1.2% 2.5%
Synthes
DePuy / Hand Innovations Smith & Nephew Zimmer
Stryker
Biomet
© iData Research Inc
49.7%
13.5%
9.7%
8.7%
7.4% 4.1% 6.9%
Synthes
Zimmer
Smith & Nephew
Stryker
DePuy
Cannulated Screws Plate and Screw Systems
Orthopaedic Implant Market Summary
• The U.S. market for Orthopaedic Implants is large and continues to grow. It is expected to reach $34 Billion by 2014.
• The market is dominated by companies that employ premium pricing strategies.
• There is downward pressure on prices from hospitals and ASCs for products used to treat common fractures.
• Many Healthcare Facilities are limiting the number of vendors and using Group Purchasing Organizations and Accountable Care Organizations to help control costs.
• No longer is the physician in exclusive control of implant decisions. Increasingly purchasing decision makers are looking at cost.
Effects of Health Reform on Implant Industry
• As of 2010 Medicare no longer reimburses separately for implants
• The cost of implants now part of the overall fee
• Commercial payers will follow Medicare • Facili:es seeking lower cost alterna:ves IFS is posiMoned well for these changes !
Bimalleolar Ankle Fracture
Standard Implants Used • 1/3 Tubular Plate • 4-6 3.5-4mm Cancellous or Cortical
Screws • (2) 4.0 Cannulated Screws • 1-2 Drill Bits, 2-3 K-Wires
$1226 - $1354*
$630-$710*
$1645 - $1877*
Average Cost Savings Per Procedure:
48% Less than Synthes ($596-$644)
62% Less than Stryker ($1015-$1167)
Management Team
• Stephen J. Dresnick, MD – President and CEO • Former Founder and CEO of Nasdq listed Sterling Healthcare • Well respected healthcare innovator and entrepreneur
• Laura Cattabriga – Chief Financial Officer Laura has a Masters of International Business from George Washington University. She has worked on start-up companies, market expansions and has managed companies and organizations going through restructuring . She has been responsible for aggressive growth plans that include developing organizations as well as increasing revenues
• Kenneth C. West – Vice President, Sales. Ken previously served as Sales Representative, Regional Sales Manager and Distributor for many of the top Orthopaedic and spine surgery companies such as Stryker Corporation, J&J – DepuyAcromed, Synthes USA, NexaOrthopaedics, and Trans1 Inc
• Arica Finnieston, Vice President, Product Management Arica has over 16 years of experience in the medical device industry, specifically in orthopedics. Prior to joining IFS, Ms. Finnieston held posi:ons as Global Marke:ng Director for Maramed Orthopedic Systems, Global Marke:ng Director for BioSculptor Corpora:on, and Global Product Manager for Trulife. Her experience in orthopedics combines manufacturing, R&D, marke:ng, strategy and product management.
IFS management team has extensive experience in the orthopaedic, medical device, and healthcare industries
combined with a track record of starMng and growing successful companies.
Modular Set Design
Sales Since Launch of Small Fragment Systems
0
20000
40000
60000
80000
100000
120000
140000
Q1 11 Q2 11 Q3 11 Q4 11
Current Distribu:on
Current Distribu:on
• Florida • Georgia • Arizona • Indiana • New Hampshire • Massachuse^s • Connec:cut • California
• Louisiana • Wyoming • Montana • Oregon • Washington • Maine • Rhode Island • Alaska
Projected Sales Growth
2012 2013 2014 Sales $5,268,365 $16,411,318 $31,489,641
Gross Profit Margin 60% 60% 60%
EBITDA $1,022,131 $6,226,819 $13,276,131
Company Milestones
October 2011 – Ini:al Release of modular locking plates
January 2012 – Release of Straight plate module March 2012 – Ini:al Release of Large Cannulated
Screws March 2012 – Ini:al Release of Temporary External Fixator
Capital Needs
Build new inventory/surgery sets for exis:ng products Inventory and sets for new products Addi:onal manufacturing capacity Develop Overseas markets Enter Veterinarian Market Working Capital Build-‐out Distribu:on Network Marke:ng
Product Licensing
Advantages • Use exis:ng 510K • Can get sets consigned • Only need to file as repackager • Can expand territory much quicker
Barrier to Entry for New Players • Requirements for Market Entry
– FDA approval – Distribution network – Significant capital – Depth of product to gain attention in the market place
• Additional Factors: – Difficult to gain surgeon support – Manufacturing takes significant trial and error to get it right
• There are a few companies trying to offer lower cost products manufactured outside of the U.S. Quality of both the raw materials (e.g. surgical grade stainless steel) and the products themselves, has been inconsistent.
• This is a business where quality is VITAL and lesser products, even if attractively priced, will not be accepted.
IFS Investment Highlights • Surgical Implant Costs have been rising 8-‐10% per year • By focusing on every-‐day products instead of block-‐buster
products, IFS has much lower R&D costs • Implant Industry is $35 Billion market in US • Innova:ve set design, new distribu:on pathways, use of
standardized instruments and components across product lines, and aggressive inventory management mean lower costs to the consumers while maintaining industry margins
• IFS preferred by leading surgeons • Based on early market experience IFS is seeing a 90% conversion
rate from exis:ng products to ours (including major academic centers)
IFS delivers doctor preferred designs at a superior value (40-‐60% less than compeMtors)
Stock Overview
Symbol -‐ OTCQB: IFIX
OTC.QB (IFIX)
For more information: 786-268-0995
Stephen Dresnick, MD [email protected] Laura Cattabriga [email protected]
5901 SW 74th Street, Suite 408
South Miami, FL 33143
www.ifsusa.net
OTC.QB (IFIX)
For more information: 786-268-0995
Stephen Dresnick, MD [email protected] Laura Cattabriga [email protected]
5901 SW 74th Street, Suite 408
South Miami, FL 33143
www.ifsusa.net