SGS_Healthcare_Case_Studies_Healthcare_devices by Sutherland Global Services

Expert Interviews Intelligence on the Drug Performance Expert Interviews

www.sutherlandglobal.com January 10, 2013

Pharmaceutical Expert Interviews Client • The client was a leading asset management company and hedge fund in the US. The fund was looking to invest in a pharma company that was in the midst of conducting clinical trials

Client Ask • The client’s major focus was on understanding future performance of a drug called XXX made by a leading pharmaceutical company in the US and which has passed Phase II & Phase III clinical trials. This drug is used for irritable bowel syndrome and chronic constipation and is prescribed by gastroenterologists • To understand the long-term efficacy of the drug, the client wanted to gain first-hand reviews from doctors involved in its trials . The client, therefore, wanted SGS to identify and interview the doctors and researchers involved in the trial of the drug • Major focus of the study was on understanding perceptions of leading doctors on the drug and its performance in the market. The client also wished to understand various technicalities such as comparison of the drug with already-launched competing products to determine its market-competitiveness

Sutherland’s Solution • SGS identified key doctors and researchers involved in the clinical trials of the drug through a multi-pronged approach of combing social-media, identifying patient groups involved in the trials and individually reaching out to them and searching the regulatory websites of agencies involved in the trial for mention of doctors and radiologists involved in the trial • In-depth discussions were held with the doctors and researchers to generate unpublished intelligence and make a more accurate assessment of the drug’s efficacy based on trial-results. SGS conducted 8 detailed interviews with leading gastroenterologists in the study

•Benefits to the Client • SGS research helped the client take a more informed call on the likely success of this drug and its ability to displace competition • Armed with this intelligence, the client was able to assess the likely impact on the company’s financials and if there was an investment case arising from the launch of this new drug © 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

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Sample of the Work

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Market Assessment US Aesthetic laser â&#x20AC;&#x201C; Market Assessment Market Assessment

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Market Assessment of Aesthetic Laser Devices Market in the US Client • The client, a global management consulting firm, was advising a medical device manufacturer who was planning to invest in the aesthetic laser devices market in the US

Client Ask • The client mandated SGS to undertake a thorough market assessment of the aesthetic laser devices market in the US and in particular • To analyze the historical and future demand for aesthetic laser devices • To identify trends in consumer uptake of aesthetic laser treatments • To understand alternative treatments and trends in such treatments • To understand competitor landscape

Sutherland’s Solution

• Using a bottoms-up approach, starting with population demographics, income and age segmentation and the penetration of various treatments, SGS sized the market for aesthetic treatments, and, consequently, the devices used for these treatments • SGS conducted primary research with top device manufacturers to understand equipment buying process, current uptake, buyergroups and financing needs. Analyzed the drivers of aesthetic treatments, studied the trends in procedure volume, comparison of prices of laser vs. alternative procedures • Performed a competitive benchmarking of aesthetic laser device manufacturers on technology and cost parameters

•Benefits to the Client • Based on the findings of our research, the client was able to get an accurate assessment of the market’s needs, demand drivers and inhibitors, and the attractiveness of the segment from an investment perspective • The research also helped the client benchmark valuations for similar businesses and explore buy vs. build options

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Aesthetic procedure value estimated to grow ~50% by 2019; laser treatments account for ~17% of non-surgical cosmetic procedures U.S. Medical Laser Market $400mn

13% 8%

U.S. Aesthetic / Cosmetic Procedures Value

$800mn

(Values in $ million)

32%

% 5.2

11%

13%

Non-Surgical Cosmetic Procedures by Type of Device (Volume in # of procedures)

25 million

5 million 2010: 30 million

Source: SGS Research, XXX reports

Note: Dummy data is provided in sample slides

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Focus on services, consumables and non-core customers are the key themes across laser device manufacturers

Player

Distribution Strategy

# of patents (US)*

Non-US

Key focus areas / strategy

• Direct sales • Aesthetic devices for home-use are sold through retailers

• Subsidiaries in Spain, Portugal, France, Germany, Italy, United Kingdom, China, Hong Kong, Japan and Australia

 More acquisitions to expand product portfolio  Increased focus on consumables and service  Innovative physician support programs

XXX

• XXX

 XXX

XXX

• XXX

 XXX

XXX

• XXX

 XXX

• Direct sales (32 employees)

• Direct subsidiaries - France, Spain, the United Kingdom, Germany, Korea, China, Japan and Mexico • Distributors – 78 countries

 Home-based products  Focus on services

• XXX

 XXX

XXX Source: SGS Research, XXX reports

Note: Dummy data is provided in sample slides

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XXX company has been diversifying geographically Key Financials (Values in $ mn)

Revenue by Business Segment Dec’07

Dec’08

Dec’09

Dec’10

Net Sales

141

115

54.7

189.5

Gross Margin

81%

74%

65%

47%

EBITDA Margin

18.8%

0.3%

-40.8%

-12.7%

Net Margin

22.2%

4.9%

-43.1%

-13.5%

Total Assets

269.3

281.3

270.3

374.8

Cash & Investable Securities

132.4

122.6

106.9

89.1

0.0

2.7

0.6%

15.5%

34.7%

6.0%

R&D (% to Sales)

13.5%

20.2%

24.1%

S&M**Expenditure

20.2%

26.6%

31.9%

31.4%

Sales Per Employee

0.490

0.356

0.297

0.299

Debt Capex (% to Sales)

(Values in $ million)

Revenue by Geography (Values in $ million)

Key Observations • The company product related services revenue has seen a surge in 2010 • During the years the company has diversified geographically with significant

revenues now coming from Europe and Asia Pacific regions

Source: Company filings, XXX reports

Note: Dummy data is provided in sample slides