Acquisition of US Anatomic Pathology Business

Transcription

1 Acquisition Anatomic Pathology Business (October 6 th, 211) * Figures and ratio in this material are rounded to the appropriate unit in principle. 1 Purpose the Acquisition The First-ever Acquisition Clinical Lab Testing (CLT) Business a Japanese Firm 1 A solid platform to enter CLT market Attractive CLT/ Anatomic Pathology (AP) market (Giant and Growing market) Able to take advantage management experience/knowhow Miraca Group (Experience/knowledge laboratory business and FDI, a ) 2 Appreciation the business to be acquired Business model: differentiated high-quality service (Short turnaround time, leading pathologists, and well-established support system for operation) Excellent management skill and achievements the current Chairman & CEO (former CEO Advanced PCS) 3 Re-emphasis CLT business as a core segment in Miraca Group The first initiative toward globalization CLT business: potential another growth scenario (In addition to IVD business growth through globalization) 2

2 Clinical Laboratory Testing market Comparison with Japan In, CLT market has been growing steady (About three times as large as that Japan in 21) CLT market ($ billion) High growth rate over the past 1 years Development new methodology for early diagnosis/treatment Highly pritable business based on cutting-edge expertise and knowledge ($ billion) CAGR: 6.4% Japan CLT market(jp billion) Susceptible market to the revision the medical reimbursement fee the Japanese government Slightly declining trend over the years (remaining flat in the past few years) ( billion) 1, 8 6 CAGR: -1.% E Source: Lab Industry Strategic Outlook 211: Market Trends and Analysis, G2 Intelligence Source: Marketing report Yano Research Institute Ltd. 3 Business Opportunity in AP market In AP market, while the market shares the major labs are relatively small, middle sized AP-specialized labs are increasing their sales ~2% ~2% ~6% CLT market Esoteric AP Routine Source:Washington G-2 Report Ex) genetic diagnosis Higher technology and expertise required High growth and high pritability Sample: human cells/tissues Examined a pathologist Share large labs in the AP market is approx. 2% (fragmented market) Samples:mostly blood and urine Automated system Low price and low growth Dominated the large labs Average growth rate:% 29 Large labs - National pathology companies Local/regional and independent labs Academic center Hospital based Source:Laboratory Economics Limited scale-merits due to difficulty in automation many AP processes 4

3 Summary Caris Diagnostics Caris Diagnostics Inc. Established in 1996 Headquarters: Dallas, TX A Laboratory location: Dallas/TX, Phoenix/AZ, Boston/MA Chairman and CEO: David D. Halbert Employee: Approx. 76 people (End 211) - Over 7 subspecialty pathologists - Over 1 sales force Business: Anatomic pathology service 3 subspecialties: Gastrointestinal Pathology (GI) Dermatopathology (Derm) Hematopathology (Hem) Net sales: $27 million (FY21.Dec) Operating income: $34 million (FY21.Dec) Net sales ($ million) CAGR 3% FY7 FY8 FY9 FY1 Operating income ($ million) CAGR 37% FY8 FY9 FY1 <A> Transaction Scheme (to be confirmed) Making a wholly-owned Miraca Holdings (MHD) through absorption-type merger acquisition vehicle Payment purchase price in cash Shareholder <Japan> Establishment a wholly-owned MHD (acquisition vehicle) Spin-f Absorption-typed merger Non-target CDx : Caris Life Science, Inc. CDx: Caris Diagnostics Inc. Establishment Establishment (acquisition (acquisition vehicle) vehicle) MHD MHD Separation Separation non-target non-target Purchase Purchase acquisition acquisition and and making making payment payment to to shareholders shareholders 6

4 Outline the Transaction and Impact on Miraca s Financial Results Purchase price Purchase price: $72 million (Approx. 8 billion, foreign exchange ratio:$ 1= JP 8) - Purchase price includes repayment the existing debt and payment to shareholders - Funding: Plan to use cash on hand and to borrow up to billion Goodwill Goodwill on acquisition: 2.~3. billion per year(amortized under the straight-light method over 2 years) Impact the acquisition on Miraca s consolidated financials this year - Net sales will increase - Effect goodwill amortization on operating income is estimated to be small ( More details are to be announced when the accounting processing business consolidation is decided.) Time closing Plan to be within Possibility Globalization CLT business Japanese market Overseas market IVD Fujirebio, TFB and ALSI FDI, TFS, and Innogenetics Growth scenario - 1 AP Business (New) CLT SRL, JCL and Tsuchiya Growth scenario - 2 Take a new step for globalization Miraca Group 8

5 Contact information: IR Public Relations Group Phone: URL: Disclaimer regarding forward-looking statement: The forecast provided in this document is prepared the management based on currently available information and various hypotheses and ideas including significant risks or uncertainties. Please be aware that the actual performance may turn out to be different from the forecast as a result various contributing factors. Factors affecting the performance include, among others, aggravation the economic situation, fluctuation the exchange rate, change regulatory, statutory, and administrative requirements, delayed launch new products, pressures from the product strategies competitive companies, and decline the sales potential existing products. 9