Deutsche Bank 33 rd Annual Healthcare Conference. Joe Almeida President, Medical Devices

Transcription

1 Deutsche Bank 33 rd Annual Healthcare Conference Joe Almeida President, Medical Devices

2 Forward-Looking Statements This presentation contains certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of These statements are based on management s current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. All statements contained herein that are not clearly historical in nature are forward-looking and the words anticipate, believe, expect, estimate, plan, and similar expressions are generally intended to identify forward-looking statements. The forward-looking statements in this presentation may include statements addressing the following subjects: future financial condition and operating results, economic, business, competitive and/or regulatory factors affecting our business. Any of the following factors may affect our future results: Our ability to effectively introduce and market new products or keep pace with advances in technology The reimbursement practices of a small number of large public and private insurers Cost-containment efforts of customers, purchasing groups, third-party payers and governmental organizations Intellectual property rights disputes Complex and costly regulation, including healthcare fraud and abuse regulations Manufacturing or supply chain problems or disruptions Recalls or safety alerts and negative publicity relating to Covidien or its products Product liability losses and other litigation liability Rising prices for oil, gas and other commodities 2

3 Forward-Looking Statements (cont.) Divestitures of some of our businesses or product lines Our ability to execute strategic acquisitions of, investments in or alliances with other companies and businesses Competition Risks associated with doing business outside of the United States Foreign currency exchange rates Potential environmental liabilities Implementation of the ongoing reorganization of our operating structure Our ability to repay outstanding indebtedness on a timely basis or on commercially reasonable terms. These are examples of factors, among others, that could cause actual results to differ materially from those described in the forward-looking statements. In addition, our historical combined financial information is not necessarily representative of the results we would have achieved as an independent, publicly-traded company and may not be a reliable indicator of our future results. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements whether as a result of new information, future events or otherwise. More detailed information about these and other factors is set forth in Covidien Ltd s. SEC filings, including the Form 10-K filing of December 13, 2007, the Form 10-Q filing of February 11, 2008 and the Form 8-K filing of April 15,

4 Agenda Medical Devices Overview FY 2008 YTD Sales Results Key Areas of Focus Hernia Repair, Bariatric Surgery, Biosurgery, Energy Summary 4

5 2007 Net Sales and Adjusted Operating Income* Excluding Discontinued Operations and Corporate Expenses 2007 Net Sales $8.9 Billion 2007 Adjusted Operating Income $1.9 Billion 10% 12% 10% 68% 6% 12% 6% 76% Medical Devices Imaging Solutions Pharmaceutical Products Medical Supplies * Fiscal year ended September 28, Adjusted Operating Income (non-gaap) excludes the following charges: $1.2B for class action lawsuit settlement (net of insurance recoveries), $57MM for restructuring, $38MM for in-process R&D and $34MM for asset impairments. Including the foregoing items, GAAP Operating Income was $585MM in

6 Medical Devices Overview 2007 Sales by Product Line All Other* Soft Tissue Repair 8% Oximetry & Monitoring 27% 10% 31% 11% 13% Energy Endomechanical Airway & Ventilation 2007 Net Sales: $6.0B Strong franchises, market leadership positions and a highly diversified product portfolio Focus on growth through internal and external initiatives, acquisitions and further geographic expansion Ramp up R&D, expand sales force and marketing function * Includes Vascular, SharpSafety, Clinical Care and other products. 6

7 Strong Line-Up of Well Recognized Brands 7

8 Recent Acquisitions AbsorbaTack Airox Confluent Polysuture Scandius TSL Date Announced Apr 2007 Aug 2006 Jul 2006 Mar 2007 Nov 2007 Mar 2008 Expands current product offerings Provides adjacent market opportunities Benefits from geographic footprint Bolsters intellectual property portfolio 8

9 YTD Sales Results 9

10 Medical Devices YTD Net Sales $ Millions YTD Operational Product Line FY 2008 % Change Growth % Endomechanical $1, Soft Tissue Repair Energy Oximetry & Monitoring Airway & Ventilation Vascular SharpSafety Clinical Care Total Medical Devices $3, FY2008 Sales Growth Guidance 10% to 13%* * Sales guidance assumes exchange rates remain constant as of May 6,

11 Key Areas of Focus Hernia Repair 11

12 2007 Worldwide Hernia Repair Market $800MM* 14% 26% 5% 55% Growth Drivers 3 acquisitions R&D Center of Excellence established in Trevoux, France Specialized Sales Force Investment in training Synthetic Mesh Biologic Mesh Fixation Dissection CAGR 6% 8% 16% 18% 5% 7% 4% 6% * Market size and market growth based on Millennium Research and management estimates. Actual amounts could differ. 12

13 Hernia Repair Acquisition Strategy Transactions Used to Acquire Market-Leading Technologies, Accelerate Market Entry and Improve Innovation Capability Hernia Repair Technology Acquisitions Floreane Synthetic Surgical Mesh September 2005 AbsorbaTack Bioabsorbable Hernia Tacks April 2007 Tissue Science Laboratories Biologic Mesh April

14 Floreane Innovator in the development of hernia meshes and surgical implants Step acquisition: October 2005 September 2007 New Product Launches Lap Inguinal Mesh Introducer Lap Ventral Mesh Introducer Parietex ProGrip Prolapse Mesh FY Parietene Progrip Parastomal Mesh Resorbable Mesh Plug Open Umbilical Mesh Kit Parietex Monofilament 14

15 Tissue Science Laboratories (TSL) Announced offer to purchase Tissue Sciences Laboratories for approximately $80 million TSL s core technology is Permacol Surgical Implant, a cross-linked xenograft for complex hernia repair Biological Mesh combined with the Synthetic Mesh offering already within Covidien will result in a full line offering to our customers Integrate TSL Sales Force into Covidien to optimize the sales channel 15

16 Key Areas of Focus Bariatric Surgery 16

17 2007 Worldwide Bariatric Surgery Market $650MM* 10% 41% 7% 42% Growth Drivers Global obesity epidemic Type II diabetes Less invasive procedures Reimbursement Stapling Bands Trocars Instruments CAGR 13% 15% 14% 16% 12% 14% 20% 25% * Market size and market growth based on Millennium Research and management estimates. Actual amounts could differ. 17

18 Innovations for Bariatric Surgery New, innovative technologies Several recent and upcoming product launches from stapling, trocar and laparoscopic instrument device teams. VersaStep 15mm Access Device Orvil Comprehensive solutions Successful US-based Lap-Band co-promotion agreement with Allergan, Inc. Lap-Band 18

19 Bariatric Surgery Selected New Products New Product Launches VersaStep 15mm Access Device EndoClip III with Clip Logic FY DST EEA Circular Stapler Orvil trans-oral delivery device Versaport Visiport with 15mm with Fixation Fixation 19

20 Key Areas of Focus Biosurgery 20

21 2007 Worldwide Biosurgery Market $1.1Billion* 20% 11% Growth Drivers 39% Robust Clinical data to support product indications 30% Innovation Pipeline targeted at clinical needs Channel Strategy Sealants Hemostats Adhesion Barriers Adhesives CAGR 13% 15% 5% 7% 18% 22% 10% 12% * Market size and market growth based on Millennium Research and management estimates. Actual amounts could differ. 21

22 BioSurgery Clinically superior sealants, adhesion barrier and other biosurgery products used in a variety of surgical procedures. New Product Launches VascuSeal (Europe) Duraseal FY Xact Adhesion Barrier & Sealant System (Europe) Pleuraseal (Europe) SprayShield Adhesion Barrier (Europe) 22

23 Key Areas of Focus Energy 23

24 2007 Worldwide Energy-based Devices Market $1.7 Billion* 5% 41% 54% Vessel Sealing/Dissection Electrosurgery Ablation CAGR 15% 18% 3% 4% 20% 22% * Market size and growth based on Millennium Research and management estimates. Actual amounts could differ. 24

25 Energy-based Devices ForceTriad Key Product: ForceTriad Energy Platform State-of-the-art software-driven system enables surgeons to precisely manage energy and desired tissue effect Delivers both monopolar and bipolar energy for use with next generation LigaSure tissue fusion technology 25

26 Energy-based Devices Advance Instruments used with ForceTriad LigaSure Advance 1st multifunctional laparoscopic instrument Monopolar dissection tip Impact LigaSure Impact Used in open surgical procedures Largest jaw for tissue fusion, dissection TriVerse Force TriVerse Sterile field power control and Valleylab mode Unique blend of hemostasis, dissection 26

27 Energy - Selected FY08/09 Expected Product Launches Force TriVerse LigaSure Advance RapidVac Smoke Evacuation System Handswitch LigaSure Max and Extend Q1 Q2 Second Half 2008 / 2009 Microwave Ablation LigaSure V LONG 27

28 Medical Devices - Selected FY08/09 Expected Product Launches Force TriVerse Pleuraseal 15mm Versastep Prevad Mesh LigaSure Advance Taper Guard Vascuseal Sprayshield RapidVac Smoke Evacuation System Handswitch LigaSure Max and Extend Q1 Q2 Second Half 2008 / 2009 Sandman Pocket AbsorbaTack Microwave Ablation Bladeless Trocar Prolapse Mesh Safety Dialysis Catheters Endo Clip III Parastomal Mesh Parietex Progrip Mesh Filac Electronic Thermometers Sandman Intro CPAP LigaSure V LONG 28

29 Covidien Global diverse healthcare products company Increased commitment to driving growth and innovation Strong portfolio of leading brands, many of which are leaders in attractive market segments Global infrastructure creates synergies and cost savings Strong financial profile 29

30 Deutsche Bank 33 rd Annual Healthcare Conference Joe Almeida President, Medical Devices