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INTERNAL FIXATION SYSTEMS, Inc. (OTC.QB IFIX)
Bringing Superior Value to
Orthopedic Implants
Stephen J. Dresnick, MD, Chairman & CEO Laura Cattabriga, CFO
Forward Looking Statements
This presentation contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of Internal Fixation. There are numerous risks and uncertainties that could cause actual results and Internal Fixation’s plans and objectives to differ materially from those expressed in the forward-looking information, including: (i)Internal Fixation’s inability to remain current in its reporting obligations with the SEC; and (ii) Internal Fixation’s inability to secure the financing necessary to continue its operations. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and views of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, IFS does not intend to update these forward-looking statements.
Superior Value
Quality, U.S.-made Orthopedic Implants designed by doctors and sold for 40-50% less than the competition.
Value created through innovative set design, flexible distribution pathways, responsible inventory management, and
standardization of instruments and components across multiple products.
IFS Product Development Process
Identify Product
Evaluate Competitive
Products
IFS National Advisory Panel
Suggests Enhancements , Improvements
Manufacture Redesigned
Product
IFS FDA Approved Products Currently 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 Existing Industry Trends Position 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
• Facilities seeking lower cost alternatives
IFS is positioned well for these changes
Bimalleolar Ankle Fracture
•
•
•
•
At these prices, IFS maintains margins of
50% after cost of goods and sales expense
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 positions as Global Marketing Director for Maramed Orthopedic Systems, Global Marketing Director for BioSculptor Corporation, and Global Product Manager for Trulife. Her experience in orthopedics combines manufacturing, R&D, marketing, strategy and product management.
IFS management team has extensive experience in the orthopaedic, medical device, and healthcare industries combined with a track record of starting and
growing successful companies.
Modular Set Design
Sales Since Launch of Small Fragment Systems
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
August September October November
Sales
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
Capital Needs
Build new inventory/surgery sets for existing products
Inventory and sets for new products
Additional manufacturing capacity
Develop Overseas markets
Enter Veterinarian Market
Working Capital
Build-out Distribution Network
Marketing
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
• Innovative set design, new distribution 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 existing products to ours (including major academic centers)
IFS delivers doctor preferred designs at a superior value (40-60% less than competitors)
Stock Overview
Symbol - OTCQB: IFIX
Shares Outstanding – 5.3 Million
Shares held by insiders – 2.3 million
Average Daily Trading volume – 321
Market Makers – Murphy Durieu BMA Securities Knight Securities
Last Closing Price - $2.29
Thank You
Internal Fixation Systems
OTC.QB (IFIX) For more information:
786-268-0995
Stephen Dresnick, MD [email protected]
5901 SW 74th Street, Suite 408 South Miami, FL 33143
Tel: 786-268-0995 Fax: 786-268-0998
Email: [email protected] www.ifsusa.net
