Strategic Investment in European Top Hyaluronic Acid Laboratory

Transcription

1 Strategic Investment in European Top Hyaluronic Acid Laboratory New Engine for China Medical Aesthetics Eco-system Continue to lead the Industry in the Future 10 years

2 Preface 2 Change has been continuing Bloomage dedicated in only one thing in the past 20 years Hyaluronic Acid That s why we possess the global leading HA raw material technologies and production facilities Now, leveraging on the synergies with European top laboratory for HA end products, we will continue to lead the global HA industry in the future 10 years

3 Contents 3 1 Global Vision, Investment Opportunity 2 Six Strategic Synergies

4 Chapter 1 Global Vision, Investment Opportunity

5 Highlights of US Aesthetics Market in There were more than 10 million surgical and nonsurgical cosmetic procedures performed in the United States in Surgical procedures accounted for 60% of the total expenditures and nonsurgical procedures accounted for 40% of the total expenditures Americans have spent more than 12 billion dollars during each calendar year in 2013 and 2014 on combined surgical and nonsurgical procedures, the most money spent on elective aesthetic cosmetic procedures since Since 1997, there has been a 274% increase in the total number of cosmetic procedures. Surgical procedures increased by 82% and nonsurgical procedures increased by 508% The top five nonsurgical procedures were: 1.Botulinum Toxin (3,588,218 procedures) 2.Hyaluronic Acid (1,696,621 procedures) 3. Hair Removal (828,480 procedures) 4.Chemical Peel (484,053 procedures) 5. Microdermabrasion (417,034 procedures) For the fourth year in a row, ASAPS annual survey asked doctors for the total number of nonsurgical procedures being performed in their practices by physicians, their physician assistants and nurse injectors. The total number of procedures performed in the practices surveyed: 1. Botulinum Toxin Type A (4,606,728), 2. Hyaluronic Acid (2,032,238), 3. Hair Removal (1,080,082), 4. Chemical Peel (690,144) 5. Microdermabrasion (636,003). Women had more than 9.6 million cosmetic procedures, 90% of the total. The number of cosmetic procedures for women increased over 429% from 1997 Men had more than 1 million cosmetic procedures performed - 10% of the total. The number of cosmetic procedures for men has increased over 273% from People age had the most procedures performed over 4.2 million and 40.1% of the total. People age had 31%, age had 17.2%, age 65 and over had 10.4%, age 18 and under had 1.3%. Source:American Society for Aesthetic Plastic Surgery

6 Aesthetic Injections (HA & Botulinum Toxin) and Skin Rejuvenation are the Main Directions of Beauty Consumption 6 Injectables: Procedure Botulinum Toxin( 肉毒素 ),including Botox, Dysport, Xeomin Calcium Hydroxylapatite (Radiesse) Hyaluronic Acid ( 玻尿酸 ), incl. Juvederm Ultra, Ultra Plus, Voluma,Perlane, Restylane, Belotero Best Candidate Frown lines, crow s feet Nasolabial folds, frown lines,crow s feet, lips Nasolabial folds, forehead wrinkles, smile lines, and lips Length of Procedure 30 minutes Less than 1 hour Number of Treatments Repeat treatments 4-6 months (onset of actions in 1-5 days) Repeat treatments 4 months 1 year Number of Procedures 2014 Rank within Category (Nonsurgical National Average Total Expenditures 3,588,218 1 $324 $1,162,084, , $634 $84,352,347 1,696,621 2 $592 $1,004,586,284 Poly-L-Latic Acid (Sculptra) 79, $837 $66,372,941 Totals - Injectables 5,497,212 $2,317,396,347 Botulinum Toxin and Hyaluronic Acid have maintained the #1 and #2 spots for most popular nonsurgical procedures for six years. Skin Rejuvenation: Chemical Peel Sun-damaged, unevenly pigmented skin 484,053 4 $574 $277,816,805 Dermabrasion (not including microdermabrasion) 25, $1,611 $40,861,573 Full Field Ablative (laser skin resurfacing) Fair, non-oily skin, sun-damaged facial skin, wrinkles around mouth and eyes, acne scars Variable, up to 1 1/2 hours One or multiple depending on laser and skin condition 408,433 6 $2,284 $932,679,075 Micro-Ablative Resurfacing (fractional resurfacing) 84, $799 $67,768,206 Microdermabrasion 417,034 5 $127 $52,840,653 Nonsurgical Skin Tightening (incl. Ulthera, Thermage,Pelleve) Early skin laxity with good skin 1-2 hours 1-6 months 298,223 9 $1,774 $529,025,740 tone and elasticity Photo Rejuvenation (IPL) Pigment, superfi cial lines minutes 3-5 months 370,497 7 $360 $133,292,182 Totals - Skin Rejuvenation 2,088,442 $2,034,284,233 Other: Hair Removal (laser or pulsed light) 828,480 3 $311 $257,433,334 Nonsurgical Fat Reduction (incl.coolsculpting,vaser Shape,Liposonix) 135, $1,208 $163,587,367 Sclerotherapy 315,707 8 $360 $113,737,763 Tattoo Removal 33, $464 $15,467,210 Totals - Other Nonsurgical Procedures 1,312,998 $550,225,674 Totals - Nonsurgical Procedures 8,898,65 2 $4,901,906,254 Source:American Society for Aesthetic Plastic Surgery

7 In China, Aesthetic Injections (HA) Also Showed Explosive Growth /2012 growth rate is 35%; 2016/2012 growth rate will be as high as 232.5% From 2012 to 2016, CAGR is expected to be 34.27% A large cap of HA dermal filler usage between us and China China HA Injection Market (No. of syringes) CAGR 35% Awg. HA dermal filler usage(1000 persons) Source:Credit Suisse estimates

8 Professional Skin Care Product Market for Skin Rejuvenation Projects Keeps Rapid Growth 8 Expected market size of China professional skin care products in 2018 will be RMB74.42 billion, with a CAGR of 15%+ More Attention on Dermatology Department in Aesthetics Surgery Hospitals More Popular of Immediate Maintenance after Laser Treatment Life Beauty Department Exploration and Development China Skin Care Product Sales Scale Forecast Referring to experiences from US, Europe, Korea, HK and Taiwan, development of Life Beauty Department in Aesthetics Surgery Hospitals provides sales opportunities for skin care products, facilitated by equipments and form projects

9 More Importantly, the Government Policies Support the Development of Medical Aesthetics Industry 9 Policies support the opening of private dermatology clinics, which are expected to appear quickly since 2015 Policies support multisite practice of doctors, encouraging doctors in public hospitals to practice in private hospitals Rapid expansion of small dermatology clinics substantially owned by doctors

10 Five Drivers Are Promoting the Rapid Growth of Medical Aesthetics Industry 10 1 st Driving Force Medical aesthetics industry has psychological, service and consumer goods characteristics and little influenced by macroeconomic and political factors 2 nd Driving Force Continuously increasing disposable income increased the urban population s consumption power for medical aesthetics services 3 rd Driving Force Greater acceptability by society due to the progress of social civilization and influence of pop culture and celebrity culture 4 th Driving Force With an increasing ageing population in China, demand to reduce skin aging from aesthetics medical customers will increase 5 th Driving Force Development and wider application of new medical technologies have reduced the risks of non-surgical aesthetics medical treatments

11 Bloomage has Clear Advantages Despite of New Competitors 11 Continuous innovation is Bloomage s key advantage over other competitors Bloomage Type 1 Competitors Type 2 Competitors Type 3 Competitors 第四类型竞争对手 Leader of HA dermal filler with high brand awareness Broad sales channel covering over 710 hospitals Concern of smuggled product from customers Cheap price of smuggled product forced price cut of licensed product Hard to distinguish smuggled and licensed products by customers High purchase price Unstable price, with the impact of smuggled product No clinical trials Run by distributors and adopt surviving strategy Follower of marketing activities Low brand loyalty by Aesthetics Surgery Hospitals Lack of brand positioning and building Serious product homogeneity Not pure HA and AE occurred frequently Lack of long-term market strategy. Market activities are decreasing More and more KOL and doctors have concerns about safety Strong sales and marketing team Whole industry chain R&D and technological advantages Whole industry chain cost advantages Bloomage Academy(Value-added services enabling differentiation competition) Clear long-term strategy and product positioning Be able to provide innovative comprehensive projects to enhance client stickiness Strategic alliance with large medical aesthetics groups, penetrating in 1 st tier cities and expanding coverage in 2 nd and 3 rd tier cities Try out in life beauty channel to occupy the legitimate product market. defensive competition

12 Global Giants Have Paid Attention to the Trend and Increased Acquisition of HA Technologies 12 $US 233,948,411 Acquisition on 2 Jan 2007 Cornéal Laboratoires Juvederm HA dermal fillers $US 67,534,403 Investment On 26 May nd Generation HA Hylacross Technology Vivacy Laboratoires Founder Waldemar Kita And the Team HA dermal fillers 3 rd Generation HA IPN-Like Technology Relatively low trading price comparing with Allergan s acquisition

13 Investment in Vivacy Lab is Bloomage s Most Important Step for Strategic Layout 13 China Medical Aesthetics Ecosystem Organic growth + Acquisition of core technology of high value added product + Integration End Products 产品 服务 Application Content Platform Ecosystem HA dermal filler Botulinum toxin injections Vivacy New generation HA dermal filler Devices (Laser/RF) HA Skin care products Services to following sectors: Minimally invasive medical aesthetics treatments Medical skin care Ophthalmology Orthopedics Provide Tailor -made solutions and combination solutions with our products Connecting beauty fans, medical aesthetics physicians, medical clinics and Products/devices providers World s largest HA manufacturer Two decades R&D Core advantage Raw materials Plastic Surgery products Dermatology products Surgery and health products

14 Investment in Laboratoires Vivacy is Crucial to the Strategic Layout of the Eco-system 14 European Top HA Lab brought The 3 rd Generation HA dermal filler technologies and products to Bloomage Transaction consideration Share Sale and Purchase Agreement Board Membership Shareholders Agreement Long-term Master Distribution Agreement A total cash consideration of EUR 59m, subject to decrease if apportioned closing net financial debt of the target increase financed via own funds and existing credit facilities Buyer: Bloomage BioTechnology Co., Ltd. Seller: Substantial shareholder and two other individuals, holding 70.47% of the target before the transaction Target: transferring 37.32% of V Plus SA and thus indirectly holding 33.41% of Laboratoires Vivacy SAS Bloomage shall be entitled to have at all times during the term of the Shareholders Agreement one representative appointed to the board of directors of the Target Company Close collaboration and active involvement in strategic vision and material decisions V Plus SA has revised its Shareholders Agreement to accommodate the successful entry of Bloomage as a new second-largest investor with significant rights Bloomage is responsible for the sales of Vivacy s products in the APAC regions with exclusive right Closing No later than July 15, 2015

15 Chapter 2 Six Strategic Synergies (R&D, Technologies, Products, Brands, Government Resources, Sales channels)

16 European Top HA Laborotory Vivacy 16 1 European fast growing high-end HA dermal fillers provider Possess core technology: 3 rd generation HA dermal filler cross linking technology Founder has successfully developed the Global No. 1 HA dermal filler. Over 15 years experience in R&D Strong sales team and channels, covering over 70 countries and especially strong in Western Europe Rich product pipeline including four series: Aesthetics & antiageing products, ophthalmology products, rheumatology products and gynaecology products etc. GMP certified 3500 square metres production facility in France

17 Synergies of R&D 17 5 years plan with French Lab + Beijing Lab+ Jinan Base, creating special innovation and can apply advantages in other regions in China R&D of HA End Product French Lab Beijing Lab HA Dermal Filler R&D direction Basic: collagen, HA Natural: Plant extraction (Chlorophyll etc.) Genetic engineering Stem cells Growth factor, Polypeptide Genetic modification of skin DNA Other new types: skin micro ecological balance study HA Professional Cosmetics For Skin Rejuvenation Market Direction Customization Germ-free No additive Functions Moisturizing, repair Whitening, anti-ageing Our innovation will be fully integrated with market and reflect the trend in the future 5-10 years. We will be in front of the trend and grasp the opportunities Foundation R&D for HA Pharmaceutical-grade Raw Materials Jinan Base

18 Synergies of Technologies 18 Bloomage is the first company in the world possessing both biphasic and monophasic cross-linking technologies Advantages of monophasic technology Q-med produced Restylane (biophasic product) in Corneal produced Juvederm (monophasic product). Advantages of monophasic crosslinking technology: Higher density of HA- 3 rd generation monophasic products contain almost 100% cross-linked HA (~75% for biophasic products) Longer lasting More stable and better effect for reshaping Smoother injection and more comfortable feeling for clients Few company in the world has the 3 rd generation monophasic crosslinking technology HA dermal filler is the safest filler. HA is a polysaccharide substance found in the human body, with great moisturizing effect. Without cross-linking, HA will degrade very quickly. Cross-linking is very important to produce HA dermal filler. Difficulties to produce high quality HA products: purification of pharmaceutical HA raw materials, crosslinking technologies, removal of cross-linking agent and protein residues, and balance of ph value Advantages of biophasic technology Better rebound elasticity and sustainability of BioHyalux's remodelling product Special BioBalance Technology (BBT) technique, enable evenly penetration and precise injection, to achieve foreseable effect Highest cross-linked hyaluronic acid content comparing with similar products (20% higher.) and last 12 months Biological activating - Utilize bio - extraction and biological homologous technology, from nside out, to stimulate cell vitality Bee hive HA:large, middle and small molecule weights to effectively lock up water Higher HA level, 10 times of comparable products

19 Synergies of Products (HA Dermal Fillers) 19 The premium Stylage line for an exclusive clientele (13 types) The more affordable BioHyalux line (5 types, including forthcoming new products) Ca. 10 product launches planned until 2018 by Vivacy, accelerating Bloomage s portfolio renewal and sustainability Explore and develop HA based high value-added products such as skin care products, health food etc. leading the industry HA + different forms of application HA applied on different symptoms Complementary HA dermal fillers Apply other technologies on HA to add value HA + common technologies (Vitamin, AHA, Q10 Coenzyme ) HA + growth factors HA + Chlorophyll HA + TBD

20 Synergies of Products (Surgical and Skin Rejuvenation Projects) 20 Vivacy s products will reinforce Bloomage s product pipeline Broaden each other activities towards new applications which can rely on Bloomage s high-quality HA Desirial, a promising trend in Gynecology with high potential in China. Addition of cosmetic/food grade HA and skin care BioHyalux STYLAGE 13 types Overlaps in rheumatology, ophthalmology and topical skin care Target all patient categories and also realize substantial economies of scale in the future. In Rheumatology Hyaprojoint, Hyatrue and Freda are directly complementary to Kartilage. In Skin Care, Plumoon to complement the newly launched line SkinPro from Vivacy Plumoon 2 types(3 KARTILAGE times and 1 time) STYLAGE Skin Pro 2 types

21 Synergies of Branding (HA Dermal Fillers) 21 To meet different customer demands in three markets with different brands and products Top European brand Vicacy Juvederm No. 1 brand in US Restylane High-end brands: Restylane, Juvederm, Vivacy internationali zation SY YW HW BioHyalux YM Professional brand: BioHyalux reshaping Common brands: BioHyalux anti-ageing, YW Low-end brands: YM HW SY Timing since launch

22 Synergies of Government Resources (Shorten the Time to Obtain CFDA Approval) 22 Class 3 medical devices are those implanted in human body to support and sustain life. They are potentially dangerous to human body and their safety and effectiveness must be strictly monitored HA dermal filler should be approved by CFDA and obtain product registration certificate Bloomage has rich experience in applying for CFDA certificate and is familiar with relevant laws and regulations. Bloomage was the first local company who has received the class 3 medical device registration certificate from CFDA

23 Synergies of Sales Channels 23 To be sold in 710 Aesthetics Surgery Hospitals and Institutions Covered by Bloomage simultaneously BioHyalux 5 types of HA dermal fillers (including forthcoming new products) and over 220 SKU professional skin care products Stylage 13 types of HA dermal fillers and over 50 SKU professional skin care products

24 New Engine for Bloomage s Internationalization Strategy 24 Bloomage has become China's first company possessing the global core technology, with multi-products, multi-brands and multichannels End products move beyond China, being the first step of internationalization Dealership for all product series of Vivacy in 25 countries like Australia, Korea, Japan, et c. Levering on Vivacy s strong sales channel in Western Europe, BioHyalux will enter into European market

25 Thank you! 25