Fertility, Market size estimations

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Swedish - American Life Science Summit
Stockholm August 20, 2009 Magnus Nilsson, CEO
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Agenda

• Company background
• Market presence and growth
• Product/therapy areas
• Outlook 2009

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Vitrolife a global life science company

• A global life science company (Bio-Med Tech).
  Main sites in Gothenburg and Denver, Colorado
• Developing, manufacturing and selling nutrient
  solutions (media) and instruments for fertility
  treatments and lung transplantations.
• Growing and profitable business founded in 1994.
• Approx 160 employees.
• Sales in more than 85 countries. Local presence
  Nordic countries, US, Canada, Italy, Benelux,
  Austria, Germany, China, Japan, Australia, France
  
• Listed on the OMX Nordic Exchanges Nordic Small
  Cap list since 2001.

Company Background
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Our Vision

• Vitrolife strives to be the leading supplier
  of media and other advanced disposables, used by
  hospitals and laboratories performing fertility
  treatment and other therapies where cells or
  tissues are used or are a part of the therapy.

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Company Background
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Vitrolife Strategy
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Company Background
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A Process organisation to reflect the value
chain
Purchasing
Production
QC
Sales
Order
Distribution
Product idea valuation
Product development
Marketing
Supporting Processes Quality Assurance
Finance/Information IT Human Resources
Administration
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Company Background
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Vitrolife Reaching the global market
New offices in China and Japan 2009
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Market presence and growth
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Sales by region rolling 12 months
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Market presence and growth
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Sales and growth rate 2009
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Market presence and growth
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Sales and growth rate 2009 - Fertility
Share of sales of Vitrolife
Growth rate for Vitrolife
Growth rate for Vitrolife
Regional share of global cycles
1.0 million cycles performed world wide per
year
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Market presence and growth
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Highlights of 2009

• Sales first half year 23
• Increased investment in RD and marketing
• Fertility Strong development in Asia, Europe and
  Middle East
• Transplantation Positive progress for the
  clinical study in Canada for STEEN Solution
• Successfull start up of the new offices in Asia
• Dividend 0.40 SEK/share paid out
• EBITDA 28,4 of sales
• Operating margin 14,4

Market presence and growth
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Key Financials Investing in growth for the future
SEKm
14 of Sales invested in RD activities
Investing in growth
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Market presence and growth
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Product areas - a genius combination
TRANSPLANTATION
FERTILITY

• Customers/markets
• Public clinics
• 200 Lung transpl clinics / 2000 all
  transplantations
• Subsidized
• 3000 Lungs/ 50000 all transplantations

• Customers/markets
• Private and public clinics/ specialized
  laboratories
• 3000 clinics
• Partly subsidized
• 1 million clin. IVF treatm.

• Customers/markets
• Public specialized laboratories /research
  institutions and private companies
• 400 institutions / 150 companies
• Subsidized private
• Research, in clinics 2-5 years

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Product /Therapy areas
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Fertility Competitive advantage
FERTILITY

• A complete range of advanced clinical products
• Regulatory approval
• CE mark
• FDA 510(k)
• State of the art production facilities
• Industry leading QC
• Global market reach
• External collaboration with the leading scientist

• New unique needle for the collection of human
  oocytes, Swemed Sense, recently launched and
  approved for sales in Europe
• Potential market estimated to EUR 50 million

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Product /Therapy areas
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History of Innovations
FERTILITY
Beyond HSA Recombinant media r-S1/ r-S2
First sequential media G1/ G2 v. 2
New technique -follicle aspiration needle with
ultrasound probe
Pharmaceutical-grade media IVF-50
Closer to NatureGIII Series v.3
ICSI Medium
1983
1994
1995
1998
2001
2002
Breakthrough Innovations
Unique aspiration needle SWEMED Sense
Acquisition of SWEMED lab
EmbryoGlueImplantation promoting medium
GIII Series CE marked
Ultrarapid vitrification
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2004
2003
2005
2006
2007
2008
Product /Therapy areas
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Product portfolio development
FERTILITY

• Strategy Portfolio expansion through RD and
  acquisitions to optimize market synergies

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Product /Therapy areas
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Stem Cell cultivation

• Products for human embryo stem cells and cryo
  preservation of stem cells
• State of the art production facilities
• Industry leading QC
• Cooperation with leading scientist

In VitroHes researchers can successfully grow
human stem cells and maintain pluri potency
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Product /Therapy areas
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Giant market expectations in cell therapy
Source Jain Pharmatech
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Product /Therapy areas
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Cell Therapy Situation analysis

• Clinical applications for MSC, HSC, CBSC, FNSC
• gt3 years before therapies based on hESC reach
  clinic due to
• Difficulties to control differentiation
• Scaling up production
• Ethically controversial
• Regulatory authorities

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Product /Therapy areas
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Stem cell culture media Regulatory

• Harmonisation of regulatory requirements and a
  long term view is a need for a safe treatment
• US
• Regulated by FDA/ CBER
• Classified as Class 1 Medical Device, exempted
  from 510(k)
• EU
• Classified as non Medical Device
• To be produced according to GMP

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Product /Therapy areas
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Stem Cell Cultivation Focus areas

• Increase focus on development of new clinical
  grade stem cell media together with our
  partners.
• Fulfill the clinical requirements as set out in
  other areas

Product /Therapy areas
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Transplantation the new way
TRANSPLANTATION

• The new method radically increases the
  availability of organs for transplantation
• Pioneering lung perfusion system (ex vivo and at
  37ºC)
• Clinical trial in North America of Steen
  Solution
• Innovative equipment for organ evaluation ex vivo
• Development of perfusion systems for other organs
• Preclinical trials with other organs e.g. liver,
  heart

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Product /Therapy areas
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STEEN Solution - Focus Area
TRANSPLANTATION

• Finish clinical studies in North America and
  apply for marketing authorization for Steen
  Solution in the U.S. Clinical results so far
  very promising.
• 25 lungtransplantations performed in clinic so
  far
• Continue launch of STEEN Solution in Europe by
  training and education in the STEEN Solution
  method to get market acceptance
• Developing of and clinical trials with additional
  products needed for a lung-assessment with Steen
  Solution .

Product /Therapy areas
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Vitrolife STEEN SolutionTM
TRANSPLANTATION
Problem
STEEN Solution
Advantage

• gt70 of donated organs are not used
• Too few organs to transplant
• Short of time, a maximum of 8-12 hours outside
  the body
• Patients die while waiting for organs

• Functional testing
• Large number of potential donors (including
  donation after cardiac death)
• Maximum time gt24 hours outside the body
• More patients can be provided with new lungs

• More organs can be used
• More organs available for transplantation
• More organs can be used in time (lower cost)
• Fewer deaths caused by lack of organs

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Product /Therapy areas
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Vitrolife STEEN SolutionTM
TRANSPLANTATION

• Before STEEN Sol.
• Costs for products per evaluation (SEK) ca
  10.000 gt 30.000
• Potential number of transplantations ca 3.000 gt
  20.000
• Market potential, lungs only (SEK million) ca
  35 gt 600
• Including research market
• Approved in Europe 2006, and in Australia 2008.
• The method is also being developed for other
  organs, e.g. liver.

Product /Therapy areas
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Outlook 2009

• Continued execution of main strategy
• Establish direct sales on all major markets
  covering 80 of all treatments
• Exploit market synergies with broader product
  portfolio through development and/or acquisitions
• Increase gross margin through continuous
  improvement of operations
• One major new product launch in Product Area
  Fertility
• Support launch of STEEN Solution in Europe and
  prepare for market introduction in USA and Canada
• Strong RD focus with gradually increasing
  efforts in Transplantation and Stem Cell
  Cultivation
• Maintain profitable growth and operational strong
  cash flow

Outlook 2009
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With sustainable profit cash flow
reaching the global market
investing in growth
for the future
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