PolyMedica Corporation

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PolyMedica Corporation

• Alison Haubert

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Company Profile

• Incorporated as Emerging Sciences Inc in
  Massachusetts in 1988
• PolyMedica Corporation 1997
• Operates from manufacturing, distribution,
  laboratory facilities in Massachusettes and
  Florida
• PolyMedica is a provider of direct-to-consumer
  medical products, which provides business through
  three segments.

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3 Segments

• Liberty Diabetes
• Provides direct-to-consumer diabetes testing
  supplies and related products to
  Medicare-eligible customers suffering from
  diabetes and related chronic diseases
• 80,000 new active customers this year
• Down from last years 105,000 new customers

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• Liberty Respiratory
• Direct-to-consumer prescription respiration
  medications and supplies to Medicare-eligible
  customer who have chronic obstructive pulmonary
  disease (COPD)
• Approximately 65,000 active customers (2,000 new
  customers)
• Down from the 17,000 new customers they had in
  the previous year
• Pharmaceuticals
• Provides prescription oral medications not
  covered by Medicare
• Prescription oral medications are only offered to
  PolyMedica customers
• Sell prescription urology and suppository
  products, otc female urinary discomfort products
  and home medical diagnostic kits to drug store
  chains, supermarkets, and drug wholesalers

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• Customers Medicare eligible seniors
• How they get there name out there Commercials
• Competition
• Retail pharmacies
• Healthcare product distributors
• Pharmacy benefit management companies

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Lawsuit

• PolyMedica was accused for issuing false or
  misleading statements concerning its billing
• Gave incomplete documentation to Medicare
• Reached a 35 M settlement with the government
  over alleged Medicare fraud
• The CEO Patrick Ryan stated that he wanted to put
  the matter behind them and focus on the company

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Earnings Report

• Revenue was up from last years 2nd quarter report
• There was a net loss of 7.1 M for the quarter
• Net loss of 0.26 per share
• Attributed to
• Hurricanes that hit there buildings in Florida
• Settlement

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S.W.O.T Analysis

• Strength
• Unique, efficient service (providing mail order
  delivery to customers homes, 24-hour telephone
  support to customers)
• Liberty national brand recognition (among
  seniors, people aged 40 65)
• Expertise in Medicare reimbursement (They bill
  Medicare and 3rd parties)
• Weakness
• Heavily weighted in Liberty Diabetes segment

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S.W.O.T Analysis Continued

• No research into new diabetes innovation
• Could experience significantly reduced profits if
  Medicare changes, delays or denies reimbursement
• Must follow all government regulation
• Lawsuit pending

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S.W.O.T Analysis Continued

• Opportunity
• Room to grow
• Estimated 7 million seniors with diabetes,
  Liberty Diabetes has 545,000 active customers
• 63,000 active customers out of 4 million seniors
  with COPD
• 1 Debt in there capital structure (leaves them
  room to expand if need be)
• Threat
• Lose customers to new competitors
• More competition is expected in the near future
• Ongoing investigation
• No new improved technology
• Diabetes

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Prices

• Purchased 200 shares at 12.70
• 2540
• Price today 34.68
• Profit 4396
• Price 2 weeks ago 32.63

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Direct Competitor Analysis