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Collagen Solutions PlcJamal Rushdy, CEO
Company OverviewApril, 2017
DisclaimerThis presentation is incomplete without reference to, and should be viewed solely in conjunction with the oral briefing which accompanies it.The information in this presentation is subject to updating, revision and amendment. The information in this presentation, which includescertain information drawn from public sources does not purport to be comprehensive and has not been independently verified. Thispresentation has not been examined, reviewed or compiled by the Company’s independent certified accountants.
No reliance may be placed for any purpose whatsoever on the information contained in this presentation or any assumptions made as to itscompleteness. No representation or warranty, express or implied, is given by the Company, any of its subsidiaries or any of its advisors,directors, officers, employees or agents, as to the accuracy, reliability or completeness of the information or opinions contained in thispresentation or in any revision of the presentation or of any other written or oral information made or to be made available to any informationor opinions (which should not be relied upon) and no responsibility is accepted for any errors, misstatements in or omissions from thispresentation or for any loss howsoever arising, directly or indirectly, from any use of this presentation or its contents. The information andopinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice.
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April 2017 2
Overview
Opportunity Multiple growth initiatives create potential for 5x+ revenue within 5 years
Strategy & Value
CreationCore Business + Finished Device Pipeline creates multiple value creation opportunities
Core Business Stable recurring sales from collagen and tissue-based biomaterials and devices
Finished Device
PipelinePipeline of finished devices with owned I.P. for commercialisation via distribution and licensing
Growth Recently reported 6 month interim results £1.9m sales/other income, +30% on prior year
Stronger Balance Sheet Recent funding of up to £10.8m provides funding path to execute.
3
A Global Regenerative Biomaterials Company
• Founded in 2014, London Stock Exchange listed (COS)
• Operations in Minneapolis USA, Glasgow UK, Marton NZ
• Sales office in Seoul, South Korea; JV in Beijing, China
• Core business is supply, development, manufacturing of
collagen and tissue-based materials and medical devices
• Pipeline of finished devices for sale, license, distribution
Medical Grade Collagen Tissue (Pericardium)
Products used in cardiovascular, orthopedics, dental, wounds,
research, and other applications
Cartilage Wounds Bone
4
Collagen and Tissue Biomaterials
• Primary structural protein in tissues
• Provides physical support and a
conducive environment for cells
Collagen Tissue
• Pericardium tissue is processed into medical devices
• Example includes engineered heart valves
Using natural collagen proteins and tissue to engineer
regenerative biomaterials and medical devices
5
We address the “Tissue Engineering” space
• 700 companies; $3 billion invested in regenerative medicine
• Moving from mechanical replacement to regeneration
Old:
Metal and plastic
New & Now:
Re-grow the knee
6
Core Business Finished Devices
B2B supply, development, manufacturing of
collagen and tissue materials/medical devices
Novel proprietary medical devices for out-
licensing and distribution, and/or sale
Building Value in Two Ways
7
Core Biomaterials Business Drivers
Core Business Growth Model
• Development and prototypes → to supply and manufacturing
• Revenue is “sticky” → Switching costs are high
• New commercial team and distribution → Geographically expand
Drivers
• New commercial team and distribution agreements
• Geographic expansion in North America, Asia, Europe
• Near-term customer launches (e.g. heart valve, bone graft)
• JV in China recently validated with in-country shipments
• Research markets through distribution and on-line direct
• Pericardium tissue business and new tissue technologies
8
Competitive Landscape
• 8 primary competitors
• Several focused on end-markets, not supply
• Opportunities for COS partnerships with some
Our Competitive Advantage as validated by independent Voice of Customer interviews:
World Class Standards
Broad Range of Materials
Collaborative Approach
Customers value our sole focus on partner success based on our expertise in collagen and biomaterials
9
ChondroMimetic™
Cartilage Repair
Fibrillar Collagen
Wound Treatment
Bone Graft Substitutes
Bone Regeneration
• Previously used in Europe, 6+ years
evidence in patients
• Retro study and CE mark in process,
targeted for 1H 2017
• Potential 450,000 cartilage procedures
($500m-$1b+ potential market)
• Potential to address multiple markets in
wound care and burns
• Target wound market clearance in 2018
• Addresses c.40% of $1 billion market
• Provisional patent filed December, 2016
• Target orthopaedic market clearance in
2018
• Addresses c.30% of $1.7 billion market
Finished Device Pipeline
10
Multiple Growth Drivers
Sales channels, geographic expansion, OEM mix
Current finished device pipeline + licensing/distribution
Next stage pipeline + licensing/distribution
£0.1
£1.5 £1.9
£0.02
£1.0
£3.2
5x+
FY 2014 FY 2015 FY 2016 FY 2017
6 Mos Full YearSales and other income (millions)
11
Recently Strengthened Balance Sheet
• Q1 2017 financing of up to £10.8m• £6.8m equity raise via placement and open offer
• Up to £4.0m (£2.0m minimum) in private bonds with strategic partner, Norgine
• Norgine strategic partnership• 110 year-old private European specialist pharmaceutical company, €300m+ sales
• Venture arm invests in/acquires strategic pharmaceutical & device companies
• Partnership provides access to Norgine’s device/pharma expertise and resources
• Proceeds to fund product development and core business growth
12
Experienced Management Team
Jamal Rushdy, CEO• 20+ years medical devices, orthopaedics and biologics
• 2 public medical device companies, 3 successful start-ups• M&A, marketing, sales ops, finance
Management Team:
• Multiple successful exits for shareholders
• Specific domain knowledge of end-markets
• Deep collagen and tissue experience
Gill Black, CFO• 25+ years experience as CA with board-level financial experience
• Senior manager at KPMG leading high growth business team
Brad Selman, VP Global Sales & Marketing• 30+ years commercial, sales & marketing, business development
• Commercial roles Noble Biomaterials, Molnlycke, Coloplast
Stewart White PhD, CSO• Founding CEO, Collagen Solutions and Collbio• International operations, business and product development
Chris Wattengel, VP Global R&D• 16+ years biomaterials product development at Kensey Nash/DSM
• Multiple 510(k) and CE-marked product clearances
Tom Hyland, COO• 30+ years med tech operations + collagen expertise
• Johnson & Johnson, Life Technologies (Thermo Fisher Scientific)
Kevin Darling, GM New Zealand• 20+ years commercial, sales & marketing, operational
management
• Commercial roles with 3M (Medical), BOC Gases, Mars
13
Summary
• Multiple growth initiatives create potential for 5x+ revenue within 5 years
• Strategy provides for multiple value creation opportunities
• Solid foundation of consistent recurring sales
• Pipeline of finished devices in attractive markets
• Strengthened balance sheet + management team with value creation track record
14
Thank You
Appendix:Summary of Interim Results Six months ended 30 September 2016
16
Embedded customers driving revenue growth
£1.04mYear Ending
31 March 2015
£3.24mYear Ending
31 March 2016
Six month revenue & other income trend
£0.02 £0.14
£0.89
£1.46
£1.78
£1.89
31-Mar-14 30-Sep-14 31-Mar-15 30-Sep-15 31-Mar-16 30-Sep-16
17
Financial KPIs
£143,213
£1,460,218
£1,891,001
Revenue & Other Income (£)
30-Sep-14 30-Sep-15 30-Sep-16
£119,023
£1,090,856
£1,305,150
Gross Profit (£)
30-Sep-14 30-Sep-15 30-Sep-16
83.2%
75.7%
71.3%
Gross Margin (%)
30-Sep-14 30-Sep-15 30-Sep-16
83.2%
75.7%71.3%
Gross Margin (%)
18
Financial KPIs
*Before separately identifiable items:
• 2016: Unrealised translation losses on deferred consideration - £294,229 debit
• 2015: NIL
• 2014: NIL
(522,144)
(79,376)
(712,537)
LBITDA* (£)30-Sep-14 30-Sep-15 30-Sep-16
(0.88)
(0.26)
(0.60)
EPS (p)
30-Sep-14 30-Sep-15 30-Sep-16
927,094
3,104,230
1,657,193
Cash and Equivalents (£)
30-Sep-14 30-Sep-15 30-Sep-16
19
Revenue by geographic region
6 months ended 30 September
54%
10%
36%
2016 Revenue by region
North America EMEA Asia Pacific
59%
2%
39%
2015 Revenue by region
North America EMEA Asia Pacific
20
Revenue by activity
6 months ended 30 September
58%
7%
35%
2016 Revenue by activity
Contract Manufacturing Development Materials
64%7%
29%
2015 Revenue by activity
Contract Manufacturing Development Materials
21