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confidential 1
Swiss Medica Inc.Raghu Kilambi, C.A., Chief Executive Officer
EUROPE 2005
(OTCBB: SWME)
PATENTED, CLINICALLY TESTED, OVER-THE-COUNTER, NATURAL
CHRONIC AILMENT SOLUTIONS
confidential 2
Disclaimer
Statements in this release that relate to future plans, events or performance are forward-looking statements reflecting management's current expectations, assumptions and estimates of future performance and economic conditions. All forward-looking statements are made in reliance on the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The company cautions investors that forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those expressed or implied in such statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
The estimates and statements contained in this presentation were prepared on the basis of assumptions and hypotheses which the Company believes to be reasonable but which are subject to substantial risks, uncertainties and contingencies, some of which are difficult to predict and beyond the control of the Company, and which may result in substantial modifications. No assurance can be given as to the availability of any of the potential benefits described in this presentation and such information should not be construed as a representation or prediction that the Company will achieve or is likely to achieve any particular results.
The assumptions and projections have neither been compiled, reviewed, nor audited by the Company’s independent certified public accountants and do not constitute a “Financial Forecast” or a “Projection” as defined by the American Institute of Certified Public Accountants. All figures used in the presentation are in US dollars.
confidential 3
Strategic Opportunity
Highlights• Patented, Clinically -Tested All Natural Over-The-Counter products • Elite OTC chronic ailment solutions NOT vitamins / supplements• 3 Products targeting multi-billion $ pain relief and anti-depression markets• Replace / reduce the use of prescription and OTC products with side effects• Penetration in 19,000 doors and growing in leading North American retailers
Period Ending Q2/2005A Q1/2005A FY 2004
Revenue $1.38 million $1.13 million $0.6 million
Gross Margins 1.13 million 0.94 million 0.5 million
EBITDA $(0.48) million ($1.22) million ($3.32) million
Market Cap (09/26/05) $20.0 Million
Common Shares (O/S) 105 Million
Common Shares (F/D) 121 Million
52-Week Range
Current Stock Price (09/26/05)
$0.46 - $0.06
$0.20
confidential 4
Industry Market ShareChronic Pain Market
350 million adults worldwide suffer from Arthritis and chronic pain, in some form. In the United States alone: 45 million + suffer from
Osteoarthritis 10 million + suffer from
Fibromyalgia 5 million + suffer from
Rheumatoid Arthritis
65 million Americans suffer from back pains and aches every year. Four of five adults will suffer back pain at some point in their lifetime.
Aging population will increase incidence of arthritic conditions.
Additional conditions: Gout, Tendonitis, injuries, back pain, foot pain, neck pain, shoulder pain, etc
46%
23%
5%
26%
Osteoarthritis FibromyalgiaRheumatoid Arthritis Other
Chronic Pain Suffers (percentage)
confidential 5
Industry Market ShareChronic Pain Remedies Market
In 2004, the worldwide market for pain relief products was estimated at $30 billion.
Dominated by Rx/OTC pills Prescription pills $23
billion OTC pills $7 billion
Consumers increasingly concerned about side effects and mixing prescription medications.
Consumers increasingly desire to self-treat pain relief and other conditions.
Prescription74%
OTC19%
Other7%
Estimated Worldwide Pain Relief Remedies
(percentage)
confidential 6
Drug Industry ConcernsTroubles in $18 Billion Chronic Pain Market
September 30, 2004: Merck & Co. withdraws Vioxx® Leading prescription pain pill: $2.5 billion revenues.
April 7, 2005: FDA requests that Pfizer withdraw Bextra® from the market Also, requires Pfizer to include a boxed warning in the Celebrex label.
July 22, 2005: PAIN MEDICINE; Survey on physician perception of Cox-2 Inhibitors In the wake of the withdrawal of Vioxx and Bextra from the market, fewer than
one in five primary care physicians plan to prescribe COX-2 Inhibitors for treating chronic pain according to a nationwide survey by Pri-Med Institute.
April 7, 2005, The FDA required that the package insert of all NSAIDs (excluding aspirin) be revised to include a “boxed” or serious warning to highlight the potential increase risk of cardio-vascular events.
Pain Relief Market has new window open for a safe, natural topical alternative
confidential 7
O24 Overview
US-Patented, all natural, essential oil topical pain relief product line 7 essential oils, patented binding process that eliminates artificial binders
that reduce absorption and efficacy
Proven relief World class sports and medical endorsements from Europe, USA and
Canada Extensive hospital, physician, pain clinic, chiropractor use
Medical & Double-Blind Clinical studies from Europe and North America
Previously used in Europe for athletes and doctors/hospitals
2 products: O24 Pain Neutralizer and O24 Fibromyalgia
confidential 8
O24 – Natural IngredientsPatented binding process – No chemicals
confidential 9
O24 Medical Studies
confidential 10
Competitive Product TypesO24 vs Other Pain Relief Products
O24 OTC Drugs
Patented √ √All Natural √Lasting Relief √ √Medical Studies √ √ √Endorsements √ √ √No Side Effects √ Economical √ √Fast Acting √
confidential 11
Retail DistributionCurrently in more than 19,000 stores
confidential 12
Swiss Medica Quarterly Store CountCurrently > 19,000 stores
02,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
Q4 04 Q1 05 Q2 05 Q3 05 Q4 05
confidential 13
O24 Fibromyalgia
Fibromyalgia syndrome (FMS) is estimated to affect between 2 to 4% of the world's population Is the second most commonly diagnosed disorder in rheumatology clinics, second only to
osteoarthritis An estimate 10-million American have been diagnosed with Fibromyalgia
Widespread and Chronic Pain Often effects all parts of the body Deep muscular aching, throbbing, twitching, stabbing and shooting pain
Symptoms include: Pain, including tenderness on pressure points Fatigue Sleep Disorders Headaches
Current pain treatment include acetaminophen or ibuprofen
No other clinically tested product available in North American pharmacies
confidential 14
O24 Fibromyalgia
O24 Fibromyalgia is the FIRST product marketed specifically for Fibromyalgia pain to be available in North American pharmacies. It is a patented formula made from seven essential oils and has been clinically tested and shown to be an effective and safe pain reliever.
O24 Fibromyalgia is the FIRST and only product to earn the coveted National Fibromyalgia Association’s Seal of Approval. The NFA has 2,000 affiliated support groups and sphere of influence of 1 million people.
A double-blind clinical study conducted at University of Toronto found that 90 percent of patients who used O24 Fibro reported mild to markedly better improvement versus only 7 percent who were given a placebo. A full 54 percent reported moderate to markedly better improvement
Launches in North American pharmacies and retailers in fourth quarter 2005.
confidential 15
O24 Fibromyalgia – Q4 LAUNCH
confidential 16
Industry Market Share Anti-Depressant Market
28 million people in the US have taken an anti-depressant
400+ million adults worldwide suffer from some form of depression
Worldwide drug market for depression treatment is more than $17 billion: Prescription Drugs –
90% of the market(significant side effects)
OTC Products – 10% of the market(no proven treatments)
Swiss Medica will launch safe, clinically proven alternatives to current Drugs and OTC products
90%
10%
Rx OTC
Worldwide $17 billion Anti-Depression Market
(percentage)
confidential 17
PMS Escape Market Opportunity
200 million women worldwide suffer from mood and appetite symptoms associated with Premenstrual Syndrome (PMS)
PMS Escape is the only clinically proven OTC product to address these conditions 100% drug-free Pleasant tasting powered drink
mix Carbohydrate / nutrient blend
PMS mood market opportunity is estimated at more than $2 billion
World Class inventors of PMS Escape also invented Serafem, the only prescription drug for PMS mood symptoms
Swiss Medica’s newly acquired ADBSI division will address the PMS market and expand to anxiety and stress related treatments
Severe20%
Moderate50%
Mild30%
PMS Intensity Level(percentage)
confidential 18
PMS ESCAPE
confidential 19
PMS Escape: World-Class Clinical Studies
confidential 20
Senior Management
Raghu Kilambi, C.A., Chief Executive Officer, Co-FounderChartered Accountant, seasoned executive and merchant banker
Co-founder of FutureLink, raised US$225 million of equity and built a $140 million revenue business with a peak market cap of $2 billion
Grant Johnson, President & COO, Co-FounderSeasoned operational & sales executive with a strong track record in selling
consumer products & services; Experienced in building sales and delivery teams
Bruce Fairbairn, Chief Financial Officer Operational finance at Canadian subsidiaries of NYSE-listed companies including
CFO of both public and private Companies
Thomas Quinn, Executive Vice President, US OperationsExtensive experience in sales management and product launches with
pharmaceutical and consumer packaged goods leaders including Procter and Gamble and Warner Lambert
confidential 21
Senior Management
Robert Esson, VP Robert Logistics and Supply Chain ManagementSenior Operations and Logistics executive with experience in consumer products
(Quaker Oats) & cosmetics (BeautiControl Cosmetics).
Wendy Kramer, Vice President Anti-Depression BiohealthExtensive background in generating new business for pharmaceutical and consumer
healthcare Companies including Allegan, Inc. Mead Johns Johnson Laboratories and Warner Lambert/Parke Davis.
Rob Klein, Vice President Strategy10+ years in strategic planning, budgeting, financing and business development for
various technology companies. In addition, was a ranked stock analyst covering Canadian Internet technology sector.
Anne Dundon, Vice President Canadian SalesStrong consumer marketing experience in both consumer packaged goods (Proctor &
Gamble, Revlon, and Bonnie Bell) and healthcare (Merck).
confidential 22
Sales and Marketing Strategy
DTC
• Radio Talk Shows
• TV, Newspaper, Magazine Editorials
• Sampling and Store Demos
• Targeted Advertising to Seniors & Minorities
ENDORSEMENTS
• Athletes, Trainers
• Celebrities
OPINION LEADERS
• Doctors
• Pharmacists
• Chiropractors
• Physiotherapists
RETAILERS
• Co-op Ads
• Detailing Pharmacists
• Displays
Consumers
confidential 23
Product Sampling
confidential 24
PR oriented Radio Marketing
confidential 25
Print Endorsements of O24
confidential 26
O24 in the News
confidential 27
Manufacturing & Regulatory Standards
Using FDA-certified contract manufacturers to manufacture O24 and PMS Escape
USA Regulatory:O24 Classified as OTC drug: oversight of FDA/FTCFDA monograph controls O24 claims
PMS Escape is approved for sale in the United States under the DSHEA regulations (Dietary Supplement)
Canada Regulatory:OTC: Health Canada NHP registration for O24 and PMS Escape
confidential 28
Growth Strategy
Enhance Product Portfolio: Depression, stress product (organic) Cholesterol, Diabetes, Heart Ailments
Professional Channel Distribution: Pain Clinics, Chiropractors, hospitals, other professionals
Physician, Pharmacist Detailing: Trade shows, samplers, conference speakers
International Distribution:
Insurance Reimbursement
confidential 29
Summary
Elite, Patented, Clinically-Tested Natural Products for Chronic Ailments
Drug /OTC Pain Relief & Depression markets have major side effect concerns
Huge opportunity to capitalize on concerns about drug safety
Expanding North American national retail presence
Robust marketing campaign focused on sampling and public relations
Growth from Professional Channels, additional products, international
distribution, insurance reimbursement
Strong management team with significant experience
Significant revenue growth / EBITDA positive by Q4 2005
Sept 26th Market Cap: US$20million
confidential 30
Comparable Valuations
Public Companies Company
Description
Year
End
Price 7/25/05
Market Cap ($ million)
P/E LQA
P/E FY
2005E*
P/Sales
(TTM)
Chattem (CHTT)
OTC
Products
Nov 46.58 921.5 19.4x 20.3x 3.33x
Cypress Bioscience
(CYPB)
Fibromyalgia
Phase III Clinicals
Dec 13.50 410.5 NM NM 28.8x
Biophan Techn.
(BIPH.OB)
Biotech Patents Feb 2.88 214.9 NM NM No Revenue
Paincare Holding
(PRZ)
Pain Mgmt
Centers
Dec 4.18 215.3 26.1x 16.0x 4.76X
CV Technologies (CVQ.T)
Patented
OTC Products
Sep 2.28 226.4 22.8x NA 11.3X
confidential 31
Contact
Contact
Chief Executive Officer:
Raghu Kilambi(416) [email protected]
Investor Relations:
David Jones(705) 495 0022
www.swissmedica.com www.O24zone.com www.pmsescape.com