INVESTORS PRESENTATION - Home - Safe Orthopaedics · more than 25 companies, including Actelion, Arpida, Targacept, Adocia, Auris and Erytech. He is currently a member of the Boards

INVESTORS PRESENTATION April 2018

www.SafeOrtho.com

Safe Orthopaedics: key highlights

Company

•  Frenchcompanycreatedin2010

•  HeadquarterinEragnysurOise(Parissuburbs)•  36employeesasofDec31,2017

•  ListedonEuronextParisCompartmentC(IPODateonFeb10,2015)

Technology

•  LeadingtheSpineFractureMarket

•  PioneerandLeaderofSpinalInstrumentedtreatmentwithSingleUseTechnology

•  BroadpatentsandpatentfilingsporHolioencompassing17productfamilies

Commercial Footprint •  GrowingdirectpresenceinEurope,starKngwithFranceandGermany

•  DistributorsinEurope&LaKnAmerica&Asia

•  2017Revenueof€3,1m(+37%versus2016)

At a glance

•  Morethan10,000surgeriesperformed

•  €36,3mequityraisedsinceincepKon

•  Equitymarketvalueof€11,6m(April12th,2018)

Investor Presentation – April 2018 2

François-HenriReynaud–CFO

►  13yearsofexperienceinfinancialaffairs

►  ExperKseinfundraising

PierreDumouchel–Co-founderandCEO

►  13yearsofexperienceinthespinalmedicaldeviceindustry

►  Master’sdegreesinManagementfromtheCNAMandintheEngineeringofAdvancedMaterialsfromtheAdvancedInsKtuteforTechnologyandManagement

A ‘Spine ’ Experienced team


PascaleDavis–GlobalHeadofMarkeKng

►  18yearsofexperienceinmarkeKngandscienKficaffairswithZimmerBiomet,SynthesandSpineArt

►  DegreeinSportsSciences,specialisedinanatomy,physiologyandtraumatology

RecruiOngonGoing–HeadofSales

►  ExpectedinQ2

RecruiOngonGoing–OperaKonsdirector

►  ExpectedinQ2

ThomasDroulout–Co-founderandCTO

►  15yearsofexperienceinthespinalmedicaldeviceindustry,including10yearsinR&DwithSpineVision

►  Master’sdegreesinManagementfromtheCNAMandintheEngineeringofAdvancedMaterialsfromtheAdvancedInsKtuteforTechnologyandManagement

DominiquePeOtistheco-founderofSafeOrthopaedics.HestartedhiscareerwithSofamor,apioneerinthismedicalfield.Hewasoriginatorof thedesignofCDHorizon (Legacy), aproduct that is sKllwidely marketedbyMedtronic today. In1999,he co-foundedSpineVision SA(Paris),forwhichhewasTechnicalDirectorfor10years.Havingbeeninvolvedindesigningmorethan30productsforthespine,MrPeKtisoneofthemostexperiencedengineersinthisfield.HehasworkedincollaboraKonwiththemostinnovaKveandreputedspinalsurgeonsintheworld.

DominiquePeOtFounderofandconsultant

toSafeOrthopaedicsNon-vo7ngBoardmember

MarieLandel,

FounderofMarieLandel&Associates

MarieLandel isaqualifiedcharteredaccountantwhohasbeenbased inBostonsince1990.Shehasconsiderableexperience insupporKngFrenchandEuropeanmedical technologyfirms in theUSA,benefiKngas shedoes from importantnetworks among funders specialised inhealthcare.

DrAlainCoudray

ChairmanoftheBoardofSafeOrthopaedics

DrAlainCoudrayisaninternaKonalveteranoftheMedicaldeviceindustrywithmorethan20yearsofexperience.SinceJune2006,hehasoccupiedseveralimportantpostswithMedtronic,notablyasEuropeanVicePresidentoftheCardiacRhythmDiseaseManagementbusinessunit,thenasVicePresidentGlobalCorporateClinicalAffairssince2014.BeforejoiningMedtronic,DrCoudraywasVicePresidentCentralandEasternEurope&DistributorsforGuidant,basedinVienna,Austria.DrCoudrayisanacKvememberoftheAdvisoryCommijeeofMDStart,an incubatorspecialised inMedTechandbased inParis,andhehasbeenamemberoftheBoardofEUCOMED(EuropeanMedicalDevicesIndustryAssociaKon).HehasamedicaldegreefromtheUniversityofGrenoble,holdsanMBAfromHECParisandcompletedhistrainingwithanexecuKveprogrammeattheKelloggSchoolofManagementintheUSA.

MichaelDeManeChairmanoftheBoard

ofNevroCorp

MichaelDeManeisChairmanofNevroCorp.,aSiliconValleyfirmthatisaleaderinthemedicaldevicessector.MrDeManeledNevroasCEOfromMarch2011toJune2016,drivingthisstart-upwithaniniKallynegligibleturnovertotherankofaleadingglobalactorinthespinalcordsKmulaKonmarket.MrDeManehasachievednumerousstrategicandoperaKonalsuccessesatthehelmofinternaKonalfirmsofallsizesinthemedical technologies sector.Over thepast35years,hehasoccupied severalmanagementposts in theUSA,EuropeandAsian-Pacificcountries.BeforejoiningNevro,MrDeManeheldseveralpostswithMedtronic,Inc.,andworkedasasenioradvisorwithThomasMcNerney&PartnersandOakHillCapital.HesitsontheBoardsofseveralcompaniesincludingCardionomic,RotaKonMedicalandSafeOrthopaedics.MrDeManecompletedtheINSEADAdvancedManagementProgrammeinFontainebleau,France.HealsoholdsaMaster’sdegreeinbio-engineeringfromClemsonUniversityandadegreeinchemistryfromSt.LawrenceUniversityinCanton,NewYork.

ThierryLaugelco-foundedKurmaPartnersin2009amerleavingAGFPrivateEquity.Hebenefitsfrom25yearsofexperienceinthelifesciencesfield,workingforventurecapitalfirmsandinindustry.Heisapharmacist,andalsoholdsaPhDandanMBA. MrLaugelbeganhiscareerin1992asR&DProjectManagerforLaboratoiresFournierinJapan.AmerobtaininghisMBAatINSEADin1996,hejoinedFlamelTechnologies,justamerthecompanyhadsuccessfullybeenintroducedontheNasdaq,andmanageditsporHolioofcandidateproductsintheirdevelopmentphase. In1998,hemovedtothefinancesector,workingfirstofall fortheCaissedesDépôtsetConsignaKons(CDC),thenwithAGFPrivateEquity(AllianzGroup)wherehesupervisedtheteamresponsibleforinvestmentsinthehealthsector.MrLaugelhasmanagedinvestmentsinmore than 25 companies, including Actelion, Arpida, Targacept, Adocia, Auris and Erytech. He is currently a member of the Boards ofMeiogenix,Pathoquest,BlinkBiomedical,AsarinaPharmaandMinoryx.

ThierryLaugelChairmanoftheBoard

ofKurmaPartners


A ‘Worldwide Business’ Experienced Board

A ‘European High level ’ ScienHfic Advisory Board

PrLeHuec,FranceHeadoftheSpineOrthopaedics&TraumatologydepartmentCHU,Bordeaux

DrVanGaalen,theNetherlandsOrthopaedicsSurgeonDiakonessenhuisHospital,Utrecht

DrFaundez,SwitzerlandOrthopaedicsSurgeonLaTourHospital-Geneva-Meyrin

DrFranke,GermanyOrthopaedicsSurgeonMagdeburgHospital

5 Investor Presentation – April 2018

The Spine pathologies

TheSpinepathologiesarecommonlytreatedwithimplants

1/ SpinalFracture:•  Highimpactfracture,duetoanaccident,•  OsteoporoKcfracture,duetoreducedbonequalityofageingpaKent,•  Malignantfracture,duetoreducedbonequalityofmetastasispaKent

UNPREDICTABLE SURGERY, OFTEN THREATED IN EMERGENCY CONDITIONS GROWING SEGMENT DUE TO GROWING & AGEING POPULATION & MIS TREND

2/ DegeneraOvedisease•  Discdisease,•  SmalldeformityduetoreducedefficiencyofLigaments,muscles

PREDICTABLE SURGERY, OBSERVED DURING FEW MONTHS BEFORE THREATED BY AN INSTRUMENTED SURGERY (WITH IMPLANTS)

3/ ComplexSpineDeformity•  Idiopathicscoliosisofteenagers•  DeformityofageingpaKent

PREDICTABLE SURGERY, OBSERVED DURING YEARS BEFORE THREATED BY AN INSTRUMENTED SURGERY (WITH IMPLANTS)


Implantstobesterilized

The classic technologies used for the last 60 years…

ReusableInstruments

+

-

7

Hospitalmanagesthesurgicalprocess

Manufacturerconsignstechnologies

Investor Presentation – April 2018

8

The improvement of the Spine Surgeries…

1950 2010

Technologieswereenhancedtoimprovethepost-operaOonqualityoflife

Thesurgicalriskisreducedthanktothe‘Sterile’environment

TheMinimallyInvasiveSurgicalapproachisrecommended

Investor Presentation – April 2018

2,1 2,5 3 3,5 4

7,6 8 8,1 8,3 8,4

2016 2017 2018 2019 2020

OpenSurgery MinimalyInvasiveSurgery

ThetrendofMinimallyInvasiveSurgery…

*DatafromMillennium2015

TheMinimallyInvasiveapproachprovidesbeêrclinicaloutcomes:•  lessbloodloss,•  lesstransfusionneed,•  lesspostoperaKvebackpain,•  quickerrecovery,andshorterhospitalstay

The Minimally Invasive approach Worldwide Spinal Fusion market (B$)*

+1.9% Globalgrowth

OPENSURGERY

MINIMALYINVASIVESURGERY

+17.5% Globalgrowth

TheMinimallyInvasiveSurgeryisthegrowingtrendInvestor Presentation – April 2018 9

ThepotenKalmarketofMinimallyInvasiveSurgeries…

*DatafromMillennium2015Basedonpathologiesanalysisandsurgeonsinterviews,thepotenOalconversiontoMinimallyInvasiveSurgeriesis:

In2017,Lessthan20%*ofthesurgeriesaremanagedbyMinimallyInvasiveapproach

*Source:DATAMILLENIUM55%ofallspinalpathologycanbeconvertedtoMIS

50% ofdegeneraKvedisease

90% ofSpinalfracture

Less than 5% complexDeformity

Pathologies analysis Market Breakdown

Spinalfractue20%

DegeneraOve

disease75%

Complexspine

deformity5%

Worldwide Spinal Fusion market

(% of B$)


The Minimally Invasive SoluHons…

3boxesminimumneeded,containing

between35 to60complexinstruments:

TheMinimallyInvasiveSoluOonscanbeopOmized&requesthighqualificaOonofSurgeonsandNurses

*Source:SpineMarketGroup


More than 70 players* promote Minimally Invasive soluHons

But all technologies presents the same characterisHcs

Cannula,smallarea,smallmechanismaredesigned=>TheCleaning/SterilizaOonbecomecomplex

Metalinstrumentsareproducedbymachiningprocess=>Thedesign&ergonomicsopOonarelimited

Thinpartsarefragileanddamagedajerdozensofsurgeries=>Thesurgicalgesturecouldbelessprecise=>TheinspecOonajereachsurgeryisneeded

The limits of the reusable technologies


* Source: Birgit Thiede1, Axel Kramer2, (1) Regional Council, Darmstadt, Germany, (2) Institute of Hygiene and Environmental Medicine, University Medicine Greifswald, Germany; GMS Hygiene and Infection Control 2013, Vol. 8(2), ISSN 2196-5226

TheMinimallyInvasivesurgeryneedsnewsoluOonstobestreamlined

Surgical Approach

Open

Minimally Invasive

Few months planificaHon

RISK

SimpledesignInstruments20/30instrumentsAvailabilityofQualifiedstaff

ComplexdesignInstruments35/60instrumentsNowarrantyofqualifiedstaff*

Emergency situaHon : Fracture

SafeOrthopaedics,AnewgeneraKonofMIS…


•  Allshapearepossibleimprovingtheergonomyofinstrument•  InstrumentareRadiolucent

•  ThescrewinserKoniseasiertocontrol•  Xraysexposureisreduced

•  InstrumentscostissignificantlyreducedofferingtheSingleUseOpKon•  Notouchprocedure=LessriskofinfecOon•  Preloadedinstruments=Lesssurgicalsteps,SurgeryKmereduced•  Theinstrumentarealwaysnew:thesurgerygestureismoreprecise

TheSingleUsetechnologyoffersaSaferSurgicalGesturetoSurgeon

SafeOrthopaedicsdesignnewgenera7onofMISinstrumentsthanktoaHighPerformancepolymer

SafeOrthopaedics,AnewgeneraKonofMIS…

2SingleUseInstrumentsreplace

7reusableinstruments


•  HighPerformancepolymer+MoldingProcess

CounterTorque

ImplantHolder

ClassichandleorRatchetSystemHandle

ClassicReusableInstrumentKit

INSTRUMENTS

KIT/BOXES

WEIGHT

VS.1kit 3boxes

minimum

17 35to60

1.2kg UnOl40kgofcontainers

MulH-funcHon Instruments

One single use Kit

OrthopaedicsTechnologymakesEasier&SaferMinimallyInvasiveSurgeriesAvailableAnyTime,Anyplace…

TPosiKonhandleorStraightPosiKonhandle

SafeOrthopaedics,AuniquecombinaisonofMISImplants

Cypress. MODULAR ANCHORAGE SCREW

Oak. AUTOCORRECTION SCREW

Patented Screw for high impact fracture

Expendable Screw for Osteoporotic fracture,

Growing challenge in the coming years


An Unique CombinaHon of Implants Based on Same Instrument Technology

SafeOrthopaedicsdeliversSoluOonsforalltypeofFractures

A unique soluHon offering unrivaled advantages

SafeOrthopaedics

•  MinimallyInvasiveSurgery•  CrosscontaminaKonrisk•  InfecKonrisk

ClassicPlayer

UnadaptedEfficientOptmized

OptmizedEfficient

Unadapted

•  Fracture•  DegeneraKvedisease•  ComplexDeformity

•  Surgicalflow•  LogisKcsCost•  TechnologyCost

•  SurgerypreparaKon•  Surgeonassistance

ComplexHighqualificaKonneeded

EasyLessqualificaKonneeded

DependinginstrumentsconsignmentPossiblePossible

AnyKme,Anyplace100%Reduced66%Reduced*

Closeto3hperSurgeryExpensive

ImplantInvoiced

80%reduced**Reduced

Implant&Instrumentinvoiced

SafeOrthopaedicsoffersbenefitsforallstakeholdersSources:*S.Litricoetal,EurJOrthopSurgTraumatol,DOI10.1007/s00590-015-1692-4,Accepted:10August2015,Springer-VerlagFrance2015

**L.Durandetal,Posterpresentaônatthe26thEuropharmatdays–Bordeaux,11th–13thOctober2013“Thebenefitsofsingle-useinstrumentaôninspinesurgery.”Investor Presentation – April 2018 16

Pathology treatment

Learning curve

Clinical outcome

LogisHcs & Cost

Spinalefracture[VALEUR

]

DegeneraOve

disease75%

Complexspine

deformity5%

TheStrategytoconverttheSpineMarket…

Spinal Fusion market…

SafeOrthopaedicsaimstoLeadtheSpinalfractureSegmentandspeedupthemarketconversiontoMinimallyInvasiveSurgery

1/ PromotetheSafestMIStreatmentforallSpinalFractures

In2017•  SafeOrthopaedicsleadsthePosteriorFixaKonofallfractures

2/ PromoteothertechnologiesfordegeneraOvedisease

In2017•  SafeOrthopaedicspromoteslumbarandCervicalcages


Worldwide Spinal Fusion market (% of B$)

ThesuccessinFrance…

18

2016 3salesrepresentaKves 4100Surgeries SFMS*:4%

2017 4salesrepresentaKves 5,500Surgeries SFMS*:8%

2014 2salesrepresentaKves 1100Surgeries SFMS*:1%

2011 1salesrepresentaKve 1STSurgery

In2018,the7repsaretargeOngsignificantmarketshares

Technologydevelopment

*MarketshareofSpinalFracturePosteriorfixa7on Investor Presentation – April 2018

Surgeriesperformedcumulated: StrategicMarketsharePosteriorfixa7onofFractures

Theworldwideexpansion…

19 Investor Presentation – April 2018

In2018,SafeOrthopaedicstechnologyisusedin20countries

In2017,SafeOrthopaedicsachieveditsstrongestbusinessgrowth

6151017 1181

15821045

10551086

1528

0

500

1000

1500

2000

2500

3000

3500

2014 2015 2016 2017

France ROW

+37%

+9% +27%

+25%

Thank to the reinforcement of sales and markeHng team (45% of human resources) and the worldwide expansion:

ADJUSTEDSALES€xM(excludingUS)


SalesgrowthwasdoubledinFrance,achieving+34%+42%intheRestoftheworld

TheStrategyforcreaKngvalueinthecoming3years

2018 2019 2020

France, Germany

and UK

New Technology

& Japan

New Technology

& Finance

France•  Recruit2newrepsforan

opKmizednaKonalsalesorganizaKon

Germany•  Accelerateconversionof

surgeonsinthefirstEuropeanSpinalfracturemarketof€80M

UK•  Reinforcementofthesalesina

85%grossmarginmarket

•  LaunchandpromoteMISTechnologyforallSpinalFractures

•  OpentheJapanmarket

•  Proposenewservicesforcatalyzingthetrendofambulatorysurgeries

•  Proveefficiencyofthe“Safecashmodel”


TheSafeCashModel…

Minimuminventorypercustomer:25k€ vs5k€

Comparedtoclassicmodel,SafeOrthopaedicsgeneratessalesgrowthwithlimitedinvestmentandreducedworkingcapital


Thanks to the Single Use Instrument technology, Safe Orthopaedics is developing a unique Cash model in the Spine Industry

Classic Reusable Instrument Kit Safe Orthopaedics Instrument Kit

VS.

Indirectcostsofthereusableinstrumentskit(CAPEX)aretwotothreeKmesgreaterthanthecostofthesingle-usekit

TheSafeCashModel…


WhentheEBITDA+willbeachieved,Cashwillbegenerated:AuniquecashmodelintheSpineIndustry

1,301,65

2,07 2,27

-2,00

-4,80

-6,20-5,40

-5,80

-7,00

-5,90

-8,00

-6,00

-4,00

-2,00

0,00

2,00

4,00

2013 2014 2015 2016

Sales(€xM) EBITDA(€xM) Cash(€xM)

+9% / Ebitda

+12% / Ebitda

+20% / Ebitda

Why invest in Safe Orthopaedics?

1 Adjusted for operations in the United States discontinued since March 1, 2016 2 Source: Millennium (2016 Europe Spinal Implants market analysis)


Unique technology leading the growing spine trends (MIS & Spinal fracture market) 1/

Limited risk: Products already on the market, validated by more than 10,000 surgery kits sold 2/

New markeHng strategy that is paying off •  Adjusted12017revenues:+43%•  ProductslistedsinceApril2017ineveryAP-HPhospitalintheParisregion

3/

Invest to finance the acceleraHon of this new strategy •  StepupdevelopmentinFrancewithnewsaleshires•  ReplicatethesuccessachievedintheFrenchmarketinGermany,amarket7Kmes2biggerthanFrance•  LaunchnewproductstobecometheSpinalFractureleader•  Financenewdirectsalesforces&strategicpartnership/opportuniKesinordertoacceleratesalesand

achieveasapthebrekeven

4/

Financials

Capital

ISINCode FR0012452746

LisOng EuronextParis

Shareprice 0,485€

12-monthhigh 1,224€

12-monthlow 0,483€

Numberofshares 23,9millions

Marketcap. 11,6M€

PierreDumouchel

CEO1,14%

Autresfondateurs3,34%

Salariés1,05%

KurmaBiofund22,24%

IDInvest3,47%

MichaelDemane2,38%

FredGoad3,21%

Floânt62,92%


Share data (at April 12th, 2018) Non-diluted ownership

Documents

INVESTORS PRESENTATION - Home - Safe Orthopaedics · more than 25 companies, including Actelion, Arpida, Targacept, Adocia, Auris and Erytech. He is currently a member of the Boards