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Forward-Looking Statements October 30, 2008This presentation contains forward-looking statements including, among other things, management's outlook, estimates of future performance, revenue, earnings per share, and growth objectives. The forward-looking statements contained herein are based on our current expectations and are subject to a number of risks and uncertainties that could cause us to fail to achieve our current financial projections and other expectations, such as changes in the demand for the V.A.C. resulting from increased competition, the seasonal slowing of V.A.C. unit growth in the fourth and first quarter of each year, changes in payer reimbursement policies, our ability to achieve expected benefits from our recent acquisition of LifeCell and our ability to protect our intellectual property rights. All information set forth in this presentation is as of today’s date. We undertake no duty to update this information. More information about potential factors that could cause our results to differ or adversely affect our business and financial results is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008, including, among other sections, under the captions, "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." These reports are on file with the SEC and available at the SEC's website at www.sec.gov. Additional information will also be set forth in those sections in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008, which will be filed with the SEC in early November 2008.
TRADEMARKS
The following trademarks are proprietary to KCI Licensing, Inc. and/or LifeCell Corporation, their affiliates and/or licensors and may be used in this presentation: ActiV.A.C., AlloDerm, AlloDermGBR, Conexa, Cymetra, GranuFoam, InfoV.A.C., KCI, KCI The Clinical Advantage, Kinetic Concepts, LifeCell, RotoProne, SensaT.R.A.C., Strattice, T.R.A.C., V.A.C., V.A.C. ATS, V.A.C. Freedom, V.A.C. GranuFoam Silver, V.A.C. Instill, and V.A.C. Therapy. The absence of a trademark or service mark or logo from this list does not constitute a waiver of trademark or other intellectual property rights of KCI Licensing, Inc. and/or LifeCell Corporation.
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Time Topic Presenter
8:00 am Strategic OverviewWound Healing Overview Cathy Burzik, President and CEO
9:00 am Regenerative Medicine Lisa Colleran, Global President, LifeCell
9:20 am Therapeutic Support Systems Lynne Sly, Global President, TSS
9:30 am Research & Development Dr. Todd Fruchterman, Sr. VP & CTODr. John Harper, VP Clinical Sciences
10:30 am Break
10:40 am Financial Overview Marty Landon, Sr. VP & CFO
11:00 am Q&A Panel KCI Management
11:30 am Lunch speaker Dr. John Pryor, Trauma Program Director, University of Pennsylvania Health System
12:30 pm KCI Tours
Today’s Agenda
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To advance the power of innovative therapies, advanced wound healing and regenerative medicine.
KCI at a GlanceOur Mission
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KCI at a GlanceA history of clinical and commercial innovation
• 30+ year heritage of innovative, high-value medical therapies
• Demonstrated leadership positions in advanced wound healing, therapeutic support surfaces and regenerative medicine
3.0MM patients treated with V.A.C. therapy1.5MM patients treated with regenerative tissue matrix7.0MM patients treated with our therapeutic surfaces products
• Demonstrated ability to change clinical practice of medicine
• Global market presence with direct operations in 20 countries
• Solid financial performance over past 7 years
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KCI at a GlanceLTM 09/08 Business Summary
WoundHealing (WH)
Therapeutic Support Systems
(TSS)
Regenerative Medicine (RM)
Market Size& Growth
KCI MarketPosition
KCI Revenue (1)(LTM Q3)
~$4.5 Billion(Advanced Wound Care)
5 to 6% Growth
~ $1 Billion 18 to 22% Growth
~ $2.5 Billion 2 to 3% Growth
#1 #1 #2
$1,391 Million13.3%
Y-o-Y Growth
CurrentMarket
• Surgical, trauma & chronic wounds
• Acute & Post-Acute
• Challenging Hernia• Breast Reconstruction
• Complications of immobility
• Pulmonary & skin integrity
• Patient handling
$227 Million27.7%
Y-o-Y Growth
$339 Million5.9%
Y-o-Y Growth
Revenue Mix (1) 71% 12% 17%
(1) On a Proforma basis as if LifeCell was owned by KCI the entire period
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Cathy BurzikPresident & CEO
Marty LandonSVP & CFO
Steve SeidelSVP & Gen Counsel
Lisa ColleranGlobal President,
LifeCell
Lynne SlyGlobal President,
TSS
Todd Fruchterman SVP & CTO
Rohit KashyapSVP
Corporate Development
Michael SchneiderSVP
Manufacturing& Operations
TLV KumarPresident,
EMEA
Patrick LohPresident,
APAC
Jim CravensSVP
Human Resources
David RamseySVP & CIO
KCI at a GlanceLeadership Team
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Superior Product
Superior Outcomes
Extensive Global Distribution Network200 Service Centers
24/7/365 Clinical SupportAdvantage Center
Billing & Collections
TSS Manufacturing Facility-San Antonio
V.A.C. Manufacturing Facility
Athlone, Ireland
LifeCell Headquar
ters
LifeCell HeadquartersBranchburg, New JerseyPic of
articles
Substantial Clinical Evidence900 Journal articles
15 V.A.C. Clinical trials17 TSS Clinical trials20+ LifeCell clinical
trials/studies
KCI at a GlanceThe Clinical Advantage
1,000+ Innovative & Leading Patents
KCI Headquarters
KCI Headquarters
San Antonio, Texas
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Strategic Vision2008 through 2013
• Sustain growth higher than market growth in all business segments
• Incremental growth through innovation and global expansion
• Build leadership position in biologics based on acquisition of LifeCell
• Focused execution to improve operating margins
• Strong business fundamentals enabling earnings growth higher than revenue growth and strong cash flows
A growth-oriented, diversified med-tech leader with best-in-class therapeutic platforms
Target Revenue Growth
8-11% CAGR
Target Earnings Growth
15-19% CAGR
Target Free Cash Flow
Growth16-20% CAGR
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Wound Healing Beyond 2013Basis of competition beyond expiry of base patents
Market expansion
• $7B (2008) to $12B (2013)
Sustainable market leadership
• Novel next generation technologies extend patent portfolio to 2020 and beyond
• Operating leverage in model generates predictable, stable, sustainable operating profit
• KCI Clinical Advantage is unique – not easily replicated
Care givers
Infrastructure
Clinical evidence
Best-in-class products & innovation
KCI The Clinical Advantage
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Realizing the VisionMarket opportunity driven by expansion and innovation
New ProductInnovation
GeographicExpansion
CurrentMarkets
WoundHealing ($ Millions)
$6,0003.5 Million wounds~25% penetration
$1,000~1.3 Million wounds
$5,000~10.0 Million wounds
9-11% Growth
Regenerative Medicine($ Millions)
$800160k procedures CHR
60k procedures BR~30% penetration
$44090k procedures CHR40k procedures BR
$2,400~2.5 Million procedures
18% to 22% Growth
Therapeutic Support Systems
($ Millions)
$800~30% Global Share
Acute Rental
$100Central Europe,
Bariatrics EU, Canada
$100Business/Product
Opportunities,Co-developments
4% to 6% Growth
Market Penetration
Market Expansion
Market Innovation
Target Rev. CAGR
‘08 – ‘13
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WoundHealing
Regenerative Medicine
Therapeutic Support Systems
New ProductInnovation
GeographicExpansion
CurrentMarkets
Realizing the VisionChallenges
• Medicare• Competitive pricing pressure• Inferior competitor products• Health technology assessments
• Business model• Price realization• Regulatory/reimbursement approvals
• Surgeon adoption• Competition
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New ProductInnovation
GeographicExpansion
CurrentMarkets
Realizing the VisionOpportunities
WoundHealing
Regenerative Medicine
Therapeutic Support Systems
• Increase V.A.C. penetration (2008 to 2013)US 35% to 50+%; EMEA 13% to 20+%
• Expand target market with reimbursement (Germany)
• APAC marketJapan opportunity: >250k wounds, >$500 Million China, India: >1 Million wounds
• Expand NPWT (Lower acuity wounds ~4.5 Million; Complex infected ~350k)• Leverage NPTP (Surgical incision ~5.2 Million, Vacuum Assisted Regenerative
Medicine ~110k)
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WoundHealing
Regenerative Medicine
Therapeutic Support Systems
New ProductInnovation
GeographicExpansion
CurrentMarkets
Realizing the VisionOpportunities
• Increase market penetration (2008-2013) from 30% to 60%• Drive Strattice conversion to maintain leadership position• Invest in clinical studies, sales force and medical education
• Launch Strattice in EU markets – current market opportunity $440MM• Investment in clinical studies, KOL development & sales force• Develop APAC regions
• Execute on new applications – market opportunity $2.4B• Apply unique processing technology to other tissue types• Exploit combination of NPWT and Regenerative Tissue Matrix
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WoundHealing
Regenerative Medicine
Therapeutic Support Systems
New ProductInnovation
GeographicExpansion
CurrentMarkets
Realizing the VisionChallenges
• Increasing competition• Inferior products-low price points• Cost to hospital is a significant part of DRG
• Surgeon adoption• Price realization• Regulatory/reimbursement approval
• Surgeon adoption
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WoundHealing
Regenerative Medicine
Therapeutic Support Systems
New ProductInnovation
GeographicExpansion
CurrentMarkets
Realizing the VisionOpportunities
• CMS reimbursement changes – pressure ulcers and infections• Capital sales and service revenue
• Bariatrics• Capital sales and service revenue
• Bariatric line extension• Infection control• Skin microclimate management
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WoundHealing
Regenerative Medicine
Therapeutic Support Systems
New ProductInnovation
GeographicExpansion
CurrentMarkets
Realizing the VisionChallenges
• Shift in business mix• Competitive GPO environment• Commoditization of selected products
• Low price points in local markets
• Mature market with limited opportunities• Product mix shifting to surfaces vs. frames
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Realizing the VisionMarket opportunity driven by expansion and innovation
New ProductInnovation
GeographicExpansion
CurrentMarkets
WoundHealing ($ Millions)
$6,0003.5 Million wounds~25% penetration
$1,000~1.3 Million wounds
$5,000~10.0 Million wounds
9-11% Growth
Regenerative Medicine($ Millions)
$800160k procedures CHR
60k procedures BR~30% penetration
$44090k procedures CHR40k procedures BR
$2,400~2.5 Million procedures
18% to 22% Growth
Therapeutic Support Systems
($ Millions)
$800~30% Global Share
Acute Rental
$100Central Europe,
Bariatrics EU, Canada
$100Business/Product
Opportunities,Co-developments
4% to 6% Growth
Market Penetration
Market Expansion
Market Innovation
Target Rev. CAGR
‘08 – ‘13
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Realizing the VisionMargin expansion through 2013
• Pricing pressures• Investment in R&D• Investment in geographic
expansion
Drivers Impact
2008E 2013E
22.5% 24.0%
25.5%
Target
Decrease Operating Margin200–250 bps
Increase Operating Margin400–500 bps
• Manufacturing service & supply chain efficiency
• Increase sales force productivity
• Reduce shared service costs• Manufacturing of V.A.C.
disposables in Ireland• Shift to Strattice
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Leverage CommercialCapabilities
M&A Growth
• Build biosurgeryfranchise
• Expand into market adjacencies
• Continue to expand presence in operating room
Leverage ScientificCapabilities
Organic Growth
• Expand into new markets
• Use core technology for new applications
• Expand usage into new geographies
• Realize KCI/LifeCell commercial and R&D synergies
LifeCell Acquisition
• Added growth platform
• Diversified revenue base
• Market leader in large underpenetrated market
Realizing the VisionFoundation for growth and diversification
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Strategic Vision2008 through 2013
• Sustain growth higher than market growth in all business segments
• Incremental growth through innovation and global expansion
• Build leadership position in biologics based on acquisition of LifeCell
• Focused execution to improve operating margins
• Strong business fundamentals enabling earnings growth higher than revenue growth and strong cash flows
A growth-oriented, diversified med-tech leader with best-in-class therapeutic platforms
Target Revenue Growth
8-11% CAGR
Target Earnings Growth
15-19% CAGR
Target Free Cash Flow
Growth16-20% CAGR
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Traumatic Degloving
InfectedAbdominal
Initial Wound 7 days V.A.C. Therapy
18 days V.A.C. Therapy with STSG
Sacral PressureUlcer withNecrotizing Fasciitis
Post-debridement 28 days V.A.C. Therapy; 2 weeks Post-Flap
Initial Wound 24 days V.A.C. Therapy
30 days V.A.C. Therapy2-3 weeks post-STSG
14 days V.A.C. Therapy
Surg
ical
Trau
ma
Chr
onic
Wou
nds
Wound HealingV.A.C. Therapy: significant unmet medical need
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• Acute (surgical and trauma) and chronic wounds
• Complex, hard to heal wounds• Wounds treated across care settings
• 20+MM complex, hard to heal wounds
4.8MM V.A.C. appropriate wounds$7B target NPWT market2x size of AWC market
Target Market
InfoV.A.C.for Acute Care
ActiV.A.C.for Home Care
Advanced DressingsUnique Mechanism of Action
Product Portfolio
Wound HealingV.A.C. Therapy: highly differentiated and clinically proven
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• 30,000 institutions• >100,000 caregivers globally
• 1,300 sales/support personnel• 1,300 Advantage Center U.S.
representatives• 1,600 service organization associates
• 15 RCTs• >400 Journal articles
• 3rd generation NPWT V.A.C. Therapy• GranuFoam dressing – mechanism of
action
Care givers
Infrastructure
Clinical evidence
Best-in-class products & innovation
Wound HealingCompetitive clinical advantage
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Wound HealingBusiness drivers 2008 through 2013
New ProductInnovation
GeographicExpansion
CurrentMarkets
• Increase V.A.C. penetration (2008 to 2013)US 35% to 50+%; EMEA 13% to 20+%
• Expand target market with reimbursement (Germany)
• APAC marketJapan opportunity: >250k wounds, >$500 MillionChina, India: >1 Million wounds
• Expand NPWT (Lower acuity wounds ~4.5 Million; Complex infected ~350k)• Leverage NPTP (Surgical incision ~5.2 Million, Vacuum Assisted Regenerative
Medicine ~110k)
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Wound HealingCurrent Market
US EMEA
1.5 MMwounds
2.0 MMwounds
35%13%
2008 V.A.C. Penetration
• New differentiated products
• Targeted sales force expansion
• Flexible business models
• Evidence-based selling
US EMEA
1.7 MMwounds
2.2 MMwounds
50-55%20-25%
2013 V.A.C. Target Penetration
UnpenetratedPenetrated
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Wound HealingCurrent Market
2008-2011 2012 -2013
Driv
ers
Growth & Market Share
NPWT Growth: >2.0x AWC market• Competition gains low single-digit
share/yr• Pricing decline: low single-digit
NPWT Growth: ~1.5x AWC market• Competition gains: low-to-mid
single-digit share/yr• Pricing decline: mid single-digit
Commercial• Targeted sales force expansion• Flexible business & service models• Evidence based selling
• Value added services • Build Installed base
Other • German reimbursement (2010) • Additional homecare reimbursement
Target Launch DFU Bridge Dressing
Simplace Dressing
Gen IV V.A.C. Gen V V.A.C.
2009 2010 2011 2012 2013
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Japan Other
20-25%
Target Expectations
(2013)
12-15%
Japan Other
Wound HealingGeographic Expansion
$700 MM
Market Opportunity
$600 MM
$500 MM$400 MM
• Build organization & infrastructure
• Balance direct & distributor operations
• Optimize product offering
• Regulatory & reimbursement
UnpenetratedPenetrated
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Wound HealingGeographic Expansion
Target MarketEntry
China
Japan
South East Asia
Eastern Europe
2008-2011 2012 -2013
Driv
ers
Organization
• Added APAC President• Established China office• Build Japan commercial organization • Direct and distributor operations in selected
APAC and EE countries
• Balance direct vs. distributor
Penetration• Product registration and regulatory approval• Launch and market development
• Japan (~20%)• Other (~12%)
Product • Current product portfolio• Customized product
• Next Generation V.A.C.
2009 2010 2011 2012 2013
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Clinical Need
• Soft tissue repair and regeneration
• Hard tissue repair and regeneration
Wound HealingNew Product Innovation
• Lower acuity wounds that need only some of the benefits of V.A.C.
• Wounds that require therapy in addition to V.A.C.
VING
• Management of high risk surgical incisions; cosmesis
• Management of open abdomen
Negative Pressure
RegenerativeMedicine(NPRM)
Negative PressureSurgical
Management(NPSM)
Negative PressureWound Therapy(NPWT)
Futura
SWMS
Ab-System
TE-Wound
TE- Ortho
Neg
ativ
e P
ress
ure
Tech
nolo
gy P
latfo
rm
Soft tissue repair and regeneration
Hard tissue repair and regeneration
Lower acuity wounds that need only some of the benefits of V.A.C.
Wounds that require therapy in addition to V.A.C.
Management of high risk surgical incisions; cosmesis
Management of open abdomen
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Wound HealingNew Product Innovation
2008-2011 2012 -2013
Driv
ers
Commercial • V.A.C. sales force• LifeCell sales force
• New sales force (TE-Ortho)
Target Penetration
• Mid to high single digit penetration• Some minor cannibalization of V.A.C.
(<2% of total)
Planning Cycle Penetration• SWMS – I (7% to10%)• Ab-System (15% to 20%)• TE-Wound (12% to 15%)• SWMS-A (10% to 12%)
Anticipatedproduct launch
Ab-System
SWMS -I
TE - Wound
Futura
SWMS-A
VING TE-Ortho
2009 2010 2011 2012 2013
R & D Planned Pipeline
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7.0%
9.5%
9.0% 0.5%2.0%
12.5%
1.0%
2.5%
CurrentMarkets
GeographicExpansion
NewProducts
Overall
Revenue Growth (‘08-’11) Revenue Growth (‘11-’13)
3.0%
7.5%4.0% 1.5%
3.0%
10.0%
2.0%
4.0%
CurrentMarkets
GeographicExpansion
NewProducts
Overall
Wound HealingGrowth through innovation and market leadership
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Beyond 2013Basis of competition beyond expiry of base patents
Market expansion
• $7B (2008) to $12B (2013)
Sustainable market leadership
• Novel next generation technologies extend patent portfolio to 2020 and beyond
• Operating leverage in model generates predictable, stable, sustainable operating profit
• KCI Clinical Advantage is unique – not easily replicated
Care givers
Infrastructure
Clinical evidence
Best-in-class products & innovation
KCI The Clinical Advantage