wk health cluster hugh yarrington member executive board november 5, 2002 philadelphia
TRANSCRIPT
WK Health Cluster
Hugh Yarrington Member Executive Board
November 5, 2002 Philadelphia
2
Agenda Agenda
9:30 – 10:00 Global Strategy - Hugh Yarrington
10:00 – 11:00 Strategy in-depth - Christopher Ainsley + Q&A
11:00 – 11:15 Coffee break
11:15 – 12:15 Business Unit Strategies - CEOs
12:15 – 13:30 Lunch
13:30 – 16:30 Break-out sessions: Product demos
16:30 – 16:45 Closing Remarks – Hugh Yarrington
3
Health Cluster – The Story Today
New Strategy to Focus on HealthNew Strategy to Focus on Health
Divestment of KAP (E 600 mln)Divestment of KAP (E 600 mln)
New Structure to Leverage Health AssetsNew Structure to Leverage Health Assets
Roll-out Product Development 2002-05Roll-out Product Development 2002-05
IT & Organizational SynergiesIT & Organizational Synergies
Development of Clinical Tools Growth BusinessDevelopment of Clinical Tools Growth Business
Pursue Uncontested No 1 StatusPursue Uncontested No 1 Status
4
Wolters Kluwer StrategyWolters Kluwer Strategy
Drive growthDrive growth
Launch newLaunch newproductsproducts
Divest slowDivest slowgrowing assetsgrowing assets
Extend contentExtend contentto softwareto software
PreservePreservefoundationfoundationbusinessbusiness
Acquire growthAcquire growthbusinessesbusinesses
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Launch New Products
HY-I 2001 HY-I 2002
Fiscal Advice Journal: internet tool Fiscal Advice Journal: internet tool enabling customers to send tailor-made enabling customers to send tailor-made newsletters to their clients, The newsletters to their clients, The NetherlandsNetherlands
Legal Announcements and Formalities: a Legal Announcements and Formalities: a workflow tool, Franceworkflow tool, France
CCH Securities Compliance tracker: a CCH Securities Compliance tracker: a daily news service on securities rules and daily news service on securities rules and regulations, CCH USregulations, CCH US
All Health cluster content loaded onto Ovid All Health cluster content loaded onto Ovid platformplatform
Redaktion D, on line language course, Redaktion D, on line language course, Germany (joint venture with Goethe Germany (joint venture with Goethe Institute)Institute)
Revenues from new products Revenues from new products (EUR mln)(EUR mln)
68.868.881.181.1
Selected examples Selected examples
New products are launchedNew products are launchedin the past 12 monthsin the past 12 months
+18%+18%
6
Acquire Growth Businesses…Acquire Growth Businesses…
Emphasis onEmphasis onacquiring strongacquiring strongsoftware companiessoftware companiesin growing marketsin growing markets
ArtelArtel
CiceronCiceron
Compliance ToolsCompliance Tools
ICCICC
Moorehouse BlackMoorehouse Black
UniformUniform
Val InformatiqueVal Informatique
AverageAverageprojectedprojectedgrowth rate ofgrowth rate ofrevenues is revenues is 17% p.a.17% p.a.
Selected examples of HY-I acquisitionsSelected examples of HY-I acquisitions
7
TotalTotal2001 - 2001 -
June 2002June 2002
… … at Good Multiplesat Good Multiples
HY-I 2001HY-I 2001 HY-I 2002HY-I 2002
Number of transactionsNumber of transactions
Total investmentTotal investment
Acquired annual revenuesAcquired annual revenues 1)1)
Revenues multiplierRevenues multiplier
EBITA multiplierEBITA multiplier
1313
362 362
177177
2.02.0
8.08.0
2929
533533
255255
2.12.1
7.07.0
(Amounts in EUR mln)(Amounts in EUR mln)
1818
203203
105105
1.91.9
6.06.0
4747
736736
360360
2.02.0
6.76.7
FY 2001FY 2001
1) Revenues from first full year after acquisition1) Revenues from first full year after acquisition
8
Extend Content to SoftwareExtend Content to Software
Total revenues per business type (%)Total revenues per business type (%)
HY-I 2001HY-I 2001 HY-I 2002HY-I 2002
100%100%
Revenue increase year on year (%)Revenue increase year on year (%)
Static contentStatic content
Dynamic contentDynamic content
Smart toolsSmart tools
IntegratedIntegratedsolutionssolutions
100%100%
48.048.0
34.134.1
12.412.4
5.55.5
44.444.4
36.036.0
13.013.0
6.66.6
Static contentStatic content
Dynamic contentDynamic content
Smart toolsSmart tools
IntegratedIntegratedsolutionssolutions
1515
1313
2929
11
ContinuingContinuingrevenuerevenue
Total continuingTotal continuingrevenue (EUR M.)revenue (EUR M.)
1,6001,600 1,7471,747
99
9
Internet and Other Electronic Revenues (EUR mln)
2089
175
263245
255
295
344
HY1-99 HY1-00 HY1-01 HY1-02
Other electronicrevenues
Internetrevenues
Percentage figures represent total electronic revenues as part of total revenuesPercentage figures represent total electronic revenues as part of total revenues
+32%+32%
+26%+26%
+20%+20%
+18%+18%
10
Divesting Non-Core AssetsDivesting Non-Core Assets
Kluwer Academic PublishersKluwer Academic Publishers
ten Hagen & Stamten Hagen & Stam
Bohn Stafleu Van LoghumBohn Stafleu Van Loghum
ISBWISBW
OthersOthers
Annualized revenues Annualized revenues (EUR mln)(EUR mln)
115050
3030
2020
3030
EUR 3EUR 3330 mln0 mln
100100
Divestments represent approximately 8% of total revenuesDivestments represent approximately 8% of total revenues
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Preserve Foundation BusinessPreserve Foundation Business
Implement retention/loyalty programs Implement retention/loyalty programs
Increase effectiveness of sales and marketing Increase effectiveness of sales and marketing Sales force restructuring/reinforcementSales force restructuring/reinforcement CRMCRM
Pursue value driven pricing policiesPursue value driven pricing policies
Enhance product qualityEnhance product quality
12
Wolters Kluwer Health: Financial Results
EUR mln
RevenuesRevenues EBITAEBITA MarginMargin
Organic growth improved to 7% (as at 1H 2002)Organic growth improved to 7% (as at 1H 2002)
58103
372
298
HY-I 2001 HY-I 2002
4751
HY-I 2001 HY-I 2002
ElectronicRevenues
15.7
13.7
HY-I 2001 HY-I 2002
+25%+25% +9%+9% (20%)(20%)
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Wolters Kluwer Health: Strategic FocusWolters Kluwer Health: Strategic Focus
Reorganize to serve health and medical professionalsReorganize to serve health and medical professionals Four customer-facing business units createdFour customer-facing business units created New CEOs and management teams in placeNew CEOs and management teams in place Marketing approach and channels rationalized Marketing approach and channels rationalized Back office and systems work scheduled for 2002/3Back office and systems work scheduled for 2002/3
Divest non-conforming assetsDivest non-conforming assets KAP purchase agreement signedKAP purchase agreement signed
Revitalize textbook, research, institutional research businessesRevitalize textbook, research, institutional research businesses Improved society, author, and distributor relationships Increased investment in new product development Improved distributor contacts Reduced cycle times
14
Wolters Kluwer Health: Strategic Focus, cont.Wolters Kluwer Health: Strategic Focus, cont.
Ovid is and “open platform” and the “health and medical” leaderOvid is and “open platform” and the “health and medical” leader Number of “A” titlesNumber of “A” titles Number of medical titlesNumber of medical titles Number of publishing partnersNumber of publishing partners Monthly growth in total titles Monthly growth in total titles Number of page viewsNumber of page views Number of end-usersNumber of end-users Market penetration (segment, national, international)Market penetration (segment, national, international) Spend per purchaserSpend per purchaser Spend per userSpend per user
Accelerate clinical tools developmentAccelerate clinical tools development Medi-Span provides great opportunitiesMedi-Span provides great opportunities Market for clinical tools about to explodeMarket for clinical tools about to explode
Increase growth organically and by acquisitionIncrease growth organically and by acquisition Organic revenue growth at 7% (as at 1H 2002)Organic revenue growth at 7% (as at 1H 2002) Acquisition program in place and actively pursuing target companiesAcquisition program in place and actively pursuing target companies
16
Health Is an Attractive Market for Wolters KluwerHealth Is an Attractive Market for Wolters Kluwer
A large market Approximately $4.0bn Roughly 40% of the global STM market
A growing market Underlying growth of 2-5%. More rapid expansion in pharmaceutical, clinical tools, payors and allied health
Additional growth opportunities through market share gains Consolidation in traditional segments: ~50% of the market controlled by small
players
Suited to our strengths Concentrated in the US (65% of revenues) Largely English-language (85% of revenue)
Largely distinct from the Scientific/Technical market Content, Authors, Societies, Libraries and End-users
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Our Vision
Become the global leader in information for
health and medical professionals
Focus on Pharma Solutions, Medical Research, Professional and Education, and Clinical Tools
Primary customers: English reading professionals globally
PhysiciansNursesMedical StudentsNursing StudentsAllied Health Professionals (e.g.
physical therapists, chiropractors)PharmacistsMedical Schools/Teaching hospitals
Community hospitals Pharmaceutical Sales and Marketing Pharmaceutical Research Biotech and Biomedical Research Medical Device companies Payors Institutional Science (focused on medical and
health-related science)
Markets served
18
Our Vision: What’s Changing
Medicine and Health Electronic-centric Organized by customer groups Ovid: Key component of the
strategy Clinical Tools: New business unit
with critical mass Pharma: Concentrated Objective: Leadership of
defendable segment
Science, Technical and Medicine Print-centric Organized by operating companies Ovid: Extension of publishing
Clinical Tools: Opportunistic venture Pharma: Scattered Objective: Participation in broad
markets
TODAY & TOMORROWYESTERDAY
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Customer-Facing Business Units
Old Business Units
Adis
Ovid/Silver Platter
LWW-Medical
LWW-Education
Facts & Comparisons/ Medi-Span
KAP
Markets Served
• Pharmaceutical Sales and Pharmaceutical Sales and MarketingMarketing
• Pharmaceutical ResearchPharmaceutical Research• Biotech ResearchBiotech Research• Medical Device CompaniesMedical Device Companies
• Medical Schools/Teaching Medical Schools/Teaching hospitalshospitals
• Community hospitalsCommunity hospitals• Biomedical ResearchBiomedical Research
• PhysiciansPhysicians• NursesNurses• Allied HealthAllied Health• Medical, Nursing and Allied Medical, Nursing and Allied
Health StudentsHealth Students• Institutional ScienceInstitutional Science
• PharmacistsPharmacists• Pharmacy StudentsPharmacy Students• PayorsPayors
New Business Units
Pharma Solutions
Medical Research
Professional and Education
Clinical Tools
Divested
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WK Health OrganizationWK Health Organization
Support Staff(HR, IT, Finance)
Adis LWW
Pharma SolutionsJohn Monahan
Ovid LWW
Medical ResearchDean Vogel
LWW
Professional & EducationJay Lippincott
F&CMedi-SpanClineguide
Clinical ToolsJon Seymour
WK HealthChristopher Ainsley
21
WK Health: 2002(E) Business Unit Revenues
Clinical ToolsClinical Tools
Pharma Pharma SolutionsSolutions
Professional Professional & Education& Education
Medical Medical ResearchResearch
Total WK Health: Total WK Health: ~ $730 Million~ $730 Million
~ $320 Million~ $320 Million
~$60 Million~$60 Million
~ $120 Million~ $120 Million
~ $230 Million~ $230 Million
22
WK Health: 2002(E) Business Unit FTEs
Clinical ToolsClinical Tools
Pharma Pharma SolutionsSolutions
Professional Professional & Education& Education
Medical Medical ResearchResearch
Total WK Health:Total WK Health: ~2,390 FTEs ~2,390 FTEs
~ 710 FTEs~ 710 FTEs
~ 240 FTEs~ 240 FTEs
~ 570 FTEs~ 570 FTEs
~ 870 FTEs~ 870 FTEs
23
WK Health: 2002(E) Print/Electronic Revenue Mix
050
100150200250300350
Med
Res
earc
h
Pro
ffes
ion
al&
Ed
uca
tio
n
Ph
arm
a
Cli
nic
alT
oo
ls
Electronic Print Other
$ i
n M
illi
on
s
24
Implementing Our StrategyImplementing Our Strategy
Reorganize to focus on health and medical Reorganize to focus on health and medical
Expand our portfolio of top medical contentExpand our portfolio of top medical content
Increase market share in medical research Increase market share in medical research
Accelerate development of clinical toolsAccelerate development of clinical tools
Revitalize core text and reference businessRevitalize core text and reference business
Grow pharmaceutical sales by restructuring and acquiringGrow pharmaceutical sales by restructuring and acquiring
Increase growth organically and by acquisitionIncrease growth organically and by acquisition
25
Reorganize to Focus on Health and MedicalReorganize to Focus on Health and Medical
Leadership: Recruited and developed strong leadership team
Processes: Improved the way we work together Finance Technology Human Resources
Implementation Teams: Task forces targeting growth opportunities Global Medical Research Professional and Education Pharmaceuticals Clinical Tools
Values, Behavior & Culture: Developed common values to establish new culture and drive change in strategy
26
Expand Our Portfolio of Top Medical Content
Achievements
Renewed AHA journal contract = $185 million Renewed AHA journal contract = $185 million Licensed 171 new titles from six publishers including 15 “A” titlesLicensed 171 new titles from six publishers including 15 “A” titles Moved all owned content to Ovid PlatformMoved all owned content to Ovid Platform
Next Steps
Pursue all “A” medical content for online platform Pursue all “A” medical content for online platform
Rationale
Provide the “must-have” content on the preferred platformProvide the “must-have” content on the preferred platform Aggregate databases and content from many publishersAggregate databases and content from many publishers
27
Increase Market Share in Medical Research
Achievements
Introduced new Introduced new content content packages and new pricing Ovid platform achieved a 62% increase in Internet usage and a 35%
increase in peak concurrent users
Next Steps
Manage customer migration from print to online with the right pricing and Manage customer migration from print to online with the right pricing and content packagescontent packages
Further penetrate international and community hospital marketsFurther penetrate international and community hospital markets
Rationale
Reinforce our leadership in institutional research segments Reinforce our leadership in institutional research segments Support WK Health goal of expanding role in electronic distribution of contentSupport WK Health goal of expanding role in electronic distribution of content
28
Accelerate Clinical Tools Development
Achievements
Medi-Span acquired 2002 – integrating F&C and Medi-Span Medi-Span acquired 2002 – integrating F&C and Medi-Span New CEO named 9/02; preliminary strategy identifiedNew CEO named 9/02; preliminary strategy identified
Next Steps
Develop disease management and drug information business strategy Develop disease management and drug information business strategy Complete integrated data tool; exit FDB editorial agreementComplete integrated data tool; exit FDB editorial agreement Explore acquisitions and partnership opportunitiesExplore acquisitions and partnership opportunities
Rationale
Place multiple “bets” in evolving clinical tools marketPlace multiple “bets” in evolving clinical tools market With multiple interests at the point of care, need to embed/integrate WK With multiple interests at the point of care, need to embed/integrate WK
Health content in more general systemsHealth content in more general systems
29
Revitalize Core Text & Reference BusinessRevitalize Core Text & Reference Business
Achievements
Established new management teamEstablished new management team Created market focused organization – improving relationshipsCreated market focused organization – improving relationships
Next Steps
Investing in market research to drive customer-focused product Investing in market research to drive customer-focused product developmentdevelopment
Developing stronger relationships with distributors, authors, and Developing stronger relationships with distributors, authors, and customerscustomers
Rationale
Near-term stronger performance depends on sourcing of top content and Near-term stronger performance depends on sourcing of top content and developing stronger relationships with customersdeveloping stronger relationships with customers
Longer term, books will have significant value as an element of our Longer term, books will have significant value as an element of our clinical tools strategyclinical tools strategy
30
Growth and Restructuring in Pharma
Achievements
New CEO named 8/02New CEO named 8/02 Acquisition plan developed Acquisition plan developed Restructuring business to improve market penetration and leverage Restructuring business to improve market penetration and leverage
strengths and assetsstrengths and assets
Next Steps
Complete key acquisitionsComplete key acquisitions Continue development of new electronic productsContinue development of new electronic products
Rationale
Pharma companies need to get products to market faster to maximize Pharma companies need to get products to market faster to maximize returns returns
Opportunity to establish strategic leadership by leading an aggressive Opportunity to establish strategic leadership by leading an aggressive industry consolidation campaignindustry consolidation campaign
31
Growing Organically and Through AcquisitionsGrowing Organically and Through Acquisitions
Improved organic growth
2001 1H 2002 1.7% 6.6%
Actively pursuing acquisitions
Business Unit Acquisition Strategy
Pharma Solutions Aggressive industry consolidation campaign
Develop critical mass across the pharma value chain
Clinical Tools Pursue small, embryonic players
Enhance with partnerships and licensing deals
Professional and Education
Use acquisitions to increase value of existing content assets
Branch out into ancillary content areas
Medical Research Securing additional licensing deals
No pure acquisitions planned
32
WK Health: Key Strengths & Challenges
Strengths
Strong proprietary content
Strong pipeline of electronic products
Excellent brands & market position
Revitalized and focused management team
Recurring revenue business model
Large and growing market segments
Challenges
Building a customer-focused organization
Rebuilding our critical processes and systems
34
Market OverviewMarket Overview
Medical Research combines the premiere clinical journals of LWW with the leading online medical platform at Ovid
Target Market & Size
Focus on information managers, clinicians, medical and student researchers purchasing through institutions: medical libraries, biomedical research facilities, teaching and community hospitals
U.S. institutional medical market is approximately $1.8 billion and growing approximately 5%
Key Trends
Institutional libraries represent the majority of medical information spending
Trends in medical information spending suggest that the share of institutional buying is likely to grow in the future
As customers migrate online, there is an opportunity to capture spend
English remains the “lingua franca” of medical research creating a global medical marketplace
35
Leading Position in Medical InstitutionsLeading Position in Medical Institutions
Penetration Time Used
North American Market Universe Ovid
ScienceDirect Ovid
ScienceDirect
Medical Library 145 93.5% 48.8% 53.9% 20.4%
Teaching Hospital 800 97.2% 29.6% 59.1% 14.9%
Private Hospitals > 200 Beds 3,000 87.2% 9.1% 55.2% 16.9%
Average 90.6% 19.2% 56.1% 17.5%
Full penetration of NHS in U.K. and Australia Supporting over 13.3 million end-users worldwide
Source: ResearchPro, March 2002Source: ResearchPro, March 2002
36
Leading Source of Medical ContentLeading Source of Medical ContentDec 31,
2001 September 30, 2002ScienceDirect
September 30, 2002
Live Live%
Increase
Bibliographic Abstracts136.5 Mln 150.8 Mln 10.5% 30.0 Mln
Full Text Journals
“A” List Titles 74 98 32.5% 73
Other Medical Titles 459 725 58.0% 478
Total Medical Titles 533 824 54.6% 551
Book Content 102 168 64.7% 0
Greatest breadth of content through bibliographic layer Greatest depth of medical content through full text journals Unique addition of book content Completed loading of all LWW content on the Ovid platform
37
Overview of StrategyOverview of Strategy
Gain Sharein Spend
Gain Sharein Spend
Expand Lead in Content
Expand Lead in Content
• Become the platform of choice for content providers
• Expand our leading position as an online provider of medical research content
Increase MarketPenetration
Increase MarketPenetration
Drive End UserDemand
Drive End UserDemand
• Become the most used (and trusted) resource for online medical research
• Maintain a leading platform for the online distribution of content for end-users
Continue to expand into new markets including:
• International Markets and
• Community Hospitals (North America)
• Capture spend as customers migrate online
• Target segments with packages tailored to their needs and price sensitivity
38
SilverPlatter IntegrationSilverPlatter Integration
Progress Report
Consolidation of SilverPlatter and Ovid sales forces and product management organizations
Migrated to a single fulfillment system with a single view of customer base
Enabled cross-selling of content across platforms
Consolidated all areas of operations including finance, accounting, customer service and technical support
Relaunched brand – “Energize Your Thinking”
Strategic Benefits
Created leadership position in the medical market
Expanded local sales presence in key international markets
Provided an installed customer base for the sale of full text content
39
Implementing the StrategyImplementing the Strategy
Gain Sharein Spend
Gain Sharein Spend
• Implemented account planning process to identify additional spend opportunities through customer profiles
• Completed customer segmentation of Ovid customer base• Captured LWW print spend to accelerate online migration through
bundled pricing incentives
Expand Lead in Content
Expand Lead in Content
• All LWW content loaded onto the Ovid platform• Increased number of “A” list journals by 32.5% to 98• Increased total number of journals by 54.6% to 824• Increased book content by 64.7% to 168
Increase MarketPenetration
Increase MarketPenetration
• Leveraged local sales offices to penetrate the international clinical marketplace – first success in Germany/Sweden
• Created content packages focused on penetrating the community hospital market in the United States
Drive End UserDemand
Drive End UserDemand
• Increase of 35% on number of concurrent users (4,100) • Increase of 62% in page views to 152 million• Numerous software feature releases focused on end-user
functionality including Ovid@Hand and PIN Support
Accomplishments
40
Summary
Medical Research has the leading online platform (Ovid) in the medical market as defined by penetration and usage
The combination of the LWW publishing program and third party licensing skills enable a rapid expansion of content offerings
A deeper integration of the LWW and Ovid organizations will enable WK to more fully leverage our market position
Ovid and SilverPlatter have been fully integrated within twelve months of the SilverPlatter acquisition
41
Medical Research – Product Demo
Patti Corbett, Vice President, Marketing and Customer Development
Will discuss and demonstrate Ovid's Web-based biomedical information solutions for information professionals and clinicians
43
PROFESSIONAL & EDUCATIONPROFESSIONAL & EDUCATION
VISION
To be the dominant and most trusted healthcare information provider to individuals in all global markets and for all stages
of their professional development
KEY STRATEGIES
Implement and practice a customer-focused approach throughout the unit, including the extensive use of market research
Work collaboratively with other WK Health units to fully exploit our high-quality content through all media and all channels
Publish more successful first editions in targeted markets and increase market share of product revisions
Strengthen management of key sales channels, i.e., direct marketing, international, and wholesale/retail
Continue to concentrate on (print) base business, but also expand program of electronic solutions
44
PROFESSIONAL & EDUCATIONPROFESSIONAL & EDUCATION
MARKET OVERVIEWProfessional & Education serves individual customers in Medicine,
Nursing, and the Health Professions
Medicine Physicians and Medical Students US Market Size = $500 Million WK Health Share = 20% Growth Rate = 2-3% Primary Competitors: Elsevier, McGraw-Hill, UpToDate
Nursing Nurses and Nursing Students US Market Size = $200 Million WK Health Share = 55% Growth Rate = 3-5% Primary Competitors: Elsevier, Thomson
Health Professions Various Allied Health Professionals and Students US Market Size = $150 Million WK Health Share = 20% Growth Rate = 7+% Primary Competitors: Elsevier, Thomson
45
PROFESSIONAL & EDUCATIONPROFESSIONAL & EDUCATION
MARKET TRENDS Market dominated by Elsevier and Wolters Kluwer
Selected markets are growing – student enrollments in nursing and the health professions, and nursing professionals
Other markets are flat – medical education and practice
Customers want up-to-date information
Student markets are being negatively impacted by used textbooks and sharing of resources
Customers are looking for print and electronic product combinations
Rapid growth in PDA handheld products
46
PROFESSIONAL & EDUCATIONPROFESSIONAL & EDUCATION
PRODUCT OVERVIEW 4,000 Textbooks and Reference Titles
375 New Books Published Each Year
60 Periodicals
50 Electronic Products, Including PDAs
TOP PRODUCTS Nursing 2002
American Journal of Nursing
Brunner & Suddarth’s Textbook of Medical Surgical Nursing, 9th Edition
Cancer: Principles and Practice of Oncology, 6th Edition
Clinically Oriented Anatomy, 4th Edition
47
PROFESSIONAL & EDUCATIONPROFESSIONAL & EDUCATION
IMPLEMENTING THE STRATEGY: WHERE WE ARE
Created market-focused organization structure
Established new management team
Improved relationships with key wholesalers
Implemented market research program to drive product development
Reallocated resources to growth areas
Working cooperatively with other WK Health units to maximize
exploitation of content and increase development of new print and
electronic products
48
PROFESSIONAL & EDUCATIONPROFESSIONAL & EDUCATION
SUMMARY
Print business remains important to customers and WK Health
Collaboration with other WK Health units will lead to improved results
Wealth of high-quality content assets presents significant opportunity
to WK Health
A customer-focused organization and operation will lead to improved
product development and increased sales
49
PROFESSIONAL & EDUCATION
PRODUCT DEMOS
Jim Ryan, Vice President, Medicine
Will explain and demonstrate Professional & Education’s PDA program for medical practitioners
Diana Mason, Editor-in-Chief, American Journal of Nursing
Will describe Professional & Education’s market-leading nursing periodical publishing program and how the Springhouse acquisition has been successfully integrated and increased our strength in the market
51
Pharma Solutions
VISION
Become the leading provider of communications and information solutions to the global pharmaceutical, biotech,
and medical device industries
KEY STRATEGIES
Focus on Pharmaceuticals, Biotechnology, and Medical Device companies
Develop Greater Depth & Breadth Across the Product Life Cycle
Move From Purchased Data to Suite of Flexible Solutions
Aggressive Acquisition & Expansion Plan
52
Pharma Solutions: Market OverviewPharma Solutions: Market Overview
Market Trends
Pharmaceuticals, Biotech & Medical Device Markets continue to grow
at + 8%
Spend approximately $50 billion annually on information, content and knowledge
Assuming 10% is outsourced = $5 billion potential throughout the product lifecycle
Greater need for timely, value-added, integrated information
Competition
Strongest competition comes from Reed Elsevier and Thomson
Additionally many small players compete on a segment-by-segment basis
53
Pharma Solutions: OpportunitiesPharma Solutions: Opportunities
Current Positioning
Revenues continue to grow organically
Currently providing solutions to 17 of top 20 Pharma Companies worldwide
However, under-penetrated in U.S. marketplace which is the largest pharma market in the world
Opportunities
Develop greater depth & breadth across product life cycle
Significant opportunities to establish strategic leadership though acquisitions
Consolidation of smaller players across the product lifecycle equals large opportunity
Development of new products and strategic acquisitions will enhance ability to capture larger market share
Restructuring business to leverage our strengths and assets and focus on customers
54
Pharma Solutions: Strengthening Depth & Breadth Across Product Life Cycle
COMMUNICATIONS PLANNING TOOLS
VA
LU
E
STRATEGIC REPORTS HEALTHCARE COMMUNICATIONS
RDI CME
SUPPLEMENTS REPRINTS
SUBSCRIPTIONS JOURNALS
DISCOVERY CLINICAL TRIALS PRE-LAUNCH LAUNCH POST LAUNCH
CTI
55
Pharma Solutions: ProductsPharma Solutions: Products
Providing robust and significant data in the areas of: Clinical Trials Data Drug Data Business Intelligence Data Commercial Reprints Customized Healthcare Communications Publication Planning Tools Continuing Medical Education Resources
56
Implementing the Strategy: Where we are
Strategic acquisition plan developed and implemented
100 initial acquisition targets identified and screened against current gaps
Thirty serious targets being closely examined
U.S. operation restructured and sales force aligned around customers
New executive team in U.S. in place
Global marketing and new product development function established
Sales force customer teams established
New electronic products launched
LWW Healthcare and Adis integration underway
57
Pharma Solutions: Summary
Combined LWW and ADIS International to form Pharma Solutions, a
strong global solution provider
History of strong organic growth
Commitment to develop greater depth and breadth across the product
lifecycle through new product development and acquisitions
Penetration into US marketplace is a priority
Move from data provider to suite of flexible solutions
58
Pharma Solutions: Product Demos
John Monahan, CEO, Pharma Solutions
John Starzewski, Vice President, Strategic Marketing Services
Will describe and demonstrate, several of the Pharma Solutions core offerings,
including: Clinical Trials Insight R & D Insight AdisZenith Publication Planning Tool
60
Clinical Tools: Focus and Guiding Principles Clinical Tools: Focus and Guiding Principles
Focus Forward-looking unit focused on the application of emerging technologies to
healthcare information needs Dramatic growth opportunities will exist -- our goal is to lead Timing: understanding state of technology and market forces is critical First example: e-prescribing
Guiding Principles Technology will inexorably creep out to the front lines of healthcare…to the
clinicians The breakthrough products for clinicians have not yet been made Print products should be derivatives of electronic products, not vice-versa Collaboration between Clinical Tools and other business units creates unique
potential We will need to innovate and take risks
61
Clinical Tools: Current Product LinesClinical Tools: Current Product Lines
Three synergistic organizations being integrated into one Three synergistic organizations being integrated into one working groupworking group
Referential drug info <--> Integrated drug info <--> Integrated Referential drug info <--> Integrated drug info <--> Integrated disease infodisease info
62
Clinical Tools: Vision Clinical Tools: Vision
Deliver tools to healthcare professionals that make them “information professionals”
Reduce medical errors…and capitalize on that financially!
Disease-centric decision support
Distance learning
“Digital human”
Attention to medical device industry in addition to pharmaceutical industry
63
Clinical Tools: Competitive Landscape Clinical Tools: Competitive Landscape
Barriers to entry are extremely high in the integrated drug data market Only two players: FirstDataBank (55%) and Medi-Span (45%) Switching costs for customers are often prohibitive
Resources and expertise required to create a comprehensive clinical drug database (e.g., Facts and Comparisons) are significant Competitors include Thomson (PDR, Drugdex, USP), Reed Elsevier (Mosby
GenRx), Medimedia (Triple-i), Lexi-Comp (Lexi-Drugs), Gold Standard Multimedia (Clinical Pharmacology), American Society of Health-Systems Pharmacists (AHFS Drug Monographs)
A new player emerges only every several years
Clineguide’s disease database is an even more complex build and only Cerner (Zynx) has an existing competitive product
64
Retail Pharmacy40%
Hospital Pharmacy24%
Physician Offices8%
Drug Benefits Administrators
8%Pharma
7%
Individuals and Students
4%
Others9%
Over 40% of total sales (and vast majority of Medi-Span sales) are to systems Over 40% of total sales (and vast majority of Medi-Span sales) are to systems vendorsvendors
Clinical Tools: Customers are institutional Clinical Tools: Customers are institutional
65
Clinical Tools: Products Landscape
Skillful application of advanced information technologies will create massive opportunities in healthcare
InitiativeInformation component
Technology catalyst
Market acceleration
E-prescribing Drug info PDA & wireless Now
Decision support Disease infoDatabase web
services1-3 years
Distance learningBasic/clinical
sciencesBroadband internet 1-3 years
Surgical simulation 3D anatomy &
physiology Virtual reality 3-5 years
66
Clinical Tools: Clinical Tools: Goals for 2003
Continue to integrate the existing product lines and operations, providing the market with novel and compelling products
Add new leadership in marketing to support an integrated and well-trained sales force
Establish operational stability and continue solid market momentum into 2004
Participate aggressively in acquisition market
Set stage for payoff in 2004 and beyond
67
Clinical Tools: Product Demos
Russ Worley, Managing Director, Medi-Span
Leslie Mills, Senior Product Developer, Medi-Span
Will explain and demonstrate the Medi-Span product line
Jon Seymour, MD, CEO, Clinical Tools
Will explain and demonstrate the Clineguide/eFacts web-based products
