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22/05/19
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17:00
q1 2017 q1 2018 and we go at the q1 2019
17:05
to be higher again so each of these key
17:07
ones gets higher our pie chart is still
17:09
a little bit out of whack typically we
17:11
would see about 45 percent of the global
17:14
healthcare business is coming out of
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whether it's pharmaceutical whether it's
17:18
medical device across the industry
17:20
globally obviously billions and billions
17:22
in revenue emerging markets typically
17:24
makes up about twenty to twenty-five
17:26
I usually includes Latin America Middle
17:29
East Africa Asia Pacific and then Europe
17:33
would make up about thirty thirty-five
17:34
silver in that range so we have a lot of
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the money coming out of North America
17:38
but both these segments are growing
17:40
significant they are and it's important
17:42
that we actually get that balance right
17:43
because means all areas are performing
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as they should one of the things that's
17:49
important to know is how the cost base
17:52
has shifted to the US now 2016 a lot of
17:57
the company was obviously based in
17:58
Australia even a therapies infusion and
18:01
the adaptors it was being run globally
18:03
out of Australia and that's pretty
18:04
difficult to do everything else is a
18:07
long way away the systems in North
18:09
America and Europe are completely
18:10
different and you've certainly need to
18:12
have that presence the distinction now
18:15
for us as Minneapolis is in fact the
18:19
global capital of medical device I grew
18:22
up in the drug industry which is New
18:23
Jersey for all the global headquarters
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for devicive based in Minneapolis why is
18:27
that important well because when you're
18:29
dealing with the global headquarters
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that's how you get deals done all of
18:33
these folks midtronics and jude boston
18:34
they're all in their backyard I visit
18:36
their campuses we know these people and
18:39
on the other side we get talent who are
18:40
floating around these places because if
18:42
thousands of employees across these
18:44
companies based in Minneapolis engineers
18:46
particularly the best in the world the
18:48
medical engineers there are responsible
18:50
for creating every device in hospital
18:52
these days we have access to those folks
18:54
all over the place they're good they're
18:57
relatively inexpensive so it is
18:58
absolutely the place to be and because
19:00
we Minneapolis that's why we've managed
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to progress out to have our project so
19:03
quickly and I'll talk about that in a
19:04
minute but you can also see maybe
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contrary to popular belief that the head
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counties are the statical or declining
19:11
at the point of curb read we had even
19:13
around 100 we haven't increased our
19:16
headcount per se we have changed some of
19:19
those jobs some of them to become more
19:21
high-value and we certainly shifted
19:23
functions to the US that were otherwise
19:26
not there because they need to be there
19:28
with 45 percent of that market is the
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global market and you have to have folks
19:32
always it connected to that so when you
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start shifting costs to the US you have
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two things going on and you'll see this
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is the full-time equivalents FTE
19:42
in Australia obviously declining as a
19:45
percentage of our global head camp
19:47
obviously going up in the States and
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everywhere else it's kind of also
19:52
slightly these are small numbers those
19:54
percentages don't really matter what's
19:56
important here is you know people like
19:58
marketing our chief medical officer dr.
20:00
brandy who joined us maybe only three or
20:02
four months ago is an outstanding
20:03
individual his commercial impact is huge
20:06
by the way because everything is driven
20:07
by clinical science and you'll see these
20:10
costs 2016's TNA costs 2017 2018
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declining in australia coming up in the
20:16
states and that's because of that shift
20:19
but also because of another thing we
20:21
have an FX impact we probably haven't
20:24
communicated them a lot because I
20:26
positive and negative across the wire
20:28
from from any shareholders and you know
20:32
it's important to keep in mind when we
20:35
repatriate dollars to the balance sheet
20:37
in sales we get a benefit obviously US
20:40
dollars come back into our dollars we
20:42
get a 30 40 percent lift when we reap it
20:44
Patriot costs to the balance sheet and
20:47
the annual report that's going to be
20:48
reflected a lot higher so when you look
20:51
at costs in the annual report they
20:54
recorded as Australian dollars but
20:55
there's a 40 percent differential
20:57
between what we spend and what you read
20:59
and that's an important distinction
21:00
doesn't really matter and they doesn't
21:02
change profitability is still dollars of
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dollars but the dollar in the US by the
21:09
same or less than the dollar in
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it was actually higher taxes or about
21:13
50% so our employees a reflection of
21:17
that environment plus the 40%
21:19
differential in FX maybe thank you
21:22
started this journey we're almost a
21:24
parody with the with the US dollar here
21:26
in Australia about 91 92 % which was
21:28
which was nice but we're always going to
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carry that but like I said the 45% of
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the market in the u.s. ultimately will
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drive up the repatriation of those US
21:38
dollars back here as well share all the
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ways there's been a dramatic shift in
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our shareholder base in the last couple
21:45
of years and I think one that's really
21:47
important to understand and one that's
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beneficial for the company this is as of
21:52
this month 2019 you can see the total
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base here we've got obviously star right
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I'll talk about these two guys in a
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seiyya capital taking up nearly 50% of
22:02
the register the rest of the top 20
22:05
fitting in there Levinson and the rest
22:07
of the investors holding about 44
22:09
percent of the company we up until this
22:12
point probably had about 90 percent of
22:15
our register was held by retail
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investors that's a good and a bad thing
22:20
it's not necessarily when you're a
22:22
company the size of Admetus you need
22:24
capital this is a global business with a
22:26
with a big undertaking and big
22:28
competitors it didn't start life that
22:30
way survivors immunotherapies and other
22:32
things but certainly the focus we have
22:34
now required the support of institutions
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I would say 90% of the small cap stocks
22:39
on the ASX in health care that I've
22:41
invested that I've studied either go
22:44
broke for lack of capital or they have
22:46
massive share price to clients as soon
22:48
as they start selling stuff because no
22:50
one's ever fascinated by five million
22:52
dollars in sales and we follow that same
22:54
trend when you've got institutional
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support both these institutions by the
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way our staff quite doctors the stark
23:00
folks out of Hong Kong there's a couple
23:02
of doctors on the board there they
23:03
invested in science they look at this
23:05
company from day one of their investment
23:07
not as a 10 year old company but as
23:09
one year or two year old company and
23:10
they invest accordingly the other
23:12
important thing is these guys just came
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on the register in the last few months
23:15
obviously late last year they're here
23:19
you know we if and when we would need
23:22
capital these are the folks that give it
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to us we don't have to necessarily don't
23:27
want to tap retail investors we simply
23:29
don't want to focus either but my point
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is that white-knuckle panic that a lot
23:34
of small caps go through when they need
23:35
money wondering where the retail
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investors can support them is not
23:39
necessarily something we have to be too
23:41
concerned about moving forward support
23:43
from institutions is critical to a
23:45
company of our size and scale these guys
23:48
say oh they're based in in New York
23:50
obviously a little bit about SIA the the
23:55
principal at SIA is a physician himself
23:57
he's an ENT surgeon started life as
24:00
doctor ended up being a banker he
24:03
invested in us originally was going to
24:05
be a small amount he invested more and
24:06
the reason he did that is that he went
24:09
did his due diligence on our science
24:10
with doctors who used that product
24:12
particularly in New York and other parts
24:13
of the u.s. doctor the doctor he sat
24:16
down with him before he made his
24:17
investment went through the science came
24:20
back to me after I think he spoke to
24:22
about five he spoke to a couple of our
24:23
table our doctors as well on our
24:25
advisory board when we look at the top
24:27
20 you can see here it's pretty roughly
24:29
evenly split between Starbright that say
24:31
oh and then 20% make out in those top 20
24:36
John mentioned we have moved towards
24:38
single focus for the company we're
24:41
bringing a company which is how we
24:42
started off even at the board when John
24:44
and I are on the board way back it was
24:46
very clear the company had to be focused
24:48
as a as a single focused company
24:50
structural hard as it turns out not even
24:53
know therapies nobody's got a billion
24:54
dollars or ten years to bring a drug to
24:56
market that's clear and the infusion
24:58
business whilst it's been a very good
25:00
business for the company certainly
25:02
doesn't nestle with our global agreement
25:05
moving forward so as you would have seen
25:07
recently we have been in negotiation for
25:09
a very long time with BTC on the sale of
25:13
our infusion business or part of our
25:17
and you were seeing that announcement
25:18
came out yesterday so we've moved it on
25:21
or the summit part of that for 6.3
25:23
million it closes on the 31st of May
25:26
that's the target of closed date
25:28
everything being equal that should go
25:30
through their full transition will be
25:32
the next day we have transition teams
25:34
now working to move the reps and the
25:36
products and all the documents need to
25:37
go across to BTC who are publicly traded
25:40
listed in Melbourne this will bring
25:42
about a reduction of about 19% in the
25:44
that's the reps and everything else to
25:46
go along with that business so there is
25:47
obviously a reduction there obviously
25:49
reduction in the revenue as well we will
25:51
hang on to the argument missus at the
25:53
moment now just for clarity the
25:55
alchemist is in fact the Royal Adelaide
25:57
when we used to talk about that a lot
25:58
there's about two more years to run out
26:00
on that contract and some dollars there
26:03
with regards to the consumables we need
26:06
to manage that through completion then
26:09
we have obligations to the Royal
26:10
Adelaide so that will remain with us but
26:12
in general terms we are now single
26:14
focused you know humina therapies
26:16
obviously that deal fell over after a
26:19
significant period of time that was
26:22
never a balance sheet deal anyway
26:24
so whilst we may have got some upside at
26:27
the others up the other end if they got
26:28
a drugs market we were never getting any
26:30
money out of that and that's why I
26:31
stopped funding at several years back so
26:34
here we are we're an adapt company I'll
26:37
give you a quick view on the commercial
26:39
update I won't spend too much time here
26:41
this is now looking at the u.s. the u.s.
26:44
is actually growing 55% last year given
26:47
the size and scale and it's may be
26:49
difficult to appreciate this but the
26:51
reps are outnumbered six to one with the
26:54
small competitors with the big ones to
26:55
forget it it's a big number we went to
27:00
partner back when I first joined we look
27:03
for partnerships people didn't want to
27:04
talk to us they didn't know who we were
27:05
we had no profile it wasn't enough to
27:08
have the science unless you have a lot
27:09
of doctors using it we now have 20,000
27:11
patients who have adapt inside that's
27:14
significant we have a lot of doctors now
27:16
supporting us we have a lot of podiums
27:17
and more important we have publications
27:20
coming out that no other company is even
27:21
close to matching in terms of science I
27:23
with a doctor here who was just going on
27:26
about the amount of data that this
27:27
company generates relative to the
27:29
competitors because he knows them all
27:30
obviously feels woman but it's a tough
27:32
slog for our represents the point i made
27:34
when i when i opened the reps in the
27:36
state and across the world our
27:38
hard-working guys i mean they're girls
27:40
they're out there up against a big
27:42
number and they're winning the battle i
27:43
mean they're growing its data data data
27:46
this is a clinical cell that's an
27:48
important distinction we have more data
27:50
and science than anybody in our science
27:52
it's just better and i'll talk about
27:53
that again you all know the the key
27:56
messages generally but the calcification
27:58
that john mentioned is significantly
28:00
important and nobody has that and i'll
28:02
talk about in a minute but the north
28:04
america is growing at 67% it's very good
28:07
we talk a lot about health systems back
28:08
way back when a few years back we have
28:10
it signed a few even the health systems
28:13
are challenging to work with because
28:16
you're dealing with big companies who
28:18
have hundreds of millions of dollars of
28:20
business with it with the systems who
28:22
can offer major discounts which we can't
28:24
do and so you're always up against the
28:26
size and scale of the other guy but
28:29
we launched these 3d products 60 and 30
28:32
now out in the US there are hundreds of
28:35
thousands of dollars now generated an
28:37
additional revenue that we didn't or
28:39
wouldn't otherwise have had that have
28:40
come from this portfolio and it
28:42
continues to expand of course our
28:43
tomorrow project is a 3d product as well
28:46
and this this is moving forward quite
28:48
quickly we are getting market leadership
28:51
in this space in other spaces but what I
28:55
heard I had dinner with a surgeon in the
28:57
US just a few weeks back an important
29:00
surgeon does a lot of a lot of
29:02
procedures and we were talking about the
29:04
competition I was obviously very keen to
29:05
know when he sees grips from other
29:07
companies what are they saying now
29:08
compared to what they're saying two
29:10
years ago one of our biggest competitors
29:12
whoever's account name had seen him
29:15
maybe two or three days before one of
29:16
the reps and said we're just as good as
29:18
their meters and two years ago they
29:21
would never have said that you know
29:24
maybe a year ago they would never have
29:26
said it but it's a huge comp
29:27
they didn't say they were better because
29:29
they can't the the most the the best
29:32
strategy they had per se which is just
29:34
as good which of course is not a
29:35
strategy now if you consider the
29:37
importance of that over two years just
29:39
in two years to get to a point where the
29:41
competition who are huge are saying oh
29:43
we understand oh it's okay doc we're as
29:46
good as those guys it's a huge
29:48
compliment Europe again the data is
29:51
driving everything in Europe it's very
29:52
much a data-driven market we had
29:55
challenges in 2016 2017 that's halted
29:58
that's the decline in Europe is actually
30:00
reversed we're coming back quite
30:02
strongly we did have huge delays with
30:04
the regulators it actually took 12
30:06
months longer than anticipated to get
30:07
approval for our 3d products that's
30:10
beyond the control of company that's
30:12
just the regulator's they blame breaks
30:14
it and a whole bunch of other things
30:15
because the the EU head for that was
30:17
based in the UK whatever it was we got
30:19
it over the line end of q1 and we'll
30:21
start to see those revenues for 3d
30:23
products kick in and we've got a new
30:24
team working out their emerging markets
30:27
it's quite small for us and we include
30:30
Australia in the emerging markets not
30:32
because it is one but because
30:33
geographically it's placed in and around
30:35
APEC which is generally where we
30:37
generate business it is growing of
30:38
course but off a very small base you
30:42
know we expect the TGA some time ago
30:46
we were led to believe it was coming
30:48
some time ago I'm not going to comment
30:51
on a timeline on that one anymore it
30:53
bites me every day of the week suffice
30:55
to say we've been in close contact with
30:57
the TGA they are being supportive I'm
30:58
going to Canberra tomorrow to meet with
31:00
the people at TGA and hopefully help us
31:02
facilitate a an outcome sometime during
31:05
next whatever period I won't walk away
31:08
with approval tomorrow but hopefully
31:09
I'll be able to state our case face to
31:11
face which we haven't been able to do
31:12
previously so I'm appreciative that
31:13
they're meeting with us India that was
31:16
obviously a big market we definitely had
31:19
some trouble with distributors in India
31:21
I don't think it would be super
31:22
surprised that it could be a challenging
31:24
market I've managed it before and it
31:28
just requires a lot of close work and
31:30
maybe more resources on the ground that
31:32
we are straightening that out it will
31:35
come back to us and we've got a lot of
31:37
other approvals coming through we don't
31:38
announce them all all the time some of
31:41
the bigger markets just came online in
31:43
the last week and we'll announce those
31:44
but a lot of the smaller markets as well
31:47
medical and reg for those that don't
31:49
know regulatory affairs in a healthcare
31:52
company they're the folks to get you the
31:54
approvals the registrations all the
31:56
safety monitoring all the things you
31:57
need to have this is why you need to
31:59
have scientists and doctors and other
32:00
people on staff as a medical company
32:02
there's no getting out of that so there
32:03
are costs there but this is well one of
32:05
the things they do obviously is get
32:06
approvals and you can just see around
32:07
the world what's pending what's in
32:09
process so we do have a lot of the 3d
32:10
stuff now in process including here
32:15
and then we of course save a lot of
32:16
markets online predominately Europe and
32:19
same with Vaska sill the big markets for
32:23
they're online we're working here bit by
32:25
bit the the Southeast Asian markets will
32:28
also come in line in the coming years
32:30
also part of regulatory affairs is
32:32
monitoring our clinical studies and it's
32:35
important that we understand the
32:39
relevance of the studies to our future
32:40
revenue and our future strategy these
32:42
are costs that we have to win
32:44
if we want to become bigger than what we
32:46
are today you've got to have data to get
32:48
approvals but you remember when we
32:50
announced the animal studies about six
32:53
months ago eight months ago we started
32:54
to implant these 3d valves into sheep
32:56
for the first time now this is a 3d
32:59
product it's a valve obviously valves
33:01
are in a very big space and they form
33:03
the core of a Tamara device the rest is
33:05
a catheter but what's on the end of that
33:07
is the valve before we stick them in
33:09
people who go stickmen animals make sure
33:11
they work we did them on the bench
33:12
obviously now this is a first nobody's
33:14
been able to make this 3d valve so
33:16
there's one about 3d products we only
33:18
started this a couple of years ago I
33:20
with John appreciated two years back
33:22
that the flat flat patch business was
33:24
prestigious but it was never going to
33:26
make the family fortune we had to get
33:28
into these add alt indications
33:29
particularly here this one was X planted
33:31
two days ago from the Sheep it's at six
33:35
months if you don't quite know what
33:37
you're looking at these are the leaflets
33:39
of the aortic valve that's the outside
33:42
part what's significant about this is
33:45
that there is a complete lack of
33:47
anything that looks like an adhesion or
33:49
calcification which you will see in
33:51
these animal models early this thing is
33:53
as clean as a whistle so to speak this
33:57
is critically important I mean it's it's
33:59
hugely valuable for us to see this we
34:02
obviously put out some data recently the
34:04
EOS or a 2.5 they're much bigger than we
34:06
anticipated that's also a very good sign
34:08
but when we see them like this ones
34:09
we've had to explain them it's amazing
34:12
now the professor who did this it's in
34:15
Europe we've got normal function after
34:18
that means the valves still working as
34:20
it should that's important remember
34:21
these are juvenile animals so you're
34:23
basically taking a healthy valve out of
34:26
putting in another valve in a patient or
34:29
an animal that doesn't need a valve
34:31
replacement you have to do that but my
34:33
point is when you've got it's already a
34:35
you really strut you know it's important
34:38
to see those differences when the
34:40
animals already healthy and what we're
34:41
seeing is a maintenance of that of that
34:43
animals health so easily implanted the
34:45
surgeons have no trouble putting these
34:46
in I was there for the first procedure
34:48
in Belgium we have had no failures that
34:51
means the valves all worked in the
34:53
animals the the gradients are an
34:55
important hemodynamic marker no regurge
34:57
so these are all important things to
34:59
test the valve before we go to man to
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