Attached files
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| 8-K - FORM 8-K - OMNICARE INC | form8k-oppenheimer.htm |
Exhibit 99.1
Forward-Looking Statements
Except for historical information discussed, the statements made today
are forward-looking statements that involve risks and uncertainties.
Investors are cautioned that such statements are only predictions and that
actual events or results may differ materially.
are forward-looking statements that involve risks and uncertainties.
Investors are cautioned that such statements are only predictions and that
actual events or results may differ materially.
These forward-looking statements speak only as of this date. We
undertake no obligation to publicly release the results of any revisions to
the forward-looking statements made today, to reflect events or
circumstances after today or to reflect the occurrence of unanticipated
events.
undertake no obligation to publicly release the results of any revisions to
the forward-looking statements made today, to reflect events or
circumstances after today or to reflect the occurrence of unanticipated
events.
To facilitate comparisons and enhance understanding of core operating
performance, certain financial measures have been adjusted from the
comparable amount under Generally Accepted Accounting Principles
(GAAP). A detailed reconciliation of adjusted numbers to GAAP is posted
the Investor Relations section of our Web site at http://ir.omnicare.com.
performance, certain financial measures have been adjusted from the
comparable amount under Generally Accepted Accounting Principles
(GAAP). A detailed reconciliation of adjusted numbers to GAAP is posted
the Investor Relations section of our Web site at http://ir.omnicare.com.
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Omnicare Today…
A Senior Care Pharmacy Services Company
A Senior Care Pharmacy Services Company
• Industry leader
– 47 states, District of Columbia and Canada
– 120 million prescriptions dispensed per year
• Nation’s largest provider of hospice
pharmacy
pharmacy
• Global contract research organization
Omnicare Growth Drivers
• Demographic trends
• Pharmaceutical market trends
• Strategic objectives
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Demographic Trends
Aging Population Shaping Healthcare
Aging Population Shaping Healthcare
• Life expectancy continues to lengthen
• Significant population mix shift towards seniors
Source: U.S. Census Bureau
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Pharmaceutical Market
Trends
Trends
• Branded drugs
• Major market shift to generic drugs
• Development and use of biologics
increasing
increasing
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Brand to Generic Drugs
Increasing Utilization of Generics
Increasing Utilization of Generics
(1) Generic prescriptions dispensed as a percent of total scripts
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Major Shift to Generic Drugs
Benefits
Benefits
• Buy-side margin
• Favorable impact on working capital
• Top 100 generic drug analysis
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Generic Drugs
Long-Term Trends
Long-Term Trends
• Top 100 generics based on revenue
• 94% of these older generics providing
positive contribution relative to brand
positive contribution relative to brand
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(1) All generic launches are subject to change due to litigation or pediatric exclusivity.
(2) Drugs already launched shown in gray and italics
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2010
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2011
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2012
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2013
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Arimidex
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Fazaclo
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Actos
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Aciphex
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Cozaar
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Femara
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Diovan
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Asacol
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Effexor ER
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Gabitril
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Exelon Patch
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Avodart
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Exelon Caps
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Levaquin
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Geodon
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Cymbalta
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Flomax
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Lipitor
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Invega
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Humalog
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Lovenox
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Plavix
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Lexapro
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Lupron Depot
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Merrem Inj.
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Tricor
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Lidoderm
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Niaspan SR
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Mirapex
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Uroxatrol
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Seroquel
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Oxycontin
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Prevacid Soltabs
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Xalatan
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Singulair
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Renagel
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Aricept
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Zyprexa
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Xopenex
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Travatan
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2010-2013 Potential Patent Expirations(1)(2)
Geriatric Market
Geriatric Market
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Specialty Pharmaceuticals
A Growth Industry
A Growth Industry
(1) Source: EvaluatePharma
Pharmaceutical Market Share(1) by Drug Type
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• Mail order
• Oncology and multiple sclerosis
• Outsourced services for
biotechnology firms
biotechnology firms
• Omnicare’s institutional
pharmacies
pharmacies
Conventional
Drugs, 72%
Drugs, 72%
Other, 19%
Omnicare’s Positioning Within Specialty Pharmaceuticals…
Strategic Objectives
• Productivity improvements
– Cost-reduction initiatives
• Customer growth
– Skilled nursing facilities (SNFs)
– Assisted living facilities (ALFs)
– Other institutional settings
• Specialty pharmacy
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Productivity Improvements
Transitioning to an Operations-Driven Company
Transitioning to an Operations-Driven Company
• Cultural transformation
– Instill collaborative environment,
encourage employee innovation
encourage employee innovation
– Revamp budgeting process
– Reinforce a commitment to compliance
• Reallocation of resources
– Align employee interests
– Reshape the organization, bringing it
closer to the customer
closer to the customer
– Improve accountability with regional
realignment
realignment
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Productivity Improvements
Cost-Reduction Initiatives
Cost-Reduction Initiatives
• Drug purchasing
– Leveraging brand and generic drug
purchasing power
purchasing power
• Strategic sourcing
– Capitalizing on scale with non-drug
purchases
purchases
• Operating initiatives
– Hub-and-spoke network, new
technologies, best practices
technologies, best practices
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(1) P&L savings realized for trailing four quarters through the third quarter of 2010.
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Customer Growth
Initiatives Focused on Organic Growth
Initiatives Focused on Organic Growth
• Enhance the customer experience
– Align customer retention with incentive programs
– Proactive vs. reactive approach to customer service
– Reposition leading technology offering
• Improve selling effectiveness
– Re-engage sales consulting group
– Improve coordination of selling process
– Revamped incentive programs
– Redeploy marketing resources
Customer Growth
Broadening Markets
Broadening Markets
• Assisted living market
• CCRCs, independent living
• Mental health market, rural hospitals,
prisons
prisons
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Customer Growth
Focus on Assisted Living Opportunity
Focus on Assisted Living Opportunity
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Assisted Living:
Three-Pronged Growth Opportunity
Specialty Pharmacy
Growth Outside Institutional Setting
Growth Outside Institutional Setting
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• Omnicare specialty pharmacy growth rates have outpaced
robust industry growth rates…but opportunities exist to
further accelerate growth through:
robust industry growth rates…but opportunities exist to
further accelerate growth through:
– Addition of new leadership
– Tighter coordination of efforts
– Penetrate additional disease states (for ACS)
– Primary disease states currently multiple sclerosis and oncology
– Potential additional acquisitions to fill-out portfolio
Two-year CAGR(1) for Omnicare’s specialty pharmacy businesses = 43.8%
(1) Quarterly revenues based on third quarter 2010 results (as compared with third quarter 2008 results)
Third Quarter 2010 Highlights
• Scripts dispensed increased 1.3% sequentially
– One additional calendar day in 3Q 2010 as compared with 2Q 2010
– Number of beds served up sequentially
– Utilization stable
– Census was lower, although rate of decline improved from 2Q 2010
• Qtr. ending number of beds served(1) up 32,000 sequentially
– Increases in additions; bed adds benefitted from CCRx acquisition
– 25% sequential reduction in losses
• Net sales, gross profit higher sequentially
• Adjusted EBITDA(2),(3) slightly lower at $140.7 million
• Adjusted EPS(2),(3) up 8.3% sequentially to $0.52
• $37.4 million returned to shareholders through dividends and share
repurchases
repurchases
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(1) Includes patients served under patient assistance programs
(2) Excludes discontinued operations
(3) Excludes special items. A reconciliation of this non-GAAP information has been attached to our press release and
is also available on our Web site under ‘Supplemental Financial Information’ from the ‘Investors’ page.
Capital Returned to Shareholders
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(1) Cumulative % Returned = (YTD Dividends Paid + YTD Share Repurchases) / 12/31/09 Market Capitalization of $2,908.4 million.
Omnicare’s Fundamental Value Drivers
• Favorable industry dynamics
• Industry leading position
• Scale business
• Solid financial position
• Substantial cash flow generator
• Enhancing efficiency of operations
• Opportunities to leverage core business
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