The Biomnis Group

Réunion mensuelle DSC - BIOMNIS 15/09/2009

National Healthcare ConferenceBurlington Hotel, March 24th 2011

Pierre-Yves Guiavarch, President & CEOSimon Chipperfield, International Director

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Agenda

Overview of The Biomnis Group

Reforming the Healthcare System Pathology Reform in France – Consolidation at a

Crossroads

Biomnis in Ireland

International Trends in Pathology

www.biomnis.com

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I. Overview of the Biomnis Group (history)

1897 … 1976 1994 1996 1998 1999 2000 2001 2003 2004 2005 2007

1897Foundation of the « LMM » in Lyon,

by Marcel Merieux (associate of Louis Pasteur)

1994LMM is detached from the

Marcel Merieux Foundation but remains under its umbrella

2000Acquisition of LCL

(Paris)

2001Acquisition of

« Bioffice » (Bordeaux)

2004 ISO 9001

certification of TSE

…

1999Acquisition of Claymon

Lab (Ireland)Acquisition of OpenLab

(IT)

2006

1998Acquisition of TSE (logistics)

2008

2008Merger of LMM &

LCLCreation of

« BIOMNIS »Creation of CBM 69 

& CEF 

1997

24/10/2008Acquisition of

Biomnis by DS (private equity)

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1994-1996Acquisition of

« LACB » (Grenoble)Acquisition of

« LABS » (Nice)Acquisition of the

Pasteur Institute of Lyon

1998The Marcel Merieux

Foundation sells out the LMM (but retains a 23% shareholding)

Dr. JL Oger becomes CEO and acquires a 75% shareholding of the LMM

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I. Overview of the Biomnis Group

The Biomnis Group:

• Dedicated to Clinical Pathology since 1897• 10m+ tests per annum

• Expertise in all fields of Clinical Pathology (ISO 15189 accredited)• 2,500 in-house assays

• Medically and scientifically led• 60+ consultant pathologists and over 1600 employees

• International reach• 50+ countries referring tests• Subsidiaries in Ireland and the UK

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Core activity

• Specialised cold laboratory testing services, in all fields of Clinical Pathology:

o Pre-analysis phase

=> temperature controlled logistics of biological samples

o Analysis phase

=> test menu composed of 2,500 assays (in house)

o Post-analysis phase

=> expert consultant led advisory support, data transmission, sample storage

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I. Overview of the Biomnis Group

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Lyon

500 staff including 35 expert Pathologists 10 000 m² 10 000 patient requisitions / day => 18 000 tests

/ day

I. Overview of the Biomnis Group

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I. Overview of the Biomnis Group

Mycobacteria Department

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Paris

400 staff including 20 expert pathologists 6000 m² 10 000 patient requisitions /day => 18 000

tests / day

I. Overview of the Biomnis Group

9Haematology

I. Overview of the Biomnis Group

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Other activities :

• Full management of Hospital based clinical laboratories –• 10 hospital locations – 1000+ beds – supported by 4 labs• Point of Care Testing, Hot Labs and specialist referrals

• Walk in patient Primary Care Laboratories - « Town Labs »• Paris, Lyon and Bordeaux regions

• Forensic genetic testing• Specialist service for French Police

• Temperature controlled logistics of biological samples• 500+ vehicles in own specialist medical logistics service

across France & Ireland

www.biomnis.com

I. Overview of the Biomnis Group

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Logistics

• « TSE express medical »o 25 hubso 4 regional platformso 500 staff

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I. Overview of the Biomnis Group

Regional hubs

Local hubs

Central hubs

Head quarters

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• Regulatory environment for pathology laboratories in France established since 1975:• Only Clinical Pathologists are allowed to run a laboratory

• Hold a minimum of 75% of the voting rights

• Restricted rules for operating a laboratory

• Limited Geographic scope, minimum headcount, specific equipment, minimum surface area and requirement to perform 60% of tests on site

• Other Features:• 40%+ of clinical pathology performed by private sector

• Price regulation via a National Tariff structure

• 2 main private specialist referral test laboratories – Biomnis and Cerba

• c.4000 Town Laboratories – fragmented and relatively expensive

2. Pathology Reform in France – At a Crossroads

www.biomnis.com

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• Restrictive environment put under scrutiny following 2 major reports – IGAS Report (2006) and Ballereau Report (2008)

• Key findings from IGAS:• Inappropriateness of current regulations for opening a new laboratory and protection

of clinical pathologist from any competition

• Dysfunctional influence of the price regulation system

• Reform should focus on high quality level at optimised cost

• Mandatory accreditation of all laboratories

• Thorough review of tariff nomenclature

• Necessity to create larger players and platforms

• Ballereau report required reform around 3 key axes:• Reaffirmation of the medical characteristic of clinical pathology

• Systematic and mandatory accreditation system to improve quality

• Cancellation of restrictions on laboratory shareholding structure

• Target savings for next 5 years (2.5 to 3.5% per annum)

2. Pathology Reform in France – At a Crossroads

www.biomnis.com

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• HPST law (or “Bachelot Law”) incorporating clinical pathology reform passed 15 January 2010:• Clinical pathology is a medical act – clinical pathologist has to be responsible for the

entire testing process

• Reduced regulation relating to laboratory operations

• All laboratories required to obtain ISO 15189 by 2016 at the latest

• Initially committed to opening the laboratories shareholding structure but postponed after clinical pathologists’ lobbying

• Since the Bachelot Law:• Price reductions implemented

• Rebates from specialist laboratories to Town Laboratories have been suppressed

• Rebates to Public Hospitals (for up to 50% of the standard tariff) are being cancelled over 3 year period

• Private sector has rapidly started to consolidate in the Town Labs sector

• Combination of laboratories into regional clusters with hub and spoke model - 1 major lab technical platform and multiple collection centres

2. Pathology Reform in France – At a Crossroads

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• However…..

• Recent ECJ Ruling on shareholding structures

• French National Assembly vote to repeal Ballereau Ordonnance

• In spite of this fresh uncertainty part-way through a major reform programme, the market will continue to consolidate to achieve:• Larger higher volume regional laboratory platforms

• Mandatory quality and accreditation standards

• Better value for money

• Whilst ensuring that clinical pathology remains a medically delivered service for the benefit of the patients

2. Pathology Reform in France – At a Crossroads

www.biomnis.com

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1.5 million tests/year

>100 staff members, 4 pathologists

ISO 15189 accreditation

Logistics service dedicated to the collection and

temperature controlled transportation of samples

•HSE hospitals

•Private hospitals/clinics

•Clinical trials/pharma

All clinical pathology

disciplines, and gynae cytology

•Public service departments: Semi-state companies

•Corporate clients

Occupational health and

lifestyle screening

Drugs of abuse

testing

• Irish Prisons Service

• « Methadone maintenance » clinics

3. Biomnis in Ireland

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3. Biomnis in Ireland

• €3m investment in Biomnis Ireland in late 2010• Acquisition of Euromedic Lablink• Extension of test repertoire in Dublin Laboratory• Phase 1 technology transfer from France

• 30% increase in Test Menu

• Celebrating 20 years in business in Ireland in 2011

• 20 new technical & scientific employees in 2010 – 70% graduates

• Phase 2 technology transfer in 2011

• Collaboration with Third-Level Institutes

• Establishment of JVs with public sector partners

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4. International Trends in Pathology

> 70% of diagnostic decisions based on a lab test

Lab test results are the major contributor to patient records

65 year olds account for x6-9 more lab tests per head

It is estimated that pathology testing in US will increase c.90% by 2017

In countries with ageing populations, there will be considerable pressure on Diagnostic Laboratory services due to ageing populations

and an increasing reliance on pathology diagnostics

www.biomnis.com

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4. International Trends in Pathology

• Use of Lean Six Sigma method to improve efficiencies in pathology

laboratory operations

• Greater use of automation and larger technical platforms

• ICT integration into public health networks

• Use of mobile devices

• Higher volumes and lower prices

• Market consolidation across the private sector in Europe and USA

• Outsourcing and extensive use of the private sector as a partner with the

public sector

• Potential Global shortages of scientific staff

• Standardisation of accreditation standard to ISO 15189

• Development of genetic companion diagnostics and personalised medicine

www.biomnis.com

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Conclusion

• Population demographics and medical advances will drive demand on already stretched services

• Staff shortages in medical science disciplines will drive need to change working practices

• Automation and scaling of technical platforms can enable volume to be delivered at lower cost

• We can learn from a number of international experiences and models already delivering rapid, high quality results that help clinicians diagnose, treat and monitor patient illnesses and diseases

www.biomnis.com