Key Findings - TVM Capital Healthcare Partners · 2015. The strategy focuses ... Phasing out of...

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HEALTHCARE PARTNERS

Key FindingsHealthcare Investors Conference 2014

Thursday, 4th December 2014

Dubai

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Supporting OrganizationHealthcare Investors Conference 2014HEALTHCARE PARTNERS

„Common changes are taking place in all countries in the region, driving the reform agenda and creating

a set of different opportunities for the

private sector.“

Joel Finlayson

The Development of the Healthcare Market in the MENA Region

In recent decades, Gulf Cooperation Council (GCC) governments have heavily invested in the development and transformation of local healthcare systems. Commonalities between GCC states, such as geographic location, disease burden, the presence of hydrocarbon reserves, and the large influx of foreigners, have created common threads across the regional healthcare industries. Unprece-

dented demands for health services in the region are mainly driven by an aging population, sharp population growth, rising life expectancy, high prevalence of non-communicable diseases, and shift in the demographic structure. Meeting such demands will pose great pressure on GCC governments to modernize their healthcare systems, raise healthcare quality, and increase population access to health services. While GCC healthcare expenditures continue to be on the rise, there remains a significant service gap between investments in healthcare and health outcomes of Gulf citizenry, coupled with a shortage of qualified workforce, thus fueling growth for private players and constituting a source of opportunities for the private sector.

In his talk, Joel Finlayson, partner with PwC, leading the firm’s Middle East Healthcare Strategy Practice, focused on how governments are reforming their healthcare policies in order to implement an efficient and effective healthcare delivery to all the population. For instance, Oman has developed a Country Cooperation Strategy with the WHO to identify and address the country’s healthcare priorities for the period of 2010-2015. The strategy focuses on strengthening public health capabilities, public health law, policy making, and on supporting the prevention of communicable diseases. KSA, the largest market in the region and the newest reformer, is continuously exerting efforts to attract foreign investment in the healthcare sector, through easing the restrictions on foreign ownership with regards to healthcare facilities.

On December 4th, 2014, we held our 2nd Annual Healthcare Investors Conference. The overarching theme of the event was “Creating International Healthcare Networks”. The conference included speakers and partici-pants from a diverse set of backgrounds who are highly experienced leaders in their respective fields, including healthcare provision, insurance, regulation, investment banking, and private equity. The day also included presentations from our international strategic partners: Spaulding Rehabilitation Network and Joslin Diabetes Center. Topics during the day included: capital markets and MENA healthcare, impact investing in emerging markets healthcare, the evolution of the health insurance program in Abu Dhabi, and the implications of ObamaCare on healthcare markets in the Middle East, among others.

In the evening, we celebrated “30 Years of Value Creation in Healthcare” for TVM Capital Group. This year’s event was a great success, and we plan to continue this tradition of inviting you to a high-quality, engaging event in an intimate setting once again in 2015. Meanwhile please enjoy this summary of key findings from our conference which we prepared to help spreading the insights of our esteemed speakers and panelists. We do thank the sponsors of our event who helped making the conference both an inspiring and cheerful networking event of key industry experts. Dr. Helmut Schuehsler

CEO & ChairmanTVM Capital Healthcare PartnersTVM Capital Group

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Key Findings TVM Capital Healthcare Investors Conference 2014

Joel Finlayson, Partner, PwC

4th December 2014, Dubai

3

Systemic Changes

1 5

4

2

3

Care Settings

Payment Mechanisms

Health Insurance

Private Sector &

PPPs

Health -care

Roles

Gradual introduction of insurance-based systems whereby healthcare costs are reimbursed through health insurance schemes

Phasing out of block funding for bundled or capitated payments to provide greater insight into the cost of care delivery & incentives for improved outcomes

Redistribution of key healthcare functions (e.g. policy- making, care provision, regu-lation, payments, etc.) across new entities to improve system effectiveness

Shift in care settings to improve the effectiveness, efficiency and value of care provided, with ex-panded roles for primary care and public health services

Increased role of the private sector in healthcare delivery & the creation of ‘healthca-re systems’ to allow private players to operate and patients to benefit

Source: PwC

3 4

According to Joel, “common changes are taking place in all countries in the region, driving the reform agenda and creating a set of different opportunities for the private sector. The role of Ministries of Health (MoH) in the region is shifting from being the sole provider of healthcare services to becoming a catalyst for the development of health systems. The overall objective is to improve quality of care, ultimately drive competition in the market, and subsequently drive patient choice.” Indeed, patients are increasingly showing confidence in the quality of care delivered by the private sector. Consequently, the new strategy adopted by GCC governments include gradually pulling away the Ministries of Health from a number of government-related functions, decentralizing the role of the ministries, and actually involving the private sector to support in various areas. Subsequently, the private sector is now encouraged to provide technology support, portable and temporary ICUs, participate in inspection control, etc. Furthermore, government-run healthcare centers in the region are ill-prepared for a rapidly growing and aging population, nor are they prepared for the rise in chronic diseases. Therefore, public providers are tapping private sector expertise and are leveraging the sector’s well-trained staff and track record of providing quality services. As such, Saudi Arabia’s MoH recently started outsourcing the operation of a large number of its dialysis centers to internationally-renowned private dialysis providers, Diaverum and DaVita. Similarly, in 2011, the Kuwaiti Government set up a public-private entity, the Kuwait Health Assurance Company (KHAC), that operates under the MoH and is mandated to accelerate privatization. KHAC expects to roll out more than 800 healthcare projects, including 3 hospitals and 15 primary healthcare clinics by 2015. Ownership will be divided among private investors, the government and free-float Kuwaiti shareholders.

Panelists: Dr. Jad Aoun, Chief Medical Officer, Daman John Kaelin, Senior Advisor, HAAD Allen Harris, Group CFO, Abu Dhabi Health Services Co.

In one of the panel discussions, Dr. Jad Aoun (Chief Medical Officer at Daman), John Kaelin (Senior Advisor to HAAD), and Allen Harris (deputy Chief Financial Officer at SEHA), discussed the evolution of the health insurance program in Abu Dhabi and its implications for the rest of the UAE and the wider region. Indeed, the desire to achieve the best outcomes in the provision of healthcare has

driven health system reforms in many countries across the region, including the Emirate of Abu Dhabi, United Arab Emirates. The latter implemented a mandatory health insurance system. The Health Authority of Abu Dhabi (HAAD) adopted the DRG claiming system and moved gradually from a model in which the government plays the role of both provider and payer to one in which numerous private and public healthcare providers and insurance companies interact to provide coverage. As such, both Daman and private sector insurers are today able to offer different packages to customers, subsequently providing them with a wider coverage. When asked by Carl Stanifer, Senior Strategic Healthcare Advisor at TVM Capital Healthcare Partner, “to what extent is the private sector involved in the overall healthcare delivery in the UAE”, John Kaelin stated that “while

inpatient is still dominated by the public sector (60% market share), the private sector is growing significantly on the out-patient side”. Indeed, the private and public sectors each bring different strengths to the table, and a collaboration between both sectors can range from service delivery to full ownership of healthcare assets. Therefore, governments are increasingly capitalizing on the private sector to deliver quality care, manage rising healthcare costs, and upgrade healthcare systems. “We are keen to provide patient choice and increase accessibility for UAE nationals”, said Allen Harris, “and, while the original intent of SEHA was to privatize up to 80% of its assets, SEHA is now focused on a current mandate to significantly reduce our overall total volume in order to facilitate private sector growth“. While passing from a single player model to an open competitive model will enhance competition and drive patient choice, governments are yet to define clearly the actual role of the private sector. “Today, the border line between public and private is not really set”, said Dr. Jad Aoun, “the private players have a big opportunity to grow if they work smartly, and collaborate with the governments to satisfy unmet needs”.

Notwithstanding the shift in care settings and the restructuring of healthcare roles between public and private entities, “GCC health systems are also well down the path of rethinking reimbursement and moving beyond the typical bulk funding model.” According to Joel, “healthcare costs are increasing in an unsustainable manner which has significant implications for the way healthcare services need to be provided, financed and reimbursed. The days of the block payments (per bed per year with no considerations neither for quality and health outcomes, nor for complexity of care) are over, and the Saudi government, among other governments in the region, is swiftly moving towards a fee-for-services system”. Nonetheless, the latter does not incentivize targeted care, hence, a move towards capitated payments model will more likely focus on prevention, outcomes, and finding the lowest cost interventions. Moreover, several developed and developing countries are now adopting a pathway-based payment model including the Diagnosis Related Groups or DRG-type scheme where the provider receives the average cost of treating patients with similar characteristics. This payment method drove efficiency and enabled payers to share some of the financial risks with the providers. On a parallel note, policymakers in the region, keen to reduce the burden of expenditure on the state, are introducing mandatory healthcare insurance and are paving the way for the private sector. “Increasingly, governments have recognized the merits of an insurance based system with Abu Dhabi and Qatar leading the way”.

• Singleentitythatactsastheprimehealthcare institution

• Entityhasbeenresponsibleforall aspects of healthcare, from policy- making and coordination, through to service provision and regulation

• Thisstructurehasproventobeun- wieldy, can be inefficient, risk averse and sometimes runs at cross purposes

• Needforincreasedspecialisationofcore health system functions

• Decentralisation/devolutionofkey functions and the creation of new payor, regulator, provider bodies

• Eachbodyhasdifferentresponsibilitiesbut all play a vital role in the modern healthcare system

Health Ministries Health Systems

Key Changes to the division of responsibilities

Moderated by: Carl Stanifer, TVM Capital Healthcare Partners

Pa n e l D i s c u s s i o n

Evolution of the Health Insurance Program in Abu Dhabi and Implications for the Rest of the UAE and the Wider Region

„The private players have a big opportunity to grow if they work

smartly, and collaborate with the governments to satisfy unmet needs.“

Dr. Jad Aoun

Source: PwC

Key Findings TVM Capital Healthcare Investors Conference 2014 4th December 2014, Dubai

5 6

After almost two generations of political debate, the U.S. finally passed an almost universal health insurance scheme in 2010, representing the most significant regulatory overhaul of the U.S. healthcare system since the enactment of Medicare and Medicaid in 1965. The new Health Law aimed at increasing the quality and affordability of health insurance, reducing the costs of healthcare for individuals and the government, and lowering the uninsured rate by expanding public and private insurance coverage. Indeed, as of May 2014, approximately 20 million previously uninsured Americans had gained health insurance coverage. Subsequently, the percentage of uninsured Americans dropped from 19% in 2013 to less than 14% in May 2014, and is expected to reach 10% by 2017.

Moreover, in line with the new Health Law requirements, the government set up a managed competition model whereby insurers compete on quality, efficiency, price, and innovation. Accordingly, the government and the private payers, along with healthcare providers, are implementing differential payment, incentives, penalties and bonuses to achieving clearly defined quality measures. Positive outcomes have been observed since, and as the system matures, measureable quality goals will be assessed more accurately, ultimately differentiating payments accordingly. This model of managed competition fostering quality over quantity can be replicated in the GCC countries to raise the quality of care and ease the burden on the public sector. Care providers will be rewarded for their performance and efficiency, encouraging more providers to focus on quality improvement and innovation to streamline the delivery of healthcare in the region, especially in this era of rising demand for healthcare services.

Panelists: Othman Abuhussein, CEO, National Medical Care Co. Dr. Mohammed El Yemeni, KSA Former Deputy Minister of Planning & Health EconomicsDr. Adam Bader, Chairman, Healthcare Quality International

Engaging the private sector is becoming crucial to achieve an immediate step-change in care availability, and the latter is increasingly playing an instrumental role in the recent healthcare developments, not only in the UAE, but also across the region. Unlike UAE and Qatar where overseas investors are allowed greater contribution, foreign ownership in KSA remained for long off limits to investors,

restraining the participation of the private sector. Despite being the largest economy in the Middle East, foreign investors are not permitted to operate or acquire businesses in KSA without first obtaining an investment license from the Saudi General Investment Authority (SAGIA). Once the license is obtained, foreign investors may directly acquire a Saudi operating company. However, the Saudi Arabian foreign investment regulations impose some restrictions on available areas of investment through what is known as the negative list. Nonetheless, company formation in Saudi Arabia is no longer a nightmare process as the Saudi authorities have recently made the processes of company incorporation clearer and easier which is likely to boost the propensity of FDI. As such, the ministerial decree that came out in end of

November eased the restrictions on foreign ownership. This announcement has been long-awaited and will likely trigger a surge of foreign inflows to the Saudi market. Dr. Mohammed Al Yemeni, KSA former deputy minister of planning and health economics, expounded: “If we consider the ministerial decree regarding foreign ownership by itself, it will not mean much as more clarity is needed and more regulations are yet to be changed. But if we look at the entire spectrum, we clearly see a positive trend amongst the ministry of health, the investment authority of Saudi Arabia, the governor of SAGIA, and the ministry of commerce, towards the diversification of the economy. There is also a general consensus that healthcare is a core sector where foreign investment is welcomed as the demand for healthcare services will continue to grow.” In addition to the latest government regulations encouraging the private sector to step in, Youssef Haidar, Partner & Managing Director at TVM Capital Healthcare Partners, pointed out that recent changes in the macro environment in the GCC region (such as a 40% decrease in the price of oil compared to past year) are also expected to further boost the engagement of the private sector in different industries, including healthcare.

On the other hand, Dr. Helmut Schuehsler, Chairman & CEO of TVM Capital Healthcare Partners, alluded to the fact that the gradual shift towards the private sector will certainly create a new line item in the budget of the Ministry of Finance; however, the public sector’s budget allocated to healthcare is not expected to decrease in the coming years as the private sector’s budget increases. “Unless there is a clear separation of the provider from the payer from the regulator, we will not see a decrease in the public sector’s budget” commented Othman Abahussein, CEO of National Medical Care. “In Oman, the government’s budget is mainly deployed in primary care, leaving a big gap in the secondary and tertiary care where the private sector is bound to be an active partner, particularly in therapeutic areas like dialysis and orthopedic implantation”, stated Dr. Adam Bader, chairman of Healthcare Quality International. “However, the legal structure of privatization is still lacking”, he added. With all these developments taking place across the GCC region, there is clearly a general consensus among the public authorities to further engage the private sector in order to widen the scope of healthcare services and subsequently meet the rising local demand and decrease the reliance on international patient care.

MEDICARE

MEDICAID

COMMERCIAL / ESI

HEALTH INSURANCE EXCHANGE PROGRAM

Generally universal coverage for elderly (over 65) and some disabled, currently covering around 50 million Americans, out of which 16 million are enrolled in private plans

Coverage for low income citizens, currently covering 68 million Americans, out of which 30 million are enrolled in private plans

Primarily employer based covering approximately 158 million employees. Until recently,Commercial/EmployerSponsoredInsurance(ESI)wasnotmandatory

Newly established under the Health Law, allowing individuals to purchase health insurance in a standardized and transparent market place. The exchange program currently covers about 7 million citizens, all enrolled in private plans

Moderated by: Youssef Haidar, Partner, TVM Capital Healthcare Partners


Major News from the Healthcare Markets in Saudi, Qatar, Oman, and Kuwait

“Healthcare is a core sector where foreign

investment is welcomed as the demand for

healthcare services will continue to grow.”

Dr. Mohammed El Yemeni

John J. Kaelin, Senior Advisor, HAAD

The U.S. Health Reform Law “Obamacare” and its Potential Implications on the Healthcare Markets in the Middle East

As GCC countries are gradually implementing healthcare insurance schemes and are increasingly relying on theprivatesector’sparticipation,lessonslearnedfromtheU.S.healthcaresystem,basedonapublic/private model, could be valuable for governments in the region. In order to appreciate the lessons learned from the U.S., John Kaelin, Senior advisor at HAAD, provided the audience with a clear understanding of the Affordable Care Act in the U.S. (“Obamacare”) and its implications in the health insurance industry. Up to date, four dominant forms of health insurance coverage are available in the U.S.:


7 8

30financing innovation in healthcare

years


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As aforementioned, Obamacare greatly impacted the life of 50 million uninsured citizens in the U.S. Simi-larly, developing healthcare systems, expanding accessibility, and raising quality standards will undeniably impact people’s health and life, especially in emerging

countries in the GCC and wider MENA region. Subsequently, impact investing is increasingly gaining pace despite the skepticism surrounding the term: can investors generate financial returns as well as do good for the en-vironment and the society? Patricia Dinneen, senior advisor at EMPEA, and Marwa Zohdy, vice president of Global Consulting Services for Joint Commission International, tackled this subject, providing evidence that one can make money and promote economic development and social benefits. “For the past 9.5 years, I was an investor at a big Private Equity firm running the emerging markets private equity business”, said Patricia, “we invested around USD 2.5 billion in over 1,400 companies and we kept track of every single one of these portfolio companies. At the end, we found that some of the most impactful sectors like healthcare, education, and clean energy,turned out to be highly

correlated with financial returns.” In fact, impact investment operates at the intersection of profit- maximization and philanthropy (“doing good and doing well”). “It is intended to create measurable positive social and environmental benefits in addition to financial return. It also has the potential to unlock significant amounts of private capital to complement public resources and charitable donations”, as elucidated by Hoda Abou-Jamra, Founding Partner of TVM Capital Healthcare Partners.

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According to JP Morgan, impact investing accounts today for over USD 46 billion with the majority of investments originating from developed countries, while MENA represented to only less than 2% of the total capital invested. According to the same study surveying 125 of the world‘s largest impact investors, over 91% of investors reported financial returns to be above or in line with their expectations. Furthermore, the potential market for impact investing is projected to reach USD 400 billion to 1 trillion over the next decade, focusing on the more than 4 billion people living on less than USD 8 per day. Nonetheless, only 6% of impact investments is currently allocated to healthcare, although the latter is today the largest industry in the world, estimated at USD 6.5 trillion. “Impact investing in healthcare will definitely increase”, commented Marwa. “When you are investing in healthcare, you are - by definition - investing in improving patients’ outcomes, hence, one cannot really take the impact part out when investing in this sector”, she added, “and impact investing is not only about investing in producing positive outcomes, but also about preventing negative outcomes”. Indeed, JP Morgan survey revealed that more investors plan to increase the percentage of their portfolios allocated to healthcare in the coming years. But in order to attract the private capital towards impact investing in the healthcare sector, proof that investors can generate financial returns as well as produce social and environmental outcomes leading to better living is needed. Consequently, a number of metrics is currently being developed, such as the IRIS (Investment Reporting and Investment Standards) with over 430 metrics, developed by the Global Impact Investing Network for that purpose. “EMPEA (Emerging Market Private Equity Association) has also launched a major program with the Wharton School of the University of Pennsylvania to develop the first comprehensive database that should provide evidence that attractive financial returns and environmental and social benefits can be generated simultaneously”, stated Patricia. Indeed, generating quality outcomes can irrefutably drive stronger future businesses and subsequently yield higher profit, thus attracting further impact investors. “As the CEO of The Joint Commission often says, achieving quality and reliability in healthcare is not rocket science; it’s actually more difficult than rocket science”, concluded Marwa.

Moderated by: Hoda Abou-Jamra, Partner, TVM Capital Healthcare Partners


Impact Investing in Healthcare in Emerging Markets

Panelists: Patricia Dinneen, Senior Advisor, EMPEA Dr. Marwa Zohdy, VP, Global Consulting Services, Joint Commission International (JCI)

“The most impactful sectors like healthcare, education, and clean

energy, turned out to be highly correlated with

financial returns.”

Patricia Dinneen

John L. Brooks III, President & CEO, Joslin Diabetes Center

Joslin Diabetes Center and its International Partnerships: Strategies for Operational Success

As investments in the healthcare sector are on the rise, building international partnerships is considered today as one of the pillars of operational success. John Brooks, President & CEO of Joslin Diabetes Center, highlighted the importance of strategic partnerships to create a competitive advantage, raise awareness, and deliver quality care. Joslin Diabetes Center, based in Boston, Massachusetts, is specialized in diabetes and the broader aspects of metabolic disorders. It undertakes diabetes research, clinical care, education, and health and wellness programs on a global scale. In fact, diabetes is a human and economic burden, with over 380 million people having diabetes in 2013. It is a huge and growing problem and the costs to society are high and escalating. On average, 4.9 million deaths per year are caused by diabetes, and around 11% of the worldwide healthcare expenditures are allocated to this condition. Moreover, one in two people with diabetes do not know they have it. “Therefore, in order to increase awareness and deal with the rising prevalence of diabetes worldwide”, commented John, “we are exerting efforts to strengthen international partnerships and foster innovation, such as developing virtual applications and putting tablet solutions in place that primary care doctors, patients, and their families can use”. Indeed, Joslin Diabetes Center established some strong partnerships in the Middle East. “For instance, we have teamed up with Al Nahdi pharmaceutical company in Saudi Arabia to provide diabetes training to over 2,000 pharmacists, and to implement a proof-of-concept pilot patient engagement program”, said John. Joslin established also a strategic partnership with TVM Capital Healthcare Partners in the UAE to assess and develop training programsforlong-term/rehab/homecare,aswellastoimplementdiabetescasemanagementprograms.

22%

19%

15%

12%

10%

10%

8%

2% 2% 0.1%

Total AUM by Geography

Northern America Latam and Carribbean Sub Saharan Africa E. Europe, Russia, C. Asia East and Southeast Asia South Asia Western Europe

21%

21%

18%

11%

8%

8%

6%

3% 3% 1%

Total AUM by Sector

Microfinance Financial Services

Other Energy

Housing Food & Agriculture

Healthcare Information & Comm. Tech

Education Water & Sanitation

Assets under management of over 100 major Impact Investors = $46 billion

Source: JP Morgan Social Finance 4th Annual Survey, May 2014

6% in healthcare

2% in MENA


Moderated by: Dr. Sameer Al Ansari, Member of the Board, TVM Capital Healthcare


11 12

Another successful and unique model of international partnerships is the strategic collaboration undertaken by TVM Life Science with the pharmaceutical major Eli Lilly. The overall concept of this partnership is based on bringing together a private equity and a strategic partner without necessarily relying on the latter in the decision making process. “Our fund invests in companies that only hold one molecule at preclinical or phase I development stage. That molecule is developed in a virtual partnership with Chorus, Lilly’s fully owned CRO. Lilly has then the option to buy back that molecule from the fund at very attractive multiples, playing the role of an exit partner for TVM Capital Life Science”, explained Dr. Hubert. This strategic relationship with Lilly enables the “project-focused companies” of the fund to reach clinical proof of concept efficiently and cost effectively. Overall, this novel model of partnership is particularly interesting for venture capital firms for three main reasons: risk mitigation, capital efficiency, and exit partnership.

Panel Discussion: Capital Markets and Healthcare in the Middle East – A Potential Love Affair?

Panelists: Dhiraj Joshi, Director - Healthcare Strategy & Deals, PwC Ayman A. Khaleq, Managing Partner, Dubai, Morgan, Lewis & Bockius, LLP Christopher Laing, Managing Director, Investment Banking, Deutsche Bank Gary Watts, Partner, Regional Head of Coporate Commercial, Al Tamimi & Company

International collaborations are not only the vehicle for technology and knowledge transfer, but also play a crucial role in the regional companies’ valuation on the capital markets in the international scene. In this panel discussion, Dhiraj Joshi, Director of Healthcare Strategy and Deals at PwC, Ayman Khaleq, Managing Partner (Dubai) at Morgan, Lewis & Bockius, Christopher Laing, Managing Director at Deutsche Bank, and Gary Watts, Partner at Al Tamimi & Company, discussed the listing opportunities for regional healthcare companies on regional and international capital markets including disclosure requirements, due diligence processes and structural considerations.

Initial Public Offering (IPO) performance and activity in 2014 was very strong in the UK, Europe, and MENA. Despite a slower H2, the IPO pipeline for 2015 remains robust and investors remain heavily engaged. Concurrently, the outlook for IPOs in the GCC appears to be positive as both investors and issuers are slowly regaining confidence in the market. However, the average offering value is still relatively modest albeit it has improved compared to the previous year. Moreover, regional companies were mostly looking in the past few years to list on international markets and this trend is likely to continue. Indeed, some UAE healthcare companies have already trodden the capital markets route. As such, and as opposed to Amanat Holding listed on the Dubai Financial Market (DFM), Abu Dhabi-based NMC Health and Al Noor Hospitals were both listed on the London Stock Exchange during the past two years, and have since traded well above their debut share prices. Both companies ultimately proved the model of successful IPOs from the MENA healthcare industry in the London market. Al Noor has performed strongly since its listing and is up 65% in 18 months, far outper-forming the Abu Dhabi Securities Market General Index (28%), and in line with NMC Health (66%) over the same period. Both companies were also able to join FTSE250, and attracted first class investors from the UK, U.S., and elsewhere. Furthermore, high profile companies are able to obtain exemptions from the Securities and Commodities Authority (SCA) including the relief from the minimum free float requirements, subsequently facilitating the listing process and attracting a wide range of international investors. Nonetheless, while KSA currently remains the most interesting market in the region in terms of liquidity, low liquidity and turnover in the UAE, Bahrain and Kuwait led to high price variability, thereby affecting the overall stability of equity markets in the region. Consequently, international investors remain primarily concerned by the lack of market breadth, low liquidity, high volatility, as well as strict foreign ownership regulations.

Moderated by: Dr. Helmut Schuehsler, Chairman & CEO, TVM Capital Healthcare Partners


Moreover, the center educated healthcare providers and consulted on care delivery and research in countries throughout MENA including Dubai, Abu Dhabi, Egypt, Libya, Turkey, and KSA. It also established Joslin- affiliated diabetes centers in Dubai and Bahrain, and is currently engaged in multiple discussions exploring establishing Centers of Excellence and conducting additional education and trainings worldwide. More information: www.joslin.org

Making International Medical Partnerships Work

Panelists: Dr. David Storto, President,Partners Continuing Care & Spaulding Rehabilitation Network Dr. Hubert Birner, Managing Partner, Montreal & Munich, TVM Life Science Management Dr. Howard Podolsky, Group COO & CMO, Cambridge Medical & Rehabilitation CenterJohn L. Brooks III, President & CEO, Joslin Diabetes Center

International collaborations are gradually becoming a feature of every company’s strategy. As competition intensifies, it is becoming increasingly important to liaise strategically with partners around the world in diverse industries. However, the complexity of these relationships poses significant management challenges at both strategic and operational levels. John Brooks, President & CEO, Joslin Diabetes Center, along with Dr. Hubert Birner, Managing Partner at TVM Capital Life Science, Dr. Howard Podolsky, COO & CMO for Cam-bridge Medical & Rehabilitation Center, and Dr. David Storto, President of Partners Continuing Care and the Spaulding Rehabilitation Network, highlighted the most important factors that make international medical partnerships work.

In addition to their partnership with Joslin Diabetes Center to enhance diabetes disease management programs, TVM Capital Healthcare Partners has also an affiliation with Spaulding Rehabilitation Network, aU.S.-basedgloballeaderinrehabilitative/long-term/acute/homecare.This

partnership gives TVM Capital Healthcare portfolio companies access to unrivalled experience, knowledge and best practice in the sphere of long-term care and rehabilitation. “In order to succeed with our collaborators, we have to embed the sense of partnership and complete dedication to the predefined objective of the collaboration within the culture of the organization”, said Dr. Howard. “One of the keys to success with our collaborators has been the very early involvement and very significant clinical relationships on both sides of the spectrum. We engage our clinicians in the early discussions to make them understand how valuable such collaborations are”, he added. Within the scope of the collaboration, clinicians also receive regular education and training by Spaulding representatives and the facilities undertake auditing and evaluation procedures devised to promote clinical excellence. “We continuously provide a flow of information about policies and procedures,

clinical pathways and protocols that are already implemented in Spaulding. We also developed educational trainings and opportunities for specific case consultations”, commented Dr. David. Aligning the partnership’s objective with the mission of each of the involved parties is another fundamental factor to success. “A misalignment with the initial mission will kill the relationship”, stated John, “but if we can measure the outcomes and the clinical and economic impact, we can figure out where we need to recalibrate or bring the business model back in alignment with what the ultimate objective is.” Indeed, it is noteworthy to mention that “the challenge lies not only in choosing the right strategic partner, but also in structuring collaborations between different organizations and across different countries in order to ensure mutual success and serve mutual objectives”, highlighted Dr. Helmut.

“We have to embed the sense of partnership and complete dedication to the predefined objective

of the collaboration within the culture of

the organization”

Dr. Howard Podolsky

--------------- end of report ---------------


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TVM Capital Healthcare Partners

TVM Capital Healthcare Partners was established in 2009 under the name TVM Capital MENA and has since then been led by Chairman & CEO, Dr. Helmut M. Schuehsler. The firm is focusing on making highly specialized growth capital and small buyout investments in healthcare companies in the Middle East and North Africa (MENA) region and India that are or target to become leaders in their regional markets. The firm has assembled a strong team of investment professionals who are supported by a group of healthcare operators as executives-in-residence in its accelerator company, TVM Operations Group, and TVM Healthcare Advisors, which provides healthcare focused research and advisory services. Collectively, this team has developed an ability to conceptualize and develop business opportunities that provide investors with completely proprietary deal flow and investment opportunities.

TVM Capital Healthcare Partners has broken new ground with four portfolio investments to date in specialized services that were either non-existent or drastically undersupplied, e.g., long-term care, rehabilitation, home care and world-class fertility treatment. A fifth investment focuses on the area of medical device development and manufacturing. The company has an alliance with the Spaulding Rehabilitation Network, an official teaching hospital of the Harvard Medical School, which is at the forefront of research in the fields of rehabilitative care, long term acute care and home care and with Joslin Diabetes Center, giving its portfolio and patients access to expertise from the world’s leading research and clinical care organization dedicated to the prevention, treatment and cure of diabetes. Joslin is an independent, non-profit institution academically affiliated with Harvard Medical School. The firm operates out of the Dubai International Financial Center (DIFC) and is licensed and regulated by the Dubai Financial Services Authority (DFSA).

www.tvm-capital.ae

ProVita International Medical Center

ProVita first opened in Abu Dhabi in 2010 as the only facility of its kind in the MENA region to offer state of the art long-term care for ventilated patients requiring continuous medical and nursing intervention in a non-hospital setting. ProVita is affiliated with US-based Spaulding Rehabilitation Network, a Harvard Medical School Teaching Hospital and recognized leader in rehabilitative medicine, long-term care and home care in the United States. This affiliation provides access to unrivalled experience, knowledge and best practice in the sphere of long-term care and rehabilitation therapies, helping to drive regional standards in the sector. ProVita staff also receives regular education and training by Spaulding representatives and the facilities undertake auditing and evaluation procedures devised to promote clinical excellence. The partnership with Joslin Diabetes Center enhances the diabetes disease management programsbyprovidingclinicalprotocolsandguidelines,family/patienteducationresourcesandmaterialsas well as an in-depth training program for professional staff. Joslin, located in Boston, USA, is the world‘s leading diabetes research, clinical care and education organization dedicated to the prevention, treatment and cure of diabetes. Joslin is an independent, non-profit institution affiliated with Harvard Medical School.

www.provita-me.com

Cambridge Medical & Rehabilitation Center

Cambridge Medical & Rehabilitation Center, Abu Dhabi, caters for those in need of acute rehabilitation with a high level of physiotherapy, as well as treatment for a broad range of conditions including spinal cord injuries, neuromuscular diseases (such as a stroke) and birth defects. The Abu Dhabi facility is located in Shakhbout City (formerly Khalifa City B) and a new facility in Al Ain (Al-Khaiesi, Al-Naseriya) is set to open later in 2015. Cambridge is affiliated with US-based Spaulding Rehabilitation Network, a Harvard Medical School Teaching Hospital and recognized leader in rehabilitative medicine, long-term care

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and home care in the United States. This affiliation provides access to unrivalled experience, knowledge and best practice in the sphere of long-term care and rehabilitation therapies, helping to drive regional standards in the sector. Cambridge staff also receives regular education and training by Spaulding representatives and the facilities undertake auditing and evaluation procedures devised to promote clinical excellence. A partnership with Joslin Diabetes Center enhances the diabetes disease management program byprovidingclinicalprotocolsandguidelines,family/patienteducationresourcesandmaterialsaswellasan in-depth training program. Joslin, located in Boston, USA, is the world’s leading diabetes research, clinical care and education organization dedicated to the prevention, treatment and cure of diabetes. Joslin is an independent, non-profit institution affiliated with Harvard Medical School.

www.cmrc.ae

Manzil Health Care Services

Manzil Health Care Services, provide high-quality care and rehabilitation services in the comfort of the home of their adult and pediatric patients. From general care to highly specialized services, HAAD and MOH-licensed registered nurses, therapists and case managers work together with the attending physician of a patient as a team to coordinate each individual’s care. Founded by Dr. Ghuwaya Al Neyadi, Manzil Health Care Services is one of the leading home care providers in the UAE with headquarters in Abu Dhabi and clinical operations in Al Ain and Ras al Kaimah as well as in Dubai. Manzil Health Care Services is affiliated with US-based Spaulding Rehabilitation Network, a Harvard Medical School Teaching Hospital and recognized leader in rehabilitative medicine, long-term care and home care in the United States. This affiliation provides access to unrivalled experience, knowledge and best practice in the sphere of long-term care and rehabilitation therapies, helping to drive regional standards in the sector. Manzil staff also receives regular education and training by Spaulding representatives and the facilities undertake auditing and evaluation procedures devised to promote clinical excellence. A partnership with Joslin Diabetes Center enhances the diabetes disease management program by providing clinical protocols and guidelines, family/patienteducationresourcesandmaterialsaswellasanin-depthtrainingprogram.Joslin,locatedin Boston, USA, is the world’s leading diabetes research, clinical care and education organization dedicated to the prevention, treatment and cure of diabetes. Joslin is an independent, non-profit institution affiliated with Harvard Medical School.

www.manzilhealth.ae

Bourn Hall Clinics International, Dubai & India

Bourn Hall Clinic was founded by the team responsible for the world’s first IVF baby in 1980 in the UK and has been at the forefront of Fertility and IVF for more than 30 years. Professor Robert Edwards, Co-Founder of Bourn Hall Clinic UK received a Nobel Prize for Medicine for his achievements in December 2010. Bourn Hall Clinics International function under the guidance of the pioneering UK team, following the same procedures and techniques that have been developed and enhanced during more than 30 years of experi-ence, but with appropriate local expertise, ensuring that all patients are treated as individuals, in a manner appropriate to their needs, culture and circumstances.

www.bournhall-clinic.aewww.bournhall-clinic.in

Amecath

Ameco Medical Industries is a medical group active in the catheters & healthcare business since more than 12 years, and is directed by physicians who have practiced medicine for quite a long time and who have a high experience in the use of medical catheters. Ameco Medical Industries produce „Amecath“ haemo-dialysis catheters, urology catheters and central venous catheters according to high international quality standards and the plant is equipped with state-of-the-art production machines. „Amecath“ catheters are available in many countries of Europe, USA, Asia, North Africa, and are currently being FDA approved, CE marked and ISO 13485:2000 certified.

www.amecath.com

Investor and Portfolio Profiles


Investing in Value Creation in Healthcare:

www.tvm-capital.ae

Cambridge Medical &Rehabilitation Center

TVM Capital Healthcare Partners Limited

Dubai

HEALTHCARE PARTNERS

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