INTERNAL  FIXATION  SYSTEMS,  Inc.    (OTC.QB  IFIX)  

 

Bringing Superior Value to Orthopedic Implants

Forward  Looking  Statements  This  presenta,on  contains  projec,ons  and  forward-­‐looking  informa,on  that  involve  various  risks  and  uncertain,es  regarding  future  events.    Such  forward-­‐looking  informa,on  can  include  without  limita,on  statements  based  on  current  expecta,ons  involving  a  number  of  risks  and  uncertain,es  and  are  not  guarantees  of  future  performance  of  Internal  Fixa,on.    There  are  numerous  risks  and  uncertain,es  that  could  cause  actual  results  and  Internal  Fixa,on’s  plans  and  objec,ves  to  differ  materially  from  those  expressed  in  the  forward-­‐looking  informa,on,  including:  (i)Internal  Fixa,on’s  inability  to  remain  current  in  its  repor,ng  obliga,ons  with  the  SEC;  and    (ii)  Internal  Fixa,on’s  inability  to  secure  the  financing  necessary  to  con,nue  its  opera,ons.      Actual  results  and  future  events  could  differ  materially  from  those  an,cipated  in  such  informa,on.    These  and  all  subsequent  wriMen  and  oral  forward-­‐looking  informa,on  are  based  on  es,mates  and  views  of    management  on  the  dates  they  are  made  and  are  expressly  qualified  in  their  en,rety  by  this  no,ce.  Except  as  required  by  law,  IFS    does  not  intend  to  update  these  forward-­‐looking  statements.  

Superior Value  

 Quality,  U.S.-­‐made  Orthopedic  Implants  sold  for  40-­‐50%  less  

than  the  compeMMon.        

Value  is  created  through  innovaMve  set  design,  flexible  distribuMon  pathways,  responsible  inventory  management,  and  standardizaMon  of  instruments  and  components  across  

mulMple  products.    

   

IFS  Product  Development  Process  

Iden:fy  Product    

Evaluate  Compe::ve  Products  

IFS  Na:onal  Advisory  Panel  

Suggests  Enhancements  ,  Improvements  

Manufacture  Redesigned  Product  

Currently FDA Approved Products  

•  2.0 / 2.4 cannulated screw system •  3.0 cannulated screw system •  4.0 cannulated screw system •  5.0 cannulated screw system •  6.5 / 7.3 cannulated screw system •  Phalangeal Fixation Systems 1.5/2.0/2.7

cortical screws

Modular Locking Small Fragment System Basic Ankle System – Bi-Malleolar Set Comprehensive rear foot reconstruction system Pilon Fracture plate system Volar Distal Radius / Forearm FX System Clavicle Fx System Proximal Shoulder Plating System Elbow Fx Plating System Acetabular FX and Plating System MPJ Fusion System Lapidus Plating System Midfoot Fusion System

These products will cover over 70% of the Orthopaedic Fixation Market

•  Locking Large Fragment System Periarticular FX and Plating System – Proximal Tibia Periarticular FX and Plating System – Distal Femur

•  Locking Mini Fragment System Metacarpal FX and plating system Metatarsal FX and plating system

Market Overview

Healthcare  Reform  and  ExisMng  Industry  Trends  PosiMon  the  Othopaedic  Implant  

Market  for  Change    

Current Market Leaders

61.3%  

11.2%  

8.2%  

7.9%  

4.3%   3.4%  1.2%  2.5%  

Synthes

DePuy / Hand Innovations Smith & Nephew Zimmer

Stryker

Biomet

© iData Research Inc

49.7%  

13.5%  

9.7%  

8.7%  

7.4%  4.1%   6.9%  

Synthes  

Zimmer  

Smith  &  Nephew  

Stryker  

DePuy  

Cannulated  Screws   Plate  and  Screw  Systems  

Orthopaedic Implant Market Summary

•  The U.S. market for Orthopaedic Implants is large and continues to grow. It is expected to reach $34 Billion by 2014.

•  The market is dominated by companies that employ premium pricing strategies.

•  There is downward pressure on prices from hospitals and ASCs for products used to treat common fractures.

•  Many Healthcare Facilities are limiting the number of vendors and using Group Purchasing Organizations and Accountable Care Organizations to help control costs.

•  No longer is the physician in exclusive control of implant decisions. Increasingly purchasing decision makers are looking at cost.

Effects  of  Health  Reform  on    Implant  Industry  

 •  As  of  2010  Medicare  no  longer  reimburses  separately  for  implants  

•  The  cost  of  implants  now  part  of  the  overall  fee  

•  Commercial  payers  will  follow  Medicare  •  Facili:es  seeking  lower  cost  alterna:ves            IFS  is  posiMoned  well  for  these  changes  !  

Bimalleolar  Ankle  Fracture  

Standard Implants Used •  1/3 Tubular Plate •  4-6 3.5-4mm Cancellous or Cortical

Screws •  (2) 4.0 Cannulated Screws •  1-2 Drill Bits, 2-3 K-Wires

$1226 - $1354*

$630-$710*

$1645 - $1877*

Average Cost Savings Per Procedure:

48% Less than Synthes ($596-$644)

62% Less than Stryker ($1015-$1167)

Management Team

•  Stephen J. Dresnick, MD – President and CEO •  Former Founder and CEO of Nasdq listed Sterling Healthcare •  Well respected healthcare innovator and entrepreneur

•  Laura Cattabriga – Chief Financial Officer Laura has a Masters of International Business from George Washington University. She has worked on start-up companies, market expansions and has managed companies and organizations going through restructuring . She has been responsible for aggressive growth plans that include developing organizations as well as increasing revenues

•  Kenneth C. West – Vice President, Sales. Ken previously served as Sales Representative, Regional Sales Manager and Distributor for many of the top Orthopaedic and spine surgery companies such as Stryker Corporation, J&J – DepuyAcromed, Synthes USA, NexaOrthopaedics, and Trans1 Inc

•  Arica Finnieston, Vice President, Product Management  Arica  has  over  16  years  of  experience  in  the  medical  device  industry,  specifically  in  orthopedics.    Prior  to  joining  IFS,  Ms.  Finnieston  held  posi:ons  as  Global  Marke:ng  Director  for  Maramed  Orthopedic  Systems,  Global  Marke:ng  Director  for  BioSculptor  Corpora:on,    and  Global  Product  Manager  for  Trulife.    Her  experience  in  orthopedics  combines  manufacturing,  R&D,  marke:ng,  strategy  and  product  management.      

IFS  management  team  has  extensive  experience  in  the  orthopaedic,  medical  device,  and  healthcare  industries    

combined  with  a  track  record  of  starMng  and  growing  successful  companies.  

Modular  Set  Design  

Sales  Since  Launch  of    Small  Fragment  Systems  

0  

20000  

40000  

60000  

80000  

100000  

120000  

140000  

Q1  11   Q2  11   Q3  11   Q4  11  

Current  Distribu:on  

Current  Distribu:on  

•  Florida  •  Georgia  •  Arizona  •  Indiana  •  New  Hampshire  •  Massachuse^s  •  Connec:cut  •  California  

•  Louisiana  •  Wyoming  •  Montana  •  Oregon  •  Washington  •  Maine  •  Rhode  Island  •  Alaska  

Projected  Sales  Growth  

    2012   2013   2014  Sales   $5,268,365     $16,411,318     $31,489,641    

Gross  Profit  Margin   60%   60%   60%  

EBITDA     $1,022,131     $6,226,819     $13,276,131    

Company  Milestones  

   October  2011  –  Ini:al  Release  of  modular  locking  plates  

January  2012  –  Release  of  Straight  plate  module  March  2012  –  Ini:al  Release  of  Large  Cannulated  

Screws  March  2012  –  Ini:al  Release  of  Temporary  External  Fixator  

 

Capital  Needs  

   Build  new  inventory/surgery  sets  for  exis:ng  products  Inventory  and  sets  for  new  products  Addi:onal  manufacturing  capacity  Develop  Overseas  markets  Enter  Veterinarian  Market  Working  Capital  Build-­‐out    Distribu:on  Network  Marke:ng      

Product  Licensing  

 Advantages  •  Use  exis:ng  510K  •  Can  get  sets  consigned  •  Only  need  to  file  as  repackager  •  Can  expand  territory  much  quicker  

Barrier  to  Entry  for  New  Players  •  Requirements for Market Entry

–  FDA approval –  Distribution network –  Significant capital –  Depth of product to gain attention in the market place

•  Additional Factors: –  Difficult to gain surgeon support –  Manufacturing takes significant trial and error to get it right

•  There are a few companies trying to offer lower cost products manufactured outside of the U.S. Quality of both the raw materials (e.g. surgical grade stainless steel) and the products themselves, has been inconsistent.

•  This is a business where quality is VITAL and lesser products, even if attractively priced, will not be accepted.

IFS  Investment  Highlights  •  Surgical  Implant  Costs  have  been  rising  8-­‐10%  per  year  •  By  focusing  on  every-­‐day  products  instead  of  block-­‐buster  

products,  IFS  has  much  lower  R&D  costs  •  Implant  Industry  is  $35  Billion  market  in  US  •  Innova:ve  set  design,  new  distribu:on  pathways,  use  of  

standardized  instruments  and  components  across  product  lines,  and  aggressive  inventory  management  mean  lower  costs  to  the  consumers  while  maintaining  industry  margins  

•  IFS  preferred  by  leading  surgeons  •  Based  on    early  market  experience  IFS  is  seeing  a  90%  conversion  

rate  from  exis:ng  products  to  ours  (including  major  academic  centers)  

IFS  delivers  doctor  preferred  designs  at  a  superior  value    (40-­‐60%  less  than  compeMtors)  

 

Stock  Overview  

         

           

Symbol      -­‐  OTCQB:  IFIX    

OTC.QB  (IFIX)    

For more information: 786-268-0995

Stephen Dresnick, MD sdresnick@ifsusa.net Laura Cattabriga laura.cattabriga@ifsusa.net

 5901  SW  74th  Street,  Suite  408  

South  Miami,  FL    33143  

www.ifsusa.net  

OTC.QB  (IFIX)    

For more information: 786-268-0995

Stephen Dresnick, MD sdresnick@ifsusa.net Laura Cattabriga laura.cattabriga@ifsusa.net

 5901  SW  74th  Street,  Suite  408  

South  Miami,  FL    33143  

www.ifsusa.net