Home Healthcare Solutions

Home Healthcare SolutionsJohn MiclotCEO Home Healthcare SolutionsMay 16, 2008

Agenda Respironics Hospital Home Healthcare Respironics Home Philips Home Remote Monitoring Home Healthcare Vision2

Philips Journey towards Home HealthcareLeadership through Respironics The acquisition of Respironics is a significant milestone on the pathto building a Home Healthcare Franchise We believe that Home Healthcare will be a large market in the futureand the investments that we are making will clearly separate us fromour competitors Respironics significantly broadens Philips’ home healthcare platform.Philips’ global distribution reach is likely to accelerate Respironics’sales volume, while enabling cost savings for both sleep and hospitalbusinesses. The ventilation and Children’s Medical businessesof Respironics complement Philips’ hospital based solutions businessfor acute and critical care3

Broad Range of Hospital Ventilation Solutions Noninvasive Invasive Respiratory Monitoring4

Critical CareKey Differentiator is Noninvasive on5

Growing Trend inNoninvasive Ventilation Approximately 20-25% of patientsare noninvasively ventilated Demand for noninvasive vents andinterfaces growing double-digit peryear Underutilized Market share leader in stand-aloneventilation with 80% of market Strategy – develop further adoptionof noninvasive technique

Children’s MedicalVentures Strong brand name Strong channels– Neonatal Intensive Care Unit– Homecare Innovative solutions promotebest developmental outcomes Positive growth profile Long-term future growth strategy Growth products provide firmfoundation

Home Healthcare SolutionsVision, Mission, ScopeMissionVision To be the worldwide leaderat anticipating needs andproviding valued solutions tothe home healthcare marketWe will improve quality of life forchronically ill people and at-risk seniorsthrough better diagnosis, treatment,monitoring, and management of theirconditionsScope Outside traditional hospitalenvironment Products and technology enabledservices Remote (clinical) diagnosis, treatment,monitoring, and patient management Consumer, care-providers, insuranceand government as payers8

The Future of HealthcareKey driversAging populationKey consequencesIncreasing chronic diseasesPopulation 65 , M people820278198546720052025ELifestyle patterns Less physical activityMore time spent indoorsFast food and convenienceSocial isolationSugar/alcohol/tobacco addictionEnvironmental changes Increasing exposure to air pollution Urbanization Decrease of manual workDiabetes sufferers, M people360190100198520052025EIncreasing welfare conditionsObesity, US, % of population31%40%19952005Healthcare responsesImprove patients’ healthstatus and reducehealthcare costs by: Early detection andintervention to preventthe onset of chronicdiseases and conditions52%2015E Improved understandingof co-morbidities amongpatients and cliniciansEscalating healthcare costsUS Medicare & Medicaid as % ofgovernment spending19%10%1%19661986 Increased focus onhome healthcare toreduce cost ofhospitalization20069

US Patient Disease State Population – esSleepDisorderedBreathing CHF - s - 7Stroke - sSyndrome10

Home healthcare is a vast space covering manydifferent segmentsHHS Market PositionTotal global home healthcare market 2007E US 140 B InfusionRemote Monitoring 1.8BTechnology-based services pumps100%0.9BInfusion therapy servicesOSA 1.6BRespiratory therapy servicesVent &O2 1.0B80%Unskilled homecareRespiratory60%5.6BHome Monitoring /Revenues: 300m Lifeline Cardiac MonitoringHome Respiratory /Revenues: 150m Oxygen Home Ventilation COPD40%HHA / rehabilitation services(primarily hospice care)Mobility &Living aids20%Sleep / Revenues: 700m OSA Therapy Patient Interface Diagnostics4.3B0% 128B ServicesDurable SuppMedicalliesEquipment 11B 2BRespiratory Drug Delivery /Revenues: 70m Asthma Pharma Solutions COPDNote: Services market is service-provider revenues; equipment and supplies markets are manufacturer revenues;overview excl. blood glucose meters ( 5B)11

Accelerating our HHS strategic vision 3,0002,000Acceleratedroadmap withRespironics IntegrationConsolidatedleadership inRespiratory & CardiacDisease Managementin the Home.veWa1,000Historic HHS Lifeline Healthwatch Raytel MotivaWPhilips – Respironics Channels Technologies/applications Brand Follow-on acquisitionsave2Size ( M)Global homehealthcare leader Asthma detection? Consumer Lifestyle for the elderly? Broad scale insomnia solutions? Hypertension/diabetes solutions? Acquisitions?1ic roadmapHistoric strategNiche leadershipin connectedhome care0200720082010201512

Value CreatorsGrowth – Long Term Revenues: Mid-teensOptimize Value Creators Consistent performance Rapid market penetration Revenue synergiesbetween business units

Market Needs Approach Anticipate the needs of the market Provide a range of solutions to fill current and emerging needs Sense alternative ways to fill a need Develop or acquire new and different solutions for emerging needs

Upper Airway Anatomy (Richard Schwab)NormalOSA Patient15

NeurocognitiveDysfunction /Comorbidities Daytime sleepiness Poor Job Performance Decreased Quality of Life Hypertension / CHF Stroke Risk Type 2 Diabetes Control

Sleep Disordered Breathing Maintain market leadership throughearly penetration15% - 20%Diagnosed Under penetrated / Growth market( 1.8 billion 5 year CAGR 17.5%) Significant co-morbidities– Hypertension– Diabetes– Stroke– Heart Failure Growing awareness80% - 85%UndiagnosedIn the US 18-20 Million SufferSymptomatic OSA (Moderate-Severe)17

Key Differentiators Sales channel strength Sleep Diagnostics &Therapeutics market presence Technology leadership /Intellectual property Solution selling

US Sleep Sales Force Sleep Lab focus Homecare Provider focus National Accounts Sleep Diagnostics 190 sales professionals Direct in key international markets19

Well established international distributioninfrastructure positioned for continued high growth Established presence in more than 130 countries Direct presence in 13 countries– Europe– Japan– Australia Rapid Growth (2002 – 2007)– 28% CAGR– Grown from 23% to 33% of total sales20

Sleep DiagnosticSystem Alice 5 advanced systemsfor the diagnosis of sleepdisorders Portable diagnostics - CMS Clinical thought leaderrelationships Clinical pathway /reimbursement21

Sleep Therapy REMstar M Series –smaller sleeker product Encore for clinical monitoringto assist with patient care Full product range to supportour various customers’ needs Flex technology

CPAP WaveformInhalationFlowExhalationCPAPPressure 10987RxPressureLevel23

C-Flex WaveformInhalationFlowExhalationC-Flex Pressure 10987RxPressureLevel24

A-Flex WaveformInhalationFlowExhalationAutoPressure 1211109AFlex 25

Flex TechnologyClinically Proven ForComfortable CPAP Therapy C-Flex patients used therapy anaverage of 1 hour and 42 minuteslonger per night than patients ontraditional CPAP C-Flex patients were 3.8 times morelikely to use their therapy approximately6 hours a night A-Flex – next major innovation forcompliance26

BiPAP autoSV Proven product Launched in all markets Targeted toward patientswith complex apnea27

REMstar Product Range BiPAP Autowith Bi-Flex BiPAPautoSV REMstar REMstar Pluswith C-FlexTMBASIC CPAPREMstar Prowith C-FlexTMREMstar Autowith A-FlexTMBiPAP andVent SupportCPAPHIGH ENDCOMPLIANCE28

Strong Patient Interface LineupNasal MaskPillowsFull Face MaskComfortGel OptiLife ComfortFull 2ComfortSelect ComfortLite 2ComfortGel FullComfortFusion 29

Disease States – AsthmaRespiratory Drug DeliveryDiagnosis Spirometry Exhaled Breath Markers – Exhaled Nitric Oxide growthopportunity for RDD, explore early exacerbation detectionTreatment Devices Metered Dose Inhalers, Dry Powder Inhalers,Spacers and Ultrasonic/Compressor Nebulizersfor the delivery of medications Partnering pharma solutions with electronicdosing devices provides enhanced patientsolutionsMonitoring DevicesPeak Flow Meters30

Precision Dosing of I-neb Under penetrated opportunity to deliver drugs with a narrowtherapeutic index Proprietary AAD technologyWith AAD Side EffectsTherapeuticWindowLimitedEfficacyTIME31

Home Respiratory Care (COPD) Supports the respiratory-impaired patient in the home - ambulation Opportunity for long-term growth Expansion in home ventilation and oxygen New product introductions32

Remote Monitoring Lifeline – Medical Alert Services Raytel - Cardiac Monitoring Telemonitoring Services Motiva – Emerging screen telemonitoring services 2007 sales of USD 225 million* 15% organic growth over 2006 Number of subscribers of Medical Alert servicesis now in excess of 715,000 The growth is based on:– increase in the subscriber base through marketdevelopment– increase in average monthly revenue incomeper subscriber* Including Health Watch for 8 months of operations33

Connected CareOpportunitiesTarget MarketsRemote Monitoring - LifelineHome Health Agency MarketsLifelineRelationship(800)No LifelineRelationship(6000)Post-discharge MarketHospitals(500)CAHSAHTelemonitoring OpportunitiesTelehealth Solutions34

US Patient Disease State Population – esSleepDisorderedBreathing CHF - s - 7Stroke - sSyndrome35

Accelerating our HHS strategic vision 3,0002,000Acceleratedroadmap withRespironics IntegrationConsolidatedleadership inRespiratory & CardiacDisease Managementin the Home.veWa1,000Historic HHS Lifeline Healthwatch Raytel MotivaWPhilips – Respironics Channels Technologies/applications Brand Follow-on acquisitionsave2Size ( M)Global homehealthcare leader Asthma detection? Consumer Lifestyle for the elderly? Broad scale insomnia solutions? Hypertension/diabetes solutions? Acquisitions?1ic roadmapHistoric strategNiche leadershipin connectedhome care0200720082010201536

Developing the Care Cycle Market OpportunityTransforming Home Healthcare of Todayinto the Solutions of Tomorrow Outside traditional hospital environment Products and technology enabled services Remote (clinical) diagnosis, treatment, monitoring,and patient management Consumer, care-providers, insurance and government as payersPatient Disease ManagementPrimaryP r e v C ar isTreatmentMonitoringmeAt Ho ginneeScr37

Solid R&D Pipeline

Broaden the Scope – Wave 2Sleep Well Ventures U.S. Problem Sleeper Population: 135M Adults Solution Avoiders Solution Seekers Pill Likers Pill Dislikers

Wave 2 - Global Home Health Care LeaderExample: Broader Sleep SolutionsU.S. Problem Sleeper Population: 135M AdultsNon- Respiratory Sleep (NRS)WellInsomniaOptimizeBody ClockSleepSatiationMood, Energy &PerformanceRetire SleepDebtJet ry(Psychophysiological)InsomniaVariable S/WScheduleCircadianRhythm SleepDisordersTemporarySleep aresHot FlashesEnuresisChronic SleepDeprivation*SELECT* an Rhythm Insufficient SleepParasomniasPLMRestlessRestless LegsLegsSick*BROAD* Screening – Diagnostic – Monitoring – Management Tools Medical devices can compliment/supplement pharmaceutical treatment40

Wave 2 - HHS Expanding Patient Population andChannels in Home ter additional segment for OTC andretail applicationsOffer custom-fitted products through HomeCare ProviderFacilitate Home Care ProviderPatient management / loyalty programsAssist Home Care Provider merchandising, compliance, education, andreplenishmentToday’s Traditional Home Care Provider – Expand Patient / Treatment Options2007Source: Industry experts interviews, Home Care Provider interviews2015

Summary Market leader in underpenetrated and growing markets of sleep,respiratory, and remote monitoring markets Important great new products launching now Rich development pipeline Global channel coverage Consistent track record Positioned to capitalize on benefits of acquisition and leveragePhilips’ complementary strengths We are very excited about the future42

Oct 21, 2015 · COPD Respiratory Drug Delivery / Revenues: 70m Asthma Pharma Solutions COPD Total global home healthcare market 2007E US 140 B . Durable. Medical. Equipment. Technology-based services. Infusion therapy services. Respiratory therapy services. Unskilled homecare. HHA / reha