30.04.2018

1

Moscow International Medical Cluster (MIMC)

3050124-09_ Cluster roadshow_Centers of Excellence slides_RUS_22Mar2017_AT_v1.pptx 2

Global map of scientific research

MIMC

Source: https://www.sice.indiana.edu/news/story.html?story=global-maps-science

30.04.2018

2

3

Joint work of foreign and Russian medical specialists

Moscow International Medical Cluster (MIMC) – the project on the territory of Skolkovo at the intersection of various fields of knowledge

3

Medical R&DMedical services

Exchange of experience and involvement of new technologies in the Russian health care system

Educational programs in Russia for Russian doctors and nurses on the basis of leading clinics

Free movement and work of professionals from all over the world, use of international protocols of treatment, medicines and equipment

Openness

No borders

Education

Technological University

Clusters:- Information technologies- Biomedical technologies- Energy Efficient technologies- Nuclear technologies- Space technologies and communications

Replication

Synergy with SKOLKOVO facilities and international cooperationSynergySupporting

element

Supporting element

Main element

4

MIMC is located in SKOLKOVO Innovation City

Skolkovo has partnerships with >70 leading international companies Skolkovo has joint project with MIT (USA) – SKOLTECH University

~ min drive time from ~20-30 min drive time from the historical city center

and downtown

Skolkovo Innovation City

Kremlin

Moscow City

30.04.2018

3

5

SKOLKOVO Innovation City University

• Joint Project of Skolkovo Foundation and MIT (USA)

• Over 1200 graduate students (Master’s &PhD)

• Over 200 international professors

• Medical engineering and biotech projects are of the highest priority

• New building (over 130,000 sq. meters) to be launched in 2018

6

Cluster layout concept – the first pilot project is already under construction

Multi-profile hospital

Diagnostics and outpatient center

Finished in 2018

Medical building

Apart-hotel Education center

Infrastructure buildings

Specialized clinics

Rehabilitation center

Specialized clinics

R&D center

Medtech production

Pharmaproduction

R&D Center

30.04.2018

4

7

The First Resident of MIMC – HADASSAH Medical Organization (Israel)

A DIAGNOSTIC & OUTPATIENT CLINIC 1

A MEDICAL CENTER WITH AN INPATIENT BLOCK (focused on

oncology treatment)

Clinic launch – 2018Foreign medical specialists >25%Investment amount – 1,9 M US DollarsNumber of Russian medical specialists to be sent to Israel for educational programs: 68Total sq. m. – 13,000

1. 2017-2018; 2. 10 years total budget; 3. Joint results of Clinic and Hospital after 7 years of operations

Hospital launch – 2020Foreign medical specialists >15%Investment amount - 37,9 M US Dollars 2

Number of Russian medical specialists to be sent to Israel for educational programs: 277Total sq. m. – 19,000

> 50 K clinic visits per year (incl. chemotherapy)> 10 K surgeries per year> 200 K laboratory tests per year

– comprehensive program for cancer research– R&D budget is over 5 M US Dollars for 10 years– Joint research collaboration with Skoltech University (special MIT project in Skolkovo Innovation Center)

R&D programs planned Medical activities planned3:

9

Key performance indicators of the pilot project

Moscow Government committed to invest 165 M US Dollars to CAPEX of the pilot project

8

"Hospital of the Future" in MIMC - a joint project of Bundang hospital (South Korea) and investor Tashir Media

• Total Area - 47 500 м2

• Main medical directions: Oncology, cardiology, orthopedics,

rehabilitation259 коек

• 8 operating rooms

• 566 FTE medical personnel

• CAPEX: $251 mln

Multidisciplinary clinic from Seoul National University Hospital Bundang

30.04.2018

5

9

MIMC offers multiple strong advantages for operatorsSome of MIMC advantages are unique in Russian market

Support from the Moscow Government3

Privileges at the level of a Federal Law2

Partnership opportunities49

Value proposition

"Entry point" to an appealing market1

10

12.5%12.5%

Medical services market has the potential for steady and profitable growth, especially in the out-of-pocket (OOP) segment

The OOP segment will be demonstrating the highest growth rates in the medical services market

The joint OOP and VMI segment is already attractive for investors and medical services providers

1.4%

5.6%5.6%

8.4%

CAGR

[8.6% in $]

Russian medical services market, 2016–2019, T RUB

1. Top five players in the OOP segment and the VMI segment ranked by revenue size in 2015: Mother and Child, Medsi, GEMC. European Medical Center, AVA Peter and Scandinavia, SM-Clinic 2.Weighted average EBITDA margin in 2015, of four large players in the Russian medical services market: Mother and Child, Medsi, GEMC. European Medical Center, and OAO Meditsina; specialized clinics' margin – 28% of 'Mother and child' clinic in 2015 3. Private (non-state) investment in commercial medicine (medical services paid out of pocket or based on VMI) Note: Public sector: public-sector employees and CMI (compulsory medical insurance). Assumed US dollar rate: 2016: 65.1; 2017: 62.8; 2018: 63.3; 2019: 64.9 Note: OOP – out-of-pocket, VMI – voluntary medical insurance Source: WHO; BMI; EIU; BusinesStat; TASS; "Investing in Private Healthcare in 2016: Who, How and Why?" (Vademecum, January 25, 2017), Oxford Economics

70%

2016

2.22[$34.1B]

5%

6%

70%

19%

2019

2.83[$43.6B]

17%

8%

6%

"Grey"

market

VMI

OOP

Public sector

B RUB~500Size of the

OOP and VMImarket in 2016 [~$7.9B]

CAGR = 8.5%

Favorable competitive landscape:

• market share of the top five players¹

• No sizeable international players yet

~7%

Moscow accounts for ~33% of the market

Concentrated demand for OOP and VMI:

Profitability2: average EBITDA

specialized clinics' EBITDA

~19%

~30%

"Entry point" to an appealing market1

70%

30.04.2018

6

11

Moscow is by far the largest OOP and VMI medical services market in Russia, accounting for ~33%

x%Size of the circle denotes the share of solvent demand for medical services in large cities

Saint Petersburg

Moscow1 Nizhniy Novgorod

1%Perm

1% Surgut

1%

Norilsk

1%Rostov-on-Don

1% Krasnodar

1% Makhachkala

1%Tolyatti

2% Novosibirsk1% Vladivostok

3% Yekaterinburg

1%

1%

Kazan

2%

Samara

2%

Ufa1% Omsk

1%

Khabarovsk

9%(~43 B RUB,

~0.67 B $)

33%(~163 B RUB, ~2.5 B $)

• Patients from Russian regions frequently travel to Moscowand other large cities for specialized medical services

• Outside of Moscow, top 5 cities account for ~90 B RUB (1.4 B $) in healthcare (~18% of total OOP and VMI market)

Key insights

Note: OOP – out-of-pocket, VMI – voluntary medical insurance; market split by regions in 2016 is assumed comparable to 2014-2015, USD values based on Central bank of Russia exchange rate: ~65 RUB per 1 USD 1.According to official statistics, Moscow population in 2017 ~12,3 M people, Moscow region ~7,4 M people Sources: Rosstat; BusinesStat, Business Monitor International; expert interviews

"Entry point" to an appealing market1

12

MIMC will focus on out-of-pocket and VMI segments, target market size –– over 1 M patients per annum

1.Both in- and outpatient patients, excluding pediatrics 2.Personal income >65k RUB per month

Target MIMC patient profile is defined along several dimensions...

1.3 M patients1 per annum

...according to which target MIMC audience size is 1+ M patients per year

Moscow & Moscow region(total ~20 M people in 2017)

Target region

# of cases per 100K of populationwithin each selected TAs (2.5K to 35.3K cases per 100K people depending on TA)

Prevalence in target TAs and healthcare areas

% of sick people attending the doctorin terms of clinic concept and curability

Readiness to visit the doctor

% of mass-affluent2 population in the regionShare of population who can afford services

quantitative metricsMIMC patient's profile – key dimensions

=

"Entry point" to an appealing market1

30.04.2018

7

13

Law 160-FZ provides unparalleled privileges for MIMC participants

1. Details are provided in the Federal Law 160-FZ 2. I. e. current Russian quotas on employment of foreign staff will not apply.Source: Federal Law 160-FZ, dated June 29, 2015

Treatment protocols issued in OECD countries

may be used within the MIMC without obtaining a license, which is otherwise

mandatory for medical activities within the territory of Russia

Medical drugs and equipment registered in OECD

are also allowed for use within the territory of the cluster with no

requirement to register them in accordance with the mandatory rules existing in Russia

Foreign specialists in the fields of medicine, education or R&D

are allowed without restriction: no limiting quotas on invitations and job permits², education

certificates of foreign specialists from OECD countries are recognized

FederalLaw 160-FZ was made

with specific intention to support the MIMC

Privileges at the level of aFederal law2

Examples of main privileges1

14

Developed the cluster concept with support from The Boston Consulting Group

Ensured favorable leasing prices for land parcels (217 RUB / $3,6 per m2 per year)

Dedicated professional team of the IMC Foundation—focused on supporting operators and investors in the cluster

Open to discuss co-investment for future MIMC facilities

Financial support of pilot facilities on the part of the Moscow Government, potential co-financing for future facilities

Allocated ~9.7B RUB (~$165M) for the development² of the MIMC project

Commitment to make the project a success—become a link between operators and investors1, eliminate bureaucratic barriers

Key elements of support

The state supports the project at the level of Moscow

Assumed US dollar rate ~59.15 RUB 1. In case of need 2. Does not include the financing committed for the leasing of land from Skolkovo Foundation and for other administrative costs.

Support from the Moscow Government3

30.04.2018

8

15

Gastroenterology

Neurology

Endocrinology

Childhood Diseases

Other

Gynecology

Urology

Ophthalmology

Pulmonology

Pilot projects

The MIMC offers multiple opportunities to select projects for participationAll the envisaged projects are in top priority TAs for Russia

Project example: a specialized clinic

Project example:a specialized clinic

Multiprofile Clinic/Specialist Center2

Clinic and Diagnostic Center1

Construction of the Clinic and

Diagnostic Center is already in

progress, launch in Q1 2018

Orthopedics and Traumatology5

Multiprofile Rehabilitation14

Cardiology3

Oncology6

12

13

11

14

…

8

7

9

10

i

Projects in other critical areas for Russia Projects in the most critical areas for Russia

1. Mostly neurology

MIMC operators will undergo rigorous selection under the supervision of healthcare and business experts

Otolaryngology15

Partnership opportunities4

16

Various models of participation in the project are possible for operators and investors, IMC Foundation acting as a link

International

Russian

Operator:

• May provide financing for its project on

its own• May be Russian, with a foreign operator

participating as a partner

1

Investor:

• May select operators from the options

collected by the IMC Foundation, or propose its own operator

2

Operator and investor:

• May select any options for partnering

with foreign and Russian partners, respectively

3

The IMC Foundation Team• Supports the participants starting from

the moment of filing the applicationand later on, including marketing support to attract patient flows

• Allocates a personal manager to assist participants

4

Operator

1

Funds for operating expenses

StaffMedicines and

medical devicesStandards

and protocols

Investor

2

Building EquipmentFunds for

operating expenses3

The MIMC

4Land and

utilitiesProfessional

team of the IMC Foundation

Partnership opportunities4

30.04.2018

9

17

Government is open for discussion about collaboration with each potential participant

Investor

1. CAPEX reduction2. Favorable leasing prices for land3. Tax benefits4. Administrative barriers reduction5. Connections to utilities6. Developed infrastructure7. Transparent market8. Patient flow supporting

Operator

1. International expansion2. Easy market entering3. Financial benefits4. Avoid administrative barriers5. Collaboration with Russian

healthcare6. Transparent medical regulation from

the government

Government

1. Transfer of medical technologies to Russia

2. Education provided to local doctors3. R&D development and

collaboration4. Advanced medical service to

Russian patients5. Reduction of medical tourists

outflow

Possible area for collaboration

(PPP)

Interests of different parties n the projectPartnership opportunities4

18

Thank You!

mimc.global+7 (495) 139-24-44