Hikma Pharmaceuticals Plc · LSE:HIK
Hikma Pharmaceuticals — Merger or Acquisition (July 2015)
25 slides from Hikma Pharmaceuticals's merger presentation, Jul 28, 2015
Slide 1: Acquisition of Roxane Laboratories
Acquisition of Roxane Laboratories Transforming Hikma’s position in the US generics market 28 July 2015
Slide 2: Disclaimer
Disclaimer This document, which has been issued by Hikma Pharmaceuticals PLC (the “Company”), comprises the written materials/slides for a presentation. This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person
Slide 3: Strategic rationale
AIKMK QUALITY Strategic rationale
Slide 4: A transformational deal, delivering our strategy for growth
A transformational deal, delivering our strategy for growth Highly complementary with Hikma’s existing US business, creating top 6 player in US generics market1 Adds broad US portfolio with 88 differentiated products across specialised segments Enhances pipeline with 89 R&D projects including 57 Par
Slide 5: A transformational deal – enhances scale and drives long-term growth
A transformational deal – enhances scale and drives long-term growth ► Roxane is a well-established US specialty generics company with a highly differentiated product portfolio and R&D capabilities ► Agreement to acquire Roxane for $1.18 billion in cash and 40 million new Hikma shares – Gross aggreg
Slide 6: Transforms Hikma's position in the US generics market
Transforms Hikma’s position in the US generics market ► Combining Roxane and Hikma creates the sixth largest company in the US generics market by revenue US generics market share (%) 21.0% 10.0% #6 #12 #20 7.9% 6.2% 4.5% 3.0% 2.7% 2.7% 2.2% 2.2% 2.1% 2.0% 1.9% 1.8% 1.7% 1.5% 1.4% 1.3% 1.3% 1.1% 1.1%
Slide 7: Roxane represents a compelling strategic fit
Roxane represents a compelling strategic fit Delivering our strategy for growth through six key strategic objectives Commercial Pipeline Operational Investing for Employees Sustainability opportunities development excellence & growth cost control Maximising Strengthening Maintaining high Expanding B
Slide 8: Creates a more balanced and diversified business model
Creates a more balanced and diversified business model 2014 Hikma Group revenue 2014 Hikma Group + Roxane revenue (illustrative)1 Transforms Hikma’s position in non-injectable generics Branded Injectables Generics Branded Injectables Generics 1The chart above is for illustrative purposes only. Reven
Slide 9: Why Roxane?
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Slide 10: US generics market offers stable fundamentals and attractive growth opportunities
US generics market offers stable fundamentals and attractive growth opportunities US generics pharmaceutical market ($ billion) ► Stable fundamentals and attractive growth opportunities – Expected CAGR of 6% between 2014 and 2019 ► Growth drivers include: 120.0 – Continued patent cliff and loss of e
Slide 11: A leading generics company with a strong track record
A leading generics company with a strong track record ► Well-established US generics company High quality, leading ► Founded in 1885 and purchased by Boehringer Ingelheim in 1978 generics company ► Differentiated and diversified product portfolio Highly differentiated product portfolio ► Top-3 marke
Slide 12: Adds high value portfolio of differentiated products with leading market positions
Adds high value portfolio of differentiated products with leading market positions ► More than 80% of Roxane’s products have one or more Product portfolio by layers of differentiation1 layers of differentiation Weighted by 2015E net product sales ► Layers of differentiation create a high value portf
Slide 13: Adds high value portfolio of differentiated products with leading market positions
Adds high value portfolio of differentiated products with leading market positions Roxane’s top 10 products by 2015E net product sales Roxane’s product portfolio by number of competing products Product Market position # of competing products Sole Fluticasone 1 3 source, 15% Methadone 2 2 (tabs), 2 (
Slide 14: Adds impressive R&D capabilities and a large R&D team
Adds impressive R&D capabilities and a large R&D team ► Strong track record of investing in R&D to deliver a R&D structure – 182 employees highly differentiated product portfolio: R&D spend in excess of $100 million per annum from 2012 to 20141 Analytical Development Lab ► Fully integrated R&D inf
Slide 15: Brings strong track record of filing and launching new products
Brings strong track record of filing and launching new products New filings (number of products) New product launches (number of products) 15 10 14 14 9 12 12 8 8 6 5 1 6 5 6 11 9 9 8 7 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Enhancements to Existing Products New Products Average of 8 new
Slide 16: Adds high value pipeline with PIV products and first-to-file opportunities
Adds high value pipeline with 57 PIV products and 13 ‘first-to-file’ opportunities ► Addressable market of the 89 pipeline products Product pipeline summary (Number of projects) is $41 billion Total: 89 Filed: 32 ► 32 of the 89 products have been filed – these Other Other: have an addressable market
Slide 17: Transforms Hikma's non-injectables pipeline
Transforms Hikma’s non-injectables pipeline Generics expected launches, 2015 to 2019 (Number of products) 33 29 26 14 13 11 3 3 4 1 10 1 1 8 1 3 10 7 4 9 4 1 3 5 3 3 1 1 2015 2016 2017 2018 2019 Patches & transdermals Orals - controlled release Orals - other specialised Ophthalmics Oncology Other de
Slide 18: Significantly expands Hikma's high quality manufacturing capacity and capabilities
Significantly expands Hikma’s high quality manufacturing capacity and capabilities Roxane’s 875,000 sq ft production facility in Columbus, Ohio ► Broad production capabilities ► Manufacturing co-located with R&D and sales & marketing on a single campus – High containment operations for high-potency
Slide 19: Financial benefits and transaction structure
Financial benefits and transaction structure
Slide 20: Key financial and transaction terms
Key financial and transaction terms • Gross consideration of $1.18 billion in cash and 40 million Hikma shares In respect of its holding of 40 million Hikma shares, Boehringer undertakes not to exercise any voting rights that exceed 28.5 million voting rights Boehringer will be permitted to exer
Slide 21: Delivering on our targets for Roxane
Delivering on our targets for Roxane ► Targets for the Roxane business ► 2017: revenue of $725 million to $775 million ► Medium term: EBITDA margin of around 35% ► Driven by: ▲ Optimisation of existing base business through enhanced management of identified high potential products and targeted produ
Slide 22: Building a strong partnership with Boehringer
Building a strong partnership with Boehringer ► Boehringer’s take-up of an equity share in Hikma demonstrates their conviction in the long-term potential of the Hikma Group ► Boehringer will hold 16.7% of Hikma’s issued share capital immediately following closing of the acquisition, of which votes w
Slide 23: Summary
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Slide 24: A transformational deal, delivering our strategy for growth
A transformational deal, delivering our strategy for growth Very strongly Sixth largest >8,000 accretive generics employees from 2017 company in globally the US Pipeline Creates a expected to Balanced and leader in drive diversified differentiated sustainable business products long-term model growth
Slide 25: AIKMK
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