Slide 1: Dong-A Pharmaceutical 2011 Performance Results
Dong-A Pharmaceutical 2011 Performance Results FEB 2012 All of us at Dong-A are dedicated to buliding a heathler society for humanity. Thia philosophy encompasses the health and well- being of humankind as a whole as well as the environment and the vormy. Committed to building a healthier society fo
Slide 2: Audit review and forward-looking statement notice
The business results for 2011, currently under audit review, are presented here for investors’ convenience. Hence, please be advised that some of their contents may be altered in the course of audit. This presentation may contain “forward-looking statement.” Forecasts and projections contained in th
Slide 3: Agenda
I. 2011 Financial Performance (K-IFRS Non-consolidated) II. Performance by Division III. 2012 Key Issues & Strategies Appendix 2
Slide 4: I. 2011 Financial Performance (K-IFRS Non-consolidated)
I, 2011 FINANCIAL PERFORMANCE (K-IFRS NON-CONSOLIDATED)
Slide 5: Sales
241.9 907.3* 230.7 846.8 -4.7% 7.1% 212.3 8.6% 2010 2011 4Q 10 4Q 11 3Q 11 •Sales grew 3% if sales from GSK products are not considered 4
Slide 6: Cost ratios and margins 2010 vs 2011
[KRW bil., %] Account 2010 2011 YoY CoGS Ratio 40.5% 44.4% 3.9%p SG&A per Sales 46.8% 44.7% -2.1%p HR Related Cost per Sales* 13.5% 12.8% -0.7%p R&D Cost per Sales (Reflected in SG&A) /R&D Cost 7.4%/63.0 8.0%/72.4 0.6%p Advertisement Cost per Sales 5.0% 5.3% 0.3%p Other Marketing Related Cost per Sa
Slide 7: Cost ratios and margins 3Q11 vs 4Q11
Account 3Q ‘11 4Q '11 QoQ CoGS Ratio 47.0% 49.5% 2.5%p SG&A per Sales 40.9% 44.4% 3.5%p HR Related Cost per Sales* 11.5% 10.2% -1.3%p R&D Cost per Sales (Reflected in SG&A) 7.1% 8.7% 1.6%p Advertisement Cost per Sales 4.6% 6.7% 2.1%p Other Marketing Related Cost per Sales 8.0% 7.8% -0.2%p K-GAAP Ope
Slide 8: Major Financial Ratios
[KRW bil.] Sep ‘11 Dec. ‘11 QoQ Major Financial Ratios Total Asset 1,195.0 1,236.8 3.5% 68.9% - 59.3% Cash* 188.3 154.6 Liability to 17.9% Equity Ratio 38.0% Payable 144.8 143.6 -0.8% 32.0% Debt to Equity Ratio 16.9% Inventory 109.7 120.4 9.8% 6.9% Net Debt to Equity Ratio Total Liability 445.0 504.
Slide 9: II. Performance by Division
Il, PERFORMANCE BY DIVISION & DONG-A PHARM.
Slide 10: Clinic and General Hospital
[KRW bil.] 496.5 135.9 481.3 3.2% 125.1 -8.0% 122.1 2.5% 1.7% 250.0 -5.8% 66.9 Clinic 245.7 63.0 65.0 -3.0% General Hospital 235.5 4.7% 246.5 57.1 8.7% 62.1 -10.1% 69.0 2010 2011 4Q '10 4Q '11 3Q '11 9
Slide 11: ETC product sales
[KRW bil.] 0.5% 87.788.1 12.4% 1.1% -16.6% 45.9 43.6 44.1 44.3 40.9 -8.9% 37.0 28.9 21.7% 1.0% 2.1% 3.7% -3.8% 26.3 21.0 20.0 20.2 19.6 20.0 17.2 18.0 18.7 19.1 18.3 Stillen Lipinon Plavitor Opalmon Orodipine Growtropin Zydena Talion Cozartan Gaster 2010 2011 10
Slide 12: Bacchus and Other OTC
[KRW bil.] 70.7 252.9 68.0 -3.9% 14.1% 221.7 25.6% 54.2 150.1 38.2 -18.3% 46.7 17.1% Bacchus 128.3 23.4% 31.0 Other OTC 102.7 29.8 93.4 10.0% 23.2 28.5% 24.1% 24.0 2010 2011 4Q '10 4Q '11 3Q '11 11
Slide 13: Bacchus and OTC products
17.1% [KRW bil.] 150.1 128.3 -6.0% -12.3% 8.7% 13.6% New 23.7 22.3 14.9 13.1 13.7 14.9 11.1 9.8 0 3.8 Bacchus Bacchus F Panpyrin Garglin Bigen Morning Care 2010 2011 12
Slide 14: Diagnostics and Medical Equipment
[KRW bil.] 91.3 22.8 -7.4% -21.0% 84.5 18.0 1.1% 17.8 46.0 11.0 -0.3% 45.9 -2.8% Diagnostics 10.7 7.6% 10.0 Medical Equipment 45.3 11.7 -14.6% 38.7 -38.1% 7.3 -7.1% 7.8 2010 2011 4Q '10 4Q '11 3Q '11 13
Slide 15: Medical equipment products
[KRW bil.] 0.5% 20.5 20.6 4.5% -9.6% 8.9 9.3 -1.9% 9.1% 8.3 7.5 5.3 5.2 4.8 4.4 Artificial Joint Blood Vessel Stent Prosthetic Heart Valve Dental Implant Sphygmotonograph & Surgical Equipment 2010 2011 14
Slide 16: Export
[KRW bil.] 53.6 14.2 2.9% 13.8 31.7% 10.8 19.3% 44.9 2010 2011 4Q '10 4Q '11 3Q '11 15
Slide 17: Export products
[KRW bil.] 12.2% 17.0 15.1 15.6% 10.7 106.2% 9.3 8.7 -21.3% 5.1 29.3% 52.2% 4.2 4.1 3.3 3.3 2.6 2.1 Cycloserine Growtropin Bacchus Terizidone Eporon Zydena 2010 2011 16
Slide 18: Export by country
[단위: 십억원] 15.5% 15.6 13.5 -3.9% 9.8 9.4 756.2% -12.3% 5.3 79.6% -25.2% 4.4 3.9 3.3 3.4 2.5 1.8 0.6 India Brazil Cambodia Russia Turkey S. Africa 2010 2011 17
Slide 19: III. 2012 Key Issues & Strategies
Ill, 2012 KEY ISSUES & STRATEGIES & DONG-A PHARM.
Slide 20: 2012 outlook: price regulation, sales growth, R&D and CAPEX
Growth to be shriveled by the new price regulation 2~3% YoY growth in sales expected for 2012 Profits to drop R&D investment KRW90~95bil.(about KRW20bil. up YoY) To develop drugs for global sales Increase in cost due to increase in global standard research task CAPEX and Maintenance ar
Slide 21: Evidence-centered marketing
Focus on “evidence-centered” marketing from “relationship-centered” marketing Utilize our brand power being number one player in urology and digestive Relations-centered AS IS TO BE 20
Slide 22: Channel segmentation and new drug sales
Focusing on sales on new drugs including our newly developed Motilitone by channel segmentation Maximize marketing practice acquired from the GSK collaboration General Hospital General Hospital Clinic (Internal med.) Clinic Clinic (Non-Internal) AS IS TO BE 21
Slide 23: Overseas expansion
Expand in Japanese market - Launch Atorvastatin Expedite Southeast Asia market Upscale Dong-A brand with Bacchus campaign Localization Continue seeking other out-license opportunities Higher performance contribution from overseas 22
Slide 24: Bacchus and OTC strategy
Bacchus – Dual Channel, Dual Products OTC – Strengthen product line-up with more partnership 23
Slide 25: Global R&D
Find candidate for • Find candidate component for sarcopenia innovative drugs while start pre-clinical trial within the year Global R&D for • Launch Motilitone in China phyto-medicine • Get IND from SFDA in 2012 • Get IND for Herceptin biosimilar in Japan and Develop biosimilar for Korea both in 201
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Slide 27: Q&A: marketing cost savings vs R&D
How much can you save in marketing cost in order to offset the increase in R&D cost?
Slide 28: Q&A: 2012 operating profit
What is the expected operating profit for 2012 considering the price cut?
Slide 29: Q&A: price cut litigation
Are you litigate the price cut regulation and what would be the chance for winning the litigation?
Slide 30: Q&A: innovative R&D company benefits
What are the benefit of being selected as an innovative R&D company?
Slide 31: Q&A: other profit and cost
re) > Please explain the other profit and other cost that caused the lower operating profit margin on K-IFRS in comparison to K-GAAP.
Slide 32: Q&A: Tedizolid clinical trial
re) > How is the 3" clinical trial for super bacteria(Tedizolid) in the U.S. market progressing? Any news on selling patent for the E.U. market?
Slide 33: Q&A: other profit and cost in income statement
re) > Please explain the other profit and other cost in the Income Statement that caused the lower operating profit margin on K- IFRS in comparison to K-GAAP
Slide 34: Q&A: distributor returns
Are you expect to see a large return request from distributors due to price cut?
Slide 35: Q&A: additional CAPEX for biosimilar site
oO > What would be the additional CAPEX spending expect for completing the biosimilar production site beside the KRW60bil. in 2012?
Slide 36: Q&A: turnaround after price cut
When can we see the turnaround after the price cut?
Slide 37: Appendix
APPENDIX
Slide 38: Protein/Antibody pipeline
2013~2014 2015~2016 2017~ DA-3091* DA-3808 (PEGylated Exenatide) (Factor VIII) DA-3801 (rhFSH) - Hemophilia - Diabetes - Anovulation DA-3131 DA-3051** (Antibody) (Interferon ß) - Cancer DA-3803 (rhCG) - Multiple Sclerosis - Infertility (Brazil) DA -3111 (Herceptin) DA-3607 (TRAIL) -Breast Cancer DA-
Slide 39: Chemical/Phyto pipeline
2013~2014 2015~2016 2017~ DA-8159** - BPH (US, JP) DA-8159** DA-6034 - ED (US) - Dry Eye DA-7218** DA-1229 -MRSA (US) - Diabetes DA-8159** - PAH (EU) DA-8031 DA-6034 - Premature - Gastritis Ejaculation DA-9801 - Diabetic Neuropathy Chemical/ Phto **Overseas 38
Slide 40: Balance sheet 2007-2011
[KRW bil.] 2007(K-GAAP) 2008(K-GAAP) 2009(K-GAAP) 2010(K-IFRS) 2011(K-IFRS) Total Assets 671.0 731.6 1,000.0 1,100.3 1,236.8 Current Assets 284.3 292.7 294.7 380.0 466.2 Cash 51.2 44.5 44.8 132.6 194.6 Receivables 138.2 134.9 133.8 128.2 143.6 Inventories 94.7 109.0 118.2 115.0 120.4 Fixed Assets 38
Slide 41: Income statement 2007-2011
[KRW bil.] 2007(K-GAAP) 2008(K-GAAP) 2009(K-GAAP) 2010(K-IFRS) 2011(K-IFRS) Sales 635.9 702.3 801.1 846.8 907.3 CoGS 249.7 259.2 323.2 342.6 403.3 Gross Profit 386.3 443.1 477.9 504.2 504.0 SG&A 313.8 361.4 386.0 395.9 405.2 Operating Profit 72.4 81.7 91.9 112.9 95.0 Interest Cost 11.3 13.1 15.5 14.
Slide 42: Sales by division 2007-2011
[KRW bil.] Division 2007 2008 2009 2010 2011 ETC Total 316.5 399.0 463.1 481.3 496.5 General Hospital 172.0 208.2 227.5 235.5 246.5 Clinic 144.5 190.1 235.6 245.7 250.0 OTC Total 201.0 202.9 209.1 221.7 252.9 Bacchus 112.5 118.8 116.5 128.3 150.1 Other OTC 88.4 84.1 93.2 93.4 102.7 Medical Total 90.
Slide 43: Sales by product 2007-2011
[KRW bil.] Products 2007 2008 2009 2010 2011 Stillen 60.2 74.8 85.4 87.7 88.1 Lipinon - 9.6 30.9 40.9 45.9 Plavitor 13.0 29.9 39.7 43.6 44.1 Opalmon 23.5 31.9 40.6 44.3 37.0 Orodipine 13.4 23.2 28.2 28.9 26.3 Growtropin 14.7 14.4 15.6 17.2 21.0 Zydena 11.2 14.2 16.3 20.0 20.2 Talion 11.9 15.4 18.6 1
Slide 44: Sales by product: Bacchus, Panpyrin and others
[KRW bil.] Products 2007 2008 2009 2010 2011 Bacchus 112.5 118.8 116.5 128.3 150.1 Panpyrin 17.8 16.3 19.9 23.8 22.3 Bigen 19.0 15.4 15.3 13.7 14.9 Garglin 13.3 12.2 15.6 14.9 13.1 Morning Care 8.2 9.5 12.2 9.8 11.1 43
Slide 45: Thank you
—_—__— Thank you