West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Jefferies 2011 Global Healthcare Conference
27 slides from West Pharmaceutical Services's conference presentation, Jun 6, 2011
Slide 1: West Pharmaceutical Services Overview
WEST PHARMACEUTICAL SERVICES OVERVIEW Solutions for Injectable Drug Delivery NYSE:WST www.westpharma.com Jefferies 2011 Global Healthcare Conference New York, NY June 6, 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement Cautionary Statement Under the Private Securities Litigation Reform Act of 1995 This presentation and any accompanying management commentary contain “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements inc
Slide 3: West is a globally diversified manufacturer of healthcare and consumer products
West is a globally diversified manufacturer of products consumed in the healthcare and consumer markets. On average, approximately 100 million components manufactured by West and our partner Daikyo are used to enhance the quality of healthcare worldwide everyday.
Slide 4: A Diverse, Stable Customer Base
Pharmaceutical/Biotech Generic Medical Device A Diverse, Stable Customer Base
Slide 5: Sales
Sales ($ in millions) Compound annual growth rate: 8.9%
Slide 6: 2011 Market Outlook
2011 Market Outlook • Uncertain and asymmetric global economic recovery – Europe, US, Japan remain sluggish – China, India, Brazil stronger – Continuing Fx, commodity price volatility • More demanding regulatory environment – Increased scrutiny of pharmaceutical operations • Broader trends in Pharma
Slide 7: 2010 Segment Reorganization
Packaging Systems Delivery Systems Development Primary Package Administration 2010 Segment Reorganization • Established leadership • High market share • Stable growth rate • Proprietary devices • Contract manufacturing • High projected growth rate $785M $324M
Slide 8: What will Drive Future Growth?
• Pharmaceutical Packaging Segment – Demographics and increasing prevalence of chronic disease – Biologics – Growth in Emerging Markets – Increased access to Healthcare – Escalating quality expectations: “Zero Defects” • Delivery Systems Segment – Demand for combination products that promote safety,
Slide 9: Therapeutic Category Growth Drivers
Category Key Customers Projected Growth Diabetes > 10 % Oncology > 10 % Vaccines > 10 % Autoimmune > 8% Generics >10% IMS April 2010 Report; Business Insights 2009; GBI Research 2009 Therapeutic Category Growth Drivers
Slide 10: Pharmaceutical Packaging Systems
Pharmaceutical Packaging Systems Packaging Components for Small Volume Parenterals Plungers, Tip caps, Needle shields for Glass Syringes Plungers, lined seals for Glass Cartridges for Pens Closures for Glass Vials
Slide 11: Packaging Systems Segment Growth Strategy
Packaging Systems Segment • Increase per-unit value • Improve operating efficiency: lean operations • Geographic expansion - capacity investments in Asia • Strategic acquisitions and partnerships Growth Strategy
Slide 12: Packaging Opportunity
Packaging Opportunity Gross Margin Opportunity Revenue Opportunity ($ per 1,000 units) Plungers and sleeve stoppers Stoppers Seals RU seals Westar ® RS
Slide 13: Faster Growth of High-Value Products
Faster Growth of High-Value Products Pharmaceutical Packaging Systems
Slide 14: Delivery Systems
Delivery Systems West ConfiDose ® Auto-injector System Daikyo Crystal Zenith Life-cycle Containment Solutions West Electronic Patch injector West MixJect ® and Vial2Bag ® Custom Manufacturing of Components and Devices Proprietary Components, Devices and Systems
Slide 15: Delivery Systems Segment Growth Strategy
Delivery Systems Segment • Leverage life-cycle management opportunities • Realize commercial potential of CZ • Develop new platform opportunities - combination products • Custom solution provider Growth Strategy
Slide 16: PDS Opportunity
PDS Opportunity Gross Margin Opportunity Revenue Opportunity ($/1,000 units) Consumer products Consumer device manufacturing Mix2Vial ® CZ vials CZ Syringes ConfiDose ® Electronic patch injector
Slide 17: Pharma Industry Drug Life-Cycle Management
Phase I Phase II Phase III Post-Market Life Cycle Management Pharma Industry Drug Life-Cycle Management 8 - 10 years 2 - 3 years 2 - 3 years Regulatory Approval Discovery
Slide 18: Concerns With Glass Syringes
Concerns With Glass Syringes • Interaction with sensitive biologics • Protein aggregation (silicone oil) • Residual chemicals (tungsten, glue) • Glass flakes • Breakage • In process • Within auto-injector systems • Recent FDA recalls • Dimensional variation • Breakage in auto-injector systems • Desi
Slide 19: Recent glass-related product recalls
Epogen Amgen “September 24, 2010 *Glass flakes +200 lots Methotrexate Sandoz *November 1 2010 *Glass flakes +24 lots Glucagen Novo *October 28, 2010 *Broken/cracked vials “Blots Enbrel Sureclick Amgen sJanuary 18,2010 *Broken/cracked syringes *3 million units
Slide 20: Electronic Patch Injector
Programmed by PDA or PC Dose may be customized Applied and activated by patient Electronic Patch Injector • Controlled, subcutaneous, micro-infusion delivery of high volumes and high viscosity drugs • Prefilled cartridge, no need for user filling • Based on Daikyo CZ cartridge • Compact • Hidden nee
Slide 21: Custom Delivery Device Utilizing Daikyo Crystal Zenith
Custom Delivery Device Utilizing Daikyo Crystal Zenith
Slide 22: Our Long-Term Focus
Our Long-Term Focus • Pharmaceutical Packaging Systems – Organic growth (on average) of 3-5% per year – Margin expansion through operating efficiency, product mix – Capital investments targeted at enhanced quality and value • Pharmaceutical Delivery Systems – Deliver the potential of Daikyo CZ produ
Slide 23: Long-Term Growth Opportunity
Pharmaceutical Packaging Systems Primary Container Solutions Pharmaceutical Delivery Systems Administration Systems Long-Term Growth Opportunity 2 billion combined markets for safety, prefilled syringes and auto-injectors, with unit growth of 6%-12%, depending on product and therapeutic segment Stra
Slide 24: Summary First Quarter Results
Three Months Ended March 31 2011 2010 Net Sales $295.4 $274.7 Gross Profit 88.0 82.2 Reported Operating Profit 28.8 28.9 Adjusted Operating Profit (1) 30.7 29.5 Reported Diluted EPS $0.56 $0.57 Adjusted Diluted EPS (1) $0.60 $0.58 Summary First Quarter Results $ millions, except per-share data (1) T
Slide 25: Raw Material Cost Factor
Raw Material Cost Factor Pricing (modestly higher) Unit Volume (slow growth) Mix (continuing shift) cost increases) Raw material costs (higher) Labor (~ inflation) Comprise approximately 1/3 rd of COGS Materials include: Synthetic elastomers and polymer and film (petroleum based), aluminum, natural
Slide 26: Summary
Pharmaceutical Packaging Systems Pharmaceutical Delivery Systems • Well positioned – Substantial market share – Proprietary technology – Diversified customer base – Global footprint • Stability with growth potential – Strength in new product pipeline – Preferred products for biologics • The financia
Slide 27: West Pharmaceutical Services Overview
WEST PHARMACEUTICAL SERVICES OVERVIEW Solutions for Injectable Drug Delivery NYSE:WST www.westpharma.com Jefferies 2011 Global Healthcare Conference New York, NY June 6, 2011 © 2011 by West Pharmaceutical Services, Inc., Lionville, PA All rights reserved. This material is protected by copyright. No
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