Lotus Pharmaceutical Co., Ltd. · TWSE:1795
Lotus Pharmaceutical — Q2 2016 Earnings Presentation
33 slides from Lotus Pharmaceutical's earnings presentation, September 2016
Slide 1: Building a Pan-Regional Leader
LOTUS BUILDING A PAN-REGIONAL LEADER September 2016 Page I 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Except for historical information contained herein, the matters set forth in this presentation are forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. These forward looking statements are not based on hist
Slide 3: Company Overview
COMPANY OVERVIEW Page I 3 Page I 3
Slide 4: Market Leader in the Asia Pacific Generic Pharmaceutical Industry
COMPANY OVERVIEW Market Leader in the Highly Attractive Asia Pacific Generic Pharmaceutical Industry with Access to Other Advanced Markets Investment Highlights Strong Pipeline • Industry leading footprints: A fast growing, pan-regional, • Robust international pipeline through integrated RD platform
Slide 5: Progress in '16YTD
PROGRESS IN ‘16YTD Progress in ‘16YTD • Continues to strengthen product portfolio Final approval of Paricalcitol Capsules for chronic kidney diseases by US FDA received in Feb’16 ANDA of Temozolomide Capsules for brain cancer has been officially approved by US FDA in Apr’16 • Lotus’ first cancer d
Slide 6: Robust Growth Momentum with Consecutive QoQ Growth
FINANCIAL HIGHLIGHTS Robust Growth Momentum with Consecutive QoQ Growth +14.7% Unit: NT$mn More than doubled from Q4’14 to Q2’16 3020 1594 1473 1417 1425 1337 1294 663 2632 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Jan - June Jan - June '15 '16 Page I 6 Page I 6
Slide 7: Improving Profitability Quarter over Quarter
FINANCIAL HIGHLIGHTS Improving Profitability Quarter over Quarter... Gross Magin Operating Margin Unit: % Unit: % 62% 58% 58% 59% 57% 12.9% 11.4% 10.4% 55% 8.5% 6.8% 5.4% 43% Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 -48.0% Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 • Improved significantly from 43.4
Slide 8: OPEX % as of Total Sales
FINANCIAL HIGHLIGHTS OPEX % as of Total Sales Total OPEX % 69% 50% 52% 50% 50% 49% 44% 46% Total OPEX (in 1,590 2,780 675 669 711 725 631 742 NT$mn) 4% 4% 7% 7% 6% 4% 12% 4% 12% 10% 12% 10% 14% 20% 5% 12% 36% 34% 34% 43% 30% 30% 28% 33% FY2014 FY2015 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Sales & Marke
Slide 9: EPS v.s. Cash EPS
FINANCIAL HIGHLIGHTS EPS v.s. Cash EPS EPS (NT$) Cash EPS (NT$) • EPS = Net Income / # of Outstanding Shares • Cash EPS = Cash flows from operating activities / # of Outstanding Shares • Better indicator as it represents real cash earned from daily operations • More cash EPS also illustrates a bette
Slide 10: Continues to Strengthen Product Portfolio
MORE TO COME … Continues to Strengthen Product Portfolio 2016YTD MA recevied Generic Name Indication Country Approval Date Remarks Metabolism 1 Diosmin 500mg TW Jan’16 In license 靜脈疾病 Schizophrenia 2 Olanzapine 5mg, 10mg TW Jan’16 In license 精神分裂症 Nephrology Own development; 3 Paricalcitol 1mcg, 2mc
Slide 11: Products & Pipeline Updates
PRODUCTS & PIPELINE UPDATES Page I 11 Page I 11
Slide 12: Top 15 Products of the Quarter
PRODUCTS & PIPELINE UPDATES Top 15 Products Of The Quarter Q2’16 $ Product Indication QoQ (%) YoY (%) Remarks (NT$mn) 1 Sarpogrelate Anticoagulant 抗凝血 135.9 +62% +388% Dosage improved to 1/day 2 Phentermine Anti-obesity 減肥 92.1 +7% -2% 3 Calcium Polystyrene Sulfonate Nephrology 腎臟病 87.0 +0% +8% Excl
Slide 13: Strong and Broad Pipeline Targeting US & EU Markets
PRODUCTS & PIPELINE UPDATES Strong And Broad Pipeline Targeting US & EU markets To be launched in 2016 - 2019 Target Market Generic Name Indication Formulation BE & CT Submission Approval Launch Remarks (US$mn) Not Disclosed CNS PIV; formulation for different dosage strengths also 1 US: 700 抗癲癇 init
Slide 14: Continuous IMD Pipeline Expansion for Korea Market
PRODUCTS & PIPELINE UPDATES Continuous IMD Pipeline Expansion For Korea Market To be launched in 2016 - 2018 Target Generic Name Indication Market Formulation BE & CY Submission Approval Launch Remarks (US$mn) Anti-obesity 1 DP-R211 14 減肥 Rosuvastatin/ Cardiovasular 2 146 New combination Candesartan
Slide 15: Beyond 2020: Biosimilars
PRODUCTS & PIPELINE UPDATES Beyond 2020 Biosimilars • Alvogen/Alvotech aims to create a leading presence in biosimilars • US$500 million is being invested in a new state-of-the- art biotech plant and pipeline • Lotus and Alvogen/Alvotech signed distribution agreements for two key biosimilars current
Slide 16: Appendix
APPENDIX Page I 16 Page I 16
Slide 17: Lotus History and Key Milestones
LOTUS HISTORY AND KEY MILESTONES Korea Operations, Kunwha and Dream Jun 1 Pharma, Merged into Alvogen Korea Alvogen Became a Majority Shareholder of Lotus Lotus Acquired Alvogen’s Korea, Taiwan and India Businesses Aug 11 Dec 19 Listed in GreTai First Product First Product Stock Exchange Launch
Slide 18: Key Operations – Lotus Taiwan
KEY OPERATIONS – LOTUS TAIWAN Strong Presence in Taiwan • Founded in 1966 and has been listed in Taiwan GreTai market since 2010 Key Milestone • Strategic partnered with Alvogen in 2014 • Among the Top 3 of pharma companies in Taiwan by revenue on consolidated basis Sales office in Taipei Product •
Slide 19: Key Operations – Alvogen Korea
KEY OPERATIONS – ALVOGEN KOREA Comprehensive Footprints in Korea • Kunwha was founded in 1958 and acquired by Alvogen in October 2012 Key • Dream Pharma was established as the pharmaceutical division of Hanwha Corporation in 1996 and acquired Milestone by Kunwha in December 2014 • Kunwha and Dream P
Slide 20: Key Operations – CRO Capabilities in India
KEY OPERATIONS – CRO CAPABILITIES IN INDIA Strong CRO Capabilities Support to Lotus/Alvogen Norwich Clinical Services provides Biostudy, Clinical and pharmacovigilance services to Lotus/Alvogen and 3rd party customers • Clinical Area: 17,000 sq.ft Located within a multi-specialty hospital 72 bed
Slide 21: Shareholding Structure
COMPANY OVERVIEW Shareholding Structure Alvogen Asia Pacific Holdings Ltd. 63.4% Lotus Pharmaceutical Co., Ltd. (Taiwan) 100.0% 100.0% 98.0% 100.0% Alvogen Pharma India Pvt Lotus International Pte. Ltd. Alvogen Taiwan Alvogen Korea Holdings Ltd. Ltd. (Taiwan) (Korea) (Singapore) (India) 82.5% 100.0%
Slide 22: Global Spending on Medicines 2014-2020
MARKET DYNAMICS Global Spending On Medicines 2014 - 2020 Generics continue to drive growth globally 30% 37% 7% Europe 46% 49% Asia $25-35bn growth North America $100-130bn growth 44% $115-145bn growth 15% AFME 26% $15-25bn growth 59% 30% 33% 9% 50% Latin America 30% $25-35bn growth 13% 61% 35% 52% G
Slide 23: Well-positioned in Highly Attractive and Fast Growth Markets in Asia
MARKET DYNAMICS Well-positioned in Highly Attractive and Fast Growth Markets in Asia… Pharma Market Size 5yr CAGR (US$bn) (%) Strong Presence in Korea and Taiwan Japan 107.0 2.1% • Well-established presence in key markets of North Asia where China strong growing economies, fast aging populations, hi
Slide 24: Recap of FY2015
RECAP OF 2015 ACHIEVEMENTS Recap of FY2015 • Successful integration by the combined efforts Kunwha and Dream Pharma in Korea have officially merged into one legal entity and renamed as Alvogen Korea effective June 1st • The combined entity successfully launched Sarpogrelate XR and gained significan
Slide 25: With Strong Pipeline Support and Product Launches
PROGRESS IN ‘16YTD With Strong Pipeline Support and Product Launches… Number of MA Received Number of Product Launches (By SKU) 74 59 52 48 37 47 36 27 35 37 21 4 16 10 12 2 2014 2015 2 0 1 6 YT D 2014 2015 2 0 1 6 YT D Lotus + Alvogen TW Alvogen Korea Lotus + Alvogen TW Alvogen Korea Page I 25 Page
Slide 26: YTD Sales Breakdown by Therapeutic Area
STRUCTURE OF REVENUES YTD SALES BREAKDOWN BY THERAPEUTIC AREA CVS GI CNS Others 24% Product Snapshot 34% Market YTD Therapeutic Area Taiwan Korea Export Key Products YoY 23% 19% CVS V V - +29.8% Sarpogrelate, Rosuvastatin/Ezetimibe GI V V Japan +7.0% Phentermine, Orlistat Seroquel (Quetiapine), Phen
Slide 27: Pipeline: For Japan Market
PRODUCTS & PIPELINE UPDATES For Japan market Target For- Clinical/ Sub- Generic Name Indication Market mulation BE Study mission Approval Launch Remarks (US$mn) Allergy 1 Not Disclosed 340 抗組織胺 Contraceptive 2 Not Disclosed 100 避孕藥 Non-small-cell 3 Gefitinib lung cancer 130 非小細胞肺癌 Cancer 4 Capecitab
Slide 28: Pipeline: For China Market
PRODUCTS & PIPELINE UPDATES For China market Target CTP1 sub- Clinical/ IDL2 sub- Generic Name Indication Market mission BE Study mission Launch Remarks (US$mn) Contraception 1 Levonorgestrel 13 CTP submitted in Q2’10 避孕 Anti-epilepsy 2 Divalproex sodium 100 CTP submitted in Q4’08 抗癲癇 Local analgesi
Slide 29: High Growth via Organic Growth and Strategic M&As
MORE TO COME High Growth via Organic Growth and Strategic M&As Organic Growth M&A Strategies • Robust portfolio of existing products with additional • Supports from Alvogen to capture opportunities ahead of potentials from board pipeline to gain further market share industry consolidation in the reg
Slide 30: Financial Statements
FINANCIAL STATEMENTS Page I 31 Page I 31
Slide 31: Results of Q2'16 – Income Statement
FINANCIAL HIGHLIGHTS Results of Q2’16 – Income Statement Unit: NT$mn unless otherwise stated Page I 32 Page I 32
Slide 32: Results of Q2'16 – Balance Sheet
FINANCIAL HIGHLIGHTS Results of Q2’16 – Balance Sheet Unit: NT$mn Page I 33 Page I 33
Slide 33: Results of Q2'16 – Cash Flow Statement
FINANCIAL HIGHLIGHTS Results of Q2’16 – Cash Flow Statement Unit: NT$mn For the Six Months 2016 2015 Change Income before income tax 239 142 98 Total non-cash adjustments 380 381 (1) Net change in operating assets and liabilities 88 (25) 112 Interest and taxes received (paid) (79) (133) 55 CASH FLOW