Dong-a Socio Holdings Co., Ltd. · KRX:000640
Dong-a Socio — Dong-A Pharmaceutical — Samsung Global Investors Conference 2011
50 slides from Dong-a Socio's conference presentation, May 2011
Slide 1: General Introduction to Dong-A Pharmaceutical
General Introcluction to Dong-A Pharmaceutical May 2011, 7 DONG-A PHARM.
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain “forward-looking statement.” Forecasts and projections contained in this material are based on current business environments and management strategies, and they may differ from the actual results upon changes and unaccounted variables. 1
Slide 3: Table of Contents
TABLE OF CONTENTS I, Market Environment i, Dong-A ’s Strengths Ii. Financial Performance Ajppenelix a ke / { @) DONG-A PHARM.
Slide 4: I. Market Environment
Il. Market Environment
Slide 5: Korean Pharmaceutical Industry
Korean Pharmaceutical Industry [KRW bil.] 2006 2007 2008 2009 2010 ETC 7,020 8,034 9,156 10,436 11,226 OTC 1,796 1,724 1,690 1,802 1,872 Total 8,816 9,758 10,846 12,238 13,098 2006 2007 2008 2009 2010 ETC 15.0% 14.4% 14.0% 14.0% 7.6% OTC 0.3% -4.0% -2.0% 6.6% 3.9% Total 11.7% 10.7% 11.1% 12.8% 7.0%
Slide 6: Regulatory Issues
Regulatory Issues EFFECTIVE KEY REGULATIONS FROM DETAILS Cost-effectiveness Assessment Jan. 2007 Rationalize the drug price according to its effectiveness by comparing to a reference product 1. Drug Expenditure Rationalization Drugs enlisted before 2007 Plan Price down to 80% of the highest
Slide 7: Affect on Dong-A
Affect on Dong-A 1. Drug Expenditure Rationalization Plan 20% Uniform cut less than 1% drop in sales per year [10’ Sales in KRW bil.] EFFECTIVE FROM EFFECTIVE FROM EFFECTIVE FROM 2H 2010 1H 2011 2H 2011 Circulatory, Digestive, Diabetes, Antithrombotic, Therapeutic Area Hypertension Gastric ulcer,
Slide 8: Affect on Dong-A
Affect on Dong-A 2. Real Transaction Price Incentive System [KRW bil.] 463.1 3.9% 481.3 Impact in 2011 - virtually no impact 235.6 4.3% 245.7 Clinic Impact beyond 2011 General - Less than 5% sales reduction Hospital 3.5% 227.5 235.5 when all the general hospital participates 2009 2010 3. Dual Pu
Slide 9: Still an Attractive Industry
Still an Attractive Industry Grew 7.0% on volume but 14.0%* on unit demand due to aging population Double digit growth possible when price stabilize Medical spending per GDP is around 6.5%, lower than OECD average of 9.1% Ample room to grow Possible industry consolidation when regulation s
Slide 10: Growing Area
Growing Area The biggest therapeutic areas in Korea are cardio especially hypertension followed by digestive area. [KRW bil.] [KRW bil.] 2009 2010 GROWTH 700 2.5% Total Cardio 2,233 2,389 7.0% 600 500 Hypertension 1,206 1,307 8.4% -4.1% 400 Hyperlipidemia 497 553 11.2% 300 Antithrombotic 530 529 -0.
Slide 11: Market Strategy
Market Strategy MARKET TREND CHANGES STRATEGY Aging Increase in chronic Focus on circulatory, urology, Population and senile disease endocrine therapeutic areas Higher income Develop original products with Changing Changes in diet lucrative prices Life Style habits Focus on digestive are
Slide 12: II. Dong-A's Strength
Ii, Dong-A’s Strength
Slide 13: Dong-A's Merits
Dong-A‟s Meritz Well-diversified Business Portfolio Strong Franchise Proven R&D Capability Lucrative Financials Successful Overseas Expansion 12
Slide 14: Well-diversified Product Portfolio
Well-diversified Product Portfolio Sales Contribution - 60% ETC, 25% OTC, 10% Medical, 5% Export ETC Product contribution - 65% Original (30% In-house Development, 35% In- license) vs. 35% Generic ETC Channel Contribution - 50% General Hospitals / 50% Clinics Less vulnerable to recent regula
Slide 15: Well-Positioned in Growing Area
Well-Positioned in Growing Area 3.6% 4.5% 11.0% Hypertension 4.1% Other Cardio 3.6% Digestive 5.0% Endocrine Urology 6.3% 25.4% Neurotic Respiratory 7.2% Antivius Antibiotic 3.7% Oncology 3.9% Bio 21.5% Anti -inflammatory 14
Slide 16: Strong Franchise – Gaining Market Share
Strong Franchise – Gaining Market Share Dong A has gained a significant market share shortly after it‟s launch ® ® ® 2.1% 5.7% 10.7% 12.7% 13.6% 13.2% 12.9% 10.0% 10.1% 17.6% 14.5% 6.4% 17.0% 16.4% 13.7% 14.0% 13.9% 13.0% Platless Atorva Salotan 76.5% 59.7% Plavitor 68.1% Lipinon Cozartan 51.1% 45.6
Slide 17: R&D Capability – Accredited by FDA
R&D Capability – Accredited by FDA Dong-A proved its global quality R&D capability with Udenafil (DA-8159) and Torazolid (DA-7218) which are well on the way for U.S. FDA as well as E.U. FDA approval DA-8159 Phase 3 completed for Erectile Dysfunction US market DA-7218 In Phase 3 for MRSA Infectio
Slide 18: Global Level Competitiveness of Dong-A's Candidates
Global Level Competitiveness of Dong-A‟s Candidates We expect a commercial success, which will be a milestone for direct entrance with our own brand PRODUCT MARKET SIZE IN 2010 COMPETITIVENESS Erectile dysfunctions Fewer side effects - Market over US$4.0bil. Ideal action duration (Viagra® sales
Slide 19: R&D Capability – Commercial Success Rate
R&D Capability – Commercial Success Rate With the 17 originals developed in Korea, all of Dong-A‟s new products are scoring huge successes [KRW bil.] 258.4 88.6 66.0 52.0 42.0 42.6 10.0 15.7 12.6 4.4 1.3 0.0 0.0 2.8 5.5 0.2 0.0 [Source : Press] 18
Slide 20: R&D Capability - Robust R&D Pipeline
R&D Capability - Robust R&D Pipeline PEER IN PHASE 1 IN PHASE 2 IN PHASE 3 Dong-A 5 8 5 Company G 4 5 2 Company H 8 0 0 Company D 5 0 3 Company Y 1 0 0 [Source : FSS Dart Filing] 19
Slide 21: Lucrative Financials – High Margin / Low Gearing
Lucrative Financials – High Margin / Low Gearing OP Margin 69.0% 11.6% 11.5% 11.6% Debt to Equity Ratio 56.3% 42.6% 8.3% 33.1% 7.9% 6.2% Net Profit Margin 34.8% Net Debt to Equity Ratio 14.9% 2008 2009 2010 2008 2009 2010 20
Slide 22: Lucrative Financials – Affluent Cash Flow
Lucrative Financials – Affluent Cash Flow [KRW bil.] 2008 2009 2010 Net Cash in from Operating 53.2 89.9 90.7 Net Cash from Investing -72.7 -92.1 -97.8 CAPEX + Maintenance 70.0 70.9 106.3* Net Cash from Financing 12.7 2.5 94.9 *KRW40.2bil. for purchasing land for cGMP plant + KRW42.0bil. for researc
Slide 23: Preparing the Future - R&D Pipeline
Preparing the Future - R&D Pipeline TYPE CODE NAME MAJOR INDICATION DESCRIPTION STAGE Under Phase 3 (US) Erectile Dysfunction Warner Chilcott Benign Prostatic Phase 2 planned (US) Hyperplasia Warner Chilcott DA – 8159 PDE-5 Inhibitor Under Phase 2 (EU) Portal Hypertension Dr. Falk Pulmonary Arterial
Slide 24: Preparing the Future - R&D Pipeline
Preparing the Future - R&D Pipeline TYPE CODE NAME MAJOR INDICATION DESCRIPTION STAGE DA–9701 Functional Dyspepsia Herbal Extracts NDA (KR) Phyto DA-9801 Diabetic Neuropathy Herbal Extracts Phase 2 planned (KR) Infertility (Ovulation DA-3801 Induction) Recombinant FSH Under Phase 3 (KR) DA-3803 Infe
Slide 25: Preparing the Future - R&D Pipeline
Preparing the Future - R&D Pipeline Biosimilar/better- DA-3811 (Gaucher Disease) DA-3853 (Rheumatoid & Psoriatic Arthritis) DA-3808 (Hemophilia A) DA-3880 (Anemia of Chronic Renal Failure) Antibody - DA-3111 (her2 Positive Breast Cancer) DA-3131 (Solid Tumor) 24
Slide 26: Preparing the Future - R&D Pipeline
Preparing the Future - R&D Pipeline 2011~2012 2012~2013 2013~2014 2014~BEYOND DA-8159 (BPH – U.S. / DA-7218 PAH) (MRSA - U.S.) DA-1229 DA-8159 (Diabetes) (PH) DA-9701 DA-8159 DA-6034 (Dyspepsia) (ED – U.S.) DA-3803 (Dry Eye) (Infertility) DA-3801 DA-6034 DA-8031 (Anovulation) (Gastritis) DA-3031 (Pr
Slide 27: Visible Overseas Expansion
Visible Overseas Expansion [KRW bil.] 51.7% [KRW bil.] 68.3% 13.1 11.7 -9.1% 9.2% 8.9 8.6 8.5 7.8 8.1 7.0 37.5% 16.0% 46.7% 81.4% 82.6% 3.8 4.4 3.3 3.3 3.6 2.9 3.2 2.2 2.0 1.6 Brazil India S. Africa Russia Growtropin Leucostim Cycloserine Terizidone Bacchus 2009 2010 2009 2010 26
Slide 28: Overseas Expansion Strategy
Overseas Expansion Strategy Product launch criteria for Emerging Market - No competition i.e. Cyclocerine, Terizidone - Product with patent i.e. Zydena®, Atrovastatin - Possible marketing differentiation i.e. Monotaxel® - Price competitiveness - Market with toughening regulation i.e. Zydena® Str
Slide 29: Strategic Alliance With GSK
Strategic Alliance With GSK STAGE OBJECTIVE Co-promotion of GSK products through our sales channel to take on clinical channel sagged by Dual Punishment System GSK : Revenue growth, capital gain 1st Stage Dong-A : Sales commission (profit growth), Enhanced product line up GSK invested 9.9% s
Slide 30: 2011 New ETC Products Launch Plan
2011 New ETC Products Launch Plan [KRW bil.] Original Product Indication Sales (2009) 2Q Aprovel Generic Hypertension (ARB) 37.4 3Q Co-Aprovel Generic Hypertension (ARB + Diuretics) Comb. 28.3 Diovan Generic Hypertension (ARB) 53.1 Co-Diovan Generic Hypertension (ARB + Diuretic) Comb. 32.7 4Q Flivas
Slide 31: III. Financial Performance
im. Financial Performances wa , @) DONG-A PHARM.
Slide 32: Condensed Statements of Income (K-GAAP)
Condensed Statements of Income (K-GAAP) [KRW bil.] 2007 2008 2009 1Q „10 2Q „10 3Q „10 4Q „10 2010 1Q „11 Sales 686.8 702.3 801.1 201.0 221.4 212.1 212.3 846.8 210.2 CoGS 306.8 259.2 323.2 81.7 86.4 87.9 89.6 345.6 83.7 Gross Profit 380.0 443.1 477.9 119.3 135.0 124.2 122.7 501.3 126.5 SG&A 304.2 36
Slide 33: Condensed Statements of Financial Position (K-GAAP)
Condensed Statements of Financial Position (K-GAAP) [KRW bil.] 2007 2008 2009 1Q „10 2Q „10 3Q „10 4Q „10 1Q „11 Total Assets 671.0 731.6 1,000.0 1,025.8 1,188.2 1,175.0 1,160.4 1,193.7 Current Assets 284.3 292.7 294.7 301.7 448.2 438.6 380.4 401.2 Cash 51.2 44.5 44.8 54.9 177.5 181.8 132.6 147.0 Re
Slide 34: Sales by Divisions
Sales by Divisions [KRW bil.] 2007 2008 2009 1Q „10 2Q „10 3Q „10 4Q „10 2010 1Q „11 ETC Total 316.5 399.0 463.1 120.0 124.2 115.4 122.1 481.3 114.5 General Hospital 172.0 208.2 227.5 60.9 60.7 56.8 57.1 235.5 55.8 Clinic 144.5 190.8 235.6 58.7 63.5 58.5 65.0 245.7 58.7 OTC Total 200.9 199.0 209.1 4
Slide 35: Sales by Major Products
Sales by Major Products [KRW bil.] Therapeutic Products 2009 2010 Growth Treatment Orodipine 28.2 28.9 2.3% CCB - 3rd Generation Cozartan 13.6 18.0 33.1% ARB Hypertension Vasotrol 4.3 4.6 7.3% β-Blocker Tanatril 4.7 4.5 -5.8% ACE-I Opalmon 40.6 44.3 9.2% Antithrombotic Agents Other Cardio Plavitor 3
Slide 36: Sales by Major Products
Sales by Major Products [KRW bil.] Therapeutic Products 2009 2010 Growth Treatment Talion 18.6 19.6 5.5% Allergic Rhinitis Respiratory Onon 11.7 12.4 5.9% Asthma Valtrex 10.3 10.0 -3.1% Herpes Zoster Antivirus / Zovirax 7.9 8.7 10.0% Genital Herpes Skin Disease Diflex 6.9 6.0 -13.2% Anti-fungals Epo
Slide 37: 2011 Budget
2011 Budget Sales Expected: About KRW 900 bil. Positive Attributors Stronger product line-up, growth in export Negative Attributors Dual Punishment System, low price incentive Operating Profit Margin Expected 11%~12% Positive Attributors Proceeds from GSK product sales, cost reductio
Slide 38: Appendix
Appenclix 2 Pi o s ) DONG-A PHARM ~
Slide 39: Corporate Information and Governance
Corporate Information and Governance Quick Overview Major Shareholders (Over 5%) Chairman Founding 1949. 8. 9 and etc. Listing 1970.2.10 10.96% Other Group Dong-A Socio GSK 9.91% Co-CEOs Won-Bae Kim/Jung-Seok Kang Employees 2,200 (2010.12.31) National 51.62% 9.29% Pension Audit Opinion Unqualified (
Slide 40: Major Affiliates
Major Affiliates 50.0% 97.7% 100% 34.6% 100% 11.2% Dong-A Yongma Dong-A DA Sooseok ST Pharm. Otsuka Logis Pharmteck Information Beverage Maker Distributor of Maker of Bacchus Manager of Clinical IT solution API maker for Well-known for Medicine & etc. bottles Trials of Zydena in Provider Pharmaceuti
Slide 41: Consolidated Financial Summary (K-GAAP)
Consolidated Financial Summary (K-GAAP) [KRW bil.] [KRW bil.] 2008 2009 2010 2008 2009 2010 Total Assets 769.9 1,057.3 1,234.3 Sales 763.6 866.2 947.6 Current Assets 305.7 315.6 424.4 Cash and Cash Equivalent 44.9 50.6 150.5 Receivables 145.2 145.2 145.4 COGS 327.9 388.5 421.7 Inventory 111.0 120.5
Slide 42: Product Details
Product Details Zydena® [Erectile Dysfunction Treatment] Global Market Size : US$4.0bil. Domestic Market Size : KRW97.5bil. Mvix PRODUCT COMPANY FEATURE Yaila 4.1% 1.7% Levitra Onset Time : 15M 2.9% Zydena (Udenafil) Dong-A Zydena Duration : 24H 25.7% Onset Time : 1H Viagra (Sildenafil) Pfizer Durat
Slide 43: Global Level Competitiveness of Dong-A's drugs
Global Level Competitiveness of Dong-A‟s drugs Especially, Torezolid (DA-7218) are showing excellent 2nd stage results against its peer, Zyvox ATTRIBUTE LINEZOLID TOREZOLID ADVANGTAGE MRSA MIC90 μg/mL 4.0 0.5 More potent Faster Acting = In vivo activity Bacteriostatic Bacteriostatic Expanded Applica
Slide 44: Major Products Sales (ETC)
Major Products Sales (ETC) [KRW bil.] Products 2007 2008 2009 1Q „10 2Q „10 3Q „10 4Q „10 2010 1Q „11 Stillen 60.2 74.8 85.4 22.1 22.4 20.7 22.5 87.7 22.1 Opalmon 23.5 31.9 40.6 11.0 12.3 13.2 7.8 44.3 8.8 Plavitor 13.0 29.9 39.7 10.5 10.5 10.9 11.7 43.6 10.5 Lipinon - 9.6 30.9 9.6 10.4 10.2 10.7 40
Slide 45: Major Products Sales (OTC)
Major Products Sales (OTC) [KRW bil.] Products 2007 2008 2009 1Q „10 2Q „10 3Q „10 4Q „10 2010 1Q „11 Bacchus 112.5 118.8 116.5 23.0 36.8 37.6 31.0 128.3 26.6 Panpyrin 17.8 5.3 19.9 7.2 5.0 4.9 6.7 23.8 6.9 Begen 19.0 4.5 15.3 3.4 3.5 4.2 2.6 13.7 3.7 Garglin 13.3 3.5 15.6 4.2 4.6 2.9 3.2 14.9 3.4 M
Slide 46: Key Biologic Patent Expiries (U.S.)
Key Biologic Patent Expiries (U.S.) [US$ bil.] BRAND COMPANY INDICATION 2009 Sales Year of Patent Expiry Enbrel Amgen Rheumatoid Arthritis 5.0 2012 Engyme Amgen Anemia 5.3 2013 Remicade Johnson & Johnson Rheumatoid Arthritis 4.4 2013 Avonex Biogen Idec Multiple Sclerosis 1.8 2013 Rebif Merck KGaA Mu
Slide 47: Global Partners
Global Partners PRODUCT REGION COMPANY PROGRESS Russia OJSC Launched MENA HIKMA Preparing to sell API CIS Valenta Launched in Ukraine Thailand B.L.HUA Launch within a year Brazil Bergamo Launch within a year Zydena® Columbia Procabs Launch within a year (Erectile Dysfunction) Launched in Malaysia /
Slide 48: Global Partners
Global Partners PRODUCT REGION COMPANY PROGRESS Leucostim® Turkey DEM ilac Launched (Netropenia) Syria Oubari Recently contracted DD completed / Clinical trial expected to Eporon® Turkey DEM ilac finish by end of 2011 (Anemia) Yemen Ak-Dawa Recently launched Brazil Bergamo Launched ® Growtropin Ukra
Slide 49: Glossary
Glossary Eporon Inj. Prefilled syringe (Recombinant erythropoietin/ Anemia associated with chronic renal failure) Bio Gonadopin Inj. (Recombinant follitropin / Infertility) Bio Growtropin AQ Inj. Pen. (Recombinant somatropin / Growth failure due to an inadequate secretion of growth hormone) Bio Leuc
Slide 50: Corporate Information & IR Information
CORPORATE INFORMATION & IR INFORMATION CORPORATE INFORMATION IR INFORMATION jermun-Qu March 18, 20 hittpy/Awww.donga-pharm.com Dalseong Plant +i, No Icheon Plant um-dong, Icheon-si MAG OCSCRIPTION The Main iii ot Dong A Pearmacmtis! Mscipsrtane
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