Recordati S.p.a. · MIL:REC
Recordati — Italian Investor Conference, New York 2005
33 slides from Recordati's conference presentation, Apr 13, 2005
Slide 1: Expanding pharma operations
Expanding pharma operations Italian Investor Conference New York, 13 April 2005
Slide 2: Company profile
Company profile • A fully integrated pharmaceutical company listed on the Italian Stock Exchange since 1984 • Original research focused on cardiovascular and urological fields • Direct operations in Italy, France, Germany (as from 2005) and Spain covering a broad range of therapeutic areas • Proprie
Slide 3: Composition of sales
Composition of sales 1999 (€ 272 m) 69 % 2004 (€ 488 m) 31 % 90 % 10 % Pharmaceuticals Pharmaceutical chemicals 2
Slide 4: Breakdown of pharmaceutical sales
Breakdown of pharmaceutical sales Spain International licensees 6% 19% France Sophartex 24% 2% Italy Data: full year 2004 49% 3
Slide 5: Main products
Main products Proprietary In-Licensed Breakdown of 2004 pharmaceutical sales (€ 439 m) Branded Generics Neo Codion Lomexin Urispas (codeine (fenticonazole) (flavoxate) cough mix.) Acequin/ Methadone Exomuc Hexa line Octegra Acequide Abufene (acetylcysteine) Isocef (moxifloxacine) (biclotimol) (quina
Slide 6: ZANIDIP (lercanidipine)
ZANIDIP® (lercanidipine) • Next generation calcium-channel blocker. Lipophilic dihydropyridine. • Natural once a day. Potent, long-lasting vasodilatory activity. Highly vasoselective with gradual onset, smooth and uniform blood pressure lowering activity. • Efficacy as best in class. Significantly i
Slide 7: Lercanidipine launch status
Lercanidipine launch status • Launched in 69 countries, approximately one third of world market for calcium channel blockers • Major European launches • 1998 Italy, Spain, UK • 2000 Germany • 2001 France • Approved in additional 23 countries • Filed for approval in additional 15 countries 6
Slide 8: % share of CCB market
Lercanidipine as a % of all calcium channel blockers Bubble size represents $ market value of CCB’s France 16 % share of CCB market Germany 14 Australia Italy Austria 12 10 S.Korea 8 Spain 6 Belgium U.K. 4 2 Holland 0 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Source: IMS data - 4Q 2004 Quarters fro
Slide 9: Product pipeline
Product pipeline LERCANIDIPINE modified release formulations - with LifeCycle Pharma and Eurand LERCANIDIPINE /ENALAPRIL - with Forest for U.S. COMBINATION (hypertension) LERCANIDIPINE market new 20 mg dosage 2 NEW REC 0545 PROJECTS (overactive bladder/ REC 2615 (overactive urinary incontinence) EU
Slide 10: ZANIPRESS (lercanidipine-enalapril fixed combination)
ZANIPRESS® (lercanidipine-enalapril fixed combination) • New aggressive targets for blood pressure control • Combination of drugs needed for most patients • Patient compliance • Fixed combinations will play a significant role in the future hypertension market • Filed for approval, Germany to be Refe
Slide 11: Lercanidipine life cycle management
Lercanidipine life cycle management • 20mg strength approved in Europe and other countries. Launched in Germany, France and Australia in 2003, Italy, Spain, Scandinavia and Portugal in 2004, roll-out continues • Modified release formulation under development with Forest Labs for the U.S. market • Ag
Slide 12: Ongoing R&D in urology - micturition disorders
Ongoing R&D in urology - micturition disorders • Micturition disorders affect over 70 million people in the major pharmaceutical markets • Only 20% are diagnosed and not all receive or tolerate well the current pharmacological therapies • Anticholinergic agents are the most commonly used drugs for t
Slide 13: Ongoing R&D in urology - micturition disorders
Ongoing R&D in urology - micturition disorders • Recordati has long standing research expertise in the urogenital field • Studies the central nervous system mechanisms that control the bladder’s function • A new target for novel drugs was identified, the 5-HT1A serotoninergic receptor • Rec 0545 is
Slide 14: Rec 0545
Rec 0545 • Rec 0545 is endowed with a potent and selective antagonistic effect at 5-HT1A receptor • Shows remarkable activity in increasing bladder volume capacity (or time between micturitions) without blunting bladder contractility (differently from antimuscarinics/anticholinergics) • A completely
Slide 15: Ongoing R&D - other urogenital programs
Ongoing R&D - other urogenital programs • Potent antagonists of the α1-adrenergic receptors, highly selective for the lower urogenital tract, were pioneered by Recordati and are potentially useful in the development of treatments for benign prostatic hyperplasia (BPH) • Two other potential biologica
Slide 16: Operational highlights in 2004
Operational highlights in 2004 • Pharmaceutical sales up 3.5%, or 8.4% excluding Sophartex • International pharmaceutical sales up 12.0% • Lercanidipine sales up 25.4% • Operating income up 11.6%, at 18.5% of sales • Net income at 11.1% of sales • New product licenses 15
Slide 17: Composition of revenue
Composition of revenue (million euro) 2003 2004 Change % PHARMACEUTICALS 424.0 438.9 3.5% 87.0% 89.9% PHARMACEUTICAL 63.5 49.4 (22.1)% CHEMICALS 13.0% 10.1% TOTAL 487.5 488.3 0.2% 100.0% 100.0% ITALY 211.6 218.8 3.4% 43.4% 44.8% INTERNATIONAL 276.0 269.5 (2.3)% 56.6% 55.2% 16
Slide 18: Sources of growth
Sources of growth (% change, full year 2004 over full Volume Price Exchange Total year 2003) PHARMACEUTICALS 12.2 % (3.5) % (0.3) % 8.4 % excluding Sophartex SOPHARTEX (73.1) % - - (73.1) % PHARMACEUTICAL (18.9) % (0.1) % (3.1) % (22.1) % CHEMICALS TOTAL CHANGE 3.6 % (2.8) % (0.6) % 0.2 % 17
Slide 19: Composition of pharmaceutical revenue
Composition of pharmaceutical revenue (million euro) 2003 2004 Change % Pharmaceuticals Italy 203.4 213.5 5.0% Pharmaceuticals France 97.9 106.7 9.0% Pharmaceuticals Spain 21.0 26.3 25.3% International licensees 76.1 85.4 12.3% Sophartex * 25.7 6.9 (73.1)% TOTAL PHARMACEUTICALS 424.0 438.9 3.5% Excl
Slide 20: Lercanidipine sales
Lercanidipine sales (million euro) 2003 2004 Change % Italy 33.7 39.5 17.3% France 15.7 23.4 48.4% Spain 4.3 4.9 15.9% DIRECT SALES 53.7 67.8 26.3% 58.7% 59.1% SALES TO LICENSEES 37.8 46.9 24.1% 41.3% 40.9% TOTAL LERCANIDIPINE 91.5 114.7 25.4% SALES 100.0% 100.0% 19
Slide 21: Full year results
Full year results (million euro) 2003 2004 Change % Revenue 487.5 488.3 0.2% Gross Profit 287.8 309.0 7.4% as % of revenue 59.0% 63.3% Selling Expenses 148.0 156.0 5.4% as % of revenue 30.4% 31.9% R&D Expenses 32.8 37.3 as % of revenue 6.7% 7.6% 13.9% Operating Income 81.0 90.4 as % of revenue 16.6%
Slide 22: Operating income by business area
Operating income by business area (million euro) 2003 2004 Change % PHARMACEUTICALS 85.5 88.4 3.3% as % of revenue 20.2% 20.1% PHARMACEUTICAL CHEMICALS (4.5) 2.0 as % of revenue* (6.0)% 3.2% n.s. TOTAL OPERATING INCOME 81.0 90.4 11.6% as % of revenue 16.6% 18.5% * Including inter-company sales 21
Slide 23: Capital employed
Capital employed (million euro) 31 December 2003 31 December 2004 21.4 Net working capital 72.1 71.7 for operations Net non-current assets 44.7 227.9 Net debt or cash 265.0 177.6 Shareholders’ Equity 148.2 (before negative hedging reserve of € 3.2 million) Capital employed: 249.3 Capital employed: 1
Slide 24: Net financial position
Net financial position (million euro) 2003 2004 Change Cash and marketable securities 98.7 232.2 133.5 Short term bank debt (17.6) (3.5) 14.1 Current portion of medium and long term (27.6) (25.2) 2.4 debt Medium and long term debt (74.9) (131.4) (56.5) NET FINANCIAL POSITION (21.4) 72.1 93.5 23
Slide 25: Cash flow
Cash flow (million euro) 2003 2004 Net income 23.7 54.0 Depreciation of fixed assets 16.0 12.0 Amortization of intangible assets 10.8 9.1 Write-down of assets 30.0 1.8 Change in working capital (1.5) 25.1 Changes in non-current items (11.6) (4.1) Net investments in fixed assets (15.9) (0.2) Net inve
Slide 26: Company strategy
Company strategy ¾ Confirm commitment to research and development in the urological and cardiovascular fields ¾ Acquire new product licenses ¾ Expand geographical presence in Europe 25
Slide 27: Company strategy: R&D commitment
Company strategy ¾ Confirm commitment to research and development in the urological and cardiovascular fields 9 R&D expenditure to increase by 25% from 2003 to 2005 9 Four new molecules in different stages of clinical development in 2005 26
Slide 28: Company strategy: acquire new product licenses
Company strategy ¾ Acquire new product licenses 9 Licensing-in agreements signed in 2004: Cidine rupatadine prulifloxacin silodosin 27
Slide 29: Company strategy: expand geographical presence in Europe
Company strategy ¾ Expand geographical presence in Europe 9 Acquisition of the marketing and sales organization of Merckle GmbH 9 Pan European product licenses obtained: 9Rupatadine France, Italy, Spain and options for Germany, Poland and the U.K. 9Silodosin 45 European countries 28
Slide 30: Breakdown of the European pharmaceutical market
Breakdown of the European pharmaceutical market (EU 25 countries) Ot Au Portu he rE Sw e stria ga U den 1.9 l 1.9 7. 0 Gree 2 . % % Germany 20.8% ce 2. 3 % % Poland 5% 2.8% Belgium 3.0% Netherlands 3.2% Spain 9.3% France 19.1% U.K. 13.0% Italy 13.2% Source: IMS 2003 data 29
Slide 31: Size and growth of the five largest European markets
Size and growth of the five largest European markets Market size 2004 2003 CAGR $ billion growth growth 1997-2002 Germany 25.1 4% 8% 7% France 21.0 6% 5% 6% U.K. 15.4 8% 9% 10% Italy 14.4 4% 2% 9% Spain 10.2 7% 12% 16% leading 5 86.1 6% 7% 9% Source: IMS data - Market size and 2004 growth are 12 mon
Slide 32: Actual Outlook
Actual Outlook (million euro) 2004 2005 SALES 488.3 >550 EBIT 90.4 >100 NET INCOME 54.0 >60 Assumptions: • Excluding any future acquisitions 31
Slide 33: Forward-looking statements
Statements contained in this presentation, other than historical facts, are “forward- “forward-looking statements” (as such term is defined in the Private Securities Litigation Reform Act of 1995). 1995). These statements are based on currently available information, on current best estimates, and o
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