Orion Oyj Class A · OMXHEX:ORNAV
Orion Oyj Class A — Investor Day (December 2010)
39 slides from Orion Oyj Class A's investor day presentation, Dec 9, 2010
Slide 1: Orion CMD 2010 Agenda
Orion CMD 2010 9 December 2010 in Helsinki Agenda Presentations part I Orion’s view of the future Timo Lappalainen, President and CEO Strengthening the European presence Satu Ahomäki, SVP, Global Sales Maximising opportunities in generics Markku Huhta-Koivisto, SVP, Specialty Products Q&A + coffee b
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements which involve risks and uncertainty factors. These statements are not based on historical facts but relate to the Company’s future activities and performance. They include statements about future strategies and anticipa
Slide 3: Parkinson's drug markets continue growing
Estimated pharmaceutical market growth annually 5 8 % through 2014 • By 2014, global pharmaceutical sales to exceed USD 1.1 trillion 1) • Emerging markets to sustain strong growth up to 17% during the next 5 years 1) • In 2011, global pharma market is estimated to grow 5 7 % 2), and sales to exceed
Slide 4: Stalevo outgrows the Parkinson's drug market
Stalevo outgrows the Parkinson’s drug market Comtess/ Stalevo Comtan in-market sales in-market sales Timelines for Orion’s Parkinson’s disease franchise 2) EUR million EUR million (growth) 1) (growth) 1) 2011 2012 2013 2014 2015 EU 30 (-18%) 151 (+15%) Entacapone Stalevo Potential molecule data laun
Slide 5: Market reactions in Europe are milder
Market reactions in Europe are milder EUR million Requip patent expiry 40 in Europe 35 30 25 20 15 10 5 0 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Requip CR Requip IR GENERIC ropinirole 9 9.12.2010 Orion CMD 2010 Complexity of estimation in Europe Strategie
Slide 6: Sales in Japan have further growth potential
Sales in Japan have further growth potential • Currently only Comtan available in Market shares of Orion’s Parkinson’s drugs 6/10 6/09 Japan Japan 1) 3) 9% 7% – Launched in 2007 – Data protection valid until 2015 United States 2) 3) 18% 18% • Sales in Japan have grown steadily Germany 2) 15% 15% to
Slide 7: Strengthening the European presence
Strengthening the European presence Satu Ahomäki SVP, Global Sales Orion Capital Markets Day 2010 9 December 2010 in Helsinki 7
Slide 8: Europe is very diversified as a market place
Orion’s own operations cover the main markets in Europe Rough no. of Orion’s sales regions personnel Finland 100 Scandinavia 70 Western and Central Europe 175 Eastern Europe 270 Southern Europe 40 15 9.12.2010 Orion CMD 2010 Europe is very diversified as a market place Local requirements for Logisti
Slide 9: Emerging stakeholders and pharma approaches
Emerging stakeholders and pharma approaches Traditional model Additional stakeholders • Physicians • Payers • Key Opinion Leaders • Patients • Trade channels • Sales Representatives • Key account management • Medical Education Programs teams Source: Vision & Reality Study, 7th Edition. Capgemini 201
Slide 10: Regional breakdown is getting more balanced
Orion adapts to the local conditions, while using a centralised approach Orion has • Broad geographical coverage in Europe by own sales force • Long experience from each market – Knowledge on local regulations and roles of different authorities – Connections with different market specific customer g
Slide 11: European expansion is proceeding as planned
European expansion is proceeding as planned • Orion is prepared for the upcoming changes • New operations have been successfully established • Orion applies regional approaches and ensures profitability of operations in all markets – Success in tough Finnish market – Broadened product offering in Sc
Slide 12: Maximising opportunities in generics
Maximising opportunities in generics Markku Huhta-Koivisto SVP, Specialty Products Orion Capital Markets Day 2010 9 December 2010 in Helsinki Orion’s generic business focuses on Nordic countries and Eastern Europe • Global generic markets are Orion’s Specialty Products net sales expanding in volume
Slide 13: Net sales of Specialty Products continue to grow
Net sales of Specialty Products continue to grow EUR million EUR million 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 2006 2007 2008 2009 MAT 9/10 2006 2007 2008 2009 MAT 9/10 Finland Scandinavia Eastern Europe Other Europe Others OTC Generics Branded generics MAT 9/2010 = Rolling 12 mo
Slide 14: Orion, clear market leader in declining Finnish market
Orion, clear market leader in declining Finnish market Finnish human pharmaceuticals market Finland’s biggest pharmaceutical companies in 1 9/2010 9/2010 EUR million • Wholesales EUR 1,415 million (-1%) • Biggest market decrease in prescription 160 drugs covered by reference price system 140 141 +2%
Slide 15: Steady growth also throughout Eastern Europe
Steady growth also throughout Eastern Europe Specialty Products net sales in top 5 Eastern European countries EUR million Sales Growth 1) 40 EUR million % 35 Poland 7.5 30 % 30 Russia 7.0 37 % 25 Czech Republic 3.3 16 % 20 Ukraine 2.7 15 % 15 10 Hungary 2.0 20 % 5 0 2006 2007 2008 2009 MAT 9/10 (1)
Slide 16: Orion's R&D pipeline review
Orion’s R&D pipeline review Reijo Salonen SVP, R&D Orion Capital Markets Day 2010 9 December 2010 in Helsinki 16
Slide 17: Focus on own strengths and active partnering
Focus on own strengths and active partnering Late stage Research Early development development Target Hit to Lead Lead Candidate Phase I Phase II Phase III identification generation optimisation selection, and validation preclinical dev. 8–24 months 12–24 mth 18–36 mth 12–24 mth 12–14 mth 12–36 mth
Slide 18: Antiandrogen for treatment of CRPC
High unmet need for Castration Resistant Prostate Cancer Death Androgen Chemotherapy deprivation Therapies after Local LHRH agonists, Tumor therapy anti-androgens, volume etc. Post-chemo & activity Asymptomatic Symptomatic Non-metastatic Metastatic Hormone-sensitive Castration-resistant A B C 1 2 3
Slide 19: Alpha2C receptor antagonist platform
Alpha2C receptor antagonist platform Orion has strong knowledge in alpha2 adreno receptors • the “major subtype” • universally expressed a2A-AR • mediates most of the prominent effects of subtype- nonselective a2-agonists • expressed mainly in the periphery, a2B-AR but also in the thalamus • role in
Slide 20: Alpha2c antagonists have a unique profile
Alpha2c antagonists have a unique profile Neurotransmitter modulation (alpha2C) Cholinergic Butyrylcholines- Tau pathway terases deficiency Muscarinic agonists Direct activation Nicotinic agonists Other AD Therapy Inflammation Cholinesterase 1st generation Tacrine inhibitors Donepezil Oxidative Amul
Slide 21: Easyhaler combinations
Easyhaler combinations Orion’s has two Easyhaler® combinations under development • Both budesonide/formoterol and fluticasone/salmeterol programmes are in clinical development (pharmacokinetics) • Indication in both combinations is asthma (adults and children) and COPD (chronic obstructive pulmonary
Slide 22: Stepwise approach as outlined in EMA guidelines
Stepwise approach as outlined in EMA guidelines on orally inhaled products* Yes In vitro evaluation No Yes Yes Lung deposition Systemic exposure APPROVAL No Yes Pharmacodynamics No No Yes Phase III No Rejection * CPMP/EWP/4151/00 Rev. 1 43 9.12.2010 Orion CMD 2010 Inhaled drugs are absorbed both thr
Slide 23: Dexmedetomidine i.v.
Dexmedetomidine i.v. Dexmedetomidine to be used in sedation of long-stay intensive care patients • Treatment period in Orion’s phase III study was at least 24 h with a maximum dexmedetomidine dose of 1.4 g/kg/hour • Dexmedetomidine is the only alpha2 agonist approved in the USA for continuous IV sed
Slide 24: Positive results from dexmedetomidine Phase III programme
Dexmedetomidine is a relatively selective alpha2 agonist 2A-adrenoceptors in locus coeruleus in the brain stem activated Ca2+ channel inhibition and K+ channel opening Hyperpolarisation of excitable neural cells Sedation 47 9.12.2010 Orion CMD 2010 Positive results from dexmedetomidine Phase III pro
Slide 25: Plan is to publish main results in ISICEM in March 2011
Plan is to publish main results in ISICEM* in March 2011 Secondary Nurses’ assessment of rousability, efficacy ability to communicate the presence of pain objectives Length of stay in ICU Additional Time to extubation efficacy objectives Length of hospital stay Use of rescue treatment Costs of care
Slide 26: Market access in Europe
Market access in Europe recent experiences and future expectations Liisa Hurme SVP, Proprietary Products Orion Capital Markets Day 2010 9 December 2010 in Helsinki Proprietary Products growth accelerates beyond Parkinson’s franchise Growth % of net sales EUR million 35 % 160 30 % 140 120 25 % 100 20
Slide 27: Five steps to markets access in Europe
Five steps to markets access in Europe On-going Orion commercialisation projects 1 2 3 4 5 EU level National level +++ National / Regional / Local Regional level + (e.g., sickness funds, regional (EMEA) health authorities and hospitals) Several Levels exist Health HTA / care Safety Efficacy Quality
Slide 28: Complexity of Orion's business has increased
Complexity of Orion’s business has increased 2007 Traditional Rx Orion had operations in 7 countries that required Hospital in-patient 2010 HE evaluation Orion has operations in 28 countries* that require Hospital out-patient HE evaluation >50 different market access processes to master in Europe HE
Slide 29: Efficacy of sedation on a satisfactory level, but...
Efficacy of sedation on a satisfactory level, but... Unmet needs in ICU sedation Relevance rating Short half-life, low risk of accumulation High Fast onset of action High Haemodynamic stability High No respiratory depression Moderate Shorter time on mechanical ventilator Moderate Improved pain manag
Slide 30: Precedex has captured a significant market share in the USA
Precedex has captured a significant market share in the USA Sedation market in USA in 2003 Sedation market in USA in 2009 Total market value 594 million USD in 2003 Total market value 312 million USD in 2009 Dexmedeto midine Remifentanil Remifentanil Midazolam 1% 1% 6% 11 % Dexmedeto- midine 27 % Pr
Slide 31: Solid financial position by continuous focus on efficiency improvements
Solid financial position by continuous focus on efficiency improvements Jari Karlson, CFO Orion Capital Markets Day 2010 9 December 2010 in Helsinki 31
Slide 32: Orion has solid financial position
Orion has solid financial position • For years Orion has had very solid financial position, which provides good basis for future development of the company – 9/2010 equity ratio 62% and gearing 2% – 12/2009 equity ratio 58% and gearing -9% • Maintaining financial strength is important for Orion – Ca
Slide 33: Cost cuttings only will not be enough
Cost cuttings only will not be enough Challenges: Thus: • Deliveries to Novartis cover >50% of • Cost management must not total Parkinson’s business endanger the sales growth EBIT margin of the business is high • Capability to manage complexity • Lower volumes will not substantially needs to be impr
Slide 34: On-going cost efficiency initiatives
On-going cost efficiency initiatives • Continuous decrease in costs of goods manufactured – Develop own manufacturing processes – Outsource manufacturing when appropriate – Improve purchasing processes • Improved efficiency of in-direct purchasing • Further development of R&D partnership model • Fle
Slide 35: Re-allocation of resources support growth
Re-allocation of resources support growth Resources by function Ratio between internal and external costs (EUR million) (case IT costs) 350 100 % 90 % 300 50 40 80 % 250 52 39 70 % 40 85 200 95 60 % 85 90 73 50 % 150 40 % 100 30 % 160 180 130 143 144 20 % 50 10 % 0 0% 2006 2007 2008 2009 MAT 2006 20
Slide 36: Cash needs to be reserved also for growth
Cash needs to be reserved also for growth Cash conversion = Cash flow before financial items / net profit Possible target = 1 – sales growth 1,20 1,10 1,00 0,90 0,80 Possible target = 1 - sales growth 0,70 Cash conversion 0,60 0,50 0,40 0,30 0,20 0,10 0,00 2006 2007 2008 2009 MAT 9/2010 MAT 9/2010 =
Slide 37: Complexity of business has increased
Complexity of business has increased • Amount of net working capital has increased, but not on average as % of net sales – Trade receivables have increased due to growth in net sales and larger share of business in Southern Europe – Seasonal variances in short-term non-interest bearing liabilities a
Slide 38: Good performance today creates good basis for future
Good performance today creates good basis for future EUR million EUR Net sales million Operating profit 900 772 250 800 711 641 680 207 202 700 193 635 193 192 200 185 600 173 180 44 162 36 39 33 71 500 213 Q4 Q4 192 150 163 170 53 49 44 56 400 149 Q3 Q3 300 207 100 60 166 181 196 Q2 42 44 45 50 Q2
Slide 39: Balancing mid-term building long-term
Balancing mid-term building long-term • Rich early pipeline e.g. alpha 2c adreno Upside potential from receptor and antiandrogen • Continuous search for in-licensing and long-term portfolio product/portfolio acquisition opportunities management • Post patent reactions in USA are Parkinson’s franchis