Solvay Sa · EURONEXT:SOLB
Solvay Sa — Investor Presentation (November 2003)
35 slides from Solvay Sa's investor presentation, November 2003
Slide 1: Solvay Group presentation: Pharmaceuticals sector
Solvay Group presentation Pharmaceuticals sector November 2003
Slide 2: Pharmaceuticals sector
Pharmaceuticals sector © 2003, SOLVAY S.A November 2003
Slide 3: Key characteristics
PHARMACEUTICALS SECTOR Key characteristics ü Non-cyclical and faster growing activity ü Mid-sized Pharmaceutical company ü Strong investments in R&D (~15% of sales) ü Well diversified portfolio of products ü Strong worldwide market position in selected therapeutic areas ü Improving margins PPPT 0000
Slide 4: Strategy
PHARMACEUTICALS SECTOR Strategy Accelerated growth based on : ü INTERNAL DEVELOPMENT of the existing portfolio (gastroenterology, gynecology/andrology, cardiology and mental health) ü DEVELOPMENT and /or ACQUISITIONS of new products or medium-sized companies ü Expanding and optimising SALES FORCES,
Slide 5: Long term strategic objectives
PHARMACEUTICALS SECTOR Long term strategic objectives üSales target of EUR 2.5 Bn in 2006 àLong term goal of 50% of sales from the US (based on USD/EUR parity) üREBIT of at least 15% of sales from 2006 onwards üROI of at least 20% üMarket share of 0.8-1.0% at long term PPPT 0000 5 © 2003, SOLVAY S.A
Slide 6: Strategic objectives in sales
PHARMACEUTICALS SECTOR Strategic objectives in sales Sales target of EUR 2.5 Bn in 2006 à Long term goal of 50% of sales from the US (based on USD/EUR parity) ü Above average growth in our markets : w Defend positions in Europe w Expand to Central and Eastern Europe, Latin America w Continue expansi
Slide 7: Strategic objectives in PROFIT and ROI
PHARMACEUTICALS SECTOR Strategic objectives in PROFIT and ROI REBIT of at least 15% of sales from 2006 onwards ü REBIT growth rate higher than sales growth rate ü Efficiency improvements through costs optimization wIn R&D, manufacturing, marketing & sales, administration – global and regional ü To g
Slide 8: Strategic objectives in market share
PHARMACEUTICALS SECTOR Strategic objectives in market share Market share of 0.8-1.0% at long term ü Maintaining our actual market share through internal growth ü Additional market share through external growth : w Acquisitions w Alliances, partnerships ü Advantages to be a mid sized company : w Flex
Slide 9: Strategic objectives in market share
PHARMACEUTICALS SECTOR Strategic objectives in market share % of 2002 % market share Solvay rank sales USA 38% 0.5 31 France 11% 1.2 22 Germany 8% 0.9 31 Canada 7% 1.2 23 Japan 2% increase low contribution Brazil 1% 0.6 37 PPPT 0000 9 © 2003, SOLVAY S.A November 2003
Slide 10: Current portfolio
PHARMACEUTICALS SECTOR Current portfolio ü Gynecology/andrology : • Women, Men, Endometriosis, High dependence on in- licensing for this area ü Cardiology • Arrhythmia, Congestive Heart Failure, Hypertension ü Gastroenterology • Irritable bowel syndrome (IBS), Functional disorders, Pancreatic enzyme
Slide 11: Record EBIT in Pharmaceuticals in 2002
PHARMACEUTICALS SECTOR Record EBIT in Pharmaceuticals in 2002 M EUR 250 +13% 230 203 200 è Impact of the weaker 150 USD 134 144 è Hormone Treatment slowdown in the 2nd half 100 USA 96 50 +63% 1st half 59 0 2001 2002 PPPT 0000 (in B GAAP) 11 © 2003, SOLVAY S.A November 2003
Slide 12: Pharmaceuticals sales in 2002: +5%
PHARMACEUTICALS SECTOR Pharmaceuticals sales in 2002 : +5% è Focus on more profitable growth (EBIT : +13%) è Impact of currencies (weak USD in H2/02) è Hormone Treatment slowdown in the USA in H2/02 (Estratest : -14% in EUR (-3% in USD) in H2/02 vs H2/01) 2002 M EUR vs 2001 M EUR 2002 2001 2002 vs 2
Slide 13: Nine months 2003 Pharma results
PHARMACEUTICALS SECTOR Nine months 2003 Pharma results SALES : -2% +7% at constant exchange rates 4USA+Canada : +18% in USD w Androgel® +56% in USD w Prometrium® +34% in USD w Pantoloc® +20% in EUR (Canada) w Marinol® +89% in USD w Estratest® -19% in USD à competitive pressures à consequences of the
Slide 14: Evolution of Pharmaceuticals sales for the first nine months 2003 by therapeutic area
PHARMACEUTICALS SECTOR Evolution of Pharmaceuticals sales for the first nine months 2003 by therapeutic area 9M03 M EUR 2002 9M02 9M03 vs 9M02 M EUR 2002 9M03 GYNECOLOGY/ • Androgel ® 196 186 • Estratest® 207 112 ANDROLOGY 713 540 521 -3% • Prometrium® 71 59 GASTRO- • Creon® 140 101 ENTEROLOGY 539 3
Slide 15: Continued progress in a more balanced pipeline
PHARMACEUTICALS SECTOR Continued progress in a more balanced pipeline üFinancial objectives of reorganization achieved üContinued modernization of the R&D organization and structure üOptimized research to proof-of-principle approach üCompleted portfolio platform in women’s health üContinued progress
Slide 16: Growth through a focused R&D program
PHARMACEUTICALS SECTOR Growth through a focused R&D program Gynecology/andrology Gastroenterology 22% 35% (Women Health, (Irritable Bowel Syndrome, Men Health,) Delayed Gastric Emptying, Functional disorders) Mental health Cardiology 25% (Anxiety & Depression, 19% Psychosis, Parkinson, (Arrhythmias,
Slide 17: R&D expenditures over the last years
PHARMACEUTICALS SECTOR R&D expenditures over the last years in MEUR 1998 1999 2000 2001 2002 è2002 VS. 2001 TOTAL 175 229 247 222 270 è + 22% R&D % SALES 15 17 16 13 14 % INT 66 65 62 64 52 è STABLE %EXT 34 35 38 36 48 è + 63% Available for clinical development PPPT 0000 17 © 2003, SOLVAY S.A Novemb
Slide 18: Continued progress in a more balanced pipeline
PHARMACEUTICALS SECTOR Continued progress in a more balanced pipeline üFinancial objectives of reorganization achieved üContinued modernization of the R&D organization and structure üOptimized research to proof-of-principle approach üCompleted portfolio platform in women’s health üContinued progress
Slide 19: Continued modernization of the R&D organization and structure
PHARMACEUTICALS SECTOR Continued modernization of the R&D organization and structure Discovery üCompleted transition to a “biological target focused” approach üOptimized biotech-alliance platform towards molecule output üRenewed agreement with Innogenetics to focus on biological targets and their va
Slide 20: Continued progress in a more balanced pipeline
PHARMACEUTICALS SECTOR Continued progress in a more balanced pipeline üFinancial objectives of reorganization achieved üContinued modernization of the R&D organization and structure üOptimized research to proof-of-principle approach üCompleted portfolio platform in women’s health üContinued progress
Slide 21: Optimized research to proof-of-principle approach
PHARMACEUTICALS SECTOR Optimized research to proof-of-principle approach üConventional organizational structure (chemistry, pharmacology, etc…) was changed into an output driven structure üResearchers and clinicians manage together the process from research to proof-of-principle in phase II studies
Slide 22: Improved output of discovery
PHARMACEUTICALS SECTOR Improved output of discovery New clinical candidates in 2002 : ü SLV 317 : IBS & IBD ü SLV 318 : Parkinson ü SLV 319 : Obesity & Psychosis ü SLV 320 : Congestive Heart Failure & kidney disease ü SLV 322 : Arrhythmia Underlined = already in the clinic PPPT 0000 22 © 2003, SOLVA
Slide 23: Continued progress in a more balanced pipeline
PHARMACEUTICALS SECTOR Continued progress in a more balanced pipeline üFinancial objectives of reorganization achieved üContinued modernization of the R&D organization and structure üOptimized research to proof-of-principle approach üCompleted portfolio platform in women’s health üContinued progress
Slide 24: Women's health platform
PHARMACEUTICALS SECTOR Women’ health platform üInternal discovery efforts were started in 2001 üPortfolio completed by : wIn-licensing of phase II project - non HRT : contract signed with Zentaris for cetrorelix Dec. 2002 wAccelerate internal discovery by external partnership : contract signed with
Slide 25: Continued progress in a more balanced pipeline
PHARMACEUTICALS SECTOR Continued progress in a more balanced pipeline üFinancial objectives of reorganization achieved üContinued modernization of the R&D organization and structure üOptimized research to proof-of-principle approach üCompleted portfolio platform in women’s health üContinued progress
Slide 26: Strategic milestones in R&D
PHARMACEUTICALS SECTOR Strategic milestones in R&D Strategic Choices Strategic Choices Strategic Choices long-term strategy and Partnering positioning intention to register make and sell International SLV code Nonproprietary Trademark Name D Programs Programs POP Projects Projects L Products Product
Slide 27: R&D Portfolio progress
PHARMACEUTICALS SECTOR R&D Portfolio progress September 2001 April 2002 November 2003 PPPT 0000 27 © 2003, SOLVAY S.A November 2003
Slide 28: March 2002: some gaps
PHARMACEUTICALS SECTOR March 2002 : some gaps Gastro- Mental Gynecology Cardiology Enterology Health /andrology 3 2 Pre-Clinical 2 (IBS** (2), Enzyme (Parkinson’s, =7 (Hypertension/CHF) Insufficiency) Psychosis) Phase I 3 =3 (Psychosis) 2 4 Phase II (Motility (Parkinson’s, 1 Psychosis, Pain/ =7 Diso
Slide 29: 2003: a more balanced portfolio
PHARMACEUTICALS SECTOR 2003 : a more balanced portfolio Gastro- Mental Gynecology Cardiology Enterology Health /andrology Pre-Clinical 2 2 3 318 316, 322 =7 321, 323, NASEP MARINOL AEROSOL Phase I 1 1 4 TESTOSTERONE 1 =7 317 310, 313, 314, 319 FEMALE USE 320 Phase II 2 1 1 1 =5 324, 325 308 CETROREL
Slide 30: Recent pharmaceuticals news
PHARMACEUTICALS SECTOR Recent pharmaceuticals news positive developments in R&D : 4forthcoming introduction of the registration dossiers of cilansetron 4move to Phase III trials for bifeprunox PPPT 0000 30 © 2003, SOLVAY S.A November 2003
Slide 31: Cilansetron: forthcoming introduction of the registration dossiers
PHARMACEUTICALS SECTOR Cilansetron : forthcoming introduction of the registration dossiers è Positive results of first two of three Phase III trials è We will expedite compilation of registration dossiers for all major territories beginning with Europe and United States è We plan to be ready to subm
Slide 32: Bifeprunox: move to Phase III trials
PHARMACEUTICALS SECTOR Bifeprunox : move to Phase III trials Proof of Research Registration principle bifeprunox DU127090 DU127090 (DU127090) SCHIZOPHRENIA/ PSYCHOSIS 4 Solvay Pharma/Lundbeck partner development and marketing 4 Partial D2 antagonist with additional 5HT1A agonism 4Launch year 2006 4
Slide 33: Continued progress in a more balanced pipeline
PHARMACEUTICALS SECTOR Continued progress in a more balanced pipeline üFinancial objectives of reorganization achieved üContinued modernization of the R&D organization and structure üOptimized research to proof-of-principle approach üCompleted portfolio platform in women’s health üContinued progress
Slide 34: Visit our Internet site specifically designed for Investors
Visit our Internet site specifically designed for Investors www.solvay-investors.com and become member of our Shareholders’ Club PPPT 0000 34 © 2003, SOLVAY S.A November 2003
Slide 35: Forward-looking statements
“ To the extent that any statements made in this presentation contain contain information that is not historical, these statements are essentially essentially forward- forward -looking. The achievement of forward--looking statements contained in this presentation is subject to risks and uncertaintie