West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Investor Day (March 2008)
141 slides from West Pharmaceutical Services's investor day presentation, Mar 13, 2008
Slide 1: Investor Day 2008
Investor Day 2008
Slide 2: Don Morel, Chairman and Chief Executive Officer
Don Morel Chairman and Chief Executive Officer
Slide 3: Agenda and Participants
Agenda and Participants Welcome and Introduction Don Morel Market Overview Mike Schaefers Growth Platforms John Paproski Daikyo Crystal Zenith Platform Bernie Lahendro Break Operations Overview Steve Ellers Long Term Outlook and Summary Don Morel Q&A Mike Anderson
Slide 4: Forward-looking statements
Certain statements in the following slides and certain statements that may be made by management of the Company orally during this presentation contain some forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Excha
Slide 5: Company Overview
Founded in 1923 HQ in Lionville, PA Company Overview
Slide 6: Who we are
Who we are World’s premier manufacturer of components and systems for injectable drug delivery Closure systems and prefillable syringe components Components for disposable systems Devices and device sub-assemblies Safety and administration systems Record 2007 sales $1.02 billion Market cap $1.3 bill
Slide 7: Diverse, Stable Customer Base
Diverse, Stable Customer Base Company Estimated Market Share: 70% in Pharma; 70% in Device; 95% in Biotech
Slide 8: West's Competitive Advantage
West’s Competitive Advantage World class technical and regulatory support Global supply chain stability – multiple site sourcing Protected IP: West’s components and systems Unmatched experience/expertise: drug - material interface Regulatory barrier to entry: NDA and ANDA filing must include referen
Slide 9: Strong Sales Growth
$107 $227 $797 $223 ($ millions) Strong Sales Growth Existing Business Acquisitions
Slide 10: Global Revenue Breakdown
Global Revenue Breakdown Based on 2007 sales of approx $1 billion South America: $55.3 million (5%) North America: $496.4 million (49%) Europe: $430.6 million (42%) Asia/Pacific: $37.8 million (4%)
Slide 11: Our Long Term Objectives
Our Long Term Objectives Build on our global competitive advantages to create multiple platforms for sustainable growth
Slide 12: Four Strategic Growth Platforms
Injectable Container Solutions Prefillable Syringe Systems Advanced Injection Systems Safety & Administration Systems Four Strategic Growth Platforms
Slide 13: Future Growth Drivers
Future Growth Drivers Aging population creates an increasing number of patients with chronic illnesses such as diabetes and cancer Biologic drug growth and a resurgence in vaccine research Demand for ultra clean silicone free packaging and delivery systems China, India economic growth and growing de
Slide 14: Convergence of Primary Containers and Delivery Systems
Convergence of Primary Containers and Delivery Systems Disposable Syringe-based Auto Injectors Traditional Injection System Components for Pen System Applications
Slide 15: Our Long-Term Objectives
Our Long-Term Objectives Build on our global competitive advantages to create multiple platforms for sustainable growth Undergo selective geographic expansion Continued investment in innovation and new manufacturing technology Five-year financial goals: Average annual sales growth 7-9% Average annua
Slide 16: Mike Schaefers, Ph.D.
Mike Schaefers, Ph.D. Vice President of Marketing, Europe
Slide 17: Global Pharmaceutical Market Update
Global Pharmaceutical Market Update
Slide 18: Global pharmaceutical market growth
Global pharmaceutical market predicted to increase by 5-6% in value in 2008 vs. 6-7% in 2007 driven by: Aging populations Strong economies Introduction of new products Geographic expansion Patent expirations ($16 billion in 2007, $12 billion in 2008) Reimbursement issues Strong generic competition I
Slide 19: Geographic expansion
Geographic expansion Growth in emerging markets (China, India, Brazil, Turkey, Russia) accelerated at 12-13% Trend toward specialty products vs. former mass market approach (i.e. oncology vs. cardiovascular) Specialty products expected to grow 14-15% in 2008 80% of the 29 new innovative medicines ex
Slide 20: Paradigm shift in the pharmaceutical world
Paradigm shift in the pharmaceutical world Fewer new drugs being launched! FDA approved 60 new drugs between 2005-2007 (NME, novel biologics) vs. 60 new drugs approved in 1996 alone Agencies move towards risk assessment based approval process Limited claims for newly approved drugs More black box wa
Slide 21: Paradigm shift in the pharmaceutical world
Paradigm shift in the pharmaceutical world Drug makers cut back costs Workforce Inventory Lean programs Supply chain programs Sourcing costs Companies increase R&D spend and fill pipelines through M&A activities (mainly biotech) FDA, The RPM Report; IMS Global Insights, Nov. 2007 Global Pharmaceutic
Slide 22: Pharma/biotech customer trends
Pharma/biotech customer trends Integration of container/closure system into delivery system Reduction of drug waste and improved operational throughput High quality packaging to ensure drug stability Value-added devices and systems for product/brand differentiation Secure packaging Global Pharmaceut
Slide 23: Patient/caregiver trends
Patient/caregiver trends Point of care shift Hospital specialty clinic/physician home Dosage form migration Increase patient compliance rates through enhanced application systems i.e. safety systems, pens, auto-injectors Patient convenience Ease of use Minimized pain Increased focus on healthcare wo
Slide 24: Top therapeutic categories
Top therapeutic categories Increasing number of patients with chronic illnesses such as diabetes, cancer, AIID (RA, MS, etc.) Resurgence of vaccine market Emergence of high-value therapeutic vaccines New technologies and delivery methods Pandemic concerns Top therapeutic categories (annual growth 05
Slide 25: Top therapeutic categories
Top therapeutic categories Injectable products currently account for ~15% of global drug delivery market Significant growth expected through above mentioned therapeutic categories High number of injectable products in pipelines Biologic drugs represent the fastest growing segment in injectable pharm
Slide 26: Strategic Growth Platforms
Strategic Growth Platforms Therapeutic Targets and West’s Strategic Growth Platforms
Slide 27: Percentage of injectable products by therapeutic category
Percentage of injectable products by therapeutic category and biological injectables (awaiting approval and in clinical trials in US – all forms)
Slide 28: Oncology, Auto-Immune, Vaccines, Diabetes
Oncology & Hematology Auto-Immune Vacei accines (RA,MS, AllD) DiabetesiInsulin
Slide 29: West's Therapeutic Targets
West’s Therapeutic Targets Rationale Current presence in targeted categories/ segments Future annual growth rates per therapeutic category Number of products in pipeline per therapeutic category Percentage of injectable products in pipeline Need for high-value products and enhanced packaging systems
Slide 30: Therapeutic Targets and West Strategic Platforms
Therapeutic Targets and West Strategic Platforms A Perfect Match High value products for container closures systems Enhanced packaging systems Advanced application and administration systems Needle safety systems Stability of demanding pharma- ceuticals/biopharmaceuticals Need for product/brand diff
Slide 31: Four Strategic Growth Platforms
Injectable Container Solutions Prefillable Syringe Systems Advanced Injection Systems Safety & Administration Systems Four Strategic Growth Platforms
Slide 32: Injectable Container Solutions
Injectable Container Solutions
Slide 33: Prefillable Syringe Systems
Prefillable Syringe Systems Unique silicone-free syringe systems for demanding biopharmaceuticals Daikyo Crystal Zenith RU syringes Daikyo Crystal Zenith is a registered trademark of Daikyo Seiko, Ltd.
Slide 34: Safety and Administration Systems
Safety and Administration Systems West´s reconstitution, administration and safety systems Project Orion MixJect
Slide 35: West Advanced Injection Systems
West Advanced Injection Systems Syringe and cartridge-based autoinjector systems
Slide 36: Customer Account Penetration for Strategic Platform Products
Customer Account Penetration for Strategic Platform Products Secondary
Slide 37: Top Therapeutic Categories: Diabetes/Insulin
Top Therapeutic Categories and West’s Position Westar RS/RU Westar Lined Seals RS Envision VeriSure Safety & Administration Systems Advanced Injection Systems Stability of biotechnologically derived insulin drugs High-quality container/closure systems Ease of use Suitability for home administration
Slide 38: Examples of West Participation in Insulin Market
Examples of West Participation in Insulin Market
Slide 39: Top Therapeutic Categories: Vaccines
Top Therapeutic Categories and West’s Position FluroTec stoppers and plungers Envision VeriSure Westar RS/RU Daikyo Crystal Zenith RU syringe Safety & Administration Systems Advanced Injection Systems High-quality packaging for stability of high value therapeutic vaccines Trend towards prefillable s
Slide 40: Top Therapeutic Categories: Oncology/Hematology
Top Therapeutic Categories and West’s Position FluroTec stoppers and plungers Westar RS/RU Envision VeriSure Daikyo Crystal Zenith RU syringe Safety & Administration Systems Advanced Injection Systems Stability of demanding pharmaceutical/ biopharmaceutical compounds Need for silicone-oil-free packa
Slide 41: Top Therapeutic Categories: Autoimmune
Top Therapeutic Categories and West’s Position FluroTec stoppers and plungers Westar RS/RU Westar lined seals RS Envision VeriSure Daikyo Crystal Zenith RU syringe Safety & Administration Systems Advanced injection systems Stability of demanding biopharmaceutical compounds Reduction of drug waste Ne
Slide 42: Generics
Generics Are generics/biogenerics a threat for West?
Slide 43: West's Generic/Biogeneric Strategy
West's Generic/Biogeneric Strategy $12 billion of brand name drugs will go generic in 2008 West addresses challenge through multiple activities Focus on therapeutic targets (specialty injectable drugs) growing faster than any other category Proactive support of lifecycle management activities at pha
Slide 44: West's Generic/Biogeneric Strategy
West´s Generic/Biogeneric Strategy West addresses challenge through multiple activities Growth opportunities through generic/biogeneric companies by addressing their drug packaging needs Primarily using originator’s container/closure system Frequent outsourcing of value-added services to suppliers B
Slide 45: Summary
Summary Major programs directly address market needs Focus on strongly growing therapeutic categories diabetes/insulin, vaccines, oncology and AIID Importance of injectable and biological products within these categories Growing need for high value container/closure and packaging systems Growth oppo
Slide 46: John Paproski, Vice President, Innovation
John Paproski Vice President, Innovation
Slide 47: Growth Platforms
Growth Platforms
Slide 48: Innovation Focus
Innovation Focus Bring unique value added solutions to the growing need for combining injectable drug containers with delivery systems For 2008 Prepare three major products for broad market introduction Q2 – Ready-to-Use Daikyo Crystal Zenith luer lock syringe system Q3 – Disposable auto injector fo
Slide 49: Injectable Pharma Market Needs: Patient/Caregiver
Injectable Pharma Market Needs Patient/Caregiver Focused Increasing patient compliance rates Patient and clinician convenience Minimize pain and needle fear Healthcare worker and patient safety Sharps exposure Blood-borne pathogen transmission (HIV, Hepatitis) Unintended drug exposure Home and self-
Slide 50: Injectable Pharma Market Needs: Pharma Company
Injectable Pharma Market Needs Pharma Company Focused Improve drug stability Reduce drug waste Integrate with existing filling operations Reliable supply Differentiate brands Enabling delivery methods Secure packaging Risk mitigation Outsourcing non-core competencies
Slide 51: West Innovation Model
West Innovation Model Creating proprietary products that serve our existing injectable customers Regulatory hurdles for our customers Slow time to market Long product lives Patent protected Operate like start-up business units Manufactured primarily by The Tech Group or our partner, Daikyo Provide h
Slide 52: West Sources of Innovation
West Sources of Innovation Entrepreneurs In-license intellectual property Acquire small companies Established products Knowledgeable people Intellectual property Internal idea development
Slide 53: Innovation Spending
Innovation Spending $ millions
Slide 54: Strategic Platforms: Target Markets
Strategic Platforms: Target Markets $1.5B 4% 9B Injectable Containers $1.5B 11% 5.2B Safety & Administration $210M 8-12% 70M Advanced Injection Systems $900M 8-12% 1.8B Prefilled Syringe Total Market Sales CAGR (Unit) Total Market Units Strategic Platform
Slide 55: Injectable Container Solutions
Injectable Container Solutions Market focus: high-value drugs Drug stability Reduced waste Universal processing and filling West innovations Ready-to-Use Daikyo Crystal Zenith vial system Ready-to-Use Daikyo Crystal Zenith bulk bio processing containers
Slide 56: Advanced Injection Systems
Advanced Injection Systems Market focus: high-value drugs Self administration Home administration Use standard prefillable syringes West innovations Disposable auto-injector: Q3 2008
Slide 57: Advanced Injection Systems: Disposable Auto Injector
Advanced Injection Systems Single Use: Disposable Auto Injector for Staked Needle PFS Utilizes 1ml long prefilled syringe format Staked needle with rigid needle shield Glass or CZ compatible Full visibility of drug contents Automatic insertion, delivery and retraction of the needle Single push-butto
Slide 58: Auto Injection System Video
AUTO INJECTION SYSTEM VIDEO Auto Injection System Animation
Slide 59: Safety and Administration Systems
Safety and Administration Systems Market focus: entire injectable market Needle-phobia Patient and caregiver safety OSHA and local EU legislation Patient and caregiver convenience West innovations Reconstitution and transfer systems Vial adaptors Transfer aids Safety needles Project Orion passive sa
Slide 60: Project Orion: What Does It Offer?
Project Orion: What Does It Offer? Passive, automatic needle cover Compact design Simple and easy to use Compatible with any standard luer lock syringe Minimize patient fear! Minimal amount of needle exposed
Slide 61: Orion Video
ORION VIDEO Project Orion
Slide 62: Safety Video
SAFETY VIDEO Safety Test
Slide 63: Prefillable Syringe Systems
Prefillable Syringe Systems Global PFS units 1.8B units North America .3M units Europe (E5) 1.5B units CAGR 8-12% Biologic market needs Drug waste Drug stability Silicone, tungsten, adsorption User convenience and self- administration
Slide 64: Prefillable Syringe Systems
Prefillable Syringe Systems RU Daikyo Crystal Zenith luer lock syringe: Q2 2008 RU Daikyo Crystal Zenith staked needle: 2009
Slide 65: Platform to Market Alignment
Platform to Market Alignment STRATEGIC PLATFORMS MARKET NEEDS Patient or Healthcare Worker Pharmaceutical Customer Injectable Container Systems Safety and Administration Sys. Prefillable Syringe Systems Advanced Injection Systems
Slide 66: Value of West Products in the Injectable Drug Package
Value of West Products in the Injectable Drug Package Daikyo Crystal Zenith Syringe System with Orion West auto injector with Daikyo Crystal Zenith syringe
Slide 67: Bernie Lahendro, Daikyo Crystal Zenith Products
Bernie Lahendro Vice President and General Manager Daikyo Crystal Zenith ® Products
Slide 68: Daikyo Seiko, Ltd.
Daikyo Seiko, Ltd. Daikyo Family-owned business since 1954 Approximately 500 employees and approximately $110 million U.S.D. Market leader in Japan for pharmaceutical closures
Slide 69: Daikyo and West Partnership
Daikyo and West Partnership West purchased 25% of Daikyo Seiko Ltd. in 1973 Technology transfer and marketing agreement signed in 1992 with additional 10 year agreements signed in 1997 & 2007 Daikyo has developed and transferred to West state of the art materials and processes such as: B2, Flurotec,
Slide 70: Slide 70
Slide 71: Daikyo Crystal Zenith
Custom formulated COP resin developed for pharmaceutical use Coupled with Flurotec laminated elastomers for low extractables with no silicone oil 100% vision inspected Platform for development of new innovative products Daikyo Crystal Zenith
Slide 72: Properties of Daikyo Crystal Zenith
Properties of Daikyo Crystal Zenith Cyclic Polyolefin Custom formulated for better break resistance, scratch resistance and steam sterilizability Exclusivity for Daikyo/West High transparency Colorless
Slide 73: Approved In All Major Markets
Approved In All Major Markets Japan 10 syringes: contrast media (5) MRI (2), hyaluronic acid (2), calcitonin (1 - PEPTIDE) 3 vials: Fluconazole, oncology, anticoagulant API container (one liter bottle) US 3 vials: acyclovir and oncology, 1 syringe for hyaluronic acid; several pending for oncology, c
Slide 74: Daikyo Crystal Zenith Syringe Systems
Daikyo Crystal Zenith Syringe Systems Sizes available from 0.25 mL to 150 mL
Slide 75: Daikyo Crystal Zenith 1mL-S
Daikyo Crystal Zenith 1mL-S RU Luer Lock Syringe System Daikyo Crystal Zenith barrel Polypropylene rod Flurotec laminated piston Flurotec lamination inside nozzle cap Silicone oil free 100% vision inspected
Slide 76: Daikyo Crystal Zenith RU Syringe System Features and Benefits
Daikyo Crystal Zenith RU Syringe System Features and Benefits Provides market differentiation Less adsorption/absorption Predictable piston release and travel forces Suitable for high viscosity products Ultra low extractables Reduces aggregation issues No need for added silicone oil Tungsten-free Ca
Slide 77: Flurotec Coverage Syringe
Flurotec Coverage Syringe Complete coverage of inert film on drug contact surfaces Orange color indicates Flurotec ® film coverage Formula D-21-6-1 Ultra clean chlorobutyl Plunger Tip Cap
Slide 78: Daikyo Crystal Zenith 1ml LL-S
Daikyo Crystal Zenith 1ml LL-S RU Syringe Systems Ready for sampling Launch April 2008 Sterilization: Assembled syringes: E-beam Pistons: steam Tubs and nests manufactured in clean rooms 10 * 10 nest format for standardized filling machines Nested or bulk pistons
Slide 79: Model Antibody
Model Antibody Higher extent of aggregation in glass compared to Daikyo Crystal Zenith ® Crystal Zenith Glass With Permission of the University of Kansas
Slide 80: Targeted Therapeutic Categories: Luer Lock Syringes
Large Molecules Oncology New Vaccines Ophthalmic - Macular Degeneration/Cataract Surgery Cosmeceuticals Anti-Parkinsons Anti-Alzheimers Targeted Therapeutic Categories Luer Lock Syringes
Slide 81: Daikyo Crystal Zenith Ready-to-Use Staked Needle Syringe
Daikyo Crystal Zenith Ready-to-Use Staked Needle Syringe (in development) Silicone oil-free container Reduced variability Consistent piston release and travel forces Tungsten free Glue free Break resistant Tight dimensional tolerances Design flexibility of plastics
Slide 82: Targeted Therapeutic Categories: Staked Needle Syringes
Large Molecules ESA Auto-Immune, MS Anti- Rheumatics Hepatitis C Targeted Therapeutic Categories Staked Needle Syringes
Slide 83: Daikyo Crystal Zenith Summary
Daikyo Crystal Zenith ® Summary First in silicone oil free prefillable syringes Break resistant Ultra low levels extractables/leachables/particulate 100% vision inspected (all components of syringe) Zero defects for the high quality markets (Japan) Protein aggregation - dramatic reductions Tungsten,
Slide 84: Delivering Innovative Solutions, Steve Ellers
Delivering Innovative Solutions Steve Ellers President & Chief Operating Officer
Slide 85: Strategic Objectives
Create profitable and sustainable growth platform Strengthen market leadership position Maintain strong financial condition Strategic Objectives
Slide 86: Business Perspective
Business Perspective Market Position Profit Margin Operations Pipeline Sales
Slide 87: Business Perspective 1995-2001
1995 - 2001 Business Perspective Losing share Market Position Declining Profit Margin Aged & inadequate factories Operations Re-launch old products Pipeline Losing share Sales
Slide 88: Business Perspective 2002-2006
2002 - 2006 1995 - 2001 Business Perspective Gaining momentum Losing share Market Position Strong incremental gains Declining Profit Margin Upgrade & catch-up expansions Aged & inadequate factories Operations New product launches Re-launch old products Pipeline Listening and reacting to customer Los
Slide 89: Business Perspective 2007-2012
2007 - 2012 2002 - 2006 1995 - 2001 Business Perspective Leading market in injectable container solutions Gaining momentum Losing share Market Position Funding growth strategies compress margins Strong incremental gains Declining Profit Margin Centers of Excellence Upgrade & catch-up expansions Aged
Slide 90: Market Knowledge Identifies Market Needs
Market Knowledge Identifies Market Needs Manufacturing Strategy Capital Expenditures Product Launches
Slide 91: Strengthen Sales and Market Penetration
Strengthen Sales and Market Penetration Market segments Diabetes, oncology, vaccines and generics Long-term contracts BD, Braun, Hospira, Consort, Covidien, Novo Value-added (revenues 2x unit growth) FluroTec , Westar, Daikyo, Envision, Spectra
Slide 92: 2008 Product Pipeline
2008 Product Pipeline Q4 Q4 RSV (Daikyo) Q4 ‘07 Q4 Envision - - - Q2 Inhalation/Nasal Lab Testing Q2 Q2 RU Crystal Zenith Syringe System (1 mL LL) Q4 Q2 West RU Ready Pack System Europe North America Targeted Market Launches
Slide 93: 2008 Product Pipeline
2008 Product Pipeline Q4 Q4 Orion SQ Q2 TBD Westar RS Lined Seals Q3 Q3 Auto-injector (P2 version) Q2 Q2 RU PFS Plunger (non-nested) - - - Q2 Kitting Capability to Support SAS Q2 Q2 Vented Vial Adapter Europe North America Targeted Commercial Introduction
Slide 94: Sales & Pipeline
Sales & Pipeline Core – Growth Platforms Injectable Container Solutions Safety & Admin System Prefillable Syringe System Advanced Injection System Safety Orion Medimop Market Needs Silicone-free Daikyo Crystal Zenith PFS Systems Solution Westar ® - RU Lined Seals Ready Pack Kitting Reconstitution Re
Slide 95: Creative Access to New Products and Solutions
Creative Access to New Products and Solutions Target Mkt. Launch/ Comm. Intro Partners Action Market Need
Slide 96: Creative Access to New Products and Solutions
Creative Access to New Products and Solutions CAGR 20% Medimop Acquire Reconstitution Target Mkt. Launch/ Comm. Intro Partners Action Market Need
Slide 97: Creative Access to New Products and Solutions
Creative Access to New Products and Solutions Q4 Salvus Tech License Safety CAGR 20% Medimop Acquire Reconstitution Target Mkt. Launch/ Comm. Intro Partners Action Market Need
Slide 98: Creative Access to New Products and Solutions
Creative Access to New Products and Solutions Q2 Daikyo Partner PFS in RU Crystal Zenith Q4 Salvus Tech License Safety CAGR 20% Medimop Acquire Reconstitution Target Mkt. Launch/ Comm. Intro Partners Action Market Need
Slide 99: Creative Access to New Products and Solutions
Creative Access to New Products and Solutions Q3 Pharma-Pen Acquire & in-house Develop Auto-injector Q2 Daikyo Partner PFS in RU Crystal Zenith Q4 Salvus Tech License Safety CAGR 20% Medimop Acquire Reconstitution Target Mkt. Launch/ Comm. Intro Partners Action Market Need
Slide 100: Manufacturing Strategy
Market Knowledge Identifies Market Needs Manufacturing Strategy Capital Expenditures Product Launches
Slide 101: Manufacturing Strategy
Manufacturing Strategy Focused factories – Centers of Excellence Pharma and device facilities Products manufactured to a global quality standard Vision inspection Six Sigma Westar RS & RU cGMP facilities with DMF registrations and FDA audits Multiple site sourcing Project Atlas SAP and MES systems i
Slide 102: Capital Expenditures
Market Knowledge Identifies Market Needs Manufacturing Strategy Capital Expenditures Product Launches
Slide 103: Investments in Operations
Investments in Operations Europe and Asia Expansion Projects China Greenfield China plastics in Qingpu USA Expansions IT Project Atlas – SAP and MES Jurong, Singapore Bodmin, England Kovin, Serbia LeNouvion, France Eschweiler, Germany Jersey Shore, Pennsylvania Clearwater, Florida Kinston, North Car
Slide 104: Operations Record Levels of CAPEX
Capital as % of sales 10% 8% 12% 10% 7% 10% 13% 14% Depreciation as % of sales 7%7% 6% 6% 6% 5% 5% 6% Operations Record Levels of CAPEX
Slide 105: Manufacturing Processes
Manufacturing Processes Rubber Compounding Molding Trimming Finishing Specialty products Metal TrimTec
Slide 106: Compounding
Compounding
Slide 107: Molding
Molding
Slide 108: Trimming
Trimming
Slide 109: Washing/Finishing
Washing/Finishing
Slide 110: Vision Inspection
Vision Inspection
Slide 111: Metals
Metals
Slide 112: TrimTec
TrimTec
Slide 113: Product Launches
Market Knowledge Identifies Market Needs Manufacturing Strategy Capital Expenditures Product Launches
Slide 114: Product Launch Process
Product Launch Process Match need in market with West product Target specific customers Secure development partnerships Sampling Machine trials Stability tests Regulatory assistance Analytical Labs
Slide 115: Product Launch Process
Product Launch Process Plan – Initiate Launch Campaign CAPEX investments Promotion Training Sample kits Broad market - product launch (2 - 3 years later) Market experience Market acceptance/regulatory approval Customer ramp-ups
Slide 116: Product Launches: Westar RS
Product Launches Westar RS Elastomer components Seals
Slide 117: Westar Units Sold in North America
Westar Units Sold in North America (in millions)
Slide 118: Product Launches
Product Launches Drive development through superior positioning FluroTec Unrivaled barrier coating Westar State of the art ready-to-sterilize elastomer closures Flip-Off CCS Prewashed and sterilized Flip-Off seals West Spectra Covert and overt security for product authentication
Slide 119: Branding of Value-Added Products & Services
Branding of Value-Added Products & Services West Analytical Services
Slide 120: The Tech Group
The Tech Group A West Pharmaceutical Services Company,
Slide 121: Tech Restructuring
Tech Restructuring (December 2007) Pfizer decision to abandon Exubera Need to right-size operations Accelerate transition to IP-based systems supplier
Slide 122: Tech Restructuring Activities
Tech Restructuring Activities Close Erie, PA tool shop Right size SG&A and Engineering Mexico - transfers Mold moves to create “focused factories” Grand Rapids turnaround
Slide 123: Strategic Business Units
Strategic Business Units Organize SBU’s around markets Consumer Health Care Device Systems General Managers with P&L responsibilities Improved profitability Allocation of resources Provide integrated approach to serve customers Invest CAPEX based on market/strategic plan Shed unprofitable business
Slide 124: Tech Group Synergies
Tech Group Synergies Manufactured by Tech Product/ Market Partner Growth Platform
Slide 125: Tech Group Synergies
Tech Group Synergies Reconstitution Medimop Safety & Admin. Systems Manufactured by Tech Product/ Market Partner Growth Platform
Slide 126: Tech Group Synergies
Tech Group Synergies Orion Safety Needle Salvus Tech Safety & Admin. Systems Reconstitution Medimop Safety & Admin. Systems Manufactured by Tech Product/ Market Partner Growth Platform
Slide 127: Tech Group Synergies
Tech Group Synergies Orion Safety Needle Salvus Tech Safety & Admin. Systems Unique Silicone Oil Free, Tungsten Free Syringe System Daikyo Crystal Zenith Prefillable Syringe Systems Reconstitution Medimop Safety & Admin. Systems Manufactured by Tech Product/ Market Partner Growth Platform
Slide 128: Tech Group Synergies
Tech Group Synergies Orion Safety Needle Salvus Tech Safety & Admin. Systems Auto Injector In-house with Pharma-Pen Advanced Injection Unique Silicone Oil Free, Tungsten Free Syringe System Daikyo Crystal Zenith Prefillable Syringe Systems Reconstitution Medimop Safety & Admin. Systems Manufactured
Slide 129: Tech Direction
Tech Direction Transition to proprietary intellectual property (IP) Synergies with Innovation and core Pharmaceutical Systems Conversion from component to systems provider
Slide 130: Summary
Summary Strengthen market leadership position Grow faster than market Record number of product introductions Sufficient cash flow to fund CAPEX and R&D Accelerate innovation activities: In-house R&D Licensing Strategic partnering Acquisitions Attractive opportunities to expand geographically Synergi
Slide 131: Delivering Innovative Solutions: Summary, Don Morel
Delivering Innovative Solutions Summary Don Morel Chairman and Chief Executive Officer
Slide 132: Management Operating Priorities 2008-2012
Grow revenues and earnings despite reduced sales of certain products Organic growth and sales mix will offset lost revenue associated with Exubera, ESA drugs etc. Offset cost increases (raw materials, labor, energy) with lean programs, operating efficiencies and pricing Generate Tech Group performan
Slide 133: Continue Investing for the Future
Continue Investing for the future Innovation programs Aggressive launch schedule Geographic expansion plans - China, India IT Platforms Management Operating Priorities 2008 - 2012
Slide 134: Investment Considerations
Investment Considerations Established foundation for sustainable growth Significant barriers to entry Favorable growth drivers in key market segments Global, diverse customer base Global manufacturing capability Strong, experienced management team Strong corporate governance
Slide 135: 2008 Annual Guidance
2008 Annual Guidance Revenue estimated between $1.05 and $1.07 billion Estimated adjusted earnings per diluted share is between $2.40 and $2.50. This estimate: Excludes anticipated restructuring costs of an approximately $8.6 million Includes exchange rate assumption of $1.40/1 Euro Includes between
Slide 136: 2008 Annual Guidance
2008 Annual Guidance Lower revenues from those specified products will have a much more pronounced impact on periodic comparisons to 2007 during the first half of 2008 Specified products contributed earnings per diluted share of $0.14 in the first quarter and $0.11 in the second quarter of 2007, as
Slide 137: Five-Year Financial Goals
Five-Year Financial Goals Expect average annual sales growth of between 7% and 9%, excluding acquisitions Growth in existing products, supported by capacity expansions, in the near- term New products and geographic expansion contribute significantly beginning in 2010. Operating profit growth should
Slide 138: Five-Year Financial Goals
Five-Year Financial Goals Continue to manage balance sheet and capital conservatively Maintain net debt to total capital ratio between 30% and 40%, excluding acquisitions Acquisition activity focused on complementary, proprietary products
Slide 139: Summary
Summary Working through short-term revenue challenges Long term business drivers remain in place Strategic Product Platforms create sustainable growth opportunities West’s competitive advantages uniquely position the Company to capitalize on these opportunities: Daikyo partnership Global manufacturi
Slide 140: GAAP and Adjusted EPS
GAAP and Adjusted EPS 2007 Diluted earnings per share from continuing operations As reported $2.06 Restructuring, impairment and other charges 0.54 Tax adjustments/settlements (0.23) As Adjusted $2.37 Our reported 2007 results include the impact of restructuring charges, an impairment loss on our cu
Slide 141: Investor Day 2008
Investor Day 2008
West Pharmaceutical Services — Investor Day (March 2008) on 6ix