Recordati S.p.a. · MIL:REC
Recordati — Investor Day (December 2008)
47 slides from Recordati's investor day presentation, Dec 18, 2008
Slide 1: 2009 - 2011 Business Plan
Milan, 18 December 2008 2009 - 2011 Business Plan A plan for sustainable shareholder value creation
Slide 2: Index
2009 - 2011 BUSINESS PLAN INDEX 1.1. STRATEGY STRATEGY 2.2. SALES SALESDEVELOPMENT DEVELOPMENT 3.3. FINANCIAL FINANCIALPROJECTIONS PROJECTIONS 4.4. FURTHER FURTHERGROWTH GROWTHOPPORTUNITIES OPPORTUNITIES 1
Slide 3: Index: 1. Strategy
2009 - 2011 BUSINESS PLAN INDEX 1.1.STRATEGY STRATEGY 2.2. SALES SALESDEVELOPMENT DEVELOPMENT 3.3. FINANCIAL FINANCIALPROJECTIONS PROJECTIONS 4.4. FURTHER FURTHERGROWTH GROWTHOPPORTUNITIES OPPORTUNITIES 2
Slide 4: Company Profile
1. STRATEGY Company Profile • Mid sized pharmaceutical company with an European focus • R&D in the cardiovascular and urology fields and in treatments for rare diseases • Marketing operations in the main Western European markets and in Russia, CIS and Turkey • Expanding through organic development a
Slide 5: Portfolio development
1. STRATEGY Portfolio development • Recordati will continue to develop its business in Europe, both Western and in • High focus on new corporate the new growing CEE (Central and products Eastern Europe) markets, which together represent the second largest • Maximization of existing products pharmace
Slide 6: Index: 2. Sales Development
2009 - 2011 BUSINESS PLAN INDEX 1.1. STRATEGY STRATEGY 2.2.SALES SALESDEVELOPMENT DEVELOPMENT 3.3. FINANCIAL FINANCIALPROJECTIONS PROJECTIONS 4.4. FURTHER FURTHERGROWTH GROWTHOPPORTUNITIES OPPORTUNITIES 5
Slide 7: Sales Development
2. SALES DEVELOPMENT • • New Newcorporate corporateproducts products • • Existing Existingcorporate corporateproducts products • • Local Localproduct productportfolios portfolios • • New Newgrowing growingmarkets markets • • Orphan OrphanEurope Europe 6
Slide 8: Sales Development: New corporate products
2. SALES DEVELOPMENT •• New Newcorporate corporateproducts products • • Existing Existingcorporate corporateproducts products • • Local Localproduct productportfolios portfolios • • New Newgrowing growingmarkets markets • • Orphan OrphanEurope Europe 7
Slide 9: New Corporate Products
NEW CORPORATE PRODUCTS • • ZANIPRESS ZANIPRESS®(lercanidipine+enalapril) ® (lercanidipine+enalapril) • • SILODOSIN SILODOSIN • • PITAVASTATIN PITAVASTATIN • • KENTERA KENTERA®(oxybutynin ® (oxybutyninTDS), TDS),RUPATADINE, RUPATADINE, FROVATRIPTAN FROVATRIPTAN 8
Slide 10: Zanipress (lercanidipine+enalapril)
NEW CORPORATE PRODUCTS ZANIPRESS® (lercanidipine+enalapril) • Fixed combination of lercanidipine (a CCB) • Fixed combinations will play a significant role in the future and enalapril (an ACE-I) indicated for the hypertension market treatment of hypertension. Two strengths: • New aggressive targets f
Slide 11: Zanipress - expected sales
NEW CORPORATE PRODUCTS ZANIPRESS® (lercanidipine+enalapril) - expected sales Includes direct sales and sales to licensees • Market for fixed combinations of calcium channel blockers and ACE inhibitors (C9B3) is a new market in most countries generating double digit growth • Plan assumes launch in al
Slide 12: Silodosin
NEW CORPORATE PRODUCTS SILODOSIN • Highly selective α1A receptor antagonist indicated positioning for the treatment of symptoms associated with • The symptoms associated with BPH (urination benign prostatic hyperplasia (BPH) frequency and urgency, hesitancy and weak urinary • Originator Kissei Pharm
Slide 13: Silodosin - expected sales
NEW CORPORATE PRODUCTS SILODOSIN - expected sales Includes direct sales and sales to licensees • The market for BPH products in 19 major European markets for the 12 months to September 2008: € 1.0 billion. • Main competitor: tamsulosin • In-market peak sales: € 100 -150 million 12
Slide 14: Pitavastatin
NEW CORPORATE PRODUCTS PITAVASTATIN positioning • Highly effective HMG-CoA reductase inhibitor • Similar LDL-C reduction of market leading indicated for the treatment of best-in-class statins hypercholesterolaemia • Broad-spectrum effects on secondary lipid • Semi-exclusive license granted by Kowa p
Slide 15: Pitavastatin - expected sales
NEW CORPORATE PRODUCTS PITAVASTATIN - expected sales Includes direct sales and sales to licensees • Statins market in the 8 largest of the 21 countries covered by the agreement was € 2.8 billion in 2007 • Competitors: atorvastatin, rosuvastatin, simvastatin, pravastatin, lovastatin, etc. • In-market
Slide 16: Kentera, Rupatadine, Frovatriptan
NEW CORPORATE PRODUCTS KENTERA® (oxybutynin TDS) RUPATADINE • Bi-weekly oxybutynin transdermal patch • Latest generation systemic antihistamine drug indicated for indicated for the symptomatic treatment of the treatment of allergies and in particular allergic rhinitis urge incontinence and/or increa
Slide 17: Kentera, Rupatadine, Frovatriptan - expected sales
NEW CORPORATE PRODUCTS KENTERA® , RUPATADINE, FROVATRIPTAN - expected sales Includes direct sales and sales to licensees 16
Slide 18: Sales Development: Existing corporate products
2. SALES DEVELOPMENT • • New Newcorporate corporateproducts products •• Existing Existingcorporate corporateproducts products • • Local Localproduct productportfolios portfolios • • New Newgrowing growingmarkets markets • • Orphan OrphanEurope Europe 17
Slide 19: Existing Corporate Products
EXISTING CORPORATE PRODUCTS • • ZANIDIP® (lercanidipine) ZANIDIP® (lercanidipine) • • FENTICONAZOLE, FENTICONAZOLE,FLAVOXATE FLAVOXATE 18
Slide 20: Zanidip (lercanidipine)
EXISTING CORPORATE PRODUCTS ZANIDIP® (lercanidipine) • Calcium channel blocker indicated for the treatment • Sales in 2008 expected to reach € 200 million of hypertension. Lipophilic dihydropiridine discovered and developed by Recordati. Efficacy • Sales in 2009 expected to be around € 200 as best i
Slide 21: Zanidip - expected sales
EXISTING CORPORATE PRODUCTS ZANIDIP ® (lercanidipine) - expected sales Includes direct sales and sales to licensees • The market for CCB’s today in the 16 main territories where lercanidipine is present is worth approx. € 2 billion 20
Slide 22: Lomexin (fenticonazole) and Urispas (flavoxate)
EXISTING CORPORATE PRODUCTS LOMEXIN® (fenticonazole) URISPAS® (flavoxate) • Antimycotic for dermatological and • Antispasmodic for the treatment of urinary gynecological use incontinence • Original Recordati product now off-patent • Original Recordati product now off-patent but but represents new sa
Slide 23: Lomexin and Urispas - expected sales
EXISTING CORPORATE PRODUCTS LOMEXIN® (fenticonazole) URISPAS® (flavoxate) Includes direct sales and sales to licensees 22
Slide 24: Sales Development: Local product portfolios
2. SALES DEVELOPMENT • • New Newcorporate corporateproducts products • • Existing Existingcorporate corporateproducts products •• Local Localproduct productportfolios portfolios • • New Newgrowing growingmarkets markets • • Orphan OrphanEurope Europe 23
Slide 25: Local Product Portfolios
LOCAL PRODUCT PORTFOLIOS LOCAL PRODUCT PORTFOLIOS • Continue to promote profitable products currently present in local product portfolios • Ongoing search of local new product opportunities that fit local promotional activities (an example is the recent acquisition of Ortoton® in Germany to expand t
Slide 26: Sales Development: New growing markets
2. SALES DEVELOPMENT • • New Newcorporate corporateproducts products • • Existing Existingcorporate corporateproducts products • • Local Localproduct productportfolios portfolios •• New Newgrowing growingmarkets markets • • Orphan OrphanEurope Europe 25
Slide 27: Commonwealth of Independent States (CIS)
NEW GROWING MARKETS COMMONWEALTH OF INDEPENDENT STATES (CIS) Expected sales • In March Recordati acquired the French companies FIC and FIC Médical which are dedicated to the registration and the promotion of pharmaceutical products on behalf of third party companies in Russia and other C.I.S. countr
Slide 28: Turkey
NEW GROWING MARKETS TURKEY • Agreement to acquire Yeni Ilaç in Turkey, closing Expected sales expected by year-end • Current product portfolio expected to generate sales of over € 17 million in 2008 • Sales of lercanidipine, fenticonazole and flavoxate (total of € 7 million p.a.) currently licensed
Slide 29: Sales Development: Orphan Europe
2. SALES DEVELOPMENT • • New Newcorporate corporateproducts products • • Existing Existingcorporate corporateproducts products • • Local Localproduct productportfolios portfolios • • New Newgrowing growingmarkets markets •• Orphan OrphanEurope Europe 28
Slide 30: Orphan Europe
ORPHAN EUROPE ORPHAN EUROPE • Current product portfolio CAGR of 10% over Expected sales the period • Stanate® (stannsoporfin), under development for the treatment of neonatal hyperbilirubinemia caused by G6PD deficiency and AB0 incompatibility, to be approved by end 2011 • Upside: Approval of Carbag
Slide 31: Index: 3. Financial Projections
2009 - 2011 BUSINESS PLAN INDEX 1.1. STRATEGY STRATEGY 2.2. SALES SALESDEVELOPMENT DEVELOPMENT 3.3.FINANCIAL FINANCIALPROJECTIONS PROJECTIONS 4.4. FURTHER FURTHERGROWTH GROWTHOPPORTUNITIES OPPORTUNITIES 30
Slide 32: Financial Projections
3. FINANCIAL PROJECTIONS • • Profit Profit&&Loss Loss • • Net Netfinancial financialposition position 31
Slide 33: Financial Projections: Profit & Loss
3. FINANCIAL PROJECTIONS •• Profit Profit&&Loss Loss • • Net Netfinancial financialposition position 32
Slide 34: Profit & Loss: Sales Development
PROFIT & LOSS SALES DEVELOPMENT Based on existing business, no new acquisitions included 33
Slide 35: Gross Profit Margin Evolution
PROFIT & LOSS GROSS PROFIT MARGIN EVOLUTION • Reduction of gross margin from 2009 peak level due to the price decrease of lercanidipine • Objective in 2011 to keep gross profit, in absolute terms, similar to that in 2009 thanks to the development of new corporate products • Going forward gross margi
Slide 36: SG&A Expenses Evolution
PROFIT & LOSS SG&A EXPENSES EVOLUTION • Review organization structure increasing detailing to specialists • Primary care field force strictly to the extent necessary • Selective reduction of the total sales force by around 10-15% in traditional markets • Development of sales organization in growing
Slide 37: R&D Expenses Evolution
PROFIT & LOSS R&D EXPENSES EVOLUTION • R&D to increase to around 10% of sales in 2009 due to the clinical development of products in the current pipeline which include new lercanidipine based combinations • Objective is for R&D to remain stable in 2010 and 2011 at 9 -10% of sales due to the completi
Slide 38: 2008 Targets, 2009 - 2011 Plan
PROFIT & LOSS 2008 TARGETS, 2009 - 2011 PLAN 2008 2009 2010 2011 Targets Plan Plan Plan (million Euro) Revenue ~ 690 ~750 700-720 780-800 R&D expenses ~ 60 ~75 ~70 ~75 Operating income (EBIT) ~ 144 ~155 135-140 145-150 Net Income ~ 100 ~105 95-98 102-105 Based on existing business, no new acquisitio
Slide 39: Financial Projections: Net financial position
3. FINANCIAL PROJECTIONS • • Profit Profit&&Loss Loss •• Net Netfinancial financialposition position 38
Slide 40: Expected cash flow generation
NET FINANCIAL POSITION Expected cash flow generation 2009 2010 2011 (million Euro) Plan Plan Plan Cash flow ~135 ~125 ~130 CAPEX (tangible assets) ~10 ~10 ~10 Investment in intangible assets ~20 ~20 ~20 Expected free cash flow ~105 ~90 ~100 generation Dividend pay-out ratio maintained 50% 50% 50% as
Slide 41: Expected net financial position
NET FINANCIAL POSITION Expected net financial position 2008 2009 2010 2011 Based on existing business, no new acquisitions included 40
Slide 42: Index: 4. Further Growth Opportunities
2009 - 2011 BUSINESS PLAN INDEX 1.1. STRATEGY STRATEGY 2.2. SALES SALESDEVELOPMENT DEVELOPMENT 3.3. FINANCIAL FINANCIALPROJECTIONS PROJECTIONS 4.4.FURTHER FURTHERGROWTH GROWTHOPPORTUNITIES OPPORTUNITIES 41
Slide 43: Further Growth Opportunities
4. FURTHER GROWTH OPPORTUNITIES • • Leveraging Leveragingexisting existinggeographies geographies • • Acquisitions Acquisitionsininnew newgeographies geographies 42
Slide 44: Leveraging Existing Geographies
LEVERAGING EXISTING GEOGRAPHIES • Seek new corporate products to develop on a European basis • Acquire rights to products already on the market on a country by country basis • Orphan Europe organization to enable access to new specialty care products • Increase emphasis on OTC market opportunities 4
Slide 45: Acquisitions in New Geographies
ACQUISITIONS IN NEW GEOGRAPHIES Demand for medicines is increasing in the emerging markets of Eastern Europe as the population grows, ages and becomes more prosperous. “As GDP grows, healthcare spending grows at an even faster rate and spending on medicines grows even faster” The Economist In spite
Slide 46: Strategic Objective
STRATEGIC OBJECTIVE • Strategic objective for the 2009-2011 period is to grow sales and profits every year by adding to organic development new business acquisitions in growing markets • Solid acquisition track record • Since 1999 approx. € 375 million invested in acquisitions to expand geographical
Slide 47: Company declarations, disclaimers and profile
Company declarations, disclaimers and profile DECLARATION BY THE MANAGER RESPONSIBLE FOR PREPARING THE COMPANY’S FINANCIAL REPORTS The manager responsible for preparing the company’s financial reports Fritz Squindo declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finan