Lotus Pharmaceuticals, Inc. · OTC:LTUS
Lotus Pharmaceuticals — Investor Presentation (December 2007)
27 slides from Lotus Pharmaceuticals's investor presentation, Dec 6, 2007
Slide 1: Lotus Pharmaceuticals
Lotus Pharmaceuticals December 2007
Slide 2: Safe Harbor
Safe Harbor we This presentation contains "forward-looking statements" within the meaning of the “safe-harbor’” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of
Slide 3: Corporate Profile
Corporate Profile ‘ » gos LOTUS prarmaceth A developer, manufacturer & distributor of pharmaceutical products in the PRC market Operations began in September 1999 Listed on OTCBB through reverse merger in September 2006 Headquartered in Beijing, China Core Strengths: ° National sales & distribution
Slide 4: Investment Highlights
Investment Highlights Oe Significant marketing and distribution channels to the hospital systems in China Established product portfolio o Strong pipeline of branded generics and innovative pharmaceuticals in the leading therapeutic classes China’s tremendous growth potential in the pharmaceutical in
Slide 5: Market Potential
Market Potential
Slide 6: Growing Chinese Pharmaceutical Industry
Growing Chinese Pharmaceutical Industry Total Market Demand Growth rac Comparison of Global @ Chinese government Pharmaceutical Markets é ao TCRER spending less on ompound Annual Growth Rate (2000 - 2005) healthcare Individuals forced to shoulder more of cost China’s per capita expenditure on pharma
Slide 7: Complex Distribution System
o LOT Complex Distribution System he Spitals rmacies o Distribute 80% of the drugs sold in © Central government is China encouraging development of retail pharmacies o Over 10,000 wholesalers act as middlemen to distribute from Promotes separation of manufacturers to hospital market prescribing and
Slide 8: Opportunity for Market Leaders
Opportunity for Market Leaders Fragmented Industry Trend of Consolidation » Total pharmaceutical manufacturers: » GMP certification reduced the number ° ~4,000 of pharmaceutical manufacturers from > Average Revenue: 6,000 to less than 4,000 » ~RMB 50M, or ~$7M US >» Market driven competition may » A
Slide 9: Competitive Strengths
Competitive Strengths a
Slide 10: Sales and Distribution
gos LOTU SD, pRormacett Sales and Distribution 2007 Wholesale Revenue Geographic Breakdown Others, 7.7% Powerful Sales Network Hui 3% - 100+ salespeople / hospital sales reps ~ Beijing Headquarters + 4 regional s. Henan. S16 Cover 28 provinces 300+ distributors Sell direct to 40+ and distribute to 1
Slide 11: Retail Pharmacies in Beijing
Retail Pharmacies in Beijing Store Location of Pharmacies \ | Operated by Lotus \ City of Beijing "1
Slide 12: Proven Track Record of Product Development
Proven Track Record of Product Development Ni Mai Jiao Lin
Slide 13: Lotus Pharmaceuticals Brands
onan U5 Lotus Pharmaceuticals Brands Mu Xin - Brimonidine tartrate eye drops Levoflaxin lactate powder for injection - Open angle glaucoma (AMO) + Anti-infective Ni Mai J + Nicergoline for
Slide 14: Established Product Portfolio
Established Product Portfolio _ roti 50 Other Wholesale Drugs, 3.8% liao, Lin, 5.14 14
Slide 15: Deep Pipeline for Sustainable Growth
Deep Pipeline for Sustainable Growth Lotus has 7 drugs on which the pi Product Candidate linical studies are complete and the SFDA application has been launched ey Te, | [oe 4. Sodium Aescinate- Central Nervous Drug Category 6 2008 N/A Injection System 2. Gatifloxacin Lactate- Anti-infectives Drug C
Slide 16: Deep Pipeline for Sustainable Growth
Deep Pipeline for Sustainable Growth otus has drugs r pr Product Candidate Sustained Release Tablets 1. Gliclazide Hormone-Diabetes Drug Category 6 2009 NIA 2. Hawthorn Flavonoids Cardiovascular TCM Category 6 2011 ily Controlled Release Tablets Frorection 1, Salbutamol Sulfate Respiratory Drug Cate
Slide 17: R&D: Future Development Plan
30% LOTUS @, \ed 3 R&D: Future Development Plan “« » Strategic therapeutic area focus: anti-infective, gastrointestinal, cardiovascular, and hormone » Guided by first-hand market research and data collection » 3-4 new product launches each year » Branded drugs, innovative drugs, and Traditional Chin
Slide 18: Successful Management Team
Rog LOT © pharmace ane Successful Management Team Liu Zhong Yi, Chief Executive Officer and President + Founder and Chairman of Lotus Pharmaceuticals + Established the Research Center of Space Flight Biological Engineering Technology while working for the Chinese Government in 1992 + Entered the pri
Slide 19: Rapid Organic Growth
Rapid Organic Growth 50.0 - peicartane rest ; 1000% 90 - 300% 45.0 + 90.0% 80 25.0% 40.0 362 376 | 800% 45 35.0 + 70.0% gs Z 60 | 20.0% = 300 | 60.0% 2 . & 50 § 25.0 + 50.0% 5 F 15.0% = = 40 = 200 40.0% 150 300% 3° 1008 10.0 | 20.0% 20 } 8.0% 50 100% 10 00 —* 0.0% 0.0 0.0% 2005 2006 2007 (Through 9/
Slide 20: Solid Balance Sheet
Solid Balance Sheet Sources of Capital Activity Ratios 35.0 12/31/06 Debt / Equity = 75.1% 30.2 30.0 26.7x 30.0 ' 0/0 25.0x Debt / Equity 25.0 g 20.6 202 20.0x 3 200 2 g E 15.0x 2 150 5 118 & ag 10.0 10.0x 8.5x 10.0 : 6.2x 2: 5.0x oe 5.0x 5.0 2x te 00x + snipes 9/30/2007 12/31/2006 9/30/2007 WTotal
Slide 21: Growth Strategy
Growth Strategy
Slide 22: Growth Strategy
Growth Strategy Pipeline product portfolio consisting of branded generics and innovative products » Cardiovascular and hormone agents are identified as the strategic focus Market penetration » Penetrating deep into the target geographic markets. Already an important player in Inner Mongolia and Anhu
Slide 23: Concluding Remarks
Concluding Remarks a 23
Slide 24: Maximizing Shareholder Return
Maximizing Shareholder Return Acquisitions Pipeline of Innovative Products Distribution Capabilities for Current Product Portrolio 24
Slide 25: Appendix
Appendix
Slide 26: Corporate Structure
oo) LOTUS Corporate Structure ee Lotus Pharmaceuticals, Inc Outside China 100% Inside China Mr. Liu and Senior Manage! g Lotus Genesis Pharmaceutical Co, ent 1 I 100% 1 1 g Liang Fang Beijing En Ze Jia Shi i aaet Pharmaceutical Co, Ltd Pharmaceutical Co, Ltd Contractual 4 ‘Agreement 26
Slide 27: Capitalization Summary
LOTUS Capitalization Summary -_ Share Ownership Pre-Offering % Held Other sharehol lers (with less than 5%) j Total Shares Outstanding 41,564,200 100.00% As of 12/4/07 ar
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