Hikma Pharmaceuticals Plc · LSE:HIK
Hikma Pharmaceuticals — Investor Day (November 2016)
48 slides from Hikma Pharmaceuticals's investor day presentation, Nov 15, 2016
Slide 1: Hikma Pharmaceuticals PLC Meet the Management Day
Hikma Pharmaceuticals PLC Meet the Management Day 15 November 2016
Slide 2: Disclaimer
► This document, which has been issued by Hikma Pharmaceuticals PLC (the “Company”), comprises the written materials/slides for a presentation. This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or publis
Slide 3: Agenda
Agenda TIME ITEM PRESENTER 12.30-12.45 Welcome Said Darwazah Riad Mishlawi Natheer Masarweh Ragheb AbuRmaileh 12.45-13.45 Injectables Presentation and Q&A Rui Godinho Joel Rosenstack Tareq Darwazah 13.45 Break Mazen Darwazah Salah Mawajdeh 14.00-15.00 Branded Presentation and Q&A Hassan Shafiq Basel
Slide 4: Strategic overview
Strategic overview
Slide 5: Six key priorities to achieve our strategic objectives
Across the Group, we are focusing on six key priorities to achieve our strategic objectives Develop a differentiated product portfolio Build best-in-class R&D capabilities by exploiting WWC’s P-IV oral R&D expertise Bring new generics to market Leverage strong commercial capabilities to maximize pot
Slide 6: Market footprint across the US, Europe and MENA
Our market footprint is stronger than ever with extensive operations across the US, Europe and MENA EUROPE • Manufacturing facilities in Portugal, Germany and Italy • 724 employees • Manufacturing capabilities include sterile liquid, power, lyophilised and cytotoxic products US MENA • Manufacturing
Slide 7: Well diversified business model creating long-term sustainable value
Our well diversified business model is creating long-term sustainable value Our core business objectives Branded Leading pharmaceutical To maintain our position as a top 3 manufacturer in MENA generic injectables company in the 30%* US and expand in existing and new markets Our mission Our mission P
Slide 8: Strong track record of growth, organic and through acquisition
Our strong track record of growth, delivered organically and through acquisition Group revenue ($m) CAGR: 18% 1 489 1 440 1 365 1 109 918 731 2010 2011 2012 2013 2014 2015 2016E* 8 * Company guidance as of 10 November 2016; Group revenue of around $2 billion in constant currency in 2016
Slide 9: Injectables
Injectables A ar
Slide 10: Broad product portfolio and footprint support continued Injectables growth
Our broad product portfolio and geographic footprint will support continued growth in our global Injectables business Specific market opportunities Acquired 900 Bedford Laboratories Acquired EUP in 800 Egypt 713 710 700 $ Millions 600 536 Acquired 500 Baxter’s multi- 470 source injectables 400 316 3
Slide 11: Top 3 US injectables position and six priorities
We are focusing on six key priorities to achieve our strategic objectives Develop a differentiated product “ portfolio Build best-in-class R&D To maintain our position capabilities as a top 3 injectables company in the US and “ Bring new generics to market expand in existing and Leverage strong comm
Slide 12: Generic injectables market is large and fast growing
Generic injectables market is large and fast growing ► Injectables growth has out-paced other US injectables market sales by value ($ billion)1 generic categories in recent years ► Global generic injectables market estimated to exceed $70 billion by 2020 – a CAGR of $160,0 Generic CY 2011-2015 Sales
Slide 13: Maintaining our strong market share in US injectables
Maintaining our strong market share in US injectables US generic Injectables market share June 2016 (eaches) US generic injectables market share 2016 June (Sales, US$) 600 $2 000 $1 800 Sales (USD $millions) 500 $1 600 Volume (eaches in millions) $1 400 400 $1 200 300 $1 000 $800 200 $600 $400 100 $
Slide 14: Extracting significant value from the Bedford acquisition
Extracting significant value from the Bedford acquisition Acquired Bedford Laboratories in 2014 for $225 million ► Portfolio of 82 differentiated products ► Ben Venue manufacturing site, including state-of-the-art R&D centre ► 45 R&D employees ► Transferred over 40 products to our facilities in US,
Slide 15: Broad US product pipeline with at least one layer of differentiation
Our broad US product pipeline with at least one layer of differentiation US Injectables pipeline (Number of products) US Injectables pipeline by layers of differentiation 100 Four Zero 90 Three 4% 5% 9% 80 70 60 Two 50 28% One 91 54% 40 30 20 43 10 0 ► 95% of the pipeline has at least one layer of M
Slide 16: Large MENA product pipeline with focus on oncology
A large product pipeline in the MENA with a strong focus on oncology Launches across key markets Launches by therapeutic category Others Morocco Saudi Iraq Sudan Jordan Oncology Lebanon Rest of GCC Others Algeria Egypt Launching over 50 new molecules across multiple markets over the next 5 years
Slide 17: Leveraging broad portfolio to strengthen presence in Europe
Leveraging our broad portfolio to strengthen our presence in Europe and enter new markets Product submissions in 2015 and H1 2016 ► Leveraging our existing product portfolio to enter new European markets - France, 40 products Germany, Italy, UK and Spain ► Submitted over 200 product registrations ac
Slide 18: Strengthening centres of excellence to support future growth
Strengthening centres of excellence to support future growth plans ► Building new high-potent plant and adding lyophlised capacity in Portugal to support new Bedford products Europe ► Transfer of equipment from Ben Venue has saved considerable capex and accelerated timelines ► Increasing capacity fo
Slide 19: Well-positioned to grow across global Injectables business
Well-positioned to grow across our global Injectables business Extensive portfolio and infrastructure will support future growth Strong R&D capabilities and incremental R&D investment will enhance product pipeline Potential to expand in existing markets and leverage our portfolio in new markets 19
Slide 20: 15 min coffee break
QUALITY 15 min coffee break
Slide 21: Branded
QUALITY Branded
Slide 22: Delivering above market growth while navigating headwinds
Delivering above market growth while navigating headwinds Hikma 5-year CAGR (reported): 9% Hikma 5-year CAGR (constant currency): 12%** MENA market 5-year CAGR: 8%*** Depreciation of North African currencies Floating of Egyptian pound 800 Acquired EUP Acquired in Egypt The Arab EPCI in Restructuring
Slide 23: Private retail market in MENA remains attractive
Private retail market in MENA remains attractive, with an estimated market size of more than $13 billion Lebanon $635 m Tunisia $458 m Jordan Syria $235 m Iraq Kuwait Morocco $201 m $866 m Jordan Algeria $3 bn Egypt Bahrain UAE Libya $1.3 bn $3.9bn Qatar Saudi Arabia $3.1 bn Oman Sudan Yemen 27 IMS
Slide 24: Maintaining our strong market position in MENA
Maintaining our strong market position in MENA MENA top 10 market share (by $ value)* 10% 8% 8% 6% 6% 6% 5% 4% 4% 3% 3% 3% 2% 2% 2% 0% Sanofi Novartis GSK Pfizer Hikma Spimaco Merck & Co Astrazeneca Novo Nordisk Bayer 1 2 3 4 5 6 7 8 9 10 28 * IMS Health, YTD December 2015. Private retail sales for
Slide 25: Leading regional player in MENA through top five positions
We are focusing on six key priorities to achieve our strategic objectives Develop a differentiated product portfolio in our core therapy areas “ of cardiovascular, diabetes, CNS, anti-infectives and oncology To maintain our position as the Build best-in-class R&D capabilities leading regional player
Slide 26: Focus on chronic diseases a key driver of future growth
Our focus on chronic diseases will be a key driver of future growth 2019 split of MENA market by therapeutic class 3 000 CAGR 11.5% CAGR 6.6% 2 500 2 000 $ Millions CAGR 11.5% CAGR 12.1% 1 500 CAGR 12.1% 1 000 500 - CARDIOVASCULAR ANTI-INFECTIVES NERVOUS SYSTEM RESPIRATORY SYSTEM DIABETES 26 Source:
Slide 27: Successfully launching higher value products across our markets
Successfully launching higher value products across our markets Product launches per market, 2014 to June 2016 (Number of products) Sudan Lebanon 4 Includes 6 first generics and 3 new under- Includes 2 diabetes and 2 7 Iraq licensed products metabolism products 8 Saudi & GCC 24 Morocco 10 Includes 8
Slide 28: Continuous enhancement of product portfolio and pipeline
Continuous enhancement of our product portfolio and pipeline Branded launches by therapeutic area* 10% 15% 12% 3% 9% 6% 22% 3% 23% 8% 5% 22% 7% 5% 16% 17% 11% 26% 30% 8% 27% 3% 1% 13% 2015 2016E 2017-19E 69 launches 122 launches 60 – 80 launches per year Cardiovascular Anti-infectives Opthalmic Derm
Slide 29: Saudi Arabia and GCC — well positioned for future growth
Saudi Arabia and GCC — well positioned for future growth Hikma Saudi & GCC 5-year revenue CAGR: 6% ► Market size: approx. $4.6 billion ► Market position and share: • #7 in Saudi Arabia, 4.7% share • #10 in UAE, 2.3% share • #14 in Kuwait, 2% share 2010 2011 2012 2013 2014 2015 ► Large and attractive
Slide 30: Algeria — leveraging our local presence to deliver growth
Algeria — leveraging our local presence to deliver growth Hikma Algeria 5-year revenue CAGR: 5% (12% in CC) ► Market size: approx. $3.0 billion Reported Constant ► Market position: 4th largest pharmaceutical player ► Market share: 5% 2010 2011 2012 2013 2014 2015 ► Well positioned to benefit from ma
Slide 31: Egypt — consistent delivery of above market growth
Egypt — consistent delivery of above market growth Hikma Egypt 5-year revenue CAGR: 13% (21% in CC) ► Market size: approx. $3.9 billion Reported ► Market position: 10th largest Constant pharmaceutical player ► Market share: 2.2% 2010 2011 2012 2013 2014 2015 ► Uniquely positioned as the only local m
Slide 32: Local presence and strong market position will drive sustainable growth
Local presence and strong market position will drive sustainable growth Delivering above market growth while navigating headwinds Market fundamentals remain intact to support long-term growth Hikma is uniquely positioned to capture growth opportunities 32
Slide 33: 15 min coffee break
QUALITY 15 min coffee break
Slide 34: Generics
Generics
Slide 35: Transforming our non-injectables business in the US
Transforming our non-injectables business in the US ►1,454 employees ►107 products in 357 dosage forms ►Top 10 player in the US non- injectables market ►2 facilities– Eatontown and Columbus 700 ►405 employees 600 ►50 products in 122 dosage forms 500 $ Millions ►Small player in the US non- injectable
Slide 36: US generics market offers stable fundamentals and growth opportunities
US generics market offers stable fundamentals and attractive growth opportunities ► Stable fundamentals and attractive growth opportunities US generics pharmaceutical market ($ billion) • Expected 2014-2019 CAGR of 6% ► Growth drivers include: 120,0 • Continued patent cliff and loss of exclusivity o
Slide 37: Well positioned in the US non-injectables market
Well positioned in the US non-injectables market US non-injectable generics market share (%) 20,0% 8th largest player in the US non-injectables market 9,9% 7,7% 6,5% 4,6% 2,9% 2,6% 2,6% 2,4% 2,3% 2,3% 2,1% 2,1% 2,0% 2,0% 1,7% 1,6% 1,5% 1,4% 1,4% Source: IMS Healthcare, CY 2015
Slide 38: Leading player in US non-injectable generics market
We are focusing on six key priorities to achieve our strategic objectives Develop a differentiated product “ portfolio Build best-in-class R&D To be a leading player capabilities by exploiting WWC’s P-IV oral R&D expertise in the US non-injectable generics market “ Bring new generics to market Lever
Slide 39: WWC brings manufacturing capabilities, team, portfolio and pipeline
WWC brings state-of-the-art manufacturing capabilities, an experienced team, a differentiated portfolio and exciting pipeline ► Broad production capabilities with state-of-the-art operations ► Strong track record of high-quality manufacturing and regulatory compliance ► Differentiated product portfo
Slide 40: Opportunities to drive value from the West-Ward Columbus portfolio
Opportunities to drive value from the West-Ward Columbus portfolio ► Increase sales of low market share products ► Improve product mix from low to high margin products ► Rationalise current portfolio, discontinuing products with negative or minimal contribution ► Reduce fees within current terms and
Slide 41: Large R&D team with advanced capabilities
Large R&D team with impressive and advanced capabilities ► Strong track record of investing in R&D to deliver a highly differentiated product portfolio – 170 full-time employees including: • Formulation & Analytical Development • Regulatory Affair • Medical Affairs • Strategy • Business development
Slide 42: Strong track record of filing and launching new products
Strong track record of filing and launching new products New filings (number of products)* New product launches (number of products)* 15 10 14 14 14 9 12 12 8 8 8 9 6 6 2010 2011 2012 2013 2014 2015 2016E 2010 2011 2012 2013 2014 2015 2016E Average of 13 product submissions annually Average of 8 pro
Slide 43: Diverse product pipeline with at least one layer of differentiation
Diverse product pipeline with at least one layer of differentiation Columbus pipeline by layers of differentiation Four layers; 8% One layer; 96 products currently in development 35% • 49 PIV products Three layers; 23% • 25 High containment facility products • 12 DEA products • 11 Modified release
Slide 44: High value pipeline with emphasis on PIV and first-to-file
High value pipeline with emphasis on PIV and ‘first-to-file’ opportunities Product pipeline summary at Oct 2016 (number of products) Total: 96 Filed: 25 Under- development: Other Other: In dev: 8 39 71 10 – 15 in active litigation 22 Potential FTF PIV opportunities in dev: 32 Some settled with date-
Slide 45: Driving long-term value through new product launches
Driving sustainable long-term value through new product launches Non-Injectables (WWC and legacy) pipeline highlights PIV product with Extended release Derm product with Ophthalmic product date certain launch product R&D partner Product with Product with hard to technically Delayed release Generic A
Slide 46: Improved profitability driven by multiple levers
Improved profitability will be driven by multiple levers ► Reduce low-margin contract manufacturing revenue ► Exit current portfolio products with minimal contribution ► Portfolio optimisation ► New product launches ► Cost Savings 46
Slide 47: Summary
QUALITY Summary
Slide 48: Strong investment case with clear potential for growth
Strong investment case with clear potential for growth ► Diversified business model ► Experienced R&D teams and large, differentiated pipeline ► High-quality global manufacturing footprint and efficient operations ► Well established commercial capabilities ► Global portfolio and potential to expand