Mayne Pharma Group Ltd. · ASX:MYX
Mayne Pharma — Merger or Acquisition (June 2016)
40 slides from Mayne Pharma's merger presentation, Jun 28, 2016
Slide 1: Acquisition of U.S. generic product portfolio from Teva and Allergan
For personal use only Acquisition of U.S. generic product portfolio from Teva and Allergan Mayne Pharma Group Limited 28 June 2016 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer For personal use only The following notice and disclaimer applies to this presentation (Presentation) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained in this Presentation. In
Slide 3: Important Notice and Disclaimer (cont)
Important Notice and Disclaimer (cont) For personal use only No responsibility for any errors or omissions from this Presentation arising out of negligence or otherwise is accepted by Mayne Pharma or its Advisers nor by any of their respective related bodies corporate, affiliates, directors, employees
Slide 4: Executive summary
Executive summary Agreement to acquire a portfolio of generic products (“Acquired Portfolio”) from Teva Pharmaceutical Industries Limited (“Teva”) and Allergan plc (“Allergan”) for US$652m For personal use only Mayne Pharma has executed a binding agreement to acquire a portfolio of generic product
Slide 5: Compelling strategic rationale
Compelling strategic rationale For personal use only Majority of the Acquired Portfolio products have leading market shares in well established and stable markets 1 Attractive portfolio Diversified portfolio – largest product represents 12% and top 5 represent 43% of last twelve months (“LTM”) M
Slide 6: Overview of the Acquired Portfolio
For personal use only 1 Overview of the Acquired Portfolio NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 7: Diversified and stable portfolio
Diversified and stable portfolio For personal use only Acquired Portfolio net sales by therapeutic area 37 approved products LTM Mar-16 − 21 hormone/OC products comprise 49% of LTM Mar-16 net sales − largest individual product represents 12% of LTM Mar-16 net sales The Acquired Portfolio is well
Slide 8: Complementary portfolio with a focus on complex formulations
Complementary portfolio with a focus on complex formulations For personal use only The Acquired Portfolio is expected to build on existing expertise in Mayne Pharma pro-forma 1H FY16 Generic Products Division oral potent and controlled-release products (“GPD”) Net Sales1 In 1H FY16, Mayne Pharma
Slide 9: Attractive pipeline expected to drive future growth
Attractive pipeline expected to drive future growth For personal use only The Acquired Portfolio includes 6 pipeline products Market size # of generic Expected targeting markets with IMS Health sales > US$700m1 Product (US$m)1 competitors launch Status − 1 product has recently received FDA approva
Slide 10: Leverages Mayne Pharma's existing manufacturing capability and broadens supply chain network
Leverages Mayne Pharma’s existing manufacturing capability and broadens supply chain network For personal use only Increased utilisation of Mayne Pharma’s existing manufacturing Forecast manufacturing oral solid volumes1 capacity (Units, millions) Manufacture of up to 11 products expected to begin
Slide 11: Enhanced scale expected to drive future growth opportunities
Enhanced scale expected to drive future growth opportunities for Mayne Pharma For personal use only Increase in scale post completion of acquisition Key benefits The acquisition positions Mayne Pharma as a significant Acquisition will provide a platform for new portfolio and pipeline participant
Slide 12: Potential for synergies over the mid-long term
Potential for synergies over the mid-long term For personal use only Stronger and deeper relationships with wholesaler chains and retail drug store chains expected to drive incremental portfolio selling opportunities for Mayne Pharma’s existing on-market products Revenue Expected to provide new
Slide 13: Operational plans
For personal use only 2 Operational plans NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 14: Detailed handover and integration plans established
Detailed handover and integration plans established For personal use only Prior to signing and Day 0 - 60 Day 60 – 1 year 1 year + close of acquisition Doubled sales team to 22 products expected to support sales and marketing launch in Mayne Pharma New third party logistics labelling within 7
Slide 15: In addition to the existing team, we have secured new talent
In addition to the existing team, we have secured new talent For personal use only Andrew van Breugel Craig Boyd EVP, Operations EVP, Generic Products Medochemie, Douglas Pharma., 49 employees already hired in Hospira, Mylan, Novartis Merck 20+ years of industry experience advance of this transact
Slide 16: Recent investments in people, systems and capability
Recent investments in people, systems and capability to support the enlarged organisation For personal use only Generic Products Division commercial team has more than doubled to 24 over the last year across customer account management, customer solutions and commercial analytics to support the 4-
Slide 17: Financial impact of acquisition
For personal use only 3 Financial impact of acquisition NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 18: Financial overview and outlook for Acquired Portfolio (pre synergies)
Financial overview and outlook for Acquired Portfolio (pre synergies) For personal use only LTM Mar-16 net sales for the Acquired Portfolio under Teva/Allergan ownership were US$292m1 Several factors will impact the level of net sales of the on-market products under Mayne Pharma ownership − one-
Slide 19: Funding the acquisition
Funding the acquisition For personal use only Acquisition funded through proceeds of an equity raising and Sources A$m Uses A$m expansion of existing debt lines secured in June 2015 Debt 145 Consideration paid 881 Attractive debt funding package with Westpac Banking Corporation (Australia) Equit
Slide 20: Pro forma balance sheet
Pro forma balance sheet For personal use only Impact to Balance Sheet Mayne as at Pro forma Pro forma as Funding has been structured to ensure a prudent and A$m 31-Dec-15 adjustment at 31-Dec-15 conservative balance sheet is maintained Cash 49.7 120.0 169.7 Increase in cash of A$120m required fo
Slide 21: Mayne Pharma trading and business update
For personal use only 4 Mayne Pharma trading and business update NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 22: Trading and business update
Trading and business update For personal use only Business Update FY16 Forecast Results (A$m)1,2 Revenue and underlying EBITDA expected to be up >80% and >130% respectively on Revenue $260m – $265m prior corresponding period All segments contributed to the growth year on year Underlying EBITDA $
Slide 23: Equity offer structure
For personal use only 5 Equity offer structure NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 24: Equity raising details
Equity raising details Fully underwritten ~A$888m equity raising comprised of: For personal use only − a 1-for-1.725 accelerated non-renounceable entitlement offer to raise approximately A$601m (“Entitlement Offer structure Offer”)1 and size − a placement to raise approximately A$287m (“Placement”
Slide 25: Equity raising timetable
Equity raising timetable For personal use only Trading halt and announcement of acquisition and Entitlement Offer Tue, 28 Jun 2016 Institutional Entitlement Offer opens Tue, 28 Jun 2016 Institutional Entitlement Offer closes1 and bookbuild for Placement shares and institutional shortfall Wed, 29 Jun
Slide 26: Key risks
For personal use only 6 Key risks NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 27: Key risks
Key risks This section discusses some of the risks associated with an investment in Mayne Pharma. Mayne Pharma's business is subject to a number of risk factors both For personal use only specific to its business and of a general nature which may impact on its future performance and forecasts. Befor
Slide 28: Key risks (cont)
Key risks (cont) For personal use only Operational risks (cont) Product liability Mayne Pharma’s business exposes it to potential product liability risks that are inherent in the marketing and use of its products and as and uninsured such Mayne Pharma has secured insurance to cover various product l
Slide 29: Key risks (cont)
Key risks (cont) Operational risks (cont) For personal use only Relationships Mayne Pharma remains exposed to competitor pressures in retaining and attracting customers. The loss of a key customer, the inability with customers to renew contracts on similar terms, or the inability of the business to
Slide 30: Key risks (cont) - Acquisition risks
Key risks (cont) For personal use only Acquisition risks Completion risk Completion of the transaction is expected to be late July 2016. Although we have been in regular dialogue with the FTC regarding this transaction, there is no guarantee that the FTC will provide formal approval within any parti
Slide 31: Key risks (cont) - Acquisition risks
Key risks (cont) For personal use only Acquisition risks (cont) Integration risk The acquisition requires the integration of a large number of products, all of which have been manufactured and marketed independently of Mayne Pharma. Most of these products are currently manufactured by Teva or Allerg
Slide 32: Key risks (cont) - General risks
Key risks (cont) For personal use only General risks Share price The market price of Mayne Pharma shares will fluctuate due to various factors, many of which are non-specific to Mayne Pharma, fluctuations including recommendations by brokers and analysts, Australian and international general economi
Slide 33: Key risks (cont) - General risks
Key risks (cont) For personal use only General risks (cont) Change in Mayne Pharma is subject to the usual business risk that there may be changes in accounting policies which impact Mayne Pharma. accounting policy Asset As a consequence of the global financial crisis, ASIC has specifically identifi
Slide 34: Foreign selling restrictions
For personal use only 7 Foreign selling restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 35: Foreign Selling Restrictions
Foreign Selling Restrictions International Offer Restrictions For personal use only This document does not constitute an offer of New Shares of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not
Slide 36: Foreign Selling Restrictions (cont)
Foreign Selling Restrictions (cont) Canada (British Columbia, Ontario and Quebec provinces) (continued) For personal use only Statutory rights of action for damages and rescission Securities legislation in certain of the Provinces may provide purchasers with, in addition to any other rights they may
Slide 37: Foreign Selling Restrictions (cont)
Foreign Selling Restrictions (cont) European Economic Area - Germany, Luxembourg and Netherlands For personal use only The information in this document has been prepared on the basis that all offers of New Shares will be made pursuant to an exemption under the Directive 2003/71/EC ("Prospectus Direc
Slide 38: Foreign Selling Restrictions (cont) - Hong Kong
Foreign Selling Restrictions (cont) Hong Kong For personal use only WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Future
Slide 39: Foreign Selling Restrictions (cont) - New Zealand
Foreign Selling Restrictions (cont) New Zealand For personal use only This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the "FMC Act"). The New Shares are not being offered to the public within New Zeal
Slide 40: Foreign Selling Restrictions (cont) - Switzerland
Foreign Selling Restrictions (cont) Switzerland For personal use only The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared withou
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