Orion Oyj Class A · OMXHEX:ORNAV
Orion Oyj Class A — Investor Presentation (February 2019)
75 slides from Orion Oyj Class A's investor presentation, Feb 6, 2019
Slide 1: Orion Investor presentation
Orion Investor presentation Updated on 6 February 2019
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements which involve risks and uncertainty factors. These statements are not based on historical facts but relate to the Company’s future activities and performance. They include statements about future strategies and anticipated benefits of
Slide 3: Content
Content 1) Orion in brief 2) R&D 3) Highlights of 1−12/2018 4) Outlook and financials 5) Businesses 6) Sustainability 7) Financial calendar Investor Presentation © Orion Corporation 3 3
Slide 4: Orion in brief
Orion in brief
Slide 5: Key messages
Key messages 11 3 5 Orion develops, Growth targeted Strong position in manufactures and through new in- the Nordic markets human house developed generics market. and animal drugs. pharmaceuticals, and APIs. Products marketed in >100 countries. 6 Core therapy 22 4 4 Balanced business Strong model: Bo
Slide 6: Orion at a glance (2018 figures)
Orion at a glance (2018 figures) Net sales Sales by business Sales by market area 977 MEUR Operating profit 5% 2% 15% 8% 253 MEUR 37% 32% 6% Personnel 3,154 R&D investments 48% 31% 104 MEUR 16% 6 production sites in Finland Proprietary Products Finland Scandinavia Specialty Products Other Europe Own
Slide 7: Steady development despite patent expiries
Steady development despite patent expiries Net sales Operating profit EUR million EUR million 33% 1,000 11% 300 32% 9% 250 800 7% 31% 5% 200 30% 600 29% 3% 150 400 1% 28% 100 200 -1% 27% -3% 50 26% 0 -5% 0 25% 2011 2012 2013 2014 2015 2016 2017 2018 Parkinson franchise + Precedex Operating profit Ot
Slide 8: Orion's product mix has changed
Orion’s product mix has changed Sales by business 2011 Sales by business 2017 Net sales, EUR million 3% 5% 2% 5% 1,200 8% 8% 1,050 47% 37% 900 750 600 450 37% 48% 300 150 0 Proprietary Products Specialty Products Animal Health Fermion Contract manufacturing & other Investor Presentation © Orion Corp
Slide 9: Our businesses
Our businesses 1 Proprietary Products Specialty Products In-house developed drugs and other drugs with valid product 3 Generic prescription drugs, OTC and non-medicinal 5 protection products, biosimilars Animal Health Fermion Medicine and well-being Active pharmaceutical products for animals ingredi
Slide 10: Orion's strategy – Mission to build well-being
Orion’s strategy – Mission to build well-being Growth Sustainability Investor Presentation © Orion Corporation 10
Slide 11: Orion had ~73,000 shareholders on 31 December 2018
Orion had ~73,000 shareholders on 31 December 2018 By number of shares By number of votes Households (Finnish 5% retail) 3% 5% 9% Non-Finnish holders and 8% nominee-registered 6% Private corporations 7% 42% 13% Public sector 62% Non-profit institutions 7% 32% Financial and insurance corporations Oth
Slide 12: Research and development
Research and development
Slide 13: Focus areas of Orion's R&D
Focus areas of Orion’s R&D Proprietary products Animal Health Fermion • Central nervous system • Orion utilises the R&D of • APIs to Orion’s • Oncology proprietary products to proprietary products • Respiratory develop new medicines • Generic APIs (Easyhaler product for animals. • Contract developme
Slide 14: Together we can achieve more in R&D
Together we can achieve more in R&D Late stage Research Early development development Target Hit to Lead Lead Candidate Phase I Phase II Phase III identification generation optimisation selection, and validation preclinical development 8‒24 mo. 12‒24 mo. 18‒36 mo. 12‒24 mo. 12‒14 mo. 12‒36 mo. 18‒48
Slide 15: Orion's key clinical drug development projects
Orion's key clinical drug development projects Project Indication Phase Registration Easyhaler® tiotropium COPD Bioequivalence study Darolutamide 1) Prostate cancer (nmCRPC) I II III Darolutamide 1) Prostate cancer (mHSPC) I II III ODM-109 (oral levosimendan) ALS I II III ODM-104 (more effective COM
Slide 16: Phase III trial of darolutamide for nmCRPC: primary endpoint met
Orion and Bayer’s phase III trial of darolutamide for non-metastatic castration-resistant prostate cancer: Primary endpoint was met ● Darolutamide significantly extended ● Bayer is having discussions with health metastasis-free survival compared to authorities regarding the submission for placebo. T
Slide 17: Financial impacts of darolutamide
Financial impacts of darolutamide ● Bayer covered the majority of the development costs and has the right to commercialize darolutamide globally. Orion has the option of co-promoting in Europe. Orion will manufacture the product. ● Milestone payments upon first commercial sales: EUR 45 million in th
Slide 18: Two trials with Bayer on darolutamide
Two trials with Bayer on darolutamide ● Patients: men with non-metastatic, ● Patients: men with metastatic, hormone- castration-resistant prostate cancer treated with sensitive prostate cancer androgen deprivation therapy (hormonal therapy) and at risk of developing metastatic ● Treatment: Darolutam
Slide 19: ODM-109: Oral levosimendan for ALS
ODM-109: Oral levosimendan for ALS ● First patients recruited in July ● The aim is to apply for marketing authorisation for the Phase III clinical trial (REFALS). in the US and Europe. ● By enhancing respiratory muscle function ● Levosimendan has been granted an Orphan Drug in ALS patients, orally a
Slide 20: ODM-109 (ALS): REFALS phase III trial
ODM-109 (ALS): REFALS phase III trial 450 patients Primary endpoints • Levosimendan • 12 weeks: 1-2mg/day Slow vital capacity (300 patients) (Breathing • Placebo capacity compared to normal subjects) (150 patients) • 48 weeks: Approx.100 clinical sites ALS functional rating scale (Overall • US, Cana
Slide 21: ALS as a rare disease
ALS (Amyotrophic lateral sclerosis) as a rare disease 1−2∕ ~16,800 ~12,500 ~450−500 100,000 Patients Incidence Patients Patients in the US in 2017 in Europe in Finland Investor Presentation © Orion Corporation 21
Slide 22: ODM-208: CYP11A1 inhibitor for castration-resistant prostate cancer
ODM-208: Pan-steroid hormone synthesis inhibitor (CYP11A1 inhibitor) for castration-resistant prostate cancer ● Steroid hormones stimulate the growth of hormonally regulated cancers, such as most prostate and breast cancers. ● Hormonal treatments are highly effective, but Steroid producton drug resi
Slide 23: Highlights in January–December 2018
Highlights in January–December 2018
Slide 24: Important year for future growth
Important year for future growth 1 2 Profitability was good, profit 2 The net sales of Proprietary margin for continuing Products increased slightly operations exceeded financial particularly due to strong target. Cash flow was strong. Easyhaler sales. Sales of Dexdor Net sales and operating profit
Slide 25: Key strategic target in 2019−2023: Growing faster than the market
Key strategic target in 2019−2023: Growing more rapidly than the growth in the market 1 Net sales target Own investments in Investments in sales in 2025 new clinical trials: and marketing: E.g. strengthening 1.5 E.g. EUR 60 million investment in the Easyhaler Phase III trial on ALS product family (R
Slide 26: Key figures 1−12/2018 (continuing operations)
Key figures 1−12/2018 (continuing operations) Net sales Operating profit Operating Cash flow per share profit margin before financial items** 977 253 26% 2.32 MEUR (1,034) MEUR (284) (27%) EUR (1.09) -5% -11% +112% **) Cash flow per share before financial items: Continuing and discontinued operation
Slide 27: Net sales and operating profit bridge vs 2017
Without the negative impact of exchange rate changes and lower milestone payments and royalties, profitability would have slightly improved from 2017 Net sales, EUR million Operating profit, EUR million 1,034 31 19 13 284 10 22 16 12 1 5 19 23 977 253 54 60 37 37 33 (1) Product sales without sales m
Slide 28: Geographical breakdown and development of net sales
Geographical breakdown and development of net sales 1−12/2018 1−12/2017 1−12/2018 EUR million 15% -5% 350 -2% 6% 32% 300 250 -11% 200 +5% 31% 150 -26% 16% 100 Finland 50 Scandinavia Other Europe 0 North America Finland Scandinavia Other North Other Other markets Europe America markets Investor Prese
Slide 29: Net sales by business division
Net sales by business division EUR million 1−12/2018 -9% 600 5% 2% 519 473 8% 500 +2% 400 351 357 37% 300 200 +6% -1% -55% 48% 100 76 80 51 51 36 16 0 Proprietary Products Specialty Proprietary Animal Fermion Contract Specialty Products Products Products Health manufacturing Animal Health & other Fe
Slide 30: Best-selling pharmaceuticals 1−12/2018
Best-selling pharmaceuticals 1−12/2018 Net sales Change vs . Indication (EUR million) 1−12/2017 1. Parkinson’s disease 100 -3% 2. Asthma, COPD 90 +18% 3. Intensive care sedative 63 -2% 4. Acute heart failure 59 +4% 5. Animal sedatives 34 +10% 6. Intensive care sedative 26 +3% Rheumatoid arthritis, i
Slide 31: Proprietary Products
Proprietary Products
Slide 32: Proprietary Products
Proprietary Products Easyhaler Simdax ● Strong growth, investments in ● Sales increased slightly. sales and marketing Possible generic competition particularly in Germany. is not estimated to have a ● Salmeterol-fluticasone material impact on sales Easyhaler sales started. in 2019. Dexdor Parkinson’
Slide 33: Sales of Proprietary Products increased slightly
Sales of Proprietary Products increased slightly EUR 1−12/2018 million -3% 120 +18% 5% 104 100 7% 100 90 -2% 28% 77 +4% 17% 80 64 63 57 59 60 +3% 40 25 26 18% 25% 20 Parkinson: Stalevo, Comtess & Comtan 0 Easyhaler Parkinson’s Easyhaler Dexdor Simdax Precedex Dexdor drugs product Simdax family Prece
Slide 34: Decrease in sales of Parkinson's drugs slowed down
Decrease in sales of Parkinson’s drugs slowed down Sales of Orion’s branded Sales, EUR million Parkinson’s drugs by market area 50 45 40 2% 35 30 25 30% 20 35% 15 10 5 0 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 2014 2015 2016 2017 2018 Europe 33% Japan Deliveries of Parkinson’s drugs (Stalevo, ROW C
Slide 35: Repatriation of Stalevo's sales and distribution rights in Europe
Repatriation of Stalevo's sales and distribution rights in Europe reinforces Orion's growth targets ● The rights were transferred back from Novartis in December: – 18 EU countries and a few other European country. ● Added sales initially around EUR 20 million/year. ● Provides Orion with greater oppo
Slide 36: Easyhaler product family will be a key source of growth
Easyhaler product family will be a key source of growth in the next few years ● Continued strong growth for budesonide- Sales, EUR million formoterol Easyhaler. 30 ● Product family total sales: +18% 25 ● Budesonide-formoterol Easyhaler: +29% 20 – Strong market position in some markets, e.g. in Swede
Slide 37: Sales of Dexdor continued to grow in most European markets
Sales of Dexdor intensive care sedative continued to grow in most European markets – generic competition expected to expand in 2019 Total value of the European sedatives market: EUR 558 million Sales, EUR million 20 (+3%) 18 12% 16 14 12% 12 65% 10 8 11% 6 4 2 0 Propofol EUR 361 million (+4%) Q1 Q2
Slide 38: Specialty Products
Specialty Products GRION Building well-being
Slide 39: Specialty Products net sales in Finland, Scandinavia and biosimilars
Specialty Products ● Net sales of biosimilars decreased ● Net sales decreased in Finland from record year 2017. and Scandinavia, and grew in ● The decrease was due to tightened Eastern Europe and Russia. competition, declined price level and the situation of tendering competitions. ● Orion won the n
Slide 40: Specialty Products: tightened price competition and lower biosimilar sales
Specialty Products: tightened price competition and lower sales of biosimilars showed as a decrease in net sales Development of net sales Net sales by region Net sales by product EUR 1−12/2018 1−12/2018 million -7% 350 13% 5% 292 300 273 250 14% 58% 24% 71% 200 -26% 150 +2% 94 100 69 65 66 15% 50 0
Slide 41: Price competition has led to decline in reference priced drugs market in Finland
In Finland, price competition has led to a decline in the entire market of reference priced prescription drugs The market of reference priced The sales of Orion’s reference prescription drugs in Finland priced prescription drugs (1–12/2018) in Finland 490 126 MEUR (528) MEUR (139) Market development
Slide 42: Orion is Finland's most significant provider of pharmaceuticals
Orion is Finland's most significant provider of pharmaceuticals Human pharma market in Finland (1−12/2018) Reference Self-care Medicinal and non-medicinal products priced products in hospital and pharmacy channels: EUR 2,746 million prescription Orion market share EUR million drugs in pharmacy Orion
Slide 43: Orion's key business targets in 2019
Orion's key business targets in 2019 1. Preparation for the commercialisation of 5. Accelerating the growth of darolutamide. ARASENS trial (metastatic the Easyhaler product family and prostate cancer) continues in order to strengthening its market position. expand the indication. Salmeterol-fluticas
Slide 44: Digital projects to improve patients' well-being
Digital projects to improve patients' well-being ● Daisy: Optimising Parkinson’s patient’s quality ON-time (the period when medication is effective, and symptoms are under control) by gathering data on the patient’s condition. ● Orion and ● ToxBuddy: Fifth Corner Inc: Information and The research pr
Slide 45: Outlook
Outlook
Slide 46: Investments in growth EUR 30 million in 2019
Investments in growth EUR 30 million in 2019 ● The ongoing projects ● This comprises clearly ● At the same time, operating supporting growth are increased depreciation as profit is burdened by expected to burden Orion’s well as investments in intense price competition in profit in 2019 by an sales a
Slide 47: Outlook for 2019
Outlook for 2019 Net sales Orion estimates that in 2019 net sales will be + slightly higher than in 2018 (net sales in 2018 were EUR 977 million). The estimated net sales include the possible EUR 45 million milestone payment associated with the commercialisation of darolutamide. Operating = profit O
Slide 48: Profit impact of the sale of Orion Diagnostica
The profit impact of the sale of Orion Diagnostica closed on 30 April 2018 Capital gain +128 MEUR Pension gain +5 MEUR Administrative costs of the transaction -1 MEUR MEUR Investor Presentation © Orion Corporation 48 42
Slide 49: Financials
Financials
Slide 50: Orion's financial objectives
Orion’s financial objectives Growing net sales more rapidly than ≥ growth of the pharmaceuticals market. Achievement of this objective requires continuous investment in Keeping the equity ratio at least 50%. development of the product portfolio. Distributing an annual dividend that > Maintaining p
Slide 51: Financial objectives
Financial objectives Net sales Operating profit Dividend 1,200 8% 30% 1.60 300 27% 6% 275 1.55 1,000 250 24% 1.50 4% 225 21% 800 200 1.45 2% 18% 175 1.40 600 150 15% 0% 125 12% 1.35 400 100 9% 1.30 -2% 75 6% 1.25 200 -4% 50 25 3% 1.20 0 -6% 0 0% 1.15 2016* 2018** 2012 2013 2014 2015 2017 2015 2016 2
Slide 52: Key figures by quarter
Key figures by quarter Net Netsales, sales,EUR EURmillion million Operating Operating profit, profit, EUREUR million million 1,500 400 Q4 Q4 1,000 300 59 Q3 273 255 262 280 266 262 Q3 66 55 51 71 200 92 69 237 238 239 259 242 222 67 64 59 55 45 Q2 500 Q2 84 71 248 277 255 273 261 246 100 61 86 74 70
Slide 53: Key figures
Key figures Change vs. Orion’s key figures 2013 2014 2015 2016 2017 2018 ∕2017 Net sales, EUR million 1,006.9 1,015.3 1,015.6 1,073.5 1,033.6 977.5 -5.4% Operating profit, EUR million 267.7 272.4 266.6 314.6 284.1 252.8 -11.0% Profit before taxes, EUR million 264.0 267.8 262.3 310.9 277.7 248.4 -10.
Slide 54: Income statement
Income statement Change vs. Formation of profits, EUR million 2013 2014 2015 2016 ADJ.2017 2018 2017 Net sales 1,006.9 1,015.3 1,015.6 1,073.5 1,033.6 977.5 -5.4% Cost of goods sold -393.5 -401.7 -405.8 -421.7 -417.6 -387.9 -7.1% Gross profit 613.4 613.6 609.8 651.8 616.0 589.6 -4.3% Other operating
Slide 55: Financial position
Financial position Change Change EUR million 12/18 12/17 % EUR million 12/18 12/17 % Non-current assets total 418.5 434.7 -3.7% Inventories 222.1 225.4 -1.5% Equity total 773.1 679.7 +13.7% Interest-bearing non-current Trade receivables 188.8 199.0 -5.1% liabilities 0.6 150.3 -99.6% Other receivable
Slide 56: Development of capital expenditure
Development of capital expenditure Orion Capex, EUR million 90 80 70 60 50 Property, plant and equipment 40 30 Intangible assets 20 Depreciation, amortisation and 10 impairment 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Investor Presentation © Orion Corporation 56
Slide 57: Development of net working capital
Development of net working capital % of net sales EUR million 40% 400 30% 300 20% 200 10% 100 0% 0 -10% -100 -20% -200 -30% -300 2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018 Receivables Receivables Inventories Inventories Short-term non-interest bearing liabilities Short-ter
Slide 58: Dividend distribution policy
Dividend distribution policy • Orion’s dividend distribution takes into account distributable funds and capital expenditure and other financial requirements in medium and long term to achieve the financial objectives. EUR Dividend distribution history 1.75 100% 1.50 0.06 0.12 95% 1.25 90% 0.10 85% R
Slide 59: Orion B share performance January 2016 – December 2018
Orion B share performance January 2016 – December 2018 Index 31/12/2015=100 200 Orion B 94.71 190 Orion B total return 104.10 180 Europe/Pharmaceutical 86.94 170 OMXH-Portfolio 107.2 160 150 140 130 120 110 100 90 80 70 60 31/12/15 29/2/16 30/4/16 30/6/16 31/8/16 31/10/16 31/12/16 28/2/17 30/4/17 30
Slide 60: Business units
Business units Building well-being
Slide 61: Proprietary Products: In-house developed prescription drugs
Proprietary Products: In-house developed prescription drugs with valid product protection Net sales EUR million 400 Global sales and Other 350 R&D partner Simdax networks 300 250 Easyhaler 200 150 Dexdor 100 Precedex Key drivers: 50 0 Stalevo/Comtess Easyhaler, Simdax Generic competition 2012 2013 2
Slide 62: Proprietary human pharmaceuticals developed by Orion
Proprietary human pharmaceuticals developed by Orion Product Indication Year Year Indication Sedative for ICU use 2011 Salmeterol- 2018 fluticasone Easyhaler® Parkinson’s disease 2003 Budesonide- Acute decompensated 2014 2000 formoterol Easyhaler® heart failure Formoterol Easyhaler® 2004 Asthma and
Slide 63: Treatment options for asthma and COPD using the same inhaler technology
Diverse treatment options for asthma and COPD by utilizing the same inhaler technology ● Easyhaler is a dry-powder inhaler developed in-house ● Orion has developed Easyhaler-adapted dry powder formulations of several well-known generic active substances: – salbutamol, beclometasone, budesonide, form
Slide 64: Easyhaler product family is expanding
Easyhaler product family is expanding 2018 Tiotropium development started Investor Presentation © Orion Corporation 64
Slide 65: Specialty Products: Generic prescription drugs, biosimilars and OTC
Specialty Products: Generic prescription drugs, biosimilars and OTC including also non-medicinal products EUR million 550 22% 500 20% Portfolio of 18% 450 16% hundreds 14% 400 12% of products 350 10% 300 8% 6% 250 4% 200 2% 0% 150 -2% 100 -4% 50 -6% -8% 0 -10% Net sales Growth, % Investor Presentati
Slide 66: Animal Health
Animal Health EUR million 105 12% In-licensed products 90 10% sold in own sales 75 8% areas 6% 60 4% 45 2% 30 0% 15 -2% 0 -4% In-house developed Medicinal and non- 2012 2013 2014 2015 2016 2017 2018 proprietary products medicinal products for Net sales Growth, % sold globally through companion anima
Slide 67: Fermion has an important strategic role
Fermion has an important strategic role EUR million 70 50% 60 40% Active 50 30% pharmaceutical 40 20% ingredients (APIs) for Orion’s own 30 10% Proprietary Products. 20 0% 10 -10% 0 -20% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Generic APIs for Contract Orion and other development and Net sales*
Slide 68: Fermion's new production plant operational in Hanko
Fermion's new production plant operational in Hanko – nearly 100% of production is exported ● Special expertise in demanding production of active pharmaceutical ingredients (APIs), e.g. extremely potent substances. ● The aim is to captively manufacture the APIs for Orion's in-house developed proprie
Slide 69: Contract manufacturing & other
Contract manufacturing & other EUR million 50% 40 35% Pharmaceutical 20% manufacturing for 30 5% other companies. -10% 20 -25% 10 -40% -55% 0 -70% 2012 2013 2014 2015 2016 2017 2018 Net sales Growth, % Investor Presentation © Orion Corporation 69
Slide 70: Sustainability is built into Orion's mission
Sustainability is built into Orion’s mission
Slide 71: Material themes of Orion's sustainability
Material themes of Orion’s sustainability • Patient safety • Ensuring reliable supply of medications • Manufacturing medications in an environmentally sustainable way: efficient use of materials, energy efficiency, wastewater management Customer Audits undertaken Energy Energy savings Injury rate co
Slide 72: We assess product safety throughout the lifecycle
We assess product safety throughout the lifecycle Investor Presentation © Orion Corporation 72
Slide 73: Orion calendar
Orion calendar Financial Statements 2018 By week 10 Annual General Meeting 26/3/2019 Interim Report 1−3/2019 25/4/2019 Half-Year Financial Report 1−6/2019 17/7/2019 Interim Report 1−9/2019 23/10/2019 Capital Markets Day in Helsinki on 22/5/2019
Slide 74: Investor Relations
Investor Relations Jari Karlson CFO jari.karlson@orion.fi +358 10 426 2883 Lilli Riikonen Communications Manager lilli.riikonen@orion.fi +358 10 426 2319 Heidi Ahti Executive Assistant (Investor meeting requests) heidi.ahti@orion.fi +358 10 426 2169 www.orion.fi/EN/Investors twitter.com/OrionCorpIR
Slide 75: Building well-being
Building well-being GRION Building well-being