Slide 1: FY15 Results Presentation
For personal use only Mayne Pharma Group Limited FY15 Results Presentation 28 August 2015 Scott Richards, Chief Executive Officer Mark Cansdale, Group CFO 1
Slide 2: Disclaimer
Disclaimer For personal use only ● The information provided is general in nature and is in summary form only. It is not complete and should be read in conjunction with the company’s audited Financial Statements and market disclosures. This material is not intended to be relied upon as advice to inve
Slide 3: Executive summary
Executive summary For personal use only ● Transformational year following the US Doryx acquisition and establishment of Specialty Brands Division (SBD) with initial focus on dermatology ● Now have fully integrated operations in the world’s largest pharma market with complementary revenue streams acr
Slide 4: FY15 Results
For personal use only FY15 Results
Slide 5: FY15 operational highlights
FY15 operational highlights For personal use only ● Transformational US$50m Doryx™ acquisition completed which has diversified the earnings stream in the US across generic products, contract services and now branded products ● US Specialty Brands Division created with a 60+ person sales team to mark
Slide 6: Key financials – A tale of two halves
Key financials – A tale of two halves For personal use only Change Change A$million FY15 FY14 FY15 v FY14 2H15 1H15 2H15 v 1H15 Revenue 141.4 143.3 (1%) 81.9 59.5 37% Gross Profit 80.0 75.1 7% 49.1 30.9 59% Gross Profit % 56.6% 52.4% 59.9% 52.0% EBITDA - underlying1 36.4 40.4 (10%) 21.8 14.6 49% EBI
Slide 7: FY15 revenue breakdown
FY15 revenue breakdown By geography For personal use only ● Group benefiting from the expanding US earnings base 5% USA 17% Australia ● US Doryx represented 12% of FY15 revenue and A$141m more than 20% of gross profit Rest of World 78% ― US Doryx gross profit contribution up >10% year on year By div
Slide 8: US Products (USP)
US Products (USP) ● For personal use only Revenue uplift driven by: Change A$million FY15 FY14 FY15 v FY14 — US Doryx acquisition (US$7.9m of sales since re-launch in May 2015) Revenue 67.7 56.9 19% — Generic Products: BAC, Methamphetamine, Gross Profit 36.2 32.0 13% Doxycycline AG products, Amiodar
Slide 9: Metrics Contract Services (MCS)
Metrics Contract Services (MCS) ● For personal use only MCS revenue was US$28.3m up 9% on the 12 months to Change 30 June 2014 A$million FY15 FY14 FY15 v FY14 — 2H15 USD revenue up 10% on 1H15 Revenue 33.8 28.4 19% ● Gross profit margin increase reflects improved pricing, Gross Profit 17.0 13.0 31%
Slide 10: Mayne Pharma International (MPI)
Mayne Pharma International (MPI) For personal use only Change ● MPI includes US Doryx third party sales and margin, A$million FY15 FY14 FY15 v FY14 transition profit, manufacturing margin on in-market direct sales and intercompany sales US Doryx1 24.7 22.8 8% ● Excluding US Doryx and licensing fee i
Slide 11: US Doryx update
US Doryx update For personal use only ● Establishment of new SBD business unit went to plan and TRx market share of key brands (tetracycline market)1 60+ sales team in field actively promoting the benefits of Doryx to dermatologists from 4 May 16.0% ● Doryx weekly TRx stable ~5,000 since re-launch i
Slide 12: Development pipeline expected to drive long term sustainable growth
Development pipeline expected to drive long term sustainable growth For personal use only ● 30+ pipeline products in the US targeting markets >S$7bn 1 R&D cash investment (A$m) — 17 products pending with FDA targeting markets >US$1.8b1 — 2 products filed with FDA in FY15 15% — Active dialogue with F
Slide 13: Generic Tikosyn – significant first-to-file opportunity
Generic Tikosyn – significant first-to-file opportunity Tikosyn MAT IMS sales and units1 (US$m) For personal use only ● Mayne Pharma filed an ANDA for dofetilide capsules (generic Tikosyn) with the FDA in May 2014 ● In November 2014, Mayne Pharma was sued by Pfizer – standard Paragraph IV process 20
Slide 14: Mayne Pharma's global specialty brands pipeline
Mayne Pharma’s global specialty brands pipeline For personal use only ● Developing branded dermatology pipeline to complement Doryx Dermatology ● Sustained-release ● SUBA-Itraconazole – morphine being Pain / Phase IIb study in Basal repurposed in Palliative Oncology Cell Carcinoma Nevus breathlessne
Slide 15: Significant opportunities to drive growth
Significant opportunities to drive growth For personal use only ● Optimise market penetration of product portfolio ● Approval and launch of filed FDA products 1. US retail generics maximisation ● Control manufacture, distribution and sales and marketing of key franchises ● Efficient and reliable pro
Slide 16: Investing for growth
For personal use only Investing for growth Two site capacity expansion to strengthen manufacturing capabilities and accelerate organic growth
Slide 17: US facilities expansion – investing for growth
US facilities expansion – investing for growth For personal use only Description Strategic investment in a new greenfield 126,000sqft (11,700m2) oral dose commercial manufacturing facility on land owned by the Company and adjacent to its existing Greenville, NC, USA facility plus re- purpose exist
Slide 18: AU facilities expansion – investing for growth
AU facilities expansion – investing for growth For personal use only Description Investment in new fluid bed spray coater in Salisbury, South Australia Capital A$11m investment Will be funded from operating cash and secured A$4m Next Generation Manufacturing Investment Programme grant from Fed
Slide 19: Compelling strategic rationale
Compelling strategic rationale For personal use only More than doubles footprint to 225,000sqft Increases production suites from 7 to 16 and dose capacity from 250m to 1bn units / year Creates further Consolidates US distribution to Greenville including Montgomery warehouse and Schedule II con
Slide 20: Capital expansion will deliver incremental shareholder returns and earnings growth
Capital expansion will deliver incremental shareholders returns and significant earnings growth For personal use only Target return on invested capital of >20% Manufacturing volumes ROIC Target Units (millions) FY20F manufacturing unit volumes expected to 1000 900.0 increase ~6x on FY15 driven b
Slide 21: Outlook
For personal use only Outlook
Slide 22: Outlook
Outlook For personal use only US Specialty ● New segment will capture full year contribution from Doryx Brands Division ● Recent launch of 50mg Doryx tablet is expected to grow the franchise (SBD) ● Expected monthly EBITDA contribution of US$2.7m on average in FY16 from US Doryx franchise US Generic
Slide 23: Appendix
For personal use only Appendix
Slide 24: Earnings comparison
Earnings comparison For personal use only ● Excluding US Doryx and licensing fees, Year ending Change revenue was up 7% on pcp A$million 30 Jun 15 30 Jun 14 $m ● Gross profit margins were stronger at 57% up from 52% in the pcp driven by inclusion Revenue 141.4 143.3 (1.9) of earnings from US Doryx a
Slide 25: Segment breakdown – FY15
Segment breakdown – FY15 For personal use only Eliminations Total & Total A$million USP MCS MPI Segments adjustments Consolidated Sale of goods 67.7 - 49.4 117.0 (20.7) 96.3 Services income - 33.8 9.7 43.5 - 43.5 License fee revenue - - 0.5 0.5 - 0.5 Royalty income - - 1.1 1.1 - 1.1 Revenue 67.7 33.
Slide 26: Balance Sheet position
Balance Sheet position ● For personal use only Intangible assets and goodwill increased by As at As at Change $161.8m reflecting: A$million 30 Jun 15 30 Jun 14 $m ― $63.8m for acquisition of US Doryx; ― $32.2m for ANDAs and marketing rights; Cash 59.2 14.8 44.4 ― $13.5m of development costs; Invento
Slide 27: Cash flow
Cash flow For personal use only ● Net operating cash flow pre tax, Year ending Change interest, SBD set up and transaction costs was $39.1m up $4.8m from FY14 A$million 30 Jun 15 30 Jun 14 $m EBITDA - underlying 36.4 40.4 (4.0) ● Notable cashflows during the period were HedgePath equity investment -
Slide 28: Financial impact of HedgePath Pharmaceuticals
Financial impact of HedgePath Pharmaceuticals For personal use only ● Following the A$4.5m non-cash investment in FY14, a cash investment of US$2.5m in HedgePath FY15 FY14 Pharmaceuticals (HPPI) was made in FY15 to Mayne Mayne accelerate the clinical development program A$million HPPI (excl. HPPI) T
Slide 29: Reconciliation of reported NPAT to underlying NPAT
Reconciliation of reported NPAT to underlying NPAT For personal use only A$million FY15 FY14 2H15 1H15 NPAT – Reported 7.8 21.3 3.8 4.0 Acquisition expenses 0.7 0.8 0.7 - Option revaluation - 0.3 - - Remove impact of HedgePath (1.9) - (2.7) 0.8 Write-off of borrowing costs 1.0 - 1.0 - Litigation exp