Hexima Ltd · ASX:HXL
Hexima — Investor Presentation (July 2009)
25 slides from Hexima's investor presentation, July 2009
Slide 1: Investor Update
HEXIMA Investor Update July 2009
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation relate to the future, including forward looking statements and worked examples relating to Hexima’s future expectations, beliefs, goals, plans, prospects, financial position and strategy. These forward looking statements and worked e
Slide 3: Contents
Contents 1. Introduction 2. Market and Value Opportunity 1) Introduction 3. Execution 4. What to Expect – Timelines 5. Conclusion 3 Hexima Limited ©
Slide 4: Hexima is an agricultural biotechnology company
Hexima is an agricultural biotechnology company 1) Introduction Biotechnology: The introduction of genetically modified seed (GM) has transformed agribusiness 4 Hexima Limited ©
Slide 5: Hexima is building a substantial portfolio of valuable technologies
Hexima is building a substantial portfolio of valuable technologies HEXIMA’S PLATFORM Scientists, Innovation, Intellectual Property = 1) Introduction Primary focus: Commercial Agreement with DuPont in corn and soy Disease Control + Major GM crops: Emerging GM Secondary focus: canola, sugar beet crop
Slide 6: GM market has grown rapidly from 1996 launch
GM market has grown rapidly from 1996 launch ¥ 25 nations plant GM crops commercially ¥ 2 major traits: Insect resistance (Bt) and herbicide tolerance (HT) ¥ 5 major crops: corn, soy, cotton, canola and sugar beet ¥ 125+ million GM hectares planted in 2008 (310m ac) Opportunity 2) Market & ¥ 8% of w
Slide 7: GM technology drives growth and profitability in global agribusiness
GM technology drives growth and profitability in global agribusiness Percentage of ag sales derived from seed and traits 1998 2008 50% Ag sales of US$8.0b in FY08 Opportunity 2) Market & DuPont Value 0% Ag sales of US$4.5b in FY08 Dow 12%* 0% 56% Ag sales of US$11.4b in FY08 21% Reported margins of
Slide 8: Well established industry model has promoted rapid uptake of GM technologies
Well established industry model has promoted rapid uptake of GM technologies VALUE TO FARMER = • Yield improvement • Labour savings • Cost savings • Insurance value • Chemical displacement • Other measurable value Opportunity 2) Market & Value Farmer Tech Fees ~60% ~40% Seed Technology Company Provi
Slide 9: Model provides mutual benefits for farmers and GM technology providers
Model provides mutual benefits for farmers and GM technology providers Value to farmer drives GM trait adoption z US cotton = 90% GM (Bt + HT) z Australian cotton = 90% GM (Bt + HT) z US soy = >90% (HT) Opportunity 2) Market & z US sugar beet = 90% 2009(f) (launched 2007) (HT) Value Worked Example:
Slide 10: GM market growth will be driven by new crops, countries and traits
GM market growth will be driven by new crops, countries and traits Growth Opportunities Global Ag-Biotech Market Opportunity 2) Market & New 14 50 Traits Value 12 US$b 10 8 New Crops 6 4 2 New 0 Countries 1996 1998 2009(f) 2025* (Market launch) 10 Hexima Limited © Source: ISAAA, *BASF
Slide 11: Disease control traits represent a major opportunity
Disease control traits represent a major opportunity Opportunity 2) Market & Value Source: Pioneer, FAPRI, Wrather & Koenning, estimates based on 2008 figures 11 Hexima Limited ©
Slide 12: Fungal disease causes over US$10b yield loss in corn and soy each year
Fungal disease causes over US$10b yield loss in corn and soy each year Corn (US) Area 32m Ha Av yield 380 bu / Ha Price US$4 / Ha Av value US$48.5b pa Av disease loss 10-12% pa Opportunity Value of loss US$5.7b pa 2) Market & Soy (US) Value High disease regions 25% area Disease loss 18-20% pa Area 3
Slide 13: A successful fungal disease control trait for corn could generate substantial royalties
A successful fungal disease control trait for corn could generate substantial royalties Worked Example: Potential Disease Control Trait US Corn Corn Price $4 / bu Av Yield 380 bu / Ha Yield /Ha $1,520 / Ha ******** Opportunity 2) Market & Disease Loss 10 -12% % Disease Controlled by Trait 50% - 70%
Slide 14: DuPont partnership creates a direct path to market
DuPont partnership creates a direct path to market for Hexima’s fungal disease control technology Key Agreement Highlights: ¥ Exclusive partner in transgenic anti-fungal protein disease in corn/soy ¥ Co-development model ¥ Hexima’s royalty based on trait value, not price charged 3) Execution ¥ DuPon
Slide 15: Why did DuPont choose Hexima?
Why did DuPont choose Hexima? Value creation INNOVATIVE TECHNOLOGY Value capture 3) Execution Market share On entering into the collaboration with Hexima in August 2008, Paul Schickler, Pioneer president and DuPont vice president and general manager said: “This agreement with world-class experts in
Slide 16: Proof of concept in cotton was an important factor in DuPont's decision
Proof of concept in cotton was an important factor in DuPont’s decision to partner with Hexima HXL’s fungal resistant cotton trial against Fusarium Wilt FUSARIUM WILT • 2-3 times survival rate • Up to a 4 fold increase 3) Execution in lint yield • Equivalent lint quality Conventional Transgenic Conv
Slide 17: Establishing a world class corn transformation facility with DuPont
Establishing a world class corn transformation facility in partnership with DuPont Corn embryos ready to harvest Corn and cotton 3) Execution growing in glasshouse The first corn plants grown from DuPont/Pioneer seed 17 Hexima Limited ©
Slide 18: Corn transformation facility is fundamental to progress
Corn transformation facility is fundamental to progress and will generate new opportunities 3) Execution • Expected completion Q1 2010 • World class facility • Access to elite germplasm and enabling technology • ~5x existing glasshouse capacity • ~3x existing growth room and tissue culture • Potenti
Slide 19: MGEV technology is critical to the success of the disease program
MGEV technology is critical to the success of the disease program ¥ Single vehicle delivers multiple C2 disease control proteins ¥ Will provide broad spectrum 3) Execution T4 C1 T1 disease protection EEKKN linker ¥ Tailored to hit multiple targets T3 X T1 for sustainable disease protection T2 ¥ MGEV
Slide 20: Hexima's Proteinase Inhibitors could protect and extend market share of Bt traits
Hexima’s Proteinase Inhibitors have the potential to protect and extend market share of current Bt traits ¥ Transgenic cotton expressing Hexima’s PIs were protected from insect damage in the field ¥ Sustainable insect protection requires a “stack” of insecticidal genes 3) Execution ¥ Stacking of PIs
Slide 21: Hexima has built a portfolio of ~100 patents and patent applications
Hexima has built a portfolio of ~100 patents and patent applications Number of Patents (Cumulative) 100 90 3) Execution 80 70 Number 60 50 40 30 20 10 0 8 9 4 6 7 2 3 5 0 1 9 /0 /0 /0 /0 /0 /0 /0 /0 /0 /0 -9 03 07 08 01 02 04 05 06 99 00 92 Year Applications Granted Patents 21 Hexima Limited ©
Slide 22: Next Months and beyond
Next 12 Months and beyond 4) TImelines 22 Hexima Limited ©
Slide 23: We have the financial resources to reach key milestones
We have the financial resources to reach key milestones CASH BALANCE $31.8 million at 31 Mar 09 DEBT Zero 4) TImelines ANNUAL SPEND $7-8 million projected operating cashflow p.a. Hexima’s cash will now reach further CLIMATE READY $1.38m over three years GOV T GRANT R&D TAX CREDITS Worth over $2m pa
Slide 24: Summary
Summary Hexima is an ag-biotech company delivering innovative technologies. 5) Conclusion In the last 10 years ag-biotechnology has transformed agriculture and created a high value multi-billion dollar business. Future industry growth will be driven by new and innovative technologies. Disease contro
Slide 25: Appendix: Assumptions and Risks
Appendix: Assumptions and Risks This presentation includes “forward-looking statements” and worked examples. The Company has tried to identify such statements and examples by the use of such words as “could”, “potential”, “estimated”, “approximately”, “assumptions”, “may” and other similar expressio