GlaxoSmithKline Pharmaceuticals Limited · NSE:GLAXO
GlaxoSmithKline Pharmaceuticals — Investor Presentation (February 2008)
38 slides from GlaxoSmithKline Pharmaceuticals's investor presentation, Feb 26, 2008
Slide 1: GSK Pharmaceuticals Limited Analysts Meet
GSK Pharmaceuticals Limited Analysts Meet 26th February 2008
Slide 2: Leading the Industry in R&D
Leading the Industry in R&D Mid-to-late-stage pipeline products NDA’s Filed 15 15 3 10 6 9 5 3 6 3 6 2 Cowen Dec 07
Slide 3: Pipeline is delivering
Pipeline is delivering Upto 25 Potential launches 2007- 32 Phase III / 2009* Filed # 12 NCEs 5 Vaccines 8 PLEs Phase II 149 projects in clinical development Phase I 89 NCEs 37 PLEs 23 Vaccines # Key projects in Phase III/Filed (STA-4783 (Synta) and Lunivia entered Phase III/Filed in Q3) * Includes l
Slide 4: Late stage activity of key assets in 2007
Late stage activity of key assets in 2007 Approvals Submissions Phase 3 Starts Tykerb (US) Volibris* (EU) } |elesclomol’ (melanoma) Altabax (US,EU) Promacta‘(US)* |{ 18382627 (RLS) Veramyst (US) Luniviat (EU) belimumab’ (SLE) Arixtra (ACS) (EU) Gepirone ER* (US) |{ ofatumumabt (RA**) | ReQuip XL‘ (P
Slide 5: Strengthening Biopharmaceuticals: 20% by 2015
Strengthening Biopharmaceuticals : 20% by 2015 Transforming Acquired Domantis Technology dAb FTIH demonstrated Ofatumumab† Syncria† Building Bosatria ToleRx anti-CD3 Late Phase Belimumab† Continued mAb for MAG in Phase 1 Investment 26 mAbs & dAbs in CEDDs † In-license or other alliance relationship
Slide 6: Vaccines, a key GSK growth engine
‘ Vaccines, a key GSK growth engine Phase | Phase Il Phase Ill Submitted HIV Mosquirix Simplirix Cervarix (BLA) (1) (Malaria) (Herpes Simplex Virus) (Cervical cancer) A Flu Pre-pandemic S. pneumo adult |/TB New generation flu (MAA) Cc iovi Epstein-B pet|| MAGE-AS ASCI Flu Pandemic ytomegalovirus pst
Slide 7: Business Environment
Business Environment
Slide 8: Market Dynamics
Market Dynamics Post new patent law, generic players reluctant to take the risk of launching “new” molecules. Accelerated activity to launch on market pre ‘95 molecules. Significant increase in competitive activity around GSK brands. Erosion of MNC shares. Market conditions to remain similar for the
Slide 9: Pharma Market – Key Drivers in '07
Pharma Market – Key Drivers in ‘07 Vol.Gwth Price Gwth N.I Gwth % to Growth KEY GROWTH DRIVERS Mkt Total % (18%) Systemic Antibacterials 17.5 11 A-Acid, A-Flat A-Ulcerant 5.2 16 (13%) 8 Drugs Used In Diabetes 5.0 26 Agents: Renin-Angiotensin 2.8 25 (9%) Antianaemics 2.5 15 1 8 Anti-Asthma & Copd Pro
Slide 10: Rx Market forecast to grow ~11% in medium term
Rx Market forecast to grow ~ 11% in medium term Pharma Industry India GDP 18 13 Growth % 11 11 11 10 8.6 8 8 6 8 8 8 8 75 8 6 5 6 2000 2001 2002 2003 2004 2005 2006 2007 2008E 2009E Source : ORG IMS Retail Audit
Slide 11: New Launches in '07
New Launches in ‘07 — —=- Zemetril 250mg AriXtra’ 25 0:05: SS ® (ARZEC 9 Tablets ° ® QVINFLAPEN Tablets
Slide 12: GSK Pipeline (contd.) New Pharma Products
GSK Pipeline (contd.) New Pharma Products NCE India launch Key Differentiation 1st in Class. Dual mechanism Tykerb 2008 to cut of blood supply to the tumor Inlicensed - Cardio H1-2008 Cardiovascular Vascular Inlicensed - Critical 2009 Critical Care Care New corticosteoid in a novel 2009 device - wor
Slide 13: GSK Pipeline: Vx Portfolio Growth
GSK Pipeline Vx Portfolio Growth NCE India launch Key Differentiation Rotavirus - biggest Rotarix Q2-2008 cause of diarrhoea Cervical cancer vaccine Cervarix 2009 Infanrix Hexa 2009 DTPa + Hib + HB + IPV Strep-Pneumonia - Synflorix 2010 vaccine
Slide 14: Strategies Actions & Opportunities
Strategies Actions & Opportunities Continued emphasis on improving product mix. Focus (high margin) products to drive growth Growth in 2008 driven by new Vx, new products (Carzec, Tykerb, Arixtra). Augment vaccines portfolio: – launching Rotarix in Q2 ‘08 to drive Vx portfolio performance. Prepare f
Slide 15: New Initiatives: Restructuring for growth
New Initiatives : Restructuring for growth Institutional Develop channels for hospitals to leverage GSK scale, Opportunity optimise marketing spends and develop expertise.
Slide 16: Institutional Opportunity in India
Institutional Opportunity in India Growing Hospital Sales contribution expected – Over next 10 yr, addition of 780,000 beds & Capex of $34Bn anticipated (Source: ORG IMS) – In India hospital Sales currently 9.2% of Total Mkt (compared to ~25% in dev mkts)
Slide 17: Institutional Opportunity in India (contd.)
Institutional Opportunity in India …(contd.) Hospital sales, a major contributor to the industry worldwide contributions ~ 25 – 30% In India currently accounts for 10% to IPM and increasing steadily; this is a key growth driver of the IPM GSK is the leader in the hospital segment M.S. 7.4% Has domin
Slide 18: New Initiatives: Restructuring for Growth
New Initiatives: Restructuring for Growth Institutional Develop channels for hospitals to leverage GSK scale, Opportunity optimise marketing spends and develop expertise. Rural Develop channels & reach for tapping rural opportunity. Opportunity Expand resourcing non promoted products through contrac
Slide 19: Rural Market Insights / Opportunity
Rural Market Insights / Opportunity 64% of India’s Health Care spend from rural markets Only 28% of ethical Rx Sales from rural India – indicating low penetration, inadequate infrastructure Situation changing with use of innovative technology, NGO efforts 21 (37%) 26 (15%) 23 Metro cities account fo
Slide 20: Rural Market Growths
Rural Market Growths Metros Class 1 Class 2 - 6 + Rural 100% 17% CAGR 17% CAGR 41% 43% 75% 50% 33% 12% CAGR 32% 13% CAGR 25% 26% 9% CAGR 25% 9% CAGR 0% IPM Rep mkt Source – ORG SSA Dec06 (3yr CAGR)
Slide 21: New Initiatives: Restructuring for Growth
New Initiatives: Restructuring for Growth Institutional Develop channels for hospitals to leverage GSK scale, Opportunity optimise marketing spends and develop expertise. Rural Develop channels & reach for tapping rural opportunity. Opportunity Expand resourcing non promoted products through contrac
Slide 22: 6 Business units
Sales & Marketing organization today 6 Business units ENT,GP ENTEROPLUS P R I DERMAT DERMA M A GYANEC ASCLEPIUS R Y DIABETO/CP UNICORN C PACC A R BIOLOGICALS E Fragmented market Large no. of products Large Geographical area Ageing portfolio
Slide 23: New Sales & Marketing Structure
New Sales & Marketing Structure CVS & Diab NEW ENT,GP Specialty EnteroPlus Teams Oncology Derma Derma Biologicals Asclepius Gynae, Ortho Derma +CSF Unicorn Diab / Cons Phy Asclepius +HSF Pul. & CriticalCare Surgeons, Chest P&CC +HSF Biologicals Vaccinators EnteroPlus +CSF Fragmented market Unicorn L
Slide 24: What will this structure achieve
What will this structure achieve Consolidate GSK strength in Primary care Enhance presence in growing therapy areas/specialties Improve penetration in Rural /extra urban markets Consolidate Presence in Hospitals Maximize resources for growth
Slide 25: Overview 2007
Overview 2007
Slide 26: Financials – As Is basis
Financials – As Is basis Jan - Dec 06 Jan - Dec 07 Change % to % to % Rs. L. Rs. L. Rs. L. Sales Sales Growth 1677,57 Sales 1712,84 2.1 124,65 Less: Excise Duty on Sales 135,70 1552,92 100.0 Net Sales 1577,14 100.0 24,22 20,61 Other Income 19,21 (1,40) 15,06 Treasury Income 25,40 10,34 34,26 Interes
Slide 27: Summary
Summary In INR Mn Continuing Businesses Q4 2007 2007 Net Sales 3,393 15,083 % of Growth over PY 14 7 Other Income 76 189 Gross Margin* 2,030 9,130 % of Sales 60 61 % of Growth over PY 13 9 Expenses* 1,006 3,887 % of Sales 30 26 % of Growth over PY 4 5 EBITDA 1,100 5,433 % of Sales 32 36 % of Growth
Slide 28: Key Highlights
Key Highlights In INR Mn Rx Business Sales growth led by focus products 10%. Momentum up in Q3 and Q4 with sales growth of 7% and 14% respectively.
Slide 29: Key Highlights
Key Highlights In INR Mn Despite: Sporadic Stock Shortages Vx competitive pressures Govt. enforced Price reductions & continued scrutiny of price increases taken Key acute segments (Pain, C&C, Antibio, Anti-hist) slowing down; high base effect
Slide 30: Key Highlights
Key Highlights In INR Mn Offset by: Successful BD initiatives/ New Launches – Carzec, – Inflapen, – Arixtra, – Zemetril Continued improvement in gross margin Expense control
Slide 31: Key Highlights
Key Highlights In INR Mn Continuing businesses close at ~8% sales growth; PBT growth of ~14% Fine Chemicals business divested in September 2007. Exceptional Net Profit Rs.1385 Mn
Slide 32: Sales Growth – Q4
Sales Growth – Q4 In INR Mn Category Q4 2006 Q4 2007 Gr% Priority Focus 948 1,055 11% Vaccines 134 165 24% Priority Others 958 1,150 20% Price Controlled 946 1,029 9% Total Sales 3,003 3,423 14%
Slide 33: Sales Evolution
Sales Evolution In INR Mn Category 2006 2007 Gr% Priority Focus 4,499 4,963 10% Vaccines 790 804 2% Priority Others 4,431 4,891 10% Price Controlled 4,499 4,592 2% Total Sales 14,304 15,325 7%
Slide 34: Continuing Businesses
Segmental Performance In INR Mn QFC Net Sales 14,048 246 158 631 15,083 15,771 688 Growth % 6.7 11.3 7.5 1.6 PBT margins 39% 35% 36% 35% 33% 34% 26% 27%29% 25% 23% 2007 15% 2006 Businesses Exports Exports Iodex Overall Pharma Continuing Beta Treasury Q Income F C Profit 4,904 64 24 170 5,273 6,112 1
Slide 35: Exceptional Income
Exceptional Income 2006 2007 Gross Proceeds 2,071 2,400 NBV of Assets 201 417 Commitment on working capital delivery 58 Provision for Claims 109 Expenses Incidental to Sale: 7 7 Profit on sale business 1,864 1,809 Voluntary Retirement Schemes 8 Provision for Pricing of Formulations 28 - Tax thereon
Slide 36: Cash flow
Cash flow In INR Mn 2007 2006 Cash from Operations 5,551 5,187 Treasury income (Net) 697 398 Working Capital 65 (413) Capex (net) (149) (153) Tax Paid (2,468) (2,241) Sub-total 3,696 2,778 Dividends encashed (2,613) (2,359) Dividend Distribution Tax (368) (333) Increase in Cash / Investments 715 87
Slide 37: Financial performance
Financial performance EPS and Book Value per share 42.7 47.2 35.7 30.5 24.4 17.3 Book value ` 162 EPS 142 106 112 90 78 2002 2003 2004 2005 2006 2007 PAT % to Sales Return on Net Worth % 25% 32% 23% 29% 30% 29% 21% 27% 19% 18% 22% 13% 2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 2007
Slide 38: Thank you!
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