Par Pharmaceutical Companies Inc
Par Pharmaceutical Companies — Investor Day (January 2012)
61 slides from Par Pharmaceutical Companies's investor day presentation, Jan 6, 2012
Slide 1: Uniquely Positioned for Growth
Uniquely Positioned for Growth
Slide 2: Allison Wey, Vice President, Investor Relations
ALLISON WEY Vice President, Investor Relations
Slide 3: Forward-Looking Statement
Forward - Looking Statement Certain statements in this presentation constitute “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 . To the extent any statements made in this presentation contain information that is not historical, these statemen
Slide 4: PRX Analyst Day Agenda
PRX Analyst Day January 6, 2012 Welcome Allison Wey – Vice President, Investor Relations & Corporate Affairs Opening Remarks and Strategic Overview Patrick G. LePore – Chairman and Chief Executive Officer Accomplishments of 2011 and Themes for Today Thomas J. Haughey - President Generics Business, R
Slide 5: Patrick G. LePore, Chairman and CEO
PATRICK G. LEPORE Chairman and Chief Executive Officer
Slide 6: Strategic Overview
Strategic Overview What makes Par uniquely positioned for success TODAY’S FOCUS Growth Platform What are the building blocks of our growth over the next three years and beyond Development Overview Close look at the products, pipeline and future opportunities Financial Outlook A detailed review of th
Slide 7: Significant Growth Potential
Significant Growth Potential Par is positioned for significant growth over the next three years and beyond TODAY’S KEY TAKEAWAYS Foundation for Growth is in Place Existing products, filed ANDAs, strong R&D pipeline and aggressive external BD team Par is in a Unique Position Market position and focus
Slide 8: PRX Has the Right Elements
The Right Size The Right Strategy The Right Marketplace The Right Investment Discipline PRX HAS THE RIGHT ELEMENTS The Right People
Slide 9: Thomas J. Haughey, President
THOMAS J. HAUGHEY President
Slide 10: Our Strategic Framework
Entrepreneurial Business Development Intelligent Product Selection Capital Allocation & Financial Management Commercial Excellence Operational Effectiveness Our Strategic Framework Core Competencies Primary Growth Drivers Funding
Slide 11: 2011 Highlights – Foundation for Growth in Place
2011 Highlights – Foundation for Growth in Place • Acquired Anchen Pharmaceuticals and Edict Pharmaceuticals (in progress) • Executed numerous business development deals • Successfully launched eight products • Right - sized branded division • Passed all FDA inspections – no 483s • Settled three Par
Slide 12: Sources of Growth
E XISTING P RODUCT L INE B USINESS D EVELOPMENT R&D F UTURE P IPELINE F ILED ANDA S Sources of Growth near term long term
Slide 13: Sources of Growth
E XISTING P RODUCT L INE B USINESS D EVELOPMENT R&D F UTURE P IPELINE F ILED ANDA S Sources of Growth near term long term
Slide 14: Sources of Growth
E XISTING P RODUCT L INE B USINESS D EVELOPMENT R&D F UTURE P IPELINE F ILED ANDA S Sources of Growth near term long term
Slide 15: Sources of Growth
E XISTING P RODUCT L INE B USINESS D EVELOPMENT R&D F UTURE P IPELINE F ILED ANDA S Sources of Growth near term long term
Slide 16: Sources of Growth
E XISTING P RODUCT L INE B USINESS D EVELOPMENT R&D F UTURE P IPELINE F ILED ANDA S Sources of Growth near term long term
Slide 17: Key Generic Products
Key Generic Products Product Brand Name Market Share YTD Sep Revenue (unaudited) Metoprolol succinate Toprol ® XL 40% $194.6M Zolpidem tartrate ER Ambien ® CR 38% $56.8M Propafenone HCl SR Rythmol ® SR 100% $53.4M Sumatriptan injectable Imitrex ® 59% $48.8M Budesonide EC Entocort ® EC 49% $36.9M Bup
Slide 18: Strativa Today
Strativa Today • Fully developed infrastructure of 123 field personnel deployed to maximize value of Megace ® ES and Nascobal ® • Nascobal improved presentation (one - month unit with minimal overfill) • Megace ES Rx volume remains consistent • Lifecycle management Focused on execution and profitabi
Slide 19: Nascobal and Megace ES
Nascobal ® Provides Opportunity for Growth Megace ® ES Provides Consistent Revenue Nascobal reached all - time TRx highs in 2011 ~ $40 to $50M peak sales projection Nascobal 2011 TRx Volume 7,884 7,306 8,654 7,848 9,190 10,667 9,118 10,193 9,703 9,621 8,793 Jan Feb Mar Apr May Jun Jul Aug Sep Oct No
Slide 20: Broad Pipeline With ANDAs Filed
Broad Pipeline With 72 ANDAs Filed 4 Potential FTM 19 Confirmed FTF 72 Total Filed Potential FTM Confirmed FTF ANDAs Filed Edict Anchen Par 3 13 32 1 1 11 0 5 29 72 filed ANDAs represents over $20B of combined branded product sales Total ANDAs F ILED ANDA S
Slide 21: Future Pipeline Provides Long-Term, Sustainable Growth
39 Par 35 Anchen Future Pipeline Provides Long - Term, Sustainable Growth Large universe of product opportunities • Majority P - IVs or will be P - IVs • Not bound by technology • Leads to active development 18 Edict Products in Development 92 Total In Dev R&D F UTURE P IPELINE Abundance of projects
Slide 22: Business Development – A Core Competency
Par offers: • Quick decision - making • Financial resources • Favorable economics • Strong trade presence • Regulatory and compliance acumen • Legal expertise Business Development – A Core Competency Types of Partnerships • Company Acquisitions – Anchen, Edict • Marketing and Distribution Agreements
Slide 23: Sources of Growth
Sources of Growth near term long term 3 - year plan E XISTING P RODUCT L INE B USINESS D EVELOPMENT R&D F UTURE P IPELINE F ILED ANDA S
Slide 24: Paul V. Campanelli, COO
PAUL V. CAMPANELLI Chief Operating Officer President, Par Pharmaceutical
Slide 25: Par Generics – Uniquely Positioned for Long Term Growth
Par Generics – Uniquely Positioned for Long Term Growth • FTF/FTM strategy • How Anchen and Edict enhance Par’s business • Business development strategy • Product pipeline review • Expectations for 2012 – 2014 and beyond
Slide 26: Guiding Principles for Growth
Guiding Principles for Growth Commercial Excellence • Exceptional launches • Leading market shares • Strong trade presence • Effective legal strategy Operational Execution • Robust project management • Experienced regulatory team • Rigorous QA/QC • State - of - the - art systems & tech Entrepreneuri
Slide 27: Our Product Selection Strategy
Our Product Selection Strategy • FTF and FTM opportunities • High - barrier - to - entry products Selection Criteria Combination Therapies API Challenges Technology Barriers Modified Release Commercially Compelling Product selection is key capability
Slide 28: Case Study – Propafenone HCl (Rythmol SR)
Case Study – Propafenone HCl ( Rythmol ® SR) • Identified product nine years prior to patent expiration • Good fit with Par’s patent and commercial criteria • Utilized Par’s internal modified release capability (Par’s first P - IV modified release) • Achieved FTF status • Reached fair and equitable
Slide 29: Case Study – Omega-3-Acid Ethyl Esters (Lovaza)
• Identified product 10 years prior to patent expiration, subsequent patent OB - listed • Good fit with Par’s patent and commercial criteria • API and softgel partnerships established • Timely filing on statutory NCE – 1 year block for P - IV filers • Par has invested in infrastructure to commercial
Slide 30: Anchen Broadens Expertise and Pipeline
Anchen Broadens Expertise and Pipeline • Strong development track record targets FTF and FTM – 29 filed pipeline products • Synergistic, entrepreneurial culture – Cost - efficient development, aggressive timelines • Established commercial infrastructure – 6 product launches since 2008 • State - of -
Slide 31: Anchen – Key Commercialized Products
Anchen – Key Commercialized Products Product Brand Name Launch Date Market Share* Bupropion HCl ER Wellbutrin XL ® May 2008 37% Divalproex ER Depakote ER ® Mar 2009 12% Zolpidem ER Ambien CR ® Dec 2010 38% Ciprofloxacin ER Cipro ® XR May 2011 21% Proven track record of success * IMS Health Data as o
Slide 32: Anchen – Disclosed Pipeline
Anchen – Disclosed Pipeline Product Brand Name Type Brand Value (as of 9/30/11) Tramadol HCl Ryzolt ® PIV trail $14M Doxercalciferol Hectorol ® PIV, FTF $79M Fluvoxamine Maleate Luvox CR ® PIV $36M Pramipexole DiHCl Mirapex ER ® PIV, FTF $28M Duloxetine Cymbalta ® PIV, shared FTF $3.5B Clonidine HCl
Slide 33: Edict Broadens R&D and Adds Manufacturing Flexibility
Edict Broadens R&D and Adds Manufacturing Flexibility • Enhanced R&D capabilities, product selection flexibility • Expands generics pipeline – 11 ANDAs filed with U.S. FDA – 18 products in development • Experienced management team with proven track record – Developed tramadol APAP/ER, amlodipine / b
Slide 34: Multiple Sites Provide Broader Solutions
Multiple Sites Provide Broader Solutions Par Spring Valley, NY; Suffern, NY; Woodcliff Lake, NJ 650 employees, 389,000 ft 2 Capacity - 1B single use units (1 shift)
Slide 35: Multiple Sites Provide Broader Solutions
Multiple Sites Provide Broader Solutions Par Spring Valley, NY; Suffern, NY; Woodcliff Lake, NJ 650 employees, 389,000 ft 2 Capacity - 1B single use units (1 shift) Par - Anchen Irvine, CA 200 employees , 100,000 ft 2 Capacity - 400M single use units (2 shifts)
Slide 36: Multiple Sites Provide Broader Solutions
Multiple Sites Provide Broader Solutions Par Spring Valley, Suffern, Woodcliff Lake, NY and NJ 650 employees, 389,000 ft 2 Capacity - 1B single use units (1 shift) Par - Anchen Irvine, CA 200 employees , 100,000 ft 2 Capacity - 400M single use units (2 shifts) Par - Edict Chennai, India 100 employee
Slide 37: Our Expanded Capabilities
Our Expanded Capabilities FTF FTM CII Combination Therapies Modified Release Immediate Release High Value Products Modest Value Products BC//Life - cycle Management Opportunistic Fast Development Economical API Driven Technology Driven Spring Valley x x x x x x x Irvine x x x x x Chennai x x x x x x
Slide 38: Business Development Drives Additional Value
Business Development Drives Additional Value DHA Lovaza AZ/Metoprolol AG Sumatriptan Royalty Buyout Cipla Development Deals MdRNA Aveva Clonidine TDS Abon Dev Deals Emcure Deals Glenmark Ezetimibe Nascobal Impopharm Dev Deal Tramadol ER Tussionex Huahai Deals MdRNA Calcitonin Mesalamine Axcan Develo
Slide 39: Case Study - Teva Divestiture Products
Case Study - Teva Divestiture Products Par, the partner of choice • FTC expertise • Financial resources • Technology Three products acquired from Teva for $24M • Fentanyl citrate( Actiq ® ) – Stable market; barriers to entry – CII, REMS • Modafanil ( Provigil ® ) – date certain launch 4/12; shared e
Slide 40: Date Certain Pipeline Opportunities
Date Certain Pipeline Opportunities Products Brand Brand Value* Timing Fluvastatin Sodium Lescol ® XL $ 71M Launch patent expiry 4/12 Modafinil Provigil ® $ 1.1B Settled. Launch 4/12 Oxaliplatin Eloxatin ® $ 904M Settled. Launch 8/12 Dexmethylphenidate HCl Focalin XR ® $ 471M Settled. Launch 10/12 F
Slide 41: Additional Disclosed Pipeline Opportunities
Additional Disclosed Pipeline Opportunities Product Brand Name Brand Value (as of 9/30/11) Dextromethorphan HBr / Quinidine Sulfate Nuedexta ™ $7M Diclofenac K Cambia ® $ 8M Omega - 3 - acid ethyl esters Lovaza ® $ 998M Omeprazole/Sodium Bicarb Zegerid ® OS/OTC $ 25M Sumatriptan succinate /Naproxen
Slide 42: Expectations for 2012-2014 and Beyond
Expectations for 2012 - 2014 and Beyond 2012 - 2014 • 13 - 17 ANDAs filed each year • 10 - 14 launches each year • 100+ products under development • Opportune business development deals Beyond 2014 • Date certain launches of generic Androgel ® , Zetia ® , Enablex ® , Crestor ® • Monetization of prod
Slide 43: Michael A. Tropiano, CFO
MICHAEL A. TROPIANO Chief Financial Officer
Slide 44: 2011: Another Solid Year
2011: Another Solid Year Earnings Drivers & Financial Highlights • Potential record gross margin • Successful launches of propafenone HCl ( Rythmol ® ), amlodipine / benazepril ( Lotrel ® ) and budesonide EC ( Entocort ® EC AG) • Modest price/unit erosion on base generic portfolio (~10%) • Expected
Slide 45: 2012-2014 Plan Assumptions (1 of 3)
2012 - 2014 Plan Assumptions (1 of 3) Revenue & Margin • Reasonable competition scenarios modeled for all of Par’s top, inline generic products • Non - core generic products declining ~10% per year, reflecting standard industry erosion • P - IV patent challenge opportunities, risk adjusted on a prod
Slide 46: 2012-2014 Plan Assumptions (2 of 3)
2012 - 2014 Plan Assumptions (2 of 3) Operating Expenses • R&D: Inclusion of Anchen and Edict will increase annual spend • SG&A expenses initially increasing to reflect addition of Anchen & Edict • Lower brand sales and marketing expenses reflect the full year impact of restructuring the Strativa di
Slide 47: 2012-2014 Plan Assumptions (3 of 3)
2012 - 2014 Plan Assumptions (3 of 3) Balance Sheet & Cash Flow • $350M five - term loan to finance Anchen, reduced to ~$230M by end of 2014 • Interest costs dependent on company leverage ratio and LIBOR forecast • Edict transaction forecasted to close in January 2012 • Annual capital spending of ~$
Slide 48: Anchen Financing Terms & EPS Impact
Anchen Financing Terms & EPS Impact • Facilities: • Maturity: • Interest Rate Assumptions: • Financial Covenants: • Financial Summary: • $350 million five - term loan • $100 million revolving credit facility • 5 years – amortizing annually @ 5%, 10%, 15%, 20% and 50%, respectively • Initially LIBOR
Slide 49: Prudent Capital Allocation
Prudent Capital Allocation R&D • Doubling of current spend • Strategic partnering when appropriate Business Development • Includes product acquisitions, M&A transactions & licensing opportunities • ROI target of >15% Legal • Aggressively fund historically successful P - IV program • Settlements to p
Slide 50: Increasing Gross Margin Diversification
Increasing Gross Margin Diversification 47% 48% 50% 2012 2013 2014 100% 50% 0% Existing Products Launches – Date Certain Launches – Other Other Annual Gross Margin Rates
Slide 51: Key Financial Metrics
Key Financial Metrics Rolling 3 - Year Cumulative Cash Flow Annual R&D Annual SG&A Cumulative Cash EPS 2010 - 2012 Prior Guidance 2011 - 2013 Prior Guidance 2012 - 2014 New Guidance >$250 30 180 $6.60 ($ millions, except EPS)
Slide 52: Key Financial Metrics
Key Financial Metrics Rolling 3 - Year Cumulative Cash Flow Annual R&D Annual SG&A Cumulative Cash EPS 2010 - 2012 Prior Guidance 2011 - 2013 Prior Guidance 2012 - 2014 New Guidance >$250 30 180 $6.60 $400 35 - 40 185 - 190 $10.00 ($ millions, except EPS)
Slide 53: Key Financial Metrics
Key Financial Metrics Rolling 3 - Year Cumulative Cash Flow Annual R&D Annual SG&A Cumulative Cash EPS 2010 - 2012 Prior Guidance 2011 - 2013 Prior Guidance 2012 - 2014 New Guidance >$250 30 180 $6.60 $400 35 - 40 185 - 190 $10.00 $400 - 500 65 - 70 185 - 190 $12.50 ($ millions, except EPS)
Slide 54: Metrics 2012-2014 CAGR
5% Operating Expenses CAGR Metrics 2012 - 2014 8% 11% 15% Revenue Gross Margin Cash EPS
Slide 55: Patrick G. LePore, Chairman and CEO
PATRICK G. LEPORE Chairman and Chief Executive Officer
Slide 56: 2012 Earnings Drivers
2012 Earnings Drivers • Four date certain launches with brand value of $2.5B • Six to nine additional launches • Increased profitability of Strativa • Modest erosion of base generics • Controlled operating expenses of $255M • Operational cash flow of ~$150M • Opportune business development deals Ano
Slide 57: 2012-2014 Performance Metrics Summary
2012 - 2014 Performance Metrics Summary • Cumulative EPS of at least $12.50 in 2012 - 2014 • Adjusted gross margin rates approaching 50% • R&D spend of ~$70M annually • SG&A spend holding steady near $185M annually • Cash flow from operations of ~$450M over the 3 - year period • Key CAGRs: – Revenue
Slide 58: Upside to Three-year Guidance
Upside to Three - year Guidance Potential opportunities NOT included in $12.50 cumulative EPS: • New AG partnerships • Opportune business development deals • Potential acquisitions, including products and/or companies • Less erosion of base generic products • Better pipeline production • Longer mark
Slide 59: Significant Growth Potential
Significant Growth Potential Par is positioned for significant growth over the next three years and beyond TODAY’S KEY TAKEAWAYS Foundation for Growth is in Place Existing products, filed ANDAs, strong R&D pipeline and aggressive external BD team Par is in a Unique Position Market position and focus
Slide 60: Q&A Executive Team
Q&A Executive Team
Slide 61: Uniquely Positioned for Growth
Uniquely Positioned for Growth
Par Pharmaceutical Companies — Investor Day (January 2012) on 6ix