Orion Oyj Class A · OMXHEX:ORNAV
Orion Oyj Class A — Investor Presentation (April 2019)
78 slides from Orion Oyj Class A's investor presentation, Apr 26, 2019
Slide 1: Orion Investor presentation
Orion Investor presentation Updated on 26 April 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 1−3/2019 4) Outlook and financials 5) Businesses 6) Sustainability 7) Financial calendar Investor Presentation © Orion Corporation 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 2018 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-203 (targeted FGFR+VEGF
Slide 16: ARAMIS trial: Efficacy and safety of darolutamide in nmCRPC
ARAMIS trial: Efficacy and safety of darolutamide in non- metastatic castration- resistant prostate cancer
Slide 17: Orion and Bayer's phase III trial of darolutamide
Orion and Bayer’s phase III trial of darolutamide for non-metastatic castration- resistant prostate cancer ● Detailed data presented at ● Bayer is also having discussions with the ASCO GU on 14 February 2019 other health authorities regarding the and simultaneously published in the submission for ma
Slide 18: Financial impacts of darolutamide
Financial impacts of darolutamide ● Bayer 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 the US • EUR 20 million in the EU • EUR 8 millio
Slide 19: Non-metastatic castration-resistant prostate cancer (nmCRPC)
Non-metastatic castration-resistant prostate cancer (nmCRPC) ● A form of prostate cancer associated with rising PSA (Prostate-Specific Antigen) levels despite androgen deprivation therapy (ADT). ● The cancer has not yet spread beyond the prostate region. ● High risk for progression to metastatic dis
Slide 20: No effective treatment options for non-metastatic CRPC patients
Until recently, there have been no effective treatment options for CRPC patients who have rising Prostate-Specific Antigen (PSA) levels while on ADT and no detectable metastases Non-metastatic CRPC 20
Slide 21: Darolutamide has low blood-brain barrier penetration
Darolutamide has demonstrated low blood-brain barrier penetration that may lead to lower incidence of adverse events ● Darolutamide is a non-steroidal androgen receptor antagonist that binds to the receptor with high affinity and inhibits the growth of prostate cancer cells. ● In preclinical studies
Slide 22: ARAMIS Phase III trial design
ARAMIS Phase III trial design 1,200 mg darolutamide + ADT Randomization 1,509 patients (600 mg twice a day) − 955 patients Men with nmCRPC currently 2:1 being treated with ADT, and at high risk for developing Placebo twice a day + ADT metastatic disease − 554 patients Primary endpoint Secondary endp
Slide 23: Darolutamide shows substantial efficacy and favourable safety profile
Summary of results: Darolutamide shows substantial efficacy and favourable safety profile ● Darolutamide significantly improves ● Darolutamide has a favorable metastasis-free survival (MFS): safety profile: – Median 40.4 months with darolutamide – It didn’t increase rates of critical adverse vs 18.4
Slide 24: ARASENS trial continues to expand to metastatic prostate cancer
ARASENS trial continues in order to expand the indication to metastatic prostate cancer Patients Endpoints ● Men with metastatic, hormone-sensitive ● Primary: prostate cancer Darolutamide over placebo Treatment in overall survival ● Darolutamide plus ● Secondary: androgen deprivation therapy Time to
Slide 25: Global prostate cancer estimates (2018)
Global prostate cancer estimates (2018) 70 12nd 35th 5 most commonly leading cause of diagnosed death from cancer malignancy in men 50 60 70 80 in men worldwide 50 60 70 80 21.2 million men 358,000 died from 4 6 50+ Mainly affects men diagnosed with the disease over 50, the risk prostate cancer incr
Slide 26: 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 27: ODM-109 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 28: 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 28
Slide 29: 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 30: Highlights in January–March 2019
Highlights in January–March 2019
Slide 31: Marketing authorisation applications for darolutamide submitted
Marketing authorisation applications for darolutamide submitted in main markets 1 Marketing authorisation applications for the prostate cancer drug darolutamide 3 Net sales of Proprietary Products slightly declined from the previous year. Easyhaler, submitted in the main markets Dexdor and Simdax so
Slide 32: Key strategic target in 2019−2023
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 33: Key figures 1−3/2019
Key figures 1−3/2019 Net sales Operating profit Operating profit Cash flow per share margin before financial items 241 55 23% 0.40 MEUR (247) MEUR (70) (28%) EUR (0.39) -3% -21% +3% Investor Presentation © Orion Corporation 33
Slide 34: Development of net sales and operating profit
Development of net sales and operating profit Net sales Operating profit 247 7 3 70 1 2 3 3 2 1 3 2 4 241 7 55 26 26 25 22 15 15 (1) Product sales without sales margin and product mix change and exchange rate effect (2) Product sales margin and product mix change but without exchange rate effect (3)
Slide 35: Geographical breakdown and development of net sales
Geographical breakdown and development of net sales 1−3/2019 1−3/2018 1−3/2019 EUR million 11% +10% 90 -7% 6% 31% 80 70 60 +7% 50 -29% 40 34% 18% 30 -1% 20 Finland 10 Scandinavia Other Europe 0 North America Finland Scandinavia Other North Other Other markets Europe America markets Investor Presenta
Slide 36: Net sales by business division
Net sales by business division EUR million 1−3/2019 -5% 140 2% 118 6% 120 111 -4% 9% 100 89 93 37% 80 60 +3% +21% 46% 40 +8% 21 20 20 15 12 5 4 0 Proprietary Products Specialty Proprietary Animal Fermion Contract Specialty Products Products Products Health manufacturing Animal Health & other Fermion
Slide 37: Best-selling pharmaceuticals 1–3/2019
Best-selling pharmaceuticals 1–3/2019 Net sales Change vs . Indication (EUR million) 1−3/2018 1. Asthma, COPD 26 +21% 2. Parkinson’s disease 21 -25% 3. Intensive care sedative 19 +10% 4. Acute heart failure 17 +16% 5. Animal sedatives 10 +15% Rheumatoid arthritis, inflammatory 6. Biosimilars bowel d
Slide 38: Proprietary Products
Proprietary Products
Slide 39: Easyhaler became the top proprietary product
Easyhaler became the top proprietary product EUR million 1−3/2019 +21% -25% 30 28 26 3% 3% +10% 25 22 21 19% +16% 24% 20 19 18 17 15 14 10 -52% 22% 5 29% 5 3 Parkinson's: Stalevo, Comtess & Comtan 0 Easyhaler Easyhaler Parkinson's Dexdor Simdax Precedex Dexdor family drugs Simdax Precedex 1−3/2019 1
Slide 40: Easyhaler product family key source of growth
Easyhaler product family will be a key source of growth in the next few years ● Budesonide-formoterol Easyhaler Sales, EUR million continued strong growth. 30 ● Product family total sales: +21% 25 ● Budesonide-formoterol Easyhaler: +35% 20 – Strong market position in some countries, 15 such as Swede
Slide 41: Orion taking over sale of Parkinson's drugs in Europe
Orion is taking over the sale of its proprietary Parkinson’s drugs in Europe Breakdown of sales of Orion's branded Parkinson's drugs by market area 50 Sales, EUR million 45 40 2% 35 30 25 31% 20 34% 15 10 5 0 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 Q1 2014 2015 2016 2017 2018 2019 Europe 33% Japan
Slide 42: Dexdor sales continued to grow – patent expired
Sales of Dexdor intensive care sedative continued to grow – patent expired at the end of March Total value of European sedatives market: EUR 569 million (+3%) Sales, EUR million 20 18 12% 16 14 12% 12 65% 10 8 11% 6 4 2 0 Propofol EUR 368 million (+4%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 43: Specialty Products
Specialty Products GRION Building well-being
Slide 44: Specialty Products: price competition continued in Finland
Specialty Products: price competition continued especially in Finland Development of net sales Net sales by region Net sales by product EUR 1−3/2019 1−3/2019 million -4% 80 68 10% 8% 70 65 60 12% 50 58% 26% 66% 40 +6% -8% 30 22 21 20 14 15 20% 10 0 Finland Scandinavia Eastern Finland Generic drugs E
Slide 45: Price competition has led to decline in reference priced drug market
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 (1–3/2019) in Finland MEUR 106 (118) MEUR 28 (30) Market development Or
Slide 46: Orion is strong in home market Finland
Orion is strong in home market Finland Human pharma market in Finland 1−3/2019 Self-care Medicinal and non-medicinal products Reference priced products in hospital and pharmacy channels: EUR 676 million prescription Orion market share in EUR million drugs pharmacy 80 76 Orion 70 60 24 market share i
Slide 47: Orion's key business targets in 2019 (1-3)
Orion's key business targets in 2019 1. Preparation for the • Marketing authorisation applications commercialisation of submitted in main markets. darolutamide. ARASENS trial (metastatic prostate cancer) • With recruitment completed, the continues in order to expand the ARASENS trial continues as pl
Slide 48: Orion's key business targets in 2019 (4-6)
Orion's key business targets in 2019 4. Competitive product portfolio in • Orion's sales volume in Finland grew Specialty Products and faster than the market. strengthening of product launches. 5. Accelerating the growth of the • Easyhaler product family sales Easyhaler product family and increased
Slide 49: Outlook
Outlook
Slide 50: 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 51: 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 52: Financials
Financials
Slide 53: 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 54: 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 55: 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 56: Key figures
Key figures Change Orion’s key figures 2013 2014 2015 2016 2017 2018 vs. 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 -10.6
Slide 57: 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 58: 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 59: 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 59
Slide 60: 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 61: 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 62: 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 63: Business units
Business units Building well-being
Slide 64: 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 65: 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 66: Diverse treatment options for asthma and COPD with same inhaler
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 67: Easyhaler product family is expanding
Easyhaler product family is expanding 2018 Tiotropium development started Investor Presentation © Orion Corporation 67
Slide 68: 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 69: 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 70: 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 71: 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 72: 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 72
Slide 73: Sustainability is built into Orion's mission
Sustainability is built into Orion’s mission
Slide 74: 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 75: We assess product safety throughout the lifecycle
We assess product safety throughout the lifecycle Investor Presentation © Orion Corporation 75
Slide 76: Orion calendar
Orion calendar Capital Markets Day Helsinki, 22 May 2019 Half-Year Financial Report 17/7/2019 Interim Report 1−9/2019 23/10/2019
Slide 77: Investor Relations
Investor Relations Jari Karlson CFO jari.karlson@orion.fi +358 10 426 2883 Heidi Ahti Executive Assistant (Investor meeting requests) heidi.ahti@orion.fi +358 10 426 2169 www.orion.fi/EN/Investors twitter.com/OrionCorpIR
Slide 78: Building well-being
Building well-being GRION Building well-being