West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — UBS Global Life Sciences Conference 2009
30 slides from West Pharmaceutical Services's conference presentation, Sep 23, 2009
Slide 1: UBS Global Life Sciences Conference
Donald E. Morel, Jr., Ph.D. Chairman and Chief Executive Officer William J. Federici Vice President and Chief Financial Officer Investor Relations Contact: Michael A. Anderson Vice President and Treasurer mike.anderson@westpharma.com UBS Global Life Sciences Conference New York, New York September 2
Slide 2: Forward Looking Statements
This presentation contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on management’s beliefs and assumptions, current expectations, estimates and forecast
Slide 3: Who We Are
Who We Are • Founded in 1923 • Global Headquarters near Philadelphia • Market capitalization $1.3 billion • World’s premier manufacturer of components and systems for injectable drug delivery – Closure systems and prefillable syringe components – Components for disposable systems – Devices and devic
Slide 4: Diverse, Stable Customer Base
Diverse, Stable Customer Base
Slide 5: West's Competitive Advantage
West’s Competitive Advantage • Unmatched experience/expertise: drug - material interface – Global regulatory and technical support • Protected IP: Proprietary materials and technology • Regulatory barrier to entry: US NDA and ANDA filing must include reference to packaging/components in contact with
Slide 6: Sales and Income from Continuing Operations
Sales and Income from Continuing Operations ($ in millions)
Slide 7: Business Environment
• Global economic conditions remain soft • U.S. government focus on healthcare structural reform and cost containment • Within our customer base: – Changing operating priorities à changing order patterns – Working capital / supply chain / inventory management • Delivering against rising expectations
Slide 8: Second Quarter and Year-To-Date Results
Quarter 2 Year-to-date 2009 2008 2009 2008 $261.0 $279.3 Net Sales $503.4 $550.0 30.2% 29.9% Gross Margin 29.4% 30.4% $4.7 $4.9 R&D $8.9 $10.3 $45.1 $40.9 SG&A $88.0 $81.0 $29.0 $37.4 Operating Profit (Non-GAAP) * $51.0 $75.2 $19.9 $25.4 Net Income (Non-GAAP) * $34.1 $50.4 $0.58 $0.73 Diluted EPS (N
Slide 9: Asset Management
($M) 6/30/09 12/31/08 6/30/08 Cash $84.3 $87.2 $102.3 Accounts Receivable $143.4 $128.6 $159.2 Days Sales Outstanding (DSO) 51.6 44.8 52.7 Inventory $130.0 $115.7 $127.3 Days Inventory Outstanding (DIO) 46.7 40.3 42.1 Asset Management
Slide 10: Capital Management
($ Millions) 6/30/09 12/31/08 Total Debt $390.2 $386.0 Total Equity $533.0 $487.1 Net Debt to Total Capital 36.5% 38.0% Capital Expenditures: YTD Spending $45.2 Full Year Forecast / Actual $110.0-$120.0 $131.8 Capital Management
Slide 11: Business Environment
• Pharma remains under substantial pressure • Global growth projected at 2.5-5% (down from 5-7%) • North America down 1-2% • Europe 0-1% • Emerging economies 5-7% (India, China, Brazil) • Fundamental underlying industry change - consolidation - focus on large molecule therapies • Pfizer - Wyeth • Ro
Slide 12: Our Growth Opportunities
Drug Packaging (How it is contained) Primary Container Solutions Prefillable Syringe Systems Drug Delivery (How it gets into the patient) Administration Systems Advanced Injection Systems Development Primary Package Administration Our Growth Opportunities
Slide 13: Market Dynamics Support Future Growth
Market Dynamics Support Future Growth • Increasing number of patients with chronic illnesses • Many of these are treated with biologic drugs • Biologic drugs demand ultra- clean delivery systems • Point of care shift: Hospital to specialty clinic to home • Safe, accurate dosing needs are pushing the
Slide 14: Pipeline Drug Formulations
Pipeline Drug Formulations 34% 42% 10% 4% 4% 3% 3% Source: IMS, Tufts CSDD Over a third of all pipeline drugs will be in injectable formulation
Slide 15: Global Biotech Blockbusters
2007’s 22 Biotech Blockbusters Enbrel (Amgen/Wyeth) Aranesp (Amgen) Remicade (J&J/SP) Rituxan (Roche) Neulasta (Amgen) Erypo/Procrit (J&J) Herceptin (Roche) Epogen (Amgen) Avastin (Roche) Humira (Abbott) Lantus (Sanofi-Aventis) Avonex (Biogen Idec) Neorecormon (Roche) Gardasil (Merck) Rebif (Serono)
Slide 16: Our Growth Strategy
Drug Packaging (How it is contained) Primary Container Solutions Prefillable Syringe Systems Drug Delivery (How it gets into the patient) Administration Systems Advanced Injection Systems Our Growth Strategy • Build market share in multi- component systems for drug administration • Expand proprietar
Slide 17: Primary Drug Packaging
Primary Drug Packaging West FluroTec ® Components Seal - Stopper - Vial Daikyo Crystal Zenith ® Vials Estimated Market Size - $1.5 billion CAGR - 4% Source: Company estimate for vial systems only West Spectra™ Seals Crystal Zenith is a registered trademark of Daikyo Seiko, Ltd. FluroTec and Crystal
Slide 18: Core Strategy - Adding Incremental Value per Unit
Core Strategy - Adding Incremental Value per Unit Uncoated 4432/50 V35 $50 $200 4432/50 S2 FluroTec ® Westar RS $250 4432/50 S2 FluroTec ® Westar RS B2-40 Port Bag $300 4432/50 S2 FluroTec ® Westar ® RS B2-40 (1000 packs) $465 4432/50 Sterile S2 W (RU) Ready Pack Ô (1000 packs) $2,900 RU Ready Pack
Slide 19: Delivering Innovative Solutions
___—— Delivering Innovative Solutions
Slide 20: Our Growth Strategy
Drug Packaging (How it is contained) Primary Container Solutions Prefillable Syringe Systems Drug Delivery (How it gets into the patient) Administration Systems Advanced Injection Systems Our Growth Strategy • Build market share in multi- component systems for drug administration • Expand proprietar
Slide 21: Delivery Systems - Key Programs
Delivery Systems - Key Programs Vial2Bag™ Mix2Vial ® MixJect ® NovaGuard ™ Safety Needle Device (luer-lock syringe) ConfiDose ® Auto-injector Daikyo Crystal Zenith ® éris ™ Safety Needle Device (fixed-needle syringe)
Slide 22: Packaging & Delivery Systems for Large Molecules Key Driver
Packaging & Delivery Systems for Large Molecules Key Driver • Currently all large molecule drugs are delivered by injection • West components are preferred and used for the top selling biotech therapeutics • Used predominantly to treat chronic diseases – Diabetes – Cancer – Auto-immune • Fastest gro
Slide 23: Total Life Cycle Containment
• Polybutadiene Flurotec ® liner • Low temperature resistance • Ease of handling First-in-Human Containers Bulk Containers Inserted Needle Syringes • Stored frozen in Phase 1 • Ideal cleanliness • Low adsorption properties • Ideal for auto-injectors • No tungsten, glue or silicone • Ease of handling
Slide 24: Critical Stability Issues for Biotechnology Drugs
Critical Stability Issues for Biotechnology Drugs • Aggregation – Silicone, tungsten, glue, mfg. processing • Adsorption - vials and syringes – Impacts potency of large molecules • Immunogenicity/Neurogenicity • Polysorbate 20 and 80 – Detergents used for mitigating aggregation – Highly unpredictabl
Slide 25: Comparison of protein aggregation in glass versus CZ
Comparison of protein aggregation in glass versus CZ for a model antibody Daikyo Crystal Zenith ® Glass
Slide 26: Our Long-term Focus
Our Long-term Focus • The fundamentals matter – Superior quality and service win business • Margin improvement - lean manufacturing, OEE • Continued investment for the future – Innovation – Geographic expansion – Technology & product acquisitions • Financial discipline – Maintain strong operating ca
Slide 27: Five-Year Growth Opportunity
Drug Packaging (How it is contained) Primary Container Solutions Prefillable Syringe Systems Drug Delivery (How it gets into the patient) Administration Systems Advanced Injection Systems Five-Year Growth Opportunity $2 billion combined markets for safety, prefilled and autoinjectors: • Unit growth
Slide 28: Summary
Summary • Market leader • Proprietary technology • Regulatory expertise • Customer base • Global footprint • Partnerships – Daikyo – Mexico • New product pipeline • Financial position – Cash flow – Balance sheet • People Injectable Container Solutions Advanced Injection Systems Prefillable Syringe S
Slide 29: Each and every day,
Each and every day, more than 80 million West products are used to enhance the quality of healthcare around the world.
Slide 30: Donald E. Morel, Jr., Ph.D.
Donald E. Morel, Jr., Ph.D. Chairman and Chief Executive Officer William J. Federici Vice President and Chief Financial Officer Investor Relations Contact: Michael A. Anderson Vice President and Treasurer mike.anderson@westpharma.com NYSE: WST westpharma.com All trademarks and registered trademarks
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