Lannett — Investor Presentation (April 2021)
29 slides from Lannett's investor presentation, Apr 6, 2021
Slide 1: Investor Presentation April 2021
INVESTOR PRESENTATION April 2021 © 2021 Lannett Company, Inc. All Rights Reserved. For Discussion Purposes Only
Slide 2: Forward-looking statements
1 This presentation contains forward-looking statements. All statements other than statements of historical fact contained in this presentation, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future
Slide 3: Today's presenters
Today’s presenters Tim Crew – CEO Appointed CEO of Lannett in January 2018 31 years of experience in the industry, 3 at Lannett Previously Senior Vice President and Commercial Operating Officer of the North American Generics division at Teva Past work experience includes Teva, Cipla, Dr. Reddy’s, Br
Slide 4: Agenda
Company Overview Financial Summary Appendix | Supplemental Information Agenda 3
Slide 5: Company Overview
#tLannett COMPANY OVERVIEW
Slide 6: Lannett at a glance
$543mm Revenue 5 Lannett at a glance ~100 Marketed products Business Financial (1) Business Highlights amounts as of April 1, 2021. (2) Includes signed partner deals. $102mm Debt reduction Financial and Business Highlights(1 ) 52 Products launched since Jan 2018 (21 Internally Developed / 31 BD) LTM
Slide 7: Generics industry is expected to grow
6 Generics industry is expected to grow Source: IMS, IQVIA and Fitch Solutions. (1) IMS Nation Sales Perspective data and reflects prices outlets pay for products and does not include rebate discounts. (2) 2015 data from May 2015 through December 2015. Historical and projected US generic drug revenu
Slide 8: Major accomplishments
7 Major accomplishments January 2018 Current Initiatives Status .. Cody API Restructuring plan and sale of other real estate .. Philadelphia plant and distribution facility closed in FY19 .. Increased Seymour plant production by 75+% .. Implemented ~$66mm cost savings initiatives in FY19, with $33mm
Slide 9: Track record of successful product launches and commercialization
Revenue since launch(1) ~28mm ~6mm Partnership with Cediprof In addition, 3-year, $9mm advisory agreement with Cediprof with additional products being planned Partnership with Sino Therapeutics Launched 4 weeks after signing First to market Revenue since launch(1) ~96mm ~7mm 8 Product launch history
Slide 10: Advair Diskus generic opportunity
GlaxoSmithKline (Brand) 51% Viatris (Gx) 32% Prasco (AG) 17% * Source: EvaluatePharma. (1) Company announced that it has temporarily paused the launch of its generic Advair Diskus in 1/15/2021. Launch status unclear. $557 $407 $348 $305 $268 $237 $314 $494 $508 $495 $477 $460 $871 $901 $856 $799 $74
Slide 11: Respirent partnership and Advair timeline
10 2014 established 2017 2016 DPI manufacturing site breaking ground China FDA pharmaceutical facility approved 2019 2020 2021 (g)Flovent Diskus Distribution partnership ANDA filed on April 1, 2021 2022 (g)Advair ANDA approval Commercial launch (projected approval date to be refined post preliminary
Slide 12: Insulin Glargine and Aspart: $3bn US addressable market
Sanofi 71% Lilly 29% 11 $2.2 $2.0 $2.0 $1.9 $1.8 $1.8 $1.1 $0.9 $0.8 $0.7 $0.7 $0.7 $3.3 $2.9 $2.8 $2.6 $2.5 $2.5 CY20A CY21E CY22E CY23E CY24E CY25E Glargine Aspart US Glargine market split today Lannett / HEC is expected to be the 4th in Glargine market and 3rd in Aspart Glargine Aspart Indication
Slide 13: Insulin Glargine and Aspart – Lannett opportunity
Insulin Glargine and Aspart – Lannett opportunity 12 2011 Glargine cell line Created by HEC 2019 2020 Human Trial vs. US Lantus showing biosimilarity FDA BPD Type 2 meeting 2021 2022 BLA Filing 2023 We are Here Insulin Glargine partnership 2016 Submit IND to FDA by end of 2021 HEC: dedicated plant a
Slide 14: Quarterly financial summary
$101 $115 $119 $114 $115 $123 $26 $21 $25 $24 $11 $11 $38 $37 $36 $36 $26 $24 $127 $136 $144 $138 $126 $134 Q1'20A Q2'20A Q3'20A Q4'20A Q1'21A Q2'21A Quarterly financial summary 13 ($ in millions) Quarterly revenue and adjusted EBITDA Rest of portfolio revenue Fluphenazine Adjusted EBITDA Adjusted E
Slide 15: Diversified product portfolio
14 Historical product concentration (% by revenue) Diversified product portfolio 63% 56% 60% 82% 91% 92% 9% 8% 10% 18% 9% 8% 28% 36% 30% FY2017 FY2018 FY2019 FY2020 Q1 FY2021 Q2 FY2021 Rest of portfolio Fluphenazine Levothyroxine (1) Refers to sales of Levo tabs under a previous distribution agreeme
Slide 16: Portfolio growth through strategic new product launches
Lannett leverages both internal research and development and business development as channels to maintain a robust pipeline of opportunities Balance higher margin internally developed products with lower risk access to unique technologies in external opportunities to deliver attractive ROI Nimble, r
Slide 17: Research and development pipeline
4 8 7 2 HY FY2018A FY2019A FY2020A FY2021A (YTD) Research and development pipeline 16 (selected molecules in development) (1) Based on Lannett’s current internal estimates based on existing market conditions, which are subject to change. Track record of Lannett R&D launches Pipeline of internal R&D
Slide 18: Business development overview
Business development overview 17 190 New SKUs 69 New Applications 22 New Partners 31 Launches Achievements since January 2018 Lannett is focused on BD opportunities that require complex technologies and offer longer-term, higher value revenue potential. Since January 2018, external business developm
Slide 19: Owned manufacturing has reliable supply and capacity for growth
Doses Owned manufacturing has highly reliable supply and capacity for growth 18 Cost / 1000 doses at Seymour facility Employees ~550 ~75 Dosage form Oral solids Liquids Annual output 3.2B units (FY2020) − 3.3B units as of FY 2019 − 2.5B units as of FY 2018; increase of ~1.5B capacity while reducing
Slide 20: Strong historical cash flow generation
$4.3 $5.2 $3.2 $1.9 $0.5 $1.1 $3.0 $1.0 $4.8 $6.3 $6.2 $2.9 0 1 2 3 4 5 6 7 8 Q3'20 Q4'20 Q1'21 Q2'21 Capex BD Expenditures Commentary LTM ($ in millions) 2018 2019 2020 Q2 2021 Adjusted EBITDA $255 $230 $146 $121 (-) Cash taxes(1) 7 5 (8) 1 (-) Cash interest expense(2) (64) (67) (53) (46) (-) Capit
Slide 21: Track record of debt reduction
Track record of debt reduction 20 Note: 2Q’21 Term Loan B outstanding adjusted for 3/31/21 amortization of $9.8mm. (1) Includes $5mm of restricted cash. Laser focus on prudent management of cash flow and debt reduction
Slide 22: First-class Leadership Team
First-class Leadership Team Proven management team with deep generics experience 21 Experience Name and Title Experience Name and Title Tim Crew CEO 31 years of experience in the industry, 3 at Lannett Past work experience includes Teva, Cipla, Dr. Reddy’s, Bristol- Myers Squibb, US Army Kristin Arn
Slide 23: Financial Summary
#tLannett FINANCIAL SUMMARY
Slide 24: Historical reported financial overview
$255 $230 $146 $121 37.2% 35.2% 26.8% 22.3% 2018 2019 2020 LTM Q2 '21 $685 $655 $546 $543 2018 2019 2020 LTM Q2 '21 Historical reported financial overview (1) As disclosed in our 2019 Form 10-K, we ceased sales of Levothyroxine, previously our largest product, at the end of the third quarter of fisc
Slide 25: Historical reported financial overview (cont'd)
$145 $144 $67 $61 2018 2019 2020 LTM Q2 '21 Ceased sales of Levothyroxine 3.6x 3.5x 4.4x 0.6x 3.6x 3.5x 5.0x 2018 2019 2020 First Lien Leverage Junior & Other Leverage $897 $768 $622 $86 $897 $768 $708 2018 2019 2020 First Lien Debt Junior & Other Debt Historical reported financial overview (cont’d)
Slide 26: Appendix
#tLannett APPENDIX
Slide 27: LTM Dec EBITDA Reconciliation
USD millions LTM Dec EBITDA Reconciliation 2018A 2019A 2020A 2020A Net income (loss) attributable to Lannett Company $29 ($272) ($34) ($205) Plus: Income tax expense 22 (74) (15) (78) Plus: Interest expense 86 84 67 59 Plus: Depreciation and amortization 17 17 20 20 EBITDA $154 ($245) $38 ($204) Plu
Slide 28: Superior track record and clean inspection history
Superior track record and clean inspection history Delivers high quality and reliable supply 27 Agency Site/Topic Outcome DEA Philadelphia (2): 1. Manufacturers license 2. Analytical license No citations or observations DEA Seymour (3): 1. Distributor 2. Importer 3. Exporter No citations or observat
Slide 29: #tLannett
#tLannett