Croda International Plc · LSE:CRDA
Croda International — Investor Day (October 2022)
80 slides from Croda International's investor day presentation, Oct 7, 2022
Slide 1: Health Care seminar
Health Care seminar 7 October 2022 Smart science to improve lives™
Slide 2: Welcome and meet the team
Welcome and meet the team Steve Foots, Chief Executive Officer Smart science to improve lives™ 2 2
Slide 3: Our strategic priorities
Our strategic priorities Scale Biotech Health Care Take advantage of the biologics revolution via: Fast grow Expand • Investment in novel fast growing therapeutics solutions China Life Sciences • Development of leading strategic platforms • Winning with innovation Crop Providing sustainable solution
Slide 4: Croda portfolio of growth businesses
Croda portfolio of growth businesses Life Sciences Industrial Specialties Crop Protection Seed Enhancement Health Care Crop Care Supported by: Consumer Care Beauty Actives Beauty Care Fragrances and Flavours Home Care All businesses: minimum of 1.5x GDP growth, >20% ROS, >2x ROIC Smart science to im
Slide 5: Objectives and agenda for today
Objectives and agenda for today Objectives Agenda - Meet the team - Strategic focus - Introduce Croda Health Care strategy - Growth platforms - Explore each growth platform - Strategic execution - Introduce innovation pipeline - Q&A Smart science to improve lives™ 5
Slide 6: Meet the team
Meet the team Executive Committee Steve Foots Jez Maiden Daniele Piergentili Chief Executive Officer Group Finance Director President, Life Sciences Life Sciences leadership team Freek Snieders Laura Reilly Ritesh Tanna Senior Vice President, VP Marketing Finance Director Croda Health Care Life Scie
Slide 7: Health Care – strategic focus
Health Care – strategic focus Daniele Piergentili, President Life Sciences Freek Snieders, Senior Vice President Health Care Smart science to improve lives™ 7
Slide 8: Where we have come from
Where we have come from Smart science to improve lives™ 8
Slide 9: Evolution of a world class partner for drug delivery
Evolution of a world class partner for drug delivery – aligned with market need pre 2000 2000+ 2010+ 2018 2020 2022 Consumer Health Promotion of Patient health #1 Patient health #2 Patient health #3 New strategic focus Market leader in standard excipients Development of Vaccine adjuvants Lipids acqu
Slide 10: Delivering across development lifecycle & customers
Delivering across development lifecycle & customers Development lifecycle Drug discovery Pre-clinical Clinical development Commercial and research development and supply Universities Customer types Contract research Contract Manufacturing and Development Big pharma and biotech Generics Pharma / biot
Slide 11: Where we are now
Where we are now Smart science to improve lives™ 11
Slide 12: What we said in 2019 – delivering our promises
What we said in 2019 – delivering our promises Accelerate speciality excipient growth 20% CAGR speciality excipient sales Leverage selling network Doubled vaccine adjuvant sales Target adjacencies Acquired Avanti Polar Lipids Biologics presence Key role in Pfizer Covid-19 vaccine Deliver high growth
Slide 13: Croda Health Care in context
Croda Health Care in context Croda sales 2021 Life Sciences sales 2021 £361m £763m £193m £572m Consumer Care Life Sciences Industrial Specialties Divested Health Care CV-19 lipids Crop Protection Seed Enhancement £1,890m £572m Croda sales 2021 shows estimated analysis of PTIC sector had divestment o
Slide 14: Health Care 2017-21 – increased sales; improved mix
Health Care 2017-21 – increased sales; improved mix £200m £100m 0 2017 2019 2021 APIs standard excipients speciality excipients vaccine adjuvants non CV-19 lipids Reported sales growth 2017-21 excluding COVID-19 lipid system sales Smart science to improve lives™ 14
Slide 15: Health Care 2017-21 – global footprint in drug delivery
Health Care 2017-21 – global footprint in drug delivery PA, USA NJ, USA Denmark x2 capacity New R&D Centre x2 capacity UK Japan New scale up site +50% capacity Alabama, USA x2 capacity Manufacturing sites Innovation centres Sales offices Major investment since 2017 Smart science to improve lives™ 15
Slide 16: Health Care 2017-21 – acquired adjacent technologies
Health Care 2017-21 – acquired adjacent technologies Vaccine adjuvants (2018) Lipid systems (2020) • Leading independent producer • R&D leader • Expansion in existing vaccines • Emerging delivery technology • Novel vaccine development • Potential for significant growth Benefits to Croda Benefits to
Slide 17: Positioning Croda for future growth
Positioning Croda for future growth 2017-21 Croda edge • Accelerated growth • Innovation and customer intimacy • Enhanced profitability • Breadth of portfolio • Broadened technology platforms • Industry leader • Commercialised novel technology • Highly differentiated • Built global footprint • Prove
Slide 18: Market trends driving growth
Market trends driving growth Smart science to improve lives™ 18
Slide 19: Biologics – higher growth and value opportunity
Biologics – higher growth and value opportunity Global pharmaceutical market value: >$1.2 trillion CAGR 6% Small molecule Biologics 65% CAGR: 5% 35% CAGR:10-30% Ibuprofen Zolgensma Cost/treatment <$1 Cost/treatment > $1m Increasing importance of Biologics Market value: Statista, 2021. CAGR 2022-27 S
Slide 20: The biologics revolution
The biologics revolution 1st generation 2nd generation 3rd generation Small molecules: Proteins (mAbs): Nucleic Acids: Eg Ibuprofen Eg Keytruda Eg Zolgensma <$1/ treatment >$1,000 / treatment >$500,000 / treatment 1 indication >40 indications …..infinite possibilities Higher specificity of the treat
Slide 21: A developing market with growing needs
A developing market with growing needs Small molecule Biologics Cell & Gene therapy Nucleic CAGR >25% Acids $30bn CAGR >20% mAbs mRNA CAGR 11% Therapy Viral vector Growth potential (%) CAGR 17% vaccines Proteins CAGR 15% CAGR 8% Parenteral Proteins CAGR 7% $300bn CAGR 10% Sub-unit vaccines Small CAG
Slide 22: Croda Pharma – our vision
Croda Pharma – our vision Today – Health Care Future – Croda Pharma Supplier of excipients, custom lipids Global leader in empowering & vaccine adjuvants biologics delivery Delivering high Delivering solutions quality ingredients and systems Via unique purification Via leading synthesis, system & sy
Slide 23: Our strategic focus
Our strategic focus Smart science to improve lives™ 23
Slide 24: Smart science to improve lives™
Smart science to improve lives™ 24
Slide 25: Empowering biologics delivery
Croda Pharma Empowering biologics delivery Smart science to improve lives™ 25
Slide 26: A developing market with growing needs
A developing market with growing needs Small molecule Biologics Cell & Gene therapy LEAD CAGR >25% Nucleic Acids $30bn CAGR >20% mAbs m-RNA CAGR 11% Therapy Viral vector Growth potential (%) CAGR 17% vaccines Proteins CAGR 15% CAGR 8% SUSTAIN Parenteral Proteins DEVELOP CAGR 7% $300bn CAGR 10% Sub-u
Slide 27: Strategic focus – Croda Pharma platforms
Strategic focus – Croda Pharma platforms Small Molecule BIologics Small Molecule Protein Adjuvant Nucleic Acid Delivery Delivery Systems Delivery Sustain Lead Develop Smart science to improve lives™ 27
Slide 28: Strategic Platforms – delivering increased value
Strategic Platforms – delivering increased value Example Processing Drug delivery Systems Unique solution Unique Systems Cell therapy Value / outcome for cancer Nucleic Acid Delivery IP Complex biologic manufacture and delivery = increased value and opportunity Smart science to improve lives™ 28
Slide 29: Strategic focus – lead and develop growth platforms
Strategic focus – lead and develop growth platforms Protein Delivery Adjuvant Systems Nucleic Acid Delivery The leading portfolio of The world-leading vaccine Innovative high purity speciality excipients adjuvants systems portfolio to lipid & polymer-based providing optimal systems for enable all ph
Slide 30: Part 2: Teach-in – growth platforms
Part 2: Teach-in – growth platforms Objective – for each platform understand: - Market definition - Evolution of Croda’s position - Market scale - Why Croda will win - Growth opportunities - Investment Smart science to improve lives™ 30
Slide 31: Growth platform – Protein and Small Molecule Delivery
Growth platform – Protein and Small Molecule Delivery James Lawrence – Global Business Director Smart science to improve lives™
Slide 32: What is protein delivery?
What is protein delivery? • Protein active ingredients are manufactured by biological means, via cells, bacteria or yeast. They are large, sensitive molecules • Protein-based medicines are typically injected into the body, protecting their complex structure from being broken down by digestion if tak
Slide 33: Heritage – capturing increasing value
Heritage – capturing increasing value Moving from consumer health to pharmaceuticals Consumer health Standard excipients Speciality excipients Delivery systems Addressing more complex drug delivery challenges Small molecule Large molecule Tablet Topical Liquid Injectable Injectable Injectable Vaccin
Slide 34: Excipient market – Croda targeting high growth niches
Excipient market – Croda targeting high growth and higher value niches • Excipient market estimated to be worth Excipient market ($bn) 1-2% of overall drug market 7 • Excipients for small molecule APIs 7% market CAGR 2020-25 continue to grow mid-single digit % 6 5 • Excipients for large molecule API
Slide 35: Protein market – biologics offer highest growth
Protein market – biologics offer highest growth Increasing % of APIs are biologics Increasing % of biologics are mAbs • Proteins / mAbs market value $300bn today; 10% CAGR Pharma Development Pipeline mAb / Protein Development Pipeline (by API Type) 5500 • Biologics share continues 25000 5000 4500 to
Slide 36: Why Croda will win – improving performance of drug products
Why Croda will win – improving the performance of drug products Croda focuses on value not volume Differentiated positioning Sales of parenteral excipients • Highest purity Value Volume • Batch-to-batch consistency Croda Roquette • Customer proximity Tereos Roquette • Broadest range of speciality ex
Slide 37: Innovation – supporting customers from big pharma to start-ups
Innovation – supporting customers from big pharma to start-ups Current breakdown by customer type • >1,400 direct customers supplied globally • Supply all of top 20 big pharma companies • Balanced portfolio of customers • Partnering with academic researchers • 24 live Open Innovation projects Big Ph
Slide 38: Innovation – growth projects across many applications
Innovation – growth projects across many applications mAbs to treat cancer mAb treatment to preserve sight Oral insulin delivery system Speciality excipients for cancer applications Speciality excipients to combat Speciality excipient with superior solubility macular degeneration • Alternative to in
Slide 39: Innovation – developing delivery and bioprocessing solutions
Innovation – developing delivery and bioprocessing solutions Over 2,000 customer projects for formulation delivery solutions Protein / mAb delivery Bioprocessing aids Case study – global biopharma company Case study – new product • Croda formulation • Experiencing quality issues with injectable • Cr
Slide 40: Investing in growth
Investing in growth 1. Innovation 2. Knowledge 3. Capacity • Expansion of R&D capabilities from ▪ Increase in Protein Delivery teams ▪ Additional capacity in US, Europe and Asia Europe/US to new markets in Asia e.g. India in target markets ▪ Building portfolio of purification technologies • Drug for
Slide 41: Building a valuable innovation pipeline
Building a valuable innovation pipeline Speciality excipient Speciality excipient delivery delivery & bioprocessing < £10m Relative probability of success Speciality excipient Bioprocessing delivery £10m-£20m Speciality excipient Speciality delivery & excipient bioprocessing £20m+ Novel delivery Spe
Slide 42: Key takeaways
Key takeaways Market-leading position • 20 year track record in excipient systems for the pharma industry • Recent 10-30% annual growth in speciality excipients – meeting needs for growing biologics drug delivery market Significant growth opportunity • Protein/mAb market worth $300bn and growing 10%
Slide 43: Growth platform – Adjuvant Systems
Growth platform – Adjuvant Systems Peter Tygesen, Managing Director, Adjuvant Systems Smart science to improve lives™
Slide 44: What is an adjuvant system?
What is an adjuvant system? • Vaccine adjuvants are drug delivery systems administered together with an antigen to boost the desired immune response • Adjuvant systems comprise multiple active components and aid design of vaccines against difficult pathogens • Therapeutic vaccines help the body figh
Slide 45: Heritage – capturing increasing value
Heritage – capturing increasing value Croda acquires First Superfos Brenntag Biosector Biosector and its vaccine Croda Adjuvant Systems adjuvant plant established adjuvant portfolio strategy launched 1990 2012 2019 1939 2001 2018 2022 Site in Frederikssund opened Plant expansion Croda acquires Avant
Slide 46: Prophylactic vaccine market – WHO driving growth
Prophylactic vaccine market – WHO driving growth Vaccine market today Growth drivers WHO Immunisation Agenda 2030 | Global sales by region Government pandemic preparedness programmes Purpose: Smart science to improve livesTM Value Volume Ambition: NA & Europe RoW EM RoW Contribute to >10 clinical de
Slide 47: Therapeutic vaccine market – new vaccines accelerating growth
Therapeutic vaccine market – new vaccines accelerating growth Growth drivers – therapeutic vaccines Vaccine Development Pipelines • Expansion of vaccinology in new therapeutic areas 1800 • For example: 1600 • Oncology 1400 • Neurology 1200 • Typically higher value 1000 • Creating large unmet need fo
Slide 48: Vaccine adjuvant market – growth driven by adjuvant systems
Vaccine adjuvant market – growth driven by adjuvant systems Heritage business Vaccine adjuvant market ($USm) • Aluminium adjuvants 1600 13.4% CAGR 2021-26 • Still regarded as the "gold standard" 1400 • Applicable in ~30% of marketed vaccines in 1200 infectious diseases 1000 800 Vaccine adjuvant syst
Slide 49: Why Croda will win – uniquely diverse portfolio and expertise
Why Croda will win – uniquely diverse portfolio and expertise Formulation expertise for vaccine delivery Unique range Immunological expertise of adjuvants Croda Vaccine for efficacy of and excipients Adjuvant Systems adjuvant systems Strong IP position Smart science to improve lives™ 49
Slide 50: Innovation – partnering with customers in R&D
Innovation – partnering with customers in R&D Customer R&D challenges Key partners • Pharma companies >200 samples for discovery, • Complex pathogens = “moving targets” for vaccines preclinical and clinical development to • New administration routes for patient convenience (including all top 4) • Ne
Slide 51: Innovation – growth projects in new therapeutic areas
Innovation – growth projects in new therapeutic areas Heritage business Adjuvant systems New administrative routes >100 commercial customers ~100 preclinical and clinical projects >10 projects Typical vaccines: Project examples: Example: patch formulation - HPV, hepatatis B, Conjungate Pneumoccocal
Slide 52: Investing in growth
Investing in growth 1. Innovation 2. Knowledge 3. Capacity • Internal R&D and licensing for new adjuvants • Adding key resources to R&D, manufacturing • Denmark – mineral and saponin-based and systems and supply chain adjuvants and systems • New R&D centre of excellence – combining • Growing sales a
Slide 53: Building a valuable innovation pipeline
Building a valuable innovation pipeline < £10m Relative probability of success Adjuvant system Adjuvant £10m-£20m system Adjuvant system Adjuvant £20m+ system Novel adjuvant Weighted value by 2030: ~£80m 2035: ~£200m 2022 Market Introduction 2026 Chart shows expected peak annual sales value of new p
Slide 54: Key takeaways
Key takeaways Market-leading position • Best invested third party adjuvant supplier • Unique pipeline of adjuvants AND building blocks for innovative adjuvant systems to support new vaccine development Significant growth opportunity • WHO programme driving growth in heritage vaccines • Rapid develop
Slide 55: Growth platform – Nucleic Acid Delivery
Growth platform – Nucleic Acid Delivery Dr. Stephen W. Burgess Managing Director, Nucleic Acid Delivery Smart science to improve lives™
Slide 56: What are nucleic acids?
What are nucleic acids? • Present in all cells and essential for all forms of life • Two major forms: Deoxyribonucleic acid (DNA) Ribonucleic acid (RNA) • Primary role is to store and process genetic information Nucleic Acid Delivery • Introduction of nucleic acids into cells counteracts defective g
Slide 57: Heritage – building relationships for success
Heritage – building relationships for success Avanti founded to Exosurf receives Avanti initiates work Croda acquires Avanti expanding supply research market market approval with Acuitas reach into nucleic acid delivery 1985 1990-2017 2020 1967 1990 2017 2020 Good Manufacturing Clinical support of B
Slide 58: Market – rapidly expanding nucleic acid therapy development pipeline
Market – rapidly expanding nucleic acid therapy development pipeline Rapidly expanding pipeline Nucleic acid therapies Growth of nucleic acid therapies • 2,500 projects – increasing rapidly >20% CAGR • Mostly early phases of development – beginning to commercialise over Viral vector 15% next 5-7 yea
Slide 59: Market – targeting high-growth technologies
Market – targeting high-growth technologies Nucleic acid delivery >20% CAGR Market segment: mRNA Market segment: gene editing 40 $m commercial-scale mRNA applications • Gene editing market: >$5bn in 2021 30 • CAGR >20%; $36bn by 2030 20 • Of which, lipid component niche: 10 a further $1.5bn 0 2025 2
Slide 60: Why Croda will win – unique position from discovery to commercial supply
Why Croda will win – unique position from discovery to commercial supply Commercialisation – Technology development R&D – collaboration based Scale-up – transferability Production capability to – leading global R&D expert on technical expertise to GMP manufacture support commercial supply Strengthen
Slide 61: Innovation – partner in pharma research
Innovation – partner in pharma research Current research customers Key Partners Research and clinical development Avanti is a preferred Academic manufacturer for Acuitas Pharma / Therapeutics and their Biotech licensing partners to support clinical development. Customer collaborations In addition to
Slide 62: Innovation – growth projects at forefront of nucleic acid revolution
Innovation – growth projects at forefront of nucleic acid revolution Prophylactic vaccines Therapeutic vaccines Therapeutics Gene editing 76 projects 32 projects 72 projects 100-1,000x more lipid required Croda contributing to >50% of these projects Example: influenza Example: cancer immunotherapy E
Slide 63: Investing in growth
Investing in growth 1. Innovation 2. Knowledge 3. Capacity • Future extensions to pipeline from Avanti • R&D to support customers with • R&D capability, Avanti, US R&D and licensing application data • Further capacity at UK site, supported by • New products to improve lipid nanoparticle • Sales and
Slide 64: Building a valuable innovation pipeline
Building a valuable innovation pipeline Lipid delivery Bioprocessing < £10m reagent Lipid LNP Relative probability of success Lipid LNP Bioprocessing Lipid LNP reagent £10m-£20m Lipid delivery Lipid LNP Lipid LNP Lipid LNP Lipid LNP £20m+ Weighted value by 2030: ~ £150m 2022 Market Introduction 2026
Slide 65: Key takeaways
Key takeaways Market-leading position • Avanti established as global leader in lipid delivery – first to commercialise Covid lipids • Strong R&D presence in pharma gives access to drug / vaccine discovery and clinical development Significant growth opportunity • Covid-19 confirmed therapeutic applic
Slide 66: Empowering biologics delivery – strategy execution
Empowering biologics delivery – strategy execution Daniele Piergentili, President Life Sciences Smart science to improve lives™
Slide 67: Empowering biologics delivery – growth platform opportunity
Empowering biologics delivery platform Growth Protein Delivery Adjuvant Systems Nucleic Acid Delivery Unique portfolio of lipids, Leading partner Croda Broadest portfolio of vaccine polymers and functional UVP for high purity excipients adjuvants and systems ingredients to create unique and bioproce
Slide 68: Strategy execution
Strategy execution A new strategy and brand A clear execution plan Innovation Knowledge Capacity M&A and licensing Smart science to improve lives™ 68
Slide 69: Innovation – Smart science to improve lives
Innovation – Smart science to improve livesTM • Sustainable sources • Unique quality Growth potential • Unique technology Ingredients • IP New • Value/outcome business • Unique solution models Development need Systems Opportunities for new business models and margin expansion Smart science to improv
Slide 70: Innovation – exciting pipeline across all platforms
Innovation – exciting pipeline across all platforms £380m weighted value by 2030 • Balanced across platforms Relative probability of success • Balanced in project type • Balanced in project size • Risk adjusted for regulatory, technical, and market introduction 2022 Market Introduction 2026 Chart sh
Slide 71: Knowledge – building on strong global foundations
Knowledge – building on strong global foundations Leveraging combined Vaccine knowledge, adjuvants enriching innovation Expanding our R&D New business Operations teams, digitalising development our approach Establishing market-facing, technology-led teams to drive ambition Smart science to improve l
Slide 72: Capacity – capex with government co-investment
Capacity – capex with government co-investment Protein Delivery Adjuvant Systems Nucleic Acid Delivery Capex 2020-21 Doubled US capacity Doubled capacity at Avanti, USA 50% more Doubled capacity capacity in Japan in Denmark Established UK scale-up site Capex 2022-24 R&D / projects New US multi- UK c
Slide 73: M&A and licensing – clear framework
M&A and licensing – clear framework Partner MakeLicense pipeline vs Buy Platform acquisition Technology / Knowledge Smart science to improve lives™ 73
Slide 74: Sustainable value creation
Sustainable value creation Smart science to improve lives™ 74
Slide 75: 2021-25 – continued customer driven growth
2021-25 – continued customer driven growth Proteins / small molecules Adjuvant systems Nucleic acids High-single digit % sales CAGR 2021-25 Double digit % non-CV19 sales CAGR 2021-25 Double digit % sales CAGR 2021-25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 Base business CV19 sales Faster growth
Slide 76: 2025+ – sales growth accelerated by innovation
2025+ – sales growth accelerated by innovation 2025-30 – growth £380m current pipeline value by 2030 accelerated by innovation Nucleic Acid Adjuvant Delivery Systems ~£150m ~£80m 2021-25 – continued customer-driven low double digit % growth Protein 2021 2025 2030 Delivery Small Molecule and Protein
Slide 77: 2030 ambition – £1bn pharma opportunity
2030 ambition – £1bn pharma opportunity £1bn ~£380m Low double digit % growth CV19 2021 Customer-driven Innovation pipeline M&A 2030 Smart science to improve lives™ 77
Slide 78: Key takeaways
Key takeaways Strong Delivery • Built a leading portfolio of speciality excipients • ‘Buy and build’ expansion strategy working well Significant growth opportunity • Biologics revolution provides a unique market opportunity • ‘Empowering Biologics Delivery’ strategy • Based on three growth platforms
Slide 79: Q&A
Q&A Smart science to improve lives™ 79
Slide 80: investor.relations@croda.com
Croda Pharma investor.relations@croda.com Non-warranty The information in this publication is believed to be accurate and is given in good faith, but no representation or warranty as to its completeness or accuracy is made. Suggestions for uses or applications are only opinions. Users are responsibl