West Pharmaceutical Services, Inc. · NYSE:WST
West Pharmaceutical Services — Barclays Capital Global Healthcare Conference 2012
30 slides from West Pharmaceutical Services's conference presentation, Mar 13, 2012
Slide 1: West Pharmaceutical Services, Inc.: Barclays Capital Global Healthcare Conference
WEST PHARMACEUTICAL SERVICES, INC. Solutions for Injectable Drug Delivery NYSE:WST www.westpharma.com © 2012 by West Pharmaceutical Services, Inc., Lionville, PA. All rights reserved. This material is protected by copyright. No part of it may be reproduced, stored in a retrieval system, or transmitt
Slide 2: Safe Harbor Statement
Safe Harbor Statement Cautionary Statement Under the Private Securities Litigation Reform Act of 1995 This presentation and any accompanying management commentary contain “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements inc
Slide 3: Pharmaceutical Packaging Systems and Delivery Systems
Pharmaceutical Packaging Systems Pharmaceutical Delivery Systems • A globally diverse manufacturer of products used primarily in containing and administering small-volume parenteral drugs. • Strong competitive position – Substantial market shares – Proprietary technology – Diversified customer base
Slide 4: A Diverse, Stable Customer Base
PHARMACEUTICAL / BIOTECHNOLOGY GENERIC MEDICAL DEVICE A Diverse, Stable Customer Base (representative healthcare customers)
Slide 5: Business Segments: 2011 Revenues
$857 $337 Packaging Systems Business Segments 2011 Revenues ($ millions) Delivery Systems • Contract manufacturing base • Multi-material • Project management • Automated assembly • Regulated products • Capabilities + IP = proprietary delivery devices • Proprietary devices are expected to drive growt
Slide 6: 2011 Highlights
2011 Highlights • 2011 results announced February 16, 2012: – Sales increased 5.2%, excluding currency – Gross and operating margin compressed by material costs, currency – Mitigated by pricing actions and manufacturing savings • Updated long-term financial targets on Q3 call • China rubber facility
Slide 7: Summary Results
Summary Results $ millions, except per-share data (1) These are Non-GAAP measures. For an explanation and reconciliation of these items, see “Non-GAAP Financial Measures” and “Notes to Non-GAAP Financial Measures”(Slides 27 - 29) and “Cautionary Statement” (Slide 2) .
Slide 8: Summary Balance Sheet Information
Summary Balance Sheet Information $ millions
Slide 9: 2012 Outlook and Challenges
2012 Outlook and Challenges • Expect 4% to 7% revenue growth in 2012, excluding currency • Pharmaceutical and Device markets: – Customer’s new product pipelines showing signs of strength – Patent cliff front and center – Shift to large molecule products continues – Global shift in product sourcing (
Slide 10: 2012 Guidance: Revenue, Gross Profit and Adjusted EPS
($ millions, except EPS) Estimated 2012 Revenue (1) Estimated Gross Profit % (1)(2) Pharmaceutical Packaging Systems Segment $875 - $895 33.3% Pharmaceutical Delivery Systems Segment $340 - $350 20.1% Consolidated $1,215 - $1,245 29.6% 2012 Adjusted Diluted EPS (1)(2) Estimate $2.37- $2.55 (1) Guida
Slide 11: What will drive growth?
– Growth in emerging markets – Escalating regulatory and quality demands – Adding plants: China, India – Expanding Westar ® and Envision ® capacity, introducing NovaPure ® components – Growth in combination products: • safety, dosing accuracy, ease of use, • deliver cost savings • product differenti
Slide 12: Therapeutic Category Growth Drivers
Category Key Customers Projected Growth Diabetes > 10 % Oncology > 10 % Vaccines > 10 % Autoimmune > 8% Generics >10% IMS April 2010 Report; Business Insights 2009; GBI Research 2009 Therapeutic Category Growth Drivers
Slide 13: Packaging Segment Overview
Packaging Systems $857 Packaging Segment Overview 2011 Revenue ($ millions ) • Market leader • Strong recurring revenue base • Global manufacturing • Steady growth in base • Future growth will be driven by: added value per unit sold; geographic expansion; and growth in key therapeutic segments
Slide 14: Pharmaceutical Packaging Systems: Components for Small Volume Parenterals
Pharmaceutical Packaging Systems Packaging Components for Small Volume Parenterals Plungers, Tip caps, Needle shields for Glass Syringes Plungers, lined seals for Glass Cartridges for Pens Primary packaging components (those that touch the drug) are typically proprietary to West and are “designed in
Slide 15: Standard vs High-Value Products Revenue Opportunity
Standard High-Value Products Products Revenue Opportunity ($ per unit) Plungers and sleeve stoppers Stoppers Seals RU seals Westar ® RU
Slide 16: Faster Growth of High-Value Products
Faster Growth of High-Value Products Pharmaceutical Packaging Systems
Slide 17: Delivery Systems Segment Overview
$337 Delivery Systems Segment Overview • Contract manufacturing base • Customer owned IP • Project management • Automated assembly • Regulated products • Proprietary Product Development • West owned IP • Multiple use platforms • Focus on unmet needs for biologics 2011 Revenue ($ millions )
Slide 18: Delivery Systems
Delivery Systems Daikyo Crystal Zenith ® Life-cycle Containment Solutions West MixJect ® and Vial2Bag ® Custom Manufacturing of Components and Devices Proprietary Components, Devices and Systems West ConfiDose ® auto-injector platform technology SmartDose ® electronic patch injector platform technol
Slide 19: Effect of Increasing Proprietary Device Sales
Revenue per-unit Consumer product manufacturing Medical device manufacturing Mix2Vial ® CZ vials CZ Syringes Effect of Increasing Proprietary Device Sales Contract Manufacturing Proprietary Devices Products Auto-injector platform technology Electronic patch injector technology
Slide 20: Concerns With Glass Syringes
Concerns With Glass Syringes • Interaction with sensitive biologics • Protein aggregation (silicone oil) • Residual chemicals (tungsten, glue) • Glass flakes • Dimensional variation • Variable silicone distribution • High Cost of Quality • Breakage • In process/handling • Within auto-injector system
Slide 21: Daikyo CZ Solution
Daikyo CZ Solution with Daikyo Flurotec ® Barrier Film • Reduces: – drug exposure to extractables – risk of protein aggregation caused by silicone oil in the drug product – returns and in-process clean-ups caused by broken glass – risk of delamination and glass-particulate contamination • Consistent
Slide 22: Pharma Industry Drug Life-Cycle Management
Phase I Phase II Phase III Post-Market Life Cycle Management Pharma Industry Drug Life-Cycle Management 8 - 10 years 2 - 3 years 2 - 3 years Regulatory Approval Discovery
Slide 23: SmartDose Electronic Patch Injector Technology Platform
Programmed by PDA or PC Dose may be customized Applied and activated by patient SmartDose ® Electronic Patch Injector Technology Platform • Controlled, subcutaneous, micro-infusion delivery of high volumes and high viscosity drugs • Prefilled cartridge, no need for user filling • Based on Daikyo CZ
Slide 24: Selected Factors That Impact Margin % in 2012
Selected Factors That Impact Margin % in 2012 (3) (3) See “Cautionary Statement” on slide 2. This is not an exclusive list of risks associated with forward looking statements made in or in connection with these materials.
Slide 25: Our Long-Term Focus
Our Long-Term Focus • Pharmaceutical Packaging Systems – Organic growth of 3-5% per year – Margin expansion from efficiency, product mix – Capital investments target enhanced quality and value • Pharmaceutical Delivery Systems – Deliver the potential of Daikyo CZ products – Stronger mix of healthcar
Slide 26: Summary
Pharmaceutical Packaging Systems Pharmaceutical Delivery Systems • Strong competitive position • Stability with growth potential • New products well positioned to meet future market needs • The financial strength to invest Summary
Slide 27: Non-GAAP Financial Measures
As Reported December 31, 2011 Restructuring & related charges Acquisition- related contingenci es Special separation benefits Discrete tax items Non-GAAP December 31, 2011 Operating profit $109.6 $5.3 ($0.2) $2.9 $- $117.6 Interest expense, net 16.9 - - - - 16.9 Income before income taxes 92.7 5.3 (
Slide 28: Use of Non-GAAP Financial Measures
For additional details, please see the attached financial schedules and Cautionary Statement. Use of Non-GAAP Financial Measures- The preceding discussion of our results and the accompanying financial tables use non- GAAP financial measures. West believes that these non-GAAP measures of financial re
Slide 29: Full Year 2012 Guidance Reconciliation
Full Year 2012 Guidance (a) Diluted Earnings Per Share Adjusted guidance $2.37 to $2.55 Restructuring, net of tax (0.05) to (0.03) Reported guidance $2.32 to $2.52 (continued from prior slide) Acquisition-related contingencies: During the three and twelve months ended December 31, 2011, we increased
Slide 30: West Pharmaceutical Services, Inc.
WEST PHARMACEUTICAL SERVICES, INC. Solutions for Injectable Drug Delivery NYSE:WST www.westpharma.com © 2012 by West Pharmaceutical Services, Inc., Lionville, PA. All rights reserved. This material is protected by copyright. No part of it may be reproduced, stored in a retrieval system, or transmitt
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