Crucell Operational Excellence: Healthy Ambition

Transcription

1 Crucell Operational Excellence: Healthy Ambition Cees de Jong Chief Operating Officer March 12 th, 2008 London

2 Agenda Introduction COO s perspective on Crucell Marketed products Excellent scope for growth Production network Korea update Operational excellence Scope, expectations, early examples Organizational change Structure and culture 2

3 Fully integrated biopharma company significant growth in scope and scale Major milestones Partnering with sanofi pasteur Acquisition of SBL holding Acquisition of Berna Biotech AG Achievements Number 6 in the vaccine market through 3 strategic acquisitions Fully integrated vaccine company DSM alliance IPO Euronext / Nasdaq Providing Crucell with the cash to fuel growth Development of PER.C6 technology

4 Three triggers for operational excellence significant cost savings possible The tremendous growth in workforce, production locations and complexity triggers three potential drivers for operational excellence with the objective to create a lean and flexible growth platform % 1,073 Synergy capturing Achieve synergies in cost and resources Crucell opportunities for further integration exist Crucell workforce [FTE end of year] Cost reduction Create a competitive cost position Crucell not fully mastered the increased complexity Crucell location prior to 2006 (R&D, sales) Crucell location since 2006 (R&D, production, sales) Crucell locations [research, production and/or sales] Growth funding Achieve performance leadership to create a cash generator for biotech pipeline Crucell not focused on lean operations 4

5 Main marketed vaccines offering excellent scope for growth Pediatric Quinvaxem TM Pentavalent vaccine Travel & Endemic Epaxal Hepatitis A vaccine Respiratory Epaxal Junior Hepatitis A vaccine Epaxal Junior Hepatitis A vaccine Vivotif Typhoid vaccine Inflexal V Influenza vaccine Third party distribution Hepavax-Gene Hepatitis B vaccine Dukoral Cholera & ETEC vaccine Gardasil (Nordic) Recombinant vaccine 5

6 Pediatric vaccines Quinvaxem TM uniquely positioned Quinvaxem TM : pentavalent, pediatric vaccine Quinvaxem TM vaccines sold Doses in million units 21.3 Fully liquid 5 in 1 vaccine: Diphtheria Tetanus Pertussis H. influenzae b Hepatitis B sales expected to be significantly above

7 Growth of Quinvaxem tremendous endemic reach Countries approved for Penta, requesting Fully Liquid 7

8 Epaxal Junior superior immunogenicity and better local tolerability Launch in

9 Dukoral significant untapped demand Dukoral market-penetration and growth all travelers seeking advice growth Sweden 37% 90% 15% Norway 24% 60% 24% Spain 3% 7% 55% Italy 3% 7% 13% Australia 2% 6% 50% Canada 6% 16% 50% Dukoral relaunch in the rest of continental Europe 9

10 Production network Netherlands Clinical material production under BSL-3 conditions Sweden Dukoral production Clinical material production Fill/finish capacity Capacity utilization 50-60% Korea Quinvaxem TM formulation Hepavax-Gene production Fill/finish capacity De-bottlenecking to well over 100 million doses Spain Fill/finish capacity Increasing to >100 million doses Switzerland Epaxal and Inflexal production Vivotif production Clinical material production Average capacity utilization 60% 10

11 Korean site update production-continuity good despite construction activities Property leased until 2010; extension for 5 years possible Korean Green Cross Corporation (lessor) provides certain utilities Construction of subway and light railway started Landlord will vacate the property in 2009 to enable further urban development Crucell is creating own utilities Although Crucell property not in the way of the subway and/or railway project, preparing eventual move to other location 11

12 Operational excellence project Healthy Ambition started Internal goals Improve effectiveness and efficiency of business processes Deliver a significant cost saving Generate (more) cash from our fully integrated business to fuel growth 12

13 Optimizing business systems will results in better performance and lower costs targeting a 15% cost saving* and benefits Procure to pay Spend and organization Overhead Capacity and organizational model Marketing & Sales and Business Development Sales efficiency and organizational model Manufacturing and Supply Chain Process and infrastructure optimization Working capital reduction Realignment Berna Production capacity utilization and network rationalization * based on 2007 actuals excluding R&D 13

14 Five teams focus on key improvements internal team membership and leadership; support by consultant Overall leadership by COO and CFO Procure to pay (P2P) Overhead Marketing & Sales and Business Development 4 Manufacturing & Supply chain 5 Realignment Berna CH Switzerland Sweden Spain Korea 14

15 A clear set of deliverables final savings validation end of the second quarter of 2008 Project phases & overall deliverables January 21 st March 7 th March 10 th May 23 rd May 26 th June 27 th 1 Top down targets/vision 2 Bottom up design of solutions 3 Pre implementation Deliverables: Process descriptions as-is situation Levers to optimize costs Hypotheses/descriptions of new ways of working with reduced cost structure High level savings validation Deliverables: Detailed process descriptions "to-be" Feasibility checked Conditions to implement the solutions High level investment estimates More detailed savings potential established Deliverables: Detailed organization design & principles Required FTEs (numbers) Adapted functional descriptions (tasks and competences) Implementation steps (capacity, training, lay-out changes) Charter with implementation projects Final savings validation 15

16 Some preliminary findings complexity a key cost driver Procure to pay: Preliminary Pareto analysis shows a (very) long tail of small suppliers 90% of spend from 15% of suppliers (excl. Novartis Quinvaxem TM ingredients) Complexity in the value chain: Bern 2007: 20% small orders high cost... In addition on average SKU s per product Support functions: Business processes not completely aligned -> opportunities to further centralize 16

17 Organizational change a single organization focused on delivery COO QA, other staff Clinical Development Process Development Manufacturing Supply Chain Sales & Marketing 17

18 Implementing cultural change from early stage vaccine pipeline to fully integrated vaccine company Integrate business processes Create global systems Develop key capabilities and people whilst maintaining Crucell s speed and entrepreneurial spirit 18

19 Conclusion 1. Marketed vaccines offering good scope for growth 2. Due to significant growth in scope and scale, opportunities for operational excellence exist 3. Crucell s Healthy Ambition program has started: Sustainable improvement of business processes Significant cost saving and benefits Final savings validation with Q2 results 4. Organizational changes announced to facilitate implementation and cultural change 19

20 For more information: Investor Relations +31(0)