Corporate Presentation CMIC Co., Ltd. Chairman and CEO Kazuo Nakamura
Current Topics Dec.10 2007 Eisai announced its acquisition of US-based MGI Pharma Feb 4,2008 Amgen and Takeda announced their exclusive collaboration in Japan on up to 13 Amgen s clinical candidates Feb 13,2008 Fuji Film announced its acquistion of Toyama Chemical by TOB transaction Apr 10,2008 Takeda announced its acquisition of US-based Millennium Pharmaceuticals Jun 11,2008 Daiichi Sankyo announced its acquisition of Indian-based Ranbaxy to enter into generic business 2
Current Topics September 1,2008 Shionogi acquired US-based Sciele Pharma January 26, 2009 Pfizer and Wyeth announced that they have entered into a merger agreement under which Pfizer will acquire Wyeth January 27,2009 Astellas announced its proposal to acquire US-based CV Therapeutics February 2, 2009 Shionogi announced its entering into a licensing agreement on peptide vaccine for cancer treatment with Japan-based bio venture Onco Therapy Science February 3,2009 Astellas announced its global development organizational changes i.e.implemetation of a global matrix management system Impact on CMIC? 3
Global Pharmaceutical Market Others 27.2% North America 45.7% Italy 3.4% UK 3.5% Germany 5.5% Japan 8.8% France 5.9% 2007 Pharmaceutical Market 6,670 billion dollars for Global Sales source: IMS MIDAS 2008 4
Trends of R&D Expenditures in Japan Yen billions % 90 80 70 60 50 40 30 34.6 11.8 36.9 R&D Expenditure per Company R&D Expenditure per Sales(%) 12.6 38.6 14.3 43.3 11.1 48.8 12.9 53.9 12.7 58.8 13.8 61.2 62.1 14.2 14.2 74.7 15.3 85.8 16.9 25 20 15 10 20 5 10 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 0 Source: JPMA DATA BOOK 2008 5
Japan CRO Market (Total sales of CRO and its affiliated companies) (Yen 100 millions) 1,600 1,400 1,200 1,000 800 600 400 200 0 affiliated companies member companies 156 156 Growth Rate:: member+affiliated Growth rate 60% 249 241 69% 8 420 389 40% 31 586 85 501 42% 835 Dec.2000 Dec.2001 Dec.2002 Dec.2003 Dec.2004 Dec.2005 Dec.2006 Dec.2007 221 614 19% 24% 996 286 710 16% 1,234 403 831 1,437 482 955 Source:Japan CRO Association excluding pre-clinical (2000-2003) 6
CRO Market in Japan CMIC: the first started CRO in Japan (1992) JCROA(Japan CRO Association) Founded in 1994 Total Number of Members :41 Companies 2007 Sales and Employees; Total Sales JPN 95.5 billions Total:# of employees: 8,297 Japan s Outsourcing Rate 15~20% Top 3 companies have majority market share 7
Pharmaceutical R&D and Approval Process New chemical compounds discovery New biologics candidates selection/screening CTN(Clinical Trial Notification) Phase I Studies Phase II Studies Phase III Studies Broad-based follow-up study on safety 2-3 years 3-5 years 3-7 years 1-2 years 4-10 years Core Research Pre-Clinical Study Clinical Clinical Trials Trials Application Application Approval Approval Launch Launch Post-Marketing Post-Marketing Surveillance Surveillance (PMS) (PMS) Efficacy and safety test on animals Tests on CMC(Chemistry, Manufacturing and Controls) NDA (New Drug Application) 8
Development in Japan through CMIC s Integrated Services Feasibility Market assessment Japan Office setup Partnering Regulatory roadmap Consultation Clinical Trial NDA Approval & Launch Strategy consultation Authorities meetings Identifying doctors/sites Patient recruitment Site/CRC/SMO management Contract CRA Application dossier (CTD) Communication to authorities Reimbursement price Marketing Plan Promotion strategy PR Plan Monitoring Data management and statistical analysis Clinical Study Report Audit Contract MR Pharmacovigilance 9
The business model of the CMIC Group CMIC Group Consolidated accounting affiliates: 14 CMO Contract Manufacturing Organization PVC Pharmaceutical Value Creator Business for Pharmaceutical companies CRO Contract Research Organization CSO Contract Sales Organization HVC Healthcare Value Creator Business for medical institutions and patients SMO Site Management Organization Healthcare Service Healthcare Information Service 10 10
Corporate Profile CMIC Co., Ltd. Founded in 1985 and business started in 1992 CEO: Kazuo Nakamura Service: CRO (Contract Research Organization) CMO (Contract Manufacturing Organization) CSO (Contract Sales Organization) HC (Healthcare) and Others Consolidated results in FY 2008 (ended Sep 30, 2008) Sales: 25,777 millions of yen ($271 millions) Operating Income: 2,275 millions of yen ($24 millions) Net Income: 830 millions of yen ($9 millions) Number of Employees: 2,506 (Note: 1 dollar = 95 yen) 11
Overseas offices CMIC(Beijing) CMIC Korea CMIC-VPS CMIC Asia-Pacific Domestic offices: 14 CMIC BRASIL 12
CMIC Performance (Consolidated basis) Sales ( millions) 35,000 30,000 25,000 20,000 Sales Operating Income Ratio of Operating Income In 2005 Revised Japanese Pharmaceutical Affairs Law Operating Income ( millions) Ratio of operating Income 4,000 3,500 3,000 2,500 (%) 20 18 16 14 12 10 8 6 4 2 0 2,000 15,000 10,000 In 1997 New GCP 1,500 1,000 5,000 500 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 0 13
Number of Employees (Number of employees) 2,500 2,000 In 2005 Revised Japanese Pharmaceutical Affairs Law 1,503 1,743 1,921 2,826 2,506 1,500 1,000 500 0 In 1997 New GCP 10 12 19 58 105 138 173 322 500 658 880 1,197 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 14
Sales by operating segments CMO CSO/ Others CMO CSO/ Others CMO 9% CSO/ Others 11% 80% CRO CRO CRO 2006 2007 2008 17,557 21,617 25,777 (millions of yen) (millions of yen) (millions of yen) 15
Sales & Operating Income (consolidated basis) (millions of yen) (millions of yen) 30,000 25,000 20,000 15,000 17,557 1,818 456 CSO,Others CMO CRO 21,617 2,229 2,410 25,777 2,716 2,434 +4,161 +487 +24 2,500 2,000 1,500 Operating Income Operating Income/Sales 10.0% 8.8% 8.8% 2,160 2,275 12% 10% 8% 6% 10,000 5,000 15,283 16,978 20,627 +3,649 1,000 500 1,553 +116 4% 2% 0 2006/9 2007/9 2008/9 0 2006/9 2007/9 2008/9 0% 16
business domain
CRO (Contract Research Organization)
Structure of clinical trial Pharmaceutical company Application of the clinical study Contract Clinical site Investigator IRB CRO Case report / Adverse event report Site monitoring/ Audit Clinical Research Coordinator Obtain Informed Consent Care for patients etc. Explain Informed consent Patient SMO 19
Breakdown of the Clinical Research (Monitoring) CMIC has 650 CRAs / Monitors, one of the largest numbers in Japan. Medical Device Other Non Therapeutic Purpose Urology Biological Preparations Chemotherapeutics Antiallergic Agents Prior Preparation CNS(Central Nervous System) Epidermis Sensory Organs Cardiovascular Respiratory Organs Digestive Organs Hormones Antineoplastics Metabolism Blood and Body Fluides Total Number of Protocols; 183 (including Prior Preparation) Based on year Oct,1997-Nov,2008 accomplishments. 20
Global Study Structure (number of staff) CMIC Korea 40 Beijing 20 CMIC 60 CMIC Asia-Pacific 10 21
Our Edge Strategy & Regulatory Consulting Monitoring Wide range of therapeutic area Japanese biggest CRA resource Enhancement of in-house education Project management Data Management Experienced Staff Provide Solutions with Experienced Programmer Clinical support based on CMIC Group expertise Service from specialized staff Handling any work regarding EDC Support of Multinational Studies Pan-Asian Studies Global Studies 22
Strategy for CRO Company Pharmaceutical Value Creator Global CRO Company Final Step Expansion of Services Current 1 st st Step Step 2 nd nd Step Expansion of Trial Place and Field Increase of Global Trial Advancement of Services 23
CMO (Contract Manufacturing Organization)
Impact of Revision to The Pharmaceutical Affairs Law (April.2005) Manufacturing Approval Marketing Approval Importance of product quality control and safety management Strengthening Full Outsourcing to drug manufacture GMP Shift manufacturing department into subsidiary outsourcing to CMO Strengthening product quality control GQP Increase in quality assurance business Strengthening safety control GVP Strengthening of post-marketing surveillance Increase in number of clinical studies 25
CMIC CMO Korea Co., Ltd. -Korea- In 2005, CMIC acquired 90% stake from SS pharmaceutical Co.,Ltd. Employees:30 Ointment,Fluid medicine,internal solid medicine Key item:ginseng sahmool tang etc.(18 items) 26
CMIC SS CMO Co., Ltd. Toyama, Japan- In Autumn 2006, CMIC acquired 90% stake from SS Pharmaceutical Co., Ltd. Employees:60 Ointment,Cream,Suppository,Cachet etc. Ethical drugs account for approximately half of products. Number of items in 2007 :62 (OTC drugs 38/Ethical drugs 18/Quasi drugs 6) 27
CMIC-VPS Corporation -New Jersey, U.S.- Clinical and commercial drug manufacturing In 2007, CMIC acquired 86% from Freund Corporation Employees:30 Investigational and Commercial Drugs Tablet,Capsule,Granule,Fine Granule Location :Cranbury, NJ, U.S.A. Original Foundation: 2001 28
Our Edge High performance flexible batch-size system in order to fulfill a customer s needs. Working on GMP Quality Management System. Improvement of quality Wide range of product line 29
Strategy for CMO Company Pharmaceutical Value Creator Expansion of Production Contract manufacturing from clinical to commercial drugs Contract service of entire production function of client Global reach Current 1 st st Step Step 2 nd nd Step Final Step Increase of production by new orders Transfer from a plant to a service provider Improvement of Efficiency 30
CSO (Contract Sales Organization)
CSO:Contract Sales Organization Marketing Communication and Sales Promotion Contract-MR(Medical Representative):MR outsourcing services Medical Communication Planning Creating Materiel for Promotion and Sales Numbers of C-MRs and MRs Marketing 120,000 /Proportion of C-MRs to MRs (%) 30 Marketing Research Consultation 100,000 80,000 25 Number of C-MRs Number of MRs % of C-MR 25 20 Training and Education Training and Education for MR 60,000 40,000 8 14 15 10 15 10 20,000 0 USA England France Germany Japan Canada Source : DMS, 2004 data 3 5 0 32
MDS - Medical Communication Communication strategy planning / Development of product advertisement and product promotion materials Academic support for medical writing, translation and submission for publication Planning and production of periodicals and PR brochures Advertisement, material planning and production for patient education Planning and production of detailing tools for education and training of MRs Planning and production of informational materials targeted physicians and healthcare workers 33
Strategy for Contract MR Business in CSO Numbers of C-MRs 1,000 500 100 ~ CMIC competitors MPSS Small players MPSS MR dispatching only Integrated MR service 34
Healthcare Service
Site Support Institute (SSI) The largest SMO group in Japan Sapporo Toyama Kanazawa Okayama Hiroshima Fukuoka Sendai Tokyo Shizuoka Nagoya Osaka Takamatsu Kumamoto Kagoshima Employees :613 CRCs :426 SMAs : 82 Offices : 14 Historical protocol experiences : 1,100 Current operating protocols : 380 Sites: University Hospitals 50 Hospitals 520 Clinics 530 Total 1,100 36
Healthclick Support to pharmaceutical companies, hospitals and patients healthclick Site views 12 millions/month 1.4 million Unique Users Information support business for pharmaceutical companies, hospitals and patients Medical Call Center Disease Management 37
Strategy for SMO Business 20% Targeting 20% market share by its largest coverage of medical institutions Market Share 10% Small SMOs CRC Merger in October, 2008 SSI New SSI 0% Large scale SMOs Medium sized SMOs 0 200 400 Number of Employees 600 38
IPD (Intellectual Property Development)
Development of L-FABP Applied for Marketing Approval of L- FABP diagnostic for predicting the progression of renal diseases (Sep. 2006) 40
L-FABP project targets at Kidney diseases In 2003, Kidney disease conquest campaign began in the U.S.A. A chronic kidney disease is the greatest risk factor of cardiovascular diseases. American Heart Association(AHA) statement Circulation 2003,Oct.28 Number of patients with dialysis treatment Japan:219,183 U.S.A:292,215 Number of patients with chronic renal diseases is increase on a global basis 10.8% of population, about 20 million is suffering from early kidney disease in the U.S.A. In the year 2010, 650,000 will be in the late stage of renal failure(dialysis treatment or dysfunction of kidneys ) The likelihood of the development of cardiovascular diseases for patients with chronic renal diseases is ten to thirty times, comparing to general population. 41
National Institutes of Health (June, 2008) 42
Estimate of Performance for the FY 2009
Financial Forecast for the FY ending Sep.2009 (Consolidated) (millions of yen) Sep.2008 Sep.2009 Increase Growth Growth rate rate Sales Sales 25,777 25,777 30,193 30,193 4,416 4,416 17.1% 17.1% Gross Gross operating income income 7,165 7,165 8,234 8,234 1,069 1,069 14.9% 14.9% Selling,general and and administrative expenses 4,889 4,889 5,602 5,602 713 713 14.6% 14.6% Operating income income 2,275 2,275 2,632 2,632 357 357 15.7% 15.7% Ordinary income income 2,188 2,188 2,631 2,631 443 443 20.3% 20.3% Net Net income income 830 830 1,176 1,176 346 346 41.8% 41.8% 44
Net income per share and dividend (Yen) 1,800 1,600 1,400 Net income per share 1,328.23 1,579.33 1,338.40 (Yen) 400 350 300 26.4% Devidend Devidend rate 26.5% 25.0% 30% 25% 1,200 1,003.94 250 16.3% 1,000 13.7% 200 800 704.09 334 20% 15% 600 150 266 10% 400 100 186 216 216 200 50 5% 0 2005/9 2006/9 2007/9 2008/9 2009/9E 0 2005/9 2006/9 2007/9 2008/9 2009/9E 0% 45
Summary
Summary PVC model Consulting capability and wide-range coverage of CMIC group Total support for pharmaceutical companies, including ones foreignowned and entered from other industries Top leading CRO in Asia Established competitive advantages Strategy & regulatory consulting Pharmacovigilance (Support to collect, evaluate and analyze drug safety information) Aggressive challenges for new business frontiers Global business strategy High potentiality in the Japanese CRO market Highly skilled management team 47
Stock Information CMIC Nikkei Stock Average 45,000 15,000 40,000 2309:CMIC Nikkei Stock Average 14,000 13,000 35,000 12,000 11,000 30,000 10,000 9,000 25,000 8,000 20,000 7,000 6,000 15,000 5,000 4-Jan-08 21-Jan-08 12-Feb-08 3-Mar-08 24-Mar-08 14-Apr-08 7-May-08 26-May-08 16-Jun-08 7-Jul-08 28-Jul-08 18-Aug-08 8-Sep-08 29-Sep-08 20-Oct-08 10-Nov-08 1-Dec-08 22-Dec-08 13-Jan-09 2-Feb-09 48
CMIC s Vision CRO Conventional CRO Group of of skilled individuals Working on on pharmaceutical development Pharmaceutical Value alue Creator reator Contribution to growing pharma industry Healthcare Value Creator Patient oriented healthcare services Disease management Corporate Value =Sustainable Profit 49
Thank you for your attention. http://www.cmic.co.jp/e/ irpr@cmic.co.jp 50