HIKMA PHARMACEUTICALS PLC J.P. Morgan 29 th Annual Healthcare Conference 2011 San Francisco, CA
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Jason Grenfell Gardner Jason Grenfell-Gardner Senior Vice President Sales & Marketing
Continuously delivering strong growth Group revenues ($ million) 600 Acquired Ribosepharm and Thymoorgan (Germany) in H1 2007. Acquired Alkan (Egypt) and APM (Jordan) in H2 2007. Acquired Ibn Al Baytar/ Medicef In Tunisia Acquired Dar Al Arabieh in Algeria 581 637 500 400 300 200 100 0 HIKMA established in Jordan. Licenses from Fujisawa Japan West-ward (US) acquired Hikma Farmaceutica (Portugal) established 0 1 2 1 2 2 3 5 6 9 10 Began manufacturing operations in Trust Pharma Algeria. Acquisition iti of the 52.5% 5% of JPI not previously owned by Hikma 16 23 35 Started operations at Jazeera Pharmaceutical Industries (JPI) in Saudi Arabia) Became public company listed on LSE. Acquired Hikma Italy. Hikma Pharma (Holding Co) established in Jersey. Acquired majority interest in clinical pharma research lab (IPRC) 63 57 54 51 67 76 90 99 105 138 212 188 262 317 449 357.77 Page 3
Our network of high quality manufacturing facilities 17 manufacturing facilities in 9 countries -5 FDA approved Cost-effective R&D and manufacturing Ribosepharm GmbH, Germany Thymoorgan GmbH, Germany West-ward USA Hikma Farmaceutica, Portugal Hikma Italia Hikma Pharma, Algeria Ibn Al Baytar, Tunisia Hikma Pharma, Egypt JPI*, Saudi Arabia APM*, Jordan Hikma Pharmaceuticals, Jordan Hikma Chemicals, Jordan * JPI refers to Jazeera Pharmaceutical Industries and APM refers to Arab Pharmaceutical Manufacturing R&D Centres Manufacturing Plants Page 4
Revenue by segment and region H1 2010 revenue by segment H1 2010 revenue by region 54.2% 61.0% 24.4% 28.0% 0.6% 20.8% Branded Generics Injectables Other 11.0% MENA US Europe & ROW Page 5
Branded Underlying market growth drivers remain intact Rank Unit sales (million) Value $ m Avg Rx Value Value Market $ Growth share MENA PRIVATE MARKET 1,489.0 4,182.5 2.8 +10.8% SANOFI-AVENTIS 1 110.3 382.4 3.5 +6.4% 9.1% GLAXOSMITHKLINE 2 110.5 330.2 3.0 +6.1% 7.9% NOVARTIS 3 64.1 242.0 3.8 +11.6% 5.8% PFIZER 4 42.5 236.1 5.6 +6.7% 5.6% HIKMA PHARMA 5 41.5 155.3 3.7 +1.2% 3.7% MERCK & CO 6 16.4 133.8 82 8.2 +12.8% 32% 3.2% ASTRAZENECA 7 9.2 113.9 12.3 +31.4% 2.7% SPIMACO 8 23.4 103.6 4.4 +7.7% 2.5% BAYER 9 22.3 85.7 3.8 +6.2% 2.0% SERVIER 10 13.0 75.2 5.8 +16.1% 1.8% Source: IMS Health YTD 06/2010. Private retail sales for top 9 MENA markets. Page 6
Branded Licensing partner of choice ce for the MENA region Improving our market share of key in-licensed products Partnering with Celltrion for the MENA region - Differentiates Hikma as a biotechnology company - Access to rich pipeline of nine biosimilars - Expected EMA regulatory approval - Ability to learn biotechnology -Allows Hikma to shape and lead MENA biosimilar regulatory process Source: IMS Healthcare YTD6/2010
Generics Strong gperformance driving market share gains Better than expected performance from MAT MAT YTD core product portfolio 01/2009 01/2010 06/2010 US generic market growth +9.5% +7.2% +6.7% Additional opportunities to increase market share in certain products Hikma (West-Ward) growth +23.4% +37.7% +37.1% Service level improvements reinforce quality reputation Hikma rank #20 #17 #14 Hikma market share 1.1% 1.4% 1.7% Capacity increases improve our ability to supply/meet market demand Continuing to leverage our global manufacturing platform Page 8 Source: IMS Health. Number of prescriptions filled in the US Generics market for oral pharmaceuticals.
Injectables Sales by region H1 2010 Injectables revenue by region 17.4% 40.0% 42.6% MENA US Europe & ROW Page 9
Injectables Strong gpoe potential for continued uedoga organic cgo growth in MENA Five products launched in H1, 11 expected in H2 Strong sales in Algeria, Sudan and Libya Good progress in development of oncology franchise MENA oncology portfolio as of June 2010 Significant opportunities remain in Egypt Launched in H1 Submitted in H1 2010 2010 and Syria Epirubicin Iraq, Syria - Iraq market developing quickly Gemcitabine Lebanon, Libya Iraq, Syria Vinorelbine Iraq, Syria Irinotecan Yemen, Libya Lebanon Zoledronic Acid Imatinib Lebanon Jordan Page 10
Injectables Our growing g injectables business in the US Fast growing portfolio of ANDAs Total injectable products marketed in the US Strength in R&D and regulatory affairs -Over 27 total pending approvals 25 Continuous growth in sales and market 10 8 share 40 35 30 25 20 17 15 5 37 30 0 2006 2007 2008 2009 H1 2010 Page 11
Transforming our global Injectables business
Transaction highlights - A significant opportunity Acquisition of Baxter Healthcare Corporation s US generic injectables business* for a cash consideration of $112 million Brings close to $180 million in annual revenue, significantly enhancing the scale and scope of Hikma s global Injectables platform Adds a high-quality, complementary injectables portfolio Positions Hikma as the second largest injectables supplier in the US Earnings accretive in the first full year excluding one-off off transaction costs Financial flexibility for further acquisitions maintained * Multi-Source Injectables 13
Brings scale to our Injectables business and our US operations Hikma 2009 standalone revenue by segment Hikma 2009 pro-forma revenue by segment Generics 21% Generics 17% Injectables 23% $636.9 million Branded $806.6 6 million 55% Injectables 39% Branded 44% *Multi-Source Injectables reported revenue of $169.7 million and adjusted EBITDA of $14.5 million in 2009 14
Brings scale to our Injectables business and our US operations Hikma 2009 standalone revenue by geography Hikma 2009 pro-forma revenue by geography Europe 13% US 24% US 40% $636.9 million $806.6 6 million MENA 64% MENA 50% Europe 10% 15
Positions Hikma as the second largest generic injectables supplier in the US Top US generic injectables companies (mn eaches) DEA controlled substances market share (units) 100% 600 500 400 300 200 100 0 41.7% #2 15.7% 14.4% 13.3% 5.2% 4.9% 4.0% 4.0% 2.1% 1.4% 1.3% 1.2% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% HOSPIRA MULTI SOURCE SOURCEINJECTABLES OTHERS Strength in niche categories - #2 in DEA controlled substances #2 in overall injectables Source: IMS Health MAT 6/2010. Internal research. Eaches represent individual vials. 16
Improves access to a large, expanding market with substantial revenue opportunity US injectables market sales growth Upcoming injectables patent expiries $bn $5.0 $bn $4.5 $4.1 $4.0 $3.0 $3.0 $3.2 $3.9 $4.0 $3.5 $3.0 $2.5 $2.2 $3.1 $2.6 $2.0 $2.0 $1.5 $1.5 $1.4 $1.0 $1.0 $0.5 $0.0 2008 2009 2010e $0.0 2010e 2011e 2012e 2013e 2014e 2015e Source : IMS Health MAT 4/2010. Internal research 17
Adds a high quality, complementary injectables portfolio Top therapeutic areas Hikma Multi-Source Injectables Pro-forma Antibiotics Anti-cholinergics Anti-convulsants Anti-emetics Anti-hypertensive Anti-psychotics Cardiac Agents CAN Agent Diuretics Hematological Agents Histamine Antagonists Muscle Relaxants Narcotics/Pain Management Phenothiazines Reversal Agents and Antidotes Sedative Hypnotics Combined product portfolio consists of ~60 products and over 180 dosage strengths and forms 18
Increases Hikma s high quality injectables manufacturing capacity and distribution capabilities Cherry Hill facility Ampoules Vials 372,000 sq. ft. facility in Cherry Hill, NJ Manufacture of sterile injectables High speed/high volume liquid filling Ampoules Small Vials Large Vials Automated inspection, labelling and packaging Products Current Ttl Total utilisation capacity DEA registered and compliant Ampoules 11.6 m/year 57.5 m/year Vials 177.3 m/year 234.9 m/year Excellent track record with FDA 100,000 sq. ft. distribution centre in Memphis (Southpoint), t) TN 19
Brings a well qualified and experienced sales team with excellent customer relationships First class team of more than 20 sales professionals will complement Hikma s existing sales team and deepen territory coverage Existing contracts cover 80% of all hospital based pharmaceutical purchases in the US Excellent relationships with leading wholesalers ensure product availability and contract compliance Scope to increase the revenue potential of Hikma s existing product portfolio and pipeline 20
Synergy opportunities Cost synergies Revenue synergies Operating efficiencies through centres of excellence Greater manufacturing and distribution capacity utilisation Scale benefits Enhanced supply chain and resource allocation Increased sales and marketing capabilities Reactivation of several ANDAs Enhanced potential of R&D pipeline Opportunity to introduce certain products in Europe and MENA 21
Transaction summary Transaction structure Transaction price Funding PPE, inventory, intellectual property and existing contracts Consideration of $112 million, satisfied in cash Existing cash resources and new debt facilities Synergies Scope for revenue and cost synergies Accretion Leverage Earnings accretive in the first full year excluding one-off transaction costs Retain flexibility for further acquisitions 22
A transformational deal Significantly enhances the scale and scope of Hikma s global Injectables platform, bringing a broad product portfolio and best in class manufacturing facilities More than doubles the size of Hikma s overall US business, adding scale and strengthening Hikma s market position Enables Hikma to retain sufficient i financial i flexibility to acquire additional assets across its businesses and geographies Supports Hikma s vision of creating long-term success through a diversified business model 23