analyst conference -...

FULL-YEAR RESULTS 2018

ANALYST CONFERENCE

RADISSON BLU, ZURICH AIRPORT

14 MARCH 2019, 1:00 PM CET

PRESENTATION

© Vifor Pharma

ETIENNE JORNOD

EXECUTIVE CHAIRMAN

OF THE BOARD OF DIRECTORS

STEFAN SCHULZE

PRESIDENT OF THE EXECUTIVE

COMMITTEE & COO

COLIN BOND

CHIEF FINANCIAL OFFICER

FULL-YEAR RESULTS 2018

SPEAKERS

14 March 2019 2

© Vifor Pharma

AGENDA

1

3

2

Vifor Pharma

2018 highlights

3 Business update and outlook 2019

14 March 2019

4 Financial performance and guidance 2019

© Vifor Pharma

1) Proposed per share dividend to be approved by the shareholders at the Annual Shareholders Meeting on 8 May 2019

4

1 GUIDANCE 2018

ACHIEVED OR EXCEEDED AT ALL LEVELS

14 March 2019

2018 dividend at same level as 2017 CHF 2.001)

EBITDA increase by more than 25% 39.7%

Net sales increase by more than 15% 22.7%

© Vifor Pharma

LEADING PORTFOLIO IN TARGET THERAPY AREAS

1) Pre-commercial products

Avacopan1) CCX1401)

1)

Vadadustat1)

14 March 2019 5

CR8451)

Iron

deficiency Nephrology Cardio-renal

Own

products

In-licensed

products

1

© Vifor Pharma

Veltassa® Build a blockbuster

Vifor Fresenius Medical Care Renal Pharma Grow and enhance value

THREE STRATEGIC GROWTH DRIVERS 1

6 14 March 2019

Ferinject® Exploit the potential through market awareness

© Vifor Pharma 14 March 2019 7

1) In-market sales, based on quarterly IQVIATM MIDAS® panel, GERS, Insight Health, DLI, historical data at constant exchange rate (average 2018)

FERINJECT®

2 BILLION PLUS IN-MARKET SALES BY 20251)

> CHF 2 billion

1

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Launch in

Japan

Launch

in China

AFFIRM-AHF

results

FAIR-HF2

results

HEART-FID

results

© Vifor Pharma

EXPECTED GLOBAL MARKET EVOLUTION FOR PHARMACEUTICALS IN NEPHROLOGY

< 5%

14 March 2019 8

VIFOR FRESENIUS MEDICAL CARE RENAL PHARMA

BECOME A GLOBAL LEADER IN A FAST-GROWING MARKET

Source: EvaluatePharma 2017-22 CAGR of 10.3%, 2022-25 CAGR assumed unchanged, Vifor Pharma analysis, excludes iron products

2018

>$20bn >$40bn

2025

VFMCRP current market share

Rest of the nephrology market

1

© Vifor Pharma

CURRENT INDICATIONS

14 March 2019


NUMEROUS OPPORTUNITIES REMAIN

Polycystic kidney disease

Metabolic acidosis

Vascular calcification

Kidney stones

Hypernatremia

Fabry

aHUS

Diabetic nephropathy

Acute kidney injury

β-Thalassemia renal disease

FSGS

ANCA associated vasculitis

Uremic pruritus

C3G

Secondary hyperparathyroidism Hyperphosphatemia

Hyperkalaemia

Anaemia

Iron deficiency

PIPELINE INDICATIONS POTENTIAL INDICATIONS

9

1

© Vifor Pharma

US MARKET OPPORTUNITY

14 March 2019 10

VELTASSA®

ASSESSMENT OF LONG TERM POTENTIAL UNCHANGED 1

3 million USD 820

Monthly gross price Estimated

hyperkalaemia patients

6 months

Targeted duration

of treatment

x x > USD 10 billion =

Potential market size

(net sales)

© Vifor Pharma

EBITDA

280.4 391.5

FY 2017 FY 2018 2019E 2020E

NET SALES

14 March 2019 11

MILESTONE 2020

ON TRACK TO REACH OUR GUIDANCE 1

1'291.7

1'584.6

FY 2017 FY 2018 2019E 2020E

Grow between

11% and 13%

Exceed

CHF 2 billion

+23%

Grow by 25%

In the range of

700 million

+40%

© Vifor Pharma

>CHF 1 billion

in reported

net sales

>CHF 1 billion

in reported

net sales

>CHF 1 billion

in reported

net sales

OBJECTIVE 2025

STRONG POTENTIAL FOR OUR EXISTING GROWTH DRIVERS

14 March 2019

Ferinject® Vifor Fresenius Medical

Care Renal Pharma Veltassa®

12

1

© Vifor Pharma

VFMCRP – Grow and enhance value

Veltassa® – Build a blockbuster

14 March 2019 13

OBJECTIVE 2025

KEY ELEMENTS FOR OUR FUTURE GROWTH

1) Therapeutic areas

EXISTING GROWTH DRIVERS

Ferinject® – Exploit the potential

Licensing/acquisition across geographies & TAs1):

• Nephrology

• Cardio-renal

• Patient blood management, gastroenterology, etc.

INORGANIC GROWTH – ADJACENT INDICATIONS

• Leverage US commercial infrastructure

• Become EU partner of choice for non-European growth

and innovation companies

EXISTING INFRASTRUCTURE

• Ferroportin inhibitor

• Exploit data & pay-for-performance (anaemia and

bone-mineral metabolism management, etc.)

• Replicate VFMCRP structure in other therapeutic areas

NEW TECHNOLOGIES AND BUSINESS AREAS

1

© Vifor Pharma

AGENDA

1

14

2

Vifor Pharma

2018 highlights


14 March 2019


© Vifor Pharma 15

2 HIGHLIGHTS 2018

KEY CORPORATE DEVELOPMENTS

14 March 2019

2018

March

Veltassa® licensing

agreement with Zeria

Expand partnership with

Zeria after Ferinject®

May

CR845 license agreement

with Cara Therapeutics

USD 70m in upfront and equity

investment

December

Ferroportin inhibitor:

positive P-I study

results

P-II study to start mid-2019

May

RetacritTM approved

by US FDA

First epoetin alfa biosimilar

approved in the US

December

Venofer®: positive

PIVOTAL study results

Support optimal i.v. iron

dose in haemodialysis

May

Veltassa® approved for

use with or without food

by US FDA

Improved flexibility for patients

September

ChemoCentryx: increased

equity stake to 21.1%

Confirm commitment to rare

diseases

© Vifor Pharma

1) Including IFRS 15 restatement 2) Profit after minorities adjusted for amortisation of intangible assets

16

2 HIGHLIGHTS 2018

FINANCIAL OVERVIEW

• FY 2018 net sales of CHF 1’584.6 million, up 22.7%1)

• FY 2018 EBITDA of CHF 391.5 million, up 39.7%

• Core EPS2) of CHF 4.16

• Net debt of CHF 179.7 million

• Equity ratio of 74.8%

KEY FINANCIAL HIGHLIGHTS

14 March 2019

© Vifor Pharma

AGENDA

1

17

2

Vifor Pharma

2018 highlights


14 March 2019


© Vifor Pharma

Veltassa® Build a blockbuster

Vifor Fresenius Medical Care Renal Pharma Grow and enhance value

THREE STRATEGIC GROWTH DRIVERS 3

18 14 March 2019

Ferinject® Exploit the potential through market awareness

© Vifor Pharma

NET SALES CHF million

205 238

281

67

91

127

51

62

78

324

392

485

2016 2017 2018

14 March 2019 19

1) Net sales restated for IFRS 15 impact

FERINJECT®

INCREASE OF 24% IN REPORTED NET SALES 3

+21%

+24%

Europe US RoW

1) 1)

© Vifor Pharma

16 39 59 83 126

191 244

379

540

698

898

14 March 2019

FERINJECT®

POTENTIALLY A BLOCKBUSTER ALREADY IN 2019 3

Europe US RoW

MAT = Moving annual total

1) Based on quarterly IQVIATM MIDAS® panel, GERS, Insight Health, DLI, historical data at constant exchange rate (average 2018)

20

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GLOBAL I.V. IRON MARKET (MAT Q4 2018)1)

• Global in-market sales of CHF 1’837 million (+17%)

• Ferinject® in-market sales growth of 29%

• Global market share of Ferinject® in value is 49%

IN-MARKET SALES1)

CHF MILLION

2018


FERINJECT®

THE BLOCKBUSTER PLAN – UPDATE 2018

1) Study conducted by our US partner Daiichi Sankyo

Therapeutic

areas with high

unmet need

• Strong heart failure growth

in EU5

• Various pilots in patient

blood management

Strong

partnerships

Geographic

expansion

Life cycle

management

• Approved in 76 countries

• Launch in Japan expected

in H2 2019

• Launch in China expected

in 2021

• AFFIRM-AHF

• HEART-FID1)

• Leading product for Daiichi

Sankyo in the US

• Go-to-market strategy for

China in 2019

3

© Vifor Pharma

VELPHORO® NET SALES CHF million

54

81

96

2016 2017 2018

ESA PORTFOLIO NET SALES CHF million

329 340

461

2016 2017 2018

14 March 2019 22

1) Fresenius Kidney Care (FKC): Fresenius Medical Care North America dialysis provider organization 2) Net sales restated for IFRS 15 impact


ESA PORTFOLIO / VELPHORO®

• >95% penetration of Mircera® in FKC clinics1)

• Strong growth of Mircera® outside of FKC clinics1)

• First RetacritTM sales at end of 2018

3

• Recent update of KDIGO guidelines recommend use of non-calcium based phosphate binders

• Rollout of a new program in FKC clinics1) in H2 2018

+36%

+3%

+48%

+19%

Mircera® RetacritTM

2) 2)

© Vifor Pharma

KEY ELEMENTS GOING FORWARD

14 March 2019 23

1) Bundled payment under the end stage renal disease prospective payment system (ESRD PPS) for renal dialysis services


HIF PROLYL-HYDROXYLASE INHIBITORS (HIFS) 3

Clinical trials Reimbursement Treatment protocol Uptake

Data on safety and

efficacy outstanding

HIFs expected to be

included in the “bundle”1)

Pilots required to test

real world safety?

Low impact expected on

i.v. iron net sales

Vadadustat in-license agreement offsets potential risk to current ESA portfolio

© Vifor Pharma

VELTASSA® NET SALES CHF million

7

52

91

2016 2017 2018

14 March 2019 24

1) Not meaningful 2) 2016 net sales include only four months following the acquisition of Relypsa on 1 September 2016; Veltassa® FY 2016 net sales amounted to CHF 12.3m

VELTASSA®

NET SALES GROWTH OF 75% IN 2018

3

NM1)

HIGHLIGHTS

• Launched in Denmark, Germany, Norway and Sweden

• In Q1 2019 Veltassa® was reimbursed in Belgium, with

launch to follow in due course

• License granted to Zeria to develop and commercialise

Veltassa® in Japan

• AMBER study evaluating the concomitant use of

Veltassa® and spironolactone in patients with CKD and

resistant hypertension to report results in H1 2019

• DIAMOND study initiation in H1 2019

US Europe

+75%

2)


1) % of nephrologists considering Veltassa® as appropriate long-term treatment, Putnam Associates survey 2) Relypsa data on file 3) For all approved claims

VELTASSA® IN THE US

KEY CONSIDERATIONS

Awareness

Usage

Duration of treatment

Payers’ coverage

Prescription (% of nephrologists2))

Pricing Monthly gross price

Median out-of-pocket costs3)

31.12.2018

USD 820

89%

DIAMOND study validation Cardiology

Nephrology: positive feedback1)

~4-5 months

USD 6

94%

3


CLINICAL PROGRAMS

KEY UPCOMING TRIAL MILESTONES 3

0.8

1.7

2019 2020

H1 2019 - Veltassa®

Read out of the

AMBER study

Q4 2019 - Avacopan

Read out of the

ADVOCATE P-III

study

H1 2019 - Veltassa®

Initiation of the

DIAMOND study

Mid-2019 – Ferroportin inhibitor

Initiation of the P-II study

in beta-thalassemia

Q1/H2 2019 - CR845

Data from the

two KALM P-III

studies

2020 - Ferinject®

Data from the

AFFIRM-AHF

study

2020 - CCX140

Read out of the P-II

study in FSGS

2020 - Vadadustat

INNO2VATE study

read out

© Vifor Pharma

OUTLOOK 2019

CLINICAL TRIALS

MARKET ACCESS

Veltassa®: read-out of the AMBER study (H1 2019)

Veltassa®: initiation of the DIAMOND outcome study for RAASi enabling (H1 2019)

Ferroportin inhibitor: initiation of phase-II study (mid-2019)

Avacopan: phase-III ADVOCATE study readout (Q4 2019)

CR845: KALM-1 and KALM-2 study readouts (Q1 and H2 2019, respectively)

Ferinject® launch in Japan (H2 2019)

Go-to-market strategy in China

Partnering the Japanese rights for CCX140

BUSINESS

DEVELOPEMENT Completion of at least one additional in-licensing, product acquisition or corporate transaction

14 March 2019 27

3

© Vifor Pharma

FY

2017

FY

2018

Change

vs. 2017

Net sales 1'291.7 1'584.6 +22.7%

Other income 91.6 64.6 -29.5%

Cost of sales (517.9) (648.7) +25.3%

Gross profit 865.4 1'000.5 +15.6%

EBITDA 280.4 391.5 +39.7%

14 March 2019 29

P&L OVERVIEW (IN CHF MILLION)

1) Restated for IFRS 15 impact

4

• Net sales increase of 22.7% driven by

Ferinject®/Injectafer®, Mircera®, Veltassa®

and Velphoro®

• Proportionately lower gross profit increase of

15.6% driven by significant increase of

Mircera® sales and decrease in CellCept®

royalties

• EBITDA growth of 39.7%, driven by strong

net sales growth and cost containment

1)

© Vifor Pharma

93.4

111.4

8.6

15.1

38.8

10.0

15.6

292.9

+23.8%

+32.8%

NM2)

+7.9%

+18.7%

+75.1%

+4.9%

+22.7%

14 March 2019 30

NET SALES OVERVIEW (IN CHF MILLION)

SOLID GROWTH IN 2018

FY

2017

FY

2018

Ferinject®/Injectafer® 391.8 485.1

Mircera® 339.9 451.3

Venofer® 109.6 118.2

Velphoro® 80.6 95.7

Veltassa® 51.7 90.5

RetacritTM 0.0 10.0

Others 318.2 333.8

Net sales 1'291.7 1'584.6

Growth

in 2018

1) Restated for IFRS 15 impact 2) Not meaningful

4

1)

© Vifor Pharma

FY

2017

FY

2018

Change

vs. 2017

EBITDA 280.4 391.5 39.7%

EBIT 134.3 227.4 69.3%

Financial result (8.7) 42.0 N/A

Taxes (1.6) (25.0) N/A

Profit from continuing operations 124.0 244.4 97.1%

Profit from discontinued operations 1'113.0 - N/A

Net profit before minorities 1'237.0 244.4 -80.2%

Minority interests (89.9) (92.0) +2.3%

Profit after minorities 1'147.1 152.4 -86.7%

Core earnings1)

per share 2.12 4.16 +95.9%

14 March 2019 31

1) Profit after minorities adjusted for amortisation of intangible assets (CHF 117.5 million in 2018)

EARNINGS OVERVIEW (IN CHF MILLION)

• Financial result of CHF 42.0,

mainly driven by FX gains on

intercompany loan repayment

(Relypsa)

• Effective tax rate of 9.3%

benefiting from recognition of

deferred tax assets

• Core earnings per share of

4.16, driven by strong operating

performance and financial

result

4

© Vifor Pharma

31 Dec

2017

31 Dec

2018

Change

vs. 2017

Cash & cash equivalents 425.1 400.3 (24.8)

Receivables 407.4 509.0 101.6

Inventories 232.0 281.7 49.7

Financial investments & other 147.1 266.1 119.0

Deferred tax assets 17.6 88.4 70.8

Property & equipment 245.6 274.0 28.4

Goodwill & intangibles 2'651.1 2'676.0 24.9

Assets 4'125.9 4'495.5 369.6

Current financial liabilities 139.6 116.2 (23.4)

Other current liabilities 449.3 478.3 29.0

Non-current liabilities 204.5 536.4 331.9

Shareholders' equity 3'332.5 3'364.6 32.1

Liabilities & shareholders' equity 4'125.9 4'495.5 369.6

• Receivables increase driven by

net sales increase

• Increase in financial investments

& other mainly driven by:

o ChemoCentryx: CHF 85.4

o Cara Therapeutics: CHF 14.6

• Increase in non-current liabilities

mainly driven by the bond issue of

CHF 463.8 (net proceeds),

partially offset by the repayment of

the private placement of

CHF 114.5

14 March 2019 32

BALANCE SHEET OVERVIEW (IN CHF MILLION)

STRONG EQUITY RATIO OF 74.8%

4

© Vifor Pharma

2018

Opening cash, 1 January 425.1

Operating activities 405.9

Net working capital (133.2)

Income tax paid (78.9)

Cash flow from operating activities 193.8

Milestones & BD&L investments (318.0)

Capex & others (58.1)

Cash flow from investing activities (376.1)

Dividends paid (174.6)

Financing & others 333.2

Cash flow from financing activities 158.6

Exchange rate effects (1.1)

Ending cash and cash equivalents, 31 December 400.3

Financial liabilities (580.0)

Net debt (179.7)

• Cash flow from investing activities mainly

driven by milestones & BD&L

investments

o Avacopan: CHF 49.1

o Cara Therapeutics: CHF 70.1

o ChemoCentryx: CHF 85.4

• Cash flow from financing activities mainly

driven by:

o Dividend payments of CHF 129.6 to

Vifor Pharma shareholders and CHF

45.0 to Fresenius Medical Care

o Bond issue of CHF 463.8 (net

proceeds), partially offset by the

repayment of the private placement of

CHF 114.5

CASH FLOW OVERVIEW (IN CHF MILLION)

NET DEBT OF CHF 179.7 MILLION

33

4

14 March 2019

© Vifor Pharma

GUIDANCE 2019

4

In 2019 at constant exchange rates Vifor Pharma net sales are expected to grow

between 11% and 13%, reported EBITDA is expected to increase by 25%.

In 2020 net sales are expected to exceed CHF 2 billion and

EBITDA to be in the range of CHF 700 million.

Going forward the dividend is expected to remain at the current level of CHF 2 per share.

34 14 March 2019

© Vifor Pharma

DISCLAIMER

Certain statements, beliefs and opinions in this presentation are forward-looking, which reflect the Company’s or, as

appropriate, the Company’s directors’ current expectations and projections about future events. By their nature, forward-

looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to

differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and

assumptions could adversely affect the outcome and financial effects of the plans and events described herein. A multitude

of factors including, but not limited to, changes in demand, competition and technology, can cause actual events,

performance or results to differ significantly from any anticipated development. Forward-looking statements contained

in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities

will continue in the future. As a result, the Company expressly disclaims any obligation or undertaking to release any update

or revisions to any forward-looking statements in this presentation as a result of any change in expectations or any change

in events, conditions, assumptions or circumstances on which these forward-looking statements are based. Neither the

Company nor its advisers or representatives nor any of its of their parent or subsidiary undertakings or any such person’s

officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors

nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this

presentation or the actual occurrence of the forecasted developments. You should not place undue reliance on forward-

looking statements, which speak only as of the date of this presentation.

35 14 March 2019

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