strategy and growth opportunites in … and growth opportunites in generics luc slegers, evp...
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CAPITAL MARKETS DAY OCTOBER 5, 2016
STRATEGY AND GROWTH OPPORTUNITES IN GENERICS Luc Slegers, EVP Generics
Page STADA Capital Markets Day • October 5, 2016
GENERAL INFORMATION
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By making use of this document the reader acknowledges and agrees to the following:
We accept no liability arising from the use of this document.
STADA Arzneimittel AG, Bad Vilbel (hereinafter “STADA”), has made every effort to make sure that this document contains correct and up-to-date information. STADA accepts no responsibility for and makes no guarantee whatsoever in respect of currentness, accuracy and completeness of the information and assumes no obligation to update, complete or correct this information.
The anticipated opportunities and risks to STADA’s activities have been described in detail in the Executive Board’s management reports in the annual reports. Current possible opportunities and risks are discussed in the respective interim report.
STADA’s performance indicators are partly influenced by one-time special effects and/or effects not arising from the operating business. Disclosure of key figures adjusted for these effects (so called “pro forma” key figures) by STADA is only to provide a supplement to the recorded IFRS key figures for a transparent comparison to a relevant period from the previous year.
All text, pictures, trademarks, and other information contained in this document are subject to the copyright of STADA or subject to rights acquired from third parties. Trademark protection may apply even for preparations not indicated as trademarks. This document may not be reproduced in whole or in part without the express written consent of STADA.
Any disputes arising out of or in connection with the content of this document, insofar as they are directed against STADA, shall be subject to German law, without prejudice to mandatory provisions of foreign law. The place of jurisdiction is Frankfurt am Main to the extent legally permissible.
Page STADA Capital Markets Day • October 5, 2016
FORWARD-LOOKING STATEMENTS
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This STADA Arzneimittel AG (hereinafter "STADA") presentation contains certain statements regarding future events that are based on the current expectations, estimates and forecasts on the part of the company management of STADA as well as other currently available information. They imply various known and unknown risks and uncertainties, which may result in actual earnings, the business, financial and earnings situation, growth or performance to be materially different from the estimates expressed or implied in the forward-looking statements. Statements with respect to the future are characterized by the use of words such as “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate” and similar terms. STADA is of the opinion that the expectations reflected in forward-looking statements are appropriate; however, it cannot guarantee that these expectations will actually materialize. Risk factors include in particular: The influence of regulation of the pharmaceutical industry; the difficulty in making predictions concerning approvals by the regulatory authorities and other supervisory agencies; the regulatory environment and changes in the health-care policy and in the health care system of various countries; acceptance of and demand for new drugs and new therapies; the results of clinical studies; the influence of competitive products and prices; the availability and costs of the active ingredients used in the production of pharmaceutical products; uncertainty concerning market acceptance when innovative products are introduced, presently being sold or under development; the effect of changes in the customer structure; dependence on strategic alliances; exchange rate and interest rate fluctuations, operating results, as well as other factors detailed in the annual reports and in other Company statements. STADA does not assume any obligation to update these forward-looking statements.
The Executive Board of STADA Arzneimittel AG: Dr. M. Wiedenfels (Chairman), H. Kraft
Page STADA Capital Markets Day • October 5, 2016 4
GENERICS CLEAR STRATEGY FOR CONTINUOUS GROWTH
Continue to grow base business and defend market positions
Expansion in attractive / less regulated markets
Rollout of the biosimilar portfolio
Ongoing efficiency initiatives to sustain attractive margin level
Selective M&A activity in growing markets
Page STADA Capital Markets Day • October 5, 2016 5
GENERICS STRENGTHS AND CHALLENGES
Building on our strengths … o Solid base business
o Strong organic growth
o Full pipeline
o Expanding into new markets (biosimilars) and niches
o Expertise in working in a heterogenous environment
…we will master the challenges o Distinct markets
o Changing reimbursement policies
o Price erosion
o Decreasing number of blockbusters coming off patent
o Competitive landscape
o Evolving biosimilar market
Page STADA Capital Markets Day • October 5, 2016 6
GENERICS THE MARKET IS DRIVEN BY HIGH VOLUME GROWTH Generics continue to take an increasing share of the scripts in all markets
Europe: 44% 56% Japan: 14% 26%
Asia / Australia: 42% 48%
Africa / Middle East: 44% 47% Latin America: 55% 71%
US: 59% 82%
Canada: 58% 73%
Generic volume market share 2006 vs. 2015. Source: IMS Health: “Why we need Generic medicines“; 2016.
Page STADA Capital Markets Day • October 5, 2016 7
GENERICS CONTINUE TO BE A GROWTH STORY
62.1 48.5
93.8
5.2
21.3
Source: IMS Health / Market Prognosis & Generic Forecasts / Sales (Local Currency €) converted to €bn using 2015 (end period) exchange rates.
Total market size € 231 bn in 2020e
Page STADA Capital Markets Day • October 5, 2016 8
GENERICS THERAPEUTIC AREAS
Top ten generic therapeutic areas by volume, global
Volume (SU)
15% 10% 5% 0% -5% PPG %
Volume (SU) 2014
PPG 2013-2014
Source: IMS Health: “Why we need Generic medicines“, 2016.
Page STADA Capital Markets Day • October 5, 2016 9
GENERICS STADA‘S TOP 5 GENERIC MARKETS
Growth rates1 (ex-manufacturer sales before discounts) and market positions2
Market Growth CAGR 15-20
Germany Italy Spain Belgium Russia
4.8% 8.4% 7.7% 6.9% 6.9%
Germany
1. Novartis 2. Teva 3. STADA
Italy
1. Teva 2. Mylan 3. Novartis 4. STADA
Spain
1. Cinfa 2. Teva 3. STADA
Belgium
1. STADA 2. Novartis 3. Teva
Russia
1. Sanofi 2. STADA 3. Novartis
STADA‘s sales split regional
STADA occupies leading market positions in key Western and Eastern European generic markets
Benefits from attractive market growth
Trend of increasing generic penetration in STADA’s key markets
1) Source: IMS Generic Forecasts; 2) Source: IMS Health Midas. 3) Incl. Commercial business.
Page STADA Capital Markets Day • October 5, 2016 10
GENERICS FOCUS ON ORGANIC GROWTH – VIEW ON SELECTED REGIONS
UK o Revitalize the former Genus Pharmaceuticals Ltd. generic business together with the already
existing marketing organization as well as the Group’s pipeline products Argentina o Recent acquisition of Laboratorio Vannier to use as starting point for further business
activities in Latin America. Vannier is active in less regulated price segments MENA o Further growth to be expected in MENA region in particular in Saudi Arabia and UAE since
market forecasts for both countries show promising development in both pricing and penetration
Germany o Reorganization and reallocation of resources (e.g. bundling of German entities) o Capitalize on strong position in German tenders
Russia o Activities follow the evolution of the Russian market o Robust local market with steady growth. Business strongly impacted by the Russian Ruble
Page STADA Capital Markets Day • October 5, 2016 11
GENERICS FUTURE PATENT EXPIRATIONS
Patent expiration in Germany, France, Italy, Spain and UK
Source: IMS Health Midas.
> € 12 bn of sales coming off patent in our key markets by 2019
not including biosimilars
€m
Page STADA Capital Markets Day • October 5, 2016 12
GENERICS FULL PRODUCT PIPELINE
Introduction of more than 2,000 SKUs worldwide 2016-2019
Currently, more than 1,300 ongoing approval procedures covering approx. 150 active pharmaceutical ingredients in over 55 countries worldwide
Development partnerships to further expand pipeline
Planning horizon beyond 2024
Page STADA Capital Markets Day • October 5, 2016 13
GENERICS FULL PRODUCT PIPELINE
Important launches
2018
Efavirenz-Emtricitabine-Tenofovir Fluticasone-Salmeterol Solifenacin EverolimusA Erlotinib
2017
Pregabalin Rosuvastatine Emtricitabine-Tenofovir Dutasteride-Tamsulosin Ezetimibe
2019
Oxymetazoline Bortezomib Vildagliptin-Metformin Vildagliptin Agomelatine
Page STADA Capital Markets Day • October 5, 2016 14
GENERICS BIOSIMILARS STRATEGY – PORTFOLIO EXPANSION
Risk-averse in-licensing approach (e.g. Filgrastim)
Exploiting opportunities with adequate consideration of risks and benefits
Avoidance of high R&D costs – milestone payments backloaded and performance related
2 biosimilars on the market
5 biosimilars in development
SALES €m
2019e ~100
Page STADA Capital Markets Day • October 5, 2016
Molecule Brandname Originator Indication Patent
Expiry1 Partner Expected Launch Date2
Pegfilgrastim Neulasta®
Amgen Neutropenia 08/2017 Gedeon Richter 2017
Rituximab MabThera® Roche
Non Hodgkin, Chronic Lymphocytic Leukemia,
Rheumatoid Arthritis, Granulomatosis
expired Gedeon Richter 2019
Teriparatide Forsteo® Lilly Osteoporosis 12/2018 Richter-
Helm 2019
Adalimumab Humira® AbbVie
Rheumatoid Arthritis Ankylosing
Spondylitis, Psoriatric Arthritis, Crohn‘s
Disease, Psoriasis, Colitis Ulcerosa
10/2018 mabXience 2019
Bevacizumab Avastin® Roche
Intestinal, Mammary, Ovarial and Cervical
Carcinoma 12/2019 mabXience 2020
1) Expiry date SPC, including prolongation based on PIP. 2) Actual launch dates dependent on conclusion of development and regulatory process according to planned timelines.
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GENERICS 5 NEW BIOSIMILARS BY 2020
Page STADA Capital Markets Day • October 5, 2016
GENERICS VALUE OF ORIGINATOR PRODUCTS IN EUROPE
Source: IMS Midas; EU 28 (without CY, MT)+ CH + NO + RS + RU.
€m
16
Total Sales 2015
> € 7 bn
Seite STADA Capital Markets Day • October 5, 2016 17
Harmonize portfolio and production – Reduce complexity
Further streamline our generics portfolio and harmonize dossiers
Optimize our hospital portfolio/business
Improve our COGS and supply chain – both own products
and 3rd party manufacturing
Look for niches and attractive therapeutic areas
Foster own-developments (in cooperation with strong partners)
Maximize standardization in production
Focus our sales & marketing, reduce redundant structures
Reallocation of resources
GENERICS SELECTED INITIATIVES TO FURTHER ENHANCE EFFICIENCY AND PROFITABILITY
Page STADA Capital Markets Day • October 5, 2016 18
GENERICS SEGMENT GUIDANCE 2019e
€m
GENERICS
1) Adjusted for portfolio and currency effects; including commercial business. 2) Adjusted for special items.
1.261 1.420
2015 2019e
+ ~ € 140 m Volume growth base business / Launches
+ ~ € 100 m Biosimilars
./. ~ € 80 m Price cuts
EBITDA-Margin2 adj. 2015
18.4%
EBITDA-Margin adj. 2019e
~19.0%
CAGR ’15-’19 + ~3%
Sales1
Page STADA Capital Markets Day • October 5, 2016
YOUR CONTACT
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STADA Arzneimittel AG
Investor Relations 61118 Bad Vilbel, Germany Telephone: +49 (0) 6101 603-113 Fax: +49 (0) 6101 603-506 E-mail: [email protected]
www.stada.com
Vice President Investor Relations Leslie Isabelle Iltgen