Specialty pharma meets M&A competence

INVESTOR PRESENTATIONJUNE 2018

CHEPLAPHARM AT A GLANCE

Company Snapshot Strong Historic Growth

Recently Closed Acquisitions Brand Diversification by Area

% EBITDA margin

2

Family-owned company with over 25 years of pharma sector expertise

Buy-and-build strategy

M&A know-how and track record with > 70 products acquired

Branded specialty pharma / niche products in over 100 countries

Value creation via scalable platform and Life-Cycle-Management

Asset light business model with strong scientific backbone

Revenue growth from < € 1m in 1998 to € 226m in 2017

21%

20%

11%11%

8%

8%

6%

6%6% 3%

Obesity

Cardiology

Virology

Other indications

OphthalmicGastroenterology

Haematology

Emergency Medicine/ Sleeping disorder

Haematooncology

Addiction medicine

80122

226

3868

134

2015A 2016A 2017A

Sales EBITDA

56% 59%47%

09/2016

02/2018

01/2017

04/2018

01/2018

01/2018 01/2018

01/2018

47%

7%

31%

6%5% 4% Europe ex Germany

Germany

Asia and Oceania

Latin America and Caribbean

North America

Africa

PORTFOLIO OVERVIEW

Sales by Products

2018P

21%

17%

11%8%8%

6%

5%3%3%2%

16%XenicalDilatrendCymeveneVisudyneDeursil / UrsolvanKonakion MMVesanoidAnexateHeminevrin / DistraneurinRohypnolOther

Cheplapharm is well diversified across products and geographies providing global reach to Big Pharma

3

Sales by Geography

Niche vs. Legacy

41%

38%

21%Branded Products withcompetition

Branded Products withunique position

Branded Products withlimited/partial competition

Business Footprint

• Business in over 100 countries

• Vast network of distribution partners globally

Valuable business partner to big pharma

Niche

Legacy

ORGANISATIONAL STRUCTURE

100%

4

Glenwood LLCCheplapharmFrance SAS

HelmMedical GmbH

RubiePharmArzneimittel GmbHSanavita GmbH

Cheplapharm Arzneimittel GmbHMoody´s B1 / S&P B both stable outlook

Walter RitterGmbH & Co KG

RubiePharmVertriebs GmbH

WR Pharmaceuticals Vertriebs GmbH

UNIQUE, LOW RISK BUSINESS MODEL

Acquisition of “tried and tested” pharmaceuticals with sticky customer base, long-phase out periods and high brand awareness requiring no / less marketing

5

Post-Patent Phase Management ofproduct Life-Cycle

Optimization ofcost structure

• Limited competition, no relevant generics

• Unlikely to be replaced by new treatment guidelines

• Stable to little growing sales and cash flows

TimeCash

Development Phase Patent Phase

Cheplapharm’s Business Model

Niche product - Lower volume – typically no or limited competition (solid and stable sales)Legacy product - Higher volume – generic competition (price competitive)

Cheplapharm advantages:• Limited or no competition• 10+ years out of patent• Stable sales• Low risk due to “tried &

tested” pharmaceuticals

• Stable market share following generics competition

• High brand loyalty being able to retain customers

• Stable to slightly declining sales and cash flows

1

2

Key characteristics

Nicheproducts

Legacy products

2

1

Deal Sourcing & Due Diligence

Life-Cycle ManagementKey value levers: (i) overhead cost and complexity reduction, (ii) optimization of production costs, (iii) active pricing strategy and

(iv) well-established partners for production / D&M

Production

CHEPLAPHARM’S BUSINESS MODEL

No R&D activities & associated

risks

Research & Development

BUY – INTEGRATE – BUILD / OPTIMIZEDisciplined identification of right acquisition targets, integration into outsourced

supply chain and optimization via professional Life-Cycle Management

6

Focus on inorganic growth acquiring branded original off-

patented niche or legacy products from big pharma

Cheplapharm is in principal shifting distribution & marketing to its own external exclusive distribution network or taking over agreements by assignment

Cheplapharm’s clear focus and key competence is Life-Cycle Management creating added value vs big pharma

Distribution & Marketing

Lean set-up given outsourced manufacturing and distribution activities to trusted, qualified and long-standing 3rd parties

MARKET POSITION VERSUS COMPETITORS

Patent Protected

Generic products

Patent phase Patent ongoing

Patent expired

No patent

Niche products

Higher volume products/Legacy

• Cheplapharm sets itself apart from big pharma and generics providers due to its unique business model

• Faces only few competitors with similar business models and a global setup

• Regularly approached by Big Pharma in search of reliable partners for additional disposals

7

DISCIPLINED M&A STRATEGY -INVESTMENT CRITERIA (EXCERPT)

Track record of carefully adding new products to the portfolio based on stringent selection criteria that have been successful for 15 years

Remainingeconomic life

• > 10 years

Presence of “Pull effect” • Secures survival as cash cow • Brands should be established in the market and should have a high degree of familiarity

Track record • Established products with proven track record (at least 15-20 years history)

Market position • Either niche position (USP of API and/or indication) with growth opportunity or extremely cheap and offer attractive ROI (legacy deal)

Production • Production must be ensured in the long-term

8

Balanced product portfolio

• Incremental sales contribution from a single acquired product of max. €100m

DIVERSIFIED SALES BASE AND HIGHREVENUE VISIBILITY

9

Products’ pull effect

PUSH

Distributor/ Pre-

Wholeseller

End-userDoctor/ Hospital/ Pharmacy

PULL

• Pull-effect reflects active demand by doctors / hospitals and / or end-users due to familarity and brand loyalty• Limited or no marketing activity required in contrast to “push”products• Ensures stability of demand resulting in stable and predictable sales and cash flow

Cheplapharm’s requirement

0

200

400

600

800

1000

1200

1 2 3 4 5 6 7

CREATING VALUE FROM LIFE CYCLEMANAGEMENT

Life Cycle Value of

Big Pharma

Life Cycle Value of

Cheplapharm

Overhead Reduction

Reduction ofProduction Costs

Active Price Strategy

Reduction ofcomplexity

Others

Schematic presentation for illustration purposes only

10

Life-Cycle Management comprises several measures with regular optimization of production costs being the most important value lever

Life-Cycle Management provides additional upside, i.e. neither included in investment decision nor in

Cheplapharm’s business plan

Basis for investment decision (ROI calculation)

LEAN BUSINESS MODEL RESULTING INSIGNIFICANT CASH GENERATION

11

€m, unless otherwise specified FY15A FY16A FY17A

EBITDA 37.6 68.0 134.1

∆ Net working capital (8.4) (13.1) (36.7)

Other (0.2) (4.3) 1.4

Operating Cash Flow 29.0 50.6 98.8

Maintenance capex - - -

Unlevered FCF pre taxes & acquisitions 29.0 50.6 98.8

Cash taxes 0.6 (2.8) (0.6)

Cash Flow available for debt service and growth 29.6 47.8 98.2

Acquisitions (22.6) (222.2) (132.7)

Unlevered FCF 7.0 (174.4) (34.5)

Net total debt 66.1 248.1 299.6

Pro Forma LTM EBITDA 38.7 102.6 135.0

Net total leverage 1.7x 2.4x 2.2x

STRONG AND SUSTAINABLE EBITDA MARGINS REFLECTING INVESTMENT POLICY

Strong operational track record proven by stable EBITDA margins across the cycle

Fluctuation in EBITDA margin mostly driven by M&A activity and related Transitional Service Agreements (TSA´s), i.e. in years of stronger M&A activity such as 2013, 2016 and 2017, margins are slightly overstated due to TSA accounting effects

However, through the cycle, EBITDA margins have been fairly stable around 50%

12

7 8 11 12

26 2738

68

134

57%

48% 50% 52%

61%

48% 46%

56% 59%

0%

20%

40%

60%

80%

100%

0

30

60

90

120

150

2009 2010 2011 2012 2013 2014 2015 2016 2017

€m

EBITDA EBITDA margin

Average

SUMMARY - KEY CREDIT HIGHLIGHTS

13

Unique, low risk business model with easy scalability

Strong acquisition track record and global distribution

Limited competition market segment

Diversified sales base and high revenue visibility

Limited capex requirements resulting in significant cash generation

Highly qualified management with proven operational and M&A track record

1

2

3

4

5

6

Specialty pharma meets M&A competence

APPENDIX

BALANCE SHEET REFLECTS M&A ACTIVITY

Balance Sheet

15

• Intangible assets: Mainly concessions, trademarks and licenses for pharmaceutical products

• Addition of Dilatrend® intangibles in 2016 (€123m) mostly offset by regular amortisation. Intangible assets are expected to be reduced to nearly zero by 2022 assuming no further acquisition activity

• Working Capital: Inventory and receivable levels increase in line with revenue development and are also influenced by the acquisitions of new products

• Payment terms vary widely by country (e.g. 30 days in Germany and up to 150 days in Italy) – no major default on payments for years

• Debt increase due to acquisition financings

• Intangibles grow as a result of acquisition activity, but are also materially amortised

• Growth of financial liabilities reflects acquisition activity

• Book equity held back by amortisation – significant hidden reserves versus high implied equity

€m, unless otherwise specified FY15A FY16A FY17A

Tangible assets 3.7 3.8 4.0

Intangible assets 79.8 246.7 273.1

Other non-current assets 3.5 0.7 4.9

Fixed assets 87.1 251.1 282.0

Inventory 11.8 19.0 35.6 Trade receivables and other current assets 16.4 26.1 50.6

Trade payables, prepayments received and other liabilities (3.2) (8.1) (12.6)

Net working capital (NWC) 25.1 37.0 73.6

Total debt 84.5 283.2 343.3

Cash and cash equivalents (18.4) (35.1) (43.6)

Net total debt 66.1 248.1 299.8

Notes: Cash and cash equivalents include cash, bank balances and securities

HIGHLY PROFITABLE BUSINESS MODEL

Profit & Loss

• Revenues: driven by acquisitions of Xenical® in Sep16 (net sales of €64.8m in FY17) and Dilatrend® in Jan17 (net sales of €52.6m in FY17)

• Gross Margin: A significant proportion net sales from acquisitions are recognised as TSA profits (no underlying cost of materials). As a result, gross profit margin increased from 60.3% in FY15 to 73.7% in FY17

• Other operating expenses mainly comprise expenses for TSA service fees, fees for distributors and other sales related expenses

• Intangibles amortisation: Amortisation of intangibles over about five years in past periods - significant increase of amortisation over last three years

• Low taxable income and net profit: Low taxable income as result of high intangibles amortisation

16

• P&L significantly influenced by acquisitions as well as intangibles amortisation

• IFRS statements are based on a longer amortisation period, leading to significantly higher net income and equity

• However, Cheplapharm believes that the actual economic life is significantly longer representing additional hidden reserves

€m, unless otherwise specified FY15A FY16A FY17ASales 80.4 122.5 226.4 Growth % n.a. 52.4% 84.8%

Cost of materials (31.9) (35.9) (59.5)Gross profit 48.4 86.6 166.9 Margin % 60.3% 70.7% 73.7%

Personnel costs (3.1) (4.5) (7.4)Other operating expenses/income (7.6) (14.2) (25.4)

EBITDA 38.2 68.0 134.1 Margin % 47.5% 55.5% 59.2%Growth % n.a. 81.0% 97.2%

Depreciation and amortization (31.1) (58.1) (101.8)EBIT 7.1 9.9 32.3 Margin % 8.8% 8.1% 14.3%

Konakion®Roche

Lariam®Roche

Inhibace®Roche

Cymevene®Roche

Visudyne®Novartis

Streptosil®Boehringer Italia

UCB PackageUCB

Aldactone®Sanofi

Reisegold®Teva

Halbmond®Teva

Sanofi PackageSanofi

Rohypnol®Roche

Vesanoid®Roche

Distraneurin® / Heminevrin®AstraZeneca

Baldrian Dispert®Vemedia

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

0

30

60

90

120

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

CORPORATE DEVELOPMENT

Klosterfrau PackageKlosterfrau

Anexate®Roche

Calcivit® Hexal

Building the platform Acceleration of growth

Xenical® Roche

Dilatrend®Roche

Product acquiredSeller

Legend:Vesanoid Japan®Roche

Sotalex®BMS

Num

bero

fcou

ntrie

s cov

ered

17

VERY BROADLY DIVERSIFIED ACROSSPRODUCTS AND MARKETS (% OF SALES)

18

Xenical 20.6% Dilatrend 16.6% Cymevene 10.6% Visudyne 8.2% Deursil / Ursolvan 7.7%

Australia 2.3% Italy 2.6% Japan 3.3% China 1.6% Italy 5.9%USA 2.1% Austria 1.2% France 0.8% Japan 1.5% France 1.1%Russia 1.4% Spain 1.2% South Korea 0.7% France 0.8% Switzerland 0.6%Canada 1.3% Turkey 1.1% USA 0.6% Italy 0.4% Tunisia 0.1%UK 0.9% Mexico 0.9% Turkey 0.4% Hong Kong 0.4% Others 0.0%Spain 0.8% Japan 0.8% Russia 0.3% Spain 0.3%Malaysia 0.8% South Korea 0.8% Taiwan 0.3% UK 0.3%China 0.7% Taiwan 0.5% Italy 0.3% Taiwan 0.3%Saudi Arabia 0.7% Thailand 0.4% Thailand 0.3% Canada 0.2%Philippines 0.7% Belgium 0.4% UK 0.3% Netherlands 0.2%Others 8.8% Others 6.6% Others 3.3% Others 2.1%

Konakion 6.1% Vesanoid 4.5% Anexate 3.5%Heminevrin / Distraneurin 3.3% Rohypnol 2.3%

France 1.2% Canada 0.4% Japan 1.1% Spain 1.2% Nigeria 1.1%Germany 0.6% Germany 0.3% Brazil 0.3% Germany 0.8% Brazil 0.5%Italy 0.4% Italy 0.3% South Korea 0.3% Switzerland 0.4% Austria 0.3%UK 0.4% France 0.3% Germany 0.2% Sweden 0.3% Argentina 0.1%Spain 0.3% Spain 0.3% Italy 0.2% Norway 0.2% Germany 0.1%South Africa 0.3% Brazil 0.3% Australia 0.2% Slovenia 0.1% Kenya 0.1%Morocco 0.3% South Korea 0.2% South Africa 0.1% Greece 0.1% Switzerland 0.1%Belgium 0.2% United Kingdom 0.2% Switzerland 0.1% UK 0.1% Others 0.1%Turkey 0.2% Argentina 0.2% Taiwan 0.1% Others 0.2%Algeria 0.2% Australia 0.1% Spain 0.1%Others 2.0% Others 2.0% Others 0.8%

Highly diversified portfolio as a result of always acquiring global rights to products

OVERVIEW TOP 10 PRODUCTS

Xenical® Dilatrend® Cymevene® Visudyne® KonakionMM®

Deursil® / Ursolvan® Anexate® Vesanoid® Heminevrin®/

Distraneurin® Rohypnol®

2018BSales 22% 21% 10% 8% 7% 5% 3% 3% 3% 2%

Segment Obesity Cardiology Virology Ophthal-mology Haematology Gastro-

enterologyEmergency Medicine Oncology Addiction

MedicineSleepingdisorder

Application Obesity

Heart failure, hypertension, stable angina

pectoris

Treatment and prophylaxis of cytomegalo-virus (CMV)

disease

Retinaldisease: age-

relatedmacular

degeneration(AMD)

Haemorrhage; Vit K

Deficiency Bleeding in new-born

Dissolution of small

gallstones

Post-anaesthetic

recovery period

Acute leukemia

Treatment ofwithdrawalsymptoms

Tranquilizer

Rx / OTC Rx Rx Rx Rx Rx/OTC Rx Rx Rx Rx Rx

Intro 1997 1990 1994 1999 1955 (1998)2) 1980 1987 1994 1959 1975

PatentExpiry 2009 1999 2002 20091) 20083) 2002 2008 20024) n/a n/a

KeyCountries

Australia, USA, UK, Canada

Japan, Austria, Italy, Korea

Japan, Korea, Hongkong,Italy, Russia

Japan, China, France, Italy,

Spain

France, Germany, Italy, UK

Italy, FranceJapan, Brazil,

Germany, Korea

Canada,Germany,

Italy, Korea, Brazil

Spain, Switzerland,

Sweden, Slovenia

Nigeria, Brazil,

USP

Strong brand, first line therapy

according to several national clinical

practice guidelines

API is listed in the WHO list of essential medicines;

first line therapy

according to several

guidelines

First Line therapy in

major medical guidelines

Stable since many years as

the second line therapy with niche-position, no

generic competition

Strong brand for routine life

saving Vit K prophylaxis in neonates, with

limited competition

Strong brand, leading market

position (especially in

Italy); dominant

therapeutic strategy in guidelines

Strong brand with long

history and quality „made

in Europe“

Strong brand in a niche

market with limited

competition

Strong brand; unique with its

active substance; frontline-

treatment in acute alcohol withdrawal

and delirium tremens

Strong brand in a niche

market with limited

competition

Notes: 1) Estimate is based on assumption introduction plus 10 years; 2) Current manufactured mixed micelle (MM) solution has been introduced in 1998 in order to replace older, castor oil containing formulations;3) According to new formulation in 1998 patent expiration could be in 2008. Exact information is not available;4) Expiration of orphan drug designation 19

CONTACT

20

Chief Financial OfficerJens Rothstein +49 3834 8539 122

CHEPLAPHARM Arzneimittel GmbH Headquarters: Bahnhofstr. 1a 17498 MesekenhagenOffice: Ziegelhof 24 17489 Greifswald

Investor RelationsJens Remmers +49 3834 8539 145

investor-relations@cheplapharm.com

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