Duopharma Biotech Berhad Investor Relations Briefing 16 March 2020
Disclaimer This presentation may contain forward-looking statements by Duopharma Biotech Berhad that reflect management’s current expectations, beliefs, intentions or strategies regarding the future and assumptions in light of currently available information. These statements are based on various assumptions and made subject to a number of risks, uncertainties and contingencies. Actual results, performance or achievements may differ materially and significantly from those discussed in the forward-looking statements. Such statements are not and should not be construed as a representation, warranty or undertaking as to the future performance or achievements of Duopharma Biotech Berhad and Duopharma Biotech Berhad assumes no obligation or responsibility to update any such statements. No representation or warranty (either express or implied) is given by or on behalf of Duopharma Biotech Berhad or its related corporations (including without limitation, their respective shareholders, directors, officers, employees, agents, partners, associates and advisers) (collectively, the " Parties ") as to the quality, accuracy, reliability or completeness of the information contained in this presentation (collectively, the " Information "), or that reasonable care has been taken in compiling or preparing the Information. None of the Parties shall be liable or responsible for any budget, forecast or forward-looking statements or other projections of any nature or any opinion which may have been expressed in the Information. The Information is and shall remain the exclusive property of Duopharma Biotech Berhad and nothing herein shall give, or shall be construed as giving, to any recipient(s) or party any right, title, ownership, interest, licence or any other right whatsoever in or to the Information herein. The recipient(s) acknowledges and agrees that this presentation and the Information are confidential and shall be held in complete confidence by the recipient(s). No part of this presentation is intended to or construed as an offer, recommendation or invitation to subscribe for or purchase any securities in Duopharma Biotech Berhad . 2
Corporate Stru ructure 3
Duopharma Biotech’s Equity Structure DPHARMA (Stock Code – 7148) Market capitalization on 12.03.2020 = RM 1.02 bil Share price = RM 1.49 4
Board of f Dir irectors 5
Board of f Directors STRUCTURE Board of Directors Nomination and Risk Management and Audit and Integrity Remuneration Halal Committee Sustainability Committee Committee Committee Chairman: Datuk Nik Moustpha bin Hj Nik Chairman: Encik Razalee Chairman: Dato’ Chairman: Datuk Mohd Hassan bin Amin Mohamad Kamarudin bin Radzif bin Mohd Yunus Hassan 6
Group Management Committee 7
Financial Highlights RM’ million RM’million 80 700 70 600 60 500 50 400 40 300 30 200 20 100 10 0 0 2016 2017 2018 2019 PBT 31.5 51.8 59.7 70.8 PAT 26.8 42.5 47.6 55.3 Revenue 312.9 468.0 498.7 576.5 PBT PAT Revenue 8
Financial Highlights (in RM'million) 2016 2017 2018 2019 Non-current assets 295.3 348.6 469.0 502.6 Current assets 366.2 356.6 367.3 417.2 Equities 454.5 479.9 481.0 529.8 Liabilities 206.9 225.4 355.3 390.1 Gearing 0.25x 0.27x 0.51x 0.50x Return on Equity 5.9% 8.8% 9.9% 10.4% 9
Fin inancial Hig ighlights – Segmental Sale les Export Export 8% Export 8% 8% Local Local Local Local (Government) Local (Government) (Government) Local (Private) 49% (Private) 49% 50% 42% (Private) 43% 43% FY 2017 Revenue : FY 2018 Revenue : FY 2019 Revenue : RM 467.99 mil RM 498.72 mil RM 576.46 mil Note: Duopharma Biotech’s top export markets for FY2019 (% based on export revenue) : 1.Singapore – 27.5% (RM12.6mil) 2.Philippines – 18.7% (RM8.6mil) 3.Middle East – 16.6% (RM7.6mil) 10
Key Hig ighlights No.1 Local Pharmaceutical Company by Volu lume Source : iQVIA Report, December 2019 11
Key Hig ighlights Source : iQVIA Report, December 2019 12
Key Hig ighlights Continuous Collaboration wit ith Key Part rtners 13
Key Hig ighlights 14
Key Highlights Flavettes maintained its leadership as the No.1 Champs maintained its leadership as the No.1 supplement in the Adults Vitamin C market in supplement in the Children Vitamin C market in Malaysia with the Effervescent range overtaking Malaysia with the Champs Vitamin C range all other brands in terms of market share. overtaking all other brands in terms of market share. 15
Key Highlights Officially the first HAPI Plant in Malaysia, receiving the Certificate of GMP Compliance on 21 st August 2019. 16
Key Highlights 17
Dividend Reinvestment Plan Completion of the issuance of 18,225,450 new Duopharma Biotech Shares at RM 1.20 per share on 29 July 2019 pursuant to the Dividend Reinvestment Plan which was applied to the Final Single Tier Dividend of 4 sen per ordinary share for the financial year ended 31 December 2018. Completion of the issuance of 4,276,658 new Duopharma Biotech Shares at RM 1.25 per share on 15 November 2019 pursuant to the Dividend Reinvestment Plan which was applied to the Interim Single Tier Dividend of 1 sen per ordinary share for the financial year ended 31 December 2019. 18
In Investments in Korea Acquisition of 8.39% stake in WHY Korea? PanGen Biotech Inc, a Korean Biopharmaceutical company, • In line with our strategy to diversify into biotherapeutics and high-value niche from Chemical Company of products. Malaysia Berhad for RM 59.16 • Technology is applicable in Malaysia. million ( KRW 16.35 billion ) via • Opportunity to have an early stage entry, before it becomes costly later on. Share Sale Agreement dated 13 • As Korea recognises biotech technologies, Duopharma Biotech may be able to April 2018. monetise the technologies. • Investee company has proof of concept product. • Regulation on stem cell in Malaysia to start in 2021; timely to acquire stake in SCM. Acquisition of 5.8% stake in • SCM has successfully passed technical evaluation by two Korean technical SCM Lifescience, a Korean evaluation agencies with rating of A and BBB. • stem cell firm for RM 20.24 SCM will be listed on KOSDAQ in Korea in April 2020. million (KRW 5.5 billion) via Share Subscription Agreement dated 25 October 2018. 19
Pla lants • • • • • • • • • • • 20
Research and Development Duopharma Innovation Sdn Bhd Outsource Formulation Analytical Regulatory Affairs Services • • • 21
Duopharma In Innovation 22
Regional Operations 23
Market Presence (I (International) Year / ASEAN Asia Rest of Total RM’mil Pacific World FY 2016 27.0 3.0 6.1 36.1 FY 2017 26.6 4.4 6.4 37.4 FY 2018 28.6 4.5 7.9 41.0 FY 2019 33.5 4.0 8.4 45.9 24
Manufacturing Strategy 2016 and beyond 25
Four-Pronged Strategy Expand our Diversify onto range of Ethical high-value and Consumer biologicals and Healthcare niche products (CHC) product portfolios Upgrade of Enhance our manufacturing facilities into presence in the ASEAN region world-class assets 26
Opportunities and Challenges OPPORTUNITIES • Increase in allocation for healthcare sector in budget 2020. • Extension of Contract Period of the Supply Agreements for the supply of pharmaceutical and/or non-pharmaceutical products to hospitals, clinics and others under the Government of Malaysia for twenty five (25) months, until 31 December 2021. • Extension of supply of human insulin formulations for one (1) year, until 31 December 2020. • Commercialization of high value product in niche therapeutic areas such as oncology and bio-therapeutics: - Registration of Erysaa, an erythropoietin (EPO) biosimilar, has been approved by National Pharmaceutical Regulatory Agency (NPRA) on 31 January 2019 and successfully launch in April 2019. Able to bid for government tender worth RM 10 – 15 million. - Registration of Trastuzumab (Zuhera), an oncology product has been approved. • Oncology facility to commence in Q1 2020. • Growing International Business segment. CHALLENGES • Recent outbreak of Covid-19, reduction in consumption, global recession. • Increasing cGMP requirements. • Short term revolving credit from OCBC. • Differences in regional regulations impacting growth of international businesses. • Expanding product portfolios (prohibitive BE and clinical costs). • Strengthening USD resulting in higher cost of imported raw materials. 27
New Products Pipeline Flavettes Effervescent Zuhera Champs Effervescent CHC New Products Oncology Franchise CHC New Products Erythropoietin (EPO) Insulin Injection Insulin Glargine Injection Renal Franchise Diabetes Franchise Diabetes Franchise 28
Project Updates – HAPI Plant Plant status 1. Started operation since GMP licence granted in Aug 2019. 2. Currently running on single shift. 3. Technology transfer for 2 nd HAPI product- to commence in May 2020. Letrozole 2.5mg tablet 1. Won Letrozole 2.5mg tender for 2 years. 2. Change of site evaluation approved on 14th Feb 2020. 3. Final approval will be given after tabulation in NPRA meeting in March 2020. EU certification 1. Preparing plant for EU certification, tentatively in 2021. 2. Appointment of consultants by Q1 2020 and to commence gap analysis, thereafter. 29
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