Vistin Pharma – Corporate Presentation October 2016
Content Introduction to Vistin Pharma Operational and financial update Summary & outlook Appendix
Snapshot Vistin at a glance Summary Presence in c.40 countries Established in June 2015, when the company was spun off from Weifa and listed on the Oslo Axess stock exchange Norway Leading producer of active ingredients (API) and finished products for diabetes medicine (metformin) and opiates for use in pain relief and cough medicine Japan Vietnam Overview Philippines Significant contract manufacturer (CMO) of solid dosage form (tablets) products Singapore Established client portfolio comprising mix of Big Pharma and leading generics players Long and successful track record with production of codeine API since 1950 and production of metformin since 1969 Headquarters Headquarters Oslo, Norway Sales by geography (2015A) 1 Revenue: NOK 213m Financials Other 15% (YTD Q2’16) EBITDA: NOK 24m Norway 31% Japan 5% Metformin (B2B): The company manufactures about 8% of the global consumption of metformin API, the UK 10% active ingredient in the first-line treatment of diabetes Opioids (B2B): two key products, codeine phosphate (used in analgesics and cough syrup) and pholcodine Business Germany 11% (used in cough syrup) areas Algeria 17% Swizterland CMO: Agreement with Weifa, the largest OTC player in Norway, for the production of Weifa’s key pain relief 11% brands Sales by product type (2015A) 2,3 Key geographies FDF Metformin Employees c.155 39% API 44% Two manufacturing facilities in Kragerø, Norway Dedicated metformin plant approved by all significant international bodies including the U.S. Food and − Opioids Drug Administration (FDA) Manufacturing API 17% Finished Dose Forms (FDF) and opioids APIs manufacturing site approved by the European Medicines − Agency (EMA) Notes 1 Revenue figures for 2015 consist of B2B segment for Weifa to 31 May, B2B segment for Vistin from 1 June, and annualised revenue for CMO segment 2 Includes Weifa contract. 3. Excludes sale of raw materials
Vistin’s key milestones Long and successful track record of producing high quality APIs and FDFs Vistin’s evolution Weifa Vistin Pharma 1940: 1952: 1969: 1986: 2014: 2015: Weiders First Launch of Production Codeine Vistin Pharma Farmasoytiske production metformin API start of Ibux tablets added established as a A/S founded by facility opened to the product separate company Olaf Weider in Kragerø portfolio (Gruveveien) 1940 - 2014 2015 2016 2016: 1960: 2002: 2014: Announcement of 1950: 1977: Production New FDA-approved Weifa AS significant expansion Production Production metformin facility start of acquired by in capacity at start of start of opened in Kragero Paralgin Aqualis ASA metformin plant in codeine API Paracet (Fikkjebakke) Forte Kragerø
Content Introduction to Vistin Pharma Operational and financial update Summary & outlook Appendix
Vistin – a leading producer of high quality metformin First line treatment for type 2 diabetes Fully integrated metformin supplier One of the few European manufacturers of metformin HCl Global manufacturing capacity (MT) Leading independent producer Producer of three different types of metformin products: globally with 4 th largest capacity Metformin HCl (bulk API, “fine, dry powder”) Vistin Pharma 8% Metformin DC (“directly compressible”, a granulated pretablet form) One of only two Western European manufacturers of Metformin tablets (FDF, ready for consumption) metformin HCl and the only one of metformin DC Vertically integrated manufacturer active throughout the entire value chain across API and FDF ~40,000MT Long and established history having been involved in the production of metformin API since 1969 Positioned as a premium producer in a low cost competitive market Strong track record of growth 1,2 Sales to leading international pharmaceutical companies Attractive contract model based on long-term strategic partnerships Revenue, NOKm with key customers 2011-2015 CAGR 13% State-of-the-art plant in Kragerø with expansion potential Certified by all significant international regulatory bodies 176 156 149 Currently the only company with a listed metformin Drug Master File (DMF) in the USA and Japan 116 108 102 Strategically positioned with close proximity to key customers Excellent customer support with short lead times Delivery time less than 24 hours Competitive edge over Asian producers 2011 2012 2013 2014 2015 6M 2016 Provision of customised products and services Notes 1 Revenue figures for 2011 – 2014 and for 2015 to 31 May are for Weifa 2 Includes sale of raw materials 10
Diabetes - a global epidemic Type 2 diabetes is one of the greatest challenges to healthcare systems around the world – and metformin is expected to maintain its position as the gold standard treatment in the foreseeable future Estimated global growth in diabetes 387 million people live with Growth 82% 86% 65% 51% 47% 28% 33% 53% diabetes – Type 2 diabetes represents c.90% – Estimate that 46% are undiagnosed 592 Global healthcare costs related to treating diabetes amounted to $612bn in 2014 – Represented 11% of total healthcare costs worldwide 387 – Projected to exceed $627 billion by 2035 Cause of death of c.5m people in 2014 202 Estimated to increase by 53% from 2014 to 2035 137 123 – Largest growth in developing economies 74 68 69 52 50 – Africa and the Middle East are 42 38 39 37 25 23 expected to almost double by 2035 Africa Middle East & SEA Sounth and Western N. America & Europe World N. Africa Central Pacific Caribbean America 2014 2035 Number of people living with diabetes Source International Diabetes Federation, IDF Diabetes Atlas, sixth edition, 2014
Significant upside from additional capacity expansion Vistin plans to capitalise on strong demand in its metformin business by doubling the capacity at its plant in Kragerø Summary Significant long term growth in the metformin market and increased demand from Vistin’s customers – Forecast volumes expected to exceed future capacity in 2018 post the capacity increase programme (3,500MT) Background – Vistin’s target premium market is currently estimated to approx 13,000MT and growing The addition of a new 3,000 MT line at Fikkjebakke (Kragerø) will enable Vistin to meet this growth in demand Detailed feasibility study conducted Action taken to date Business case and investment proposal approved by Board The new production line is expected to become fully operational by 2019 Total capex estimated to be NOK 120m to be spent over 2017-18, financed Expected impact through existing cash, cash generation and loans Based on the forecasted capacity utilization, the project is expected to provide a positive EBITDA contribution in its first year of operations Current status Detailed engineering and project start commenced in September 2016
Vistin – a major opioids “powder -to- pill” supplier The company supplies c.6% of the global market for codeine API, a very commonly used medicinal opioid Overview Leading independent manufacturer of opioids Codeine market Pholcodine market Vistin produces two APIs in the opioid sector Vistin Pharma – Codeine (used in analgesics and cough syrup) Vistin Pharma ~6% ~17% – Pholcodine (used in cough syrup) Vistin is the world’s largest independent manufacturer of codeine phosphate API ~400MT ~12MT Only independent API supplier producing FDF for third parties One third of opioid APIs produced are converted to tablets First commercial sales in 2014 Track record of revenue growtht 1 Revenue, NOKm Annual volume of c.270m tablets 2011-2015 CAGR 9% Swift licence procedures and established relationships with regulators 82 81 ensure Vistin is able to deliver short lead times to its clients 75 71 58 – Typically receives export licences within 24 hours 50 Attractive collaborator for raw material companies The company has successfully negotiated a long-term strategic collaboration with a leading Narcotic Raw Material (NRM) supplier at attractive terms 2011 2012 2013 2014 2015 6M 2016 Notes 1 Revenue figures for 2011 – 2014 and for 2015 to 31 May are for Weifa 20
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