Transcript Оценка стоимости ГК Фармстандарт

Initial Offering—Roadshow Presentation
April / May 2007
0
Roadshow Presentation
Roadshow
Presentation
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1
Roadshow Presentation
Today’s Presenting Team
2
Name
Title
Dr. Igor Krylov
CEO, Chairman of the Management Board
and Member of the Board of Directors
Elena Arkhangelskaya
Chief Financial Officer
Dr. Olga Mednikova
Chief Sales and Marketing Officer
Maxim Stetsuk
Head of IR/Financial Management
Roadshow Presentation
1. Company Overview
Dr. Igor Krylov, CEO
Roadshow Presentation
Pharmstandard at a Glance
 Leading domestic pharmaceutical company in Russia (measured by sales)
– #4 pharma company overall in Russia by sales value in 20061
– #2 pharma company in the commercial segment by sales value in 20061
 Industry leading growth and profitability
 Market leading brands
– 5 brands among top-15 best selling domestic brands in Russia1
– Arbidol®, Pentalgin®, Complivit®, Terpincod®/Codelac®, Flucostat®
 Acquired Masterlek in August 2006
– Added 30 products including 2 market-leading brands, Arbidol® and Flucostat®
 Experienced sales force and modern and efficient manufacturing facilities
– 287 sales reps2, all with a medical background
– Russian GMP compliant facilities, including lines at Kursk, some of which are EU GMP
compliant
Source:
1
2
4
Company
Pharmexpert, preliminary data (subject to change), in wholesale prices
As at 31 December 2006
Roadshow Presentation
Diversified Product Portfolio
1
Pharmaceuticals
Medical Devices
87% of 2006 sales
13% of 2006 sales
OTC
71% of 2006 sales
 Therapeutic focus:
 Analgesics
 Cough & cold
 Vitamins
 Anti-viral
 Anti-fungal
Source:
Note:
Company
1 Pro forma 2006 sales, including Masterlek from 2 August 2006
2 Includes Other sales
5
Roadshow Presentation
Rx2
16% of 2006 sales
 Product portfolio includes:
 Acid pump inhibitors
 Nitrites & nitrates
 ACE inhibitors
 Alimentary tract
metabolism
 Product portfolio includes:
 Sterilisers
 Distillers
 Medical disposables
Investment Case
 Leading pharmaceutical company in the most rapidly growing pharma market
 Attractive industry fundamentals
 Portfolio of market leading brands
 Proven product development strategy
 Experienced sales force
 Modern and efficient manufacturing facilities
 Operational efficiency
 Experienced management team
6
Roadshow Presentation
Our Strategy
 Promote our market-leading brands to drive sales growth and profitability
 Launch new products on a regular basis
 Expand sales and marketing effort
 Continue to actively control costs
 Grow through acquisitions
 Exploit opportunities from Federal Reimbursement Programme (FRP) as they arise

7
Roadshow Presentation
Building a top-3 pharmaceutical company in Russia
2. Market Overview
Dr. Olga Mednikova, Chief Sales and Marketing Officer
Roadshow Presentation
Russia—The World’s Fastest Growing Pharma Market
(in retail prices, US$bn)
30
28%
24%
2006 growth rate (%)
25
20
17%
15
14%
8%
10
7%
7%
5
5%
5%
3%
2%
0
(5)
(6%)
Russia
Brazil
China
Canada
Mexico
US
Spain
France
UK
Germany
Italy
Australia/NZ
Japan
(10)
Pharma market
size (US$bn)
8.4
8.4
11.4
13.7
8.1
197.8
11.6
25.6
15.7
27.7
14.9
5.8
56.7
Population
(in million)
142
187
1,315
33
108
340
45
61
60
83
58
25
128
Source: DSM, EIU

9
3%
Roadshow Presentation
Russia was the fastest growing pharma market in
2005–2006
Russian Pharma Market Set to Expand
Pharmaceutical Consumption Per Capita in Russia($)
Consumption per capita ($)
80.00
70
58
60.00
44
40.00
38
33
 Drug consumption per capita
27
amongst lowest in Europe
20.00
 Rapid market growth
0.00
2001
2002
2003
2004
2005
2006
Consumption per capita ($)
Pharmaceutical Consumption Per Capita by Country($)
300
250
214
194
165
150
171
142
111 119
100
10
38 49
Romania
Russia
0
Czech
Republic
Slovakia
2005
Source:
47 50
50
Hungary
Pharmexpert, EIU Market Indicators
Roadshow Presentation
 Russia was the fastest
growing market globally in
2004-2006
230
200
expected to continue
Poland
2006
Russian Pharma Commercial Market Drivers
Strong
macroeconomics
driving consumer
boom
Supportive
demographic
trends
Market Drivers
Increased
consumer focus
on health and well
being
11
Roadshow Presentation
Affordability
boosts access and
consumption
Commercializatio
n and
development of
distribution
channels
A Leader in the Russian Commercial Segment
Market Share—Top 10 Companies1
Pharmstandard 2
4.2%
2
Sanofi-Aventis
4.5%
Market Share—Top 10 Domestic Companies1
Berlin-Ch/Menarini
3.4%
Pfizer
3.0%
Pharmstandard
17.7%
Servier
2.9%
2
Nizhpharm (Stada)
5.0%
Materia Medika
4.5%
Novartis
2.8%
Gedeon Richter
2.8%
Sandoz
2.6%
Other
69.2%
Otechestvennie
Lekarstva
3.4%
Other
53.7%
Nycomed
2.6%
Nizhpharm (Stada)
2.2%
Farm-Centr
2.1%
Moshimfarmpreparaty
2.5%
PHS is #2 in the US$5.3bn commercial segment
(66% of the total market)
Pharmexpert, preliminary data (subject to change)

Source:
Notes:
1 Commercial segment 2006, based on sales in wholesale prices
2 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
12
Roadshow Presentation
Microgene Npo
3.2%
Krasnogorskleksredstva
2.6%
Akrikhin
(Polpharma)
2.7%
Verofarm Zao
2.7%
Well Positioned to Capture FRP Upside
 In 2006 FRP budget was set at RUR 29bn (RUR 70bn spent)1
 2005 budget was set at RUR 51bn (RUR 46bn spent)1
 Resulted in a number of products being removed from the FRP list both voluntarily and
Key facts
involuntarily by pharma companies as FRP officials ask for even longer payment terms
and simultaneously cut prices
 17.1 million participants eligible—8.7 million currently enrolled21
 2007 FRP budget is set at approximately RUR 35bn3
Current status
 Short term solution:
– Reallocating funds from prior and future years (~RUR 20bn)
– Additional allocation of RUR 16bn
 Going forward Government focused on including generic domestic products on
FRP list rather than expensive foreign products
– Currently only 7% of the total FRP market is serviced by Russian
pharma companies

Source:
1
2
3
13
Although FRP currently in adjustment mode, domestic pharma
companies appear to be future beneficiaries
RBC daily, 4 September 2006
Commersant (Russia) 6 March 2007
Pharmvestnik #2, 23 January 2007
Roadshow Presentation
Low Exposure to FRP
100
100
Composition of Leading Companies’ Sales in Russia by Market Segment in 2006
90
90
19
19
3
3
6
6
3
3
8
8
80
80
70
70
24
24
(%)
(%)
16
16
15
15
15
15
10
10
10
10
75
75
75
75
Pfizer
Pfizer
Nycomed
Nycomed
62
62
89
89
40
40
57
57
20
20
76
76
26
26
Sanofi-Aventis
Sanofi-Aventis
Novartis
Novartis
Janssen-Cilag
Janssen-Cilag
23
23
Pharmstandard
Pharmstandard
Commercial
Commercial
Servier
Servier
BerlinBerlinCh/Menarini
Ch/Menarini
FRP
FRP
Roche
Roche
Gedeon Richter
Gedeon Richter
Hospital
Hospital
 Pharmstandard has a lower exposure to the FRP
compared to its peers
Source:
Pharmexpert, preliminary data (subject to change)
Note:
Based on wholesale prices in US$
Roadshow Presentation
69
69
66
66
49
49
10
10
14
31
31
14
14
72
72
50
50
0
0
18
18
15
15
45
45
60
60
30
30
3
3
6
6
3. Product Portfolio/Pipeline
Dr. Olga Mednikova, Chief Sales and Marketing Officer
Roadshow Presentation
Our Portfolio – Top 15 Pharmaceutical Products
Product
Terpincod®
ATC 2
Status therapeutic segment
OTC
Cough and cold
Arbidol®(1)
Pentalgin — N®
OTC
Antiviral
OTC
Analgesics
586
796
35.8%
Complivit® (excluding Mama® and Active®)
OTC
Vitamins
394
545
38.5%
Pentalgin — ICN®
OTC
Analgesics
313
410
31.0%
Codelac®
OTC
Cough and cold
222
375
69.1%
Rx
6
254
NM
OTC
Antiviral
Anti-fungal
0
197
NM
OTC
Psycholeptics
148
155
4.9%
Amixin®
Askophen®
Rx
0
137
NM
OTC
Antiviral
Analgesics
82
80
-2.4%
Validol®
OTC
Cardiac therapy
54
69
26.6%
Complivit Active®
OTC
Vitamins
46
68
48.9%
Oligovit®
OTC
Vitamins
57
60
5.2%
Citramon P®
OTC
Analgesics
41
51
2,923
1,751
4,674
5,390
1,936
7,326
26.6%
84.4%
10.6%
Phosphogliv®
Flucostat®
Corvalol®
(1)
(1)
Top-15 Pharmaceutical products
Other Pharmaceutical products
Pharmaceutical products total(2)
Source:
Notes:
1
2
16
2005 Sales 2006 Sales
(RURm)
(RURm)
Growth (%)
975
1,163
19.2%
0
1,032
NM
Company
Sales only formed part of consolidated results from 2 August 2006
Total Pharmaceutical products sales include products categorised as Other
Roadshow Presentation
56.8%
Pharmstandard’s Leading Brands
Leading domestic pharma trademarks by sales value in 2006
Ranking
Trademark
Arbidol 1
Mexidol
Pentalgin
1
2
3
Sodium Chlorid
Howthorn
4
5
Terpincod
6
Anaferon
Viferon
Phenotropil
7
8
9
Chondroxid
Complivit
10
11
Cephazolin
Flucostat 1
12
13
Essliver
Glucose
Biphidumbacterin
14
15
16
Impaza
Corvalol
17
18
Proproten
Cyclopheron
19
20
Exclusively produced by Pharmstandard
Produced by Pharmstandard
Source:
Pharmexpert. Based on consumer prices, Rx and OTC products
Note:
1 Masterlek Brands
17
share
Roadshow Presentation
 5 leading brands
 “Top of mind” position
with consumers
 Significant brand loyalty
Focused Sales and Marketing Efforts
Sales force
Marketing / Advertising
 Covers 75% of the Russian
pharma market
 All sales reps have medical
education/work experience
 Appropriately incentivised with cash
bonus up to 33% of salary
 In 2007 looking to:
 Promote products through TV, radio,
print media and internet as part of focus
on brand building
 Launched 5 new marketing campaigns
since September 2006, including TV
campaigns for Pentalgin®, Arbidol®
and Flucostat®
– Increase to over 350
sales people
– Further specialise sales force by
therapeutic area
 Electronic Territory Management
System (ETMS) system improving
efficiency
Arbidol® Print /
TV campaign
Source:
Note:
18
Company
As of 31 December 2006
Roadshow Presentation

Significant sales and marketing capabilities
Pentalgin® Print /
TV campaign
Arbidol®—#1 Pharma Brand in Russia
Leading Products in Anti-infective Systemic
Use Segment (2006)
Arbidol®
 Captured #1 brand position, in part, through
Grippferon
Aflubin
(Frn-M Zao)
(Richard
2.3%
Bittner GmbH)
Anaferon 4.2%
(Materia
Medika)
4.5%
Amixin
active promotion by Pharmstandard sales force
 Acquired as part of Masterlek transaction
 Original product developed in 1987,
Annual Segment Sales Dynamics1,2
4.72
150
3.0
1.49
1.23
12.2
5.5
3.1
29.6
40.3
2001
2002
2.5
44.9
1.91
100
50
2.0
16.4
128.7
62.3
74.6
2003
2004
97.0
19
1.0
0.0
Other
1
2
1.5
0.5
0
Source:
3.5
Pharmstandard
2005
Average price (US$)
Company
Source: Pharmexpert, 2006 preliminary data (subject to change)
Based on consumer prices
Roadshow Presentation
2006
Average price (US$)
Sales (US$m)
4.0
82.9
3.03
Immunal
(Sandoz)
7.3% Ocillococcinum
(Laboratoire
Boiron)
7.6%
5.0
4.5
3.89
200
Arbidol
(Pharmstandard)
32.1%
Amixin
(Pharmastanda
(Pharmstandard)
rd)
5.7%
5.7%
Cycloferon
(Polysan)
6.6%
active marketing launched in 2000
250
Other
6.3%
Source:
Note:
Anaferon for
Kids (Materia
Medika)
9.8%
Pharmexpert (subject to change)
Remodelled to reflect current categories
Viferon
(Feron Ooo)
13.7%
Pentalgin—#1 Pain Reliever (Non-Narcotic)
Top-10 Products in Analgesics Segment (2006)
Pentalgin
 Looking to launch new (improved) formulation
of Pentalgin in 2007 to capitalise on
Pentalgin’s brand recognition
 Franchise includes Pentalgin-N® and
Pentalgin-ICN®
 First launched Pentalgin-ICN® in 1999 and
followed with launch of Pentalgin-N® in 2002
 Steadily gained market share since 2001
Annual Segment Sales Dynamics1,2
250
0.48
Sales (US$m)
0.20
0.32
0.25
0.26
23.8
24.1
54.7
0.3
30.8
16.5
50
73.5
99.6
102.8
100.8
2002
2003
2004
126.6
147.8
0.0
2001
Other
1
2
20
0.2
0.1
0
Source:
0.4
Pharmstandard
2005
Average price (US$)
Company
Source: Pharmexpert, 2006 preliminary data (subject to change)
Based on consumer prices
Roadshow Presentation
2006
Average price (US$)
150
100
0.5
0.42
57.6
Other
40.5%
Tempalgin
(Sopharma)
8.0%
Baralgin M
(Sanofi-Aventis)
7.8%
Nurofen Plus
(Reckitt Benckiser)
2.2%
Pentalgin-ICN
(Pharmstandard)
7.8%
Sedal-M Sedalgin-Neo
(Sopharma) (Actavis)
Alka-Seltzer
5.9%
Cardiomagnyl Solpadeine 3.4%
(Bayer)
(Nycomed)
(GSK)
2.5%
2.7%
3.3%
0.6
200
Pentalgin-N
(Pharmstandard)
15.8%
Source: Pharmexpert, preliminary data (subject to change)
Phosphogliv® – Successful Rx Product Launch
Phosphogliv®
Top products in Hepatic Protectors segment (2006)
 Launched in 2005
 Novel product in-licensed from the Institute of
Other
16.7%
Biomedical Chemistry
 Premium priced product based on superior
efficacy
 Patent protected until 2018
 Clinically validated
– 2nd generation combination therapy
with anti-viral, anti-inflammatory and
immunomodulating properties
Pharmstandard
(Phosphogliv)
4.0%
Essentiale
(Sanofi-Aventis)
29.8%
Carsil
(Sopharma)
9.1%
Essliver Forte
(Stada)
9.6%
Heptral (Abbott)
19.3%
Annual segment sales dynamics1
Tycveol
(EuropaBiopharm)
4.1%
Source: Pharmexpert, preliminary data (subject to change)
250
8.71
Sales (US$m)
6.79
7.8
5.82
150
4.49
3.83
100
50
0.9
0.6
51.0
5.06
1.2
6
2.5
1.5
187.0
126.7
67.6
78.0
88.4
2002
2003
2004
0
2001
Other
Source:
21
4
2
0
1
2
8
Pharmstandard
2005
Average price (US$)
Company
Source: Pharmexpert, 2006 preliminary data (subject to change)
Based on consumer prices
Roadshow Presentation
2006
Average price (US$)
200
10
Berlition 300
(BerlinCh/Menarini)
7.5%
PHS Recent Product Approvals and Launches
Product
Date of
expected
launch
ATC
ATC value,
US$m (2006) 1
Key market brands
Rx
OTC
Recent product launches
Maxicold®
Jan-07
Passifit®
Jan-07
Biosulin®
Nov-06
Artrosan®
Jan-07
Rastan®
Jan-07
R05A – cold preparations without
anti-infectives
N05B- hypnotics, sedatives
142
Coldrex, Fervex, Teraflu
125
Novo-Passit, Persen
A10C1+A10C2+A10C3 – human
insulins and analogues
M01A1 – anti-rheumatics, non-steroidal
pain
H04C0 – growth hormones
1622
Humulin, Protaphan, Actrapid
199
Movalis, Voltaren, Diclofenac
18
Genotropin, Saizen, Humatrope
Rx
OTC
Recent product approvals
Source:
Note:
1
2
22
Complivit Ca D3®
May-07
A12A – calcium products
45
Calcium D3, Calcium
Benfolipen®
Jun-07
15
Milgamma, Neuromultivit
Combilipen®
Jun-07
25
Ondasol®
Jun-07
16
Milgamma,
Thiamine Chloride
Kytril, Zofran, Navoban
Carditrim®
Jul-07
111
Preductal
Immunex®
Sep-07
A11D (tablets) – vitamin B1 and
combinations
A11D (injections) – vitamin B1 and
combinations
A04A1 – serotonin antagonist
antiemetics/antinauseants
C01D0 – coronary therapy excluding
calcium antagonists and nitrites
L03A0 – immunostimulating agents
excluding interferons
85
Immunal, Immunorm
Pharmexpert, preliminary data (subject to change)
Russian segment size – retail audit
Excludes regional tenders
Roadshow Presentation
Product Pipeline
Near term pipeline
Products in development
Products in registration
Number of
registered
Product
applications Formulations trademarks
OTC
ATC1
Vitamins
Mineral supplements
Wound healing agents
Immunostimulating agents
Analgesics
Cough and cold preparations
Total
Rx
8
3
1
1
2
2
4
2
11
17
9
1
1
1
Number of
registered
Product
applications Formulations trademarks
ATC1
Functional gastro-intestinal disorder drugs
Antiemetics and antinauseants
Cholagogues and hepatic protectors
Drugs used in diabetes
Vitamins
Cardiac therapy
Agents acting on the renin-angiotensin system
Hypolipidaemics/anti-atheroma preparations
Topical corticosteroids
Pituitary and hypothalamic hormones
Immunostimulating agents
Analgesics
Psycholeptics
Total prescription

23
4
2
1
1
2
1
1
1
2
3
2
2
1
1
1
1
1
1
1
18
1
2
4
9
4
2
1
2
2
1
1
1
1
31
1
1
2
2
2
1
1
ATC1
Vitamins
Analgesics
Cough and cold preparations
Laxatives
Nonsteroidal products for inflammatory skin disorders
Total
ATC2
8
1
1
1
1
12
Products
Immunostimulating agents
Psychoanaleptics excluding anti-obesity preparations
Pituitary and hypothalamic hormones
Urologicals
Anti-asthma and COPD products
Antithrombotic agents
2
1
1
1
2
1
Total
8
1
1
1
1
14
Pipeline of OTC and Rx products supports Pharmstandard’s growth story
Roadshow Presentation
Products
4. Financial Overview
Elena Arkhangelskaya, Chief Financial Officer
Roadshow Presentation
Rapidly Growing Revenue Profile
9,374
10,000
8,523
9,000
8,000
RUR millions
7,000
1,196
96
1,199
5,685
14%
1%
1,196
96
13%
1,331
14%
6,722
72%
14%
6,000
5,000
3,946
4,000
44
555
1%
14%
1,011
39
733
18%
13%
6,032
3,000
2,000
3,347
85%
3,902
71%
69%
1,000
0
2004
OTC

2005¹
Prescription
Other
2006²
Medical Equipment
Achieved 25% organic growth4 in 2006
Source: Company
Note:
25
1%
1
2005 results include results of Tyumen acquisition (as of 1 January 2005)
2
2006 results include results of Masterlek acquisition (as of 2 August 2006)
3
Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
4
Organic growth excludes sales by Masterlek (standalone Masterlek sales in 2006 RUR 2,283m and in 2005 RUR 1,362m, according to IFRS)
Roadshow Presentation
2006 PF³
Competitive Cost Structure
General and Administration Costs
Selling and Distribution Costs
1,600
600
25%
549
1,372
522
1,400
1,069
14%
13.2%
499
500
1,268
20%
12%
433
1,200
10%
18.8%
14.6%
13.5%
15%
RUR millions
RUR millions
400
14.9%
1,000
800
600
8%
7.8%
300
6%
10%
532
6.0%
5.9%
200
4%
400
5%
100
2%
200
0
0%
2004
Marketing & advertising
2005¹
Labour costs
2006²
2006 PF³
Other expenses
As % of Sales
Source: Company reports
Note:
26
1
Tyumen consolidated as of 1 January 2005
2
Masterlek consolidated as of 2 August 2006
3
Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
Roadshow Presentation
0
0%
2004
2005¹
Labour costs
2006²
Other expenses
2006 PF³
As % of Sales
Margin Expansion
EBITDA
Gross Profit
6,000
70.0%
4,000
5,233
4,942
3,497
3,500
65.0%
5,000
50%
3,252
3,000
45%
40%
60.0%
3,178
38.2%
2,500
58.0%
55.9%
55.8%
55.0%
3,000
50.0%
2,000
RUR millions
RUR millions
4,000
37.3%
35%
1,720
2,000
30%
30.3%
1,500
25%
1,000
20%
1,726
45.0%
43.7%
583
1,000
40.0%
500
15%
14.8%
0
35.0%
2004
2005¹
Gross Profit
2006²
2006 PF³
Gross Margin (%)
Source: Company reports
Note:
27
1
Tyumen consolidated as of 1 January 2005
2
Masterlek consolidated as of 2 August 2006
3
Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
Roadshow Presentation
0
10%
2004
2005¹
EBITDA
2006²
EBITDA margin (%)
2006 PF³
Attractive Profitability Growth
FY Net Profit 2004–2006
2,500
30%
2,036
23.9%
2,006
25%
2,000
21.4%
RUR millions
17.9%
20%
1,500
15%
1,019
1,000
500
8.1%
10%
320
5%
0
0%
2004
2005
1
Net Profit
Source: Company reports
Note:
28
1
Tyumen consolidated as of 1 January 2005
2
Masterlek consolidated as of 2 August 2006
3
Pro Forma assumes inclusion of Masterlek as part of Phamstandard as of 1 January 2006
Roadshow Presentation
2006
Net Margin
2
2006 PF
3
Logical Consolidator—Masterlek Acquisition Overview
 Our business was built through several strategic transactions
 Masterlek is the largest pharmaceutical transaction in Russia to date
 Focused on anti-viral and anti-fungal therapeutic segments
– 3.5% market share among domestic producers by sales value in 20051
 Portfolio of 30 products:
– Leading brands include Arbidol® and Flucostat®
 Arbidol’s complementary fit with the Pharmstandard cough & cold franchise
 Significant cost savings anticipated through integration

Source:
Note:
1
29
Company
Pharmexpert
Roadshow Presentation
Focused on pursuing attractive acquisition opportunities
Consolidated Balance Sheet and Capex
IFRS basis
Capital Expenditure
2005
2006
Cash and Equivalents
66
244
193
Other Current Assets
2,980
4,263
5,277
Long-term Assets
2,291
3,806
8,299
5,337
8,313
13,770
1,496
584
3,875
930
3,302
2,425
379
502
1,129
2,532
3,925
6,340
5,337
8,313
13,770
Total Assets
Total Debt
Current Liabilities (excl. shortterm debt)
Non-current Liabilities (excl.
long-term debt)
Total Equity
Total Liabilities & Equity
1,000
 Facility A: US$91m (maturity Dec-2009/L+150)
 Facility B: US$55m (maturity Dec-2011/L+190)
 Net debt: US$140m
30
Roadshow Presentation
890
2005
2006
600
400
200
189
0
2004
Debt summary
889
800
Capex (RURm)
2004
(in millions of RUR)
Modern Production Facilities
Phytopharm
Capacity: 48m
Pharmstandard HQ
St. Petersburg – Facility Closed
Moscow
Kursk
Nizhny Novgorod
Tyumen
Ufa
Leksredstva
Capacity: 645m
31
Ufavita
Capacity: 169m
Source:
Company
Note:
Capacity in packs. Figures shown are as of 31 December 2006
Roadshow Presentation
Tomsk
TZMOI
Tomskhimpharm
Capacity: 208m
Core Comparables Benchmarking
Gross margin (2006)
Sales growth (2006)
60%
80%
50%
60%
40%
30%
40%
20%
20%
10%
Veropharm
Zentiva
Zentiva
30%
Veropharm
30%
Stada
40%
Stada
Net profit margin (2006)
Krka
EBITDA margin (2006)
Krka
Hikma
Gedeon
Richter
Egis
Aspen
Actavis
Pharmstandard
Zentiva
Veropharm
Stada
Krka
Hikma
Gedeon
Richter
Egis
Actavis
Aspen
0%
Pharmstandard
0%
20%
20%
10%
10%
Hikma
Gedeon
Richter
Egis
Aspen
Actavis
Pharmstandard
Zentiva
Veropharm
Stada
Krka
Hikma
Gedeon
Richter
Egis
Aspen
Actavis
0%
Pharmstandard
0%
Source: Company reports. Veropharm figures based on equity research as 2006 results not available

32
Roadshow Presentation
PHS has industry leading growth and profitability
5. Concluding Remarks
Dr. Igor Krylov, CEO
Roadshow Presentation
Investment Case
 Leading pharmaceutical company in the most rapidly growing pharma market
 Attractive industry fundamentals
 Portfolio of market leading brands
 Proven product development strategy
 Experienced sales force
 Modern and efficient manufacturing facilities
 Operational efficiency
 Experienced management team
34
Roadshow Presentation
Transaction Highlights
35
Issuer
 OJSC “Pharmstandard,” an open joint stock company incorporated under the laws of
the Russian Federation
Securities offered
 Ordinary shares and GDRs of Pharmstandard
 100% secondary shares
 15% over-allotment option on GDRs
Selling shareholder
 Augment Investments Ltd.
Offering structure
 Institutional investors
 Shares and GDRs:
 In the US under Rule 144A to Qualified Institutional Buyers (QIBs)
 Outside US and Russia pursuant to Reg S
 Shares
 Russia
 4 GDRs will represent 1 share
Price Range
 $11.55 – $14.55 per GDR
 $46.20 – $58.20 per share
Timing
 Pricing: expected on 3 May
 Closing: expected on 10 May 2007
Lockup
 180 days for the Issuer and Augment Investments Ltd.
Listing locations
 Ordinary shares listed on MICEX and RTS
 GDRs listed on LSE
Joint bookrunners and
global co-ordinators
 Citi and UBS
Roadshow Presentation
Appendix
Roadshow Presentation
Competitive Landscape – Total Market
Market Share of Top-10 Companies in the
Russian Pharmaceutical Market (% 2006 value)1
Market Share of Domestic Pharmaceutical
Producers (% 2006 value)1
Janssen-Cilag
Sanofi-Aventis Novartis
3.2% Pharmstandard 2
3.8%
5.2%
3.1%
Pharmstandard 2
15.3%
Nizhpharm (Stada)
5.0%
Berlin-Ch/Menarini
3.0%
Servier
2.9%
Roche
Otechestvennie
Lekarstva
4.6%
Farm-Centr
3.8%
2.8%
Gedeon Richter
2.6%
Nycomed
2.3%


Materia Medika
3.5%
Moshimfarmpreparaty
2.4%
Biotek
2.5%
Verofarm Zao
Akrikhin
3.2%
(Polpharma)
3.0%
#4 pharma company in Russia overall
#1 domestic pharma company – more than 3 times
the size of the #2 domestic player
Source:
Pharmexpert, preliminary data (subject to change)
Notes:
1 Based on sales in wholesale prices
2 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
Roadshow Presentation
Microgene Npo
3.5%
Pfizer
2.6%
Other
68.7%
37
Other
53.3%
Growth Analysis Across Market Segments1
Sales 2005
Company (in US$000s)
Domestic companies
Pharmstandard
(2)
International companies
38
Commercial
FRP
Hospital
Commercial
Total Growth
Commercial
Growth
Total
Growth
(%)
Commercial
Growth
(%)
4,848
169,787
19,287
6,959
214,296
188,741
240,541
51,800
44,509
27%
26%
13,175
1,224
49,249
16,078
825
62,549
63,648
79,452
15,804
13,300
25%
27%
Otechestvennie Lekarstva
13,121
9,105
33,847
18,644
12,979
41,140
56,073
72,763
16,689
7,292
30%
22%
4,971
18,330
20,213
8,456
24,997
25,709
43,514
59,159
15,645
5,493
36%
27%
18
18,521
31,742
0
16,728
38,904
50,281
55,632
5,351
7,162
11%
23%
Verofarm
7,964
5,739
25,588
6,080
11,465
32,235
39,290
49,779
10,489
6,647
27%
26%
Akrikhin
9,555
3,482
31,822
11,789
3,167
32,418
44,859
47,375
2,515
596
6%
2%
Biotek
1,363
7,933
26,067
3,371
11,553
24,671
35,362
39,595
4,233
(1,396)
12%
(5%)
Moshimfarmpreparaty
1,874
6,249
33,871
1,052
5,910
30,180
41,993
37,142
(4,851)
(3,691)
(12%)
(11%)
18,420
13,215
21,775
5,903
8,434
20,071
53,410
34,407
(19,003)
(1,704)
(36%)
(8%)
Farm-Centr
Microgene
Sanofi-Aventis
78,234
58,894
199,556
97,095
76,280
299,804
336,684
403,179
66,496
30,248
20%
15%
Novartis
46,875
13,937
111,186
133,174
17,659
145,921
171,998
296,754
124,756
34,734
73%
31%
Janssen-Cilag
23,183
7,270
52,435
177,110
7,260
63,161
82,887
247,531
164,644
10,725
199%
20%
14,106
4,848
169,787
19,287
6,959
214,296
188,741
240,541
51,800
44,509
27%
26%
Berlin-Ch/Menarini
40,236
10,635
157,748
42,196
14,315
176,159
208,619
232,671
24,052
18,412
12%
12%
Servier
50,958
5,558
102,604
68,910
7,150
148,570
159,120
224,629
65,509
45,966
41%
45%
Roche
44,560
18,568
35,853
137,530
32,936
50,004
98,981
220,470
121,489
14,151
123%
39%
Gedeon Richter
40,936
24,419
104,756
33,535
29,321
142,626
170,111
205,482
35,371
37,870
21%
36%
Pfizer
26,652
24,608
124,690
20,351
30,095
152,634
174,950
203,080
28,130
27,945
16%
22%
Nycomed
17,758
18,769
107,807
17,769
27,476
134,068
144,335
179,313
34,979
26,261
24%
24%
Pharmstandard
(2)
Pharmstandard is growing in-line with its peers
in the commercial segment
Pharmexpert, 2006 preliminary data (subject to change)
Note:
2
Hospital
Total Sales
2006
14,106

1
FRP
Total Sales
2005
Stada Arzneimittel Ag
Brinzalov A
Source:
Sales 2006
Based on sales in wholesale prices
Includes Masterlek with respect to 2006
Roadshow Presentation
Pharmstandard Key Development Milestones
Leksredstva plant (Kursk)
4Q03:
2Q04:
3Q05:
May 2006:
3Q06:
4Q06:
Acquisition of ICN’s
business in Russia
(five factories,
distribution centres
and pharmacy
chain)
Close Polypharm
(pharma production
facility)
Sale of
Marbiopharm
(pharma production
facility)
Legal name
changed from Biovit
LLC to OJSC
Pharmstandard
Acquisition of
Masterlek (3.5%
share of domestic
Russian Pharma
market by sales
value)
New production of spray, tablets and
capsules; central manufacture
laboratory and renovation of
production facilities
Total investment since 2004:
approximately RUR 600m
Pre 2003:
Group consisted
of two manufacturing facilities
2003
(Ufa and
Phytopharm)
operating under
Biovit LLC
39
2004
2005
2006
2007
Q104:
Jan 05:
1H05:
End 2005:
2H06:
1H06:
New management
team brought in
with experience in
international and
domestic pharma
companies
Acquisition of
TZMOI (Tyumen)—
manufacturer of
medical equipment
Open centralised
warehouse for
pharmaceutical
products in Moscow
Creation of holding
company/ legal
restructuring
finalised
Termination of
production in
Oktyabr plant in St
Petersburg,
production
transferred to other
existing sites
New production of solutions,
production of vitamins and insulin
Source:
Company
Note:
OJSC – Open Joint Stock Company, LLC – Limited Liability Company
Roadshow Presentation
Total investment since 2004:
approximately RUR 730m
2007:
New production workshops for
Rastan® and Phosphogliv®
Ufavita plant (Ufa)
Medical Equipment (TZMOI)
Medical Equipment
(2006 sales RUR 1,196m)1,
14% of group sales in 2006
Sterilizers
(45% of 2006 sales)2
Aqua distillers
(8% of 2006 sales)2
 Market size approximately
 Market size approximately
 Market size of syringes
 Market leader with estimated
 TZMOI market share
 TZMOI market share
RUR700m
56% market share by
sales value
RUR190m
estimated at 24%
 Growth driven by the Priority
National Health Project
encouraging investment in
new equipment
Source:
Company estimates
Note:
40
Disposables/Other
(47% of 2006 sales)2
1
Represents Pro Forma figures which assumes inclusion of Masterlek as part of Phamstandard as of 1 January 2006
2
Based on divisional sales
Roadshow Presentation
approximately RUR3,000m
about 20%
 Portfolio includes syringes,
urology bags and catheters
Pro Forma Pharma Portfolio by Therapeutic Segment
Pro Forma1 sales split as at 2006
A02-Antacids, Antiflatulents
and Anti-Ulcerants
0.7%
C09-Agents Acting on the ReninAngiotensin System
0.7%
Other Sales
8.3%
J01-Systemic Antibacterial
0.9%
R05-Cough and Cold Preparations
19.9%
R02-Throat Preparations
1.0%
V03-All Other Therapeutic
Products
1.2%
N06-Psychoanaleptics Excluding
Anti-Obesity Preparations
1.5%
J05-Antivirals for
Systemic Use
18.5%
C01-Cardiac Therapy
2.3%
L03-Immunostimulating Agents
2.7%
N05-Psycholeptics
3.5%
A05-Cholagogues and Hepatic
Protectors
3.6%
J02-Systemic Agents for Fungal
Infections
5.7%
Source:
41
N02-Analgesics
17.4%
Company
Note:
1
A11-Vitamins
11.9%
Pro Forma assumes inclusion
of Masterlek as part of
Pharmstandard as of
1 January 2006
Roadshow Presentation
Pro Forma sales = RUR 8,053 million (2006)
OTC = 83% / Rx = 17%
Sales Team
HQ Sales and marketing
 All sales reps have medical
pharma market
 Incentivised sales force—up to 33%
bonus of annual salary
 In 2007 looking to:
– Increase “feet on the street” to
over 350 sales people
OTC
Rx
(incl. ENDO-Team)
National manager
1 manager
National manager
2 managers
Regional manager
8 managers
Regional manager
12 managers
OTC sales force
(117 medical reps)
Rx sales force
(147 medical reps)
– Further specialise sales force by
therapeutic area

Source:
Note:
42
Company
As of 31 December 2006
Roadshow Presentation
Experienced sales force
Real time data - ETMS
 Covers 75% of the Russian
Real time data - ETMS
education/work experience
Breakdown of Sales for 2006 by Distributor
Top 5 Distributors – 2006
 Top 5 distributors accounted for 51% of
commercial pharmaceutical product sales
in 2006
Distributor
 Typical payment terms for distributors:
– Regional and export distributors:
30–60 days
– National distributors: 60–90 days
– FRP program: 180 days
Genesis
17
Protek
13
SIA International
11
Katren
5
Infarma Pro
5
Total
Source:
Note:
43
Roadshow Presentation
% of sales
Company
Manufacturers’ prices
51
Production Facilities – Summary Overview
Approximate size
(sq. m.)
Factory
Source:
Note:
44
52,644
361,077
52,644
564,406
10,368
1,260
16,200
5,850 (lease)
Ampules
Frozen-dried preparation
Syrops & liquid forms
Tablets
Vitamin bars (ferrohematogen)
Insulin
Saline infusin
2
3
1
2
2
2
2
7,624
2,640
6,360
63,012
14,000
8,595
2,640
6,360
109,973
22,680
14,400
4,500
1,200 (lease)
Ointments
Powders
Syrops & liquid forms
Tablets
2
1
2
2
11,100
10,280
29,187
12,850
1,200
10,280
24,000
12,850
29,000 (own)
Syrops & liquid forms
Tablets
1
3
1,200
206,856
1,200
206,856
Closed in 2006
Capsules
Sprays
Tablets
2
1
2
1,384
4,582
72,797
857,593
1,070,412
295
624
24,250
319
7,320
295
624
24,250
319
7,320
Syringes
Needles
Sterilizing machines < 100 L
Sterilizing machines > 100 L
Aquadistilling machines
Company.
Total capacity for pharmaceutical production in 2006 excludes capacity from Oktyabr factory (St. Petersburg) which closed in Q3 2006
Total capacity calculations assume 8-hour shifts and 7 day working week
Roadshow Presentation
Capacity 000’s
packs Dec 2006
3
3
2
2
3
PHYTOFARM
(N.NOVGOROD)
TZMOI
(Tyumen)
Capacity 000’s
packs Dec 2005
Syrops & liquid forms
Tablets
Sprays
Powders
Capsules
UFAVITA
(UFA)
OKTYABR
(S.PETERSBURG)
Shifts
14,900 (lease)
LEKSREDSTVA
(KURSK)
TOMSKHIMPHARM
(TOMSK)
Formulation
2
2
2
2
2
Complivit—#1 Vitamin Franchise
Top-10 Products in Vitamin Segment (2006)
Complivit and its sub-brands
 Looking to launch 2 new products under this
Complivit (Pharmstandard)
11.5%
Vitrum (Unipharm)
6.6%
Supradyn (Bayer)
4.8%
Centrum (Wyeth-Whitehall)
4.6%
brand umbrella by the end of 2007
 Brand umbrella includes Complivit®, ComplivitActive® and Complivit “mama”®
 First launched Complivit in 1986 and followed on
Complivit-Active®
with
by the end of 2004
and Complivit
“mama”®
Other
53.0%
Annual Segment Sales Dynamics1,2
250
7
Sales (US$m)
150
4.04
4.43
3.41
100
50
14.7
63.1
16.7
81.2
18.5
91.0
4.98
5.39
26.8
5.88
27.6
19.3
102.5
Other
45
4
136.4
148.1
2
1
0
2001
1
2
5
3
0
Source:
6
2002
2003
2004
Pharmstandard
2005
Company
Source: Pharmexpert, 2006 preliminary data (subject to change)
Based on consumer prices
Roadshow Presentation
2006
Average price (US$)
Average price (US$)
200
Source:
Merz Spezial Dragees (Merz)
3.8%
Elevit Pronatal (Bayer)
3.8%
Biovital Gel for Children (Bayer)
3.4%
Vitrum Prenatal Forte (Unipharm)
3.2%
Vitrum Beauty (Unipharm)
2.9%
Vitrum Vision (Unipharm)
2.4%
Pharmexpert, preliminary data (subject to change)
Terpincod®/Codelac®—#1 Cough and Cold Franchise
Top-10 Products of Antitussive & Expectorants
Segment (2006)
Terpincod®
 First launched Terpincod® in 1996
 Non-promoted brand with high margins
Terpincod
(Pharmstandard)
14.3%
Codelac®
 Includes Codelac® tablets and Codelac Phyto®
Other
41.0%
syrup
 First launched Codelac® tablets in 1996 and
followed with Codelac
Phyto®
Ascoril Expectorant
(Glenmark)
3.0%
Hedelix Syrup Cough
Control (Krewel
Meuselbach)
3.2%
Annual Segment Sales Dynamics1,2
250
1.22
1.02
0.67
150
100
0.52
13.6
0.46
8.4
50
63.9
87.8
26.2
0.83
46.3
0.8
35.2
0.6
114.0
121.2
156.1
176.2
2002
Other
46
0.4
0.2
0.0
2001
1
2
1.2
1.0
40.1
0
Source:
1.4
2003
2004
Pharmstandard
2005
Average price (US$)
Company
Source: Pharmexpert, 2006 preliminary data (subject to change)
Based on consumer prices
Roadshow Presentation
2006
Average price (US$)
Sales (US$m)
200
Ambrobene
(Ratiopharm)
6.5%
Doktor Mom
(Unique
Pharmaceutical)
5.3%
Codelac
(Pharmstandard)
5.3%
Bromhexine 8
Berline-Chemie
(Berlin-Ch/Menarini)
2.9%
syrup in 2004
Source:
Note:
Lasolvan
(Boehringer
Ingelheim)
10.6%
ACC (Sandoz)
3.3%
Pharmexpert, preliminary data (subject to change)
Based on consumer prices
Pulmozyme (Roche)
4.5%
Maxicold® Case Study
May 2004
Stage 1
Marketing request
Jun-Aug 2004
Stage 2
Internal expertise for production
and technology, availability of
active ingredients
Aug 2004
Stage 3
Project management,
approval by GM
Sep-Dec 2004
Stage 4
Development of production
and Regulatory filing
 In-depth analysis of potential cough/cold drug
development opportunities
 Marketing/medical review of compounds/possible
compositions
 Review of production capability and capacity
 Agreed PHS-Leksredstva was to be production
location
 Production team put together (technologist,
registration mgr., procurement mgr.), project
approved by GM




Experimental / production equipment tests
Production development
Pre-clinical studies
Development of regulatory file
 1st submission to Ministry of Health: 28-Jan-05
 2nd submission (Pharmaceutical and Pharmacological
Jan 2005-Jul 2005
Stage 5
Milestones of Regulatory
stage
Source:
47
Company
Roadshow Presentation
Committees): 10-Mar-05




Clinical review completed: 19-Jul-05
Labelling approved: 07-Dec-05
Registration certification received: 26-Feb-06
License for production received: 27-Jul-06
Passifit® Case Study
 Production started in July 2006
 First commercial sales commenced in September 2006
– Line extensions include new formulations e.g. tabs and pediatric
 Actively promoted in January 2007
– Specialist doctors (e.g. gynecologists), general practitioners and
pharmacists
 Priced at a discount to key competitor product Novo-Passit
 Growth expected to be achieved through increasing market share
Source:
48
Company
Roadshow Presentation
Complivit Calcium D3® Case Study
October 2004
Stage 1
 Marketing request
Nov-Dec 2004
Stage 2
 Internal expertise for
January 2005
Stage 3
 Project management, approval
Jan-Feb 2005
Stage 4
 Development of production and
by GM
regulatory filing
March 2005
Stage 5
 Submitted to Ministry
January 2007
Stage 6
 Registration approved
April 2007
Stage 7
49
production and technology,
availability of active ingredients
Roadshow Presentation
of Health
 Production
50
Roadshow Presentation