Transcript Оценка стоимости ГК Фармстандарт

Pharmstandard company presentation
Business & Financial results, 2007
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are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual
results, performance or achievements of the Company to be materially different from results, performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in
which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation. Each of the Company and the Selling
Shareholder and their respective agents, employees and advisers, expressly disclaims any obligation or undertaking to update any forward-looking statements contained
herein.
The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.
All information not separately sourced is from Company data.
2
Today’s Presenting Team
Dr. Igor Krylov
Elena Arkhangelskaya
Dr. Olga Mednikova
CEO,
Chief Financial Officer
Chief Sales
Chairman
of the Management Board
and Member
of the Board of Directors
3
and Marketing Officer
Company Overview
Dr. Igor Krylov, CEO
4
Pharmstandard at a Glance
Leading domestic pharmaceutical company in Russia (measured by sales)
Market
•
#3 pharma company overall in Russia by sales value in 20071
•
#1 pharma company in the Consumer spending (Commercial retail) pharma market by sales value in 2007 1
Modern and efficient manufacturing facilities
Production
•
4 pharmaceutical production sites and 1 medical equipment and disposables plant
•
Russian GMP compliant facilities, some of which are EU GMP compliant
•
200 branded and non-branded pharmaceutical products
•
Capacity – more then 1.3 billion packs
Experienced sales and marketing people
Sales &
Marketing
•
More then 340 sales people and 25 actively promoted brands
•
6 brands among top-20 best selling domestic brands in Russia1
Arbidol®, Pentalgin®, Complivit®, Terpincod®, Codelac®, Flucostat®
Since IPO (May’2007) Pharmstandard is listed on LSE, RTS
Financials
•
Industry leading growth EBIDTA margin and profitability
•
Market capitalization more then $3.5 billion (60% growth from IPO)
Source
1 Pharmexpert, preliminary data, in retail prices. Subject to change. .
2 Company As at 31 December 2007
5
Russia pharmaceutical market development
CAGR 07-12 Total market-15%
CAGR 07-12 Commercial segment-17%
25.0
2.5
USD mln
20.0
2.5
2.5
15.0
2.5
2.5
10.0
2.5
2.0
1.4
5.0
0.0
5.6
4.4
5.1
1.1
1.3
1.4
2003
2004
2005
Hospitals
Commercial
FRP
Source: Pharmexpert preliminary data, retail prices 2007. Subject to change.
6
6.7
1.5
2006
7.8
1.6
2007
9.4
11.0
12.9
15.1
1.7
1.8
1.9
2.1
2009E
2010E
2011E
2008E
17.5
2.3
2012E
Retail market by countries, value and growth (%)
USA
$250 000 mln
+5%
Source:
7
Europe
$130 000 mln
+5%
Pharmexpert presentation on Аnnual Conference, St. Petersburg, March, 2008, manufacture prices
Russia
$8 000 mln
+17%
Japan
$63 000 mln
+2%
Russian Pharma Market Set to Expand
Pharmaceutical Consumption Per Capita in Russia($)*
* in retail prices
Consumption per capita ($)
180
160
160
141
140
124
96
100
expected to double in 2011 due
79
75
80
60
• Drug consumption per capita
109
120
to strong macroeconomic driving
59
44
38
consumer boom
40
20
• Growing access to medicines in
0
2003
2004
2005
2006
2007
2008E 2009E 2010E 2011E 2012E
retail market by active
Pharmaceutical Consumption Per Capita by Country($)**
** in producers' prices
350
300
303
330
230
250
251
238
health and well being in line with
149
150
160
144
160
135
demographic trends
145
100
49 63
50
0
Greece
Hungary
Czech
Republic
World
Source1: Pharmexpert, preliminary data, subject to change
Source2: Renaissance, EU Market Indicators
8
companies and pharmacy chains
• Increased consumer focus on
258
200
development of distribution
EastCentral
Europe
Poland
Russia
2006
2007
Russian Pharmaceutical market structure 2007
Market structure by sales channels
based on 2007
Market split between domestic and
international competitors 2007
3,8 bn units
Hospitals
10%
Volume
(Packs)
FRP
17%
IMPORT; 34%
DOMESTIC; 66%
11,4 bn USD
Commercial
73%
Value
(USD)
IMPORT; 78%
DOMESTIC;
22%
Commercial
FRP
Hospitals
0%
20%
IMPORT
DOMESTIC
Source:
9
Pharmexpert preliminary data, retail prices 2007. Subject to change.
40%
60%
80%
100%
FRP – Update
Key facts
•
•
•
•
2007 budget was set at RUR 40bn (RUR 51.2bn spent)1
2006 budget was set at RUR 34bn (RUR 67.9bn spent)
2005 budget was set at RUR 50.8bn (RUR 39.6bn spent)
Resulted in a number of products being removed from the FRP list both voluntarily and
involuntarily by pharma companies as FRP officials ask for even longer payment terms and
simultaneously cut prices
• 16.9 million participants eligible – 5.5 million currently enrolled
Current status
•
•
•
•
2006 debts fully paid
•
Currently only 7% of the total FRP market is serviced by Russian pharma companies
2008 FRP budget is set at RUR 58bn plus RUR 10bn reserved
FRP was divided in two parts on federal and regional level
Going forward Government focused on including generic domestic products on FRP list
rather than expensive foreign products
 FRP is recovering, domestic pharma
companies appear to be future beneficiaries
Source:
10
Pharmexpert preliminary data, retail prices 2007. Subject to change
Low Exposure to FRP
Composition of Leading Companies’ Sales in Russia by Market Segment in 2007
100
4
16
2
3
8
14
12
12
6
4
25
12
4
5
7
11
3
46
65
%
61
50
95
72
87
82
82
87
68
50
27
31
 Pharmstandard has a lower exposure to the FRP
Source:
11
Pharmexpert preliminary data, retail prices 2007. Subject to change.
compared to its peers
PFIZER
GEDEON RICHTER
JANSSEN-CILAG
ROCHE
SANDOZ
BERLIN-CH/MENARINI
BAYER SCHERING
PHARMA
PHARMSTANDARD
Hospital
FRP
Commercial
SANOFI-AVENTIS
NOVARTIS
0
Pharmstandard position in the ATC1 categories of Consumer spending
(commercial retail) pharma market by value, 2007
Top 5 ATC1 categories occupies 67% of total Commercial retail market
A - ALIMENTARY TRACT AND METABOLISM
R - RESPIRATORY SYSTEM
PHS #5
C - CARDIOVASCULAR SYSTEM
N - CENTRAL NERVOUS SYSTEM
J - GENERAL ANTI-INFECTIVES SYSTEMIC
G - GENITO-URINARY SYSTEM AND SEX HORMONES
M - MUSCULO-SKELETAL SYSTEM
D - DERMATOLOGICALS
PHS #2
L - ANTINEOPLASTIC AND IMMUNOMODULATING AGENTS
V - VARIOUS
S - SENSORY ORGANS
B - BLOOD AND BLOOD FORMING ORGANS
H - SYSTEMIC HORMONAL PREPARATIONS (EXCLUDING SEX HORMONES)
PHS #25*
PHS #1
PHS #1
K - HOSPITAL SOLUTIONS
P - PARASITOLOGY
T - DIAGNOSTIC AGENTS
*PHS growth +19%
Segm growth +12%
Source: Pharmexpert preliminary data, retail prices 2007. Subject to change.
12
Growth Analysis Across Market Segments1
2006
International companies
Domestic companies
Corporation
Pharmstandard
Nizhparm (Stada)
Otechestvennye lekarstva
Pharm-Center
Materia Medika
Mikrogen NPO
Veropharm ZAO
Biotek
Akrichin (Polpharma)
Moshimpharmpreparaty
Novartis
Sanofi-Aventis
Pharmstandard
Bayer Shering Pharma
Berlin-Chemie/Menarini
Sandoz
Roche
Janssen-Cilag
Gedeon Richter
Pfizer
Commerci
al
FRP
2007
Hospital
Commerci
al
FRP
Hospital
Total sales Total sales
2006
2007
Total
Growth
Commercia Total Growth Commercial
l Growth
(%)
Growth (%)
280,7
22,5
7,0
357,2
11,6
6,3
310,3
375,1
64,8
76,4
21%
27%
88,2
52,0
33,4
71,5
50,8
41,8
32,2
41,8
39,2
47,5
25,2
11,4
105,1
76,4
45,5
79,7
61,1
50,7
51,5
44,1
42,4
40,4
18,6
9,3
8,4
4,6
17,0
1,4
2,5
13,0
25,1
0,1
16,8
11,5
11,5
3,2
5,9
7,3
3,2
12,4
1,1
3,1
19,6
36,0
0,1
17,0
14,6
12,4
3,1
7,2
138,2
90,2
69,9
71,6
67,6
61,6
48,3
61,9
46,5
148,6
114,6
90,8
79,8
78,1
72,6
67,1
59,6
50,6
10,4
24,4
20,9
8,2
10,5
10,9
18,8
(2,3)
4,1
16,9
24,4
12,1
8,2
10,4
8,8
19,3
2,3
3,1
8%
27%
30%
11%
16%
18%
39%
(4%)
9%
19%
47%
36%
11%
20%
21%
60%
6%
8%
189,2
295,0
183,3
131,2
17,7
76,3
234,4
325,4
212,8
53,9
17,3
71,4
390,3
502,5
464,6
450,7
74,3
(51,9)
45,2
30,3
19%
(10%)
24%
10%
280,7
22,5
7,0
357,2
11,6
6,3
310,3
375,1
64,8
76,4
21%
27%
180,6
226,4
173,5
64,0
80,3
183,1
196,5
86,8
57,3
19,1
188,7
241,3
45,9
27,6
21,0
14,3
29,5
32,9
7,3
29,3
30,1
222,4
261,4
235,1
74,7
86,9
221,5
222,1
80,8
24,7
11,0
170,7
181,0
15,5
6,5
24,4
15,0
40,5
34,9
10,8
33,4
27,0
288,4
298,1
222,1
285,6
328,9
258,3
254,1
327,6
301,2
286,6
280,3
278,7
270,4
255,6
39,2
3,1
64,5
(5,4)
(50,2)
12,1
1,5
41,8
35,0
61,5
10,7
6,6
38,4
25,6
14%
1%
29%
(2%)
(15%)
5%
1%
23%
15%
35%
17%
8%
21%
13%
 Pharmstandard demonstrated leading absolute growth in 2007 among its
domestic and international pears
Source:
13
Pharmexpert preliminary data, retail prices 2007. Subject to change.
#3 pharmaceutical company on Russian market
Market Share of Top-10 Companies in the
Russian Pharma Market (% 2007 in value)1
Market Share of Domestic Pharmaceutical
Producers (% 2007 in value)1
Novartis
4,4% Sanofi-Aventis
4,2%
Pharmstandard
3,5%
Pharmstandard
16,3%
2006 – 15,0% (1st)
Nizpharm (Stada)
10,1%
2006 – 3,1% (4th)
Other
69,0%
Pfizer
2,4%
Bayer Shering Pharma
3,1%
Berlin-Chemie/Menarini
2,8%
Sandoz
2,7%
Roche
Other
2,6%
46,9%
Janssen-Cilag
2,6%
Gedeon Richter
Moshimpharmpreparaty
2,5%
2,2%
Otechestvennye
lekarstva
5,0%
Akrichin
(Polpharma)
2,6%
 #3 pharma company in Russia overall
 #1 domestic pharma company
Source:
14
Pharmexpert preliminary data, retail prices 2007. Subject to change.
Pharm-Center
4,0%
Materia Medika
3,5%
Mikrogen NPO
3,4%
Veropharm ZAO
Biotek
3,2%
2,9%
A Leader in the Consumer spending (Commercial retail
pharma market) of Russian Pharma market
Market Share—Top 10 Domestic Companies1
Market Share — Top 10 Companies1
Pharmstandard
4,6%
Pharmstandard
18,7%
2006 – 4,2% (2nd)
2006 – 17,0% (1st)
Nizpharm (Stada)
9,4%
Sanofi-Aventis
4,2%
Other
67,8%
Berlin Chemie/Menarini
3,4%
Sandoz
3,0%
Novartis
3,0%
Bayer Shering Pharma
2,9%
Pfizer
2,9%
Gedeon Richter
2,8%
Nycomed
Servier 2,8%
2,7%
Materia Medika
4,2%
Otechestvennye
lekarstva
4,0%
Other
50,2%
Akrichin
(Polpharma)
2,3%
Krasnogorskleksredstva
2,4%
Mikrogen NPO
3,2%
Biotek
2,7%
Veropharm ZAO
2,6%
Pharm-Center
2,4%
 PHS is #1 in Consumer spending (Commercial retail pharma market)
is 73% of the total market
Source: Pharmexpert preliminary data, retail prices 2007. Subject to change.
15
Pharmstandard Key Development Milestones
4Q03:
2H05:
2H06:
Acquisition of ICN’s
business in Russia
(five factories,
distribution centres
and pharmacy chain)
Sale of Marbiopharm
(pharma production
facility)
Creation of holding
company/ legal
restructuring
finalised
May 2007:
Leksredstva plant (Kursk)
Termination of production in
Oktyabr plant in St Petersburg,
production transferred to other
existing sites
Acquisition of Masterlek (3.5%
share of domestic Russian
Pharma market by sales value)
4Q06:
New production of spray, tablets and
capsules; central manufacture
laboratory and renovation of
production facilities
Total investment since 2004:
approximately RUR 600m
Pharmstandard
successfully
completed its IPO,
selling 43% of its
share capital to the
international and
domestic
institutional
investors
Pre 2003:
Group consisted of
two manufacturing facilities
2003
(Ufa and
Phytopharm)
operating under
Biovit LLC
2004
Q104:
New management
team brought in
with experience in
international and
domestic pharma
companies
2Q04:
Close Polypharm
(pharma production
facility)
2006
1H05:
1H06:
Acquisition of
TZMOI (Tyumen)—
manufacturer of
medical equipment
New production of solutions,
production of vitamins and insulin at
Ufavita plant (Ufa). Total investment
since 2004: approximately RUR 730m
Open centralised
warehouse for
pharmaceutical
products in Moscow
Source: Company
Note: OJSC – Open Joint Stock Company, LLC – Limited Liability Company
16
2005
May 2006:
Legal name changed from Biovit LLC
to OJSC Pharmstandard
2007
2007:
Solvay and Pharmstandard
has signed the agreement
on manufacturing two
pharmaceutical products
Imudon® and IRS 19® in
Russia
Start production of Arbidol
and Flucostat on
Leksredstva ( Kursk)
2008
1Q08:
Acquisition of 19,88%
shares of «DIPAKA
TRAIDING LIMITED»,
which owns Mirpharm
Signing agreement with
Grindeks on exclusive
distribution and promotion
of Mildronate®
Modern Production Facilities
Phytopharm
Capacity: 56m
Pharmstandard HQ
Moscow
Kursk
Nizhny Novgorod
Tyumen
Ufa
Leksredstva
Capacity: 719 m
17
Ufavita
Capacity: 230 m
Source:
Company
Note:
Capacity in packs. Figures shown are as of 31 December 2007
Tomsk
TZMOI
Tomskhimpharm
Capacity: 332 m
Production Facilities – Summary Overview
Approximate size
(sq. m.)
Factory
Capacity 000’s
packs Dec 2007
52,644
361,077
52,644
564,406
10,368
1,260
16,200
46,456
638,705
12,288
2,241
18,870
5'850 (lease)
Ampules
Frozen-dried preparation
Syrops & liquid forms
Tablets
Vitamin bars (ferrohematogen)
Insulin
Saline infusin
7,624
2,640
6,360
63,012
14,000
8,595
2,640
6,360
109,973
22,680
14,400
4,500
10,346
3,360
9,053
159,711
33,660
14,400
0
1'200 (lease)
Ointments
Powders
Syrops & liquid forms
Tablets
11,100
10,280
29,187
12,850
1,200
10,280
24,000
12,850
13,600
10,000
23,699
8,265
29'000 (own)
Syrops & liquid forms
Tablets
1,200
206,856
1,200
206,856
5,400
326,949
Closed in 2006
Capsules
Sprays
Tablets
857,593
1,070,412
1,357,852
295
624
24,250
319
7,320
295
624
24,250
319
7,320
552
1,200
8,400
318
6,200
PHYTOFARM
(N.NOVGOROD)
OKTYABR
(S.PETERSBURG)
TZMOI
(Tyumen)
18
Capacity 000’s
packs Dec 2006
Syrops & liquid forms
Tablets
Sprays
Powders
Capsules
UFAVITA
(UFA)
Source:
Note:
Capacity 000’s
packs Dec 2005
14'900 (own)
LEKSREDSTVA
(KURSK)
TOMSKHIMPHARM
(TOMSK)
Formulation
Company.
Total capacity calculations assume 8-hour shifts and 5 day working week
Syringes
Needles
Sterilizing machines < 100 dm³
Sterilizing machines > 100 dm³
Aquadistilling machines
1,384
4,582
72,797
Diversified Product Portfolio in 2007
OTC
85% of 2007 sales
• Therapeutic focus:
 Analgesics
 Cough & cold
 Vitamins
 Anti-viral
 Anti-fungal
37% growth (23%)2
Source: Company
Note: 1 Includes Other sales
2 Pro forma 2006
19
Pharmaceuticals
Medical Devices
86% of 2007 sales
14% of 2007 sales
Rx1
15% of 2007 sales
• Product portfolio includes:
 Acid pump inhibitors
 Nitrites & nitrates
 ACE inhibitors
 Alimentary tract metabolism
23% (12%)2 growth
33% (21%)2 revenue growth in 2007
• Product portfolio
includes:
 Sterilisers (72% of
sales)
 Distillers (5% of sales)
 Medical disposables
(23% of sales)
33% growth
Pharmstandard achievements 2007
 Leading domestic pharmaceutical company in Russia (measured by sales) :
1
– #3 pharma company overall in Russia
– #1 pharma company in the commercial segment
 Significant growth in sales and profitability :
2
–
–
–
–
Revenue growth +33% and achieved $445 mln
Gross profit growth +39% and achieved $268 mln or 60% of sales
EBITDA growth +50% and achieved $191 mln or 43% of sales
Net profit growth + 60% and achieved $ 128 mln or 29% of sales
 Market leading brands and new launches:
– Arbidol® is a leader of Russian Consumer spending pharma market (measured by sales)1
– 6 brands among top-20 best selling domestic brands in Russia1
– Launched 10 new products – $ 13.7 mln or 3% of total sales.
 New long-term projects and acquisitions:
–
–
–
–
Co - рroduction contract with Solvay Pharma (IRS-19, Immudon)
Acquisition 20% of Mir-Farm company (R&D base for future development)
Exclusive sales contract with Grindex ( Mildronat® ) in Russia
Successful completion of Masterlek integration
Source:Company
1 Pharmexpert,preliminary data, in retail prices. Subject to change.
2 As at 31 December 2007
20
Core Comparables Benchmarking
Gross margin (2007)
37,6%
33,4%
27,5%
30%
48,3%
59,1%
63,8%
49,4%
52,9%
14,0%
14,9%
48,1%
40%
10%
20%
3,9%
30%
30,0%
30%
25%
25,4%
25,4%
20,2%
20%
17,9%
20%
18,4%
17,0%
15%
6,7%
Richter
Gedeon
Hikma
KRKA
Veropharm
Stada
Richter
Gedeon
Hikma
KRKA
0%
Veropharm
0%
Aspen
5%
Pharmstandard
10%
Aspen
10%
 PHS has industry leading growth EBIDTA margin and profitability
Source: Renaissance estimations. Company reports.
Source: Renaissance
Stada
KRKA
28,7%
Stada
35%
32,2%
Veropharm
Net profit margin (2007)
42,9%
32,2%
Aspen
Stada
Gedeon
Richter
Hikma
KRKA
Veropharm
Aspen
Pharmstandard
EBITDA margin (2007)
40%
Pharmstandard
0%
0%
21
60,3%
60%
22,4%
20%
50%
80%
Pharmstandard
40%
41,6%
39,4%
Gedeon
Richter
50%
Hikma
Sales growth (2007)
Pharmstadard’s investment case since IPO
Pharmstandard IPO placement structure
Russian consumer stocks performance in 2007 vs RTS Index (%)
Offer structure:
•43.3% of total shares
•Date of placement – May 4, 2007
•Price
•$58.2 for share
•$14.55 for GDR
Stock Exchange (PHST):
•LSE - 25% in GDRs
•RTS, MICEX - 18.3%
Underwriters:
•UBS and Citigroup
Depositary for GDR:
•Bank of New York
Pharmaceutical stock performance (rebased %) GDRs
Pharmaceutical stock performance (rebased %) Local shares
180
150%
160
130%
140
110%
120
PHST
Source: Bloomberg, Renaissance
22
APTK
VRPH
RTSI
05.02.2008
28.12.2007
30.11.2007
01.11.2007
04.10.2007
06.09.2007
09.08.2007
12.07.2007
FTSEurofirst 300 - Pharmaceuticals
MSCI Pharmaceuticals Index
14.06.2007
04.03.2008
04.02.2008
04.01.2008
04.12.2007
04.11.2007
Pharmstandard
FTSE Global Pharmaceuticals
04.10.2007
04.09.2007
04.08.2007
50%
04.07.2007
60
04.06.2007
70%
04.05.2007
80
16.05.2007
90%
100
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)
 Building a top-3 pharmaceutical company in Russia
23
Sales & Marketing Overview
Dr. Olga Mednikova, Chief Sales and Marketing Officer
24
Promote our market-leading brands
to drive sales growth and profitability
Leading domestic pharma trademarks by sales value in 2007
Trademark
ARBIDOL1
PENTALGIN
MEXIDOL
SODIUM CHLORIDE
TREPINCOD
VIFERON
COMPLIVIT
HOWTHORN
FLUKOSTAT1
FENOTROPIL
CEFAZOLIN
CORTEXIN
CYCLOFERON
CAPSICI ANNUI TINCTURE
CODELAC
ESSLIVER
GLUCOSE
CHONDROLON
CORVALOL
BIPHIDUMBAKTERIN
Exclusively produced by Pharmstandard
Produced by Pharmstandard
Source: Pharmexpert preliminary data, retail prices 2007. Subject to change.
Note: 1 Masterlek Brands
25
Ranking in 2007
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Ranking in 2006
1
3
2
5
6
7
10
4
12
8
13
19
17
18
20
11
16
38
15
14
• Arbidol is #1 on
Consumer spending
pharma market
• 6 leading brands
• “Top of mind” position
with consumers
• Significant brand loyalty
• 5 leading brands
improve their positions
• 3 leading brands among
top-20 on the total
Consumer spending
pharma market
OTC Products – Top-Selling Products
Product
Arbidol1
Terpincod
Pentalgin
Complivit
Flukostat1
Codelak
Askophen-P
Ingalipt
Codelak-Phyto
Rinostop
Other
ATC-2
Therapeutic
segments
Anit-viral
Cough And Cold
Analgesics
Vitamins
Anti-fungal
Cough And Cold
Analgesics
Cough And Cold
Cough And Cold
Nasal preparationis
TOTAL OTC products sales
Source: Company and MasterLek reports
Notes:
1 Acquired as part of MasterLek acquisition on 2 August 2006,
sales 2006 on pro forma basis, Pro Forma assumes inclusion
of MasterLek as part of Pharmstandard as of 1 January 2006.
Sales in 2005 – Masterlek sales.
26
2005
Sales
RURm
2006
Sales
RURm
2007 Sales growth
Sales
in 2007
RURm
RURm
%
Growth
in 2007
840
975
899
471
296
222
82
34
29
17
1 190
1 485
1 163
1 206
663
435
375
80
49
23
31
1 212
2 316
1 322
1 314
623
502
412
85
85
56
56
1 465
831
159
108
-40
68
36
5
36
33
25
253
56%
14%
9%
-6%
16%
10%
7%
72%
145%
79%
21%
5 055
6 722
8 235
1 513
23%
Arbidol®—#1 Pharma Brand in Russia
Leading Products in Anti-infective Systemic Use
Segment (2007)
Arbidol®
•
Captured #1 brand position, in part, through active promotion
by Pharmstandard sales force
•
•
Acquired as part of Masterlek transaction
AFLUBIN (RICHARD
BITTNER GMBH)
4%
5%
•
Segment growth 2006-2007 + 31,0% (2001-2007 CAGR+42%)
•
Arbidol sales growth 2006-2007 +38,3% (CAGR +127%)
300
CYCLOFERON
(POLYSAN)
7%
5,64
2001-2007 CAGR: 42%
82,9
4,0
44,9
3,0
1,90
50
0
3,1
30,4
2001
1,49
12,2
41,1
2,0
16,4
164,7
129,1
5,5
63,0
74,7
OSCILLOCOCCINUM
(LABORATOIRE
BOIRON)
10%
5,0
3,03
150
1,24
VIFERON
(FERON OOO)
12%
1,0
97,2
0,0
2002
2003
Source: Company
Source: Pharmexpert preliminary data, retail prices 2007.
Subject to change.
2
6,0
Average price (US$)
Sales (US$m)
3,89
100
27
113,0
4,70
ARBIDOL
(PHARMSTANDARD)
35%
IMMUNAL
(SANDOZ)
6%
Annual Segment Sales Dynamics1,2
250
2004
2005
OTHER
3%
AMIXIN
(PHARMSTANDARD)
Original product developed in 1987,
active marketing launched in 2000
200
GRIPPFERON
(FIRNM ZAO)
3%
2006
OTHER
PHARMSTANDARD
Average Price (US$)
2007
Source: Pharmexpert
Note: Remodelled to reflect current categories
ANAFERON
(MATERIA MEDIKA)
15%
Arbidol – Marketing Strategy
Cough & Cold consumer based development and
potential for Arbidol
Marketing strategy
• Arbidol is expected to become the key
driver for OTC category/entire Company:
Significant market opportunity
Superior efficacy will drive market
development and sales growth
• Marketing objective is
 to further increase Arbidol's brand
Product
(millions of
consumers)
Cough & Cold
Coldrex
Teraflu
Arbidol
1H
05
2H
05
1H
06
2H
06
1H
07
34,1
7,8
4,1
1,4
33,1
7,5
4,9
1,6
34,3
7,8
5,2
2,4
33,3
8,2
5,0
2,2
34,8
7,9
7,9
3,3
Source: ComCon
Note: Growth rate based on hy-o-hy growth,
represents increase in the number of consumers
awareness as a unique, anti-flu
agent with clinically-proven efficacy
 to establish strong consumption
habit of flu treatment with
symptomatic agent plus Arbidol
New DTC campaign has been launched in
Jan 2008 “To stop and deactivate virus”
 Arbidol is a key driver of the business
28
%
growth
+4,5%
-3,7%
+59,3%
+49,6%
Pentalgin—#1 Pain Reliever (Non-Narcotic)
Top-10 Products in Analgesics Segment (2007)
Pentalgin
•
•
•
•
•
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
Market segment growth 2006-2007 +16% (20012007 CAGR +17%)
Pentalgin sales growth 2006-2007+13%
(2001-2007 CAGR +28%)
PENTALGIN
(PHARMSTANDARD)
24%
OTHER
39%
TEMPALGIN
(SOPHARMA)
7%
Annual Segment Sales Dynamics1,2
0,58
0,6
ALKA-ZELTCER (BAYER
SCHERING PHARMA)
3%
2001-2007 CAGR: 17%
0,46
Sales (US$m)
100
0,24
24,5
0
2001
0,2
102,7
105,9
104,0
2002
2003
2004
Source: Company
Source: Pharmexpert preliminary data, retail prices 2007.
Subject to change.
2
0,3
24,9
17,5
75,7
58,4
50,6
0,25
30,9
0,20
50
29
64,5
0,4
131,3
2005
152,6
176,9
0,1
2006
OTHER
PHARMSTANDARD
Average Price (US$)
2007
0,0
Average price (US$)
0,39
150
NUROFEN
(BOOTS HEALTHCARE
INTERNATIONAL)
3%
0,5
200
0,31
SEDALGIN (ACTAVIS)
6%
3%
300
250
BARALGIN
(SANOFI-AVENTIS)
7%
ASPIRIN
(BAYER SCHERING
PHARMA)
Source: Pharmexpert
SEDAL-O (SOPHARMA)
3%
EFFERALGAN (BMS)
3%
SOLPADEINE (GSK)
3%
Pentalgin – Marketing strategy
Marketing strategy
• Pentalgin has been keeping leading position
since 2001 and demonstrating stable
growth
• Pentalgin is expected to be further driver of
OTC category
• Marketing objective is to
– keep conversion consumers from old
traditional analgesics to Pentalgin
through communication of Pentalgin's
USP/Best-In-Class efficacy
– to capitalise on Pentalgin’s brand
recognition by launching Pentalgin
plus® in new (improved) formulation
(launched Mar 2008)
– introduce additional new formulations of
this leading product to consumers by
taking advantage of current brand loyalty
30
Non-narcotic analgesics consumer based development and
potential for Pentalgin
Product
(millions of
consumers)
Solpadein
All other
Pentalgin
1H
05
2H
05
1H
06
2H
06
1H
07
1,5
28,0
7,9
1,6
27,9
7,4
1,5
26,4
6,1
1,3
25,6
5,9
1,1
24,9
6,2
Source: Comcon
Note: Growth rate based on hy-o-hy growth, represents increase in the number of consumers
%
growth
-10,7%
-2,7%
+4,6%
Complivit - #1 Vitamin (Vitamins + Minerals)
Multivitamins with Minerals Market Share
Breakdown (2007)
•
•
•
Complivit has been leading brand since 2001
COMPLIVIT
(PHARMSTANDARD)
15%
Pharmstandard had 19.7% market share in 2007
Market segment growth 2006 - 2007 + 8%
VITRUM (UNIPHARM INC.)
8%
(2001-2007 CAGR +15% )
•
Complivit sales growth 2006–2007 + 32%
SUPRADYN
(BAYER SCHERING PHARMA)
6%
Other
48%
(2001-2007 CAGR +19%)
ELEVIT PRONATAL
(BAYER SCHERING PHARMA)
4%
Annual Segment Sales Dynamics1
200
2001-2007 CAGR: 15%
180
Sales (US$m)
5,0
26,8
4,42
4,0
19,3
3,40
18,5
3,0
16,7
14,7
135,9
60
81,2
91,0
143,9
142,8
2,0
102,4
63,1
1,0
20
0
2001
2002
2003
2004
2005
2006
OTHER
PHARMSTANDARD
Average Price (US$)
Source: Company
Source: Pharmexpert preliminary data, retail prices 2007.
Subject to change.
31
2
6,0
35,1
4,03
120
40
27,6
MERZ SPEZIAL DRAGEES
(MERZ GMBH)
4%
2007
0,0
Average price (US$)
4,97
140
80
5,82
5,38
160
100
6,23
MULTI-TABS JUNIOR
(FERROSAN)
2%
MULTI-TABS KID
(FERROSAN)
2%
BIOVITAL GEL FOR CHILDREN
(BAYER SCHERING PHARMA)
4%
VITRUM PRENATAL FORTE
(UNIPHARM INC.)
4%
VITRUM BEAUTY
(UNIPHARM INC.)
3%
Complivit – Marketing strategy
Marketing strategy
•
•
Complivit demonstrates above-market
sales growth and expected to continue
to be the most popular “Russian
vitamin”
Marketing objectives is to
– increase Complivit consumption
through launching of new
specialised sub-brands under
umbrella (recently launched new
brands Complivit Ca D3, Complivit
sugar free, Complivit 365)
– Increase brand consumption
among current users through
increasing of period of usage
(communication of Comlivit as
“annual vitamin” )
32
Vitamins consumer based development and potential for
Complivit
Product
(millions of
consumers)
Complivit
Vitrum
Centrum
All other
1H
05
2H
05
1H
06
2H
06
1H
07
3,0
2,4
1,6
13,0
2,7
2,0
1,7
11,5
3,7
2,3
1,7
10,6
3,5
2,0
1,6
9,9
3,9
2,4
2,0
10,0
Source: Comcon
Note: Growth rate based on hy-o-hy growth, represents increase in the number of consumers
%
growth
+11,5%
+16,3%
+26,4%
+0,8%
Prescription Products—Top Selling Products
Product
Phosphogliv
Amixin
Biosulin
Rastan
Pikamilon
Renipril
Azitrox
Piracetam
Termikon
Ciklodol
Other
ATC-2
Therapeutic
segments
Hepatic protector
Anti-viral
Diabet care
Growth hormone
Psychoanaleptics
Cardiovascular
Systemic Antibacterial
Psychoanaleptics
Anti-fungal
Anti-parkinson products
TOTAL Rx products sales
Source: Company and MasterLek reports
Note: Shading denotes actively promoted products
1 Acquired as part of MasterLek acquisition on 2 August 2006,
sales on pro forma basis, Pro Forma assumes inclusion
of MasterLek as part of Pharmstandard as of 1 January 2006.
Sales in 2005 – Masterlek sales.
33
2005
Sales
RURm
2006
Sales
RURm
2007 Sales growth
Sales
in 2007
RURm
RURm
%
Growth
in 2007
6
151
26
0
25
28
28
13
14
10
638
253
217
50
0
34
36
34
24
35
1
646
356
247
120
53
45
41
37
37
37
29
489
103
29
70
53
11
5
3
13
2
28
-157
41%
14%
140%
16920%
33%
14%
10%
54%
5%
2083%
-24%
939
1 331
1 491
160
12%
Phosphogliv® – Successful Rx Product Launch
Phosphogliv®
•
•
•
•
•
Top products in Hepatic Protectors segment (2007)
Launched in 2005
Novel product in-licensed from the Institute of 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
Market segment growth 2006-2007 + 4%
(2001-2007 CAGR +25%)
Phosphogliv sales growth 2006-2007+42%
(2001-2007 CAGR +149%)
LIV-52 (HIMALAYA
DRUG COMPANY LTD.)
3%
HEPA-MERZ (MERZ GMBH)
3%
250
PHOSPHOGLIV
(PHARMSTANDARD)
4%
BERLITION (BERLINCH/MENARINI)
6%
10,05
2001-2007 CAGR: 25%
10,0
8,74
6,85
4,55
1,2
1,5
8,0
2001
6,0
194,2
196,3
4,0
130,3
0,6
52,2
0
1,8
5,12
3,86
0,9
50
8,0
5,90
150
100
4,1
69,5
2002
80,1
2003
2004
CARSIL (SOPHARMA)
9%
2,0
90,9
2005
2006
2007
0,0
OTHER
Source: Company
Source: Pharmexpert preliminary data, retail prices 2007.
Subject to change.
34
2
Based on consumer prices
PHARMSTANDARD
Average Price (US$)
HEPTRAL (ABBOTT
LABORATORIES)
22%
ESSLIVER (STADA
ARZNEIMITTEL AG)
9%
Average price (US$)
Sales (US$m)
200
ESSENTIALE
(SANOFI-AVENTIS)
28%
THIOCTACID (PLIVA)
4%
• Expected to be a significant growth driver going forward
Annual segment sales dynamics1
TYCVEOL (EUROPABIOPHARM ZAO)
3%
OTHER
9%
1 Source: Pharmexpert
2 Based on consumer prices
New product launches in 2007
Product
ATC
Sales value
Market
2007
value 2007
USD mln
USD mln
Key Market brands
Rx
OTC
Recent product launches
R05A0-Cold Preparations Without Anti-Infectives
2,0
175,6
Passifit®
N05B5-Herbal Hypnotics/Sedatives
1,0
68,3
Immunex®
L03A0-Immunostimulating Agents Excluding Interferons 0,4
107,9
Immunal, Immunorm
Complivit® Ca D3
A12A-calcium products
1,2
45,0
Calcium D3, Calcium
Complivit® 365
A11A - Multivitamins, combinations
0,2
231,8
Vitrum, Complivit, Multi-Tabs
Biosulin®
A10C2-Human Insulins And Analogues
4,9
239,5
Humulin, Protaphan, Actrapid
Rastan®
H04C0-Growth Hormones
2,2
21,0
Artrozan®
M01A1-Anti-Rheumatics, Non-Steroidal Plain
0,6
241,1
Mexiprim®
C01X0 - All Other Cardiac Preparations
1,1
93,2
Mexidol
Benfolipen®
A11D (tablets) - vitamin B1 and combinations
0,1
15,0
Milgamma, Neuromultivit
Source: Company
Source: Pharmexpert preliminary data, retail prices 2007.
Subject to change.
35
2
Coldrex, Fervex, Teraflu
Maxicold®
New products sales achieved $13.7 mln or 3% from
total pharmaceutical sales in 2007
Novo-Passit, Persen
Genotropin, Saizen, Humatrope
Movalis, Voltaren, Diclofenac
Product Approvals and Launches 2008
Product
Date of
expected
launch
ATC
ATC value,
US$m
(2007) 1
Key market brands
New product launches in 2008
Influnorm
May-08
Pentalgine plus
Mar-08
Rx
OTC
Complivit ophtalmo Sep-08
Complivit Se
Sep-08
ComplivitFe
Sep-08
Complivit Mg
Sep-08
Neurocomplit
Mar-08
Lactazar
Neosmectine
Sep-08
Jan-0 8
A15A – appetite stimulants
A07B – intestinal absorbent
antidiarrhoeals
Combilipen
Mar-08
Octolipen
Neupomax
Nov-08
Sep-08
Formetin
Bloctran
Jun-08
Apr-08
A11D3 (injections) – vitamin B1
and combinations
A05B0 – hepatic protectors
L03A1 – colony -stimulating
factors
A10B2 – biguanide antidiabetics
C09C0 – antgiotensine-2
antagonists plain
Source: Company
Source: Pharmexpert preliminary data, retail prices 2007.
Subject to change.
36
2
R05A – cold preparations without
anti- infectives
N02B – non-narcotics analgesics
and antipyretics
A11A – multivitamins with
minerals
A11A – multivitamins with
minerals
A11A – multivitamins with
minerals
A11A – multivitamins with
minerals
A11D – vitamin B1 and
combinations
175
248
Coldrex, Fervex, Teraflu
232
Tempalgine, Baralgine,
Nurofen, Solpadeine
Vitrum, Multi -Tabs,
Supradine
Vitrum, Multi
232
Vitrum, Multi
232
Vitrum, Multi
232
43
45
34
Milgamma, Multi -Tabs
B complex,
Neuromultivit
Lactasa
Smecta, Carbone
Activated
209
13
Milgamma, Multi -Tabs
B complex
Tioctacid, Berlition
Neupogen, Granocyte
21
21
Glucofazh, Siofor
Losap, Diovan, Kozaar
Expand sales and marketing effort
• Covers 75% of the Russian pharma
HQ Sales and marketing
market
• All sales reps have medical
bonus up to 33% of salary
• In 2008 looking to:
– Increase “feet on the street” to over
470 sales people
– Further specialise sales force by
therapeutic area
– Increased product expertise
OTC
Rx
(incl. ENDO-Team)
National manager
1 manager
National manager
2 managers
Regional manager
23 managers
Regional manager
29 managers
OTC sales force
(134)
Rx sales force
(157)
 Experienced sales force up to 340 sales persons
Source: Company
Note: As at 31 December 2007
37
1
Real time data - ETMS
• Appropriately incentivised with cash
Real time data - ETMS
education/work experience
Effective Sales Force management system
• Pharmbase software system allowing regular sales in/sales out analysis
– Product distribution and stock on each territory
– Sales performance by each territory and medical rep
• ETMS system allowing effective sales people, marketing activities and clients performance management
– Real time data on sales force activities allowing regional managers to more effectively manage sales force
–
–
–
–
Clients data base and prescription dynamic by each doctor
Effective clients detailing
Segmentation and targeting of clients
Daily activities and commitments
– Sales Force recourses allocation analysis by each product
– Data on 101 880 clients: doctors, specialists, pharmacists
are already included
Effective and competitive Sales Force team
38
Rapidly Growing Revenue Profile
Achieved 21% growth in 2007 (OTC 23%, Rx 11%, Medical equip 34%)
(pro-forma)
11 371
33%
12 000
21%
11 000
50%
RUR, mln
9 000
8 000
8 523
13%
14%
44%
7 000
6 000
5 685
86%
18%
3 946
87%
86%
4 000
3 000
2 000
14%
9 374
10 000
5 000
Growth
82%
100%
1 000
0
2004 IFRS
2005 IFRS
2006 IFRS
2006 pro-forma
2007 IFRS
Medical equipment and disposables
Source: Company
Note:
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
39
PHARMA
Growth
Financial Overview
Elena Arkhangelskaya, Chief Financial Officer
40
Divisional Sales Breakdown 2004-2007
IFRS basis
Pharmaceutical products
OTC products
Branded generics
Non-branded generics
Prescription products
Branded generics
Non-branded generics
Other sales
Medical equipment and
disposables
Sale of goods
3 946
3 347
2 766
581
555
294
261
44
Growth
07/06
2 436
2 204
2 207
-3
274
308
-33
-42
Growth
07/06, %
33%
37%
41%
0%
23%
34%
-11%
-43%
1 011
0
412
34%
8 523
5 685
3 946
2 849
33%
2007
2006
2005
2004
9 763
8 235
7 548
688
1 473
1 207
266
55
8 178
6 722
6 031
691
1 331
1 025
306
125
4 674
3 902
3 275
627
733
440
293
39
3 946
3 347
2 766
581
555
294
261
44
Growth
07/06
1 585
1 513
1 516
-3
142
182
-40
-70
Growth
07/06, %
19%
23%
25%
0%
11%
18%
-13%
-56%
1 609
1 196
1 011
0
412
34%
11 371
9 374
5 685
3 946
1 997
21%
2007
2006
2005
2004
9 763
8 235
7 548
688
1 473
1 207
266
55
7 326
6 032
5 341
691
1 199
899
299
96
4 674
3 902
3 275
627
733
440
293
39
1 609
1 196
11 371
Pro-Forma basis 1
Pharmaceutical products
OTC products
Branded generics
Non-branded generics
Prescription products
Branded generics
Non-branded generics
Other sales
Medical equipment and
disposables
Sale of goods
Source: Company reports, 2004, 2005, 2006, 2007 results audited by E&Y (IFRS)
Note: 1 Pro Forma assumes inclusion of MasterLek as part of Pharmstandard as of 1 January 2006.
41
Revenue Growth Drivers
12 000
2%
3%
16%
10 000
RUR, mln
8 000
6 000
11 371
9 374
4 000
2 000
0
Sales 2006 PF
OTC product sales
Rx product sales
Med. Equipment
Total growth 21% (pro-forma)1
Source: Company reports
Note:
42
1
Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
2
Excluding Other Pharma Sales
Sales 2007 IFRS
Margin Expansion 2007
EBITDA
Gross Profit
8 000
56%
7 000
56%
44%
6 000
4 000
6 852
3 000
4 942
4 000
15%
4 882
3 255
1 000
1 726
0
0
2005 IFRS
2006 IFRS
2006
Pro-forma
2007 IFRS
583
2004 IFRS
2005 IFRS
EBITDA
As % of sales
As % of sales
Company reports
Note:
1 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
3 496
1 720
Gross profit
39% Gross Profit growth 2006-2007 (IFRS)
43
30%
2 000
3 178
2004 IFRS
37%
5 000
3 000
5 233
2 000
Source:
38%
7 000
5 000
1 000
43%
8 000
60%
RUR mln
RUR mln
6 000
58%
2006 IFRS
2006
Pro-forma
2007 IFRS
50% EBITDA growth 2006-2007 (IFRS)
Competitive Cost Structure 2007
General and Administration Costs
Selling and Distribution Costs
13%
19%
2 400
2 400
2 200
2 200
15%
2 000
13%
RUR mln
1 400
1 268
1 200
1 069
1 000
532
400
53%
200
17%
30%
24%
17%
59%
1 600
1 400
1 200
52%
46%
400
2006 IFRS
2006
Pro-forma
522
443
74%
64%
2007 IFRS
26%
36%
2004 IFRS
2005 IFRS
Marketing
Labour costs
Labour costs
Other expenses
Other expenses
As % of sales
As % of sales
Company reports
Note:
1 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
6%
5%
200
0
2005 IFRS
6%
1 000
600
52%
8%
800
10%
2004 IFRS
44
29%
30%
17%
600
1 372
31%
31%
800
Source:
1 800
1 626
1 600
0
2 000
14%
RUR mln
1 800
15%
499
42%
58%
2006 IFRS
549
42%
58%
2006
Pro-forma
571
38%
62%
2007 IFRS
Attractive Profitability Growth
4 000
Net Profit 2004–2007
3 500
29%
24%
21%
3 000
18%
RUR mln
2 500
2 000
3 263
1 500
8%
1 000
2 006
2006 IFRS
2006
pro-forma
1 019
500
0
2 036
320
2004 IFRS
2005 IFRS
Net Profit
As % os sales
60% Net Profit growth in 2007 (IFRS)
Source:
Company reports
Note:
1 Pro Forma assumes inclusion of Masterlek as part of Phamstandard as of 1 January 2006
45
2007 IFRS
Consolidated Balance Sheet and Capex
Capital Expenditure
(in millions of RUR)
2004
2005
2006
2007
Cash and Equivalents
66
244
193
193
Other Current Assets
2 980
4 263
5 300
6 696
Long-term Assets
Total Assets
2 292
3 806
8 277
8 405
5 337
8 313
1 496
584
Total Debt
13 770 15 294
3 875
3 265
Current Liabilities (excl. shortterm debt)
931
3 303
2 425
1 129
Non-current Liabilities (excl.
long-term debt)
378
502
1 129
1 297
2 533
3 925
6 340
9 603
5 337
8 313
Total Equity
Total Liabilities & Equity
1 000
800
RUR, mln
IFRS basis
600
889
400
890
687
200
189
13 770 15 294
0
2004
2005
2006
2007
CAPEX
Debt summary
• Facility A: US$80.9m (maturity Dec-2009/L+150)
• Facility B: US$51.7m (maturity Dec-2011/L+190)
• Net debt: US$125.1m
Source:
Company reports
Note:
1 Conversion rate 25,57 RUR/USD
46
CAPEX structure in 2007:
1. Purchase of property, plant and equipment 521.6 mln RUR (76%)
2. Purchase of intangible assets 165.2 mln RUR (24%)
Masterlek Integration
• Leading Masterlek brands accelerated its sales growth under Pharmstandard management in 2007 (proforma):
– Arbidol +56%; + 831 m RUR
– Flucostat + 16%; + 68 m RUR
– Amixin + 14%; + 29 m RUR
• Improvement of Gross Margin due to decrease of API prices, transferring of production to own facility
(Kursk):
– Arbidol to 62% in 2007 vs 46% in 2006
– Flukostat to 86% in 2007 vs 58% in 2006
– Amixin to 75% in 2007 vs 45% in 2006
• Amixin production transfer on own facility (Tomsk) will be fully accomplished in 2008
• Integration of commercial and administrative operations decreased S&D and G&A costs by 4% of sales
 Realised estimated synergy effect
Source: Company
47
2007 Underlying Financials
RUR Mln
48
FY 2007
FY 2006
Change
Sales
11 371
8 522
33,4%
Gross Profit
6 852
4 942
38,6%
S&D Expenses
1 626
1 268
28,2%
S&D Expenses, % of Sales
14%
15%
-1%
G&A Expenses
571
499
14,4%
G&A Expenses, % of Sales
5%
6%
-1%
Operating Income
4 614
2 967
55,5%
Net Income
3 263
2 036
60,3%
EBITDA*
4 882
3 255
50,0%
Appendix
49
Russian pharma market – generic market
Commercial
8%
FRP
Hospital
17%
25%
92%
Generics Original
Source:
50
Pharmexpert preliminary data, retail prices 2007. Subject to change.
75%
83%
Generics Original
Generics
Original
Structure of the Russian market by product group (OTC, Rx) 2004-2007
Structure of the Commercial segment of Russian
pharma market by OTC, Rx in volume
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
100%
73.8
51
75.9
75.1
49.7
74.1
51.5
49.4
48.6
80%
60%
OTC
Rx
OTC
40%
Rx
50.3
26.2
2004
Source:
Structure of the Commercial segment of
Russian pharma market by OTC, Rx in value
24.1
2005
24.9
2006
Pharmexpert preliminary data, retail prices 2007. Subject to change.
25.9
2007
48.3
50.6
51.4
20%
0%
2004
2005
2006
2007
Ratio of imported and local pharma products in Comercial segment of Russian
market is stable since 2004
In value
23.7
23.5
In volume
23.4
23.7
100%
100%
80%
80%
60%
60%
40%
40%
20%
76.3
76.5
76.6
76.3
2004
52
67.2
67.2
67.2
32.4
32.8
32.8
32.8
2004
2005
2006
2007
0%
0%
Source:
20%
67.6
2005
2006
2007
Local
Local
Imported
Imported
Pharmexpert preliminary data, retail prices 2007. Subject to change.
Maxicold® – Successful OTC Product Launch
Maxicold®
Top products in Cold preparations segment (2007)
• Launched in 2007
• Achieved about $2 mln sales during the first year
RINIKOLD (SHREYA
ANTIFLU (SAGMEL
LIFE SCIENCES)
INC.)
2%
3%
RINZASIP (UNIQUE
PHARMACEUTICAL
LABORATORIES)
3%
RINZA (UNIQUE
PHARMACEUTICAL
LABORATORIES)
5%
Annual segment sales dynamics1
3,73
200
3,03
2,23
120
1,77
1,76
1,93
0,0
40
0,0
20
37,4
2001
2,5
2,0
173,3
0,0
1,5
142,0
116,9
89,0
62,8
2002
0,1
0,0
1,70
0,0
80
60
1,0
82,2
0,5
2003
2004
OTHER
PHARMSTANDARD
Average Price (US$)
Source: Company
1 Source: Pharmexpert preliminary data, retail prices. Subject to change
2 Based on consumer prices
53
3,5
3,0
140
0
1,9
2005
2006
2007
0,0
Average price (US$)
Sales (US$m)
160
TERAFLU
(NOVARTIS)
30%
COLDACT (RANBAXY
LABORATORIES
LTD.)
5%
2001-2007 CAGR: 29%
180
100
4,0
OTHER
4%
ANTIGRIPPIN
(NATUR PRODUCT)
6%
ANTIGRIPPIN
(ANTIVIRAL NPO
ZAO)
8%
COLDREX (GSK)
20%
FERVEX (BMS)
14%
Flukostat
Flukostat
Top 10 Products - Anti Fungal Infections 2007
• Market leader since 2006
FLUKOSTAT
(PHARMSTANDARD)
18%
OTHER
26%
• Launched in 2000, actively marketed
since 2002
• Market segment growth 2006-2007 +2%
NIZORAL
(JANSSEN-CILAG)
3%
(CAGR 2001-2007 +24%)
• Flucostat sales growth 2006–2007 +21%
(CAGR 2001-2007 +102%)
Annual Segment Sales Dynamics1
140
54
4,16
60
Source:
7,0
21,4
5,36
80
0
8,0
6,67
100
20
8,51
2,63
2,2
4,44
7,6
24,9
5,0
14,8
4,0
10,7
3,0
2,0
0,3
35,0
2001
6,0
58,9
2002
59,6
2003
64,7
2004
82,3
2005
107,3
106,1
2006
2007
OTHER
PHARMSTANDARD
Average Price (US$)
Pharmexpert preliminary data, retail prices 2007. Subject to change.
1,0
0,0
Average price (US$)
Sales (US$m)
120
40
7,70
2001-2007 CAGR: 24%
RUMICOZ
(OTECHESTVENNIE
LEKARSTVA)
3%
MYCOMAX
(ZENTIVA A.S.)
5%
IRUNINE
(VEROPHARM ZAO)
5%
DIFLUCAN (PFIZER)
17%
MYCOSYST (GEDEON RICHTER)
10%
LAMISIL
(NOVARTIS)
6%
ORUNGAL
(JANSSEN-CILAG)
7%
Amixin
Amixin
• Mode of action - induces production
of all types of interferon (α, β, γ);
has antiviral and immunomodulating
activity; stimulates production of
human antibodies
• Currently 90%1 of prescriptions
come from GPs and pediatricians for
the treatment of prophylaxis and
treatment of URTI
• Other potential indications include
acute and chronic pelvic infections
and STD
• Market segment growth 2006-2007
+31% (CAGR 2001-2007 +42%)
• Amixin sales growth 2006-2007
+16,7% (CAGR 2001-2007 +37%)
Source:
55
Pharmexpert preliminary data, retail prices 2007. Subject to change.
Top 10 products - Anti-virals, excluding anti-HIV
2007
ECHINACEA
(SAINT-PETERSBURG PHARMACEUTICAL
)
FACTORY/GALENOPHARM
GRIPPFERON
0%
(FIRN-M ZAO)
OTHER
3%
AFLUBIN
(RICHARD BITTNER GMBH)
4%
AMIXIN
(PHARMSTANDARD)
3%
ARBIDOL
(PHARMSTANDARD)
35%
5%
IMMUNAL
(SANDOZ)
6%
CYCLOFERON
(POLYSAN)
7%
OSCILLOCOCCINUM
(LABORATOIRE
BOIRON)
10%
VIFERON
(FERON OOO)
12%
ANAFERON
(MATERIA MEDIKA)
15%
Terpincod/Codelac
Terpincod


Top-10 Products – Antitussive & Expectorants
2007
First launched Terpincod in 1996
Terpincod sales growth 2006-2007 + 16%
TERPINCOD
(PHARMSTANDARD)
(CAGR 2001-2007 +43%)
13%
Codelac




300
Includes Codelac tablets and Codelac Phyto syrup
First launched Codelac tablets in 1996 and followed with
Codelac Phyto syrup in 2004
Annual Segment Sales Dynamics1
2001-2007 CAGR: 25%
Sales (US$m)
46,3
6,0
5,0
220,1
8,4
156,9
87,9
64,0
0,52
2001
2002
114,0
121,2
0,67
0,83
2003
2004
1,02
2005
OTHER
PHARMSTANDARD
Average Price (US$)
Pharmexpert preliminary data, retail prices 2007. Subject to change.
4%
8,0
7,0
35,2
13,7
0,46
56
55,2
177,1
1,22
2006
4,0
3,0
1,57
2,0
1,0
2007
0,0
Average price (US$)
26,2
150
Source:
CODELAC
(PHARMSTANDARD)
6%
Market segment growth 2006-2007 +23% (CAGR 20012007 +25%)
40,1
0
ACC (SANDOZ)
10%
3%
200
50
12%
Codelac sales growth 2006-2007 +35% (CAGR 20012007 +33%
250
100
LASOLVAN
(BOEHRINGER
INGELHEIM)
OTHER
32%
AMBROBENE
(RATIOPHARM
HEDELIX
PULMOZYME
INTERNATIONAL)
(KREWEL
(ROCHE)
MEUSELBACH DOKTOR MOM
6%
5%
GMBH)
(UNIQUE
PHARMACEUTICAL
4%
LABORATORIES)
5%
Top Pharmaceutical Product Drivers
Product
ATC-2
Therapeutic
segments
Arbidol1
Terpincod
Pentalgin
Phosphogliv
Biosulin
Flukostat1
Rastan
Maxicold
Codelak
Ingalipt
Anti-viral
Cough and Cold
Analgesics
Hepatic protector
Diabet care
Anti-fungal
Growth hormone
Cough and Cold
Cough and Cold
Cough and Cold
1 485
1 163
1 206
253
50
435
0
7
375
49
2 316
1 322
1 314
356
120
502
53
50
412
85
831
159
108
103
70
68
53
43
36
36
TOTAL Pharmaceutical sales
8 053
9 726
1 673
Source: Company and MasterLek reports
Note:
1 Acquired as part of MasterLek acquisition on 2 August 2006,
sales 2006 on pro forma basis, Pro Forma assumes inclusion
of MasterLek as part of Pharmstandard as of 1 January 2006.
57
2006
Sales
RURm
2007
Sales
RURm
Sales growth
in 2007
RURm
%
Growth
in 2007
56%
14%
9%
41%
140%
16%
16920%
618%
10%
72%
21%
Breakdown of Sales for 2007 by Distributor
Top 5 Distributors – 2007
• Top 5 distributors accounted for 58% of
pharmaceutical product sales in 2007
Distributor
• Typical payment terms for distributors:
– Regional wholesalers: 45-75 days
% of
sales
Genesis
19
Katren
14
Protek
10
SIA International
9
Rosta
6
Total
58
– Export distributors: 30-90 days
– National distributors: 60–90 days
– FRP program: 60-90 days
Source:
Note:
58
Company
Manufacturers’ prices
Thank you!
59