Transcript Slide 1

Sinclair IS Pharma plc
Investor Presentation
April 2012
Disclaimer
The contents of this presentation and the information which you are given at the time of these slides and the presentation have not been approved by an
authorised person within the meaning of the Financial Services and Markets Act 2000 (the “Act”). Reliance on this presentation and its slides for the purpose
of engaging in investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. This presentation does not
constitute or form part of any offer for sale or subscription or solicitation of any offer to buy or subscribe for any securities in Sinclair IS Pharma Plc (the
“Company”) nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. No reliance may be
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grounds that it is made to: (a) persons who have professional experience in matters relating to investments who fall within Article 19(1) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (b) high net worth entities and other persons to whom it may otherwise
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a relevant person should not rely on this presentation or any of its contents and all persons (whether relevant persons or otherwise) are recommended to
seek their own independent financial advice from a person authorised for the purposes of the Act before engaging in any investment activity involving the
Company’s securities.
This presentation includes certain forward-looking statements with respect to certain development projects, potential collaborative partnerships, results of
operations and certain plans and objectives of the Company including, in particular and without limitation, the statements regarding potential sales revenues
from products, both currently marketed and under development, possible launch dates for new products and line extensions, and any revenue and profit
guidance. By their very nature forward-looking statements involve risk and uncertainty that could cause actual results and developments to differ materially
from those expressed or implied. The significant risks related to the Company’s business which could cause the Company’s actual results and developments to
differ materially from those forward-looking statements are discussed in the Company’s annual report and other filings. All forward-looking statements in this
presentation are based on information known to the Company on the date hereof. The Company will not publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
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Group at a glance
Key Markets
Top Products
DERMATOLOGY
Europe
Emerging Markets
WOUND CARE
Europe
Emerging Markets
Atopiclair®
Sebclair®
Papulex®
Flammazine®
Kelo-cote®
2011 Revenue
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Flammacerium®
Aloxi®
Variquel®
2014 Revenue Target*
Emerging
Markets
28%
Europe
72%
CRITICAL AND
SUPPORTIVE CARE
Europe
Emerging
Markets
40%
Europe
60%
*Target not guidance
Brand Development: Recognisable Sinclair IS graphic
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Fully integrated platform drives operating leverage
 Fully integrated
 Sales and marketing
 Logistics, supply and manufacturing
 Regulatory and compliance
 Quality and Pharmacovigilance
 Product and brand development
 Finance function
 Resources focused on developing and extending growth brands
 Sales and marketing budget doubled from £7.8M 2009 to £15M 2012
 Complementary in-licensing opportunities and brand acquisitions
 Create multi-product/ country partnerships outside the EU
 Divest non-core brands, reduce SKUs and number of distributors
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Distribution: Congruent channels
 Well balanced portfolio focused on three
key specialty areas:
•
Dermatology
HOSPITAL
•
Wound care
Variquel®/Haemopressin®
Aloxi®
episil®
Xclair®
•
Critical and supportive care
Flamma franchise
Kelo-cote®
DERMATOLOGIST
Sebclair®
Bio-Taches®
Fazol®
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Atopiclair®
Papulex®
Fadiamone®
 Diversified product offering
 Sales driven by own specialist sales force
 No large near term patent cliffs
PHARMACY
Aloclair®
Decapinol®
Key Brands: Growth and concentration
Leading five products
% of total sales
60%
49%
50%
40%
30%
29%
20%
10%
0%
FY 09
FY12e
Growth
of leading five products
vs. previous year
23%
25%
20%
15%
10%
5%
5%
0%
7
FY09
FY12e
£m
10
9
8
7
6
5
4
3
2
1
0
Core brand performance
(1H/12 growth, FY12e revenues)
+5%
+51%
+19%
-8%
+119%
-4%
+122%
Geographic reach
Direct sales in top EU
markets
20 year partnership
with Invida for
multiple markets
Exploring additional
partnerships for other
major emerging markets
Direct Sales and Marketing Operations
Distributors - existing
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Distributors - Invida
Distributors - recent
Fast growth target markets
Asia: Invida delivering
 Products launched already
Atopiclair® and Papulex ®already launched in eight markets
Flammazine re-launched in The Philippines
Multiple launches scheduled for 2012, including Xclair, Sebclair and others
First Chinese launch expected in 2013
 Improved economics post 2013
Focus on brand creation, but requires resources
Deal structure guarantees minimum launch spend. Budgeted spend is considerably in excess
We expect partnership to drive Sinclair IS earnings growth over medium term
 Local Asian office structure provides filing and launch infrastructure
Dedicated regulatory affairs resources for both companies
Sinclair IS employee based full-time in Invida’s Singapore head-office
Production in India (Encube PTE) already started, initially for local market
Menarini acquisition of Invida has increased sales and marketing spend
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Strategic Partners: Fewer, stronger relationships
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Executing Strategy: Recent progress
Deals
 Acquisition of ABT and Ex-US rights of
Kelo-cote® (Dec’ 11 )
Partnerships
 Fannin Limited (Ireland) (Oct’11)
Product
launches
 Invida Atopiclair® & Papulex® in
11 Asian markets (March’12)
 Disposal of Mysoline (Nov’11)
 AMS (Delm opinal option and licence)
(Aug’11)
 Merger with IS Pharma (May’11)
 Invida India (March’11)
 FlammaSpray™ Spain (March’11)
Germany (March’ 12)
 Acquisition of Kelo-cote®
(UK & Germany) (Dec’10)
 Invida (multi-product,
Asia –Pacific ) (Dec’10)
 Bio-Taches Serum, in 5 MENA
Countries (Q1 12)
 Acquisition of Terbinafine Spray
(Worldwide rights) (Nov ‘10)
 Sunstar (Decapinol® for US) (Dec’10)
 Kelo-cote® France, Italy, Spain
(Feb’11)
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Improving financial performance
Annual revenues excluding one-off
licence income £m
Lfl Sales improvement
15%
11%
35
9%
10%
30
25
5%
20
15
0%
10
2009
5
-5%
-5%
0
FY09
LfL sales growth
EBITDA
FY10
FY11
1H/12
-2%
FY'09
FY'10
FY'11
1H FY12
FY'12e*
-5%
-2%
+11%
+9%
>9%
-£3.8m
-£2.6m
-£1.3m
n/a
+£4m-£5m
LfL excludes product acquistions and disposals, licence fees and currency fluctuations
Interim Results 2012
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2011
-10%
*'Analysts' estimates





2010
Like-for-like revenues increased by 9%
International operations +41%
H1 margin increased to 58.1% from 55.8%
EBITDA of £0.7 million, first sustainably profitable period
Net debt /Shareholders funds 6%
Brand Development: Flamma
 Sterile topical creams for:
― the prevention and treatment of infection in burn
wounds
― Short-term treatment of infection in leg ulcers and
pressure sores
― The prevention of infection in skin graft donor sites
and extensive abrasions
 Small dedicated sales force
 Growth strategy
― Launch of FlammaSpray™ (sunburn, 3/11)
― FlammaGel (household burns, FY13)
― Flammacerium in MENA, UK and other territories
(severe burns, FY14)
― Flammacerium (diabetic foot ulcer, FY15)
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Flamma franchise –
Growth rate
17%
20%
10%
5%
0%
12/09
-10%
-5%
1H/12
1H/12 excl Algeria
Brand Development: Kelo-cote®
 Patented topical silicone gel range for the prevention and
management of abnormal scars
― Available both in prescribed and over the counter formats
 Launched in FY11 in Spain, France, Italy. Re-launched in UK
 Large and rapidly growing market
 Silicone recommended as the first‐line treatment for scar
management
 Grow the brand through
― entry into new territories (LATAM, Russia, Eastern Europe,
Turkey, Asia)
― developing line-extensions (Kelo-cote Stretchmarks™ FY12)
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Conclusion
 Strong revenue growth, particularly International
 Fully integrated platform drives operating leverage
 Emerging markets via key partnerships drives premium growth
― Invida delivering
― Multiple additional opportunities, including expected LATAM partnership
 Licensing opportunities and brand acquisitions
 Low risk pipeline focused on developing and extending existing brands
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Appendix
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Key brands
Product
H1’12
Sales
Indication
LFL Growth H1’12
Wound care
+5%*
Flammazine®
£8.2m
£4.0m
Drug
Kelo-cote®
£0.9m
£0.7m
Medical device
£3.8m
£2.5m
Drug
Bleeding oesophageal varices
+19%
£3.8m
£1.4m
Medical device
Oral Pain relief
-8%
£2.7m
£1.3m
Drug
Topical anti-fungal
-4%
Indication
LFL Growth H1’12
Variquel®/
Haemopressin
Aloclair®
Fazol®
Product
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2011
Sales
TOP FIVE PRODUCTS
Type
2011
Sales
H1’12
Sales
Scar reduction
Focus Brands
Type
+51%
Papulex®
£1.4m
£0.7m
Cosmetic
Acne
+7%
Atopiclair®
Sebclair®
Aloxi®
£0.9m
£0.7m
£1.2m
£0.5m
£0.6m
£0.5m
Medical device
Medical device
Drug
Eczema
Seborrheic Dermatitis
CINV
+119%
+122%
-4%
*+17% excluding Algeria
Pipeline summary
Product
Indication
Timing
Comment
BIOTACHES Serum & UV50
Hyperpigmentation
H2 2012
Adds strength to the range and brand for MENA distribution
PAPUDUO
Acne
2013/14
First anti-biofilm acne treatment
KELO-COTE Stretchmarks
Stretchmarks
Q1 2012
Ready for launch. Good scientific rationale and evidence
KELO-COTE line extension
Scar reduction
2014
Spray and gel with new actives for enhance wound healing and scar control
TERBINAFINE SPRAY
Athlete's Foot
2014/15
Proprietary slow release patch applied to brand leader's API
DECAPINOL
Plaque blocking
Launched Q3 2011
OTC "GUM" brand by Sunstar Butler. Line extension programme
DELMOPINOL
Dog chew
Q4 2012
Royalty deal, licensee has worldwide rights. High risk.
DELMOPINOL
Wound care
2013
Internal/external (AMS option commenced 2011)
FLAMMASPRAY
Sunburn
Launched Q1 2011
Trademark leverage
FLAMMAGEL
Household burns
Q3 2012
Trademark leverage
FLAMMACERIUM
Diabetic foot ulcer
2014/15
Off-label Flammazine experience indicates likely efficacy
DERMATOLOGY
DELMOPINOL
FLAMMA FRANCHISE
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Income Statement: Strong revenue increase
£'m
Revenue
Cost of sales
Gross profit
23.4
(9.8)
13.6
14.1
(6.3)
7.8
Sales & marketing
R&D/RA
G&A
Amortisation & depreciation
Share based payments
Pre-exceptional operating loss
(7.8)
(1.4)
(3.7)
(2.5)
(0.5)
(2.3)
(5.3)
(1.1)
(2.7)
(1.7)
(3.0)
Finance costs
Loss before tax
(0.6)
(2.9)
(0.5)
(3.5)
0.7
(1.3)
Pre-exceptional EBITDA
19
H1 FY12 H1 FY11
 Revenue increase of 67% over H1 11
 H1 margin increased to 58.1% from
55.8%
 Significant investment in sales &
marketing, in particular in the UK
 Continued investment in R&D/RA
 G&A increase following IS Pharma
merger
 EBITDA of £0.7m, first sustainably
profitable period
 Amortisation increased from IS Pharma
intangibles
 Share based payment expense from
VCP established in May 11
Balance sheet
£'m
Goodwill
Intangible assets
Property, plant and equipment
Non-current tax assets
Other non-current assets
Non-current Assets
20
Dec-11
Jun-11
58.9
67.8
2.3
4.8
1.6
61.9
61.7
2.1
4.4
2.0
135.4
132.1
Inventories
Trade and other receivables
Cash in blocked account
Cash and cash equivalents
Current Assets
TOTAL ASSETS
8.7
13.0
1.8
4.4
9.6
15.3
3.4
5.1
27.9
163.3
33.4
165.5
Borrowings
Trade and other payables
Deferred consideration
Provisions
Current tax liabilities
Current Liabilities
(3.8)
(15.0)
(2.4)
(0.5)
(0.3)
(22.0)
(2.8)
(16.2)
(4.3)
(0.4)
Borrowings
Deferred tax liabilities
Deferred consideration
Other non-current liabilities
Provisions
Non-current liabilities
TOTAL LIABILITIES
(11.1)
(7.2)
(2.5)
(0.4)
(0.7)
(21.9)
(43.9)
(7.1)
(7.4)
(17.9)
(41.6)
NET ASSETS
119.4
123.9
(23.7)
(2.6)
(0.5)
(0.3)
 ABT adds £20m to intangibles as well as inventory
of £0.7m and receivables £1.1m
 Inventory reduced from June due to Fannin,
Mysoline sale and FX variance but partially offset
by ABT impact
 Receivables reduced by underlying £3.3m due to
seasonality of sales
 Borrowings increased by £6.5m Clydesdale draw
for ABT
 Deferred consideration reduced by £1.3m Helsinn
(HBT) payment in December and positive FX impact
on Variquel royalty liability
Cash flow: Efficient recycling of capital
£'m
Cash flow from operations
(0.1)
(2.5)
11.1
(16.7)
(2.0)
(7.6)
(2.3)
(2.3)
Loan draw down
Equity issues
Debt repayments
Other
Release of blocked funds
Financing
6.5
(1.2)
1.9
7.2
1.1
17.8
(13.0)
0.4
6.3
Net cash flow
(0.5)
1.5
4.8
4.3
1.9
3.4
Sale of Mysoline
Acquisition of ABT
Other investing
Investing activities
Cash b/f
Cash c/f
21
H1 FY12 H1 FY11
 Benefit of IS merger seen in H1
operating cash flow
 Mysoline proceeds recycled into
acquisition of ABT
 Investing activities include settlement of
deferred consideration for HBT - £1.3m
and limited capex
 Additional draw on Clydesdale facility to
complete ABT acquisition
 Net debt of £7.3m at December 2011
1st Floor Whitfield Court
30-32 Whitfield Street
London W1T 2RQ
United Kingdom
Tel: +44 20 7467 6920
Fax: +44 20 7467 6930
www.sinclairispharma.com
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