Hikma Pharmaceuticals 2014 Preliminary Results Summary
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Hikma Pharmaceuticals is a multinational pharmaceutical company founded in Jordan in 1978 that develops, manufactures and markets branded and generic injectables and oncology products. It has operations in the Middle East, North Africa, US and Europe with over 6,600 employees and state-of-the-art manufacturing facilities approved by regulatory bodies like the US FDA. The document outlines Hikma's mission to improve patients' lives through affordable, high-quality medicines, and its goals to maintain leadership in key markets and therapeutic areas while expanding globally.
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Hikma Pharmaceuticals 2014 Preliminary Results Summary
- 1. Hikma Pharmaceuticals PLC 2014 Preliminary Results
- 2. Founded in Jordan in 1978. Public company listed on London Stock Exchange in November 2005 Multinational business, developing, manufacturing & marketing branded, injectable & Oncology pharmaceuticals on a global scale. Operations in Middle East & North Africa, US and Europe employing over around 6,600 people, of which around 2,000 are in Jordan. State-of-the-art manufacturing facilities; several of which have been US FDA approved. Fourth largest listed pharmaceutical company in the UK. Our company
- 3. Page 2 Hikma Mission and Goals Mission We are committed to improving peoples’ lives. Through our existing products, and with 527 pending approvals across our markets, our aim is to provide patients with better access to high-quality, cost-effective medicines in key therapeutic areas. • Maintain/consolidate market leadership position in MENA and EU • At least double size every four years • Expand in new therapeutic areas and markets • Leverage on scale and image to achieve cost-saving synergies and transfer our expertise between our different geographical sites Goals
- 4. OST Analysis Page 3 Strengths ThreatsOpportunities • Excellent reputation for quality and a leading position in MENA • Significant local presence in many MENA countries • Excellent track record with licensors • Large product portfolio in MENA • Political turbulence • Increasing competition from multinationals interested in emerging markets • Governments may induce price cuts to offset increase in healthcare bill • Expansion of local / regional players (Spimaco, Kindi, Julphar) • Changing and stricter regulations by many MENA regulators • Strong demographics in MENA • Governments under pressure to increase healthcare coverage • Still low penetration in many therapeutic categories Weaknesses
- 5. Our Strategy For Growth Page 4 Strengthen our leading position in the MENA region Develop our global product range in growing therapeutic areas Extend our reach and diversity as a partner of choice in the MENA region Increase the scale of our specialty Injectables business Leverage our expertise and capacity in the US market Build on our world-class manufacturing and API sourcing capabilities
- 6. A strong one track record of revenue growth Hikma in Brief | Commercial | R&D| Operation | Regulatory | Business Development | Why Hikma? Group revenues ($ million)
- 7. 0 0 0 0 0 0 0 0 0 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 6 Our diversified business model continues to deliver strong growth Group revenue ($ million) Became a public company listed on LSE Acquired Hikma Italy Began manufacturing operations in Trust Pharma (Algeria) Acquired 52.5% of JPI (KSA) not previously owned by Hikma Acquired Baxter’s Multi Source Injectables (US) Acquired 94.1% of Promopharm (Morocco) Acquired Elie Pharmaceuticals (Sudan) Acquired minority stake in Unimark (India) and Haosun (China) Acquired Ribosepharm and Thymoorgan (Germany) Acquired Alkan (Egypt) and APM (Jordan) CAGR 05-14: 21% Acquired Ibn Al Baytar/ Medicef (Tunisia) Acquired Al Dar Al Arabia (Algeria) Acquired EPCI (Egypt) Entered into JV in Ethiopia Acquired Bedford and Ben Venue (US)
- 8. US Focusing on growing our market share by value and developing our portfolio CAPABILITIES Vials, ampoules, pre-filled syringes MANUFACTURING: Multi Source Injectables COMPETITORS Hospira, APP, Sandoz , American Regent, Sagent 76.9% of Injectables revenue* TOP PRODUCTS: Glycopyrrolate Neostegmine Phenylephrine Fentanyl Argatroban EUROPE A broad portfolio across a range of product types and therapeutic areas CAPABILITIES Vials, ampoules, bags, cytotoxics, pre- filled syringes MANUFACTURING: US FDA, EU and MENA approved manufacturing facilities in Portugal, Italy and Germany COMPETITORS Actavis, Fresenius, Sandoz, Stada, Teva 10.5% of Injectables revenue* TOP PRODUCTS: Meropenem Vancomycin Cefuroxime Imipenem Cefazolin MENA Continued new product launches and expansion into new markets COMPETITORS Roche, Sanofi, Julphar, Tabuk, MSD, Pfizer 12.6% of Injectables revenue* TOP PRODUCTS: Samixon Ciprolon Hibor Prizma Cefizox KEY 7 MANUFACTURING PLANTS 2 R&D CENTRES * 2014 Injectables revenue 7 Our business segments
- 9. Hikma Pharmaceuticals in MENA
- 10. Lebanon Jordan Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Bahrain & Qatar Kuwait UAE Lebanon Jordan Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Bahrain & Qatar Kuwait UAE Lebanon Jordan Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Bahrain & Qatar Kuwait UAE JordanJordan Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco AlgeriaAlgeria Tunisia Libya TunisiaTunisia Libya EgyptEgypt SudanSudan Saudi ArabiaSaudi Arabia YemenYemen IraqIraq SyriaSyria OmanOman MoroccoMorocco Bahrain & Qatar Kuwait UAE The MENA market totals 350M in population with a total GDP of $2 trillion 1 2 3 4 5 67 8 9 The pharmaceutical market exceeds $18 billion, growing at an 8% yearly average 33M 39M 6M 82M 29M 24M 23M 3M 4M 4M 11M 33M 6M 9M 4M 38M 2% of the world’s pharmaceutical market ~3% of the world’s GDP Top 9 IMS MENA markets Source: Population 2013 World Bank
- 11. MENA and Turkey makes the third largest population in the world MENA population (17 countries including Turkey) is the 3rd largest in the world after China and India Fast growing population in the MENA region. Population levels in 2013 reached around 350 million (excluding Turkey), with a 10-13 CAGR of 2% MENA GDP is 10th largest in the world and second only to China in emerging markets. 2.1 2.2 3.0 1.9 9.2 0.8 11% 2% 3% 3% 16% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 10-13GAGR% GDPTrillionUSD 143 200 350 1,252 1,35775 - 200 400 600 800 1,000 1,200 1,400 1,600 2013Population(Millions) Source: 2013 World Bank
- 12. MENA healthcare CAGR is 2nd in the world MENA’s healthcare expenditures/capita has significant room for growth. It comes in 2nd (after China) in terms of CAGR. At this growth rate, MENA’s healthcare spent per capita will reach $496 in five years. 9% 14% 23% 4% 13% 12% 1% 11% 4% 0% 5% 10% 15% 20% 25% - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 India MENA China Turkey Russia Brazil EU Japan USA 07-12GAGR% HealthExpenditureCapitainUSD MENA Health Expenditure Source: 2013 World Bank
- 13. Iraq and Algeria have the highest healthcare CAGR among MENA countries Source: 2013 World Bank The relatively high growth in per capita health expenditure is primarily driven by Iraq. Again, we see a wide range across MENA countries spanning from USD 71 in Yemen to USD 2,029 in Qatar. Recent political unrest in the region expected to increase public health expenditure. 71 105 115 226 152 190 279 297 388 578 690 675 795 895 1,3431,428 2,029 4% 6% 6% 19% 12% 7% 16% 7% 9% 16% 11% 7% 7% 7% 3% 8% 5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 0 500 1000 1500 2000 2500 07-12CAGR% USD MENA Healthcare Expenditure per capita USD
- 14. Hikma ranks 5th in MENA
- 15. 81 Morocco 142 Algeria 219 Tunisia 56 Lybia 32 Egypt 397 Sudan 88 Jordan 252 Lebano n Syria 2 Iraq 60 Kuwait 9 Saudi Arabia 247 UAE 45 Bahrain & Qatar 19 Yemen 16 Oman 12 Next >> Sales & Marketing Team in the MENA Region >> Top 3 selling products Our unique sales & marketing team of more than 1,600 is driving growth Amoclan Lexin Torvast Megamox/Amoclan Tavacin Pepzol Amoclan Suprax Penamox Megamox/Amoclan Xefo Omnicef Our reach
- 16. Lebanon Jordan Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Bahrain & Qatar Kuwait UAE Lebanon Jordan Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Bahrain & Qatar Kuwait UAE Lebanon Jordan Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Bahrain & Qatar Kuwait UAE JordanJordan Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Syria Oman Morocco AlgeriaAlgeria Tunisia Libya TunisiaTunisia Libya EgyptEgypt SudanSudan Saudi ArabiaSaudi Arabia YemenYemen IraqIraq SyriaSyria OmanOman MoroccoMorocco Bahrain & Qatar Kuwait UAE Corporate Marketing is leading S&M teams in the 5 Territories 5 Territories each with full Sales & Marketing structure ensure efforts are tailored to markets needs% Hikma MENA Market is divided into 5 marketing territories
- 17. Source: Hikma Internal data Salesin$ A partnership-oriented company! Our top selling products in MENA 0 10 20 30 40 50 60 70 80 78 54 30 20 17 15 13 12 10 10
- 18. 17 Our strategy to drive continued growth in MENA and emerging markets MAXIMISING PORTFOLIO OPPORTUNITIES THROUGH OUR FOCUS ON HIGHER VALUE PRODUCTS AND ENHANCED SALES & MARKETING ACTIVITIES INVESTING TO EXPAND OUR PORTFOLIO, TECHNOLOGICAL CAPABILITIES GEOGRAPHIC REACH AND MANUFACTURING CAPACITY THROUGH CAPITAL INVESTMENT AND M&A MAINTAINING HIGH QUALITY, EFFICIENT AND REGULATORY COMPLIANT MANUFACTURING FACILITIES STRENGTHENING AND BROADENING OUR PRODUCT PORTFOLIO AND TAILORING OUR PRODUCT OFFERINGS TO LOCAL MARKET OPPORTUNITIES BUILDING A HIGHLY SKILLED, EFFECTIVE AND DIVERSE WORKFORCE ENSURING SUSTAINABLE LONG TERM GROWTH BY INCREASING PATIENT ACCESS TO HIGH QUALITY, AFFORDABLE MEDICINES COMMERCIAL PIPELINE DEVELOPMENT INVESTING FOR GROWTH EMPLOYEES SUSTAINABILITY OPERATIONAL EXCELLENCE AND COST CONTROL SAUDI ARABIA & OTHER GCC ALGERIA EGYPT MOROCCO LEVANT & OTHER MARKETS EMERGING MARKETS DELIVERING OUR STRATEGY THROUGH 6 KEYSTRATEGIC PILLARS LEADING PHARMACEUTICAL COMPANY IN MENA AND EMERGING MARKETS
- 19. Our partners
- 20. - More than 1600 sales Representatives across MENA - Reputation for quality products and long standing relationships with global licensing partner - Strong brand recognition and experienced marketing teams with strong customer loyalty - Excellent knowledge of registration processes and local health authorities - Extensive Distribution network across MENA - Local manufacturing facilitates market Access Partner of choice in MENA region Why Hikma?
- 21. Location # of facilitie s Oral/semi- solid/liquid Injectable API Certification FDA EU Local cGMP Other CherryHill, MSI 1 Morocco 1 Eatontown, NJ USA 1 OSHA, DEA, EPA Amman, Jordan 5 (1) Sintra, Portugal 3 (2) Pavia, Italy 1 (3) Vienenburg, Germany 1 (4) Riyadh, Saudi Arabia 1 (5) Algiers, Algeria 2 Cairo, Egypt 1 Tunis, Tunisia 2 Summary of our operations … (1) Certification by UK MHRA, (2) Certification by Infarmed, Portugal, (3) Certification by Italian Ministry of Health, (4) Certification by the German Ministry of Health, (5) Certification by Slovakian State Institute for Drug Control Our Operations
- 23. 6/4/2015 Our hospital advantage Commercial Superiority Regulatory & Medical Excellence Locally Focused More than $90M of hospital revenues 17 countries covered under one roof 127 specialized hospital sales representative >10 Under licensed innovative hospital products:Vibativ®,Cefizox ®, Infasurf®, Prizma®, Hibor® >1,000 hospitals covered >90% reach to Government, Private & Teaching hospitals Long term partnership with key medical societies Excellent relations with governmental authorities Complete and thorough understanding of local rules & regulations Dedicated Regulatory Affairs (RA) team > 70 persons with > 50 years experience US FDA & MHRA approved PV systems Parallel submission in 6 countries simultaneously Capabilities of supervising Phase III Clinical trials & conducting P IV 25 manufacturing facilities in 11 countries FDA approvals in 5 countries Faster registrations Preferred prices Preferential treatment in Tenders Operations in Middle East & North Africa, US and Europe employing over around 6,600 people Diversified product portfolio manufactured Compliance & Quality London stock exchange listed company. Top 250 FTS Highest Ethical standards in business conduct Zero tolerance policy to all forms of bribery and corruption. Ethics Committee reporting to the Company Board of Directors Reputation of Quality products
- 24. 37% 48% 15% Branded Injectables Generics 2014 revenue by segment 2014 revenue by region 43% 51% 6% MENA US Europe & ROW Revenue by segment and region 23
- 25. Branded: Hikma’s Footprint ► Hikma’s Sales and Marketing team comprises more than 1,849 employees, one of the largest in the MENA region ► Products are manufactured at facilities in Jordan, Algeria, Saudi Arabia, Egypt, Sudan, Tunisia and Morocco. Track record of investing in local markets ► Facilities in Jordan and Saudi Arabia have been successfully inspected by the US FDA and MHRA ► Excellent knowledge of local regulations and significant experience of working with local health authorities Jordan Jordan Algeria Tunisia Libya Egypt Sudan Saudi Arabia Yemen Iraq Oman Morocco Kuwait UAE Lebanon Source: Arab Health World. Note: (1) Includes distribution, wholesale and warehousing. KEY Footprint(1) Manufacturing Qatar Bahrain Ethiopia Direct Presence Indirect Presence Mali Senegal Somalia Azerbaijan Ivory Coast 53
- 26. Branded: Hikma’s Manufacturing Capabilities Morocco Tunisia Algeria Egypt Jordan KSA Sudan Facility Société de Promotion Pharmaceutique 2 Plants Medicef Ibn Al Bitar 3 Plants Dar Al Arabia Hikma Pharma Algeria 2 Plants Hikma Pharma Egypt EPCI 2 Plants Hikma Pharmaceuticals LLC APM 5 Plants Al Jazeerah Pharmaceutical Industries 3 Plants Savanna 3 Plants Types of production Penicillin General Formulation Penicillin Cephalosporin General Formulation Penicillin General Formulation Cephalosporin General Formulation Penicillin Cephalosporin General Formulation Chemical Penicillin Cephalosporin General Formulation Penicillin Cephalosporin General Formulation Certification Local Local Local EU Local Other US EU Local Other US Local Local ► Hikma manufactures its Branded products at 20 facilities 55
- 27. Injectables: Hikma’s Manufacturing Capabilities USA Portugal Italy Germany Facility Number of Employees(1) 793 326 68 70 PP&E(2) $62.6m $73.6m $7.3m $8.6m Types of production Vials / ampoules / pre-filled syringes(3) Cephalosporins ampoules / vials / bags/ lyophilised/ pre-filled syringes(3) Lyophilised Ampoules / Vials Cytotoxics - liquids & lyophilised Main markets (Primary Focus) USA EU USA MENA CIS MENA EU EU MENA USA Date of last FDA Inspection April 2014 March 2014 N/A May 2014 Note: (1) Related to manufacturing. (2) Includes buildings, computers and software, furniture and equipment, projects under progress and vehicles. (3) Pre-Filled Syringes capabilities currently being installed. ► In July 2014, Hikma agreed to acquire the Ben Venue manufacturing site in Bedford, Ohio. The Ben Venue site is not currently operational. Hikma plans to transfer certain modern equipment, including lyophilisers and filling lines, to its other global manufacturing facilities in the US and Europe, significantly increasing Hikma’s manufacturing capacity and capabilities 44
- 28. Successfully leveraging our corporate and local R&D centres Jordan Jordan Tunisia Algeria Jordan 37 launches 106 submissions 121 R&D employees Therapeutic areas: - Central nervous system - Anti-infectives - Cardiovascular - Diabetes - Oncology Egypt Egypt 51 launches 133 submissions 14 R&D employees Therapeutic areas: - Central nervous system - Cardiovascular - Diabetes - Ophthalmics - Oncology Algeria 46 launches 77 submissions 8 R&D employees Therapeutic areas: - Central nervous system - Cardiovascular - Diabetes - Anti-infectives - Oncology Tunisia 29 launches 65 submissions 7 R&D employees Therapeutic areas: - Central nervous system - Cardiovascular - Diabetes - Anti-infectives - Oncology Saudi Arabia Saudi Arabia 30 launches 66 submissions 19 R&D employees Therapeutic areas: - Central Nervous System - Cardiovascular - Diabetes - Oncology Total number of launches and submissions since 2009 Launches and submissions in Algeria, Egypt, Jordan, Saudi Arabia and Tunisia, 2009 to 2014
- 29. 14% 18% 5% 16%6% 3% 38% 2015E 23% 30% 8% 11% 22% 6% 2013 Cardiovascular Anti-infectives Opthalmic Dermatology & creams CNS Diabetes Oncology Others 69 launches 59 launches 10% 23% 2% 39% 8% 19% 2014 Expecting to launch around 200 products over the next two years Developing our Branded pipeline to meet growing demand in specific therapeutic areas 28 Branded launches by therapeutic area 12% 12% 13% 48% 1% 15% 2016E
- 30. 29 Investing in R&D and business development to build a strong pipeline ► Developing related growth strategies that build on and reinforce our strong legacy business ► Diversifying into new areas with attractive market dynamics – such as dermatologics, opthalmics and oncology ► Focusing on niche market segments, including controlled substances, transdermals, inhalations, PIV/ 505(b)(2)s and authorised generics 3 1 3 5 5 3 10 7 4 1 3 2 4 1 1 1 1 3 3 1 1 0 2 4 6 8 10 12 14 16 18 20 2015 2016 2017 2018 2019 2020 Patches & transdermals Orals - controlled release Orals - other specialised Opthalmics Oncology Other dermatologics Ihalataion Other orals Generics expected launches, 2015 to 2020
- 31. Our strong track record of growth across the MENA markets *Constant currency; based on 2009 exchange rates **Source: IMS Health. 353 394 442 529 554 551 Expecting low-teens growth in constant currency in 2015 353 398 451 561 628 631 2009 2010 2011 2012 2013 2014 2015E Reported Constant Hikma 5-year CAGR (reported): 9% Hikma 5-year CAGR (constant): 12%* MENA market 5-year CAGR: 9%** ► Expecting to return to low-teens growth in 2015 (constant currency) ► MENA pharmaceutical market continues to offer very attractive growth opportunities ► Expanding our portfolio of higher value products ► Leveraging our large and experienced sales and marketing team ► Future growth will be driven by expansion in existing and new markets, through greenfield investments and M&A 2 Branded revenue, 2009 to 2014
- 32. Building a leading global manufacturer of high quality, affordable generic injectable products 31 144 157 316 470 536 713 2009 2010 2011 2012 2013 2014 2017E ► Launch of Bedford products will be a key driver of growth ► Leveraging Bedford’s R&D capabilities, external R&D partners and business development to build our pipeline ► Expanding our presence in Europe and MENA will enhance revenues and profitability ► Focusing on maintaining the highest quality standards across our manufacturing facilities Hikma 5-year revenue CAGR: 38% Injectables revenue, 2009 to 2014 Strong medium-term growth potential driven by broad product portfolio and differentiated pipeline
- 33. US generic Injectables market share (million eaches) US generic injectables market share ($ million) Successfully growing our US market share by value 32 39.9% 13.0% 13.0% 4.5% 4.4% 3.6% 2.0% 1.6% 1.4% 1.4% 1.3% 1.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% Market Share Dec 2013 Dec 2014 Change Value 4.0% 6.1% +2.1 ppt Market Share Dec 2013 Dec 2014 Change Volume 13.9% 13.0% (0.9) ppt Source: IMS Healthcare, YTD 12/2014 Source: IMS Healthcare, YTD 12/2014 17.5% 11.0% 9.6% 6.1% 6.1% 5.4% 5.3% 5.1% 4.2% 4.1% 3.4% 3.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%
- 34. Thank you