Biotest AG — Call Transcript 2014

Aug 12, 2014

Biotest Group H1 2014 Conference call 12 August 2014

Disclaimer

• • This document contains forward-looking statements on overall economic development as well as on the business, earnings, financial and asset situation of Biotest AG and its ^s bsidiaries These statements are based on ^c rrent plans subsidiaries. current plans, estimates, forecasts and expectations of the company and thus are subject to risks and elements of uncertainty that could result in deviation of actual developments from exp p ected developments.
• • The forward-looking statements are only valid at the time of publication. Biotest does not intend to update the forward-looking statements and assumes no obligation to do so.
• • All comparative figures relate to the corresponding last year´s period, unless stated otherwise.

Biotest Group: Key topics H1 2014

• Biotest H1 2014 Group Sales up by 8.5% to € 264.1m Increase largely attributable to an Increase increase in volume and sales in international markets (Asia)
• H1 2014 EBIT increase by 2 3% to 2.3% € 26.5m
• Slow down of Bivigam ® sales due to a recall d titi k t ll and more competitive mar etenvironment in the US
• Revised guidance

Financials H1 2014

Sales grow in line with expectations with exception of US sales

Sales by region (€ million)

Moderate increase in EBIT

EBIT (€ million)

• • Hi gher R&D costs due to positive +2.3%g p trend in clinical studies (+ € 4.1m vs. H1 2013)
• Decline of€ 6 2m in allocation of • 6.2mupfront payment from AbbVie according to percentage of completion method vs. H1 2013

Decrease in EAT

Earnings after taxes (€ million)

• • Financial result at - € 4.8m(vs. - € 2.5 m in H1 2013) due to financing (interest) of the privately placed bond (Schuldscheindarlehen) of €210 m
• • Constant tax rate of 36% vs. 35% inH1 2013 due to not capitalised ^p losses

Financial position: strong equity base

Financial Position of the Biotest Group (€ million)

Revised Guidance 2014

Main components which lead to a revised outlook:

U l d i f f t t n p a n n e n e g a v e e e c s	P l d i f f t t a n n e n e g a v e e e c s
R d d f B i i e c e r e e n e s o g a m u v u v -	I d R D d i n c r e a s e + s p e n n g s -
R d d i i i i e c e r e e n e s n c r s s r e g o n s u v u - , R i I I l, L i b e g s s a r a q s r a e a u y , ,	"B i N L l " ( ( i t t t t o e s e e e c a p p a c x v y - i ) e p a n s o n x
f C A l d d i i i d t t c c e e r a e p r o u c o n o v a c r a n - B T 0 6 1 -	f f R d d l l i A b b V i t t e u c e a o c a o n o e u p r o n - t p a y m e n
N i d e w g u a n c e :	P i i d r e v o u s g u a n c e :
S l 7 % a e s + :	S l 1 0 % a e s + :
E B I T l i h l b i t s g y a o v e p r e v o u s y e a r :	E B I T 1 0 % + :

Revised Guidance 2014

• Sales:In the financial year 2014 sales will grow in the range of 7% financial
• EBIT:We expect an EBIT development slightly above previous year

Biotest Strategy for 2020

Expansion. Future

Bivigam® sales below forecast

Slower Bivigam® sales vs. expectation:

• •Negative effects due to recall
• •Highly competitive market environment in the US

New actions initiated:

• •New BPC sales & marketing vice president in US
• •Focused marketing & selling strategy
• • Intensified marketing activities with new distribution channels
• •Positive effects mainly in 2015 effects

Long-term market potential of \$100m delayed

Production site Florida, USA

Biotest situation in the US

BPC headquarters in Boca Raton, Florida

• • Number of plasma collection centres in the US will increase to 18 by the end of 2014 C ll ti l tl 2014. ollection volume currently 600.000 l p.a.
• • Opening of three new plasma collection centres in 2015
• • Plasma sales to third parties increased incl. high margin hyperimmune plasma sales
• • US plasma has no geographic US restrictions
• • Promising p pj g develo pment projects e. g. Civacir®

Entering additional growth markets

• China: Third largest pharmaceutical market in the world, two-digit growth rates
• • Marketing authorisation for Albiomin ® 20% expected by Biotest for the fourth quarter 2014; First sales expected end of the year
• B il raz : Fif h l (b l i ) i h Fifth largest country (by population) in t he world
• •Rapidly growing market for plasma proteins
• • M k ti th i ti f Albi i ®Mareting authorisation for Albiomin 20%received in November 2013 with first sales in 2014, further plasma proteins in the marketing p authorisation procedure

France: First sales with Hepatect ® and Zutectra® have started. Tectasim® market authorisation retransferedto Biotest

New products at the horizon

2 0 1 4	2 0 2 0
C i i a c r v
B T- 0 6 1
B T- 0 6 2 ( A l d A l ) t c c e e r a e p p r o a v
I G N G i t t g e x e n e r a o n
I M C t t g o n c e n r a e
F i b i r n o g e n

Clinical Immunology: Civacir ®

Model of hepatitis C virus

• • Hepatitis C immunoglobulin for reinfection prophylaxis after liver transplantation
• • Ver high demand Very demand:
• Currently no reliable prophylaxis for the critical period immediately after transplantation
• New virostatic drugs are not an option in this time not period
• In the EU and USA alone, more than 5,000 liver tranplants due to hepatitis C each year
• Phase III trial in US ongoing, > 1/3 of patients have been included in study. Part I finalized.1
• First patients have already reached primary endpoint
• Fi t t d i i t d First tren in ongoing stu dy:
  • Re-infection rate in control group: ~40% Re-infection rate in highest dose group: 0%
  • 1 Data will be presented at the American Association of Liver Disease (AASLD) on Nov 9th in Boston

Intensive Care Medicine: IgM concentrate and Fibrinogen

IgM concentrate

• • IgM concentrate for the treatment of severe the community acquired pneumonia (sCAP)
• •Unique mechanism of action
• • Over 130 p py atients treated to date in phase II stud y

Fibrinogen

• • Fibrinogen for the treatment of severe acute bleeding due to fibrinogen deficiency
• •Ready-t o-use p oduc ^s de ^e op ^e product i s in develop ment
• •First patients treated in phase I/II study
• •Completion of part I planned in 2nd half of 2014

Monoclonal antibodies extend the range of products in the Clinical Immunology and Haematology areas

Haematology: Indatuximab Ravtansine (BT-062)

Targeted mechanism of action:

• • Antibody docks on cancer cell and toxin is then released:

• • Targets cancer cells while conference end of 2014healthy cells are very largely spared

• • Clinical development in the lead indication multiple myeloma is continuing

• •Patient recruitment of study 983 completed
• • Ver yg p convincin g data from this phase II study (combination with Lenalidomide)
• • Long-lasting partial to complete remission of the disease in about 75% of treated patients
• •Presentation of additional data at the ASH*

Indatuximab Ravtansine (BT-062) High efficacy in tumour treatment

Treatment of human breast cancer

• • Very high efficacy with a tolerable dosage in the treatment of solid tumours that do not respond to implanted in mice not standard therapy
• • Tumours resolved completely within y s
• • No recurrence (renewed growth) after the end of the treatment, no metastases
• ¾ Start of development in solid bladder cancer; first patients in second dose level included
• O i t d fi hi h f t •Ongoing stu dy confirms g h safety

BT-062 - High need and large sales potential

Focus of Indatuximab Ravtansine (BT-062) development on three malignancies

* potential total number of patients who become eligible for drug treatment at a respective particular setting / Source: Decision Resources 2013 for seven major markets, Biotest estimates

Tregalizumab (BT-061) Treat 2b study: Patient recruitment almost completed

• T cell REgulating Arthritis Trial 2b(TREAT 2b)
• • Lead indications rheumatoid arthritis (RA) and psoriasis
• •Treat 2b: phase IIb trial in RA started in autumn 2013
• • Largest clinical trial in Biotest history:
• Over 300 patients
• Over 86 trial sites in 14 countries, including USA, Canada and Europe
• Results in H1 2015
• •Recruitment of patients will be finalised end of August

Investments. Future

New Biotest investments in Dreieich until 2018

Biotest Next Level: Investments in growth

Increase in global capacity to:

Plasma fractionation:

3.1 million litres per year current: 1.5 million litres per year

Immunoglobulins:

13 tonnes per year current: 5.5 tonnes per year

Albumin:

72 tonnes per year

current: 42 tonnes per year p y

• • Programme for increasing capacity at D iihDreieich•
• Construction of new production facilities at the Dreieich location
• •Period: 2013 to 2018
• I tt t€ 200 illi • Investment amount: > 200 million
• •More than 300 additional jobs

First projects initiated or already completed

Already completed:

• •Expansion of filling and packaging facilities
• •First expansion of albumin production
• •New multi-storey car park

C t ti t t dConstruction started:

• •Plasma goods receipt area
• •Virological test laboratory

Next steps:

• •Basic engineering completed in Summer 2014
• • Submission of the building application on July Submission 25th, 2014
• • Ground broken for new production building by October 2014

Global market trends

•Global IVIG Price trends:

• ¾US: slight increase in prices (54 €/ gram IVIG as industry average)
• ¾EU: slightly decreasing prices (42 €/ gram IVIG / as industry average average)

•Growing IVIG demand:

• ¾ I th idt t 2015 th f ll i i l th t t d In the midterm, up to the following regional growth rates are expected: EU: 4-5%, USA: 4-6%, RoW: 12-13% CAGR
• ¾ The global Immunoglobulin market is expected to grow with an average growth rate of~5-6% p ^a in the period between 2012 and 2025 6% p.a. 2012 2025.

•Global plasma fractionation capacity:

• ¾Global fractionation capacity to grow to 65 ^m L by 2022
• ¾ Biggest single upward step expected in 2015e: CAGR 2012-2015e: 7-8%; CAGR 2015e-2022: 3% p.a.
• ¾Strong capacity expansion in US by competitors expected

Global Albumin Market Forecast

•The global Albumin market is expected to grow to ~890 tons by 2018.

Sources: Biotest Market Research based on MRB (2013), IMS (2013)

Global market trend plasmatic Factor VIII

• • In the midterm, up to 2015 the following regional growth rates are expected: EU: 0-1%, USA: 0-1%, RoW: 4% CAGR
• • The global pd FVIII market is expected to grow with an average growth rate of ~ 1% p.a. in the period between 2012 and 2025.

Sources: Biotest Market Research based on MRB (2013, 2012)

Vision – our road to 2020

• • Consistent focus on biological drugs for the therapeutic areas of haematology immunology and haematology, intensive care medicine
• • Continuous investment in the development of new therapeutic options
• • Worldwide operations with a strong base in Europe and the US
• • 2020 sales ^> €1bn

Contact and Financial Calendar 2014

I R l i B i A G t t t t n v e s o r e a o n s o e s :	C F i i l l d 2 0 1 4 n a n c a a e n a r
D M i k B k i t t t r. o n a e r e u H d f I R l i t t e a o n e s o r e a o n s v	1 2 N 2 0 1 4 9 M R 2 0 1 4 t o v e p o r
P h ( ) 4 4 9 9 0 6 6 1 1 0 0 3 3 8 8 0 0 1 1 4 4 4 4 0 0 6 6 o n e + : - - F ( ) 4 9 0 6 1 0 3 8 0 1 3 4 7 a + x : - - @ E M i l i l i b i t t t a n e s o r_ r e a o n s o e s : v -	d t. e