Biotest AG — Earnings Release 2019

Apr 1, 2020

Biotest AG

Telephone Conference FY 2019 1 April 2020

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 subsidiaries. These statements are based on 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 expected 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 figures reported relate to the Continuing Operations of the Biotest Group, if not specified otherwise. After the transfer of all US subsidiaries incl. our associate ADMA Biologics Inc., these activities are being reported as Discontinued Operations in the previous year.
• All comparative figures relate to the corresponding last year´s period, unless stated otherwise.

Biotest Group: FY 2019 at a glance

• EBIT guidance 2019 exceeded, sales guidance confirmed
• Sales in FY 2019 at €419.1 m vs. €400.3 m in FY 2018
• EBIT in FY 2019 at €-1.2 m vs. €10.6 m in FY 2018
• Opening of three new plasma collection centres in Germany, Hungary and Czech Republic; total number to date: 22 centres
• Biotest Next Level project progressing; first inspection by Darmstadt Regional Council on qualification of clean rooms and media systems passed on 8 Nov 2019

Corona Virus Special

Product safety – no concerns / high safety margins

• No plasma collection from known Corona virus infected donors
• Corona virus has not been detected in blood plasma from SARS-CoV-2 positive asymptomatic individuals (FDA, 11 Mar 2020)¹
• SARS-CoV-2² is a large, lipid-enveloped virus and easily inactivated or removed by standard virus reduction steps in Biotest manufacturing processes
• Our production includes 4 independent virus elimination steps

Biotest plasma products are safe

1. FDA, Updated Information for Blood Establishments Regarding the Novel Coronavirus Outbreak, 11 Mar 2020, https://www.fda.gov/vaccinesblood-biologics/safety-availability-biologics/updated-information-blood-establishments-regarding-novel-coronavirus-outbreak 2. SARS-CoV-2: Severe Acute Respiratory Syndrome Corona Virus 2

Business continuity – well prepared

• Multiple measures implemented to protect employees and avoid viral spreading (hygiene and protective measures, social distancing, separation of groups, travel restrictions) at Biotest

• Stocks have been filled to prepare for shortages
• Biotest produces in-house disinfectant
• Health system relevance of Biotest has been confirmed by authorities
  • Exemptions from restrictive measures to ensure business continuity apply to Biotest (i.e. child care, commute to work, special quarantine measures similar to health workers in case of personnel shortages)

SARS & COVID-19

	Disease1	Virus2	Biotest Therapeutics
2019/ 2020	COVID-19 (Corona virus disease 2019)	SARS-CoV-2 (SARS Corona virus 2)	Hyperimmunoglobulin Pentaglobin® Trimodulin
2002/ 2003	SARS (severe acute respiratory syndrome)	SARS-CoV (SARS Corona virus)	Pentaglobin®

¹WHO 2 ICTV (Int'l Committee for the Taxonomy of viruses)

IVIG / Hyper Ig	Pentaglobin	Trimodulin
-	~ 12% IgM	~ 23% IgM
-	~ 12% IgA	~ 21% IgA
≥ 95% IgG	~ 76% IgG	~ 56% IgG
e.g. patients with immunodeficiency, specific virus treatments	Approved in severe bacterial infection in certain markets	Clinical development in severe Community Acquired Pneumonia (sCAP)

Hyperimmunoglobulin – well positioned for contribution

Hyperimmunoglobulin derived from plasma of donors with antibodies against Corona virus

• Seriously ill Chinese patients receiving convalescent plasma therapy demonstrated improved oxygenation and reduced inflammation and viral load¹
• Biotest initiated plasma collection of individuals after clearing Corona virus infection as well as test development for screening and product testing procedures
• Biotest is prepared to join forces with other plasma companies being members of the Plasma Protein Therapeutics Association (PPTA) in an effort to develop this Corona virus therapeutic

Pentaglobin - positive experiences

Case reports of Pentaglobin usage in SARS (published 2004, Hong Kong)¹

12 severe cases who continued to deteriorate despite corticosteroid and ribavirin therapy

• No adverse drug reaction was reported concerning Pentaglobin
• 10 patient made an uneventful recovery
• 1 made progress at time of publication
• 1 died from cardiovascular arrest

¹Ho et al, Int J Tuberc Lung Dis 2004, Oct. 8(10):1173-9

Physician testimonies of Pentaglobin usage in Covid-19. Usage peak in Italy

Data collection ongoing (case report forms, registries, investigator studies initiated)

Current production capacity is limited. Measures to increase capacity are initiated.

Trimodulin

Trimodulin for treatment of severe community acquired pneumonia (sCAP)

• No comparable adjuvant therapy available
• Possible effectivity during severe forms of Covid-19 under evaluation

• Neutralization of toxins
• Prevention of excessive inflammatory responses
• Reduced risk for severe sepsis, septic shock, respiratory and multiorgan failure

Trimodulin: mode-of-action in sCAP (incl. Covid-19)

Trimodulin in sCAP

Trimodulin: Experience in sCAP could apply to Covid-19

28-day all cause mortality in stratified subsets of the phase II Cigma trial – post hoc analyses 27.8 30.5 30.9 36.6 22.2 13.8 14.3 11.8 0 5 10 15 20 25 30 35 40 All patients (N=160) CRP ≥70 mg/L (n=124) IgM ≤0.8 g/L (n=111) CRP ≥70 mg/L and IgM ≤0.8 g/L (n=92) Mortality (%) p=0.465 p=0.030 p=0.043 p=0.006 20% 55% 54% 68%

34% of pathogens detected in CIGMA trial were viruses. Severe Covid-19 patients also show high inflammation markers (CRP) and a compromised immune system.

Welte et al., Intensive Care Med. 2018, Apr;44(4):438-448.

Trimodulin: Status concerning Covid-19

• Covid-19 patients will be included in the design of the phase III ESsCAPE study

The goal is to obtain a broad indication in sCAP

• A phase II study exclusively in severe Covid-19 patients is in preparation
  • To offer a fast response during the current outbreak and have a possibility to shorten the time-to-market
• Applications for public funding are ongoing for Covid-19 activities

Summary – Corona virus

• No safety concerns with regard to Biotest products
• Effective measure to ensure business continuity in pandemic times in place
• Biotest plasma protein technologies open new treatment options for severely affected patients during the Corona virus outbreak

Financials FY 2019

Income statement (€ million)

	2018	2019
Sales	400.3	419.1
Operating costs & expenses	-389.7	-420.3
Operating Profit (EBIT)	10.6	-1.2
Financial result, result from joint ventures, taxes	-23.5	-3.5
Earnings after tax (EAT) from Continuing Operations	-12.9	-4.7
Earnings after tax (EAT) from Discontinued Operations	194.6	-
Earnings after tax (EAT) Biotest Group	181.7	-4.7

EBIT reported and adjusted (€ million)

	2018	2019
EBIT reported	10.6	-1.2
Biotest Next Level costs*	53.4	68.4
Monoclonal antibodies	3.9	1.4
Strategic reorientation	1.3	-
Albumin recall incl. (income) from insurance compensation	-2.1	-
EBIT adjusted	67.1	68.6

*: including R&D costs for BNL development drugs

Biotest Next Level (BNL) costs in FY 2019

• Facility costs (energy, building costs, security, etc.)
• Depreciation
• Personnel costs (for ramp-up, commissioning etc.)
• Project administration

2. BNL R&D costs in total: € 40.0 million; thereof:

• € 18.1 million IgG Next Generation
• € 11.0 million Trimodulin (IgM Concentrate)
• € 10.9 million Fibrinogen

Total BNL costs: € 68.4 million in FY 2019

Sales development (€ million)

• Therapy sales up +6.7% to €371.9 m in FY 2019 vs. €348.5 m in FY 2018 due to reallocation of plasma products to attractive sales markets
• Segment Plasma & Services: decline in contract manufacturing (Middle East), capacity used for own production

Balance sheet – solid equity ratio and new financing (€ million)

Cash flow from operating activities 2019 (€ million)

-7.7

-16.1

Cash flow: increase in working capital (€ million)

Increase of working capital leads to cash outflow

	Cashflow Impact

A Inventories	-71.6
A Receivables and other assets	27.3
△ Trade payables and other payables	-16.2
△ Other provisions	1.2
= △ Working capital	-59.3

25 Biotest AG

Virtual Annual General Shareholder Meeting:

Dividends for 2019

Dividend

to be proposed to the Annual General Meeting on 8 May 2020, 11 a.m.

Proposal to Virtual Annual General Shareholder Meeting

• € 0.00 per ordinary share
• € 0.04 per preference share

Dividend amount remains constant to finance future growth

Sales: In 2020 sales will increase by 10 percent

• EBIT: Earnings will be influenced by various factors in 2020:
  • Mainly further BNL expenses (€80 90 million)
  • Tense situation in the crisis regions, particularly in the Middle East and Asia

EBIT of continuing operations will be between €-10 m and €-5 m For adjusted EBIT €70-85 million expected

* Caveat: Guidance is given without any expected, but not yet assessable negative impact of the Corona virus crisis!

Plasma Donation and Plasma Centres

Expansion of plasma collection centres

• New centres opened in
  • o Hanover, Germany
  • o Budapest, Hungary
  • o Jihlava, Czech Republik
• Expansion of plasma centres ongoing

…more urgent than ever….!!!

• .....particularly in Corona virus times
• Plasma centres are open in Germany and Hungary and will be re-opened in Czech Republic shortly
• Worldwide, more than 1 million people with rare diseases need medicines made from plasma, where no other treatment option exists

30 Biotest AG

Summary

Next Steps

• Biotest Next Level progressing
• Clinical trials for new BNL products ongoing: IgG Next Gen, Fibrinogen; Trimodulin in preparation
• Opening of new plasma collection centres in Europe

Financial Calendar 2020 Contact

Financial Calendar 2020

08 May 2020	Q1 Report 2020
08 May 2020	Virtual Annual General Meeting
13 Aug 2020	Q2 Report 2020
12 Nov 2020	Q3 Report 2020

Investor Relations

Dr. Monika Buttkereit

Tel.: +49-6103-801-4406 investor\_relations@biotest.de

Public Relations Dirk Neumüller

Tel.: +49-6103-801-269 pr@biotest.com