Biotest AG — Investor Presentation 2015

Nov 10, 2015

Biotest AG

Analyst Conference Q1-Q3 2015

10 November 2015, Frankfurt am Main

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 p , lans 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 comparative figures relate to the corresponding last year´s period, unless stated otherwise.

Biotest Group – Q3 2015

• • IgM Concentrate shows encouraging results in encouraging life-threatening pneumonia
• •Impairment of US business
• • Roofing ceremony at new manufacturing site in Dreieich
• • Investigations Russia Investigations
• Trial in Darmstadt ongoing
• Tax risk for year 2005 2008 of up to €16 m (incl interest) (incl.
• •FDA submission of RSV-hyperimmunoglobulin (licensed from ADMA Biologics, Inc.)

What has triggered the impairment test?

• 1) Ramp-up of Bivigam production was delayed twice since sales uptake was weaker than originally planned.
• 2) Our estimate of the market potential of Civacir had to be reduced significantly due to the success of the new antivirals (Sovaldi, Harvoni), desp py ite the fact that the latest Biotest results of clinical phase III stud y of Civacir were promising.

Write down and impairment

( ) € i n m	P & L f f i t e e c n	S b 2 0 1 5 t e p e m e r
B i i i i t v g a m n v e n o r e s	1 4 -	T h C O G S e r a p y :
G f I i t I l t, t m p a r m e n g p a n s o w a r e	5 2 -	C O G S T h e r a p y :
I i C i i j t t m p a r m e n a c r p r o e c v	1 3 -	T h R & D e r a p y :
I i t A b l t m p a r m e n m p a n	3 -	& T h R D e r a p y :
O h i d t t e r r e o n s w w	2 -	T h C O G S e r a p y :
T l t o a	8 4 -

• • Decrease in value of assets in the amount of €84 m (\$96 m)
• ¾ This is an accounting effect that represents past cash investments and does notimpact the company s' cash position today
• ¾Values decreased in the balance sheet
• ¾I t d t ff t t b i ti Impact does not effect our current business operations

Reasons for write down of Bivigam inventories

• • Pre-production for US market launch and originally planned fast ramp up of Bivigam sales led to high inventories in the beginning of 2014
• •Bivigam has a shelf life of 2 years
• • Since beginning of 2015 Biotest Pharmaceuticals Corp. (BPC) tried hard to sell short dated material
• •Promising Bivigam sales in H1 2015
• •Decline of Bivigam sales to distributors in last two months

Reasons for impairment of US production plant

Bivigam

• •Lower Bivigam sales in 2015 than originally planed
• •Excess Bivigam inventory
• •Reduced production activities in immunoglobulin manufacturing plant
• •Capacity not fully utilised
• • Unabsorbed costs
• ¾Re-evaluation of the value of facility assets (facilities, inventory)

Civacir

• • Despite promising clinical data from an interim analysis, significantly reduced market potential
• ¾Re-evaluation of the value of assets (p j , p y) roject, plasma inventory)

PLAN: Utilisation of the production plant in Boca Raton

ACTUAL: Utilisation of the production plant in Boca Raton

Financial position: long term financed

Financialposition of the Biotest Group (in € m)

Maturity structure of financial liabilities

as of 30 September 2015 (in €m)

€ 129 t d bt (fi i l li biliti i h) 129 m neebt (financial abilities minus cash)

Positive cash flow from operating activities January – September 2015 (in € m)

Sales growth slightly above last year

• • Strong market position in g p Germany
• • Growth in the Americas and Asia & Pacific
• • Lower sales in rest of Europe and Middle East/ Africa
• • Therapy
• Three main products: Immunoglobulin, Albumin and Factor VIII
• Speciality plasma products approx. 25% of sales

Current reported results – Q1-Q3 2015 (in €m)

	P & L Q Q 1 3 2 0 1 5 -	•
S l a e s	4 1 8	I i m p a r m e n −
C O G S	3 4 4 -
G i r o s s m a r g n	7 4	A b t m c o s s −
D i t i b t i t s r u o n c o s s	5 2 -
A d i t m n c o s s	2 7 -	−
R & D t c o s s	7 7 7 7 -
O O E *	0	−
E B I T	8 2 -

• • Reported figures are influenced by

• Impairment

• Idle capacity costs

• Biotest Next Level costs

P fit bl b iProfitable core business (in €m)

	P & L Q 1- Q 3 2 0 1 5	Im ir- p a * t me n	A b m ts co s	I d le i ty ca p ac ts co s	B N L ts co s	d j t d a u s e P & L Q 1- Q 3 2 0 1 5
S l a e s	4 1 8		1 -			4 1 7
C O G S	3 4 4 -	6 8		1 0	0	2 6 6 -
G i r o s s m a r g n	7 4	6 8	1 -	1 0	0	1 5 1
D D i i t t i i b b t t i i t t s r u o n c o s s	5 2 -					5 2 -
A d i t m n c o s s	2 7 -				4	2 3 -
R & D t c o s s	7 7 -	1 3	4 2			2 2 -
O O E	0					0
E B I T	8 2 -	8 1	4 1	1 0	4	5 4

	& P L Q Q 1 1- Q Q 3 3 2 0 1 4	Im ir- p a t me n	A b m ts co s	I d le i ty ca p ac ts co s	B N L ts co s	d j d t a s e u & P L Q Q 1 1- Q Q 3 3 2 0 1 4
S l a e s	4 1 0		5 -			4 0 5
C O G S	2 4 5 -		1	6	0	2 3 9 -
G i r o s s m a r g n	1 6 5	0	5 -	6	0	1 6 6
D i t i b t i t s r u o n c o s s	5 5 -		0			5 5 -
A d i t m n c o s s	2 4 -		0		2	2 2 -
& R D t c o s s	5 1 -		2 4			2 7 -
O O E	1					1
E B I T	3 5	0	2 0	6	2	6 3

* € 3 million are recognised in monoclonal antibodies

Profitable core business (in €m)

E B I T	3 5	8 2 -
I i d i f f * t t m p a r m e n a n w r e o	0	8 1
B i N L l t t t t o e s e e e c o s s x v	2	4
M l l t i b d i o n o c o n a a n o e s	2 0	4 1
I d l i ( ( B & D i i h ) ) t t e c a p a c y y c o s s o c a r e e c	6	1 0
E B I T d j d t a s e u	6 3	4 5

Q1 Q3 2014 Q1 - Q1 Q3 2015 Q1 -

* € 3 million are recognised in monoclonal antibodies

Necessary adjustments to strategy

• •Focus on plasma protein business
• •Biotest Next Level: broadening of plasma product portfolio
• •Adjustment of R&D programme

Focus on plasma protein business

•Worldwide demand for plasma proteins still growing

C A G R 2 0 1 4 2 0 2 0 e –
R W o	1 2 %
N t h o r A i m e r c a	% 5

Exp. annual growth

• •Continue to grow business in Europe and RoW
• • Strengthen profitabilit y of US business gp y

Sources: Biotest market research based on MRB (2013), PPTA (2015)

Steps to strengthen US profitability

Sales & production still below expectations

Changes in US organisation implemented

• 1. New head of sales
• 1. Reorganisation of sales force
• 1. New CEO

Increase sales

•Increasing share of voice by partnering / co-marketing

Increase production

•Toll manufacturing

¾Increase sales increase production lower idle capacity costs costs

Necessary adjustments to strategy

• •Focus on plasma protein business
• • Bi t t N t L l b d i f l d t tf li otesNexLevel: broadening o f plasma pro duct portfoli o
• •Adjustment of R&D programme

BNL: Broadening of product portfolio

• Expand product portfolio from 3 products to 5 products out of one litre plasma and double production capacity

"Biotest Next Level":On track in terms of timeline and budget (April 2015)

"Biotest Next Level":On track in terms of timeline and budget (August 2015)

"Biotest Next Level":On track in terms of timeline and budget (October 2015)

Necessary adjustments to strategy

• •Focus on plasma protein business
• • BNL b d i f l d t tf li BNL: broadening o f plasma pro duct portfoli o
• •Adjustment of R&D programme

Adjustment of R&D programme

• • Prioritise plasma protein R&D programme
• IgM Concentrate
• IgG Next Generation
• Fibrinogen
• • Adjustment of the monoclonal antibodies R&D programme
• • Significant reduction in R&D spending for mAb, continue activities up t t il t t bl t i to next milestone to enable partnering

Prioritise Plasma Protein Projects

IgM Concentrate Phase II CIGMA Study in Patients with sCAP

Objectives

• Evaluation of the efficacy yg p and safety of IgM Concentrate in patients with severe community acquired pneumonia (sCAP)

Primary Endpoint

•Increase of ventilator free days (VFD)s

Secondary Endpoints

• •28-day all cause mortality
• •28-day pneumonia cause mortality day
• •Time to discharge from ICU (intensive care unit)

VFD = Ventilator free days BT 086 = IgM Concentrate

IgM Concentrate - phase II CIGMA study Final efficacy results – ventilator free days (VFD)

VFD = Ventilator free days BT 086 = IgM Concentrate

IgM Concentrate - phase II CIGMA study Final efficacy results – mortality

• reduction with respect to pneumonia caused mortality

BT 086 = IgM Concentrate

IgM Concentrate

Attractive market potential

• • Severe Community Acquired Pneumonia
• Value driver based on CIGMA study results
• Market size in sCap app p rox. 350,000 patients worldwide*
• Sales potential approx. €500 m p.a.

P t ti l id i di tiPotential upside indication (early to market indication)

• • Common Variable Immunodeficiency Disease (CVID)
• e.g. IgM deficiency

* Source: Biotest market research

Promising development projects

IgG Next Generation

• • New development of Intratect ® and Bivigam ® helps patients with immune system dysfunctions
• •Global marketing planned

Fibrinogen

• Fibrinogen is for the treatment of acute haemorrhages due to congenital or acquired fibrinogen deficiencies

What has reduced the market potential of Civacir?

• • Original market potential: market €350 ^m /year based on ^a re 350 re-infection rate of 80% and infection a treatment period of 10 weeks
• • With the first generation of new antivirals (Sovaldi) the re-infection rate went down to 30-35%
• • Risk 1: today ( 's standard of care (treatment with Harvoni) y will most likel y reduce the re-infection rate even more ( < 10%)
• •Risk 2: Civacir treatment window gets much smaller

LT = Liver transplantation; HCV = Hepatitis C Virus; DAA = Directly Acting Antivirals

Civacir: preliminary efficacy data phase III study

G r o u p	P t i t a e n s ( ) N	f R i t i e n e c o n s ( / % ) N	) 1 O i n g o n g ( / % ) N
C l t o n r o	3 2	8 / 2 5 %	7 / 2 2 %
2 0 0 / k m g g	2 0	6 / 3 0 %	0 / 0 %
3 0 0 / k m g g g	2 8	1 / 4 %	/ 1 % 4 4
l l a g r o p s u	8 0

• 94% f ti t d i d t t d ith fbi bdi LT• 94% of patients ran domised are treated with sofosbuvirbased regimens pre-LT(including 13 patients that received a new sofosbuvir combination (Harvoni))
• •No re-infections in patients receiving Harvoni

LT = Liver transplantation

Civacir´s competitors: Vertex & Bristol-Myers

2014

12Aug 2014

07Oct 2014

Civacir® – next steps

• •Completing phase III trial
• •E l ti f i i k t t ti l Evaluation of remaining market potential
• •Assess Partnering

Update Monoclonal Antibody Projects

Tregalizumab (BT-061) – Status and Next Steps

ACRresponse Week 24

• •BT-061 bi l i ll ti b t did t t l t 061 was biologically active but did not translate i t di l b fit into medical benefit
• • Preclinical studies will be performed in other indications and form the basis for a partnering process

ACR = American College of Rheumatoloy Congress Plc = PlaceboBT-061 final data presented at ACR on 8 November 2015

Company Presentation Biotest AG

BT-062: Indatuximab Ravtansine - Overview

• • Antibody Drug Conjugate (ADC), an innovative therapy approach for the treatment of multiple myeloma
• • Combination of antibody and cytotoxic agent targets cancer cells
• •Combination of efficacy and tolerability
• • Multiple myeloma: all patients recruited, treatment ongoi fi l d d d ing; final stu dy data expecte in 2016
• • Solid tumours: breast and bladder cancer; Phase I completed, recruitment in Phase II part ongoing

BT-062 Phase I/IIa Study No. 983 in Multiple Myeloma Results of BT-062 with Pomalidomide / Dexamethasone

• •A total of 17 patients were enrolled
• • 13 patients are on treatment without p g ro gressive disease

BT-063 in Systemic Lupus Erythematosus (SLE)

2 BT.-063 Clinical Proof of Concept Study Phase 063 IIa Study No 990 No.

Patients with moderate to severe SLE on stable medication with joint and cutaneous manifestations Duration: 3 months treatment + 4 months follow up

Profitable business with attractive R&D pipeline

Forecast 2015

• •Low single digit sales growth 2015 vs. 2014
• •Positive Q4 2015 EBIT of €5-10 m

Preliminary outlook

• •Low single digit sales growth expected next year
• • Profitability 2016 will be influenced by :
• Additional requirements in quality and safety ~ €3-5 m
• Biotest Next Level costs ~ €10-15 m
• R&D monoclonal antibodies ~ €12 m
• Unabsorbed costs for idle capacity ~ €8-10 m

Despite these factors profitability 2016 in a range of ~ €30 m

Summary

• •2015 – very difficult business year BNL production Biotest => 5 products out of 1 litre plasma
• •Measures to strengthen profitability initiated
• • Focus of plasma protein business gross profit : p p
• •Broadening of plasma product portfolio
• •Adjustment of R&D programme
• • Alliances / partnerships in R&D, manufacturing and marketing & sales

Company Presentation Biotest AG 46

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