Lotus Pharm — Management Reports 2018

May 15, 2018

==> picture [720 x 422] intentionally omitted <==

LOTUS PHARMACEUTICAL BUILDING A REGIONAL LEADER

Mar 2018

Page I 1

==> picture [89 x 42] intentionally omitted <==

Safe Harbor Statement

Except for historical information contained herein, the matters set forth in this presentation are forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. These forward looking statements are not based on historical facts but rather on management’s expectations regarding future growth, results of operations, performance, future capital and other expenditures, competitive advantages, business prospects and opportunities. Statements in this presentation about our future plans and intentions, results, level of activities, performance, goals or achievements or other future events constitute forward looking statements. Wherever possible, words such as “anticipate”, “believe”, “expect”, “may”, “could”, “will”, “potential”, “intend”, “estimate”, “should”, “plan”, “predict”, or the negative or other variations of statements reflect management’s current beliefs and assumptions and are based on the information currently available to our management . Investors are cautioned not to place undue reliance on these forward looking statements, which are made as of the date of this presentation and we assume no obligation to update or revise any forward looking statements.

Page I 2 Page I 2

==> picture [89 x 42] intentionally omitted <==

Table of Contents

 Company Overview

• FY2017 Financial Results

 Operating Remarks And 2017 Achievements Highlights

Page I 3 Page I 3

COMPANY OVERVIEW

==> picture [379 x 501] intentionally omitted <==

Page I 4 Page I 4

LOTUS PHARMACEUTICAL IS AN APAC GENERICS LEADER

1

2

3

4

==> picture [89 x 42] intentionally omitted <==

Founded in 1966

Lotus Pharmaceutical is among Taiwan’s largest specialty-generic drug developers and one of the early movers to export to the US market since 2011 Its portfolio includes CNS, CVS, oncology, women health, anti-obesity, respiratory and pain relief in forms of tablet, capsule, and soft gel capsule

Capital market milestone

Lotus Pharmaceutical (1795. TWO) has been listed on Taipei Stock Exchange since 2010 and became a Taiwan Market Biotechnology and Medical Care Index stock in July 2017

Extraordinary quality management

Lotus’ R&D and manufacturing facilities in Nantou is the only one in Asia that’s approved by US FDA, EU EMA, Japan PMDA and TFDA PIC/S

The rising generic leader in APAC

Lotus is positioned as a regional platform for Alvogen Group (63.4% holding in Lotus) since Aug 2014 through a reverse merger, and leverages Alvogen Group’s cross-border reach to scale up

The current operation scope of Lotus spans across Lotus Taiwan’s domestic business, Alvogen Korea’s domestic business, Alvogen Pharma India’s CRO business, and export businesses

Page I 5 Page I 5

A FAST GROWING GENERICS & SPECIALTY PHARMACEUTICAL POWERHOUSE

==> picture [89 x 42] intentionally omitted <==

Lotus facts

1000+ Employees

3 Manufacturing and R&D Centers

300+ Marketed products

150+ Submissions since 2012

Lotus Taiwan Employees Total: 380

==> picture [223 x 125] intentionally omitted <==

----- Start of picture text -----

11%
G&A
19% R&D
47%
S&M
Plant
23%
----- End of picture text -----

70+ Generic products in pipeline

2 Biosimilar products in pipeline (mab’s)

8 MAs in the US; 25 MAs in Europe;

9 MAs in Japan; 1 MA in China

Alvogen Korea Employees

Total: 549

==> picture [145 x 136] intentionally omitted <==

----- Start of picture text -----

9%
7%
32%
52%
----- End of picture text -----

G&A R&D S&M Plant

Page I 6Page I 6

LOTUS SEES TANGIBLE PROGRESS TOWARD TRANSFORMATION

==> picture [89 x 42] intentionally omitted <==

==> picture [662 x 120] intentionally omitted <==

----- Start of picture text -----

～
2015-2016 2017-2018 2019
POST MERGER INITIAL EXPLOSIVE
INTEGRATION GROWTH GROWTH
PHASE PHASE PHASE
----- End of picture text -----

• Upgrade Nantou plant

• Change management team

• Reshape Portfolio and pipeline

• Adjust sales and marketing strategy

• Resolve legacy issues

• Solidify local portfolio through key launches

• Focus on specialty driven markets

• Continue to increase operational efficiency

• Export revenues to significantly grow from several successful key PIVchallenges

• High value products and economies of scale to drive up gross margin

• Strengthen balance sheet

• • Invest in key franchises and become category leader

Page I 7 Page I 7

WE STABILIZED IN 2017 AND HAS LAID A SOLID GROWTH GROUND

4 Year Trend (NT$mn)

Rev. Gross Profit Operating Profit

==> picture [605 x 279] intentionally omitted <==

----- Start of picture text -----

7000
6000
5000
4000
56%
59% 48%
3000
2000
50%
1000
8% 4% 8%
0
-19%
2014 2015 2016 2017
-1000
----- End of picture text -----

Page I 8

4Q AND FY2017 FINANCIAL RESULTS

==> picture [379 x 501] intentionally omitted <==

Page I 9 Page I 9

OPERATING PROFIT REACHED HISTORICAL HIGH IN 2017

==> picture [89 x 42] intentionally omitted <==

Unit: NT$000	2017	%	2016	%		YoY
REVENUE	$6,423,760	100	$5,902,566	100		8.83%
COGS	3,344,086	52	2,574,537	44		29.89%
GROSS PROFIT	3,079,674	48	3,328,029	56		-7.46%
OPEX
S&M	1,546,610	24	1,904,732	32		-18.80%
G&A	680,452	11	726,739	12		-6.37%
R&D	329,523	5	452,175	8		-27.12%
Total OPEX	2,556,585	40	3,083,646	52		-17.09%
OPERATING PROFIT	523,089	8	244,383	4		114.04%
NON-OP INCOME & EXP
Finance costs	-259,659	(4)	-277,902	(4)		-6.56%
Others	-52,616	(1)	52,779	1		-199.69%
Total non-op expenses, net	-312,275	(5)	-225,123	(3)		38.71%
INCOME BEFORE TAX	210,814	3	19,260	1		994.57%
INCOME TAX EXPENSE	-161,996	(2)	-111,805	(2)		44.89%
NET ERANINGS (LOSS)	48,818	1	-92,545	(1)		NA
EPS	$0.03		-$0.56			NA

Page I 11 Page I 11

OPERATING REMARKS AND 2017 ACHIEVEMENTS HIGHLIGHTS

==> picture [379 x 501] intentionally omitted <==

Page I 13 Page I 13

2017 IS THE TIPPING POINT OF GEOGRAPHIC DIVERSIFICATION

==> picture [89 x 42] intentionally omitted <==

While Korea remains our backbone thanks to its market potential and favorable regulatory environment, Lotus successfully diversified its geographic exposure by growing Taiwan domestic and export market

2016FY 2017FY

==> picture [294 x 189] intentionally omitted <==

----- Start of picture text -----

2.6% [4.0%]
8.0%
Korea
Taiwan
Export
India CRO
85.4%
----- End of picture text -----

==> picture [178 x 190] intentionally omitted <==

----- Start of picture text -----

2.6%
6.5%
10.3%
80.6%
----- End of picture text -----

Page I 14 Page I 14

YOY GROWTH LANSCAPE ACROSS MARKETS

==> picture [39 x 32] intentionally omitted <==

Export +173%

• Trazodone milestone fee from a Chinese

==> picture [250 x 259] intentionally omitted <==

• partner

• • Shipment of Temo, LVT and CAC to US

TW +40%

• Successful launch of

• Aclasta injection

• • 65% rev. growth from hospital channels thanks to new launches and oncology share gain

==> picture [42 x 35] intentionally omitted <==

KR +3%

• Eased anti-obesity competition in 2H17

• • Entry into oncology distribution market

Page I 15 Page I 15

NEW PRODUCT LAUNCHES IN OUR TURF TO SECURE LONG TERM GROWTH

==> picture [89 x 42] intentionally omitted <==

	Product	Indication	YTD (NT$mn)	YoY (%)	Remarks
1	Goserelin (Zoladex)	Breast cancer 乳癌	523.9	+361%	Exclusive marketing alliance with AstraZeneca KR; launched Oct’16
2	Sarpogrelate	Anticoagulant 抗凝血	400.7	+8%	Dosage improved to 1/day
3	Calcium Polystyrene Sulfonate	Nephrology 腎臟病	360.2	+2%
4	Rosuvastatin/Ezetimibe	Cardiovascular 降血脂與膽固醇	317.8	+54%	FDC; launched in 1Q16
5	Seroquel (Quetiapine)	Schizophrenia 精神分裂症	300.6	-13%	Exclusive marketing alliance with AstraZeneca KR; launched Oct’15
6	Phentermine	Anti-obesity 減肥 Oral contraceptive 口服避孕藥	262.1	-16%
7	Desogestrel/EE (Mercilon)	Oral contraceptive 口服避孕藥	250.0	+23%	Acquired from Bayer; launched in May’16
8	Bicalutamide	Prostate cancer 攝護腺癌	222.0	+145%	Exclusive marketing alliance with AstraZeneca KR; launched Oct’16
9	Phendimentrazine	Anti-obesity 抑制食慾	184.3	-20%
10	Anastrozole (Arimidex)	Oncology 癌症	182.8	+363%	Exclusive marketing alliance with AstraZeneca KR; launched 4Q’16
11	Zoledronic Acid (Aclasta)	Osteoporosis 骨質疏鬆症	154.6	-	Acquired from Novartis; launched Apr’17; TW product
12	Orlistat	Anti-obesity 減肥	148.9	-33%
13	Ibandronate D3	Osteoporosis 骨質疏鬆症	80.4	-22%
14	Diltiazem	Cardiovascular 降血壓	78.2	-1%
15	Recombinant Human Erythropoietin	Nephro + Onco 腎臟與癌症用紅血球生成素	52.1	-18%	Page I 16 Page I 16

WE ARE ALSO MAKING GREAT PROGRESS IN INNOVATION

==> picture [89 x 42] intentionally omitted <==

Norethisterone ／ Ethinylestradiol LD for JP TS-1 for KR

LAUNCHES

2017 R&D Projects for Export Markets LAUNCH PREPERATIONS

SUBMISSIONS

LATE PHASE

Temozolomide for US, Europe and APAC Levetiracetam ER & IR for US Calcium Acetate for US

Levonorgestrel for US

Paricalcitol softgel capsules for US

Methotrexate for US Gefitinib for Europe Lenalidomide for US, Europe and APAC Vinorelbine softgel capsules for Europe LP149 for Europe and US Acarbose for China

6 submissions for US and Europe markets in 2017 10+ # total active R&D projects

~85% % of R&D projects launching between 2018 – 2021

Page I 17 Page I 17

==> picture [89 x 42] intentionally omitted <==

MA list 2017

	Generic Name	Indication	Country	Approval Date	Remarks
1	Aclasta 5mg/100ml Solution for infusion	Osteoporosis 骨質疏鬆	TW	Jan’17	Acquired
2	Rosuvastatin/Candesartan 5mg/8mg, 10mg/8mg, 10mg/16mg, 20mg/32mg	CVS 心血管疾病	KR	May’17	Own development
3	Bortezomib (vial) 3.5mg, 1mg	Mantle Cell Lymphoma 多發性骨隨瘤	KR	May’17	In license
4	Native black cohosh extract	Herbal Medicine for Women Health 更年期常見症狀	TW	June’17	In license
5	Pregabalin 75mg, 150mg	CNS 帶狀泡疹後神經痛、局部 癲癇	KR	July’17	Own development
6	Norethisterone/ Ethinylestradiol 1mg/0.035mg	Contraceptive 避孕	JP	Aug’17	CDMO
7	Drospirenone/ Ethinyl Drospirenone/ Ethinyl Estradiol 3mg/0.02mg Film-Coated Tablets	Contraceptive 避孕	TW	Aug’17	In license
8	TS-1 20mg, 25mg	Oncology 癌症	KR	Aug’17	Own development
9	Raloxifene/cholecalciferol	Osteoporosis 骨質疏鬆	KR	Sept’17	Own development
10	Lenalidomide 25mg (Lenli capsule)	Multiple Myeloma 血癌	TW	Nov’17	Own development

Page I 18 Page I 18

HIGH VALUE PIPELINE BASED ON STRONG R&D CAPABILITIES

==> picture [89 x 42] intentionally omitted <==

Continuous IMD pipeline for Korea

To be launched in 2017 - 2019
	Generic Name	Indication	IMS Market Size (US$mn)	Formulation	BE & CT	Submission	Approval
1	AK-R214 (SR)	Smoking Cessation 戒菸	37
2	AK-R215 (FDC)	Osteoporosis 骨質疏鬆	18
3	AK-R308	Osteoporosis 骨質疏鬆	8
4	AK-R310	Flu 流感	33
• Korea IMD (“Incrementally Modified Drug”) path is similar to US 505(b)2, which requires phase I and phase III study while enjoying premium on NHI price; it usually takes 6 to 12 months to go through regulatory approval

• Korea IMD (“Incrementally Modified Drug”) path is similar to US 505(b)2, which requires phase I and phase III study while enjoying premium on NHI price; it usually takes 6 to 12 months to go through regulatory approval

Page I 19 Page I 19

==> picture [89 x 42] intentionally omitted <==

CDMO projects for Japan

To be launched in 2017 - 2019
	Generic Name	Indication	IMS market size (US$mn)	Formulation	BE & CT	Submission	Approval
1	LP083 ULD	Women health 女性保健	100
2	Gefitinib	Non-small-cell lung cancer 非小細胞肺癌	130

Page I 20 Page I 20

==> picture [89 x 42] intentionally omitted <==

Aggressive product filing in China

To be launched in 2017 - 2020

To be launched in 2017 - 2020
	Generic Name	Indication	IMS market size (US$mn)	CTP1 submission	BE & CT	IDL2 submission	Approval
1 2 3 4 5 6 7	Levonorgestrel	Contraception 避孕	13
	Divalproex sodium	Anti-epilepsy 抗癲癇	100
	Lidocaine	Local analgesic 局部麻醉	50
	Acarbose	Antidiabetic 糖尿病	400
	Levetiracetam	Anti-epilepsy 抗癲癇	45
	Temozolomide	Brain cancer 腦癌	100
	Memantine	Anti-dementia 老人癡呆	18
• All the filings in China are approved products in Taiwan • For imported drugs, there are two applications needed – Clinical Trial Permit (“CTP”) submission goes first and then Imported Drug License (“IDL”) submission is required once clinical/BE study is completed

• All the filings in China are approved products in Taiwan

• For imported drugs, there are two applications needed – Clinical Trial Permit (“CTP”) submission goes first and then Imported Drug License (“IDL”) submission is required once clinical/BE study is completed

Page I 21 Page I 21

READY TO ENJOY OPPORTUNITIES IN US & EU WITH HIGH VALUE PIPELINE

==> picture [89 x 42] intentionally omitted <==

One of the very few non-Indian pharmaceuticals with growing export pipeline

==> picture [678 x 432] intentionally omitted <==

----- Start of picture text -----

To be launched in 2018 - 2021
IMS
Generic Name Indication market size Formulation BE & CT Submission Approval
(US$mn)
Budesonide
1 GI 結腸潰瘍 US: 200 PIV; non-infringement
ER
Buprenorphine/ Addiction
2 US: 2,000 PIV; trial completed
Naloxone 戒毒
Chemo
3 Methotrexate 癌症 US: 340 NO BE CRL
Non-small-cell
lung cancer;
4 Gefitinib Global: 375
Inhibitor
非小細胞肺癌
Multiple
Global:
5 Lenalidomide Myeloma PIV; sued in US; first response
2,100
血癌
Breast cancer;
6 Vinorelbine Chemo EU: 130
乳癌
Women health;
7 LP149 Global: 110 FTF approach
女性保健
GIST; inhibitor EU & APAC:
8 LP650 腸胃道間質腫瘤 440 NO BE Page I 22Page I 22
----- End of picture text -----