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S.C.P.C — Interim / Quarterly Report 2023
Nov 15, 2023
51900_rns_2023-11-15_d0ec3948-ae3d-409f-a0d9-a60b91b9d89a.pdf
Interim / Quarterly Report
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Standard Chem & Pharm Co., Ltd. Stock Symbol : 1720 2023 Investor Conference 11/16/2023
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免責聲明 Safe Harbor Notice
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本次簡報與討論包含特定預測性的說明,而其內容有關於營運結果、財務狀況,以及對未來事 件的預期。因為此等前瞻性說明是有關於未來事件,而且取決於未來發生時的環境因素,所以必 然含有風險與不確定性。
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本公司將不負擔公開更新或修改這些預測性的說明之義務,無論是出現新資訊、未來發生任何
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事件,或其他情況。實際結果可能與此等預測性說明推測的內容有重大差異。
In these presentations and discussions, there are certain forward looking statements regarding the results of operation, financial condition and current expectation about future events. As forward-looking statements relate to events and depend on circumstances in the future, they involve risk and uncertainty.
We do not undertake any obligation to publicly revise or update any forward looking statements for availability of new information, future events or otherwise. Real result probably differ substantially from those expected in these forward-looking statements.
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© 2023 SCP, Ltd
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Agenda
Introduction of Standard Group
2023 Q1-Q3 Operating Results
Future Operation Strategy Corporate Social Responsibility (CSR)
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© 2023 SCP, Ltd
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Agenda
Introduction of Standard Group
2023 Q1-Q3 Operating Results Future Operation Strategy Corporate Social Responsibility (CSR)
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SCP and Related/Affiliated Com nies
pa
Upstream Manufacture Channels
Syn-Tech (1982; 2005
SCP(1967;
Taiwan Biosim(2017)
Over-The-Counter (OTC))
Western 1995 listed stock)
medicine
Your Chance
Syngen(1999; 2016 OTC) Souriree(1997)
(Invested in 2013;
2022 Pioneer Stock Board (PSB))
Syngen(1999)
Healthcare Multipower
nutrition (Invested in 2012)
Sun-you(1994)
Medical- Syngen (1999)
devices
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Ho Yao Biopharm (2021)
Obtained CRO certification In October 2023
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© 2023 SCP, Ltd
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International Accreditation
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1998 2000 2008 2009 2010 2017 2021
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The first TW pharmaceutical company to be ISO9001 certified
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The first TW company to pass US FDA inspection in 2000
Subsequent US FDA GMP inspections : no 483 Last Inspection : 2022/10/31
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SCP received JP PMDA’s “Certificate of Foreign Drug Manufacturer” in 2008
FDF Plant and API Plant passed PMDA GMP Audit in 2018
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2009
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SCP’s API plant passed AU TGA inspection
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2010 SCP passed TW PIC/S GMP inspection 2012 SCP is certified GDP by the T-FDA
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2012 SCP passed K-FDA inspection
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© 2023 SCP, Ltd
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Agenda
Introduction of Standard Group
2023 Q1-Q3 Operating Results
Future Operation Strategy Corporate Social Responsibility (CSR)
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Consolidated Income Statement
| Items | 2023 Q1-Q3 | 2022 Q1-Q3 | Diff. | Annual changes (%) |
Q |
|---|---|---|---|---|---|
| (Unless otherwise specified, expressed in thousands of New Taiwan Dollars) |
|||||
| Operating revenue | 4,647,560 | 4,268,103 | 379,457 | 8.9% | |
| Gross profit | 2,035,285 | 1,805,887 | 229,398 | 12.7% | |
| Gross profit margin | 43.79% | 42.31% | 1.48pct | ||
| Operating expenses | 1,082,817 | 991,207 | 91,610 | 9.2% | |
| Operating profit | 952,468 | 814,680 | 137,788 | 16.9% | |
| Non-operating income and expenses | 223,387 | 317,843 | (94,456) | (29.7%) | |
| Profit before income tax | 1,175,855 | 1,132,523 | 43,332 | 3.8% | |
| Profit for the year | 947,469 | 927,154 | 20,315 | 2.2% | |
| Profit attributable to Shareholders of the parent |
673,176 | 640,506 | 32,670 | 5.1% | |
| EPS(NTD) | 3.77 | 3.58 | 0.19 | 5.3% | |
| 2023 SCP, Ltd |
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© 2023 SCP, Ltd
Comparison of Quarterly Revenue of Past 5 Years (Consolidated)
Expressed in thousands of NTD
| 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2023 19 20 21 22 23 19 20 21 22 23 19 20 21 22 19 20 21 22 23 |
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2023 19 20 21 22 23 19 20 21 22 23 19 20 21 22 19 20 21 22 23 |
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2023 19 20 21 22 23 19 20 21 22 23 19 20 21 22 19 20 21 22 23 |
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2023 19 20 21 22 23 19 20 21 22 23 19 20 21 22 19 20 21 22 23 |
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2023 19 20 21 22 23 19 20 21 22 23 19 20 21 22 19 20 21 22 23 |
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2023 19 20 21 22 23 19 20 21 22 23 19 20 21 22 19 20 21 22 23 |
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2023 19 20 21 22 23 19 20 21 22 23 19 20 21 22 19 20 21 22 23 |
|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Total | Growth(%) | |
| 2019 | 846,177 | 1,010,837 | 1,048,886 | 1,031,229 | 3,937,129 | +10.2% |
| 2020 | 1,034,417 | 1,108,059 | 1,045,351 | 1,117,573 | 4,305,400 | +9.4% |
| 2021 | 1,101,113 | 1,149,060 | 1,120,840 | 1,233,069 | 4,604,082 | +6.9% |
| 2022 | 1,237,170 | 1,481,061 | 1,549,872 | 1,583,265 | 5,851,368 | +27.1% |
| 2023 | 1,493,025 | 1,509,004 | 1,645,531 | 4,647,560 | +8.9% |
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Note: SYN-TECH CHEM. & PHARM. Co., Ltd. is consolidated into the financial report since 2021.12.08 © 2023 SCP, Ltd
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Consolidated Balance Sheet
| Items | 2023/09/30 | 2023/09/30 | 2022/09/30 | 2022/09/30 | Diff. | Annual changes(%) |
|---|---|---|---|---|---|---|
| (Expressed in thousands of NTD) | Amount | % | Amount | % | ||
| Cash and cash equivalents | 1,956,260 | 17.9% | 2,454,867 | 22.0% | (498,607) | (20.3%) |
| Accounts receivable | 1,445,772 | 13.2% | 1,424,976 | 12.8% | 20,796 | 1.5% |
| Inventories | 1,520,828 | 13.9% | 1,322,473 | 11.8% | 198,355 | 15.0% |
| Investments | 1,099,750 | 10.0% | 1,464,606 | 13.1% | (364,856) | (24.9%) |
| Property,plant and equipment | 4,004,833 | 36.6% | 3,529,686 | 31.6% | 475,147 | 13.5% |
| Others | 926,081 | 8.5% | 971,562 | 8.7% | (45,481) | (4.7%) |
| Total Assets | **10,953,524 ** | 100.0% | **11,168,170 ** | 100.0% | (214,646) | (1.9%) |
| Current Liabilities | 2,535,532 | 23.1% | 3,306,926 | 29.6% | (771,394) | (23.3%) |
| Non-current Liabilities | 591,278 | 5.4% | 700,316 | 6.3% | (109,038) | (15.6%) |
| Total liabilities | 3,126,810 | 28.5% | 4,007,242 | 35.9% | (880,432) | (22.0%) |
| Total shareholder’s equity | 7,826,714 | 71.5% | 7,160,928 | 64.1% | 665,786 | 9.3% |
| Debt Ratio(Liabilities/Assets) | 28.5% | 35.9% | ||||
| 2023 SCP, Ltd |
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© 2023 SCP, Ltd
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Consolidated Cash Flows
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| Items | 2023 Q1-Q3 | 2022 Q1-Q3 |
|---|---|---|
| (Expressed in thousands of NTD) | ||
| Cash at beginning ofyear | 2,259,381 | 2,564,395 |
| Cash flows from operatingactivities | 910,300 | 962,804 |
| Acquisition ofproperty, plant and equipment | (488,791) | (1,012,966) |
| Cash dividends | (446,740) | (446,740) |
| Short & long-term borrowings | (230,713) | 699,183 |
| Investment and others | (47,177) | (311,809) |
| Cash at end ofyear | 1,956,260 | 2,454,867 |
| Free cash flow (Cash flows from operating activities-Acquisition of property, plant and equipment) |
421,509 | (50,162) |
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© 2023 SCP, Ltd
1720 SCP achieved a record high net profit after tax and EPS in 2023 Q1-Q3
NTD Thousand
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稅後淨利 現金股利 股票股利 EPS
900,000 5.00
4.56
800,000 4.50
3.95
3.77
4.00
700,000
3.50
600,000 2.93
3.00
500,000
400,000 2.09 [2.15 ] 2.09 1.95 1.90 2.03 2.09 2.11 2.50
1.77 [1.81 1.88 ]
2.00
300,000 1.35 [1.47 1.61 1.73 ]
1.50
2.50
2.50
200,000 1.20 [1.50] [1.25] 1.20 [1.60] 0.50 1.00 1.20 1.00 1.50 1.50 1.60 1.50 1.50 [1.80] 1.00
100,000 0.50
2.50
0.30 0.30 0.70
0 0.00
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1777 SYN-TECH’s net profit after tax and EPS - in 2023 Q1 Q3
NTD Thousand
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稅後淨利 現金股利 股票股利 EPS
350,000 9
8
300,000
6.62
7
6.21
250,000
5.03 6
5.06
5.12 [5.31 ]
4.93 [5.20 5.27 ]
200,000 5
150,000 3.33 3.38 4
3.10
2.93
2.37 2.15 3
100,000 1.74 2.19 1.89 3.00
1.00 3.50 [3.50] 3.30 [3.50] [4.00] 2
1.99
50,000 2.00 [2.40] 1.30 1.93 [3.00]
1.75 1
1.70 1.52 [1.00] [2.30] 2.00
0.50
0 0
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12
© 2023 SCP, Ltd
8279 Syngen’s net profit after tax and EPS in 2023 Q1-Q3
NTD Thousand
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稅後淨利 現金股利 股票股利 EPS
400,000 14.00
11.85
350,000
12.00
300,000
10.00
8.77
250,000 7.86 7.95 8.04
8.00
6.43
200,000
5.8
6.00
4.69
150,000
3.76
4.00
100,000 3.50
2.04 4.00
2.00
50,000 1.00 1.00
2.50
0.50 3.00 5.00
0.00 1.00
0 0.00
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Agenda
Introduction of Standard Group 2023 Q1-Q3 Operating Results
Future Operation Strategy Corporate Social Responsibility (CSR)
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Future Milestone
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From Taiwan to International From Generics to Better than Generics (BTG) © 2023 SCP, Ltd
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Significant Business Activities in the Past Two Years
| Taiwan | China | Japan | |||
| • Double-digit growth in | • Strategy: cooperation | • Continues shipments | |||
| clinic and hospital. • Southeast Asia region’s sales growth. • Establishment of marketing team for Philippines subsidiary. • Record-high revenue and profits in the first |
through technology transfer and import our own branded products. • Consistency Evaluation(GQCE):3 reviews in progress. • Under R&D:5cases. |
of medications for bronchiolitis and oral anti-inflammatory and pain relief medications. • CDMO contract signed for development of medication for pulmonary arterial hypertension. |
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| three quarters by 2023. |
• Acting as importer for new medicines, with a |
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| submission scheduled | |||||
| for 2023 and expected market launch in 2025. |
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| 2023 SCP Ltd |
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© 2023 SCP, Ltd
Revenue Growth Strate -Taiwan gy
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SCP (1720) 3.77 S n-Tech 1777 5.06 y ( ) S n en 8279 8.04 y g ( )
Outstanding performance
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Specializing in four key areas:
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Western medicines, APIs, health supplements, and pharmaceutical chain stores.
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SCP, Syn-Tech, Syngen, and Your Chance boast exceptional management teams
Your Chance’s application for OTC listing was submitted in Sep. © 2023 SCP, Ltd 2023.
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China Market Trends: Current
The release of policies such as the '14th Five-Year Plan for the Development of the Pharmaceutical Industry' and the '14th Five-Year Plan for National Drug Safety and the Promotion of High-Quality Development' signifies the coexistence of opportunities and challenges in the pharmaceutical industry. It aims to advance towards international high-end standards while ensuring drug safety, promoting the high-quality development of the pharmaceutical industry, and safeguarding and enhancing public health.
National industry Government policy support
Aging population Income growth
In 2010, 8.87% of the population was aged 65 or older. By 2022, this had risen to 14.9%, indicating an aging society with growing healthcare needs. In the first half of 2023, the average resident income increased by 6.5% to RMB19,672, contributing to the continuous growth of the healthcare industry due to higher income and healthcare expenditure.
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© 2023 SCP, Ltd
China Market Trends: Current
New Regulations In 2018, the Health Insurance Bureau was established, introducing changes in drug procurement, healthcare negotiations, and the for Healthcare essential drug list. Concerns about drug price stability arose in the capital market. Negotiations The release of the "2022 National Drug List Adjustment Program" and Reduced related regulations reduced the risk of renegotiating contracts for drugs Uncertainty and on the list every two years. It also expanded coverage to include Risks pediatric and rare disease medications, incorporating more drugs into
The release of the "2022 National Drug List Adjustment Program" and related regulations reduced the risk of renegotiating contracts for drugs on the list every two years. It also expanded coverage to include pediatric and rare disease medications, incorporating more drugs into the national health insurance system.
In 2022, large pharmaceutical firms had revenue growth but declining profits. Small companies like Jingxin Pharmaceutical, Salubris, and Haisco Pharmaceutical overcame procurement challenges. Early-stage biotech companies outpaced mature pharmaceutical firms in revenue growth.
Pandemic Impact Gradual Recovery
© 2023 SCP, Ltd
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China Market Trends: Current
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In mid-December 2022, China ended its "zero-COVID" policy, causing a rebound in
pharmaceutical sales. By 2023, overall sales for hospitals and pharmacies were
gradually stabilizing.
(Unit: Hundred million/RMB)
16000 Hospital Drugstore Overall sales
14063
13782 13664
14000 13313
12931
12000
10984
10386 10465 10298
9715
10000
8000 7378
6000 5558
Q
4000 2927 3079 3216 3317 3366
1820
2000 Source:
www.menet.com.cn
20
China (public hospital and
0 b rick-and-mortar
© 2023 SCP, Ltd 2018 2019 2020 2021 2022 2023 H1 pharmacy)
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Revenue Growth Strate - China gy
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© 2023 SCP, Ltd
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Competitiveness
Project initiation/Research Achievements
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SCP has successful experience with U.S. and Japan regulatory dossiers
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5 ongoing cases NMPA Consistency Evaluation
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Expertise in Fasting & Fed BE design and execution
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Medium-term targets
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Self-developed products submission
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3 cases submitted for evaluation
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2 cases obtained the consistency evaluation
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- Enhance profit sharing revenue
Cooperation
Strategy
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Tech-transfer
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Emphasize export and tech transfer simultaneously
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Joint ownership of License
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Cooperative production and marketing
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Accelerate license acquisition to become MAH
Q
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Profit-sharing Partnerships
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Expand the number of collaborative projects and pharmaceutical companies
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Ja an Market Trend p
Inadequate supply of generic drugs has been a persistent problem. Some pharmaceutical companies stopped shipments due to quality issues, causing shortages. Increasing production is difficult, and it may take time to resume normal supply.
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Joint development trend is slowing, with around 50% of newly licensed items in 2022 being joint ventures
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2022 Drug shortage and controlled shipment
Proportion of joint developed drugs Generic Drugs Joint Development © 2023 SCP, Ltd
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Shortages Controlled shipment
Category
Num# % Num# %
Brand 52 4.6% 248 7.9%
Generic 997 90.7% 2811 89.7%
Q
Other 50 4.6% 76 2.4%
Total 1099 100% 3135 100%
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- Current Japan Market Anal sis of Generic Dru Manufacturers' Production Ca acit y g p y
Roughly 30 generic drug manufacturers produce over 100 items annually, making up 16% of all generic drug makers. About 24 of them have an annual production capacity exceeding 1 billion (tablets/injections combined).
Over 10 billion (tablets/injections) 1 million to 10 billion (tablets/injections) 100 million to 1 billion (tablets/injections) 10 to 100 million (tablets/injections) 1 to 10 10 million (tablets/injections) Under 1 million
> 500 items: 3 companies
Between 100 to 499 items: 27 companies
Between 50 to 99 items: 10 companies
<50 items: 148 companies
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- Current Japan Market Production is concentrated in a few lar e-scale manufacturers g
Out of 193 generic drug manufacturers, the top 8 companies account for 50% of the total production quantity
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Production quantity of the top 8
companies accounts for 50% of
the total generic drug production
Most companies produce
relatively small quantities
© 2023 SCP, Ltd
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Revenue Growth Strate - Ja an gy p
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Strategy
Collaboration Model
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Agent for brand new drugs.
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CDMO
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Collaborating with Japan pharmaceutical company to enter other markets.
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Japan marketing partner
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Strategic alliance with API manufacturer.
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API Vertical Integration with Syn-Tech.
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Self-owned license
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Current State
On Going
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Obtained two CDMO/CMO collaborations for generic drug products.
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CDMO/CMO
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Common items for China/ Southeast Asia/ Japan are under discussion
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Acting as an agent for a new gout medication, registration is in progress.
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Signed a CDMO development collaboration contract for pulmonary arterial hypertension products.
© 2023 SCP, Ltd
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US Market Trend
- In the 2022 U.S. market, generic drugs constituted 90% of sales volume but only 17.5% of sales value.
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- They represent less than one-fifth of pharmaceutical spending in the U.S.
Sales Volume ratio
US Healthcare Expenditure
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100%
90%
80%
70%
60%
89.9% 89.9% 90.2% 90.2% 90.3%
50%
40%
30%
20%
10%
10.2% 10.1% 9.8% 9.8% 9.4% 9.7%
0%
2017 2018 2019 2020 2021 2022
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7.90%
1.50% Q
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US – Generic Drug Competition and Price Relationshi Chart p
Data from the FDA indicates that as more competitors enter the market, the price difference between pharmacy invoices and average manufacturer prices decreases, and generic drug prices become more affordable compared to brand-name drugs.
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Revenue Growth Strate – U.S.A. gy
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U.S.A. Market
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Largest Rx Market, with large proportion of generic drugs.
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Application process for drug licenses is complex, costly, and requires long-term planning
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Current Status
Strategy
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Co-develop new
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Uninterrupted factory inspections success since 2000.
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products with pharmaceutical companies and dealers.
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Products for diabetes and ALS have been shipped.
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API Vertical Integration with Syn-Tech.
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P4 product set to launch in 2023."
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Seeking Early Market Entry for First to File.
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Future Operation Strategy
Future From Taiwan to International From Generics to BTG
2024 2023 、 、 USA Japan
、 China Japan
Core techniques and Increasing oversea professional Oversea marketing Resource proportion 增加海 核心技術 skills to expend & 專業 海外市場操作 practices oversea sales 借力使力 • 外比例 • • Increase resources for Use mature Taiwanese Establish a solid foundation. overseas business.
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Use mature Taiwanese technology to create R&D wealth.
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Quickly generate revenue.
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Recruit and train international talents.
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Learn the rules of the game. in various markets.
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Jointly plan and operate in various markets. markets with foreign • Seek for long-term partners.
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companies.
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Q
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Agenda
Introduction of Standard Group 2023 Q1-Q3 Operating Results Future Operation Strategy
Corporate Social Responsibility (CSR)
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Fan Dao Nan Foundation
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Introduction to the foundation
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Established in 1987
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Endowment Fund: NT$196 Million
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Annual Budget: NT$12 Million
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Principal Activities
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Cultural and educational development activities
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Public education affairs
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Children’s education and happiness
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Scholarships and Talent Cultivation
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Rewards and Honors Received
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2011: Special Recognition Award – Ministry of Education
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2012: Tainan City Govt. Grant for Scholarship Program
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2013: National Special Selection Award for
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After-School Program – Dept. of Education
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2022: Group Award on Social Education Contribution by Ministry Of Education
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Q
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2023 Corporate Social Responsibility
Scholarships
Hope After-school Class Sunflower Wednesdays
Pharmaceutical or related major: 1
universities/ 2 students •Weekday afternoons •Every Wednesday afternoons
High school :5 schools, totaled 91 students
Middle school:53 schools, totaled 687 students •33 schools,2,315 students •9 Schools,550 students
Elementary school: 219 schools, totaled 2,602
students
NTD 5.50 million NTD 1.00 million NTD 0.20 million
Other Sponsorships Meal-Assistance
Charity
organizations.Sponsor 12 public welfare Provided 8,280 meals SCP Children’s Drawing Competition
NTD0.60 million
SCP National Table Tennis Q
Competition NTD1.80 million
NTD 0.60 million NTD 0.61 million NTD 2.40 million
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Donation of disaster assessment vehicles in 2023
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Q
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Senior Gym in Taiwan – Athletic Trainin and Health Center g
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Jan. to Oct. 2023,
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Accumulated a total of 125,773 user times.
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Held 17 health and wellness seminars and fitness courses
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Q & A
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