S.C.P.C — Investor Presentation 2017

Apr 25, 2017

Stock Ticker: 1720

Standard Chem. and Pharm. Co., Ltd. (SCP) Investor Conference

2017.04.25

1

免責聲明 Safe Harbor Notice

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。

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.

2

Conference Agenda

1. Introduction to Standard Pharmaceutical Group (SCP Group)

• Standard – History, Accomplishments

• Group Organizational Structure – Corporate Structure, Resource Integration

• Standard Pharmaceutical Group (SCP Group)

2. 2016 Financial Statements

• Income Statement

• Balance Sheet

• Global Revenue

3. Forward-looking

• Pharmaceutical Industry Forecast

• Actions for Revenue Growth

• Forward-looking Strategy

4. Corporate Social Responsibility (CSR)

3

==> picture [721 x 136] intentionally omitted <==

Introduction to Standard Pharmaceutical Group (SCP Group)

==> picture [721 x 136] intentionally omitted <==

4

Standard Chem. and Pharm. Co., Ltd (SCP) – Historical Milestones

1967 SCP is formally established

==> picture [79 x 11] intentionally omitted <==

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

JDMC - 2008
----- End of picture text -----

1995 SCP’s Initial Public Offering

1988 SCP is first Taiwan pharma company to be ISO9001 certified TGA - 2009 2000 SCP is first TW company to pass US FDA inspection and officially enter the international pharmaceutical market 2008 SCP receives PMDA “Certificate of Foreign Drug Manufacturer” FDA - 2011 2009 SCP’s API plant passes TGA inspection 2010 SCP passes TW PIC/S GMP inspection 2011 SCP passes US-FDA cGMP inspection with no 483 2012 SCP passes K-FDA inspection, and is certified GDP by the T-FDA 2014 SCP receives the Gold Award for Outstanding Biotechnology Company 2015 SCP receives its first US-FDA approved ANDA

2015 SCP receives the Little Giants Citizen’s Award for CSR 2016 SCP receives the Citizen’s Award for CSR

2017 SCP is ranked in the Top 20[th] Percentile of Taiwanese listed Companies by the Taiwan

Stock Exchange

5

SCP – Site I

==> picture [323 x 203] intentionally omitted <==

Site I:

6-20 Tuku Village, Shinying District, Tainan City

• Address:

• Land Area:

5,768 sq. meters

• Structure Area:

• 6,165 sq. meters

• Dosage forms: Oral Solids, Injectables

==> picture [324 x 206] intentionally omitted <==

6

SCP – Site II

Site II ：

• Address

154 Kaiyuan Rd., Shinying District, Tainan City

• Land Area:

54,860 sq. meters

• Structure Area: 40,562 sq. meters

• Dosage Forms: Oral Solids, Liquids, Creams, Suppositories, Gauze

==> picture [686 x 111] intentionally omitted <==

7

SCP – R&D Accomplishments

� SCP - R&D Expenditures and Ratio of past 5 years

	2012	2013	2014	2015	2016
R&D Expenditures	172,406	167,533	183,196	174,730	182,911
% of Total revenue	8%	7%	8%	8%	7%

� SCP – Dossier submission of past 5 years

Dossier Submissions	2012	2013	2014	2015	2016
Taiwan	12	14	10	16	9
Foreign Markets	0	10	23	17	14
Total	12	24	33	33	23

8

Standard Pharmaceutical Group

SCP

==> picture [721 x 204] intentionally omitted <==

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

Chia Standard
Syngen Inforight Standard Souriree Multipower
Scheng AdvPharma Chem. &
Biotech Investment Technology Pharm. Co. Philippines Biotech Enterprise
Jiangsu
Santos
Standard
Biotech Biotech
Jiangsu
Standard-Dia
Biopharma
----- End of picture text -----

9

SCP Group – Resource Integration

==> picture [721 x 432] intentionally omitted <==

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

2010
Multipower
Enterprise
2009
2012
Corp.
Souriree
Your Chance
Biotech
2000 Pharmacy
Pharm. 2010
Chain
Inforight Tech:
Standard-Dia:
Hardware &
1999 2000 Patches
Software
AdvPharma:
CNH:
researches
Intermediates
Chinese oncology 1999
1998
medicine Syn-Gen: & API
Chia-Scheng:
API Fermentation
makes foreign & Biochemical
investments 1982 Nutrition
Syn-Tech is
established
1967
SCP is
established
10
----- End of picture text -----

SCP – Operational Activities

• Focus on Western Pharmaceuticals

• � Various Dosage Forms:

Oral Solids, Injectables, Ointments, Liquids, Nasal . Sprays, Suppositories, etc

• APIs: Human and Veterinarian Use

==> picture [162 x 108] intentionally omitted <==

==> picture [161 x 115] intentionally omitted <==

==> picture [186 x 117] intentionally omitted <==

==> picture [173 x 117] intentionally omitted <==

==> picture [161 x 118] intentionally omitted <==

==> picture [162 x 117] intentionally omitted <==

11

SCP –

Most Important Milestones of Past 2 Years

� Taiwan

• Distributor for Japanese DSP new drug Latuda® launched in 2017

• Licensed for Vertically Integrated manufacturing of Japanese DSP drug Erispan®

� U.S.

• Continuous export of Repaglinide (for type 2 diabetes)

• Japan

• ODM for Japanese partner for Asthma drug Montelukast

• Montelukast launches in Japan in 2016

12

Stock Ticker: 8279 Syngen Biotech Comp.

• Founded in 1999, 2016 IPO.

• 2017 Taiwan Scientific Park plant operational

� Operations:

• Fermentation API: Mupirocin

• Biochemical Products:

Ganoderma Lucidum, Cordyceps Sinesis, Lactobacillus, Anti-histamine Lactic Acid, and other Fermented Microbial API and Finished Products.

==> picture [233 x 158] intentionally omitted <==

13

Multipower Enterprises

• Own Brand: NeoAngelac, Stronzon, Boscogen

• Products: Infant Formula, Goat Milk, Health Supplements

• Principal Suppliers:

==> picture [179 x 138] intentionally omitted <==

• France’s Leading Formula Manufacturer

• Renowned European Milk Manufacturers

• Chain-store Sales Channels

==> picture [359 x 158] intentionally omitted <==

==> picture [180 x 108] intentionally omitted <==

14

==> picture [721 x 136] intentionally omitted <==

2016 Financial Statements

==> picture [721 x 136] intentionally omitted <==

15

Income Statement (Consolidated)

(Expressed in thousands of New Taiwan Dollars)

Item 2016 2015 Change Amount % Amount % % Operatingrevenue 3,673,801 100 3,321,366 100 11 Operatingcosts 2,097,542 57 1,826,285 55 15 Gfit 1576259 43 1495081 45 5	Item 2016 2015 Change Amount % Amount % % Operatingrevenue 3,673,801 100 3,321,366 100 11 Operatingcosts 2,097,542 57 1,826,285 55 15 Gfit 1576259 43 1495081 45 5	Item 2016 2015 Change Amount % Amount % % Operatingrevenue 3,673,801 100 3,321,366 100 11 Operatingcosts 2,097,542 57 1,826,285 55 15 Gfit 1576259 43 1495081 45 5
	Item 2016 2015 Change
	Amount % Amount % %
	Operatingrevenue 3,673,801 100 3,321,366 100 11
	Operatingcosts 2,097,542 57 1,826,285 55 15
	Gfit 1576259 43 1495081 45 5
	rosspro ,, ,,
	Operatingexpenses 1,158,123 31 1,111,596 33 4
	Operating profit 418,136 12 383,485 12 9
	Non-operating income and expenses 43,619 1 80,217 2 (46)
Income before tax 461,755 13 463,702 14 0 Net income 371,808 10 367,899 11 1 EPS(NT$) 1.90 1.95 (3)	Income before tax 461,755 13 463,702 14 0
	Net income 371,808 10 367,899 11 1
	EPS(NT$) 1.90 1.95 (3)

16

Income Statement (Parent Company) (Expressed in thousands of New Taiwan dollars)

Item 2016 2015 Change Amount % Amount % % Operatingrevenue 2,357,528 100 2,205,463 100 7 Operatingcosts 1,308,075 56 1,199,627 54 9 Grossprofit margin 1049453 44 1005836 46 4	Item 2016 2015 Change Amount % Amount % % Operatingrevenue 2,357,528 100 2,205,463 100 7 Operatingcosts 1,308,075 56 1,199,627 54 9 Grossprofit margin 1049453 44 1005836 46 4	Item 2016 2015 Change Amount % Amount % % Operatingrevenue 2,357,528 100 2,205,463 100 7 Operatingcosts 1,308,075 56 1,199,627 54 9 Grossprofit margin 1049453 44 1005836 46 4
	Item 2016 2015 Change
	Amount % Amount % %
	Operatingrevenue 2,357,528 100 2,205,463 100 7
	Operatingcosts 1,308,075 56 1,199,627 54 9
	Grossprofit margin 1049453 44 1005836 46 4
	,, ,,
	Operatingexpenses 742,267 31 687,568 31 8
	Operating profit 307,186 13 318,268 15 (3)
	Non-operating income and expenses 88,622 4 92,145 4 (4)
	Income before tax 395808 17 410413 19 (4)
, , Net income 340,216 14 347,894 16 (2) Earningsper share(NT$) 1.90 1.95 (3)	, ,
	Net income 340,216 14 347,894 16 (2)
	Earningsper share(NT$) 1.90 1.95 (3)

17

SCP Financials – 50 Years of Profit

==> picture [18 x 19] intentionally omitted <==

Standard's Profit and EPS

Income after Tax

(Expressed in thousands of New Taiwan Dollars)

EPS ($)

==> picture [721 x 290] intentionally omitted <==

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

400,000 2.50
350,000 2.09 2.15 2.09
1.95 2.00
300,000 1.88 1.90
1.77 1.81 1.73
1.66
250,000 1.61
1.50
1.47
1.39
1.35
200,000 1.24
1.00
150,000
100,000 Net Income
0.50
50,000
EPS
0 0.00
----- End of picture text -----

18

SCP Financials – Historical Dividend Distributions

==> picture [721 x 347] intentionally omitted <==

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

3.00
2.50
2.15
2.09 2.09
2.00
1.95
1.88
1.81
1.77
1.73
1.61 Stock Dividend
1.50
1.47
Cash Dividend
0.30 0.30 1.35
2.50 EPS
1.00
0.70
1.60
1.50 1.50
1.20 1.25 1.20 1.20
0.50 1.00 1.00
0.50
0.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
----- End of picture text -----

19

Balance Sheet (Consolidated)

(Expressed in thousands of New Taiwan Dollars)

Item 2016/12/31 2015/12/31 Amount % Amount % Cash and cash equivalents 876,820 14 766,379 13 Accounts Receivable 975,369 16 896,756 16 Inventories 737,725 12 649,536 11 Investments 798,771 14 638,180 11	Item 2016/12/31 2015/12/31 Amount % Amount % Cash and cash equivalents 876,820 14 766,379 13 Accounts Receivable 975,369 16 896,756 16 Inventories 737,725 12 649,536 11 Investments 798,771 14 638,180 11	Item 2016/12/31 2015/12/31 Amount % Amount % Cash and cash equivalents 876,820 14 766,379 13 Accounts Receivable 975,369 16 896,756 16 Inventories 737,725 12 649,536 11 Investments 798,771 14 638,180 11
	Item 2016/12/31 2015/12/31
	Amount % Amount %
	Cash and cash equivalents 876,820 14 766,379 13
	Accounts Receivable 975,369 16 896,756 16
	Inventories 737,725 12 649,536 11
	Investments 798,771 14 638,180 11
	Property, plant,and equipment 2,090,208 33 2,186,890 38
	Other current and non-current assets 746,947 11 657,546 11
	Total Assets 6,225,840 100 5,795,287 100
	Current Liabilities 1,646,886 27 1,177,842 20
	Long-term loans 47,317 1 21,111 1
Other liabilities 334,973 5 709,413 12 Total liabilities 2,029,176 33 1,908,366 33 Total shareholder’s equity 4,196,664 67 3,886,921 67	Other liabilities 334,973 5 709,413 12
	Total liabilities 2,029,176 33 1,908,366 33
	Total shareholder’s equity 4,196,664 67 3,886,921 67

20

Balance Sheet (Parent Company)

(Expressed in thousands of New Taiwan Dollars)

Item 2016/12/31 2015/12/31 Amount % Amount % Cash and cash equivalents 438,306 8 302,033 6 Accounts Receivable 722,095 14 727,819 15 Inventories 448,633 9 410,466 9 Investments 2036377 39 1939083 40	Item 2016/12/31 2015/12/31 Amount % Amount % Cash and cash equivalents 438,306 8 302,033 6 Accounts Receivable 722,095 14 727,819 15 Inventories 448,633 9 410,466 9 Investments 2036377 39 1939083 40	Item 2016/12/31 2015/12/31 Amount % Amount % Cash and cash equivalents 438,306 8 302,033 6 Accounts Receivable 722,095 14 727,819 15 Inventories 448,633 9 410,466 9 Investments 2036377 39 1939083 40
	Item 2016/12/31 2015/12/31
	Amount % Amount %
	Cash and cash equivalents 438,306 8 302,033 6
	Accounts Receivable 722,095 14 727,819 15
	Inventories 448,633 9 410,466 9
	Investments 2036377 39 1939083 40
	,, ,,
	Property, plant,and equipment 1,170,949 23 1,235,025 25
	Other current and non-current assets 332,270 7 273,838 5
	Total Assets 5,148,630 100 4,888,264 100
	Current Liabilities 1,066,585 21 828,927 17
	Long-term loans 30,000 1 - -
Other liabilities 332,693 6 514,714 10 Total liabilities 1,429,278 28 1,343,641 27 Total shareholder’s equity 3,719,352 72 3,544,623 73	Other liabilities 332,693 6 514,714 10
	Total liabilities 1,429,278 28 1,343,641 27
	Total shareholder’s equity 3,719,352 72 3,544,623 73

21

SCP Group Global Revenue

(Expressed in thousands of New Taiwan Dollars)

2016 2015

==> picture [721 x 286] intentionally omitted <==

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

250,000
200,000
150,000
100,000
50,000
0
S.E.A. China S. Korea U.S.A. Japan Other
Note: ‘Other’ includes Germany, Iran , Hong Kong, Macao, etc.
----- End of picture text -----

22

Global Revenue Ratio of past 5 Years (SCP Group )

� International Sales of past 5 years

(Expressed in thousands of New Taiwan Dollars)

� Ratio of International to Domestic Sales of past 5 years

==> picture [721 x 246] intentionally omitted <==

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

Domestic
International
100%
11.6% 13.2% 13.5% 13.4%
17.5%
90%
80%
70%
60%
50%
88.4% 86.8% 86.5% 86.6%
82.5%
40%
30%
20%
10%
0%
2012 2013 2014 2015 2016
----- End of picture text -----

23

Global Revenue Ratio of past 5 years (SCP)

• International Sales of past 5 years

(Expressed in Thousands of New Taiwan Dollars)

� Ratio of International to Domestic Sales of past 5 years

==> picture [721 x 233] intentionally omitted <==

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

Domestic
International
100%
16.2% 16.5% 16.5% 16.8%
90% 23.4%
80%
70%
60%
50%
83.8% 83.5% 83.5% 83.2%
40% 76.6%
30%
20%
10%
0%
2012 2013 2014 2015 2016
----- End of picture text -----

24

==> picture [721 x 136] intentionally omitted <==

Forward-looking

==> picture [721 x 136] intentionally omitted <==

25

Pharmaceutical Industry Forecast

2016~2017 Taiwan Pharmaceutical Manufacturing Output Estimates

Unit: Expressed in billions of New Taiwan Dollars; Percentages

Classification	2016	2016	2016	2016	2017	2017	2017
	Q1~Q3	Q4(e)	Year(e)		Q1(e)		Year(f)
	Outut	Outut	Outut	Growth Rate	Outut	Growth Rate	Outut
	p	p	p		p		p
API	13.88	4.92	18.80	1.2%	5.14	6.4%	20.70
Pharmaceuticals	28.76	9.64	38.40	4.3%	9.95	5.7%	37.31
Biologics	0.87	0.35	1.22	15.1%	0.30	20.0%	1.20
Chinese Medicine	6.16	2.07	8.23	-7.3%	2.15	7.0%	8.53
Total	49.67	16.98	66.65	2.0%	17.54	6.2%	67.74
Notes: 'Growth Rate' compares indicated period with the same period of the previous year; (e) - estimated; (f) - forecast Source: Ministry of Finance, Customs Administration; Compiled by DCB Asset Group and ITIS

26

Future Milestone

From Taiwan Generics

to

International Better than Generics

27

Revenue Growth Strategy - Taiwan

1. Taiwan Base of Operations for Global R&D and Pharmaceutical Manufacturing

2. International sales contributed 23.4% to revenue in 2016. Our goal is for revenue to be comprised of 50% international sales by 2021.

3. Product Internationalization

4. Internationalize product lines via international audits

5. Product specification internationalization to comply with international regulatory requirements

6. Eliminate low demand, low margin products

7. Trim the fat, and focus on specialization

28

Revenue Growth Strategy - Taiwan

1. As a result of deteriorating prices, strive for new products with accelerated time-to-market

2. Each year focus on continued R&D and launch of new products.

3. In-licensing and Fully Integrated Products

4. In-license Japanese NDAs, for example CNS products Latuda and Erispan.

5. In-license generics (under active negotiation)

29

Revenue Growth Strategy - China

1. Quality ‘Consistency Evaluation’ of the CFDA

2. By end of 2018, 289 Drug Products are expected to be compliant with new CFDA Consistency Evaluation

3. 2019 will be characterized as an industry shake-up, as non-compliant products will have licenses revoked

4. Requires large capital funding and internationally competitive pharmaceutical technology.

5. Pharmaceutical BE studies average CN¥5MM; but having money does not equate to technological success.

6. Remain competitive through cross-market knowledge

7. SCP has successful experience with U.S. and Japan regulatory dossiers

8. SCP to continue to specialize expertise in BE design and execution

9. Client Prioritization: SMEs have opportunities over large corporations

10. Collaboration Model: Tech-transfer, Co-development, BE Collaboration, Profit-sharing Partnerships

30

Revenue Growth Strategy - China

1. Current State

• Goal: Substantial revenue growth in 2017

• Currently 3 products under review: 2 diabetes, 1 cardiovascular

• Seize business opportunities

• Co-develop 3 products in 2017 and 5 products in 2018

31

Revenue Growth Strategy - Japan

1. Japan Collaboration

• ODM

• Japanese companies distributors

• API Strategy

• Collaboration with Syn-Tech for API Vertical Integration

32

Revenue Growth Strategy - Japan

1. Current State

• Obtained license for Montelukast (Asthma)

• Launch in 2016

2. Under Development

• Oral capsule for pain reliever: Co-development and Manufacturing

• Oral tablet for Osteoporosis: Co-development

• Orally Disintegrating Tablet (ODT) for anti-ulcer: Co-development and Manufacturing

33

Revenue Growth Strategy - U.S.A.

1. Market

• Largest pharmaceutical market of the world.

• Market Obstacles: Long regulatory review, expensive user fees.

• Part of SCP’s long-term forward-looking strategy

• Strategy

• Collaborate with Syn-Tech for API vertical integration

• Current State

• One product on market for diabetes.

• One product approved. Launch pending patent expiration.

• 3 products under review

• Future goal: one ANDA filing per year.

34

Short-, Mid-, and Long-term

==> picture [444 x 92] intentionally omitted <==

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

� Short term
Beginning in 2017 – China
----- End of picture text -----

==> picture [721 x 260] intentionally omitted <==

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

� Mid-term
3~5 years – Japan
� Long-term 5 years and longer – U.S.A.
From Taiwan Generics to
� The Future
International Better-than-Generics
----- End of picture text -----

==> picture [14 x 9] intentionally omitted <==

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

35
----- End of picture text -----

Forward-looking Strategy Layout

• Increase International Revenue Ratio

• Increase international business resources

• Recruit international talent

• Specialized technology and professional development of

• international performance

• Develop Taiwan into a base of cutting-edge R&D technology and revenue generation.

• Leverage Competitiveness in Overseas Markets

• Stable foundation

• Rapid revenue creation

• Step-by-step optimization for minimization of loss due to inefficiencies

• Focus on market knowledge and business acumen

• Establish strategic partnerships for mid- and long-tem goals

36

==> picture [721 x 136] intentionally omitted <==

Corporate Social Responsibility

==> picture [721 x 136] intentionally omitted <==

37

Corporate Social Responsibility

� Fan Tao-Nan Foundation

• Established in 1987

• Capital: NT$196 Million

• Annual Budget: NT$11 Million

• The Fan Tao-Nan Foundation was recognized by the Department of Education as an .

• outstanding social foundation along with 16 other Taiwanese foundations in 2011

� Investments in Society

• :

• Funded or provided assistance to 5,416 students in 2016

• [Scholarships]: University – 4 students (majoring in related fields), High School – 102 students, Middle School – 828 students at 59 schools, Elementary School – 2,650 students at 221 schools

• [Hope After-school Class] (Monday to Friday afternoons): 1,500 students at 20 schools

• [Sunflower Wednesdays]: After-school classes on Wednesdays for 330 students at 4 schools

• [Graduation Subsidies]: 6 students

• In 2016, provided meal-assistance to 6,118 students during winter and summer holidays in participation with 7-11, Family Mart, 520 Lunchbox, and Huang-Ji Beef Noodles.

38

==> picture [721 x 136] intentionally omitted <==

Q & A

==> picture [721 x 136] intentionally omitted <==

39

==> picture [721 x 136] intentionally omitted <==

Thank you for your attention

==> picture [721 x 136] intentionally omitted <==

40