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SPT Interim / Quarterly Report 2016

Nov 9, 2016

51922_rns_2016-11-09_9fedec6e-39db-494b-a8f4-5ce61a3569b1.pdf

Interim / Quarterly Report

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Ticker: TWSE 1789

Third Quarter 2016 Online Investor Meeting

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November 9, 2016

Disclaimer

This material has been prepared by ScinoPharm Taiwan, Ltd. (“ScinoPharm”).

Any opinions expressed in this material are subject to change without notice as a result of using different assumptions. ScinoPharm is under no obligation to update or keep current the information contained herein.

The information contained in this presentation is ScinoPharm’s confidential information. Any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on it is prohibited and may be unlawful.

No representation or warranty , express or implied, is or will be made in or in relation to, and no responsibility or liability is or will be accepted by the Company as to , the accuracy or completeness of this material and any liability therefore is hereby expressly disclaimed.

Statements made in this presentation include forward-looking statements, which include, without limitation, statements about the issues, plans and expectations of ScinoPharm. Without limiting the foregoing, statements including the words “believes”, “anticipates”, “plans”, “expects” and similar expressions are also forward-looking statements. Forward-looking statements reflect, among other things, management’s plans and objectives for future operations, current views with respect to future events and future economic performances and projections of various financial items. These forward-looking statements involve known and unknown risks , uncertainties and other factors which may cause actual results to differ materially from those implied by such forward-looking statements.

1

Table of Content

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Overview of ScinoPharm

  • Financial & Operating Results in Q3, 2016

Business Updates

2

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Overview of ScinoPharm

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43

Confidential

Business Overview

  • Company specializes in high potency (steroid/cytotoxic) APIs and is expanding into sterile/aseptic injectable formulations

  • Facility & organization built in Taiwan and expanding in China with a new GMP plant in Changshu & marketing base in Shanghai

  • 71 generic APIs in current portfolio with 25 APIs launched; 52 US DMFs filed (743 DMFs WW), 31 US DMFs in oncology APIs. 100+ NCE CRAM projects, with 5 APIs launched and 5 in phase III for NDA filing in 1-3 years

  • Fully compliant with world-class cGMPs and international regulatory requirements; Certified by US FDA, EMA, EDQM, Australian TGA, Japanese PMDA, etc.

4

World Class API Facilities

Taiwan

China

  • 6.6 hectares of land, 330K sqft facilities with >200M[3] reactor volume

  • 5 of 16 production lines equipped with high potency capabilities for cytotoxic/steroids

  • Passed US FDA, EMA, EDQM, Australian TGA, Japanese PMDA inspections & 300+ cGMP customer audits

  • Provides comprehensive contract research & manufacturing services for Brand drug companies

  • 6.5 hectares of land with > 250M[3 ] reactor volume

  • 3 of 7 production lines equipped with high potency capabilities for cytotoxics

  • US FDA approved cGMP facility for intermediates & high potency APIs

  • Full scope capabilities in developing and producing APIs from small to large scale for generic & CRAM markets

  • Global market served including China

  • Global market served

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5

Strong Generics Product Portfolio

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40 36
35
30
25 23
20
12 unlaunched
15
launched
10 6 7
6
13 4
2
5 6 2 2 2
6 3
4
2 2 2
1 1
0
Note: Other (Women's Health, Gastrointestinal, Immunology and Metabolic)
11
6
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ScinoPharm - Oncology API Leader

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Stand-Alone API Companies
ScinoPharm 30 20
Shilpa 12 11 2
Polymed 10 2 3
# Oncology DMF Overlap with SPT
MacChem Products 7 5 2 # Non-overlapping Oncology DMF
Laurus Labs 7 7 11 # Other DMFs
Sichuan Xieli 6 8 13
Chemwerth 3 5 32
Apicore 5 6 23
0 10 20 30 40 50 60
Large Generic Pharmaceutical Companies
ScinoPharm 30 20
Teva 15 26 247
Dr. Reddy's 15 13 189
Cipla 11 16 128
Sun 17 11 170
Hisun 11 19 48 # Oncology DMF Overlap with SPT
Qilu 8 3 8 # Non-overlapping Oncology DMF
Hengrui 3 3 9 # Other DMFs
0 50 100 150 200 250 300
Source: US FDA DMF Q1 2016 database
7
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We are Transforming our Company

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synergy of our API business,
to maximize ROI
Positioning as a Transforming into a
Tightening cost control
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Tapping into formulation
space related to our core
competencies in high-entry-
barrier APIs
8
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Keys to Generic Formulation Business

Opportunity

Strategy

Tactics

  • Already the leader in providing oncology APIs to regulated markets worldwide

    • Developing dossiers per our difficult-to-make APIs to increase value proposition in the supply chain

    • � Targeted delivery & extended release of proven APIs via 505(b)(2) fast track

  • Injectable CMOs are in short supply

  • Can be customer’s

  • injectables provider by � Collaborating with start-ups developing formulations & research institutes, using our own oncology focusing on un-met APIs or others’ APIs, up to oncology medical needs of and including filing for high prevalence in Asia ANDA with FDA

  • Expanding formulation portfolio

  • Establishing on-site oncology injectable facility and providing an integrated supply chain

  • Promoting our formulations via strategic alliances, especially in China and US/EU

  • 2 US ANDAs

  • 11 co-developing and cost/profit sharing products with various partners

9

Strategic Alliance Highlights

*** Already launched**

Partner
Product
Indications
Region
Launch
Year(E)
Remarks
Genovate
Entecavir
Hepatitis B Viral
Taiwan
2013
1st co-developed formulation product launch*
Partner
Product
Indications
Region
Launch
Year(E)
Remarks
Genovate
Entecavir
Hepatitis B Viral
Taiwan
2013
1st co-developed formulation product launch*
Partner
Product
Indications
Region
Launch
Year(E)
Remarks
Genovate
Entecavir
Hepatitis B Viral
Taiwan
2013
1st co-developed formulation product launch*
Partner
Product
Indications
Region
Launch
Year(E)
Remarks
Genovate
Entecavir
Hepatitis B Viral
Taiwan
2013
1st co-developed formulation product launch*
Partner
Product
Indications
Region
Launch
Year(E)
Remarks
Genovate
Entecavir
Hepatitis B Viral
Taiwan
2013
1st co-developed formulation product launch*
Partner
Product
Indications
Region
Launch
Year(E)
Remarks
Genovate
Entecavir
Hepatitis B Viral
Taiwan
2013
1st co-developed formulation product launch*
Partner
Product
Indications
Region
Launch
Year(E)
Remarks
Genovate
Entecavir
Hepatitis B Viral
Taiwan
2013
1st co-developed formulation product launch*
Partner
Product
Indications
Region
Launch
Year(E)
Remarks
Genovate
Entecavir
Hepatitis B Viral
Taiwan
2013
1st co-developed formulation product launch*
Partner
Product

Indications

Region

Launch
Year(E)

Remarks
Genovate Entecavir Hepatitis B Viral Taiwan 2013* 1st co-developed formulation product launch
Sagent Oncology
Injectable
Myeloid Leukemia US 2017 1st US ANDA filing, triggered US FDA
inspection in Changshu site
Foresee Leuprolide Prostate cancer US 2018 505(b)2 NDA CRAM + Equity
Coland Bortezomib Multiple
Myeloma
China 2020 1st co-developed drug in China to trigger
CFDA inspection in Changshu site
Azacitidine MDS China 2021 Co-developed formulation in China
Lee’s
Pharma
Fondaparinux Anti-thrombotic China 2021 Co-development collaboration
Travoprost
Bimatoprost
Glaucoma China 2020
Nanjing
King
Friend
Regadenoson Stress agent for
heart scan
China 2020 Co-developed formulation in China
10
US
partner
Project A
non-small cell
lung cancer
US
2018
US NDA 505(b)2 with Paragraph IV filing /
The estimated launch year is subject to
litigation results
US &
China
partners
Project B
imaging agent
US
2020
ANDA with Paragraph IV filing /
The estimated launch year is subject to
litigation results
US
partner
Project A non-small cell
lung cancer
US 2018 US NDA 505(b)2 with Paragraph IV filing /
The estimated launch year is subject to
litigation results
US &
China
partners
Project B imaging agent US 2020 ANDA with Paragraph IV filing /
The estimated launch year is subject to
litigation results

Progress of Injectable Business

Product
Oncology
Injectable
Fondaparinux
Others (10 drugs)
Product
Oncology
Injectable
Fondaparinux
Others (10 drugs)
Product
Oncology
Injectable
Fondaparinux
Others (10 drugs)
Product
Oncology
Injectable
Fondaparinux
Others (10 drugs)
Product
Oncology
Injectable
Fondaparinux
Others (10 drugs)
Product
Oncology
Injectable
Fondaparinux
Others (10 drugs)
Product Oncology
Injectable
Fondaparinux Others (10 drugs)
Partner Co-development with
Sagent
US-self development+local
marketer
CN-collaboration with Lee’s
Pharma
Self development and
partnership
Formulation
Production
Kindos Pharmaceuticals,
China
CMO CMO + In-house production
Type Generic Generic New Drug
Generic
Indications Myeloid Leukemia Anti-thrombotic Cancer, diabetes,
osteoporosis, multiple
sclerosis and antinauseant
Market Size US: US$200M US:US$100M
CN:US$80M
Launch
Year(E)
2017
US:2017
CN:2020
After 2019
11
CN:US$80M
Launch
Year(E)
2017 US:2017
CN:2020
After 2019

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Financial & Operating Results in Q3, 2016

12

Quarterly P&L - Consolidated

In NT$ million, except for
EPS
3Q,’16
(Reviewed)
2Q,’16
(Reviewed)
3Q,’15
(Reviewed)
QoQ YoY
Operating Revenue 992 1,015 983 -2% 1%
Gross Profit 466 465 453
Gross margin 47% 46% 46%
Operating Expenses (233) (236) (234)
Operating Income 233 229 219 2% 7%
Operating margin 24% 23% 22%
Other Rev.(Exp.) (26) (29) (15)
Net Income before Tax 207 200 204 3% 1%
Net Income after Tax 166 174 195 -5% -15%
13
Net margin after tax
17%
17%
20%
EPS (after tax)
0.22
0.23
0.26
Net margin after tax 17% 17% 20%
EPS (after tax) 0.22 0.23 0.26

Cumulative P&L - Consolidated

In NT$ million, except for EPS
1Q~3Q,’16
(Reviewed)
1Q~3Q,’15
(Reviewed)
YoY
In NT$ million, except for EPS
1Q~3Q,’16
(Reviewed)
1Q~3Q,’15
(Reviewed)
YoY
In NT$ million, except for EPS
1Q~3Q,’16
(Reviewed)
1Q~3Q,’15
(Reviewed)
YoY
In NT$ million, except for EPS
1Q~3Q,’16
(Reviewed)
1Q~3Q,’15
(Reviewed)
YoY
In NT$ million, except for EPS
1Q~3Q,’16
(Reviewed)
1Q~3Q,’15
(Reviewed)
YoY
In NT$ million, except for EPS
1Q~3Q,’16
(Reviewed)
1Q~3Q,’15
(Reviewed)
YoY
In NT$ million, except for EPS 1Q~3Q,’16
(Reviewed)
1Q~3Q,’15
(Reviewed)
YoY
Net Sales 3,028 2,925 4%
Gross Profit 1,362 1,162
Gross margin 45% 39%
Operating Expenses (704) (676)
Operating Income 658 486 35%
Operating margin 22% 16%
Other Rev.(Exp.) (60) 85
Net Income before Tax 598 571 5%
14
Net Income after Tax
512
440
16%
Net margin after tax
17%
15%
EPS (after tax)
0.67
0.58
16%
Net Income after Tax 512 440 16%
Net margin after tax 17% 15%
EPS (after tax) 0.67 0.58 16%

Balance Sheet- Consolidated

In NT$ million
2016/09/30

2015/09/30
In NT$ million
2016/09/30

2015/09/30
In NT$ million
2016/09/30

2015/09/30
In NT$ million
2016/09/30

2015/09/30
In NT$ million
2016/09/30

2015/09/30
In NT$ million
2016/09/30

2015/09/30
In NT$ million
2016/09/30

2015/09/30
In NT$ million 2016/09/30
2015/09/30
(Reviewed) (Reviewed)
Cash and Cash Equivalents 3,137 25% 1,846 15%
Accounts Receivable 614 5% 648 5%
Inventories 2,018 16% 2,289 19%
Lon-Term Investments 364 3% 339 3%
g
Property, plant and equipment 5,248 42% 5,143 43%
Other Current/Non-Current Assets 1,128 9% 1,730 15%
Total Assets 12,509 100% 11,995 100%
Ct Libiliti 1534 12% 2199 18%
15
urren aes
,

,

L-T Liabilities and Others
880
7%
95
1%
Stockholders’ Equities
10,095
81%
9,701
81%
urren aes , ,
L-T Liabilities and Others 880 7% 95 1%
Stockholders’ Equities 10,095 81% 9,701 81%

Cash Flows- Consolidated

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1Q~3Q 2016 1Q~3Q 2015
In NT$ million
(Reviewed) (Reviewed)
Cash and cash equivalents at
2,336 1,928
beginning of period
Cash flows from operating activities 1,130 764
CAPEX (420) (582)
Short-term borrowings (747) 402
-
Long-term borrowings 812
Cash Dividends (219) (141)
Others 245 (525)
Cash and cash equivalents at
3,137 1,846
end of period
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16

Sales by Business

2015 Q1-Q3 BD & CMO CRO Others 1% 5% 2%

2016 Q1-Q3

BD & CMO CRO Others 2% 5% 1%

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92%
Generics
92%
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17

Sales by Indication

2016 Q1-Q3

Others CNS 10% 13% 2015 Q1-Q3 CNS Others Oncology 77% 11% 4% Oncology 60% Oncology 85% 18

Sales by Region

2016 Q1-Q3

JP AU+NZ ROW 8% 7% 3% 2015 Q1-Q3 India 9% AU+NZ ROW JP 6% 7% EU 6% 21% India 18% US+CAN

19

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Business Updates

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20

Passed EDQM Inspection Successfully

  • Successfully completed a GMP inspection by European Directorate for the Quality of Medicine & (EDQM) for the 1[st] time

  • Inspection of sites is a fundamental part of the EDQM's oversight of APIs via the Certificate of Suitability (CEP) system, and is used to determine whether substances are being produced in accordance with the submitted product dossier and Good Manufacturing Practices

  • A 3-day onsite inspection to evaluate quality system, facilities, storage, manufacturing, packaging, and labs for 2 APIs with CEP approved from this inspection

21

2016 CPhI WW Trend Observations

  • Big pharmas focus on core business via downsizing and outsourcing Accelerate our new generic API and CRAM business model

  • High-end APIs outsourced to India/China have gradually returned to US/EU due to GMP compliance risks and rise in cost ScinoPharm’s proven track record of high quality timely captures the high-end API business

  • High demand for oncology sterile injectable drugs Vertical integration including formulation by developing our own injectable drugs and building our oncology injectable plant

  • M&A activity within the global generic industry leading to hybrid generic-branded models

  • ScinoPharm exploring new business models according to customers’ M&A activities

22

Diversified CRAM Portfolio

Stage
First Launch Year
Indication
Location



Stage
First Launch Year
Indication
Location



Stage
First Launch Year
Indication
Location



Stage
First Launch Year
Indication
Location



Stage
First Launch Year
Indication
Location



Stage
First Launch Year
Indication
Location



Stage First Launch Year Indication Location
Commercial 2005 Eluting Stent US
Commercial 2009/2013 Skin Infection/HAP US/EU
Commercial 2011 Depression US
Commercial 2012 Obesity US
Commercial 2013 Seizure US
Stage Est. NDA Filing Year Indication Location
Phase III 2016* Infections US / EU / Asia
Phase III 2017 Ovarian Cancer US / EU
Phase III 2017 Prostate Cancer US
Phase III
2017
Ovarian Cancer
CN
Phase III
2018
Parkinson’s Disease
US
Phase III 2017 Ovarian Cancer CN
Phase III 2018 Parkinson’s Disease US

*** Filed**

11

23

Selected List of CRAM Projects at Changshu

Selected List of CRAM Projects at Changshu Selected List of CRAM Projects at Changshu Selected List of CRAM Projects at Changshu Selected List of CRAM Projects at Changshu Selected List of CRAM Projects at Changshu Selected List of CRAM Projects at Changshu Selected List of CRAM Projects at Changshu
Customer
Project
Type
Product Indication/stage
Product
Type
Remarks/
Market
Top 10 global pharma
CMO
Approved antidepressant drug in US
GMP
Intermediate
Passed Mexican
authority (APIF)
Customer Project
Type
Product Indication/stage Product
Type
Remarks/
Market
Top 10 global pharma CMO Approved antidepressant drug in US GMP
Intermediate
Passed Mexican
authority (APIF)
GMP inspection
Top 5 global pharma CMO Approved African sleeping disease drug API Site transfer
from Taiwan
Lee’s Pharma CRO /
CMO
>15 projects, including topical anesthetic,
brain tumor, antibiotic, hypertension, eye
drops, etc.
API China
China pharm company CRO Phase II/ III clinical trial for cancer API China
h b f ld l
China pharm company CRO Pase II or age-reate macuar
degeneration
API US/China
Taigen Biotech CRO Phase II clinical trial for myocardial
infarction
API China/Taiwan
US-based new drug company CRO Phase II clinical trial for prevention of HIV
infection
API US
Alsan Pharmaceuticals CRO Phase II clinical trial for cancer API China/Global
Top 5 global pharma CRO Phase II clinical trial for diabetes Intermediate US





Top 5 global pharma
CRO
Phase I clinical trial
API
NA
US NASDAQ listed pharma
CRO
Phase III clinical trial for opioid-induced
constipation
Crude API
US
24
Top 5 global pharma CRO Phase I clinical trial API NA
US NASDAQ listed pharma CRO Phase III clinical trial for opioid-induced
constipation
Crude API US

2016 API Product Launch Plan

API
Region
Indication
Brand
Marketer
Regional
Sales
WW Sales
API
Region
Indication
Brand
Marketer
Regional
Sales
WW Sales
API
Region
Indication
Brand
Marketer
Regional
Sales
WW Sales
API
Region
Indication
Brand
Marketer
Regional
Sales
WW Sales
API
Region
Indication
Brand
Marketer
Regional
Sales
WW Sales
API
Region
Indication
Brand
Marketer
Regional
Sales
WW Sales
API
Region
Indication
Brand
Marketer
Regional
Sales
WW Sales
API
Region
Indication
Brand
Marketer
Regional
Sales
WW Sales
API Region Indication Brand
Marketer
Regional
Sales
WW Sales
Azacitidine USA Myelodysplastic
syndrome (MDS)
Celgene US$248.1M US$751.6M
Desmopressin
Acetate
USA Polyuria Ferring US$150.1M US$395.8M
Entecavir USA
Singapore
Hepatitis B
Virus (HBV)
Bristol-Myers US$262.5M
(USA only)
US$1,576.6M
Australia
Flumazenil Korea Reversal of the
sedative effects of
benzodiazepines
Roche N/A US$84.0M
Gemcitabine HCl Middle
East
Pancreas, Lung,
Ovary, and Breast
Cancers
Eli Lilly N/A US$547.9M
Launched
25
Source: IMS Data (2014Q4-2015Q3)
.
Tamsulosin HCl
USA
Benign Prostatic
Hyperplasia (BPH)
Boehringer
Ingelheim
US$410.0M
US$1,818.4M
.
Tamsulosin HCl USA Benign Prostatic
Hyperplasia (BPH)
Boehringer
Ingelheim
US$410.0M US$1,818.4M

Pipeline Outlook

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� 5-6 new launches
� 5-6 new launches
� 1 [st ] in-house drug US ANDA filing � 3 drug products launched in China
� 1st in-house drug launched in US
2017 2018 2019 2020
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  • 3-5 new launches6-8 new launches

  • 1[st] co-developed US ANDAChinese CFDA inspection at Chnagshu site launchedUS FDA inspection at injectable plant

  • 1[st] self-developed US ANDA launched 26

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uestions Q

& Answers

27

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Brand Quality with Asian Advantages www.scinopharm.com

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28