SPT — Interim / Quarterly Report 2018

Aug 2, 2018

1789 TT

ScinoPharm Taiwan, Ltd. H1 2018 On-Line Investor Meeting

August 2, 2018

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 material 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.

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Table of Content

� Overall Updates of ScinoPharm

• Business Updates

• Financial & Operating Results in H1, 2018

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Overall Updates of ScinoPharm

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ScinoPharm at a Glance

• ScinoPharm specializes in high potency (steroid/cytotoxic) APIs and injectable provider, serving customers worldwide

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

• 71 generic APIs in current portfolio with 26 APIs launched; 57 US DMFs filed (776 DMFs WW), 34 US DMFs in oncology APIs. 100+ NCE CRAM projects, with 6 NDAs launched and 5 in phase III

• Fully compliant with world-class cGMPs and international regulatory requirements; Certified by US FDA, EMA, EDQM, Australia TGA, Japan PMDA, Korea KFDA, Mexico COFEPRIS and Germany regulatory Authority

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Driving Long Term Growth by Dual Profits

• Target difficult-to-make (peptide)API in our portfolio

• Tap into drug product related to our API core competencies

• Target 505(b)(2) and Paragraph IV drug product via strategic alliances

• Provide CRO/CMO for APIs

• � Offer integrated service from API to formulation for niche injectables

• � Provide biologics fill & finish CMO services

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Strong API Portfolio for Generic Product

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40 35 unlaunched
launched
35
30
25 22
20
13
15
10 7 7 6
13
5 6 2 2 2 3 3
6
4 1 2
3
2
1 1 1
0
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Note: Others (Women's Health, Respiratory and Immunology )

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Recap of Performances and Major Events

• Reported the consolidated revenues for H1 2018 were NT$1.847 billion, net profits after-tax were NT$ 267 million, gross margin was 41%, EPS was NT$0.34

• Financial performances were mainly benefited from the favorable sales volumes for colorectal cancer product of generics plus the increase of intermediates shipment for Phase III diabetes project

• The 1st ANDA approved by US FDA, an oncological product and codeveloped with Sagent

• Passed Japanese PMDA site inspections both in Taiwan and Changshu

• Rated top 5% in the Corporate Governance Evaluation by TWSE

• Issued 2017 corporate responsibility report verified by an independent third party

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Business Updates

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Strategic Alliance Highlights

* launched

Partner	Product	Indications	Region	Launch Year(E)	Remarks
Genovate	Entecavir	Hepatitis B Virus	Taiwan	2013*	1st co-developed formulation product launch
Sagent	Oncology Injectable	Myeloid Leukemia	US	2018*	1st US ANDA filing, triggering US FDA inspection in Changshu, China site. Approved by US FDA in March 2018
Foresee	Leuprolide	Prostate cancer	US	2019	505(b)(2) NDA CRAM + Equity
Lee’s Pharma	Fondaparinux	Anti-thrombotic	China	2022	Co-development collaboration
	Travoprost &Bimatoprost	Glaucoma	China	2022
Nanjing King Friend	Regadenoson	Stress agent for heart scan	China	2021	Co-developed formulation in China. Submitted ANDA in October 2017
US partner	Project A	Non-small cell lung cancer	US	2018	US NDA 505(b)(2) /Estimated launch year is subject to litigation results
US & China partners	Project B	Imaging agent	US	2021	ANDA with Paragraph IV filing / Estimated launch year is subject to litigation results
Baxter	5 niche injectables	Anti-cancer & antinauseant	US/EU	2020& continuing thereafter	Baxter has the right to add up to 15 additional injectable products for collaboration
Indian Int’l partner	Fondaparinux	Anti-thrombotic	US/EU	2018	1st self-developed US ANDA submitted . Executive right for marketing & sales

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CRO Phase III Products Portfolio

NDA Filing Year (E)	Indication	Region	Remarks
2018	Type I Diabetes	US/ EU	Intermediate project made both in Changshu & Taiwan. Type I anticipated launch in 2019.Type II expected submission in 2019. Expected revenue of several million USD per year after approval
2019	Type II Diabetes
2018	Advanced Hepatocellular Ci Mlfibi	CN	API project made in Changshu site. CFDA granted accelerated review under its category
	arcnoma, yeoross, Autoimmune disease		1.1 innovative drug. Anticipated launch in 2019 with demand in tons
2018	Prostate Cancer	US / EU	Started process validation. Anticipated launch in 2019 and revenue of several million USD per year after approval
2019	Familial Adenomatous Polysis	US / EU	API project made both in Taiwan & Changshu sites. Anticipated launch in 2020 with demand in tons to tens tons after approval
2019 or 2020	Recurrent Anaplastic Astrocytoma	US / EU	Demand in tons after approval

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2018 CPhI China Observations

• Fewer Western exhibitors in CPhI Trade Show this year

• New drug flourishing as new guidelines make China a more drug-friendly market

• As government is cracking down on noncompliance with environmental rules, API producers were buffeted by raw material and intermediate factory closures, suffered from supply chain disruption and volatility in chemicals pricing

• New inspection regimen, tightened environment laws and high standard drug license approval process pushing out lowquality API suppliers

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Ranking	API Product	Indication
1	Paclitaxel	Breast, Ovarian and Lung Cancer
2	Irinotecan HCI	Colorectal Cancer
3	Intermediates for CRAM project	Diabetes
4	Gemcitabine Hydrochloride	Pancreatic, Non-Small-Cell Lung Cancer
5	Docetaxel Anhydrous	Breast, Non-Small-Cell Lung Cancer

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2018 Product Launch Plan

Type	Product	Region	Indication	Brand Marketer	Regional Sales	WW Sales
Generic API	Tamsulosin HCl	CN	Benign Prostatic Hyperplasia (BPH)	Boehringer Ingelheim	US$97MM	US$1,731m
Generic API	Flumazenil	JP	Reversal of Conscious Sedation and General Anesthesia	Roche	US$13.5MM	US$78.4m
Generic API	Capecitabine	JP	Antineoplastic	Roche	US$122MM	US$797.4m
Generic Drug	Oncology Injectable	US	Myeloid Leukemia	MDS	US$172.2m	US$305m
Generic Drug	Fondaparinux	US	Anti-thrombotic	Mylan	US$69.6m	US$191.2m

Launched

Source: IMS Data 2017

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Financial & Operating Results H1, 2018

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Quarterly P&L - Consolidated

In NT$ million, except for EPS	Q2 2018 (Reviewed)		Q1 2018 (Reviewed)		QoQ	Q2 2017 (Reviewed)		YoY
Revenue	986	100%	861	100%	14% -7%	853	100%	16% -7%
Cost of Goods Sold	(565)	-57%	(527)	-61%		(527)	-62%
Gross Profit	421	43%	335	39%	26% -22%	326	38%	29% -9%
Operating Expense	(261)	-26%	(213)	-25%		(239)	-28%
Operating Income	160	16%	121	14%	32% 94%	86	10%	85% 74%
Non-operating Income, Net	(2)	0%	(31)	-3%		(7)	-1%
Income before Tax	158	16%	90	11%	75%	79	9%	100%
Net Income	131	13%	136	16%	-3%	84	10%	55%
EPS (NT$)	0.17		0.17			0.11

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Profit & Loss - Consolidated

							(note) 4% -12% -5% 3% -9% YoY
In NT$ million, except for EPS	H1 2018 (Reviewed)			H1 2017 (Reviewed)			YoY
Revenue	1,847	100%		1,773	100%		4% -12%
Cost of Goods Sold	(1,092)	-59%		(977)	-55%
Gross Profit	755	41%		796	45%		-5% 3%
Operating Expense	(474)	-26%		(488)	-28%
Operating Income	281	15%		308	17%		-9%
Non-operating Income, Net	(33)	-2%		(36)	-2%		9%
Income before Tax	248	13%		272	15%		-9%
Net Income	267	14%		255	14%		5%
EPS (NT$)	0.34			0.32
EBITDA	498	27%		523	29%		-5%

Note: 2018H1 vs 2017H1: 3.2% NTD appreciation against USD YoY

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Sales by Business

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2018 H1
BD&
CMO Other
2017 H1
15% 1%
BD& CRO
Other 5%
CMO
8%
Generics
8%
CRO 79%
8%
Generics
76%
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Sales by Indications

2018 H1

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Others
Infectious
CNS
17%
3%
2017 H1 10%
Others
20%
Oncology
CNS
70%
12%
Oncology
68%
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Sales by Region

2018 H1

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CN ROW
JP
2017 H1
1% 6%
8%
India
CN ROW 10%
JP
2% 11% US+CAN
7%
36%
India EU
6% 39%
US+CAN
39%
EU
35%
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Balance Sheet- Consolidated

(In NT$ million)		2018/06/30 (Reviewed)			2017/06/30 (Reviewed)
	Cash and Cash Equivalents	4,017 275 709 1,517 - 4,957 1,174 606	30%		3,721 - 726 1,802 391 5,136 1,105 -	29%
	Financial asset measured at amortised cost		2% 5% 11% 0% 37% 10% 5%			0% 6% 14% 3% 40% 8% 0%
	Accounts Receivable
	Inventories
	Financial asset measured at fair value through
	other comprehensive income
	Financial assets carried at cost
	Property, Plant & Equipment
	Other Current/Non-Current Assets
Total Assets		13,255	100%		12,881	100%
	Current Liabilities	2,654 71	20% 1%		1,365 1,284	11% 10%
	Long-Term & Other Liabilities
Total Liabilities		2,725	21%		2,649	21%
Total Shareholders' Equities Key Indices A/R Turnover (Days) Inventory Turnover (Days) Current Ratio (x) ROE(%)		10,530	79%		10,232	79%
		63.1 372.4 2.6 2.6			70.2 456.3 4.8 2.5
	A/R Turnover (Days) Inventory Turnover (Days) Current Ratio (x) ROE(%)

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Cash Flows- Consolidated

(In NT$ million)		H1 2018 (Reviewed)			H1 2017 (Reviewed)
From Operating Actavities		370			353
	Profit before tax	248 208 (86)			272 221 (140)
	Depreciation & Amortisation
	Net change in working capital
From Investing Actavities		(350)			(351)
	Financial asset measured at	(275)			-
	amortised cost
	Capital expenditure	(67)			(321)
From Financing Actavities		76			43
	Short-term loans	65 11 106			(477) 540 14
	Long-term loans
Net Change in Cash
Beginning Balance		3,911			3,707
Ending Balance		4,017			3,721
Free Cash Flow		303			32

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Brand Quality with Asian Advantages

www.scinopharm.com

1789 TT

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