SPT — Interim / Quarterly Report 2017

Feb 23, 2018

1789 TT

ScinoPharm Taiwan, Ltd. Fourth Quarter 2017 Investor Meeting

February 23, 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

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 Company Overview and Key Priorities

 Operating Results

 Business Highlights and Company Outlook

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Company Overview and Key Priorities

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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

• 73 generic APIs in current portfolio with 25 APIs launched; 56 US DMFs filed (767 DMFs WW), 33 US DMFs in oncology APIs. 100+ NCE CRAM projects, with 6 NDAs launched and 4 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

Self-Developed Products

Contract Services

• 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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World Class Facilities

Taiwan

China

 API Plant

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

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

 Injectable Plant

• Vial and cartridge production lines for oncological and peptide products

• To meet US, EU, Japan GMP standards with adopting state-of-the-art isolator technology and single use technology for product contact path

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 API Plant

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

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

• Full scope capabilities in the development and production of APIs on small to large scales for generic & CRAM markets

• Strategic partnerships with China clients with downstream formulations and mutually target for global and China markets

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We Value Our R&D

• Strong focus on R&D with +125 experts (Ph.D:27)

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16%
84%
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 R&D investments remain stable

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Strong API Portfolio for Generic Product

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

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ScinoPharm - Oncology API Leader

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Stand-Alone API Companies

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ScinoPharm 32 21
Shilpa 12 11 3
Polymed 10 2 3
MacChem Products 6 5 2 # Oncology DMF Overlap with SPT
Laurus Labs 8 7 16 # Non-overlapping Oncology DMF
# Other DMFs
Sichuan Xieli 1 2 1
Chemwerth 3 5 34
Apicore 5 8 27
0 10 20 30 40 50 60
Large Generic Pharmaceutical Companies
ScinoPharm 32 21
Teva 18 28 264
Dr. Reddy's 14 13 176
Cipla 11 17 128
Sun 17 12 164
Hisun 11 19 44
# Oncology DMF Overlap with SPT
Qilu 8 3 8
# Non-overlapping Oncology DMF
Hengrui 3 3 11 # Other DMFs
0 50 100 150 200 250 300
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Source: US FDA DMF Q2 2017 database

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Focus Drug Product Pipeline- on Complex Generics

Indication	Format	Enter Barrier & Advantage
Osteoporosis	Pen	Complex Drug-Device Combination
Diabetes	Pen	Complex Drug-Device Combination
Anti-thrombotic	Syringe	Complex API
Multiple Sclerosis	Syringe	Complex API
Antineoplastic	Lyo	Difficult to make API and Formulation
Anti nauseant	Lyo	Difficult to make API and Formulation
Antineoplastic	Lyo,Vial	Difficult to make API
Antineoplastic	Lyo	Difficult to make API, Complex Route of Delivery and Formulation
Antineoplastic	Lyo	Difficult to make API
Antineoplastic	Lyo,Vial	Difficult to make API
Antineoplastic	Lyo,Vial	Difficult to make API and Formulation
Antineoplastic	Vial	ExistingAPI
Antineoplastic	Vial	ExistingAPI
Antineoplastic	Vial	ExistingAPI

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Potential Headwinds & Tailwinds

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Headwind

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Tailwind

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• Generic business continues facing negative pricing environment

• Increased consolidation among the

• US distribution supply chains  More and faster ANDA approvals leading to quicker price erosion  Fewer small molecule blockbuster drugs invented

• Impact of patent linkage and patent term extension in Taiwan

 Pipeline of complex generics benefits from a faster approval cycle and higher margins

• CRAMs grow faster than the pharma

• Pharmerging markets are expected to grow due to increasing geriatric population and healthcare expenditure

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Focused Execution into 2018

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Expanding into formulation business by synergizing with our APIs - Complete the production of 4 registration batch drug products

• Establish partnership for self-developed drug products

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Strengthening Manufacturing and Quality

• Create leaner and flexible cost structures by improving operating efficiency, RD productivity and portfolio optimization

• Comply with the modern strict environmental laws in China

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Near term CRO projects pose to propel the company to next level - Focus on targeted therapies and orphan drugs /first in class or best in class - Provide integrated service from API to formulation for niche injectable

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Continuous process optimization on our existing APIs

• Maintain market share and profits of our major products

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Operating Results

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Quarterly P&L - Consolidated

In NT$ million, except for EPS	Q4 2017 (Unaudited)		Q3 2017 (Reviewed)			QoQ		Q4 2016 (Audited)			YoY
Revenue	895	100%	849	100%		5% -24%		1,002	100%		-11% 2%
Cost of Goods Sold	(548)	-61%	(441)	-52%				(559)	-56%
Gross Profit	347	39%	407	48%		-15% 3%		444	44%		-22% -6%
OperatingExpense	(247)	-28%	(256)	-30%				(234)	-23%
Operating Income	100	11%	152	18%		-34% 10%		210	21%		-53% -928%
Non-operatingIncome,Net	(23)	-3%	(25)	-3%				3	0%
Income before Tax	77	9%	127	15%		-39%		213	21%		-64%
Net Income	61	7%	107	13%		-43%		147	15%		-59%
	0.08		0.14					0.19
EPS (NT$)
*Weighted average outstandingshares were 790.739m units in 4Q17.

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Profit & Loss - Consolidated

										(note)
In NT$ million, except for EPS		FY 2017 (Unaudited)				FY 2016 (Audited)			YoY
Revenue		3,516	100%			4,031	100%		-13% 12%
Cost of Goods Sold		(1,966)	-56%			(2,225)	-55%
Gross Profit		1,550	44%			1,806	45%		-14% -6%
OperatingExpense		(991)	-28%			(938)	-23%
Operating Income		559	16%			868	22%		-36% -45%
Non-operatingIncome,Net		(84)	-2%			(58)	-1%
Income before Tax		475	14%			811	20%		-41%
Net Income		422	12%			659	16%		-36%
		0.53				0.83
EPS (NT$)
EBITDA		986	28%			1,294	32%		-24%
* Total outstandingshares were 790.739m units at 12/31/2017.

Note: 2016 vs 2017: 5.96% NTD appreciation against USD YoY

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Profit & Loss (ScinoPharm stand-alone)

										(note)
In NT$ million, except for EPS		FY 2017 (Unaudited)				FY 2016 (Audited)			YoY
Revenue		3,449	100%			3,889	100%		-11% 13%
Cost of Goods Sold		(1,778)	-52%			(2,041)	-52%
Gross Profit		1,671	48%			1,848	48%		-10% -11%
OperatingExpense		(870)	-25%			(782)	-20%
Operating Income		801	23%			1,066	27%		-25% -28%
Non-operatingIncome,Net		(313)	-9%			(244)	-6%
Income before Tax		489	14%			822	21%		-41%
Net Income		422	12%			659	17%		-36%
		0.53				0.83
EPS (NT$)
EBITDA		823	24%			1,178	30%		-30%
* Total outstandingshares were 790.739m units at 12/31/2017.

Note: 2016 vs 2017: 5.96% NTD appreciation against USD YoY

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Sales by Business

FY2017

FY2016

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Sales by Indications

FY2017

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FY2016

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Sales by Region

FY2017

FY2016

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Balance Sheet- Consolidated

(In NT$ million)			2017/12/31 (Unaudited)				2016/12/31 (Audited)
	Cash and Cash Equivalents		3,911 567 1,675 391 5,089 1,068	31% 4% 13% 3% 40% 9%			3,707 638 1,830 364 5,209 1,035	29% 5% 14% 3% 41% 8%
	Accounts Receivable
	Inventories
	Long-Term Investments
	Property,Plant & Equipment
	Other Current/Non-Current Assets
Total Assets			12,701	100%			12,783	100%
	Current Liabilities		1,115 1,169	9% 9%			1,692 863	13% 7%
	Long-Term & Other Liabilities
Total Liabilities			2,284	18%			2,555	20%
Total Shareholders' Equities Key Indices A/R Turnover (Days) Inventory Turnover (Days) Current Ratio (x) ROE (%)			10,417	82%			10,228	80%
			65.6 434.5 5.8 4.1				71.6 405.6 3.9 6.6
	A/R Turnover (Days) Inventory Turnover (Days) Current Ratio (x) ROE (%)

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Cash Flows- Consolidated

(In NT$ million)			FY 2017 (Unaudited)				FY 2016 (Audited)
From Operating Actavities			972				1,665
	Profit before tax		475 434 209				811 447 449
	Depreciation & Amortization
	Net change in workingcapital
From Investing Actavities			(437)				(202)
	Capital expenditure		(402)				(447)
From Financing Actavities			(314)				(138)
	Short-term loans		(584) 518 (228) 204				(720) 803 (219) 1,371
	Long-term loans
	Cash dividends
Net Change in Cash
Beginning Balance			3,707				2,336
Ending Balance			3,911				3,707
Free Cash Flow			570				1,218

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Business Highlights and Company Outlook

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Focusing on Weathering Near-Term Headwinds While Positioning for Long-Term Growth

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2017 2018 2019 and beyond
• Industry headwinds •
• Market conditions
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• • •	market conditions, leading to price erosion and volume decline Gained some, lost some in CRAM business China site still faced a financial loss Focused on cost reductions and portfolio	• • • •	expected to continue Sales from CRAM projects are expected to boost Speed up momentum of downstream integration strategy by establishing alliance with partner Aggressively expand formulation products Further cost reductions	• • •	expected to improve Continue investment in growth opportunities Maintain high level of quality and compliance Strong pipeline to drive growth from: - CRAM business - Drug products business
	optimization		and portfolio optimization
		•	Accelerate progress to
			create positive cash flow
			for Changshu site

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• Developing dossiers per our high-entry-barrier APIs to increase value proposition in the supply chain

• Building a pipeline of complex and difficult to make generic injectable products

• Significant investment in injectable R&D in the next few years

• Quality driven, diversified manufacturing operations

• Promoting our formulations via strategic alliance, especially in China and US

• Acquiring critical resources via M&A

Expected > 15 drug product launched in the next 5 years

Introducing 3 to 4 drug products per year in our pipeline

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2018 In-House Injectable Plant Progress

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First Half
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Second Half

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 Kick-off registration batch
production for other
products and offering CMO
services for both brand and
proprietary drugs
 Expected submission of 1st
in-house produced ANDA
 Taiwan FDA on-site
inspection
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• Already launched

Strate ic Alliance Hi hli hts g g g

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
Foresee	Leuprolide	Prostate cancer	US	2019	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
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
US partner	Project A	Non-small cell lung cancer	US	2018	US NDA 505(b)(2) / The estimated launch year is subject to litigation results
US & China partners	Project B	Imaging agent	US	2021	ANDA with Paragraph IV filing / The 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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CRAM Business Gaining Momentum

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• CRAM business is on track to regain growth momentum

• Sales from CMO will be boosted by Melinta's newly launched Baxdela™ , indicated for acute skin infections (ABSSSI), and other shipment by the CRO projects

• Baxdela™ , expected to become top 5 products in 2018, is designated as a qualified infectious disease product (QIDP)and enjoys a five-year extension of any non-patent exclusivity period

• More indications on the way for Baxdela™ include Serious Community-Acquired Bacterial Pneumonia (CABP) in Phase III and Complicated Urinary Tract Infections (CUTI) in Phase I

• Four CRO projects in Phase III trials are expected to file NDAs in 2018/2019 and if successful could result in the drugs being launched in 2019/2020 with incremental sales

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CRO Phase III Products Portfolio

NDA Filing Year(E)	Indication	Region	Remarks
2018	Type I,II Diabetes	US/ EU	Intermediate project made both in Changshu & Taiwan sites. Expected revenue of several million USD per year after launch
2018	Advanced Hepatocellular Carcinoma, Myelofibrosis, Autoimmune disease	CN	API project made in Changshu site. CFDA granted accelerated review under its category 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
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

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China Market Dynamics

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• China has paved the way for integration with global standard and move up to key positions in value chain, requiring dedication to quality and innovation

• Tightened GMP, Environment/Health/Safety laws and drug

• license approval process significantly raise the cost structure  Full Market Authorization Holder (MAH) rolled out creating a sizable demand in high-quality CDMO services  Reduction of application backlog and review timeline acceleration for NDA and China+US dual-track drug filing

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ScinoPharm Changeshu - Capturing Chinese Growth on Multiple Fronts

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Position as a gateway into China providing supplychain to MNCs

Adopt dual-track drug filing process in China and the US

Seek generic APIs or intermediates with large demand to increase production utilization

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Focus on mid- to late-phase CRO projects. Current portfolio includes agents for oncology, anti-hypertension, and diabetes

Tighten cost control and process optimization with enhanced management

As the back up site for generic API after the Implementation of patent term extension

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Maintain Market Share of Existing APIs - 2017 Major Products account for 50 % of total sales

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API Product Indication MKT share # of US DMF/EDMF & other filings Irinotecan HCI Antineoplastic 37% 64 Exemestane Antineoplastic 25% 46 Paclitaxel Antineoplastic 21% 60 Gemcitabine Antineoplastic 17% 76 Docetaxel Anhydrous Antineoplastic 15% 72*	API Product Indication MKT share # of US DMF/EDMF & other filings Irinotecan HCI Antineoplastic 37% 64 Exemestane Antineoplastic 25% 46 Paclitaxel Antineoplastic 21% 60 Gemcitabine Antineoplastic 17% 76 Docetaxel Anhydrous Antineoplastic 15% 72*	API Product Indication MKT share # of US DMF/EDMF & other filings Irinotecan HCI Antineoplastic 37% 64 Exemestane Antineoplastic 25% 46 Paclitaxel Antineoplastic 21% 60 Gemcitabine Antineoplastic 17% 76 Docetaxel Anhydrous Antineoplastic 15% 72*	API Product Indication MKT share # of US DMF/EDMF & other filings Irinotecan HCI Antineoplastic 37% 64 Exemestane Antineoplastic 25% 46 Paclitaxel Antineoplastic 21% 60 Gemcitabine Antineoplastic 17% 76 Docetaxel Anhydrous Antineoplastic 15% 72*
API Product	Indication	MKT share*	# of US DMF/EDMF & other filings
Irinotecan HCI	Antineoplastic	37%	64
Exemestane	Antineoplastic	25%	46
Paclitaxel	Antineoplastic	21%	60
Gemcitabine	Antineoplastic	17%	76
Docetaxel Anhydrous	Antineoplastic	15%	72

*Source: IMS data from Newport

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2018 Product Launch Plan

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Type	Product	Region	Indication	Brand Marketer	Regional Sales	WW Sales
Generic API	Tamsulosin HCl	CN	Benign Prostatic Hyperplasia (BPH)	Boehringer Ingelheim	US$97MM	US$1,652.8MM
Generic API	Flumazenil	JP	Reversal of Conscious Sedation and General Anesthesia	Roche	US$13.5MM	US$76.1MM
Generic API	Capecitabine	JP	Antineoplastic	Roche	US$122MM	US$834.7MM
Generic Drug	Oncology Injectable	US	Myeloid Leukemia	MDS	US$175.9MM	US$284.4MM
Generic Drug	Fondaparinux	US	Anti-thrombotic	Mylan	US$75.1MM	US$194.9MM

Source: IMS Data (2016Q3-2017Q2)

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Pipeline Outlook Timeline

• 3 generic APIs launched

• 5-7 generic APIs launched

• 3 in-house drug ANDAs filed

  • 2 co-developed China ANDAs

• 1[st] BD & 1[st ] self-developed US ANDA launched  3 APIs by CRAM customers launched

• 3 NDAs filed by CRAM customers 2018 2019 2020 2021

  • 3 APIs by CRAM customers launched

• 5-7 generic APIs launched

• 1 BD US ANDA launched

• 3 APIs by CRAM customers launched

• US FDA inspection at Injectable plant

• CFDA inspection at Changshu site

• 6-8 generic APIs launched

• 3 BD & 1 self-developed ANDA launched

• 5 APIs by CRAM customers launched

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Four Key Pillars to Achieve Strategic Roadmap

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BUILD
strong pipelines of complex drug
products / APIs and expand
geographic presence
CONTINUE
to drive transformation and
operational excellence through
leadership, people and culture
FOSTER
partnership and collaboration to
increase value and capture untapped
opportunity
FOCUS
long term value creation for our
shareholders
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Brand Quality with Asian Advantages

www.scinopharm.com

1789 TT

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