SPT — Investor Presentation 2013

May 13, 2013

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ScinoPharm Management Presentation

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TWSE 1789

May 10, 2013

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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 forwardlooking 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

Overview of ScinoPharm Financial & Operating Results China Market Access – via Strategic Alliance

Business Outlook Q&A

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Overview of ScinoPharm - An API + ANDA Company

Active Pharmaceutical Ingredients Abbreviated New Drug Application

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Background

• Established in 1997 in Taiwan by founders from Syntex, listed on TWSE, current market cap ~ US$1.5 billion

• Major shareholders include Uni-President Group, Government’s Development Fund, Taiwan Sugar, etc.

• Facility & organization designed & built in Taiwan by experienced Syntex team, received multiple regulatory inspections from US FDA, Australia, EU, Japan, etc.

• Specializes in high potency (steroid, cytotoxic) & injectable APIs

• Expanding in China with a new plant in Changshu & sales & marketing base in Shanghai

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Business Overview

 Maintain dominant position in Specialty APIs for generic market. Strong customer base (320+) in US/EU/Japan, some through Indian generics. Aggressively developing Japan and China markets

• Developed ~60 generic APIs with 21 launched. Filed 43 DMFs in US (642 DMFs WW), leader in supplying oncology injectable APIs with 20 US DMFs

• 70+ NCE CRAMs projects, with 5 in phase III with NDA filing in 2-3 years & 4 already launched. The only company in Asia supplying APIs for multiple commercial NCEs

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World Class Facilities

Taiwan (SPT)

China (SPC)

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

• 8 of 18 production lines equipped with high potency capabilities for cytotoxics or steroids

• US FDA approved & 200+ GMP audits by customers

• Provides full CRAMs for brand drugs

• Building an oncological injectable plant

• Global market

• 6.6 hectares of land with ~250M[3] reactor volume

• 1[st] phase completed in Q1, 2012 2[nd] phase to be completed in Q4, 2013

• CGMP designed facility for intermediates & high potency API

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

• Global market including China

Common Stren th g

Differentiators

• Same sizable land area

• Taiwan  Complied with int’l GMP & EHS vs standards for global market

• China 

• Strong R&D capabilities

• Plant  Multi-functional plants, able to produce high potency APIs

• Small, mid, to large lines

• Different reactor chamber volumes (200M[3 ] in SPT vs. 250M[3 ] in SPC)

• SPC mainly for large volume

• SPT focusing on global export; SPC on China domestic market

• SPT with an injectable plant

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Financial & Operating Results

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Quarterly P&L - Consolidated

In NT$ million, except for EPS	1Q,’13 (Reviewed)	4Q,’12 (Audited)	1Q,’12 (Reviewed)	QoQ	YoY
Net Sales	1,186	1,404	971	-16%	22%
Gross Profit	655	713	523	-8%	25%
Gross margin	55%	51%	54%
Operating Expenses	(267)	(320)	(240)	-17%	11%
Operating Income	388	393	283	-1%	37%
Operating margin	33%	28%	29%
Other Rev.(Exp.)	19	97	7	-80%	171%
Net Income before Tax	407	490	290	-17%	40%
Net Income after Tax	350	422	247	-17%	42%
Net margin after tax	30%	30%	25%
EPS (after tax)	0.54	0.65	0.38	-17%	42%

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Balance Sheet- Consolidated

In NT$ million	2013/3/31 (Reviewed)	2013/3/31 (Reviewed)	2012/3/31 (Reviewed)	2012/3/31 (Reviewed)
Cash and Cash Equivalents	3,411	31%	3,236	33%
Accounts Receivable	599	5%	740	8%
Inventories	2,226	20%	1,802	19%
Long-Term Investments	168	2%	168	2%
Fixed Assets	3,820	35%	2,944	30%
Total Assets	11,037	100%	9,715	100%
Current Liabilities	1,510	14%	864	9%
L-T Liabilities and Others	66	-%	64	1%
Stockholders’ Equities	9,461	86%	8,787	90%

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Cash Flows- Consolidated

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1Q 2013 1Q 2012
In NT$ million
(Reviewed) (Reviewed)
Cash and cash equivalents at
3,035 3,294
beginning of period
Cash flows from operating activities 413 80
CAPEX (144) (114)
Short-term borrowings 128 -
Others (21) (24)
Cash and cash equivalents at
3,411 3,236
end of period
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Sales by Business

Q1/2012

Q1/2013

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CRO, 3% [CMO, 1% ]
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CRO, <1%
CMO,
19%
Generic,
81%
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Sales by Indications

Q1/2012

Q1/2013

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Others,
Others,
3%
8%
Oncology
CNS, 18% 74% Oncology
CNS, 31%
66%
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Sales by Region

Q1/2012

Q1/2013

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AU & NZ
AU & NZ
1%
5%
US & CAN
US & CAN
35%
EU 41%
EU 28%
Asia
43%
17%
Asia
30%
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China Market Access Action Plans

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Ways to Access China Market A. Sell APIs to local Pharma companies

B.Develop, register, produce and sell our own drug products made of our APIs

C.Collaborate with Chinese marketers to develop, register, produce, and sell drug products with our APIs and share ultimate B2C profits

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ScinoPharm-Coland-Jinrui Alliance

Collaboration Framework ScinoPharm, Coland, and Jinrui work jointly for the Bortezomib injectables:

• ScinoPharm provides Bortezomib API

• Jinrui develops formulation and files with CFDA

• Coland markets the drug product in China

Market Potential

 Bortezomib injectables are for Multiple Myeloma, sales in China reached RMB330MM in 2011, YoY growth of 40%

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Strategic Alliance between ScinoPharm and Coland

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ScinoPharm-Coland Strategic Alliance

 ScinoPharm and Coland collaborate to develop oncology drugs for China market

 The strategic alliance will develop a series of oncology injectables per ScinoPharm’s APIs mainly for MDS, lung, breast, ovarian, and pancreatic cancers. The drug product sales in 2012 was estimated at RMB5billion* in China

*Data Source: IMS

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Alliance Framework

• ScinoPharm exclusively provides all APIs

• 3[rd] party CRO and CMO develop and produce injectable drug products

• Coland helps register drugs and build a dedicated sales team at beginning

• Initial cost is estimated at USD5-7 million

• ScinoPharm and Coland jointly penetrate into the niche oncological market in China

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Business Outlook

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2013 Product Launch Plan

API	Region	Indications	Brand Marketer	Regional Sales	WW Sales
Azacitidine	US	MDS, Anti-neoplastic	Pharmion	US$331.3MM*	US$729.7MM*
Decitabine	US	MDS, Anti-neoplastic	MGI Pharma	US$238.0MM*	US$249.1MM*
Docetaxel Anhydrous, Trihydrate	JP	Anti-neoplastic	Sanofi Aventis	US$236.9NM**	US$2,051MM*
Modafinil	US	Antinarcolepsy	Cephalon	US$1,219MM*	US$1,319M*
Paclitaxel	JP	Anti-neoplastic	Bristol Myers	US$307.1MM**	US$1,654M*
Riluzole	US	ALS	Sanofi Aventis	US$55.0MM*	US$237.1MM*
Topiramate	US	Seizures	Customer	NDA ( FDA tentative approval)

Source: * Newport/IMS Data In-house research**

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Outlook

 Sustain Leadership in Oncological APIs Continue to launch and develop oncological injectable APIs & others with high technological barriers including Peptides  Establish Presences in China Develop APIs and formulations to timely capture the generic business with strategic alliance and CRAMs from MNCs

 Japanese Market Penetration Expand strategic partnerships with major pharma

 Vertical Integration – API+ANDA Select difficult-to-make APIs to formulate dossiers and build an oncology injectable plant to provide value-added total solution to customers

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Confidential

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Brand Quality with Asian Advantages

www.scinopharm.com

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