SPT — Investor Presentation 2014

May 27, 2014

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ScinoPharm Management Presentation

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TWSE 1789

May 9, 2014

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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 Drug Co-development w/Lee’s in China Product Launch Table 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 in 2011, current market cap ~ US$1.8Bn, ¼ of total market cap of TWSE biotech sector

• 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), peptide, & injectable APIs

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

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Business Overview

• ScinoPharm has established its leadership position in Oncology APIs and is integrating into formulation; running two GMP compliant facilities in Taiwan & China and building an injectable plant in Taiwan

• Developed 70+ generic APIs with 24 launched. Filed 47 DMFs in US (673 DMFs WW), a leader in oncology injectable APIs with 22 US DMFs

• 80+ NCE CRAMs projects, with 6 in phase III for NDA filing in 2-3 years & 5 already launched. The only company in Asia supplying APIs for multiple commercial NCEs

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Corporate Strategies

 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 advanced APIs to formulate dossiers and build an oncology injectable plant to provide value-adding total solution

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Performance Indicators

Items	Indices	FY2013 ScinoPharm	FY2013 *Peers Avg.1 **
Financial Soundness	Current Ratio	346%	294%
	Quick Ratio	194%	174%
	Interest Cover. Ratio	17893%	118%
	Debt/Asset	16%	32%
	Op. Cashflow/CAPEX	92%	68%
Profitability	ROE	13.6%	3.5%
	ROA	11.7%	2.5%
	Operating Margin	27.5%	3.0%
	Net Margin	25.0%	2.4%
Turnover	**AR Days **	65	73
	Inventory Days	354	174

*1: Peers including 5 other API manufacturers listed on TWSE or Gre Tai Data source: 2013 annual reports

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ScinoPharm Waste Water Treatment

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Waste Water ScinoPharm in-house phase 1 & 2 treatment
Equalization pH Adjustment Denitrification Bioreactor Ultrafiltration
Tank Tank Tank Tank Membranes
National
Science-Park Effluent Permeate
Rivers Standards
WW facility Discharge Tank
Compliant
Tainan Science-Park
phase 3 Final Treatment
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Stricter Self-inspection on Waste Water than Regulation

• Science-Park checks ScinoPharm’s effluent discharge weekly, while ScinoPharm checks its own effluent on COD (Chemical Oxygen Demand) twice and SS (Suspended Solids) once a day

• To ensure wastewater treatment facilities function well, ScinoPharm checks COD on Wastewater buffer tank 3 times a week and monitors the pH value

• Reduce waste water amount; Recycle waste water from purification process and air-conditioners.

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International Verifications on EHS

 Verified by “Responsible Care Management System”, the only pharma co. in Taiwan that passed all 6 categories

 Approved by “SafeBridge” for high potency API production, the 1[st] in Asia and among 11 US & EU API co.’s

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ScinoPharm CSR results

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Social Welfare

ScinoPharm Art Seminars, Welfare Baseball Camp, PC donations, Emergency Aids, Charitable Auctions

Industry/Academia Exchange

Lectures and plant tours for college students, Sponsoring discussion between industry & academia

Sustainability

Environmental-friendly facility designs, subsidy on staff car pooling, “Responsible Care” system

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ScinoPharm CSR results (cont’d)

Labor Relations

Compliance with labor laws, Non-discrimination practice, Career development plans, Healthy activities

Corporate Governance

High standard on corp. governance, Code of conduct, Whistle-blowing hotline

Fair Info. Disclosure

Info disclosure complied with TWSE regulations, Financial transparency

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Financial & Operating Results

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In NT$ million, except for EPS	1Q,’14 (Reviewed)	1Q,’13 (Reviewed)	YoY
Net Sales	1,097	1,186	-7%
Gross Profit	433	655	-34%
Gross margin	40%	55%
Operating Expenses	(250)	(267)	-6%
Operating Income	183	388	-53%
Operating margin	17%	33%
Other Rev.(Exp.)	2	19	-89%
Net Income before Tax	185	407	-55%
Net Income after Tax	165	350	-53%
Net margin after tax	15%	30%
EPS (after tax)	0.24	0.52	-54%

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Balance Sheet- Consolidated

In NT$ million	2014/3/31 (Reviewed)	2014/3/31 (Reviewed)	2013/3/31 (Reviewed)	2013/3/31 (Reviewed)
Cash and Cash Equivalents	2,793	23%	3,411	31%
Accounts Receivable	630	5%	599	5%
Inventories	2,637	22%	2,226	20%
Long-Term Investments	260	2%	168	2%
Fixed Assets	4,434	37%	3,820	35%
Total Assets	12,029	100%	11,037	100%
Current Liabilities	2,156	18%	1,510	14%
L-T Liabilities and Others	66	-%	66	-%
Stockholders’ Equities	9,807	82%	9,461	86%

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Cash Flows- Consolidated

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1Q 2014 1Q 2013
In NT$ million
(Reviewed) (Reviewed)
Cash and cash equivalents at
2,289 3,035
beginning of period
Cash flows from operating activities 492 506
CAPEX (372) (256)
Short-term borrowings 380 128
Others 4 (2)
Cash and cash equivalents at
2,793 3,411
end of period
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Sales by Business

2013 Q1

2014 Q1

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CRO
CRO
CMO CMO
<1%
5%
19% 20%
Generic
Generic
75%
81%
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Sales by Indications

2013 Q1

2014 Q1

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Others
3%
Others
16%
CNS
31% CNS
Oncology
Oncology
24% 60%
66%
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Sales by Region

2013 Q1

2014 Q1

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Rest of
AU & NZ
Asia ROW
1%
India 8% <1%
8%
US &
EU
CAN
27%
56%
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Rest of
AU & NZ ROW
Asia
1% <1%
19%
US & CAN
India
41%
11%
EU
28%
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Formulation Co-development with Lee’s Pharma in China

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Background on Lee’s

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▪ Listed on HKSE (950.HK), Lee's Pharmaceutical Holdings Limited is a research & production integrated pharma company with over 20 years of operations in China market

▪ Lee’s enjoys strong capabilities in drug development, manufacturing, sales and marketing in China ▪ Lee’s launches 14 drugs and has 30 products in the development pipeline, focused on oncology, ophthalmology, cardiovascular, gynecology and dermatology.

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Multiple Drug Co-development with Lee’s

▪ ScinoPharm provides comprehensive API portfolio, while Lee’s operates strong drug product marketing channels in China. A win-win solution for both parties

▪ ScinoPharm and Lee’s have signed collaboration contracts to explore China market for the following products: ▪ Fondaparinux Sodium (anti-thrombotic) ▪ Travoprost (glaucoma) ▪ Bimatoprost (glaucoma)

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Cooperation Scheme (1) Fondaparinux Sodium

▪ ScinoPharm Taiwan will provide API and formulation technology to Lee’s for production and sales in China exclusively

▪ Lee’s will be responsible for applying drug license from CFDA and sell drug product in China

▪ Profits will be shared by ScinoPharm & Lee’s

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Cooperation Flow Chart (1)

Fondaparinux Formulation Technology Transfer

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China Market
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ScinoPharm
Lee’s
Taiwan
Successfully developed API Formulation production
API and Formulation CFDA DL application
Sales/Marketing in China
Profit
Sharing
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Market Info: Fondaparinux Sodium

• Fondaparinux is an anticoagulant that helps prevent the formation of blood clots caused by orthopedic surgery of the lower limbs

• ▪ Its market value in China estimated to exceed RMB500 million (US$ 80MM) in 2013

▪ The chemical synthesis of this carbohydratebased drug is extremely complicated with 50+ chemical steps. ScinoPharm is one of the few firms worldwide with a complete technical and scaled-up material supply chain for this API.

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Cooperation Scheme (2) Travoprost & Bimatoprost

▪ The above two APIs will be manufactured by ScinoPharm Changshu and provided to Lee’s exclusively for FDF production

▪ Lee’s can only buy APIs from ScinoPharm and will apply drug licenses from CFDA for sales in China

▪ Profits will be shared by ScinoPharm & Lee’s

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Cooperation Flow Chart (2)

Bimatoprost/ Travoprost API ScinoPharm Lee’s China Market Changshu Formulation Development Develop and Apply DL from CFDA produce API Formulation production Sales/Marketing in China Profit Sharing

• *Potential to trigger CFDA’s inspection at ScinoPharm Changshu

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Market Info: Travoprost & Bimatoprost

▪ These two new generation prostaglandin derivatives for glaucoma have shown good clinical results in IOP-lowering effect, which can effectively prevent disease deterioration. ~10 MM glaucoma patients are in China now ▪ Per Lee’s intelligence, the Chinese market value of glaucoma drugs and prostaglandin derivative products may reach RMB 10 billion (US$1.6Bn) and RMB 5 billion (US$800MM), respectively, by 2018

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2014 Product Launch Plan

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2014 Product Launch Plan

	API	Region	Indications	Brand Marketer	Regional Sales	WW Sales
	Azacitidine	US	MDS, Anti-cancer	Celgene	US$358MM*	US$818 MM*
	Dantrolene (injectable)	US	Malignant hyperthermia	JHP Pharma- ceuticals	US$20 MM*	US$46 MM*
	Decitabine	US	MDS, AML Anti-cancer	Eisai	US$250 MM*	US$289 MM*
	Docetaxel trihydrate	JP	Anti-cancer	Sanofi Aventis	US$180 MM (Taxotere)**	US$1,422 MM*
	Entecavir	TW	Hepatitis B virus	BMS	US$67 MM***	US$1,413 MM*
	Riluzole (liquid)	EU	Amyotrophic lateral sclerosis	Sanofi Aventis	US$66 MM*	US$187 MM*
	Zoledronic acid	JP	Osteoporosis	Novartis	US$120 MM***	US$1,361 MM*

Source: * IMS Data (Year 2013) ** Datamonitor In-house research*

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Launched

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Confidential

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Brand Quality with Asian Advantages

www.scinopharm.com

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