SPT — Investor Presentation 2014

Mar 11, 2014

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ScinoPharm Corporate Presentation TWSE 1789

Confidential

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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Confidential

Table of Content

Overview of ScinoPharm

Industry Overview

Key Strengths and Strategy

CSR Update

Outlook

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Overview of ScinoPharm - An API + ANDA Company

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Confidential

Background

• Established in 1997 in Taiwan by founders from Syntex, listed on TWSE, current market capitalization around US$1.9 billion

• Major investors including 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.

• Specialized in high potency (cytotoxic, steroid) & injectable APIs (Active Pharmaceutical Ingredient)

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

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Confidential

Mission

 Maintain dominant position in Specialty APIs for generic market

 Provide API custom synthesis services to new drug

& brand companies

• Process R&D and clinical supplies leading to future contract manufacturing opportunities of new chemical entities (“NCEs”)

 Contract manufacturing of commercialized new drugs

 Supplying small molecules and peptides

• High potency

• High technological barriers

• IP-protected and GMP-complied processing

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Confidential

Major Milestones

1997 ScinoPharm Taiwan, Ltd. established 2000 CGMP production began in small-scale units

2001 Passed first US FDA site inspection at Taiwan manufacturing site 2001 Established ScinoPharm Kunshan in China and ScinoPharm Biotech 2003 First generic API supplied for commercial launch in the U.S. 2005 First NCE API supplied for commercial launch in Europe 2005 Passed second US FDA site inspection 2005 Awarded the Entrepreneurial Company Award by Frost & Sullivan 2007 Passed Australian TGA site inspection in Taiwan 2008 Passed US FDA, Japanese PMDA, Korean FDA & Hungarian NIP site inspections

2009 Established ScinoPharm (Changshu) Pharmaceutical in China 2010 Strategically invested into Tanvex Biologics, Inc. 2010 Listed on Emerging Stock Market in Taiwan 2011 Began trading its shares on the Taiwan Stock Exchange Board 2012 Passed fourth US FDA site inspection

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Confidential

Business Overview

 Maintain dominant position in Specialty APIs for generic market. Strong customer base (300+) in US/EU/Japan, some through Indian generics. Aggressively developing Japan and China markets

 Developed ~70 generic APIs with 23 launched. Filed 47 DMFs in US (664 DMFs WW), leader in supplying oncology injectable APIs with 22 US DMFs

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

 Double A Strategy “API + ANDA”: Focusing on Oncological Injectables

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Confidential

World Class Facilities

Taiwan

China

• 6.6 hectares of land, 330K sqft facilities with >200M[3] reactor volume after 2 large product lines expansion

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

• US FDA approved & 250+ GMP audits by customers

• Provides comprehensive contract research services for brand drug companies

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

• 1st phase completed in Q1, 2012 2nd phase completed in Q4, 2013

• CGMP designed facility for intermediates & high potency API

• Complete capabilities in API development, and manufacturing from small to large scale for generic & CRAMs markets

 Global Market

 Global market including China

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Cumulative P&L - Consolidated

In NT$ million, except for EPS	1Q~4Q,’13 (Audited)	1Q~4Q,’12 (Audited)	YoY
Net Sales	5,088	4,573	11%
Gross Profit	2,543	2,313	10%
Gross margin	50%	51%
Operating Expenses	(1,145)	(1,053)	9%
Operating Income	1,398	1,260	11%
Operating margin	28%	28%
Other Rev.(Exp.)	11	112	-90%
Net Income before Tax	1,409	1,372	3%
Net Income after Tax	1,273	1,171	9%
Net margin after tax	25%	26%
EPS (after tax)	1.88	1.73	9%

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Balance Sheet- Consolidated

In NT$ million	2013/12/31 (Audited)	2013/12/31 (Audited)	2012/12/31 (Audited)	2012/12/31 (Audited)
Cash and Cash Equivalents	2,289	20%	3,035	29%
Accounts Receivable	971	8%	841	8%
Inventories	2,512	22%	1,870	18%
Long-Term Investments	258	2%	168	2%
Fixed Assets	4,214	37%	3,559	34%
Total Assets	11,484	100%	10,340	100%
Current Liabilities	1,775	15%	1,204	12%
L-T Liabilities and Others	66	1%	65	-%
Stockholders’ Equities	9,643	84%	9,071	88%

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Cash Flows- Consolidated

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1Q~4Q 2013 1Q~4Q 2012
In NT$ million
(Audited) (Audited)
Cash and cash equivalents at
3,035 3,294
be innin of eriod
g g p
Cash flows from operating activities 939 982
CAPEX (1,226) (873)
-
Long-term Investment (107)
Short-term borrowings 426 264
Cash Dividends (780) (631)
Others 2 (1)
Cash and cash equivalents at
2,289 3,035
end of eriod
p
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Sales by Business

FY2012

FY2013

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CRO
2%
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CMO
28%
Generic
72%
CRO
<1%
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Confidential

Sales by Indications

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Others
31.09%
Oncology
68.91%
學名藥
88.56%
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Confidential

Sales by Region

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Key Strengths and Strategy

Confidential

Business Strategies

 Maintain balance between generic & brand business, non-competing on same products

 Provide comprehensive (life cycle) services to NCE development companies from clinical materials to commercial

 Focus on generic APIs with high technological barrier to entry

 Provide cost-effective R&D and manufacturing of early steps in China coupled with high quality, IPprotected GMP production in Taiwan

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Confidential

Competitive Advantages

• Combination of cost advantages and GMP/IP/EHS compliance from China & Taiwan

• Rich generic pipeline driven by a seasoned & cost effective R&D infrastructure

• Familiarity with drug development & registration requirements

• Track record of timely and extensive client support

• Existence of a broad, global long term client base

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High Profile Talents

Whole Company

R&D Dept.

• Represents ScinoPharm Taiwan staff only

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Confidential

Strong Generics Product Portfolio Focus on High Barrier and High Potency Generic API Products

**Type **	# of Product
Oncological	30
CNS	7
Cardiovascular	3
Hormonal	3
Gastrointestinal	1
Muscle	4
Antiviral	5
Respiratory	2
Peptides	6
Miscellaneous	6

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Confidential

台灣神隆 DMF 全球註冊概覽表 Global DMF Filings Number of DMF filed

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台灣神隆 DMF 全球註冊概覽表
800
730
700 662
631
587
600
537
500
435
400 370
287
300
200 170
100
22 27 29 34 38 41 43 47 53
0
2006 2007 2008 2009 2010 2011 2012 2013 2014(E)
US DMF Accumulation Worldwide DMF Accumulation
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ScinoPharm’s Strengths in R&D and Product Pipeline Well-Demonstrated by the Annual and Cumulative Number of DMF Filings Globally

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ScinoPharm - Oncological API Leader

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Source: FDA 2013Q4 DMF database

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Corporate Social Responsibility (CSR) Update

ScinoPharm’s CSR Concept

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E （ Environment ）

S （ Social ）

- Energy savings - Environmental Protection - Balance between Human and Environment G （ Corporate Governance ）

• Labor Safety is priority

• Balanced compensation

• Healthy working environment

• Consumer rights

CSR

• Comprehensive and fair disclosure

• Financial transparency

- Internal audit

• Independent directors

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ScinoPharm CSR results

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Social Welfare

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

Industry/College Exchange

Holding lectures and plant tours for college students, helping students to understand industries

Sustainability

Environmental protection from facility designs, subsidy on staff car pool, “Responsible Care” system

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ScinoPharm CSR results (cont’d)

Labor Relations

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

Corp. Governance

Establishment of Corp. Governance and moral standards, Code of conduct, Integrity as top priority

Info. Disclosure

Info disclosure complied with TWSE regulations, Financial transparency

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Outlook

Confidential

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 API business to timely capture the generic business and CMO by MNCs

 Japanese Market Penetration Expand strategic partnerships with major pharma

 Vertical Integration– Double A Strategy (API+ANDA) Select difficult-to-make APIs to formulate dossiers for value added one-stopshop services to customers. Build an oncology injectable formulation plant

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uestions Q & Answers

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Brand Quality with Asian Advantages

www.scinopharm.com

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