SPT — Investor Presentation 2015

Nov 16, 2015

TWSE 1789

ScinoPharm Management Presentation

Third Quarter 2015 On-Line Investor Conference

November 9, 2015

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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• Overview of ScinoPharm

• China Site Completed US FDA Inspection

� Financial & Operating Results in 3Q, 2015

• Business Updates

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Overview of ScinoPharm

- An API + ANDA Company Active Pharmaceutical Ingredients Abbreviated New D rug Application

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Confidential

Business Overview

• Established in 1997 in Taiwan, listed on TWSE in 2011, and honored as the top 5% TWSE issuer in information disclosure & corporate governance

• Specializes in high potency (steroid/cytotoxic) APIs and expands to injectable formulations

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

• 70 generic APIs developed with 27 APIs launched; 52 US DMFs filed (719 DMFs WW), 25 US DMFs in oncological APIs. 80+ NCE CRAM projects, with 5 launched and 9 in phase III for NDA filing in 2-3 years

• � Fully Complied with world-class cGMP and regulatory requirements; Certified by US FDA, EMA, Australian TGA, Japanese PMDA, etc.

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Long Term Strategies

Transforming to a full-scope pharma company per our core competency of R&D and cGMP manufacturing in high-technical barrier APIs

• :

• Vertical Integration to Generic Formulations Developing dossiers per our difficult-to-make APIs to increase value proposition in the supply chain

• :

• Innovative Delivery Formulations Targeted delivery & extended release of proven APIs via 505(b)2 fast track

• :

• Brand New Chemical Entities (New Drugs) Collaborating with academic research institutes, focusing on un-met oncological medical needs of high prevalence in Asia

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Keys to Generic Formulation Business

• Expanding formulation portfolio

• Building on-site injectable facility and forming a complete supply chain of drug products

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

• Acquiring critical resources via M&A

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China Site Completed US FDA Inspection

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Changshu Site Completed FDA Inspection

• Successfully completed a GMP inspection by US FDA, with ZERO 483 observations

• A 5-day on-site inspection to evaluate quality system, facilities, storage, manufacturing, packaging, and labs

• With this satisfactory inspection, Changshu site adds to its current record of favorable cGMP inspections by the US FDA and the Mexican APIF

• Multiple ways to accelerate growth via license-in products, self-development, technology transfer, joint development and strategic alliance

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Policy Reforms to Expedite Drug Approvals

• Re-define new drugs and generics in China

• Elevate the overall quality and efficacy requirements of

• submissions

• Encourage innovative drugs via fast track approval

• Allow new drug developers to own drug licenses without manufacturing sites

• Clear the application backlog by discouraging redundant filings and fee raises

• Impose severe penalties on fraudulent data/activities on research & trials

This reform will significantly lift the cost structure & entry barrier to Chinese market, with a heavy focus on quality and innovation

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Selected List of CRAM Projects at SPC

No Customer Project Type Product Indication Product Type Remarks/Market	No Customer Project Type Product Indication Product Type Remarks/Market	No Customer Project Type Product Indication Product Type Remarks/Market	No Customer Project Type Product Indication Product Type Remarks/Market	No Customer Project Type Product Indication Product Type Remarks/Market	No Customer Project Type Product Indication Product Type Remarks/Market	No Customer Project Type Product Indication Product Type Remarks/Market	No Customer Project Type Product Indication Product Type Remarks/Market
	No	Customer	Project Type	Product Indication	Product Type	Remarks/Market
	**1 **	Top 3 major big pharma	**CMO **	Approved antidepressant drug in US	GMP Intermediate	Passed Mexican authority (APIF) GMP inspection
	**2 **	Top 5 major big pharma	**CMO **	Approved African sleeping disease drug	API	Site transfer from SPT
	**3 **	US NASDAQ listed Pharma	**CRO **	Phase III clinical trial for opioid- induced constipation	Crude API	US
	**4 **	Lee’s Pharma	**CRO **	Phase II/III clinical trial for cancer	API	China
	**5 **	China Pharm Company (A)	**CRO **	Phase II/ III clinical trial for cancer	API	China
	**6 **	China Pharm Company (B)	**CRO **	Phase IIb for Age-related Macular Degeneration	API	US/China
	**7 **	Taigen Biotech	**CRO **	Phase II clinical trial for myocardial infarction	API	China/Taiwan
8 US-based new drug company (C) CRO Phase II clinical trial for prevention of HIV infection API US 9 Alsan Pharmaceuticals CRO Phase II clinical trial for cancer API China/Global 10 US-based new drug company(D) CRO Phase II clinical trial for diabetes Intermediate US 10	**8 **	US-based new drug company (C)	**CRO **	Phase II clinical trial for prevention of HIV infection
					API	US
	**9 **	Alsan Pharmaceuticals	**CRO **	Phase II clinical trial for cancer	API	China/Global
	10	US-based new drug company(D)	**CRO **	Phase II clinical trial for diabetes	Intermediate	US

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Financial & Operating Results

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Cumulative P&L - Consolidated

In NT$ million, except for EPS 1Q~3Q,’15 (Reviewed) 1Q~3Q,’14 (Reviewed) YoY	In NT$ million, except for EPS 1Q~3Q,’15 (Reviewed) 1Q~3Q,’14 (Reviewed) YoY	In NT$ million, except for EPS 1Q~3Q,’15 (Reviewed) 1Q~3Q,’14 (Reviewed) YoY	In NT$ million, except for EPS 1Q~3Q,’15 (Reviewed) 1Q~3Q,’14 (Reviewed) YoY	In NT$ million, except for EPS 1Q~3Q,’15 (Reviewed) 1Q~3Q,’14 (Reviewed) YoY	In NT$ million, except for EPS 1Q~3Q,’15 (Reviewed) 1Q~3Q,’14 (Reviewed) YoY
	In NT$ million, except for EPS	1Q~3Q,’15 (Reviewed)	1Q~3Q,’14 (Reviewed)	YoY
	Net Sales	2,925	3,248	-10%
	Gross Profit	1,162	1,306	-11%
	Gross margin	39%	40%
	Operating Expenses	(676)	(797)	-15%
	Operating Income	486	509	-5%
	Operating margin	16%	16%
	Other Rev.(Exp.)	85	19	347%
	Net Income before Tax	571	528	8%
Net Income after Tax 440 479 -8% Net margin after tax 15% 15% EPS (after tax) 0.60 0.66 -9%	Net Income after Tax	440	479	-8%
	Net margin after tax	15%	15%
	EPS (after tax)	0.60	0.66	-9%

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Balance Sheet- Consolidated

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2015/09/30 2014/09/30
In NT$ million
(Reviewed) (Reviewed)
Cash and Cash Equivalents 1,846 15% 1,303 11%
Accounts Receivable 648 5% 866 8%
Inventories 2,289 19% 2,669 24%
Long-Term Investments 339 3% 251 2%
Property, plant and equipment 5,143 43% 4,884 44%
Other Current/Non-Current Assets 1,730 15% 1,268 11%
Total Assets 11,995 100% 11,241 100%
Current Liabilities 2,199 18% 1,849 16%
L-T Liabilities and Others 95 1% 67 1%
Stockholders’ Equities 9,701 81% 9,325 83%
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Cash Flows- Consolidated

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1Q~3Q 2015 1Q~3Q 2014
In NT$ million
(Reviewed) (Reviewed)
Cash and cash equivalents at
1,928 2,289
beginning of period
Cash flows from operating activities 764 278
CAPEX (582) (897)
Short-term borrowings 402 433
Cash Dividends (141) (811)
Others (525) 11
Cash and cash equivalents at
1,846 1,303
end of period
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Sales by Business

2015 Q1-Q3 CRO CMO BD 5% 1% 2%

2014 Q1-Q3 CRO CMO 3% 20% Generics 77% 15

2015 Q1-Q3

Sales by Indications CNS Others 11% 4% 2014 Q1-Q3 Oncology Others 85% 15% Oncology CNS 60% Oncology 22% 63% 16

Sales by Region

2015 Q1-Q3

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Rest of
AU&NZ
ROW
Asia
6%
<1%
12%
2014 Q1-Q3
Rest of India
AU&NZ
Asia ROW 18%
2%
US&CAN
<1%
10%
EU
45%
India
18%
15%
EU US&CAN
19% 53%
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Business Updates

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2015 CPhI WW Trend Observations

• Prosperous pharma M&A wave

ScinoPharm reaching out new business along with customer M&A

• Customer concentration increases. Big pharmas focus on core business via downsizing and outsourcing More demands for CRO & CMO services

• South America, Russia & China are emerging and migrating into regulated markets by tightening their GMP rules ScinoPharm applying its successful experiences in US/EU to

• penetrate into emerging markets

• High-end APIs outsourced to India/China have gradually reflux to US/EU due to GMP compliance risks

• ScinoPharm’s proven track record of high quality timely captures the high-end API business

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Product Development Project - 1

• ScinoPharm teams up with an US/Nasdaq listed partner on the first-line chemotherapy drug for non-small cell lung cancer with less side effect than the traditional drugs

• ScinoPharm provides API exclusively. The partner bears the cost of API development, produces formulation and leads the filing of drug license application & marketing after launch. ScinoPharm receives royalty from drug sales

• US DMF filed in Sep. 2015; The partner to apply US NDA via 505(b)2 fast track targeting Paragraph IV in late 2016

• Per Global Data, this product’s US sales expected to reach USD 1 billion in 2018

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Product Development Project - 2

• ScinoPharm formed a strategic alliance with an US/Nasdaq listed partner and a Chinese partner on an imaging agent

• ScinoPharm provides API exclusively, the Chinese partner produces drug product, and the US partner will file drug license and market. Three parties share the end profit

• Targeting for Paragraph IV challenge in late 2016

• Per Datamonitor, this product’s US sales expected to reach USD340 million in 2018

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2015 Product Launch Plan

API	Region	Indications	Brand Marketer	Regional Sales	WW Sales
Azacitidine	US	MDS Oncology	Celgene	US$323MM*	US$815MM*
Benazepril	CN	Hypertension, CV	Novartis	US$65MM**	US$480MM*
Desmopressin	US	Polyuria	Ferring	US$131MM*	US$395MM*
Letrozole	JP	Breast Cancer	Novartis	US$51MM**	US$581MM*
Tamsulosin	US	Benign prostatic hyperplasia (BPH)	Boehringer Ingelheim	US$335MM*	US$1,829MM*
			Launched

Source: * IMS Data (2013Q3-2014Q2) ** In-house research

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uestions Q

&

Answers

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Brand Quality with Asian Advantages www.scinopharm.com

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