2010 Sales Results Presentation15.02 › news3files › 2010_sales_results... · Conference call:...

PHARMSTANDARD – LEADING RUSSIAN PHARMACEUTICAL COMPANY

Conference call: 2010 Sales Results (2.15.11)

Sales Results Presentation 2010

Pharmstandard at a Glance 2010Y

Market

Production

Sales &Marketing

Financials

Leading domestic pharmaceutical company in Russia (measured by sales) for 2010

• №2 Company overall in Russian pharmaceutical market , (Market Share of 4%)

• №2 Company in the Retail market , (Market Share of 5%)

• №1 Company among domestic pharmaceutical companies , ( Market Share of 18,4%)

Modern and efficient manufacturing facilities

• 3 pharmaceutical production sites and 1 medical equipment and disposables plant

• Russian standards compliant facilities & 6 lines on Kursk are EU GMP compliant

• More than 250 pharmaceutical products, 98 are included in the VED¹ list, 50.5% of total sales.

• Capacity – more then 1,3 billion packs per year

Experienced sales force & Market leading brands

• 647 units in sales force

• 2 products in Top best selling brands in Retail market (Arbidol №1, Pentalgin № 7).

• Launched 12 new products

Industry leading growth and profitability

• Total sales of the Company in 2010 grew by 23.3% to RUR 29.719 mln (RUR 24.095 mln in 2009)

• Organic sales (with out TPP) of the Company grew by 10.7% to RUR 19.859 mln

(RUR 17.939 mln in 2009)

2Conference call: 2010 Sales Results (2.15.11)

¹The list of vital and essential drugs


2010• OJSC «Pharmstandard» won in the 'Pharmaceutical Industry' nomination category of the national business

award competition 'Company of the Year 2010'.¹

• OJSC «Pharmstandard» launched 12 new products

• OJSC «Pharmstandard» acquired 100% of the shares of CJSC «Vindexpharm». CJSC «Vindexpharm» owns the Acipol® trademark.

• OJSC «Pharmstandard» registered retail prices for 98 pharmaceuticals produced by the company (taking into account all forms and dosages) included in the Vital and Essential Pharmaceuticals (VEP).

• OJSC «Pharmstandard» and State Corporation «ROSTEKHNOLOGII» signed a co-operation agreement.

• OJSC «Pharmstandard» and «Johnson & Johnson» LLC entered into mutual agreement and successfully realized the project to localize secondary packaging of the product Velcade® (INN Bortezomib) on the Company`s production facility OJSC «Pharmstandard-Ufavita».

2011• OJSC «Pharmstandard-Leksredstva» announced an offer to purchase up to 1,850 of OJSC «Pharmstandard»

shares at RUR 3000 per ordinary share.

• OJSC «Pharmstandard» announced its purchase of 55% of shares in PJSC «Biolek».

Source: Company data

Achievements 2010/2011

3

FRP

Import Substitution

Source: Pharmexpert, Company data

• Ministry of Industry and Trade of the Russian Federation approved the concept of the Pharmaceutical

Sector Development Strategy 2020.

• This document outlines the guidelines for the adoption of the GMP standards and implementation of the

import substitution programme.

Strategy 2020

• According to the Strategy 2020, by 2020, the share of local products in the Russian market shall reach 50%.

• In December 2008, Ministry of Industry and Trade of the Russian Federation issued Order No 427. 15%

price preferences to Russian manufacturers until 31 December, 2010.

• List of 57 strategic products approved byPrime Minister of the Russian Federation Vladimir Putin

• FRP was launched in 2005 and became one of the key market drivers.

Stipulates free medication for certain social groups, such as physically handicapped and veterans.

• Budget 2010 increased by 10% up to 88 bln RUR

Government Support of healthcare in frame of PHARMA 2020 strategy

Regulations

• New approach to the price registration and regulation approved and implemented since 1/04/2010

• Obligatory GMP production facilities certification since January 2014

• 15% price preference for local producers in government procurement

• New law about pharmaceutical products is in force since 01.09.10

• New standards of treatment adopted in 2010

Expected

results

• Starting from 2020 Domestic products consumption – 50% of total market by value

• Share of innovation preparations on the market – 60% of total market by value

• Increase of export by 8 times compared to 2008

• Provision of medicinal safety of the RF in compliance with the list of life-saving drugs

• Stimulation of domestic substances production sufficient for production of 50% of total drugs by value

4Conference call: 2010 Sales Results (2.15.11)

7 Years of Substantial Growth

Conference call: 2010 Sales Results (2.15.11) 5

50%

33%

28%

68%

23.3%

44%

Pharmstandard` s sales in 2010 grew by 23.3% and amounted to RUR 29.719 million

3,946

5,685

8,523

11,371

14,565

24,095

29,719

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2004 2005 2006 2007 2008 2009 2010


Pharmaceuticals

97.9% of 2010 sales

Medical Equipment

2.1% of 2010 sales

OTC53.7% of

total Pharma sales

� Therapeutic focus:

� Analgesics

� Cough & cold

� Vitamins

� Anti-viral

� Anti-fungal

� Product portfolio includes:

� Coronary Therapy

� Acid pump inhibitors

� Nitrites & nitrates

� ACE inhibitors

� Alimentary tract metabolism

� Product portfolio includes:

�Velcade

�Mildronate

� IRS-19 & Imudon�Others

24.3% Pharma revenue growth or RUR 5,682 million; RUR 29,089 million11.5% organic Pharma growth* or RUR 1,979 million; RUR 19,229 million

5.3% growth 41.5% growth 60.2% growth

2010 FY Sales Structure

*TPP - third parties products .

Third Parties Products33.9% of

total Pharma sales

Rx11.4% of

total Pharma sales

-8.5% decrease

6


Revenue Analysis 2010

14 841 15 633

2 3383 308689

63072

2886 156

9 860

0

5 000

10 000

15 000

20 000

25 000

30 000

2009 2010

OTC Rx Medical Equipment Others Third parties products

Sales structure, mln RUR

Total sales grew by 23.3%

Third Parties Products – 33.2% of Total Sales (2009:25.5%)

24 095

29 719

OTC: +5.3%

+ RUR 792.2 mln

Rx: + 41.5%

+ RUR 969.9 mln

ME: - 8.5%

- RUR 58.5 mln

Third parties products: + 60.2%

+ RUR 3 703.6 mln

Source: Company data, IFRS FS

23.3%


Revenue Analysis 4Q 2010

6 179

4 953

831

1 071

254

240

12

153

2 2813 748

0

2 000

4 000

6 000

8 000

10 000

12 000

4Q 2009 4Q 2010

OTC Rx Medical Equipment Others Third parties products

Sales structure, mln RUR

Total sales grew by 6.4%

Third Parties Products – 36.9% of Total Sales (2009: 23.9%)

9 557

10 165

OTC: - 19.8%

- RUR 1 226.0 mln

Rx: + 28.9%

+ RUR 239.8 mln

ME: - 5.2%

- RUR 13.3 mln

Third parties products: + 64.3%

+ RUR 1 466.6 mln

Source: Company data,

6.4%


Best Selling Brands 2010 (organic)

Pharma demonstrated total value growth (with out Third parties products) of 11.5%,

Vital and Essential Pharmaceuticals - RUR 50.5% million of organic sales revenue

№ BRANDVolume

(mln packs)Sales (mln

RUR)% of total

salesVolume


RUR)% of total

sales Change % Change %1 Arbidol 42.640 5 589 29.5% 45.736 5 503 32.0% -3.095 -6.8% 87 1.6%2 Pentalgin 38.124 1 988 10.5% 40.608 2 100 12.2% -2.484 -6.1% -111 -5.3%3 Complivit 14.903 1 228 6.5% 16.818 1 188 6.9% -1.915 -11.4% 40 3.4%4 Therpincod 7.470 1 047 5.5% 6.442 889 5.2% 1.028 16.0% 158 17.8%5 Phosphogliv 2.083 699 3.7% 1.721 596 3.5% 0.362 21.0% 103 17.3%6 Codelac 8.317 692 3.7% 8.386 752 4.4% -0.069 -0.8% -61 -8.1%7 Flucostat 5.609 653 3.4% 5.534 661 3.8% 0.075 1.3% -8 -1.2%8 Afobazol 4.093 607 3.2% 3.649 531 3.1% 0.444 12.2% 76 14.4%9 Amixin 1.415 592 3.1% 1.322 558 3.2% 0.093 7.0% 34 6.1%

10 Rastan 0.336 439 2.3% 0.153 186 1.1% 0.182 118.9% 254 136.4%TOP 10 total 124.989 13 536 71.5% 130.369 12 964 75.5% -5.381 -4.1% 572 4.4%Other brands 541.013 5 405 28.5% 577.671 4 215 24.5% -36.658 -6.3% 1 190 28.2%TOTAL SALES 666.002 18 941 100.0% 708.040 17 179 100.0% -4 2.038 -5.9% 1 762 10.3%

2010 2009 Volume 10/09 Sales 10/09


Top 10 OTC Brands 2010(organic)

Pharma demonstrated total OTC growth (with out Third parties products) of 5.3%

№ BRANDVolume


RUR)% of total

salesVolume (mln

packs)Sales (mln

RUR)% of total

sales Change % Change %1 Arbidol 42.640 5 589 35.8% 45.736 5 503 37.1% -3.095 -6.8% 87 1.6%2 Pentalgin 38.124 1 988 12.7% 40.608 2 100 14.1% -2.484 -6.1% -111 -5.3%3 Complivit 14.903 1 228 7.9% 16.818 1 188 8.0% -1.915 -11.4% 40 3.4%4 Therpincod 7.470 1 047 6.7% 6.442 889 6.0% 1.028 16.0% 158 17.8%5 Codelac 8.317 692 4.4% 8.386 752 5.1% -0.069 -0.8% -61 -8.1%6 Flucostat 5.609 653 4.2% 5.458 649 4.4% 0.151 2.8% 4 0.7%7 Afobazol 4.093 607 3.9% 3.649 531 3.6% 0.444 12.2% 76 14.4%8 Amixin 1.256 542 3.5% 1.162 507 3.4% 0.094 8.1% 35 6.9%9 Coal activated 71.233 247 1.6% 56.587 180 1.2% 14.646 25.9% 68 37.7%

10 Corvalol 41.986 230 1.5% 46.298 222 1.5% -4.312 -9.3% 7 3.4%TOP 10 total 235.631 12 825 82.0% 231.144 12 521 84.4% 4.487 1.9% 304 2.4%Other brands 376.720 2 808 18.0% 433.374 2 320 15.6% -56.654 -13.1% 488 21.1%TOTAL SALES 612.351 15 633 100.0% 664.518 14 841 100.0% -5 2.167 -7.9% 792 5.3%

2010 2009 Volume 10/09 Sales 10/09


Arbidol sales structure 2010

Volume packs


26,349

45,73642,640

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2008 2009 2010

Thsd units

2,731

5,503 5,589

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2010

Mln RUR

73.6%

-6.8%

101.5%

1.6%

In the end of 2010 there was no flu pandemic in Russia. Overall annual sales of Arbidol® amounted to RUR 5.589 exceeding their revenue of RUR 5.503 million in 2009.

Value mln RUR


Arbidol sales structure 4Q2010


6,847

23,931

12,322

0

5,000

10,000

15,000

20,000

25,000

30,000

4Q 2008 4Q 2009 4Q 2010

Thsd units

279.5%

-48.5%

703

2,932

1,739

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4Q 2008 4Q 2009 4Q 2010

Mln RUR

316.8%

-40.7%

In the 4th quarter of 2009 Russia experienced a high incidence of the pandemic H1N1 influenza strain.

Volume packs Value mln RUR


Top 10 Rx Brands 2010 (organic)

Pharma demonstrated total Rx value growth (with out Third parties products) of 41.5%,

(23.3% volume growth)

№ BRAND

Volume (mln

packs)Sales (mln

RUR)% of total

sales

Volume (mln

packs)Sales (mln

RUR)% of total

sales Change % Change %1 Phosphogliv 2.083 699 21.1% 1.721 596 25.5% 0.362 21.0% 103 17.3%2 Rastan 0.336 439 13.3% 0.153 186 8.0% 0.182 118.9% 254 136.4%3 Biosulin 0.731 361 10.9% 0.442 211 9.0% 0.289 65.4% 150 71.4%4 Combilipen 2.919 279 8.4% 1.811 195 8.4% 1.108 61.2% 84 42.9%5 Cocarboxylase 4.417 217 6.5% 3.165 109 4.7% 1.252 39.6% 107 98.5%6 Picamilon 3.959 155 4.7% 4.299 129 5.5% -0.341 -7.9% 26 20.5%7 Cyclodol 2.730 120 3.6% 2.506 107 4.6% 0.224 9.0% 13 12.4%8 Sulfocamphocain 2.632 104 3.1% 1.989 69 3.0% 0.643 32.4% 35 50.0%9 Azitrox 0.631 99 3.0% 0.655 108 4.6% -0.023 -3.5% -9 -8.1%

10 Octolipen 0.482 93 2.8% 0.149 29 1.2% 0.333 222.7% 64 224.1%TOP 10 total 20.920 2,566 77.6% 16.890 1,738 74.3% 4.030 23.9% 828 47.6%Other brands 32.731 742 22.4% 26.632 600 25.7% 6.099 22.9% 142 23.7%TOTAL SALES 53.650 3,308 100.0% 43.522 2,338 100.0% 10.128 23.3% 970 41.5%

2010 2009 Volume 10/09 Sales 10/09


Products launched in 2010

Pharmstandard launched 12 new products: • Pentalgin® (new)• Acipol® (capsules) • Formetin® (850 mg and 1000 mg tablets) • Phosphogliv® forte (capsules)• Artrozan® (solution for intramuscular injection 6 mg/ml)• Complivit® Calcium D3 forte (tablets)• Complivit® Calcium D3 for young children (powder)• Complivit® Trimestrum 1,2,3, trimester (tablets)• Maxicold® Rino (powder)• Selmevit® Intensive (coated tablets).

Sales proceeds of the Company for the products launched in 2010, amounted to RUR 262 million or 1.4% of the Company's organic sales of pharmaceuticals.

RUR 140 million of which resulted from sales of Acipol®.

The majority of the new pharmaceutical products were launched in the 4th quarter of 2010.

Export of the company's pharmaceutical products in 2010


• Export of the company's pharmaceutical products in 2010 increased by 38.8% and amounted to RUR 593 million over RUR 427 million in 2009.

• The share of Top-10 exported pharmaceuticals amounts to 79% (RUR 472 million) of the Company's revenue from export.

211.6

119.9

43.8

13.03.7 3.9

9.52.2 0.8 1.9 4.1 0.0

6.6 6.6

248.1

206.6

46.2

24.5 21.212.7 10.9 9.1 5.1 4.2 3.8 0.9 0.0 0.0

0

50

100

150

200

250

300

2009 2010

The Company exports its products to 14 countries, mostly to CIS and former SU countries


Collaboration projects – 3rd parties products

16

Sales 20102010 % of total

sales2009 % of total

sales

Growth in 2010/2009

Growth in 2010/2009

( RUR mln) (RUR mln) (RUR mln) (%)

Third parties products 9,859.9 33.2% 6,156.4 25.5% 3,703.6 60.2%Velcade® 3,838.2 12.9% 3,661.9 15.2% 176.3 4.8%Coagil VII 1,799.5 6.1% 0.0 0.0 1,799.5 _Midronate® 1,211.7 4.1% 1,194.3 5.0% 17.3 1.5%Prezista® 942.5 3.2% 0.0 0.0% 942.5 _Pulmozym® 610.2 2.1% 143.9 0.6% 466.4 324.1%IRS®-19, Imudon® 533.5 1.8% 645.6 2.7% -112.1 -17.4%

Other 3rd parties products 924.4 3.1% 510.6 2.1% 413.8 81.0%

The sales of third party products have grown by 60.2% or RUR 3.703 million and reached RUR 9.860 million. The share of TPP in the overall structure of the Company's sales in 2010 was 33.2%.

There are different types of third party products:Manufacturing of TPP at the company's facilitiesVelcade® (Johnson & Johnson), IRS 19® and Imudon® (Abbott Products). The Company's revenue from sales of these products in 2010 amounted to RUR 4.372 million.

Distribution, promotion of TPPMildronate® (Grindex), Prezista® (Janssen-Cilag) and other products. The revenue from sales of these products in 2010 amounted to RUR 2.752 million.

Participation with TPP in open auctions Coagil VII (CJSC «GENURIUM»\CJSC «Lekko»), Pulmozyme® (Hoffmann-La Roche) and other products. The revenue from sales of these products in 2010 amounted to RUR 2.736 million.


Sales of medical equipment

In 2010 the company's revenue from the sales of medical equipment amounted to RUR 630 million.

Despite a reduction in sales in 2010 compared to 2009 by 8.5%, it would be reasonable to say that this segment of the Company's business has stabilised, considering that in 2009 reduction in sales of medical equipment compared to 2008 was 36%.


• PJSC «Biolek» is a Top-20 Ukrainian pharmaceutical company • The Biolek`s revenue for 2010 was RUR 545 million (UAH 142.6 million¹) which represents an increase of

35.1% over RUR 403.4 million (UAH 105.6 million¹) for the previous year.• PJSC «Biolek» exports its products to 14 countries, mostly to CIS

As per Central Bank rate on 31.12.2010: UAH 10 = RUR 38.28

PJSC «Biolek» (Ukraine) sales results 200-2010

Biotechnological project GENERIUM:


founded by two Russian pharmaceutical companies CJSC «GENERIUM»\CJSC «Lekko» and OJSC«PHARMSTANDARD» in order to establish biotechnological R&D center and production facilities to develop and

produce modern biopharmaceutical products.

Targets: to cover demand of Russian population in biopharmaceutical products with attractive price to diagnose and treat serious and social diseases as:

CJSC «GENURIUM»CJSC «Lekko»

Role in the project:production facilities to develop

and produce modern biopharmaceutical products

Therapeutic areas:● Hemophilia● Tuberculosis● Multiple sclerosis● Oncology diseases● Human growth hormone deficit● Myocardial infarction● Insult

Manufactured drugs:•Coagil VII •Diaskintest®

2011-15•5 new products

NTS+50% OJSC «Pharmstandard»

50% Shuster A.M.

Role in the project:• biopharmaceutical products research

and development • collaboration with leading local

scientific academic centers

Role in the project:

• clinical trials

• registration

• marketing

• sales and distribution


Within the framework of the biotechnology project GENERIUM:

Main objectives : Research &Development center

• biopharmaceutical products research and development

• collaboration with leading local scientific academic centers

• scientists with big pharma experience

• organization of local / international scientific board member

Project idea: To build the modern R&D center :

• Territory – 70 hectares in central region ( Pokrov, 80 km from Moscow)

• Buildings and production facilities – 4500 sq. m.

• Employees – 150 scientists with experience in R&D in biotechnology, chemistry, pharmacology and other scientific areas

• Residential area – more than 10 000 sq. m. with all necessary infrastucturefor 600 people.

• Total Investment planned – around 1,080 mln RUR

• PHS investments by the end of 2010 – RUR 630 million, of which RUR 150 million contributed to the equity capital of NauchTekhStroy Plus Ltd.

• Project completion – end of 2012


Biotechnological project GENERIUM

•Pharmstandard met all conditions of the Coagil VII (MNN Eptacog Alpha) delivery contract to the amount of RUR 1,799 million (excluding VAT) under the 7 nosologies program.

•The product Diaskintest® for the total amount of RUR 135 million (excluding VAT) was delivered in 2010.

• 5 new pharmaceutical products which are being developed through the joint bio-technology project GENERIUM, are undergoing clinical trials.


Biotechnological project GENERIUM

In 2011 the Company is planning to invest no less than an additional RUR 150 million in the completion of the R&D center construction.

By the end of 2011, laboratories of molecular biology, cellular technology and bio-chemistry will be operational.

41 residential buildings for R&D personnel accommodation, a cultural and business center, a general communications network and municipal amenities will be competed.

Сonference call: 1H2010 Sales Results (27.07.10) 23

Disclaimer and Confidentiality Requirements

This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of OJSC Pharmstandard (the “Company”) or any of its subsidiaries in any jurisdiction or aninducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.

This presentation may contain 'forward-looking statements'. These statements may include the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning. All statements other than statements of historical facts, possibly contained in this presentation, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's projects and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of theCompany to be materially different from results, performance or achievements expressed or implied by such forward-looking statements. Risks and uncertainties include, without limitation, general industry conditions and competition; economic conditions, such as interest rate and currency exchange rate fluctuations; technological advances and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approvals; domestic and foreign health care reforms and governmental laws and regulations; and trends toward health care cost containment. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation.

The Company does not undertake to update any forward-looking statements as a result of new information or future events or developments.

The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.

All information, unless expressly specified herein, is from Company data.

Contacts

Сonference call: 2009 Sales Results (11.02.10) 24

JSC PharmstandardLikhachevsky drive, 5 «B» Moscow region,

Dolgoprudny, Russia, 141700.Tel/Fax: (495) 970-0030/32

IR ex.2416www.pharmstd.ru

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