Mayne Pharma Group Ltd. · ASX:MYX
Mayne Pharma — Investor Presentation (May 2006)
96 slides from Mayne Pharma's investor presentation, May 5, 2006
Slide 1: Mayne Pharma Limited Strategic Review
Mayne Pharma Limited Strategic Review 5 May 2006
Slide 2: Agenda
Agenda • Vision and strategic direction overview Dr Thierry Soursac • Generic and oncology pharmaceutical industry overview Dr Thierry Soursac • Pillar 1. Strengthening the core – aligning with the vision Hugh Burrill Mike Rutkowski Bill Simmons • Pillar 2. Establishing the specialty oncology busine
Slide 3: Vision and Strategic Direction Overview
Vision and Strategic Direction Overview
Slide 4: History of the company
History of the company • Until its demerger in November 2005, Mayne Pharma’s injectable pharmaceutical business had never been the sole focus of the Board and management – In FH Faulding the focus was on the oral pharmaceutical business – In Mayne Group Limited, it was part of a healthcare conglomer
Slide 5: Mayne Pharma's historical growth
Mayne Pharma’s historical growth • Launch of key oncology products (paclitaxel, pamidronate, Mayne Pharma sales by region* carboplatin, irinotecan) has $A m enabled pan European presence 350 • Scope for further growth in Europe FY03 and fully leverage position – albeit 300 FY04 at a lower rate FY05
Slide 6: Mayne Pharma's key strengths
Mayne Pharma’s key strengths • World class expertise in formulating, manufacturing and commercialising injectable generic oncology products – Strong know-how in two key pillars in oncology treatments • Taxanes – derivatives of yew tree – e.g. paclitaxel • Platins – platinum based active ingredient –
Slide 7: Defining oncology for Mayne Pharma
Defining oncology for Mayne Pharma • A customer focused pharma company • Primary focus is oncology Anti-cancer • Customers may include oncologists, agents hospitals, GPOs, distributors and government bodies Bisphos- Hormone • Portfolio of products that an phonates Therapies oncologist uses in treati
Slide 8: Vision
Vision 2005 FUTURE Leading Leading global generic injectable Focus and expand specialty pharma and on company specialty pharma oncology strengths focused on business the oncology customer A CUSTOMER FOCUSED STRATEGY 8
Slide 9: Process for the strategic review
Process for the strategic review • An integrated, cross functional approach • Heads of the major areas of the business and the people they wanted involved • Identified the key areas for improvement, change or development • Rich list of oncology product and enterprise targets screened to identify tho
Slide 10: Key takeaways
Key takeaways • The process will build on our existing capabilities, for example we will retain existing non-oncology products that deliver value during the transition process • Mayne Pharma is becoming a globally focused business with benefits that will be highlighted throughout the presentation •
Slide 11: Tangible outcomes
Tangible outcomes Strategy Pillar 1 • Operational effectiveness expected to yield around $10 million in savings in FY07 – Reducing complexity across the organisation – 20+ molecules identified for rationalisation representing 100+ SKUs – Drive revenue growth through focus on molecules in which we ca
Slide 12: Strategy pillars for oncology evolution and growth
Strategy pillars for oncology evolution and growth III. Secure Strong Specialty Pipeline II. Establish Specialty Oncology Business Total sales I. Strengthen the core – Align with the vision Increasing proportion of sales/margin from ‘oncologist’s basket’ Increasing proportion of sales from ‘protecte
Slide 13: Pillar 1: Strengthen the core – align with vision
Pillar 1: Strengthen the core – align with vision • The review identified a number of areas where the way we perform tasks are more complex than required • Inefficiencies developed historically based on the way the business evolved • Gains can be made in manufacturing, supply, product portfolio opti
Slide 14: Pillar 2: Establish specialty oncology business
Pillar 2: Establish specialty oncology business • Mayne Pharma will evolve into a specialty oncology company in 2-4 years through: – Leverage existing capability – Product in-licensing/acquisition opportunities (target 2-5); – Custom build infrastructure to meet specialty oncology needs; – Leverage
Slide 15: Pillar 3: Secure strong specialty pipeline
Pillar 3: Secure strong specialty pipeline • In parallel with establishment of the specialty pharma business, Mayne Pharma will develop and maintain a robust pipeline which it controls for realisation in a 4-6 year time horizon through: – Investing an increasing proportion of the R&D budget developi
Slide 16: What are the challenges
What are the challenges • Moving to become a specialty pharmaceutical company will involve organisational change – Commercial business needs to focus around products – Establishing a clinical development and clinical sales capability outside Australia that delivers value from day one depends on prod
Slide 17: Generic and oncology industry overview
Generic and oncology industry overview
Slide 18: Environmental factors impacting generics
Environmental factors impacting generics Top 20 Generic Companies by 2004 Sales (USDm) 5,081 1 Sandoz/Hexal • Generics benefit from scale and 2 Teva/Ivax 5,080 industry is consolidating 3 Merck Generics 1,972 1,468 • Competition increasing in US and EU 4 Ratiopharm from low cost competitors 5 Actavi
Slide 19: Oncology market has high growth potential
Oncology market has high growth potential Growth by therapeutic class* • Cancer therapeutic class was fastest Cancer growing of top eight classes* Arthritis/Pain • Lower commercialisation costs due to CNS small oncology community Diabetes • Many business development Cardiovascular Anti-inf ectives o
Slide 20: Significant value of oncology products losing patent protection to 2013
Significant value of oncology products losing patent protection to 2013 Global 2005 LMV* Growth (USD m) Rate Selected injectable cytotoxic molecules – Eloxatin (oxaliplatin) 1,476 28% – Taxotere (docetaxel) 1,408 12% – Gemzar (gemcitabine) 938 10% – Camptozar (Irinotecan) 732 1% – Alimta (pemetrexed
Slide 21: Mayne Pharma has a broad oncology portfolio
Number of oncology molecules with sales > $US500K 10 15 20 25 30 0 5 portfolio Novartis Teva Mayne Pharma SanofiAventis Baxter Boehringer Ingelheim Pfizer APP BMS Roche GSK Wyeth Schering AG AstraZeneca Hospira Merck & Co J&J Amgen Schering Plough Mayne Pharma already has a broad oncology Abbott Eli
Slide 22: Specialty oncology focus will enhance value
Specialty oncology focus will enhance value • Increasingly competitive environment in generics due to consolidation and new entrants in US and Europe • Mayne Pharma has a good foundation in oncology (development, manufacturing and generic commercialisation capability) from which to evolve to special
Slide 23: Pillar 1: Strengthening the core – aligning with the vision
Pillar 1: Strengthening the core – aligning with the vision Drive efficiencies through the business by using a global structure and simplify a business that has developed complex processes with regionalised management Total Sales I. Strengthen the core - Align with the vision 23
Slide 24: Pillar 1: Strengthen core – align with vision
Pillar 1: Strengthen core – align with vision • Operational effectiveness – being smarter about what we do and how we do it • US Strategy – securing the business and positioning it for growth • Compounding – defensive and attacking strategies • Generic pipeline – delivering underlying growth and sup
Slide 25: Operational effectiveness: Global product development
Operational effectiveness Area 1: Global product development Aim: Refocus product development resources for greater efficiency and savings Corporate services Product Manufact- Supply Sales & Portfolio Developmt. uring chain Marketing 25
Slide 26: Product development today
Product development today Over 200 Product Development, Regulatory and Medical Affairs staff located globally 33% of staff have PhD’s or other post graduate qualifications 193 number of country approvals since 1 July 2003 Skill Mix* Geographic Mix* Oral Product Development Clinical Americas Preclini
Slide 27: Global product development core competencies
Global product development core competencies Injectable Product Development 1. Development of generic injectable oncology and oncology-related products for global registration 2. Increasing development of more complex molecules and formulations Large molecules – ie peptides, extracted and fermente
Slide 28: Action Plan – Product Development
Action Plan – Product Development Increase development focus and efficiency by: • Refocusing new product developments on oncology products – A number of non-oncology molecules to be removed from development pipeline – Salisbury (oral) group to concentrate on oncology related products – An injectable
Slide 29: Operational effectiveness: Manufacturing
Operational effectiveness Area 2: Manufacturing Aim: Maximise manufacturing resources to gain better production efficiency, reduce costs with better supply chain management and establish each site with its own specific focus Corporate services Product Manufact- Supply Sales & Portfolio Developmt. ur
Slide 30: Highly developed oncology manufacturing capabilities
Highly developed oncology manufacturing capabilities Type of Facility Location Staff Products Key assets Mulgrave Victoria, 650 Non-Cytotoxic Vials • Oncology focused Australia Cytotoxic Vials • Established support functions (e.g. QA, FD Vials supply chain) Cytotoxic FD • Staffs technical knowledge
Slide 31: Improvements already in progress
Improvements already in progress Mulgrave DIFOT* 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 * Delivery in full and on time 31
Slide 32: Manufacturing action plan
Manufacturing action plan Specialise / Simplify / Increase Flexibility • Continue to drive and improve upon efficiencies successfully realised in 1H06 • Mulgrave to become solution vial centre of excellence – Progressively reduce non-cytotoxic molecule manufacturing (less than 10 non- cytotoxic mole
Slide 33: Manufacturing action plan
Manufacturing action plan • Aguadilla fit with strategy to be determined in the short term • Salisbury’s core capabilities to be aligned with oncology strategy and extract value – Capitalise on underutilised complex product development and manufacturing capabilities – Use Salisbury to support Mulgra
Slide 34: Operational effectiveness: Supply chain
Operational effectiveness Area 3: Supply chain Aim: Simplify the supply chain to eliminate costs and improve performance to customers The supply chain needs to be re-evaluated under a global structure since it has become too complex during period of considerable growth to deliver real benefits Corpo
Slide 35: Highly complex supply chain
Highly complex supply chain Outsourcing adds complexity through an already complex supply chain network - add more customers and products and it creates even more complexity Current State Fill/FD/Pack Order/Warehousing Customer Wholesaler Mulgrave Asia Pac Hospital Benefits from reduced complexity:
Slide 36: Supply chain action plan
Supply chain action plan • Minimise product differentiation – ongoing – Develop and launch global dossier products (organisation wide responsibility) – Integrated product supply strategy at launch that matches supply with market requirements (batch size, order quantities, inventory policy, service l
Slide 37: Operational effectiveness: Sales effectiveness
Operational effectiveness Area 4: Sales effectiveness Aim: While the sales and marketing functions are generally well positioned and resources are appropriate there are opportunities for gains with better distributor management and increasing exposure to new markets Corporate services Product Manufa
Slide 38: Global sales and marketing strength
Global sales and marketing strength EMEA Americas Asia Pac • 49% of sales* • 26% of sales* • 25% of sales* • Direct presence in 14 • 50 molecules • Direct presence in 6 countries marketed countries • Indirect sales in 17 • US portfolio • Indirect sales in 10 countries subscale in hospital countries
Slide 39: Sales effectiveness action plan
Sales effectiveness action plan • Sales teams ‘right sized’ for oncology generics – Additional products sold to same customers with marginal effort • Opportunities remain to improve sales and marketing effectiveness, especially in regard to pricing – 0.5% price increase globally would provide an EBI
Slide 40: Operational effectiveness: Portfolio effectiveness and optimisation
Operational effectiveness Area 5: Portfolio effectiveness and optimisation Aim: Manage current on-market products and internally and externally developed products with a global focus to maximise their value and fully exploit talent in specialist teams already part of Mayne Pharma Corporate services
Slide 41: Current portfolio – very long tail in all classes
Current Portfolio - very long tail in all classes Corporate services Product Manufact- Supply Portfolio S&M Developmt. uring chain 450 400 • Eliminate hidden costs of 350 complexity without impacting Gross margin $Am 300 Other (95) gross profit Gross Profit 250 200 Oncologist ( 39) • Manage selected
Slide 42: Product management - global leadership/roll-out and rationalisation programs
Product management - global leadership/roll-out and rationalisation programs Focus on key global leadership molecules Eliminate or make profitable the long tail that will provide the highest financial and of molecules that presently contribute strategic benefit to Mayne Pharma little to our business
Slide 43: Operational effectiveness: Corporate duplication
Operational effectiveness Area 6: Corporate duplication Aim: Reduce corporate costs that are duplicated in the regional offices as a result of the previous regional structure Corporate services Product Manufact- Sales & Portfolio Supply chain Developmt. uring Marketing 43
Slide 44: Corporate services action plan
Corporate services action plan • Each major region has a corporate structure which is a function of the regional specific requirements but also a legacy of the regional organisational structure • Senior management is in the process of relocating to London to be closer to the market and the opportuni
Slide 45: Operational effectiveness summary
Operational effectiveness summary • Product development – refocus activities specialise on oncology developments • Manufacturing – specialise / simplify / increase flexibility – Mulgrave to focus on solution vials – Wasserburg to focus on freeze dried and ampoules – Boulder increasing focus on addit
Slide 46: Pillar 1: Strengthen core – align with vision
Pillar 1: Strengthen core – align with vision • Operational effectiveness – being smarter about what we do and how we do it • US Strategy – securing the business and positioning it for growth • Compounding – defensive and attacking strategies • Generic pipeline – delivering underlying growth and sup
Slide 47: Mayne Pharma US status
Mayne Pharma US status • US product portfolio is subscale in injectable generics compared to major competitors (Bedford, Teva, APP) Historical Americas Performance* • Lower number of product approvals and $A m launches in US versus competitors 160 • Recent MVI acquisition has helped 140 bolster US b
Slide 48: Mayne Pharma's US share performance
Mayne Pharma’s US share performance Mayne enjoys a leading market share when launching at market formation • When we launch at market formation we garner our fair share or better – Able to compete for GPO contracts – Gain Independent Hospital Network contracts – Negotiate channel access with Oncolog
Slide 49: Repositioning path for Mayne Pharma US
Repositioning path for Mayne Pharma US Near Term Future term Objectives Objectives • Improve profitability • Establish critical mass in US • Expand oncology portfolio • Significantly expand oncology • Increase emphasis on generic and proprietary proprietary drugs portfolio through in-licensing/ • Fo
Slide 50: Pillar 1: Strengthen core – align with vision
Pillar 1: Strengthen core – align with vision • Operational effectiveness – being smarter about what we do and how we do it • US Strategy – securing the business and positioning it for growth • Compounding – defensive and attacking strategies • Generic pipeline – delivering underlying growth and sup
Slide 51: Value creation opportunities in compounding
Value creation opportunities in compounding Value Drivers Description Early generic market Circumvent unfavourable contract cycles by offering ready- penetration to-use products Access to value from Make margin on sales of innovative products pre-patent proprietary oncology expiry Improved product d
Slide 52: Compounding action plan
Compounding action plan Compounding represents a growth opportunity that will enable Protect generic vial Mayne to protect its established position from increasing generics business competition on vial product Exploit existing UK Mayne will continue to expand the customer base, product range compoun
Slide 53: Pillar 1: Strengthen core – align with vision
Pillar 1: Strengthen core – align with vision • Operational effectiveness – being smarter about what we do and how we do it • US Strategy – securing the business and positioning it for growth • Compounding – defensive and attacking strategies • Generic pipeline – delivering underlying growth and sup
Slide 54: Generic pipeline – key principles
Generic pipeline – key principles • Significant investments (sunk costs) made in developing a robust product pipeline – Internal developments – In-licensing from low-cost, high quality jurisdictions (e.g. India, CEE) • Strong pipeline of generic products to launch at market formation • Invest in IP
Slide 55: Generic Product development pipeline
Generic Product development pipeline Internal Developments : # molecules Portfolio Mix : Pre-dossier • pre-dossier submission 15 • Of the 15 internal development Contracted Developments: molecules: • pre-dossier submission 14 • 11 are oncology products __ • 7 are novel formulations, or non- Total mo
Slide 56: Product pipeline
Product pipeline Pre-dossier Filed dossier 29 molecules 26 molecules Pending at TGA Development 21 Stage Pending at an EU Agency 18 13 Pending at TPD Pending at FDA 8 10 Early Stability Testing Stage Pre-filing 6 5 • Estimated total LMV* of molecules filed awaiting approval US$2.1 billion • In total
Slide 57: Improving portfolio depth
Improving portfolio depth Major products # needed for 80% gross profit 30 • Mayne Pharma’s reliance on broader ANZ 38 base of products increases from 25 in FY06 to 38 expected in FY09 5 US 17 • Portfolio strengthens in most markets so that 80% of gross profit in FY09 UK* 12 11 comes from 5 or more p
Slide 58: Oxaliplatin product opportunity
Oxaliplatin product opportunity • Oxaliplatin is a core anticancer (antineoplastic) product used in the treatment of stage III colon and metastatic colorectal cancer (brand name Eloxatin®) • 2005 sales of US $1.5 billion* growing at 28% for innovator • Significant global IP strategy developed for ox
Slide 59: Current Mayne Pharma accessing the India advantage
Current Mayne Pharma accessing the India advantage Feb 2005 Sep 2005 Sept 2004 Development & Development & Contract manufacture & supply a range of supply of 5 anti- India advantage anti-infective infective products supply of 3 cytotoxic products products High quality low cost: ⎯ Development 2004 2
Slide 60: Top Biologicals: EU and US
Top 20 Biologicals: EU and US MAT Jun 2005 € million in hospitals, percent growth on previous period Oncology-related biological Growth 1st gen EPO 4630 -13% Darb EPO 2006 33% Infliximab 1779 9% Rituximab 1522 12% PEG-GCSF 1472 25% Enoxaparin 1247 6% 1st gen G-CSF -10% 770 • G-CSF development remain
Slide 61: Summary generic pipeline optimisation principles
Summary generic pipeline optimisation principles Key findings Major success depends 11 molecules are responsible for 80% of near term growth on many major Majority have some degree of complexity molecules Together they deliver a robust growth trajectory Investment in IP on 3 key molecules No
Slide 62: Pillar 1: Action plan
Pillar 1: Action plan • Investments required – Management costs relating to implementation – Manufacturing – invest in Boulder API capability; molecule deletion or transfer costs – Supply chain – Mulgrave small volume packaging and regional packaging capabilities • Revenue growth opportunities reali
Slide 63: Pillar 2: Establishing specialty oncology
Pillar 2: Establishing specialty oncology Rapidly establish Mayne Pharma as a specialty oncology company through a combination of product licensing and M&A activities II. Establish Specialty Oncology Business I. Strengthen the core - Align with the vision 63
Slide 64: Various opportunities to establish specialty pharma capability
Various opportunities to establish specialty pharma capability Specialty pharma transition continuum Organic Build Product Driven Vehicle Driven Bolt-on A Deal C Develop B Acquire product Build Deal B Capability Acquire C Deal A Access further Large entity M&A opportunities Serial acquisitions of si
Slide 65: Capability and Infrastructure – what do we have?
Capability and Infrastructure – what do we have? R&D and scientific affairs • Mayne Pharma has a long history of novel formulation development which continues today and we have some capability in medical and scientific affairs • Our proprietary competency is emergent and well placed for rapid develo
Slide 66: Key Success Factors – What do we need?
Key Success Factors – What do we need? Specialty Oncology Sales and Business Research and Scientific and Marketing Development Development Medical Affairs Focus Proprietary search and Representatives and product Strong conceptual product Need staff with core select team with branded managers with de
Slide 67: Global oncology licensing opportunities - methodology and results
Global oncology licensing opportunities - methodology and results Progressive Screening Number of Opportunities Licensing Acquisition Level 0 – Capturing the Universe >800 479 Targeted review of pharma pipelines Database review Review of Past Opportunity Analyses Level 1 – Key Inclusion Criter
Slide 68: Oncology NCE/ICEs are relatively higher cost / higher risk / higher return
Oncology NCE/ICEs are relatively higher cost / higher risk / higher return Increasing level of certainty: Lower risk, but higher acquisition NDA / Marketed price Phase III Phase II Increasing complexity: higher risk, higher returns Phase I Preclinical Value Added “Semi- “Proprietary” “Proprietary” G
Slide 69: Risk associated with moving up the complexity curve
Risk associated with moving up the complexity curve maximising the odds!! • Mayne increases the odds of producing a registrable product, trade offs are: • Higher entry cost • Less products to chose from u gh PI o n thr itio 30% Fails s is ter cqu IND PII en /A n e g 55% Fails ay nsin 70% PI Trial M
Slide 70: Why Mayne Pharma is an attractive oncology partner
Why Mayne Pharma is an attractive oncology partner • Sole focus on oncology means in-licensed product will be sold by a dedicated, specialist sales force • Niche focus means that a small to medium sized product for Big Pharma will receive significant commercialisation attention from Mayne Pharma • P
Slide 71: Pillar 2: Next steps and financial impact
Pillar 2: Next steps and financial impact • Resource alignment – Opportunity assessment/deal teams already being created to pursue more than 10 identified, available opportunities (some conversations have already started) – External network of clinical experts to be expanded in therapeutic areas rel
Slide 72: Pillar 3: Establishing specialty pharma pipeline
Pillar 3: Establishing specialty pharma pipeline Develop pipeline of specialty oncology products through internal development and partnerships to cement ongoing profitable growth Total Sales III. Establishing Specialty Pharma II. Establish Specialty Pipeline Oncology Business I. Strengthen the core
Slide 73: We have latent ICE capability that we can leverage
We have latent ICE capability that we can leverage Adelaide Orals Group • Proven track record in oral Sustained Release (SR) development (pain and anti-infective ICEs) • Excellent infrastructure and technology partner network • GMP pilot plant for clinical trials Well positioned for strategic oral I
Slide 74: ICEs using Oral Drug Delivery
ICEs using Oral Drug Delivery Proprietary delivery systems able to deliver improved clinical outcomes • Sustained release : suitable for the 45 Plasma Concentration (ng/mL) formulation of soluble to slightly 40 soluble drugs into beads which 35 produce zero or first order release 30 25 – Eg. Kadian
Slide 75: ICEs using Oral Drug Delivery
ICEs using Oral Drug Delivery • Targeted delivery: suitable for the formulation of soluble drugs, into beads that can release at one or more sites in the intestinal tract – Eg. Doryx® : oral gastro-protected doxycycline indicated for the treatment of lower respiratory tract infections, genito-urinar
Slide 76: Pillar 3: Action plan and financial impact
Pillar 3: Action plan and financial impact • Resource alignment – Selected staff members with proprietary development experience to be re-aligned – Technical teams assembled to further evaluate short-list of ICE technologies and partners and confirm design of commercially viable products – Clinical
Slide 77: Financial analysis
Financial analysis
Slide 78: FY06 trading update and outlook
FY06 trading update and outlook • March ‘06 quarter trading slightly ahead of expectations – Successfully launched irinotecan in Canada and progressing well – Continued paclitaxel pricing pressure in EU markets – Intense pamidronate competition in [France, UK and Germany] – Recommenced selling hydro
Slide 79: Benchmarking analysis – generic pharma
Benchmarking analysis – generic pharma EBITDA Margin (2005A) Average = 27.4% Average = 21.3% Average = 17.6% 34.1% 32.5% 30.3% 29.8% 28.6% 29.6% 27.4% 27.4% 26.5% 27.3% 23.7% 17.7% 40% 21.6% 10.6% 8.1% 8.0% 7.8% 20% 0% Ranbaxy Pliva Teva Andrx Zentiva Krka Stada Gedeon Richter Par APP Barr Labs Hikm
Slide 80: Benchmarking analysis – specialty pharma
Benchmarking analysis – specialty pharma EBITDA margin (2005A) Average = 32.6% 43.2% 42.6% 39.2% 37.1% 30.6% 60% 29.7% 29.8% 21.8% 19.5% 21.6% 40% 20% 0% Biovail Forest Medicis Novo Nordisk Allergan King Lundbeck UCB Schering AG Mayne Pharma (1) European US & US Focused • [Mayne Pharma will target a
Slide 81: Dynamics at play - external
Dynamics at play - external • Governments globally expected to continue to support increased use of generic products to reduce growth in healthcare expenditure • Government pricing initiatives leading to reduced pricing for both branded and generic products in some markets • Strong pipeline of paten
Slide 82: Dynamics at play - internal
Dynamics at play - internal • Strong revenue growth in FY05 (35%) and expected for FY06 (15%) • Clean balance sheet - $75 million net cash and $225 million undrawn debt facility • Strong operating cash flows in 1H06 • International sales and marketing platform to be leveraged with stronger pipeline
Slide 83: Financial impact of building specialty pharma
Financial impact of building specialty pharma Capital investment FY07 P&L Pillar 1 required ($A) impact ($A) Operational effectiveness (OE) $5 M Around $10 M Generic pipeline Ongoing PD - Funded by generic IP Litigation business growth and OE savings US strategy Deal dependent Target positive EBIT C
Slide 84: Financing options
Financing options • Strategy requires capacity to make bolt-on and potentially larger acquisitions • Strong balance sheet provides substantial flexibility • Depending on the size and nature of the deal, will consider debt and/or raising equity • UK listing continues to be evaluated but no decision y
Slide 85: Financial summary
Financial summary • Benchmarking analysis indicates scope for improvement • Strong performance in FY05 and FY06 and clean balance sheet provides confidence for oncology transition • Investments in products to drive establish specialty pharma may be funded in debt or equity depending on deal size – f
Slide 86: Key implementation steps
Key implementation steps
Slide 87: Benefits of global organisation in pharma
Benefits of global organisation in pharma • Organisational alignment – Provides focus and establishes priorities – Clear communication lines and areas of responsibility – Leverages skills from all countries and functional areas – Reduces regional duplication • Global portfolio management and priorit
Slide 88: Implementation
Implementation • Successful implementation requires organisation change in three areas: – Core business to align around global products not geographies – Office of operational effectiveness established to drive change and reports to the COO and Executive Committee – Business Development function mus
Slide 89: Next Steps
Next Steps April-May June-July H1 FY07 H2 FY07 FY08 FY09+ Appoint Ops Prioritise OE Secure quick Continue Full operational Continuous Effectiveness projects OE wins implementation effectiveness improvement Steering and secure bulk savings run Engage front New processes Committee of op
Slide 90: Summary – key takeaways
Summary – key takeaways • Strategy builds on existing strengths and is made up of Three Pillars • Each is important on its own and also integrated with the others • We have a strong base and proven history in generic oncology globally • We have successfully built a specialty proprietary oncology bus
Slide 91: Summary – key takeaways
Summary – key takeaways • Size and speed of specialty pharma infrastructure build will be matched to scale of in-licensed/acquired specialty product sales and cash flows • Moving into specialty proprietary oncology products will over time: – Increase margins – Larger average product life cycles – Re
Slide 92: Questions and answers
Questions and answers
Slide 93: Appendices
Appendices
Slide 94: Mayne Pharma's FY05 sales composition
Mayne Pharma’s FY05 sales composition Already a strong foundation in oncology Other 19% Antidotes 3% Cardiovascular 3% Anaesthetics 2% Oncology 73% • Cancer treatment (defined as cytostatic therapy, injectable bisphosphonates, antibiotic and pain management) contributed over 70% of Mayne Pharma reve
Slide 95: Oncology: high unmet needs in niche indications
Oncology: high unmet needs in niche indications • High prices paid for improved survival • Specialised therapy, Key Opinion Leader HIGH (KOL) driven (efficient sales) Other 100% Leukemias • Smaller peak product sales, many targets, Pancreatic often not on Big Pharma radar Other Liver Lung Ovarian Mu
Slide 96: Opportunity to increase proportion of sales from major markets
Opportunity to increase proportion of sales from major markets Market Mayne US$92b US$32b US$59b 100% 80% Other** ANZ 60% Canada UK Spain Italy 40% Germany France US 20% 0% Hospital Oncology Generics Product sales injectables *Source: FY06 6+6 Management forecast; IMS; Mayne analysis 96 **