植物制药
TRANSCRIPT
Committed to become the first botanical medicine brand for anti-depression, anti-melancholy and nerve regulation
China Botanic Pharmaceutical Inc.
October 2011
Safe Harbor Statement
This presentation contains certain statements that may include 'forward-lookingstatements' as defined in the Securities Act of 1933, and the Securities ExchangeAct of 1934. All statements, other than statements of historical facts, includedherein are 'forward-looking statements.' Although the Company believes thatthe expectations reflected in these forward-looking statements arereasonable, they do involve assumptions, risks and uncertainties, and theseexpectations may prove to be incorrect. You should not place undue reliance onthese forward-looking statements, which speak only as of the date of thispresentation. The Company's actual results could differ materially from thoseanticipated in these forward-looking statements as a result of a variety offactors, including those discussed in the Company's periodic reports that arefiled with and available from the Securities and Exchange Commission. Allforward-looking statements attributable to the Company or persons acting on itsbehalf are expressly qualified in their entirety by these factors. Other than asrequired under the securities laws, the Company does not assume a duty toupdate these forward-looking statements.
2
A leading botanical medicine producer in China
First brand in botanical medicine for treatment of depression, melancholy and nerve regulation
Products standard-setter of Siberian Ginseng (Acanthopanax) sector
With core products included in China Medical Insurance System
Multilevel distribution network with specialized sales centers and forces all over China
Financial strength: Gross margin 50% and Net margin around 30%
Controlling over 70% of Siberian Ginseng (Acanthopanax) resources grow in China
Company Highlights
3
Strong R&D capabilities, multi-channel independent innovation system
Introduction
China Botanic Pharmaceutical Inc. is aleading developer, producer anddistributor of botanical medicine productsin China
Headquartered in Harbin, HeilongjiangProvince of China
Over 15 years of botanical medicineresearch and production experience
Major products include: botanical anti-depression and nerve regulation products,biopharmaceutical and traditional Chinesemedicine
Distribution network covers over 70 salescenters and more than 3,000 sales agentsacross 24 provinces
Three “Good Manufacturing Practice” orGMP certified production facilities,
capable of producing 18 dosage forms andover 200 different products
We are the first NYSE AMEX-listed Chinesecompany focusing on botanical medicineproduction
We are among China’s most innovativecompanies
Awarded “National Innovative Enterprises”by the State Council
Awarded “National High-tech Enterprises”by the Ministry of Science and Technology
Awarded “China Top 500 CompetitiveHigh-growth Entrepreneurial Enterprises”by the China News Service
4
Market condition of melancholy and depression
Depression is the second largest disease
WHO identified that depression has become the world’s second largest disease (second only to cardio-cerebral vascular disease)
About 200 million Chinese were suffering from varying degrees of depression
According to official statistics, about 200 million Chinese were suffering from depression at the end of 2009
Chinese people refer to cure melancholy and depression through regulating nerve and improving sleep with botanical drugs
There is untapped 90% market space in China
Chinese people’s knowledge of melancholy and depression
China recognized the existence of depression since 2008
In China only about 10% of depression patients are getting medical care according to statistics
Siberian Ginseng（Acanthopanax）has been used for centuries in China，and its medical efficacies such as nerve regulating and sleep improving are universally recognized
5
Market Analysis
Resource：Medical Economics News
14%
12%
9%
65%
9%
4%
7%
80%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
Top 8 chemical drugs
Other chemical drugs
Siberian Ginseng
Other botanical drugs
In coming 5 years, market shares of major chemical anti-depression medicine will decline to certain extent for patents expiring. Because of high side-effects and high price of chemical medicine, customers prefer botanical drugs substitution which is safe.
Single plant-based medicine Siberian Ginseng will be quickly accepted by customers with features of good efficacy, minimal side-effect and low cost
The world marketsize of anti-depressionmedicine is $110billion in 2010
In 2010,there areover 0.1 billionpatients sufferingfrom depressionand millions ofpotential patientsin China , butlarge-scalepromotion ofpharmacotherapyis still on demand
Resource：Medical Economics News
Market analysis of Siberian Ginseng (Acanthopanax) for anti-depression
present 2016
6
Competitive Advantage
In China, about 94% of the wild Siberian Ginseng (Acanthopanax) resources grow in the Heilongjiang Province, mainly in Greater and Lesser Khingan Ranges, Zhangguangcai mountain and Wandashan Mountains
We Controlled over 70% of Siberian Ginseng (Acanthopanax) resources grow in China
We are standard setter of Siberian Ginseng products in China having absolute discourse power.
Industrial policy on national forest resources
Substantial support from local government
Signed exclusive purchase agreement of wild Siberian Ginseng for indefinite terms with several forestry bureaus
Resource Monopoly
Supporting Measure
Agreements with forestry bureau
7
Research & Development
More than 30 researchers and Investments in R&D system account for 5% of annual revenues
R&D System:
Independent R&D Centre
Cooperative R&D Centre(supported by the technological advantage of Biophysics Institute of Chinese Academy of Sciences, Shenyang Pharmaceutical University, Harbin Medical University, Heilongjiang University of Chinese Medicine)
National post-doctoral research workstations
Siberian Ginseng research institution—sole genuine medicinal materials professional institute authorized by Heilongjiang Provincial Science and Technology Department
Heilongjiang Provincial Key Laboratory(research laboratory of Herbal Extracts and innovative drugs of traditional Chinese medicine)
Engineering and technological research centre
Development Direction
Single plant medicine(one of three major development trends of medical industry of China)
Anti-depression and nerve regulating medicine, botanical anti-Alzheimer's medicine
Research on effective components of Siberian Ginseng and Schisandra
More than 20 declared invention patents and R&D achievements
The patent for “Extraction of effective ingredients of Siberian Ginseng and its preparation and application ” protects powerfully deeply development of Siberian Ginseng products 8
Research & Development
Four Current R&D Projects
Class one new drugs- Siberian Ginseng (Acanthopanax) Lyophilized Syringin Powder
For treatment of melancholy and depression. Class one new drugs that we have proprietary intellectualproperty rights, internationally initiated. To be tested on pharmacodynamics fordepression, pharmacology and toxicology study and comprehensive quality research, then applied forclinical trial to National new drug evaluation center.
Innovative TCM Siberian Ginseng (Acanthopanax) Total Glucosides Total Flavonoids softcapsules
Powerful in combating senile dementia。Preliminary pharmacology and toxicology test shows it haslittle side-effect, sound effects, safe and reliable, and can be taken for long term. It is under pharmacyresearch testing for quality standard and stability.
Total Alkaloids of Sophora Flavescens and Colorless Sterile Injection against Hepatitis B
Total Alkaloids of Sophora Flavescens Injection against Hepatitis B shows obvious effects in the clinicaltherapy of hepatitis B. We extract Total Alkaloids of Sophora Flavescens without organic solvent for thefirst time, which results in high purity and low cost. There are nearly 0.1 billion patients with hepatitis Bin China where our product has tremendous market potential. It is under pharmacy study at present.
Schisandra Total Lignin Soft Capsule
Innovative drugs of single plant-based effective component medicine, it is used for treatment of livercirrhosis and hepatic fibrosis with side-effect far below similar chemicals, under pharmacy research atpresent.
9
2010 2011 2012 2013 2014 2015 2016
Siberian Ginseng (Acanthopanax) Total
Glucosides Total Flavonoids soft
capsules
Total Alkaloids of Sophora Flavescensand Colorless Sterile
Injection against Hepatitis B
Schisandra Total Lignin Soft Capsule
Siberian Ginseng (Acanthopanax)
Lyophilized SyringinPowder
Research & Development
10
Pharmacological test and clinical
applications
Clinical Trial
New drug
promotion
Pharmacological test and clinical applications
Clinical Trial
New drug
promotion
Pharmacological test and clinicalapplications
Clinical Trial
New drug
promotion
Pharmacological test and clinicalapplications
Clinical Trial
New drug
promotion
Product Portfolio: Sales Contribution
Our key botanical anti-depression and nerve regulation products account ourmajority sales.
51%
20%
5%
24%
Siberian Ginseng (Acanthopanax) series
Other plant-based anti-depression and nerve regulation products
Biopharmaceuticals
Botanical antibiotic and traditional OTC series
Sales Contribution by Product series(fiscal year ended 10/31/10)
11
Plant based anti-depression and nerve regulation series
Schisandra Series
Yangjiao Tablets Series
Products
Siberian Ginseng (Acanthopanax) Series
Anti-depression and nerve-regulation, sleep improvement
Relieve pain and headache caused by blood supply
shortage and blood stasis
Nervous centralis regulation, palpitation and neurasthenia treatment
Relieve pain from migraines, vascular headaches, tension headaches and
nervous headaches
Tianma Series
12
Shengmai GranulesQing Re Jie Du Oral
Liquid
Products
Compound Honeysuckle Granules
Banlangen Granules
Use for treating influenza and infection of upper
respiratory tract
Regulate blood flow; improve the immune system and blood
quality for female
Treating anemopyretic cold, pharyngitis and
amygdalitis
Treating virus flu and alleviating throat soreness and pain
Biopharmaceutical
Ginseng and Deer Antler ExtractBadger Oil
Treatment of burn and scald Nourishing the blood and the kidneys, restore the body's energy and increase endurance.
Botanical antibiotics and traditional OTC Chinese medicines
13
新疆省
吉林省
西藏四川省
云南省
湖南省
广西省
湖北省
宁夏
江苏省
浙江省
福建省
香港
东北
东南
中西部中心地区
澳门
海南省
台湾
甘肃省
江西省
广东省
青海省
内蒙古
山西省
北京
陕西省
重庆市
贵州省
河南省
天津
山东省
安徽省 上海
河北省
黑龙江省
辽宁省
National Sales Network
Sales Network Marketing System
Sales Network covers over 3,000 distributors and over 70 sales centers across 24 provinces in
China, actively play a part in medicare drug bidding of each province
14
Branding Business Unit: provincial resellers distribute biopharmaceuticals through chain store, secondary distributors, promoters and salesmen, customers buy our products in designated area chain stores.
OTC Business Unit:provincial resellers deliver products to chain stores and distribute Botanical antibiotics and traditional OTC Chinese medicines through salesmen and promoters selling products to customers in need.
New Medical Reform Business Unit: provincial resellers distribute bulk medicine through nationwide retail stores and township health centers.
General Resell Business Unit：Provincial resellers distribute anti-depression and nerve regulation products through prescription, traditional media and volunteer medical consultation in municipalities and prefecture level cities
Promotion
Terminal Sales
Publicity
15
New product R&DFocus on R&D of plant-based
anti-depression productsIncrease investment in R&D of Siberian
Ginseng series botanical drugsStrengthen cooperation with research
institutesStimulate progress of projects under
research
Organic growthExpand distribution channel and
strengthen brand buildingEnhance publicity of botanical
anti-depression productsEnlarge percentage of products
included in Medical Insurance Continue launching new products
Merger and integrationProduct line mergerOperating costs mergerPerformance merger
16
Growth Initiatives
17
Experienced Management Team
Li, ShaomingChairman of the Board, Chief Executive Officer
Founded Renhuang Pharmaceuticals in 1996
Extensive experience in the pharmaceutical and healthcare industry
A well-known entrepreneur in China with outstanding leadership and management skills
Bachelor’s degree in Finance from China Central University of Finance and Economics
EMBA from Tsinghua University
David DongChief Financial Officer
Key positions in finance, audit, investment advisory and tax planning for more than 10 years
Former investment manager with Hatitac Inc. and former senior audit manager with TianHua Accounting Firm
Bachelor’s degree in Engineering from North-Western Polytechnic University in China
A Certified Financial Planner in Canada
Lou, JingwangChief Sales & Marketing Officer
More than 20 years of management experience in pharmaceutical industry
Experience in project management, sales and marketing, and business development
Bachelor’s degree in Medical Management from Inner Mongolia Medical Management College
Cui, YuhaiChief R&D Officer
10 years of product development and project management experience in large pharmaceutical companies
Master’s degree in Microbiology and Biochemistry from China Medical University
Meritorious winner for Scientific and technological progress awarded by the Chinese academy of sciences
Director of professional committee for the first traditional Chinese medicine new drug delivery system of the world federation of Traditional Chinese medical association
The director of Heilongjiang key laboratory of extraction form traditional Chinese medicine and innovative drugs
18
Li, ShaomingChairman of the Board, Chief Executive Officer
Founded Renhuang Pharmaceuticals in 1996
Extensive experience in the pharmaceutical and healthcare industry
A well-known entrepreneur in China with outstanding leadership and management skills
Bachelor’s degree in Finance from China Central University of Finance and Economics
EMBA from Tsinghua University
Pi, DianjunDirector
Years of management experience in pharmaceutical industry
Master’s degree from Renmin University of China
Zack PanIndependent Director,
Audit Committee Chair
Over 10 years of extensive economics and audit experience
Extensive experience as an director and as an Chief Financial Officer in public companies
Holds a CPA license issued by the Oklahoma State Board of Accountancy and member of American Institute of Certified Public Accountant (AICPA) and Oklahoma Society of Certified Public Accountants (OSCPA)
Bachelor's degree from Anhui University and Master's degree from the University of Central Oklahoma
Wu, BingchunIndependent Director,
Compensation Committee Chair
Director of the Chinese Pharmacology Research Office and the Head of Chinese Medicine Research
Chief Expert of the Chinese Medicine Group of the Innovation System of Heilongjiang Province Science and Technology Department
Team Leader of the Chinese Medicine Research Group at the Heilongjiang Province Chinese Medicine Research Institute.
Sun, ChangxiongIndependent Director,
Remuneration Committee Chair
Head of Heilongjiang Technical Economics Key Subjects
Executive Director of the Overseas Development and Layout Association of China Industry
Director of the Heilongjiang Dongbeiya Economy and Technology Committee
Board of Directors
201020072003 200620041996
• CBP began operations
• Quoted on the OTCBB in September
• Listed on NYSE Amex
• Ah City manufacturing facility and Dongfanghong manufacturing facility received GMP certification
• Established the post-doctoral research work station upon Ministry of Personnel ’s approval
• Acquired Heilongjiang Dongfanghong manufacturing facility
• Acquired Qingyang Herbal Extracting Factory
2005
Top 500 competitive high-growth-oriented start-up enterprises in China
2008 2009
• Innovation-based pilot enterprises
• Rated as high-tech enterprises again
19
Company History
• National High-techenterprises
Financial Performance
Revenue ($M) Gross Profit ($M)
Net Income ($M)
$9.6 $10.3
$14.8
$17.9
$0.0
$10.0
$20.0
2007 2008 2009 2010
$14.3
$18.5
$23.1
$29.4
$0.0
$10.0
$20.0
$30.0
2007 2008 2009 2010
$28.0$34.5
$43.4
$55.2
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2007 2008 2009 2010
20
Financial Snapshots in Past Three Years (USD)
Items 2007A 2008A 2009A2010Q
1
2010Q
2
2010Q
32010A 2011Q1 2011 Q2 2011 Q3
Revenue 28,040,17
434,474,490 43,411,562
17,132,61
4
12,092,50
69,263,892
55,183,94
122,625,060 18,837,689 12,376,352
Netincome
9,596,632 10,291,099 14,846,857 7,383,129 3,419,648 1,456,30917,868,94
210,948,295 7,081,056 2,519,845
Netmargin
34% 30% 34% 43% 28% 16% 32% 48% 37.5% 20%
Grossmargin
51% 54% 53% 55% 51% 50% 53% 61% 59% 60%
Cash 10,153,60
39,747,693 8,111,514
17,704,44
9
23,391,60
9
28,749,48
0
27,826,14
212,384,621 27,627,143 38,321,244
Totalassets
24,889,47
136,005,843 53,150,196
60,744,37
1
63,576,73
5
65,544,92
2
73,145,07
985,921,875
102,197,36
0
106,547,72
2
Earningsper share
0.27 0.29 0.41 0.2 0.09 0.04 0.47 0.29 0.19 0.07
21
Financial Snapshots
22
Company Contact:
China Botanic Pharmaceutical Inc
Ms. Portia Tan
Tel: +86-451-8260-2162
E-mail: [email protected]
Contact us
Investor relations
CCG Investor Relations
Mr. Mark Collinson, Partner
Tel: +1-310-954-1343(Los Angeles)
E-mail: [email protected]
Auditor
Windes & McClaughry Accountancy Corporation
Mr. Peter W. Lee，Partner
Tel: +1-562-435-1191x342
E-mail: [email protected]
Attorney
DLA PIPER
Mr. William N. Haddad, Partner
Tel: +1-212-335-4998
E-mail: [email protected]
Thanks for Your Listening and Wish for a Happy Cooperation
23