company profile - veropharm · company in brief 3 the company was founded in the year 1997 one of...

COMPANY PROFILE 2014

THIS PRESENTATION IS NOT AN ADVERTISEMENT OF SECURITIES IN ANY JURISDICTION.

NOT FOR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA,

AUSTRALIA, CANADA OR JAPAN.

This document includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can

be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as”

anticipate”, “target”, “expect”, “estimate”, “intend”, “expected”, “plan”, “goal” believe”, or other words of similar meaning. By their nature,

forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are

beyond Company’s control. As a result, actual future results may differ materially from the plans, goals and expectations set out in these

forward-looking statements. Any forward-looking statements made by or on behalf of the Company speak only as at the date of this

announcement. Save as required by any applicable laws or regulations, the Company undertakes no obligation publicly to release the results

of any revisions to any forward-looking statements in this document that may occur due to any change in its expectations or to reflect events

or circumstances after the date of this document.

The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities

Act"), and may not be offered or sold in the United States or to US persons unless the securities are registered under the Securities Act, or an

exemption from the registration requirements of the Securities Act is available. No public offering of the securities will be made in the United

States.

This communication is being distributed only to and is directed only at (a) persons outside the United Kingdom, (b) persons who have

professional experience in matters relating to investments, i.e., investment professionals within the meaning of Article 19(5) of the Financial

Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), and (c) high net worth companies, unincorporated

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persons together being referred to as "relevant persons"). The securities are available only to, and any invitation, offer or agreement to

subscribe, purchase or otherwise acquire such securities will be available only to or will be engaged in only with, relevant persons. Any

person who is not a relevant person should not act or rely on this communication or any of its contents.

DISLAIMER

2

COMPANY IN BRIEF

3

○ The company was founded in the year

1997

○ One of the largest Russian generic drug

manufacturers

○ Operates three production facilities – in

Belgorod, Voronezh, and Pokrov

○ Representative office in Belarus,

subsidiaries in Ukraine and Kazakhstan

○ Employees 1.749 people as at 30.06.2014

○ Specializes mostly in prescription (RX)

drugs

○ Leading player in the oncology market

○ №1 by production of adhesive

bandages in Russia

○ IPO in April 2006

○ Current market cap. RUR 10.603 million

as at 20.06.2014

○ Trading at MICEX (Tickers: VRPH)

○ 81.2% of shares of OJSC "VEROPHARM"

belongs to LLC "GardenHills“

○18.8% of shares of OJSC "VEROPHARM"

are owned by minority shareholders

July August September October November December January February March April May June

2013 2014

MARKET STRUCTURE

4 * GRP – Government Reimbursement Program

Source: DSM Group, Q1 of 2014

Market Structure,

in value terms

Imported vs Domestic drugs,

in value terms

Rx, 38%

Rx vs OTC,

in volume terms

OTC, 62%

217

bln RUR

Pharmacy, 61%

Hospital, 21%

GRP*, 18%

Foreign, 76%

Domestic, 24%

Rx, 66%

Rx vs OTC,

in value terms

OTC, 34%

Market statistics

○ Pharmaceutical Market

for Q1 of 2014:

- In value terms increased by

6% and amounted to RUR

217 bln (RUR 206 bln for Q1 of

2013),

- In volume terms the market

decreased by 4% and amounted

to 1.459 mln units (1.520 mln

units for Q1 of 2013).

o Share of pharmacy segment in

value terms for Q1 of 2014

increased by 12% making 68% in

comparison with Q1 of 2013.

o Hospital sales share in value

terms increased by 14% and made

21% for Q1 of 2014.

o For Q1 of 2014 share of GRP decreased by 16% making 18% in

comparison with Q1 of 2013.

Rating Company

Increase 2014/2013

Share

Q1 2014 Q1 2013 Q1 2014 Q1 2014

1 1 PHARMSTANDART 3,2% 16,4% 16,5%

2 3 VALENTA 20,2% 4,5% 3,9%

3 4 STADA ARZNEIMITTEL 9,6% 3,5% 3,3%

4 5 VEROPHARM 3,6% 3,23% 3,24%

5 10 SERVIER 39,6% 2,9% 2,2%

6 6 EVALAR 3,6% 2,7% 2,7%

7 8 MATERIA MEDICA 1,8% 2,3% 2,3%

8 7 NEARMEDIC PLUS -10,4% 2,2% 2,6%

9 11 MICROGEN 7,2% 2,1% 2,0%

10 13 POLPHARMA PHARMACEUTICAL 15,8% 2,0% 1,8%

Source: Database «Retail, hospital audits , ONLS, VZN of Russia», DSM Group

*The pharmaceutical market of Russia includes medicines and dietary supplements 5

in value terms

DOMESTIC CORPORATIONS

RATING*

Rating Company

Increase 2014/2013

Share

Q1 2014 Q1 2013 Q1 2014 Q1 2013

1 1 PHARMSTANDART 1,5% 16,7% 17,8%

2 2 VALENTA 25,0% 5,7% 4,9%

3 3 STADA ARZNEIMITTEL 4,7% 4,4% 4,5%

4 4 EVALAR 3,6% 4,0% 4,1%

5 8 SERVIER 51,3% 3,6% 2,6%

6 6 MATERIA MEDICA 1,6% 3,3% 3,5%

7 5 NIARMEDIK PLUS -11,5% 3,2% 3,9%

8 7 VEROPHARM -0,7% 2,5% 2,7%

9 10 POLPHARMA PHARMACEUTICAL 19,7% 2,4% 2,2%

10 11 RIA PANDA 34,9% 2,1% 1,7%

DOMESTIC CORPORATIONS RATING

in the pharmacy segment

Source: DSM Group, Database «Retail audit of Russia» 6

in value terms

Rating Company

Increase 2014/2013

Share

Q1 2014 Q1 2013 Q1 2014 Q1 2013

1 2 MICROGEN 5,7% 5,8% 6,1%

2 3 VEROPHARM 17,6% 5,6% 5,3%

3 6 PHARMSTANDART 44,2% 5,5% 4,2%

4 8 KRASPHARMA 39,2% 5,2% 4,1%

5 4 ABOLMED RF -9,9% 4,3% 5,3%

6 7 SINTEZ 7,2% 4,0% 4,2%

7 27 YUGRAFARM 183,1% 3,0% 1,2%

8 1 BIOTEK -50,7% 2,9% 6,4%

9 5 ESCOM -31,4% 2,8% 4,5%

10 25 Federal State Unitary Enterprise on Manufacture of Bacterial and Viral Preparations of Chumakov Institute of Poliomyelitis & Viral Encephalitides, Russian Academy of Medical Sciences

149,8% 2,7% 1,2%

DOMESTIC CORPORATIONS RATING

in the hospital segment

Source : DSM Group, Database «Hospital audits of Russia» 7

in value terms

Rating Company

Increase 2014/2013

Share

Q1 2014 Q1 2013 Q1 2014 Q1 2013

1 1 F.HOFFMANN-LA ROCHE 11,0% 47,1% 38,4%

2 2 JOHNSON & JOHNSON 16,1% 30,0% 23,4%

3 8 SANOFI-AVENTIS 8,2% 2,1% 1,8%

4 9 VEROPHARM 3,2% 2,0% 1,7%

5 7 MERCK -1,3% 1,9% 1,8%

6 10 ASTRAZENECA 28,5% 1,5% 1,1%

7 3 LABORATORY TUTEUR -86,5% 1,4% 9,6%

8 11 TEVA PHARMACEUTICAL 10,2% 1,3% 1,0%

9 14 MEDAC GMBH 72,0% 1,2% 0,6%

10 13 BIOCAD 43,5% 1,1% 0,7%

RATING ALL OVER THE WORLD

CORPORATIONS

in the segment of oncology

Source: DSM Group

in money terms

8

Rating Company

Increase 2014/2013

Share

Q1 2014 Q1 2013 Q1 2014 Q1 2014

1 1 VEROPHARM -39,0% 15,2% 20,1%

2 5 F.HOFFMANN-LA ROCHE LTD 12,0% 8,9% 6,4%

3 2 BIOHIMIC -52,2% 8,2% 13,8%

4 4 EBEWE ARZNEIMITTEL GMBH -22,0% 6,8% 7,0%

5 3 TEVA PHARMACEUTICAL -56,7% 6,3% 11,7%

6 7 MEDAC GMBH 62,2% 5,9% 2,9%

7 6 JOHNSON & JOHNSON 15,6% 4,6% 3,2%

8 11 BIOCAD 36,0% 3,2% 1,9%

9 14 BAXTER HEALTHCARE CORP 39,5% 2,9% 1,7%

10 9 PFIZER -19,3% 2,7% 2,7%


CORPORATIONS

in the segment of oncology

Source: DSM Group

in volume terms

9

Rating Company Country

increase 2014/2013

Share

Q1 2014 Q1 2013 Q1 2014 Q1 2013

1 3 PAUL HARTMANN Germany 27,9% 19,6% 15,2%

2 1 VEROPHARM Russia -21,5% 17,3% 21,8%

3 2 GUIZHOU MIAOYAO PHARMACEUTICAL China -7,5% 17,2% 18,4%

4 4 BOUTY S.P.A. Italy -32,2% 8,6% 12,5%

5 7 JOHNSON & JOHNSON USA 56,0% 5,5% 3,5%

6 5 CHANGZHOU HUALIAN HEALTH China -8,8% 5,3% 5,7%

7 6 VALENTA Russia 6,2% 4,5% 4,2%

8 8 PHARMAPLAST S.A.E Egypt 14,7% 2,9% 2,5%

9 9 BETASAN Turkey 4,7% 2,6% 2,5%

10 10 MASTER PHARM POLAND Poland 20,8% 2,5% 2,1%


CORPORATIONS

in the adhesive bandages segment

10

in value terms

Source: DSM Group

BELGOROD

First modernization in 2001

Second modernization –

reconstruction with a view

of production facilities

expansion since 2011 up to

this day

Production: ampoules,

tablets, capsules, flacons

(lyophilized forms)

Employees: 625

VORONEZH

Production: all types of

adhesive bandages,

cosmetic products

Employees: 475

POKROV

New plant construction in

Volginsky settl. of Vladimir region

since 2011 up to this day

Production: flacons (lyophilized &

liquid forms)

Employees: 398

3 plants in the European

part of Russia

1.498 factory employees

as of June 30, 2014

Flexible manufacturing

facilities allow:

○ cost-efficient production

of both small and large

batches

○ quick shifts from one

product to another

PRODUCTION

FACILITIES

11

Prescription drugs (RX)

Geptor (Ademetionine) - 21.8*%;

Cerepro (Choline Alfoscerate) – 9.6%;

Tautax (Docetaxel) – 6.9%;

Anfibra (Enoxaparin sodium) - 4.9%;

Parclitaxel-LENS (Parclitaxel) - 3.7%.

Over-the-counter drugs (OTC)

Xilen (Xylometazoline) - 65.1%;

Motilak (Domperidone) - 18.6%;

Slabilen (Sodium picosulfate) - 9.7%;

Vitasharm and Vitatress (ATC «Vitamins») - 4.4%;

Ginkgo biloba (Ginkgo biloba) - 1.0%

Plaster (PL) + Cosmetic products (CP)

Traditional antimicrobial adhesive bandages – 30.7%;

Therapeutic plasters - corn plasters - 29.2%;

Traditional reel adhesive bandages - 22.1%;

Therapeutic plasters - pepper plasters – 9.0%;

Clinical nutrition – 3.3%.

Traditional Products (TP)

Vero-Dexamethasone (Dexamethasone) – 34.9%;

Pyridoxine (Pyridoxine) -24.3%;

Vero-Ciprofloxacin (Ciprofloxacin ) – 23.4%;

Vero-Loperamide (Loperamide) – 17.4%.

.

TOP-SELLERS

BY PRODUCT GROUPS

12 * The share of sales of drugs in the segment for the 1st quarter of 2014 in terms of value

Registration in Russia

In the 1st half of 2014 registered:

• 1 - ATG «Digestive tract and metabolism».

• 2 - biological food supplement;

• 1 - cosmetic product;

• 1 - substance included in National Register of Medicinal Products.

At various stages of the State registration are 24 medicines.

Registration in CIS countries and Mongolia

In the 1st half of 2014 registered 4 medicines:

• 4 - ATG «Antineoplastic agents»;

• 1 - ATG «Inhibitor of proteolysis»;

• 1 - ATG «immunostimulant»;

• 1 - ATG «Digestive tract and metabolism».

At various stages of the State registration are 15 medicines.

REGISTRATION

OF NEW DRUGS

13

DEVELOPMENT AND LAUNCH

OF NEW PRODUCTS

2013-2017 We have launched more than 100 pharmaceuticals for the recent 7 years

To achieve success of our products, we maintain active promotion within 18 months from launch

14

Antineoplastic and immunomodulating agents 10

Medications for the treatment of nervous system 10

Digestive tract and metabolism 3

Antimicrobials for systematic use 3

Medications for the treatment of respiratory system 3

Preparations for the treatment of diseases of urogenital organs and sex hormones 2

Medications affecting hematogenesis and blood 2

Preparations for the treatment of diseases of the musculoskeletal system 1

Medications for the treatment of cardiovascular system 1

Preparations for the treatment of skin diseases 1

Medicinal drugs 36

Diet nutrition 14

Perfumery and cosmetic products 10

Medical products 4

Dietary supplements 4

Non-medicinal products 32

At the moment in terms of development are 68 products

INVESTMENT

ACTIVITY

CONSTRUCTION OF NEW

PRODUCTION SITES

16

PROJECT 1 Construction of a new plant in Volginsky settl.

(Pokrov branch)

PROJECT 2 Construction of an annex to the existing

generics workshop in Belgorod

17

PROGRESS OF WORKS

PROJECT 1 (POKROV)

- Construction of a new plant of medical products in Volginsky settl. (Pokrov branch) began in 2011;

- The production of medicines is designed in accordance with the requirements of GMP EU and Russian standards;

- Assumes the use of insulator technology that will allow to create sterile conditions of production, protect the product from human impacts and human from the toxic effects of the product;

- Planned to create a section for the production of hormonal preparations;

- Manufacture hormonal drugs in Russia is missing and this site will allow to produce under contract;

- The work continues on the construction of the new plant in 2014.

LIST OF PRODUCTS*

PROJECT 1 (POKROV)

Manufacture of sterile drugs - cytostatics and hormones

• sterile injection solutions in glass vials;

• lyophilized medicines;

• sterile injectable solutions in plastic vials;

• sterile medicines in the form of dry powder;

• non-sterile drugs - pills hormones, cytostatics;

• non-sterile products – capsules.

Production of sterile non-toxic drugs

• sterile injection solutions in glass vials;

• lyophilized medicines;

• sterile injections in syringes.

18 * After the launch of the new plant

MEDICAL PRODUCTS PLANT

PROJECT 1 (POKROV)

19 19

INSTALLATION OF EQUIPMENT

PROJECT 1 (POKROV)

20

ADJUSTMENT OF EQUIPMENT

PROJECT 1 (POKROV)

21

CONSTRUCTION PROGRESS

PROJECT 2 (BELGOROD)

22

- Started modernization of the plant - construction of an annex to the existing generics workshop in 2011 ;

- The work on the construction of an annex to the existing generics workshop continues in 2014;

Increase in production capacity after the upgrade including through the launch of new forms:

- tablets coated sugar-coated;

- pills without shell;

- soft gelatin capsules.

BUILDING EXTENSIONS


23

TECHNICAL FLOOR FURNISH


24

IFRS for 2004 –2013 audited by Deloitte

FINANCIALS &

ANALYSIS


2013 2014

MARKET CAPITALIZATION RUR 10.603 MLN (as at June 20, 2014 as per MICEX)

SHARE PRICE

26

• IPO in April 2006 • Shares placed at $28 per share • Tikers: VRPH (MICEX) • 81,2% of shares of OJSC «VEROPHARM» belongs to LLC «GardenHills» • 18,8% of shares of OJSC «VEROPHARM» are owned by minority shareholders


2013 2014

50 mln

25 mln

0 mln

Volume of transactions, RUR

3m2014 3m2013

Sales 1 311 1 200

growth 9,3%

Gross profit 644 794

growth -18,9%

Gross Margin 49,2% 66,2%

EBITDA 310 500

growth -38,0%

EBITDA margin 23,7% 41,7%

SALES,

GROSS PROFIT

& EBITDA

27

mln RUR

Sales Gross profit EBITDA

1 311

644

310

1 200

794

500

3m2014

3m.2013

BALANCE SHEET

28

31.03.2014 31.12.2013

CL 1 732 1 305

growth 32,7%

share in L&EQ 12,5% 9,8%

DEBT 3 020 2 911

growth 3,7%


EQ 9 137 9 107

growth 0,3%


Current assaets 7 644 7 455

growth 2,5%

share in Assets 55,0% 56,0%

Non-current assets 6 244 5 868

growth 6,4%

share in Assets 45,0% 44,0%

31.03.2014 31.12.2013

9.137

6.244

9.107

5.868

1.732 7.644 1.305 7.455

3.020 2.911

Current assets

Non-current assets

Debt

CL

EQ

mln RUR

CREDIT PORTFOLIO

29

2 666 2 852

31.12.2013 31.03.2014

mln RUR

Address: 119530, Moscow, Russia, 2nd Yuzhnoportovy Proezd, 18-9

Tel.: +7 (495) 792-5330

Fax: +7 (495) 792-5328

E-mail: [email protected]

www.veropharm.ru

company profile - veropharm · company in brief 3 the company was founded in the year 1997 one of...

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