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Introduction to DOC GenericiJefferies Conference
November 19-20, 2014
INTRODUCTION TO DOC GENERICI
• The generics market in Italy
• DOC Generici: Leading Independent player
1
A LAND OF OPPORTUNITY
PENETRATION STILL SIGNIFICANTLY BEHIND EUROPEAN AVERAGE
Source: EGA European Generic Medicines Associations
2
Note: Represents retail sales to the pharmacy market. Source: IMS Health Sell-in
GENERICS: 19% PENETRATION OF ITALIAN RETAIL PHARMA MARKET IN 2014
3
ITALIAN GENERICS MARKET: KEY FEATURES
High concentration of players
High entry barriers
Company Branded
Reference pricing
Prescription by INN (International non-proprietary name) since 2012
Interchangeability with the originator and substitution among generics
Commercial discounts banned since 2009
National budget and repayment of overspending
(*) : source IMS Retail channel 2013 value
4
OUTLOOK: NEW WAVE OF PATENT EXPIRATIONS DRIVE GROWTH FROM 2017 IN ITALY
Ori
gin
ato
r m
arke
t va
lue
tod
ay
Year of Patent Expiration
5
2014-17 GROWTH DRIVEN BY PENETRATION AND PATENT EXPIRATIONS
Source: IMS Forecast 2014, prescription market
CAGR Value: +7,1%
CAGR Volume: +7,2%
6
INTRODUCTION TO DOC GENERICI
• The generics market in Italy
• DOC Generici: Leading independent player
7
DOC: THE LEADING INDEPENDENT GENERIC COMPANY IN ITALY
The only large independentplayer in Italian market
First sales in 2001 from theborn of the generic market
Acquired by Charterhouse in2013
Sales 2013: 156,6 Mio/€(+18,9% vs. 2012)
EBITDA 2013: 56,3 Mio/€(+29% vs. 2012)
EBITDA MARGIN 2013: 36%(2012: 31%)
Market Share 2013: 15,6%(2012: 15,3%)
ORGANIZATION:• 63 employees• 94 exclusive agents
8
DOC: KEY FEATURES OF THE BUSINESS MODEL
A branded strategy with professional endorsement by doctors, pharmacists and consumers.
A network of European R&D and manufacturing suppliers (business light model).
A high proportion of variable and discretionary costs (more than 60%, excluding COGS)
9
A STRONG TRACK RECORD OF REVENUE GROWTH
0.3 4.3
23.1 29.3 30.5
39.0 39.1
53.5 59.2
71.3
98.9
115.5
131.8
156.6
0
20
40
60
80
100
120
140
160
180
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Net Sales Evolution (2000-13), EURm
2000-13 Revenue growth CAGR: 64%
CONSISTENT HISTORICAL GROWTH
Market Shares (Value)
2008: 12,5%
2009: 12,9%
2010: 14,4%
2011: 15,1%
2012: 15,3%
2013: 15,6%
CONCLUSION
Leading independent player in the Italian company-branded generics market
One of the most recognised generic brands in Italy
Flexible cost structure and asset light business model
Strong financial performance and cash generation
A market leading position….
….providing a compelling competitive position for future growth..
Uniquely positioned to exploit the growth of the Italian generics market
12