Phone Conference Semi-annual Report 2008 · document are to be keppy yy y y pt strictly confidential by you and may not be forwarded or disclosed to any other person. No representation

Phone ConferenceSemi-annual Report 2008

Siegfried – when substance matters

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Slide 227. August 2008Half-year report A&FC

Review of the 1st half year and market positioningReview of the 1st half-year and market positioningFigures 2008


Siegfried GroupSiegfried GroupVision

To be a world-class partner in developing and f t i d th t i h lifmanufacturing drugs that improve human life.


Siegfried GroupSiegfried GroupTwo Divisions

Actives Generics

Exclusives Multiclients Classical Generics Inhalation


Siegfried GroupSiegfried GroupOverall

• Ongoing growth, revenues CHF 159.6 mio., + 6.8% in local currencies and 1.2% in Swiss francs,despite negative currency influencep g y

• Operating profit CHF 28.5 mio., + 33.2%, incl. contribution of sale of pharmaceuticalproduction facility in Zofingen to Arena and license payment for a bio-generic project

• Net profit CHF 21.9 mio., + 19.6%

• Siegfried Actives revenues CHF 95 1 mio 4 9% in local currencies and 12 7%• Siegfried Actives revenues CHF 95.1 mio., - 4.9% in local currencies and – 12.7% in Swiss Francs

• Siegfried Generics revenues CHF 64 6 mio + 32%Siegfried Generics revenues CHF 64.6 mio., + 32%


Siegfried GroupSiegfried GroupOverall

• Good order inflow for the Siegfried Actives Division

• Rapid development of the inhalation technology

• Siegfried continues to grow


Siegfried ActivesSiegfried ActivesHighlights of Exclusive Synthesis Business

• Positive market environment

• Good order inflow

• 26 new projects in the last 18 months

• Better capacity utilization

• Two important products going into ramp up phase 4th quarter 2008• Two important products going into ramp-up phase 4th quarter 2008


Siegfried ActivesSiegfried ActivesPipeline Exclusive Synthesis

18

14

16

8

10

12

ject

s

4

6

er o

f pro

j

0

2

Product launched Phase III Phase 2 Phase I and preclinical

Num

be

Phase


Siegfried ActivesSiegfried ActivesMulti-Client Products: Standard APIs

• Expansion of product range ongoing

• In Europe, interest for opiate derivatives growing

• Sales of nicotine and methadone developing well


Siegfried ActivesSiegfried ActivesMulti-Client Products: Standard APIs

Product RegistrationCommercial available

Buprenorphine HCl CEP / US DMF Codeine phosphate US DMFavailable

productsCodeine phosphate US DMFHydrocodone bitartrate US DMFMorphine sulfate CEP / US DMFpOxycodone HCl CEP / US DMF

Products in development

Buprenorphine baseHydromorphone HClHydromorphone HClNaloxone HClNaltrexone baseNaltrexone HClOxymorphone HCl


Siegfried GenericsSiegfried GenericsHighlights Classical Generics

• Good 1st half 2008 result

• Result includes license fee for successfully completed bio-generics project and sale of pharmaceutical facility in Zofingen

• Build pipeline of projects with different delivery technologies. First dossierssubmitted 1H08


Siegfried GenericsSiegfried GenericsPipeline Classical Generics


Siegfried GenericsSiegfried GenericsInhalation

• Rapid development of device

• Munich lab expansion

• GMP facility in Höchstädt

• All costs for inhalation technology charged to the P&L


Siegfried GenericsSiegfried GenericsTimelines Market Introduction PulmoJet USA

2008 2009 2010 2011 2012

1st clinical batch released

Results pilot pharmakinetics

Start large clinical trials

Submission

Approval and launch


Siegfried GenericsSiegfried GenericsTimelines Market Introduction PulmoJet EU

2008 2009 2010 2011 2012

1st clinical batch released

Results pilot pharmakinetics

Start large clinical trials

Submission

Approval and launch


Siegfried GroupSiegfried GroupGoals

• Ensure long-term profitability and growth

• Grow Siegfried Actives as key-business:- be fast, reliable and responsive- build strategic partnership with key-customers- balance business risk (pipeline build-up, multi-client-products)- further strengthen technological base (e.g. high-potency)

• Build Siegfried Generics:• Build Siegfried Generics:- further invest in technology (inhalation device)- leverage none patent-infringing Malta base


Siegfried GroupSiegfried GroupOutlook 2008 and 2009

Siegfried Group 2008(goal)

2009(goal)(g ) (g )

Sales growth single digit single digit

EBIT (% sales) </= 10 % > 10 %


Business Development 1st Half Year 2008Business Development 1st Half-Year 2008 Key Figures


Business Development 1st Half Year 2008Business Development 1st Half-Year 2008 Consolidated Income Statement


Business Development 1st Half Year 2008Business Development 1st Half-Year 2008 Cash Flow Statement


Business Development 1st Half Year 2008Business Development 1st Half-Year 2008 Balance sheet: Assets


Business Development 1st Half Year 2008Business Development 1st Half-Year 2008 Balance Sheet: Liabilities and Equity


Siegfried GroupSiegfried GroupSiegfried Actives Division : Key Figures

EBITDA Developmentp

• First half 2007 positively impacted byCelgene Asset Deal

9.1

4.4 3.6

• Negative US$ impact of CHF 4.4 million

P d t d l i t d h lf 2008

27.4

17.5

• Product delays into second half 2008 with impact on EBIT

Actives 1sthalf 2007

Asset SaleCelgene

Currencyloss

BaseActives

Actives 1sthalf 2008


Siegfried GroupSiegfried GroupSiegfried Actives Division : Lower than expected sales in 1st half 081st half 08

• Growth in Exlusive Synthesisexpected for second half 2008

107.533 108.882

*95.087 p

• Higher volumes lead toimproved margins for second

82.70387.909

83.514 EBITDAMargin

70.593

62.778

half 2008

• Good development ofmulticlient products

62.301

EBIT

9 %

Margin25 %

18%

32 309

64.297

multiclient products

1 HJ 2005

24.019

1 HJ 2006

9 %

38.289

1 HJ 2007

2%

32.309

1 HJ 2008

20.402

1 HJ 2004

23.612

Outlook 2 HJ 20081. HJ 2005 1. HJ 2006 1. HJ 2007 1. HJ 20081. HJ 2004 Outlook 2. HJ 2008

EBIT MarginEBITDA MarginSales ExclusivesSales MulticlientsSales Multiclients


Siegfried GroupSiegfried GroupSiegfried Actives Division Outlook: Growth from newly introduced projects and opiates franchiseintroduced projects and opiates franchise

Growing sales from 4 new projects; 1 approval2nd half 2008; 3 approvals 1st half 2009 expected95.087

Slow-down of older core productscompensated by introduction of follow-upproducts in 2nd half 2008 and growth inexisting portfolio due to increased customerdemand following supply chain reorganizations

Raw material sales in first half 2008compensated by market introduction of 5 new

Outlook 2. HJ 20081. HJ 2008

• Growth in exclusive synthesis expected forsecond half 2008

C i i l h f 2009

opiate APIs. Signing of contracts expected for 2nd half 2008.

• Continuing sales growth for 2009

• Rejuvenated product portfolio for 2009


Siegfried GroupSiegfried GroupSiegfried Generics Division

• Good sales development in firstEBITDA Development Good sales development in first half 2008

• Special income from Arena

p

13.6

and from licence fee Bio-Generics

R&D t f CHF 5 6 illi11.7

1.0

5.6

13.5

32.2

• R&D costs of CHF 5.6 millionexpensed for inhalation project(1st half 2007 CHF 0.4 million)

Generics 1sthalf 2007

Base Generics

InhalationR&D

LicenceBiogenerics

SaleArena

Generics 1sthalf 2008


Siegfried GroupSiegfried GroupSiegfried Generics Division : Good sales in first half 2008;sharp reduction in second half 2008 expectedsharp reduction in second half 2008 expected

• Sales and margin boostbecause of licence income

Launch of Amlodipin

72 131

first half 2008

• Reduction of base business in47.33848.910

64.557

29%EBITDA Margin

72.131

second half 2008 with negativeimpact on margin

38.44926%

EBIT Margin(Base) 20%

(Base) 24%

1. HJ 2004 1. HJ 2005 1. HJ 2006 1. HJ 2007 Outlook 2. HJ 20081. HJ 2008

EBIT MarginEBITDA MarginLicence BiogenericsSales GenericsSales Generics


Siegfried GroupSiegfried GroupSiegfried Generics Division Outlook: Substantial reduction with existing productsreduction with existing products

13.498

Market introduction 1st half 2008, only smaller product introductions until 2012Licence Biogeneric

64.557

C ti d i d

New Products

Continued pressure on prices andmargins due to changes in the Germanhealth policy. Stock piling bycustomers in the first half year foruncertainities in the German market

Base Portfolio

1 HJ 2008 Outlook 2 HJ 2008

uncertainities in the German market.

• Stock piling of key products in 1st half 2008 due to uncertainities in the Germanhealth policy

1. HJ 2008 Outlook 2. HJ 2008

• Limited product pipeline but continued investments in R&D for projects with significantmarket introductions 2012 onwards


Siegfried GroupSiegfried GroupEBITDA Development

• Arena and licence feeBiogeneric as main positiveg pdrivers of EBITDA in 1st half 08

• Lower sales in exclusive$synthesis, US$ exchange rate

and R&D costs for inhalationtechnology with negative impact

5.61.0

*

1.040.6 9.1

4 4 3 6

13.6

13.5

5.946.3

32

27.4

11.7

4.4 3.6Actives

Generics

17.5

LicenceBiogeneric

Inhalationcosts

BaseGenerics

SaleAtlantis

Asset saleCelgene

3.4

11.7

EBITDA 1sthalf 2007

Currencyloss

BaseActives

BaseCorporate

Sale Arena

Corporate

EBITDA 1sthalf 2008


Business Development 1st Half Year 2008Business Development 1st Half-Year 2008 Net Sales Business Operations

2008 2007 Change Change2008CHF Mio.

2007CHF Mio.

Change%

Change% in lc

Siegfried Actives 95.1 108.9 - 12.7 - 4.9

Siegfried Generics 64.5 48.9 32.0 32.6g

Siegfried Group 159.6 157.8 1.2 6.8


Business Development 1st Half Year 2008Business Development 1st Half-Year 2008 Net Income

2008 2007 ChangeCHF Mio. CHF Mio.

g%

Net sales 159.6 157.8 1.2

EBITDAMargin

46.329.0

40.625.7

14.1

Operating income (EBIT)Margin

28.517.9

21.413.6

33.2

Net income 21.9 18.3 19.6


Business Development 1st Half Year 2008Business Development 1st Half-Year 2008 Capital Expenditure 1st Half of 2008

15.5

11.3

2.71 3

EuropeUSA1.3 USA


Thank you for your attention


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Phone Conference Semi-annual Report 2008 · document are to be keppy yy y y pt strictly confidential by you and may not be forwarded or disclosed to any other person. No representation