ALK at a glance The leading allergy specialist

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2 ALK at a glance The leading allergy specialist 33% of global allergy immunotherapy market Leading R&D pipeline with proven technology Strategic partnerships to globalise tablet portfolio Modern allergy immunotherapies Diagnostics and adrenaline Partners 7% 4 year CAGR 11% 4 year CAGR Allergy immunotherapies 1.5 million patients using ALK s products 2012 Revenue: DKK 2.3b (EUR 314m) 2012 EBITDA: DKK 306m (EUR 41m)* 2 *) before special items

3 Immunotherapy cuts the symptoms, treats the cause Sustained effect after completion of treatment The only treatment documented to modify the underlying cause of allergic disease Evidence of a sustained effect after treatment has been completed The only treatment with potential for asthma prevention Market exclusivity secured via a unique biological production process 3

4 Continued unmet medical need Allergic rhinoconjunctivitis (prevalence) 85m (23%) Patients in poor control 60m (19%) 17m Treated with immunotherapy 12m 3m 1.5m 10m 35m (27%) North America Europe Japan House dust mite (HDM) Grass Ragweed HDM Grass Tree HDM Japanese cedar Most important allergies 4 Sources: UN Forecast, Bachau 2004; Adelphi Research (EU 5), Canonica Patients in poor control in the USA and Japan are extrapolated on basis of EU characteristics. Datamonitor 2010

5 Platform for growth TORII PHARMACEUTICAL CO., LTD. Globalising convenient tablet portfolio Expanding into new markets European core = ~80% of current revenue >20% normalised EBITDA margin adjusted for accelerated R&D Stable cash flow Primarily non-tablet products (currently 1 tablet launched) Exploring asthma and asthma prevention Complementary products 5

6 Global reach through partnerships Clinical development, registration, marketing & sales Product supply USD 100 million in upfront and milestones USD 190 million in sales milestones Sales royalties undisclosed Additional revenues from product supply TORII PHARMACEUTICAL CO., LTD. EUR 60 million in upfront and milestones Sales milestones undisclosed Sales royalties undisclosed Additional revenues from product supply 6

7 Tablet development on track AIT pipeline Product GRAZAX Grass ARC* Geography Europe Pre-clinical Phase I Phase II Phase III Filing (exp.) Marketed Grass AIT** Grass ARC North America GRAZAX Asthma prevention Europe (2016) Ragweed AIT Ragweed ARC HDM*** AIT HDM asthma HDM AIT HDM rhinitis HDM AIT HDM rhinitis HDM AIT HDM asthma HDM AIT HDM rhinitis Tree AIT Tree ARC North America Europe Europe North America Japan Japan Europe (2014) (2014) (n.d.) (n.d.) (n.d.) (n.d.) Results from MERIT and MITRA Phase III trials expected during Q3 Results from Tree AIT Phase II in H2 and HDM AIT Phase IIb, USA ~Q4 7 *) ARC: Allergic Rhinoconjunctivitis, **) AIT: Allergy Immunotherapy Tablet ***) HDM: House Dust Mite

8 Tablet portfolio (AITs) Grass AIT: expanding reach Currently under regulatory review in North America Disease-modifying treatment of grass pollen ARC Launched with reimbursement in all major European markets 2012 sales of DKK 202 million (EUR 27 million) Licensed to Merck in North America March 2013: BLA accepted for review by the FDA Clinical trial overview Total number of pivotal trials 14 Total number of adults 3,762 Total number of children 940 GAP: On-going landmark trial to investigate asthma prevention 800 children Key efficacy results from Grass AIT Phase III trials Trial Relative difference* p-value GT-08** -34.2% <0.001 GT % P % <0.005 GT % P % P08067 Data not available <0.001 * Percentage reduction in mean total combined scored vs placebo ** Results from year 1 of the GT-08 trial 8

9 Tablet portfolio (AITs) Ragweed AIT: a new treatment option BLA submitted to the FDA in March 2013 Immunotherapy treatment of ragweed ARC 30 million patients affected in North America Clinical trials conducted by Merck Clinical trial overview Number of pivotal trials 5 Adult subjects included 2,517 Key efficacy results: ragweed AIT Phase III First-in-class documentation Trial Relative difference* p-value Well-tolerated treatment Increasing prevalance in central and southern Europe (not licensed) P % P % * Percentage reduction in total daily rhinoconjunctivitis symptommedication score (amb 12 dosis), p 0.05 vs placebo 9

10 Tablet portfolio (AITs) HDM AIT: For the most common allergy 200 million house dust mite allergy sufferers in Europe, USA, Japan and China Immunotherapy treatment of HDM respiratory allergies Perennial disease with strong link to asthma ~9% ~11% ~8% ~12% Early onset and occurrence in life Parallel development in Europe, the USA and Japan Largest development programme ever: 7,000 patients to be included Europe: Two ongoing Phase III studies into efficacy in asthma and rhinitis Japan: Two ongoing Phase III studies into efficacy in asthma and rhinitis USA: Tolerability and safety study, Phase III trial in preparation 10

11 Tablet portfolio (AITs) Patients in EU top 5 markets A large population is currently not treated with allergy vaccination HDM-specific prevalent population 31 million patients (100%) Potential HDM AIT-eligible patients 1.25 million patients (4%) Diagnosed, moderate-severe, uncontrolled patients at specialists office Patients currently treated with HDM allergy vaccines 345,000 (1%) (est. sales EUR m) 11 11

12 Tablet portfolio (AITs) An unprecedented clinical development programme Phase Region Age N Main aim Completed trials MT-01 I Europe Tolerability and safety MT-02 II/III Europe Dose-finding and efficacy on asthma MT-03 I Europe Tolerability and safety TO-203 Phase I I Japan Tolerability and safety Ongoing trials MT-04 (MITRA) III Europe Efficacy in asthma MT-06 (MERIT) III Europe Efficacy in rhinitis TO II/III Japan * Efficacy in asthma TO II/III Japan * Efficacy in rhinitis MK I North America ** Tolerability and safety MK IIb Europe ** Dose-finding (exposure chamber trial) MK III North America ** Efficacy in rhinitis/rhinoconjunctivitis *) In partnership with Torii **) In partnership with Merck 12

13 Tablet portfolio (AITs) The house dust mite allergy tablet A key step in ALK s growth plans Effectively treat the most important global allergy Drive global expansion (established and emerging markets) Expand the AIT portfolio The long-term vision for HDM AIT Treatment of house dust mite induced respiratory disease (rhinitis and asthma) Disease modification in adults and children Prevention of asthma in children 13

14 Tablet portfolio (AITs) Expanding AIT indications Exploring asthma & asthma prevention HDM AIT treatment of asthma Treatment of HDM allergic adults with asthma Primary endpoint is reduction of asthma exacerbations Results of MITRA clinical trial in Q GRAZAX asthma prevention (GAP) trial 5-12 year old children with allergy but no asthma Prophylactic treatment with GRAZAX Results of five-year clinical trial in 2015/16 14

15 Tablet portfolio (AITs) Tree AIT: Completing the tablet portfolio Tree Immunotherapy treatment of tree ARC Covering birch, hazel, alder, elm (& oak) Phase II dose-finding trial initiated in Europe (TT-02, 600 patients results available Q4 2013) Not yet licensed to global partners Cedar AIT for cedar allergy in Japan in preclinical development About 14%* of the Japanese population is sensitised to cedar pollen 15 *MHLW-subsidized research program for prophylaxis/treatment of immunological allergic diseases, "Research for Correct Treatment of Pollinosis, 2011

16 Product Supply with global capacity High quality pharmaceutical production standards 12m AITs in 2012 Long-term capacity to produce 500m AITs/year State of the art raw materials facility in the USA Tablet API unit in Denmark In-licensed tablet casting unit in UK 16

17 AIT pipeline outlook 2013 Filings and new clinical trials Grass AIT filing, USA FDA Ragweed AIT filing, USA FDA HDM AIT Phase III, USA Presentation of results from clinical development HDM AIT MERIT Phase III, Europe (~Q3) HDM AIT MITRA Phase III, Europe (~Q3) Presentation of results from Phase III grass AIT studies, USA/Canada (H2) Tree AIT Phase II, Europe (H2) HDM AIT Phase IIb, USA (~Q4) 17

18 Market update (Q1 2013) Europe Slight decline in vaccine sales in weaker markets, except for France, Nordic and Eastern/Central Europe New austerity measures in the Netherlands ALK maintains its overall market shares Continued strong market uptake of Jext 0% Outside Europe Commodity sale ceased China: double-digit growth in vaccine sales North America: 3% growth in sales of extracts Partner income USD 5m milestone payment from Merck related to ragweed AIT Reimbursement of R&D activities carried out for Merck and Torii -3% +50% Group revenue 81% Europe Outside Europe Partner income 11% 8% 18

19 Product sales (Q1 2013) -4% SCIT & SLIT vaccines Depressed sales in Central and Southern Europe SCIT growth in Nordic, France and overseas Tablet vaccines (AIT) 6% sales growth 11% volume growth Strong growth in France, Central/Eastern Europe +6% Product sales 81% 11% 8% Adrenaline Growth driven by UK, Nordic and France Market share now estimated at >10% Sales target: DKK 200m +92% Other products Decline in diagnostics Double-digit growth in PRE-PEN sales Discontinuation of commodity sales -17% SCIT & SLIT vaccines Tablet vaccines Adrenaline and Other products 19

20 Quarterly results DKK million Q EURm Q Revenue Gross profit Capacity costs EBITDA before special items EBITDA Net result DKK million Q EURm Q Operations Investments (50) (8) (56) Financing (30) (8) (57) Unchanged gross margin of 73% Dividends and share buybacks R&D expenses up 7% Admin. expenses declined 6% Sales/ marketing expenses declined 2% 20

21 Financial outlook 2013 Revenue on par with 2012 Stable vaccine sales Solid growth in Jext sales Minor growth in diagnostics and other products Lower income from partners (milestones, etc.) 2013 Outlook (DKK) Revenue >2.3bn Operating profit (EBITDA)* m CAPEX m *) before special items Unchanged capacity costs R&D expenses > DKK 500m Robust DKK m operating profit Subject to timing of milestone payment from Merck Earnings mainly to be generated in Q4 21

22 Long term strategy: Simplify, Innovate, Grow Investing in growth Accelerated R&D to launch and expand tablet range Simplify initiatives to optimise portfolio, consolidate production and streamline business Investment in new product opportunities Earnings & revenue growth Income from partner sales in North America and Japan Expansion into new, fast growth regions 2016: Yearly cost savings of DKK 100 million from simplifying initiatives Unlocking allergy Expected completion of tablet (AIT) portfolio Expand beyond current niche Broaden awareness of disease burden Establish AIT within standard treatment paths

23 Driving long-term value creation 3,000 Potential upsides Partners' sales and product prices New partnerships or extensions of existing Expansion into new markets or in existing markets through acquisitions No risk-adjustment 2,000 Risks Partners' sales and product prices Unforeseen regulatory demands New, mandatory price reductions/healthcare reforms or expansions of existing Partner revenues* Reduced R&D/revenue ratio Revenue DKK 3,000 million (EUR 400m) 1,000 EBITDA 7% Cost reductions from Simplify initiatives Jext sales >DKK 200m in 2015 EBITDA 25% Moderate growth in vaccine sales *) Includes sales royalties, milestone payments, product supply and R&D costs reimbursements

24 Forward-looking statements This presentation contains forward-looking statements, including forecasts of future revenue and operating profit as well as expected business-related events. Such statements are naturally subject to risks and uncertainties as various factors, some of which are beyond the control of ALK, may cause actual results and performance to differ materially from the forecasts made in this presentation. Without being exhaustive, such factors include e.g. general economic and business-related conditions, including legal issues, uncertainty relating to demand, pricing, reimbursement rules, partners' plans and forecasts, fluctuations in exchange rates, reliance on suppliers and market structure. An additional factor is potential side effects from the use of ALK's existing and future products as allergy immunotherapy may be associated with allergic reactions of differing extent, duration and severity.. 24

25 Appendix

26 ALK - Products Allergy immunotherapies SCIT (subcutaneous immunotherapy) Injections Major brands: Alutard, AVANZ, ALK7, Cover all respiratory allergies plus venom SLIT (sublingual immunotherapy) Liquid drops Major brands: SLITone ULTRA, SLITone, OSIRIS Cover all respiratory allergies Modern allergy immunotherapies AIT (allergy immunotherapy tablets) Oral dissolvable tablets Brand name: GRAZAX Covers grass pollen allergy Diagnostics & adrenaline Diagnostics Major brand names: Soluprick, PRE-PEN AAI (adrenaline autoinjectors) Brand name: Jext Emergency treatment of allergic reactions (anaphylaxis) 26

27 Market exclusivity secured through know-how, patents and regulation Raw materials in Pollen House dust mite Animal dander Analysis Bulk (API) production Extraction Purification Freeze drying Analysis Proprietary rights Patents Licensed rights (e.g. Zydis) Clinical data Trademarks High barriers of entrance Finished production Unique formulation Filling Analysis 27

28 Two leaders in a highly fragmented industry ALK Stallergenes 28% 11% Allergopharma 28% Others (10+ companies) 33% Source: ALK analysis, ALK Annual Reports, Stallergenes Annual Reports, Thomson Reuters 28

29 Allergy immunotherapy in Europe Market overview Nordic 2012 Sales: EUR 15m Patients treated 2012: ~44,000 Key competitors: None Netherlands 2012 Sales: EUR 37m Patients treated 2012: ~40,000 Key competitors: HAL; Allergopharma; Allergy Therapeutics; Stallergenes UK 2012 Sales: EUR 2m Patients treated 2012: ~5,000 Key competitors: Allergy Therapeutics; Allergopharma Germany 2012 Sales: EUR 269m (after rebate) Patients treated 2012: ~560,000 Key competitors: Allergopharma; HAL; Leti; Bencard; Stallergenes; Roxall France 2012 Sales: EUR 228m Patients treated 2012: ~350,000 Key competitors: Stallergenes Austria 2012 Sales: EUR 20m Patients treated 2012: ~45,000 Key competitors: Allergopharma; Stallergenes; Bencard; HAL Spain 2012 Sales: EUR 72m Patients treated 2012: ~188,000 Key competitors: Leti; Stallergenes; DIATER; BIAL; Allergopharma Italy 2012 Sales: EUR 49m Patients treated 2012: ~135,000 Key competitors: Stallergenes; Lofarma; Anallergo; Allergopharma; BIAL Source: Internal Calculations based on countries market data and most recent competitors annual reports 29

30 Current medical practice in the USA No FDA approved allergy immunotherapy products in the USA 5,500 allergy immunotherapy practitioners: ~3,000 allergists Increasing interest from ENTs (~20,000) and others SCIT: self-mixing common practice among allergists Increased off-label SLIT usage in recent years Compounding pharmacies under scrutiny Extracts seen as commodity: Total sales ~ USD 100 million Six licenses granted to four companies Diagnosis service important to allergists Reimbursed by private insurance, MediCare and MedicAid 30

31 Patient dynamics in the USA AIT to supplement existing practice US population 306m Allergic rhinitis (60M, 19%) 1 AR diagnosed (~32M, 55%) 1 Undiagnosed (~26M, 45%) 1 Mild seasonal (~3.5M, 11%) 1 Moderate/severe seasonal (~11.2M, 35%) 1 Mild perennial (~2.6M, 8%) 1 Moderate/severe perennial (~14.7M, 46%) 1 Available for treatment with immunotherapy Treated with immunotherapy (~ 3M, 9%) Diagnosed AR patients are typically moderate-to-severe. Patients with mild symptoms may not seek help. 31 1) Immunotherapy in Allergic Rhinitis. Moving away from injections. Datamonitor. March 2006

32 The adrenaline auto-injector market RoEU 35% UK 44% Approx. 7 million units distributed (2011) Total sales ~ DKK 4 billion (EUR 550m) Projected market growth ~ 5% p.a. EpiPen dominates France 13% Germany 8% Allergy prevalence USA Europe EU 18% RoW 7% Units Food 6m 9m Venom 8m 11m USA 75% 32 Sources: ALK market research

33 MITRA trial Establishing efficacy in the treatment of HDM-related allergic asthma Treatment of house dust mite-allergic patients with asthma Primary endpoint: reduction of asthma exacerbations 33

34 MITRA study design Building a case for HDM AIT in HDM-induced allergic asthma Primary Objective Evaluate the efficacy of once daily HDM tablets (6 DU and 12 DU) compared to placebo in subjects with HDM-induced asthma, measured by reduction of risk for an asthma exacerbation Key Secondary Objectives Determine the effects on asthma symptoms and immunology Other Secondary Objectives Effects on lung function, asthma control, safety, symptomatic medication, asthma quality of life and pharmaco-economics 34

35 MERIT trial Establishing efficacy in the treatment of HDM-related allergic rhinitis Treatment of house dust mite-allergic patients with rhinitis Primary endpoint is reduction in average total combined rhinitis score 35

36 MERIT study design Building a case for HDM AIT in HDM-induced allergic rhinitis Primary Objective Evaluate the efficacy of once daily HDM AIT compared to placebo in the treatment of HDM allergic rhinitis. Primary endpoint: average total combined rhinitis score during the last eight weeks of treatment Key Secondary Objectives Determine the effects on average allergic rhinitis DSS, average allergic rhinitis DMS and average total combined rhinoconjunctivitis score Other Secondary Objectives Evaluate the safety and tolerability of HDM AIT Effects on individual rhinitis and conjunctivitis symptoms, medication use, onset of action, treatment satisfaction, and generic and disease-specific quality of life Immunological parameters will be investigated in a subset of subjects 36

37 2012 full-year results DKK million 2012 EURm 2011 Revenue 2, ,348 Gross profit 1, ,737 Capacity costs 1, ,440 EBITDA before special items EBITDA Net result Margins affected by AIT production ramp-up etc. Restructuring costs of DKK 64m in Q4 R&D costs of DKK 511m (+12%) DKK 155m gain on sale of Chr. Hansen in 2005 Dividend of DKK 5 per share (EUR 0.67) for the 2012 financial year 37

38 ALK equity and shareholder structure ALK (ALK B) listed on NASDAQ OMX Copenhagen (Reuters: ALKB.CO / Bloomberg: ALKB.DC) Number of shares outstanding: 10.1 million Two share classes (A / B) Market Cap: ~575 EURm Largest shareholder groups Lundbeck Foundation (40%), since 1987 ATP, Danish Labour Market Pension Fund (>5%) Other insitutitional investors (~30%) ~13,000 retail investors (~25%) Foreign ownership: ~25% Domestic ownership: ~75% 38

39 Thank you for your attention Read more: Investor Relations: Per Plotnikof Director Head of Investor Relations Phone: