A world leader in allergy immunotherapy

Transcription

1 A world leader in allergy immunotherapy Investor Relations Presentation April I Investor Relations presentation April 2017

2 ALK: Towards redefining treatment of severe allergies The commercial leader and foremost innovator in Allergy Immunotherapy (AIT) ALK fundamentals AIT: A unique disease-modifying treatment for people with severe allergies Global reach Exclusivity via high-quality biological manufacturing processes including sourcing and standardisation of allergens 2,300 employees (+200 in 2016) Patient solutions in all areas of AIT SLIT-tablets Diagnostics, adrenaline 2016 Revenue DKK 3bn SCIT (injections) SLIT-drops Today ~80% Europe 99% allergy-related Niche ~1.5m patients Strategic drivers Globalisation of AIT Standardised, evidence-based products Prescriber expansion Asthma treatment and prevention Future Truly global Allergy & asthma Mainstream for people with severe allergies 2 I Investor Relations Presentation April 2017

3 Highlights: High growth driven by market disruptions Q % growth in base business, 12% overall FY 2016 Competitor problems boosted European sales Record-high revenue and EBITDA result Asthma evidence continues to build Encouraging uptake of ACARIZAX / GRAZAX disruption profits to be reinvested in building growth and robustness Base business growth DKKm 3,200 2,400 1, DKKm % 20% 10% 0% Base business Partner income Base growth rate Reported EBITDA Growth rates are stated as organic growth in local currencies EBITDA Milestones Margin 20% 10% 0% 3 I Investor Relations Presentation April 2017

4 Re-educating the immune system Allergy Immunotherapy (AIT) AIT Treatment with standardised doses of allergens (proteins) Disease modification: Treats the cause of allergy in addition to reducing symptoms and use of other medications Typically recommended for three years Common causes of allergic rhinitis with/without conjunctivitis Other allergy sources House dust mite Grass Tree pollen Ragweed Japanese cedar Insects Food Prevalence: 10-30% globally, most common chronic disease 30-60% of patients with allergic rhinitis develop allergic asthma 4 I Investor Relations Presentation April 2017

5 Strategic direction Market access GMP compliance Mix of legacy and newer products Transform Expand Asthma New prescribers Asthma New markets Strategic intent From a European company focused on allergic rhinitis to a global company with standardised, evidence-based products which also treat and potentially prevent asthma. 5 I Investor Relations Presentation April 2017

6 Global footprint Partnerships to leverage growth SLIT-tablets SLIT-tablets and SCIT Allergic rhinitis AIT industry sales 2016 ALK AIT sales 2016 EUR ~10 billion Global allergic rhinitis market North America; 18% International; 7% EUR ~0.9 billion Global AIT market Europe; 75% International; 2% North America; 13% EUR ~360 million Europe; 85% ACARIZAX SLIT-tablets ALK Partner markets AIT treatment is mainly distributed as finished products in Europe and recently also in the USA and International markets - in North America, also as bulk extracts to allergy specialists 6 I Investor Relations Presentation April 2017

7 Financial overview 2016 disruption profits to be reinvested in building growth and robustness DKK million E Base business 2,219 2,384 2,918 SLIT-tablet partnerships 2) Revenue 2,433 2,569 3, bn (Revenue in USDm) Gross margin 70% 67% 67% R&D (% of revenue) 16% 16% 13% - S, M & A 994 1,033 1,091 EBITDA before special items and excl. milestones /royalties EBITDA ~300 (in USDm) CAPEX Free cash flow > -500 Equity ratio 69% 63% 60% - Cash and marketable securities priorities US scale-up for repatriated SLITtablets ~+150 DKKm Market shaping in Europe and Int l markets ~+50 DKKm Capacity expansion and Product Supply robustness: +75 DKKm (COGS) ~ DKKm (CAPEX) 1) Growth in local currencies 2) Revenue from SLIT-tablet partnerships in North America and International markets. In years , this mainly consists of milestones and service fees. 7 I Investor Relations Presentation April 2017

8 Anticipated market dynamics in 2017 ALK to retain part of market share gains Markets expected to gradually find a new normal SCIT sales squeezed by upgrades; strong growth for ACARIZAX Revenue lower than 2016 but significantly above 2015 (DKK 1.9bn) Revenue to grow driven by allergen extracts, diagnostics and SLIT-tablets Conversion of tablet sales royalties to revenue Contribution from recent acquisitions Revenue to grow in current markets, expansion into new markets No milestone or upfront payments (2016: DKK 38m) 8 I Investor Relations Presentation April 2017

9 Europe: Record results despite lower SCIT sales DKK 2,434m revenue (+28%) Market volatility played out in ALK s favour 61% growth for SLIT-tablets Weaker SCIT sales during capacity upgrades >40% market share for total AIT ALK s strategy Lead transition to evidence-based products Lock-in market share gains ACARIZAX : Paediatric development, extend label to adolescents Tree tablet and ragweed tablet Explore adjacencies Base business growth DKKm 2,500 30% 1,875 20% 1, % 0 0% Revenue Growth rate Growth rates are stated as organic growth in local currencies +61% 9 I Investor Relations Presentation April 2017

10 North America & Int l markets: A year of transition North America: DKK 512m revenue (+15%) DKK 449m product sales (+12%) Phase-out of MSD partnership completed HDM SLIT-tablet approved in the USA (1 March 17) Significant expansion of organisation in the USA Base business growth North America DKKm Revenue Growth rate 20% 10% 0% Growth rates are stated as organic growth in local currencies ALK s strategy for North America International markets: DKK 59m revenue (-68%) Sales of allergen extracts to allergists Repatriate SLIT-tablets and complete registrations Develop long-term business model Explore adjacencies International markets DKK 59m revenue (-68%) New distribution set-up in China Decline in milestone payments 10 I Investor Relations Presentation April 2017

11 Capacity expansion and Product Supply robustness 2017: DKK 75 million in extra costs, DKK million increase in CAPEX SLIT-drops: Capacity expansion SCIT: Continued upgrades SLIT-tablets: Continued expansion Full-year effect of staff and capacity doubling Retain market leadership Staff and upgrades to equipment and facilities in DK and the USA Quality documentation HDM source material facility in the USA HDM drug substance in DK Scale to roll-out tree tablet Digitalisation of workflow IT capabilities and applications Compliance 11 I Investor Relations Presentation April 2017

12 Pipeline is key for ALK s global expansion GRAZAX Europe Adults and children Allergic rhinitis GRASTEK North America Adults and children Allergic rhinitis GRAZAX International markets* Adults and children Allergic rhinitis RAGWITEK North America Adults Allergic rhinitis Ragweed SLIT-tablet International markets* Adults Allergic rhinitis Ragweed SLIT-tablet Europe Adults Allergic rhinitis RAGWITEK SLIT-tablet North America Children Allergic rhinitis MITICURE Japan** Adults Allergic rhinitis ACARIZAX Europe Adults Allergic rhinitis and allergic asthma ACARIZAX International markets* Adults - Allergic rhinitis and allergic asthma HDM SLIT-tablet North America Adults Allergic rhinitis MITICURE Japan** Children Allergic rhinitis Japanese cedar SLIT-tablet Japan** Adults Allergic rhinitis Tree SLIT-tablet Europe Adults Allergic rhinitis Phase I Phase II Phase III Filing Marketed *) Licensed Abbott for Russia and South-East Asia and Seqirus for Australia/New Zealand **) Licensed to Torii for Japan *** Already marketed in selected markets 12 I Investor Relations Presentation April 2017 *** ***

13 Update on ACARIZAX globalisation Recent highlights Launched in eight markets ~25,000 patients Approved in ESP, NL, CH, USA Filings in South-East Asia and Canada Development in China Approved in the USA Approved for adolescents with HDM-induced allergic rhinitis in 12 European countries 2017 highlights (expected) Strong growth in existing markets New launches in Europe New registrations Approvals/launches in Abbott regions Approval in Canada Launched Approved Filed Preparations for filing * ACARIZAX is the trade name for ALK s HDM SLIT-tablet in Europe 13 I Investor Relations Presentation April 2017

14 Major future pipeline events Pivotal news-flow concerning all five SLIT-tablets Region Event Exp. timing Europe Canada USA Japan Completion of Phase III trial with tree SLIT-tablet Additional launches of ACARIZAX Initiation of paediatric development of ACARIZAX Approval of ragweed SLIT-tablet Review of NDA for ACARIZAX Launch of HDM SLIT-tablet Phase III trial with MITICURE in paediatric patients Approval of Japanese cedar SLIT-tablet ff / Russia Approvals of GRAZAX and ragweed SLIT-tablet 2017 Regulatory filing of ACARIZAX 2016/17 Australia Approval of GRAZAX 2016/17 Rest of world ACARIZAX : Filings/approvals in South East Asia; Approval in Turkey 2016/17 14 I Investor Relations Presentation April 2017

15 Thank you for your attention Read more: Investor Relations: Per Plotnikof Head of Investor Relations Phone: I Investor Relations presentation April 2017

16 APPENDIX 16 I Investor Relations Presentation April 2017

17 ALK s path to long-term growth EU market shaping EU market expansion North American build-up Geographical expansion Across regions ACARIZAX launches Explore adjacencies: in-license or acquire Jext in new markets Customer-centric approach Basis Expand capacity and robustness in Product Supply 17 I Investor Relations Presentation April 2017

18 North America: A significant opportunity USA: Market profile Self-mixing and compounding of SCIT by allergists common >6m severe patients eligible for AIT SCIT: low take-up and high drop-out rate 50% refuse treatment, 84% drop out Three FDA-licensed manufacturers Stallergenes-Greer, ALK and Hollister Steer ~3m AIT patients >6m eligible patients ~DKK 25bn billing to payers ~DKK 1.2bn industry sales Main allergies: HDM, grass, ragweed and tree 18 I Investor Relations Presentation April 2017

19 Market-shaping and expansion Europe: Market profile Mature, diverse markets under regulatory transformation Mainly legacy and named-patient products Restricted market access SLIT-tablets fully-documented and registered ~DKK 5bn industry sales ~1.4m patients on AIT Main allergies: HDM, grass and tree 19 I Investor Relations Presentation April 2017

20 Japan: An emerging opportunity Japan: Market profile Allergy prevalence higher than EU and the USA AIT currently almost non-existent as a treatment option Japan: ALK s strategy Partnership with Torii MITICURE launched in December 2015 for treatment of HDM allergic rhinitis Positive Phase II/III results from cedar SLIT-tablet in August 2015, registration application submitted in December 2015 SCIT HDM licensed for market-building Main allergies: HDM and Japanese cedar 20 I Investor Relations Presentation April 2017

21 ACARIZAX for allergic rhinitis and allergic asthma First product for both indications In Europe, ACARIZAX is indicated in adults (18-65 years) diagnosed by clinical history and positive test of HDM sensitisation, with at least one of the following conditions: Persistent moderate to severe HDM allergic rhinitis despite the use of symptom-relieving medication HDM allergic asthma which is not well controlled by inhaled corticosteroids and is associated with mild to severe HDM allergic rhinitis and where patients' asthma status has been carefully evaluated 21 I Investor Relations Presentation April 2017 In Japan, ACARIZAX under the name MITICURE is indicated for the treatment of allergic rhinitis caused by HDM in adults and adolescents (12-64 years) In the USA, the HDM SLITtablet is indicated as immunotherapy for HDMinduced allergic rhinitis in adults (18-65 years)

22 ACARIZAX for the most common allergy Allergic rhinitis (hay fever) is the most common childhood allergy; allergic asthma is the most common chronic lower respiratory disease in children The link between house dust mite (HDM) induced allergic rhinitis and asthma: Allergic asthma and allergic rhinitis frequently co-exist in the same person ~50% of HDM allergic rhinitis patients also suffer from allergic asthma ~50% of asthmatic patients are reported to be sensitised to HDM HDM-allergic patients risk of developing asthma is significantly higher than that of other allergy patients 22 I Investor Relations Presentation April 2017

23 Best documented AIT product ACARIZAX : Approved for allergic rhinitis and allergic asthma in Europe Asthma results (MT04) published in JAMA* in April 2016 ACARIZAX works by addressing the cause of the respiratory disease Reduces days impacted by severe allergic rhinitis symptoms by 50% ACARIZAX furthermore offers better asthma control Reduces the risk of moderate to severe asthma exacerbations by 34% Reduces risk of nocturnal awakenings by 36% * Journal of the American Medical Association ALK s ACARIZAX data results in significant change to the GINA asthma management strategy: Sublingual allergy immunotherapy (SLIT) recommended as a treatment option in patients with house dust mite allergic asthma 23 I Investor Relations Presentation April 2017

24 The unmet medical need in Europe ACARIZAX for patients not well-controlled with symptom relieving medication HDM respiratory allergy sufferers ~35m adults and ~9m children and adolescents Potential HDM AIT-eligible patients* ~3m adults and ~1m children Approximately 50% have access to AIT ~1.5m adults and ~0.5m children Patients currently treated with AIT ,000 patients, DKK bn industry sales * Moderate-severe, not well-controlled patients 24 I Investor Relations Presentation April 2017

25 GRAZAX Asthma Prevention (GAP) trial Initiated in 2009, completed in 2016 First large, multinational placebo-controlled trial with AIT (GRAZAX ) in asthma prevention 812 children with grass pollen allergy, but no signs of asthma Three years with daily intake of GRAZAX or placebo; Twoyear follow-up to monitor effects post-treatment Objective: To investigate the effect of GRAZAX on children s risk of developing asthma Top-line results Significant reduction in proportion of children experiencing asthma symptoms or using asthma medication; effect sustained two years after treatment Significant reduction of allergic rhinoconjunctivitis symptoms; effect sustained two years after treatment GRAZAX disease-modifying effect confirmed *: p<0.05 **: p<0.01 Placebo GRAZAX The trial showed no effect in terms of time to first diagnosis of reversible impairment of lung function. 25 I Investor Relations Presentation April 2017

26 Sponsored ADR Programme ALK has a sponsered Level l ADR programme in the USA. The ADRs trade on Over-The-Counter ( OTC ) market in the USA. Details are as follows: Ticker Symbol: AKABY CUSIP: Ratio: 5 ADR : 1 Ordinary Share ADR depositary: Deutsche Bank Share price information: Please contact the Deutsche Bank s dedicated ADR broker desks: Jay Berman (New York) Simon Davies (London) Tel: Tel: jay.x.berman@db.com simon.davies@db.com 26 I Investor Relations Presentation April 2017

27 ALK Equity and shareholder structure ALK (ALK B) listed on NASDAQ Copenhagen (Reuters: ALKB.CO / Bloomberg: ALKB.DC) Number of shares outstanding: 10.1m Two share classes (A / B) Market Cap: ~EUR 1.2bn Largest shareholder groups: Lundbeck Foundation (40%), since 1987 ATP, Danish Labour Market Pension Fund (>5%) Jupiter Asset Management, Ltd. (>5%) ~13,000 retail investors (~25%) 27 I Investor Relations Presentation April 2017

28 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 subject to risks and uncertainties as various factors, some of which are beyond ALK s control, may cause actual results and performance to differ materially from the forecasts made in this presentation. Without being exhaustive, such factors include 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, as well as changes to market structures. An additional factor would be the consequences of potential side effects from the use of ALK s products, as allergy immunotherapy may be associated with allergic reactions of differing extents, duration and severity. 28 I Investor Relations Presentation April 2017