Hi-Tech Pharmacal Co., Inc. Presentation

Transcription

1 Hi-Tech Pharmacal Co., Inc. Presentation

2 Disclaimer This presentation contains certain future projections and forward-looking statements (statements which are not historical facts) with respect to the anticipated future performance of Hi-Tech made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of Such future projections and forward-looking statements are not assurances, promises or guarantees and investors are cautioned that all future projections and forward-looking statements involve significant business, economic and competitive risks and uncertainties, many of which are beyond Hi-Tech's ability to control or estimate precisely, including, cud but not limited to, the impact of competitive t e products poductsand pricing, product demand d and market acceptance, new product development, the regulatory environment, including without limitation, reliance on key strategic alliances, availability of raw materials, fluctuations in operating results, loss of customers or employees, the possibility that legal proceedings may be instituted against Hi-Tech and other results and other risks detailed from time to time in Hi-Tech s filings with the Securities and Exchange Commission. The actual results will vary from the projected results and such variations may be material. These statements are based on management's current expectations and assumptions concerning the future performance of Hi-Tech and are naturally subject to uncertainty and changes in circumstances. No representations or warranties are made as to the accuracy or completeness of any of the information contained herein, including, but not limited to, any assumptions or projections contained herein or forward-looking statements based thereon. We caution you not to place undue reliance upon any such forward-looking statements which speak only as of the date made, except to the extent specifically dated as of an earlier date. Hi-Tech is under no obligation, and expressly disclaims any such obligation, to update, alter or correct any inaccuracies herein, whether as a result of new information, future events or otherwise.

3 Corporate Overview Hi-Tech Pharmacal Co., Inc. is a specialty developer, manufacturer and marketer of generic and branded pharmaceutical products Generic Drugs 83% HCP 7% Prescription Branded Consumer OTC Products Contract manufacturing Diabetes focus In-licensed products Topical arthritis pain relief Allergy ECR 10% Branded Prescription

4 Generic Drugs

5 Pharmaceutical Dosage Forms Broad array of dosage forms including: Oral liquids solutions and suspensions Topical solutions, gels, creams and ointments Steroidal nasal sprays Sterile products Ophthalmic solutions and gels Solutions for inhalation Unit dose cups

6 Fluticasone Steroidal Nasal Spray ANDA approved in January 2008 for generic version of fglaxosmithkline s Flonase Launched immediately 3 rd generic approved Market share of approximately 30% Sales $103 mm in LTM $76 mm for the 9 months ended 1/31/12 Total market unit sales expanded by 38% in two years to over 30 million units* * Source: IMS; MAT 12/08 v. MAT 12/10

7 Top 10 Generic Products* Fluticasone propionate nasal spray Dorzolamide with Timolol/Dorzolamide ophthalmic solution Sulfamethoxazole and Trimethoprim oral suspension Lidocaine and Prilocaine Cream Lactulose solution Hydrocodone and Homatropine syrup Chlorhexidine oral rinse Gabapentin oral solution Clobetasol (5 formulations) Levofloxacin oral * Based on internal sales for the 12 months ended 4/30/12

8 Unit Dose Opportunity Targeting over $30 million in sales including pipeline products and unit dose generics marketed by other companies Creating opportunities in non-unit dose products Limited number of generic competitors marketing unit dose liquids Unit dose liquids: individual dosage cups primarily for patient use in hospitals Simplifies dispensing and increases dosage accuracy Market growth due to demographic trends 3 products launched Lactulose Chlorhexadine Guaifenesin/DM 4 products to be launched in the next 9 months

9 Recent/Planned Launches Brand Generic Marketer IMS (1) Brand Sales Launch Zantac Ranitidine Syrup GSK $21 M 5/11 Levaquin Levofloxacin oral sol. McNeil $6 M 6/11 Xylocaine Lidocaine HCl Jelly, 2% APP $17 M 9/11 Nilstat Nystatin Oral Susp. Glenmark $23 M 2/12 Levaquin Levofloxacin oral sol. McNeil $6 M 6/11 Lidocaine 5% Lidocaine 5% ointment various $20M 3/12 Keppra Levetiracetam Oral Concentrate UCB $62M 5/12 Lorazapam Lorazapam Oral Intensol Solution Roxanne $10M 7/12 Undisclosed Undisclosed Undisclosed $5M (2) 8/12 Undisclosed Undisclosed Undisclosed $30M 12/12 (1) IMS data based on 12 months prior to launch (2) Market opportunity

10 Generic Growth Strategy Remain focused on liquid, semi-solid and sterile ophthalmic products Over $6 billion of branded liquids including nasal sprays, semisolid and sterile products will lose patent protection over the next 5 years Focus on development and manufacture of ophthalmic products to compete in the $4 billion market Pursue high barrier, limited competitor products Hi-Tech has the expertise, infrastructure, and capacity to capitalize on the market opportunity Unit dose launches expand sales reach for currently marketed products

11 Generic R&D Focus R & D Spending (Millions $) 33% compound annual growth in R & D expenditures

12 Generic R&D Pipeline 14 products at the FDA with a target market of approximately $1.5 billion Asacol, Warner-Chilcott - Mesalamine 400mg IMS sales $566 million Par ANDA, Hi-Tech and EMET have financial stake 5 oral liquids 8 ophthalmic and other formulations including Bimatoprost Ophthalmic 0.01% (Lumigan IMS $114mm) Bimatoprost Solution 0.03% (Latisse IMS $84mm) Gatifloxacin Ophthalmic 0.5% (Zymaxid IMS $67mm) Gatifloxacin Ophthalmic 0.3% (Zymar IMS $13mm) 20 products in development with brand market of approximately $3 billion 7 oral 7 ophthalmic 6 other 3 of the 20 require clinical trials, which are partnered

13 Branded Rx Products

14 ECR Pharmaceuticals Overview Branded specialty pharmaceutical company that promotes prescription products to Physicians and Pharmacists 70 field representatives concentrated in 16 mid-atlantic and southern states 30 additional contract reps across the US Continuing product lines: DexPak line: Dexamethasone for treatment of dermatitis/poison ivy Bupap : treatment of tension headache Lodrane to be launched as 12 hour OTC pending approval

15 ECR Pharmaceuticals TussiCaps Acquisition In August 2011 Hi-Tech acquired approval, the marketing and distribution rights for TussiCaps (chlorpheniramine polistirex; hydrocodone polistirex) extended release capsules from Mallinckrodt Acquisition terms: Upfront payment of $11.6M Additional payments of up to $12.5M over the next four years based on competitive landscape and sales performance Product is available in two strength indicated for adult and pediatric patients TussiCaps is the only FDA approved extended release Rx cough & cold product in a non-liquid formulation Provides accurate and convenient dosing TussiCaps is covered by a patent which expires in September 2024 Significant overlap between high prescribers and ECR territories

16 ECR Pharmaceuticals Acquisition of Pain Products In June 2011 Hi-Tech acquired marketing and distribution rights to several unique branded prescription product for: $3.6M in cash and royalty payments for several products Three products are currently FDA approved and are on the market: Orbivan oral capsule (acetaminophen; butalbital; caffeine; 300mg;50mg;40mg) Cephadyn oral tablet (acetaminophen; butalbital; 650mg;50mg) Zolvit oral solution (acetaminophen;hydrocodone; 300mg/10mg/15mL) Other products pending FDA approval All products are indicated for pain Good synergy with current products promoted through primary care physicians

17 Branded Consumer Products

18 Health Care Products Overview The leader in the branded OTC cough and cold market for people with diabetes Branded product lines generated LTM net sales of $15.3 million as of 1/31/12 7% of total Hi-Tech net sales Nationwide distribution through Walmart, Target and all major drug chains, including Walgreens, CVS and Rite Aid Growth strategy includes: Leverage current infrastructure to build on diabetes franchise Expand in-line products into diabetes market In-license and acquire new products to leverage presence in the OTC diabetes market Line extensions Additional dosage forms for in-line products Pursue product technologies that improve patient convenience and compliance, and which provide enhanced patient therapy and outcomes

19 Key In-Line Products Active Various Magnesium Capsaicin Various L Arginine/ Various Dosage Form SF Cough Oral Tablet Cream Oral Tablet Cream Syrup/ drops Use/ Cough Supplement Arthritis/ Healthy Dry skin, Attributes Cold Foot Pain blood sugar and nerve function antifungal, blood flow Category OTC Nutritional OTC Nutritional Cosmetic

20 Nasal Ease Nasal Ease is a new, unique, all natural, nasal powder spray that is clinically proven to work with your body s own defense mechanism to strengthen your resistance and block airborne allergens, germs and viruses from penetrating nasal passages 100% Natural homeopathic Drug free Distribution at two major drug chains Supported by advertising campaign Reaches important growing consumer base looking for homeopathic and non-drug allergy products

21 Sinus Buster and Allergy Buster Sinus Buster - nasal congestion, sinus pressure Allergy Buster nasal congestion, runny nose, sneezing Homeopathic products with capsaicin $3.3 3 mm sales in 2011 $2.5 mm cash paid for inventory and brand rights Expected to be accretive and cash flow positive Strong advertising spend by previous owner led to name recognition HCP advertising plan implemented in April 2012

22 Improved Financial Performance $200 $100 $ Sales ($Millions) Continued growth in sales and... $4 $2 $ $(2) EPS ($) profitability in FY 2011

23 Financial Highlights FY 2011 Ended 4/30/11 and 9 Months Ended 1/31/12 FY 2011 ended 4/30/11 9 months Ended 1/31/12 Revenue: $190.8 MM Revenue: $168.7MM Net Income: $41.5 MM Net Income: $38.4 MM EPS: $3.29 EPS: $2.87 Cash: $62. 3 MM Cash: $74.3 MM Market Cap: $377MM Enterprise Value: $304 MM Book Value: $203 MM Book Value: $263 MM Hi-Tech owns all of their facilities (manufacturing, R&D and admin.) Current Stock price = $ (5/31/12)

24 Investment Highlights A market leader in generic liquids 14 ANDAs at the FDA 7 ANDAs approved in past 15 months Approvals for difficult to develop products 20 products in development Strong branded OTC product line with growth potential ECR acquisition enables Hi-Tech to diversify Strong balance sheet and continued profitability

25 (Nasdaq: HITK)