A China-Focused, US-Based Specialty Pharmaceutical Company Achieving Commercial Success in China as a Small Cap Company May 2012

Transcription

1 A China-Focused, US-Based Specialty Pharmaceutical Company Achieving Commercial Success in China as a Small Cap Company May

2 Safe Harbor Statement This presentation contains forward-looking statements regarding expected financial results and expectations. Readers are urged to consider statements that include the words "may," "will," "would," "could," "should," "might," "believes," "estimates," "projects," "potential," "expects," "plans," "anticipates," "intends," "continues," "forecast," "designed," "goal," unaudited, approximately or the negative of those words or other comparable words to be uncertain and forward-looking. These statements are subject to risks and uncertainties that are difficult to predict and actual outcomes may differ materially. These include risk and uncertainties relating to: changes in results that may occur in completing the close of the Company s consolidated financial statements for the fiscal year 2011 and completing the audit of the Company s consolidated financial statements for fiscal year 2011, the course, cost and outcome of regulatory matters, including pricing decisions by authorities in China; the on-going regulatory investigations and SciClone s independent investigation; the Company s ability to execute on its goals in China and on its objectives for revenue in fiscal 2011; the challenges presented by integrating an acquired business into existing operations; the variability in earnings on a GAAP basis that may result from non-cash charges related to the NovaMed acquisition; the dependence on third party license, promotion or distribution agreements including the need to renew such agreements; operating an international business; the clinical trial process, including the regulatory approval and the process of initiating trials at, and enrolling patients at, clinical sites; the Company s ability to remediate its identified material weaknesses over internal control; and changes in its practices and policies which could adversely affect its ability to generate revenue. SciClone cannot predict the timing or outcome of the SEC and DOJ investigations, of the various litigations that have or may be filed relating to any of those matters, or of its efforts to cooperate with those investigations, however the Company expects to incur substantial expenses in connection with the investigations and the results of the investigations could include fines and further changes in its internal control or other remediation measures that could adversely affect its business. Please also refer to other risks and uncertainties described in SciClone's filings with the SEC. All forward-looking statements are based on information currently available to SciClone and SciClone assumes no obligation to update any such forward-looking statements. 2

3 Achieving Commercial Success in China as a Small Cap Company o Focus o Take a long term view o Relationships o Build on local people o Understand country specifics 3

4 A Top Specialty Pharmaceutical Company Focused on China Uniquely positioned to take advantage of the growing Chinese pharmaceutical market US-based, China-focused Established Branded Products Profitable and Growing Focus on strong financial controls and compliance in US and China Proven regulatory and commercialization experience in China Scale of business in all key regions across China More than 15 in-licensed and proprietary molecules on the market Thymosins (includes ZADAXIN ) are a top 5 category product in China ZADAXIN sales surpassed the $100M milestone in 2011 in China Market-leading/highgrowth potential products Depakine, Stilnox, Aggrastat Compelling 20% plus revenue growth annually for last 3 years Leveraging enlarged sales infrastructure to accelerate sales of key products like ZADAXIN Three consecutive years of increasing profitability Pipeline with promising late-stage assets, including Tramadol and DC Bead 4

5 A Top Specialty Pharmaceutical Company Revenue Comparison US/HK Listed China Specialty Pharma (2011E*) * Source: Capital IQ, Bloomberg, Company Estimates ** 2011 estimated sales at the ex-factory level of approximately $205 million 5

6 Commercial Strategy Successfully Implemented in China o o o Top and bottom-line growth through existing product portfolio Multiple market-leading established products with diversified therapeutic focus with top business partners Actively marketing more than 15 approved products in China despite challenging regulatory environment Near-term success independent of new drug approvals Regulatory hurdles are a barrier to entry for new products; limiting competition Partner of choice for additional in-market and pipeline opportunities Several late-stage, promising pipeline products, including recently approved Tramadol for pain, and DC Bead for liver cancer Evaluating late-stage or approved, branded, well-differentiated products, either approved, or with clear regulatory pathway for key future-growth drivers Solid business fundamentals Consistent top-line growth: 3-yr CAGR 30% 3rd consecutive year of increasing profitability: 2011 EPS $0.62 (basic)* Significant cash balance at 2011 YE: $67M; not dependent on financing for continued growth *Non-GAAP; **Updated as of 3/15/2012 6

7 Experienced Multinational Company o Headquartered in Foster City, CA; China operations based in Shanghai Strong, well established financial controls SEC-regulated, Sarbanes-Oxley compliance /accounting standards Experienced, credible, international management team Including China-based team with proven MNC experience navigating the regulatory and commercialization environments in China Business practices and standards comparable to multinational companies doing business in China Much stronger emphasis on compliance than local companies Highly improved policies, training and practices with regard to antibribery practices 7

8 Strong China Platform is Major Commercial, Competitive and Partnering Advantage o o o Critical mass is major growth driver Broad marketed product line spanning high value therapeutic areas Well established infrastructure NovaMed acquisition enabled rapid expansion of sales efforts and new growth opportunities > 850 sales reps, in 3 business units: ZADAXIN, primary care, oncology Greatest focus on building momentum on high margin products Highly experienced marketing and management personnel Successful implementation of wider and deeper strategy for ZADAXIN and other marketed products Penetrate more hospital departments Expand to new geographies: tier 2 and 3 cities with large populations that represent significant growth potential in markets supporting premium pricing Leverage ZADAXIN position in traditional Chinese medicine to expand usage, e.g., sepsis, high fever, surgery 8

9 Major Products On Market In China o Description: Thymalfasin immunomodulator and tumor/viral cell replication inhibitor o Indication: HBV, HCV and certain cancers o Licensor: NA o Market Share: 40%+ o Potential YoY Market Growth: 20% o Launch Year*: 1996 o Comment: highquality, imported, premium-brand. Surpassed the $100M sales milestone in 2011 o Description: broadspectrum anticonvulsant o Indication: general seizures. New indication bipolar disorder o Licensor: Sanofi- Aventis o Market Share: 40%+ o Potential YoY Market Growth: 30% (epilepsy) and Bipolar disorder o Launch Year*: 2008 o Comment: market leader with large underserved market in 2nd tier cities o Description: a nonbenzodiazepine hypnotic for the short-term treatment of insomnia o Indication: insomnia o Licensor: Sanofi- Aventis o Market Share: 35% o Potential YoY Market Growth: NA o Launch Year*: 2008 o Comment: high growth potential in tier 1 cities and T3 institutions o Strong efficacy/side effect profile o Description: an ACE inhibitor for the treatment of hypertension o Indication: hypertension o Licensor: Sanofi- Aventis o Market Share: 20% o Potential YoY Market Growth: 10% o Launch Year*: 2008 o Comment: best selling ACE Inhibitor globally; demonstrates sustained vascular and metabolic benefits o Description: a fast acting, reversible IIb/IIIa inhibitor that disaggregates platelet thrombi and improves myocardial perfusion o Indication: acute coronary syndrome o Licensor: Iroko o Market Share: NA o Potential YoY Market Growth: 20%+ o Launch Year*: 2009 o Comment: 1 st IIb/IIIa inhibitor to be launched in China. Well positioned in the fast growing PCI market * In China Significant Product Diversification In Key Therapeutic Areas 9

10 ZADAXIN ( 日达仙 ) in China Premium Brand Description o Demonstrated healthcare benefits for Chinese patients, primarily in severe hepatitis and oncology indications Effective in immune system compromised patients Extensive clinical experience to demonstrate quality-of-life benefits Commercial Opportunity o Thymosins (ZADAXIN category) top 5 category product in China Key advantage: Western-manufacturing, ensuring highest level of manufacturing standards, but imported into China Unique, growing opportunity with no imported competitive products YoY growth of consistently more than ~20%, despite heavy competition from readily available local generics Strategy to continue to grow ZADAXIN sales and significantly expand sales capabilities Penetrate deeper and wider into more departments within hospitals in markets that can support premium pricing 10

11 Depakine Current Market Leader Description o Broad spectrum treatment for all types of epileptic attacks and syndromes; also indicated for the treatment of bipolar disorder Commercial Opportunity o Exclusive China promotion rights o Most widely-prescribed broad-spectrum anti-convulsant in China o Large underserved market in 2nd tier cities o 30% potential year-over-year market growth (epilepsy) and bipolar disorder 11

12 Aggrastat Future Market Leader Description o Recently launched intervention cardiology product Fast acting, reversible IIb/IIIa inhibitor that disaggregates platelet thrombi and improves myocardial perfusion Improves results of those at high risk of MI 3-4 days postacute angina (including patients facing early PTCA) Commercial Opportunity o Exclusive China distribution rights o Significant long-term growth potential >150,000 angioplasty procedures in China per year Competition: 1st and only imported, China-approved IIb/IIIa inhibitor Poised to become a market leading product 12

13 Marketed Product Portfolio Licensor Product Indication ZADAXIN Xatral Perenan Depakine Stilnox Tritace Rulide Holoxan Mesna Endoxan Farlutal Methotrexate Daunoblastina Estracyt Leucovorin Aggrastat HBV, HCV, cancer adjuvant, vaccine enhancer, immunostimulant Benign prostatic hyperplasia (BPH) Behavioral and psychological disorders including symptoms and signs of mental deterioration, acute cerebrovascular disease, peripheral vascular disorders Seizures, bipolar disorder Short-term treatment of insomnia Hypertension, mild to moderate heart failure following acute myocardial infarction and non-diabetic nephropathy, prevention of myocardial infarction, stroke or cardiovascular death in patients with an increased cardiovascular risk or in diabetic patients Bronchitis, pneumonia, tonsillitis, sinusitis, otitis media, urinary infection, skin infections, respiratory tract infections and soft tissue infection Bone and soft tumors, lymphoma, lung cancer, cervical cancer, ovarian cancer, testicular cancer and child solid tumors, bladder cancer, head and neck cancer and breast cancer Urotoxicity (combined with ifosfamide) Breast cancer, lymphoma, ovarian cancer, small cell lung cancer and sarcoma Breast cancer, carcinoma of the endometrium, prostate cancer and renal cancer Acute leukemia, osteosarcoma, breast cancer Children s acute lymphoblastic and adults acute myeloid leukemia, rhabdomyosarcoma Hormone resistant advanced prostate cancer Stomach and intestine cancers Acute coronary syndrome Partnering with Tier-One Pharmaceutical Companies 13

14 China Pipeline Highlights o Description: Used to relieve moderate to severe pain o Licensor: MEDA o Comment: Innovative slow release technology reducing the risk of side effects and of delayed onset of action, enabling a 2x/day administration and no food interaction; certain contract terms with MEDA in dispute. SciClone executing under the terms of the agreement. o APPROVED Q o Description: Embolic agent, delivers chemotherapy drugs (doxorubicin, potentially other chemotherapy agents directly to tumor) o Licensor: BTG/Biocompatibles o Comment: Marketspecific unmet need - liver cancer one of most prevalent and deadly cancers in China; regulatory process in China is challenging and time consuming with potential for delays. o Description: Used for treatment of oropharyngeal candidiasis o Licensor: BioAlliance o Comment: Used most frequently by immunocompromised patients, especially those undergoing chemotherapy and/or radiotherapy o Description: Used for the treatment of breakthrough cancer pain o Licensor: Orexo o Comment: Combined the properties of fast dissolution and quicker onset of action o Description: Antinausea drug o Licensor: Applied Pharma Research o Comment: Commonly used to treat and prevent nausea and vomiting caused by chemotherapy, radiotherapy, and surgery Significant Product Diversification in Key Therapeutic Areas 14

15 SciClone is Partner of Choice in China Market o Strong China platform is important partnering advantage Expertise in managing complex regulatory, pricing, and commercial environment Strong internal controls Reputation for high quality products and processes o Multiple successful partnerships established with top-tier pharma and biotech companies looking to commercialize products in China o Excellent reputation as a provider of high quality products o Strategy is to further expand commercial portfolio with high value, high margin products o Proven regulatory and market success are strong attractions for additional partnering opportunities 15

16 SciClone: A High Growth Company o Strong performance during last 5 years o Grew with or above the market o Partnered with leading global MNCs Pfizer, Sanofi and Baxter o Attracted and retained leading talent in China o Achieved strong positions in leading TAs in China o Successfully launched NCEs into the China market o Successfully navigated Chinese regulatory and commercial environments o Focused on EPS and revenue growth * 2011 revenues include NovaMed business unit revenues post acquisition dated 4/18/11); ** 2012 revenue guidance, $165MM - $170MM 16

17 Achieving Commercial Success in China as a Small Cap Company o Focus On your strengths On what works! o Take a long term view And find the resources to stay the course o Relationships KOL s Distributors Partners for products o Build on local people o Understand country specifics Role of brands Role of IP TCM 17

18 Uniquely Positioned as Partner of Choice in the Chinese Pharmaceutical Market US-based, China-focused Thymosins (Zadaxin Category) Top 5 China Product Profitable and Growing A LEADING SPECIALTY PHARMACEUTICAL COMPANY IN CHINA More than 15 Marketed China Products Promising Late-Stage Pipeline Partner of Choice for In-Licensing 18