Aceto Corporation. NASDAQ: ACET Investor Update November 2018

Transcription

1 Aceto Corporation NASDAQ: ACET Investor Update November 2018

2 Disclosure This presentation contains forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, that can be identified by words such as believes, expects, anticipates, plans, projects, seeks and similar expressions and involve numerous risks and uncertainties. The Company s actual results could differ materially from those anticipated or implied in such forward-looking statements as a result of certain factors, as set forth in the Company s filings with the Securities and Exchange Commission. 2

3 Company Overview HUMAN HEALTH PHARMACEUTICAL INGREDIENTS PERFORMANCE CHEMICALS Generics (Rising Pharmaceuticals) Nutritionals Active Pharmaceutical Ingredients Pharmaceutical Intermediates Specialty Chemicals Agricultural Protection Products 3

4 Human Health R E P R E S E N T A T I V E C U S T O M E R S Rising Pharmaceuticals Portfolio of 121 generic prescription and overthe-counter products Strong brand recognition within generic pharma industry Brought onboard new team with deep Generics experience Partnership model including supply contracts with 63 leading pharmaceutical Development and Manufacturing Organizations including with Aurobindo Group for Citron and Lucid products Significant investment in infrastructure including 125,000 Sq. Ft. distribution center in NJ, USA as well as SAP S4/HANA ERP system, as part of its roadmap to build a foundational platform for future growth Nutritionals The Nutritionals segment supplies 400+ products used in the production of nutritional and packaged dietary supplements including: Vitamins Supplements Botanical Extracts Amino Acids Other nutraceuticals Products are largely distributed in the USA and Europe with a growing market share in Asia Revenue & Gross Profit Fiscal Years $400 $350 $300 $250 $200 $150 $100 $50 $120 $100 $80 $60 $40 $20 $375 $315 $228 $78 $78 $49 Revenue Gross Profit First Quarter $106 $81 $48 $25 $14 $8 Revenue Gross Profit Q Q Q

5 Rising Pharmaceuticals Pipeline Pipeline Progression Approved ANDAs Filed ANDAs Parked Under Development Portfolio of 13 approved ANDAs in the active pipeline, representing ~$500M in IMS addressable market value 45% of the active pipeline projects are either filed with the FDA or already approved but pending launch Blend of oral, topical, and sterile finished dosage forms Diverse therapeutic treatments 0 End Q End Q Pipeline Transformation Capabilities and Focus Rigorous product selection process to focus development resources to more promising candidates Parked, Active, Under Development Filed ANDAs Approved ANDAs Thorough project management and in-house technical expertise enables greater probability of technical success Incorporating best practices to pivot efforts to higher value opportunities 13 Demonstrated launch capability Active management of the portfolio and pipeline strategy 5

6 Rising Portfolio & Addressable Market # of Products $25 Addressable IMS Market (1) $(Billions) $20 $ $10 $ QE Q4 FY 2018 QE Q1 FY 2019 $5 $5.9 Active Inline.8 $3.7 Active Pipeline Inline: Active Pipeline: Parked Inline: Parked Pipeline: Active Active Inline Market Loss in Brand Market Due to Genericization Post Genericization Value Branded Pipeline Genericized Pipeline Market (1) As per IQVIA data 6

7 Pharmaceutical Ingredients R E P R E S E N T AT I V E C U S T O M ERS Aceto has been sourcing and supplying pharmaceutical ingredients in the U.S. for over 35 years and in Europe since the acquisition of Schweitzerhall in 2001 The PI business selects and sources: Active pharmaceutical ingredients in partnership with brand and generic drug manufacturers primarily in the US and Europe High quality pharmaceutical intermediates, the building blocks used in the production of APIs, that meet customers quality assurance standards Aceto acts as a virtual manufacturer with strategic sourcing relationships Our APIs become part of the finished drug applications of our generic partners creating a barrier to entry for future competitors We provide regulatory and technical support with in-house expertise and a strong network of suppliers Extensive pipeline of 150+ new PIs at various stages of development $180 $160 $140 $120 $100 $80 $60 $40 $20 $45 $40 $35 $30 $25 $20 $15 $10 $5 Revenue & Gross Profit $161 $41 Fiscal Years $157 $159 $29 $25 $25 Revenue Gross Profit First Quarter $37 Revenue $39 $7 $6 $7 Gross Profit Q Q Q

8 Performance Chemicals R E P R E S E N T AT I V E C U S T O M E R S Specialty Chemical Business Sources and supplies chemicals with applications in a wide variety of end markets such as coatings, plastics, food/beverage, ag intermediates on a global basis Strong global capabilities to source products from reliable and properly vetted sources and to manage all aspects of the supply chain to ensure timely delivery to our customers Diversified customer served by technically trained sales force spread over 4 sales offices Ag ricultural Protection Products IP ownership through EPA licensing that enables marketing of niche post-patent products Product categories include fungicides, insecticides and inhibitors that protect crops such as cotton, peanuts, sugarcane, rice, pecans, and potatoes from insects, disease and weeds Warehouse and distribute finished product under the Aceto label Has developed relationships with multiple chemical contract manufacturers in China to introduce several newly synthesized products Revenue & Gross Profit Fiscal Years $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $50 $40 $30 $20 $10 $178 $169 $165 $36 $37 $38 Revenue Gross Profit First Quarter $45 $43 $40 $10 $9 $10 Revenue Gross Profit Q Q Q

9 Worldwide Presence UNITED KINGDOM GERMANY NETHERLANDS JAPAN New York, USA Corporate HQ CHINA PHILIPPINES FRANCE INDIA SINGAPORE 9

10 Balance Sheet and Cash Flow Highlights Balance Sheet at September 30, 2018: Cash, cash equivalents and short-term investments of $52.5 million Working capital of $182.6 million Convertible debt of $129.5 million, net of discount Bank debt of $185.9 million Deferred purchase note of $50 million Cash Flow for the Three Months Ended September 30, 2018: Cash used in operating activities of $46.4 million Includes increase in A/R of $45.3 million and increase in inventory of $19.6 million Cash used for debt repayments of $3.8 million 10

11 Income Statement Highlights Human Health Pharmaceutical Ingredients Performance Chemicals ($/M) ($/M) ($/M) $400.0 $300.0 $315.4 $374.5 $200.0 $150.0 $ $158.9 $200.0 $150.0 $ $178.0 $200.0 $100.0 $106.0 $80.8 $100.0 $50.0 $36.6 $38.8 $100.0 $50.0 $42.7 $44.7 $- FY 2017 FY 2018 Q Q FY 2017 FY 2018 Q Q $- FY 2017 FY 2018 Q Q Revenue Revenue Revenue ($/M) ($/M) ($/M) $100.0 $30.0 $25.5 $50.0 $78.1 $24.6 $80.0 $25.0 $37.2 $38.1 $40.0 $20.0 $60.0 $48.8 $30.0 $15.0 $40.0 $24.6 $20.0 $10.0 $5.8 $6.9 $9.5 $10.1 $20.0 $8.5 $5.0 $10.0 $- $- $- FY 2017 FY 2018 Q Q FY 2017 FY 2018 Q Q FY 2017 FY 2018 Q Q Gross Profit Gross Profit Gross Profit 11

12 NASDAQ:ACET International company engaged in in the marketing, sale and distribution of Human Health products, Pharmaceutical Ingredients and Performance Chemicals Aceto Headquarters: 4 Tri Harbor Court Port Washington, New York For additional information please contact: Jody Burfening LHA Investor Relations 800 3rd Avenue, 17th Fl. New York, NY Tel: jburfening@lhai.com Social Media: Linkedin.com/company/aceto-corporation 12