ACQUISITION OF CSM ACQUISITION OF IQONE

Transcription

1 FULL YEAR RESULTS Year ended 30 June 2018 ACQUISITION OF CSM ACQUISITION OF IQONE 27 September 2018

2 CAUTIONARY STATEMENT This presentation contains certain statements that are neither reported financial results nor other historical information. The information contained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution to, or use by, any person or entity in any jurisdiction in any country where such distribution or use would be contrary to law or regulation, or which would subject any member of the Clinigen Group to any registration requirement. No representation or warranty, express or implied, is or will be made in relation to the accuracy, fairness or completeness of the information or opinions made in this presentation. Statements in this presentation reflect the knowledge and information available at the time of its preparation. Certain statements included or incorporated by reference within this presentation may constitute forward-looking statements in respect of the Group s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast. This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the shares of the Company or any invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act Past performance cannot be relied upon as a guide to future performance. Liability arising from anything in this presentation shall be governed by English Law, and neither the Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws. 2

3 AGENDA YEAR END RESULTS OVERVIEW P4 FY18 RESULTS P5 BUSINESS OPERATION REVIEW P9 STRATEGY P14 PROPOSED ACQUISITION OF CSM P16 iqone ACQUISITION P27 SUMMARY P32 APPENDICES P34 3

4 OVERVIEW Highlights STRONG FINANCIAL PERFORMANCE WITH MORE THAN 10% GROWTH IN ADJUSTED GROSS PROFIT*, EBITDA* & EPS* EXCELLENT PERFORMANCE BY COMMERCIAL MEDICINES GOOD GROWTH IN AFRICA AND ASIA PACIFIC ACQUISITION OF QUANTUM AND IMMC ADDS FURTHER CAPABILITY Gross profit* FY16 FY17 FY m 122.8m 140.1m EBITDA* EPS* FY m FY p FY m FY p FY m FY p * Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Adjusted EBITDA includes the Group s share of EBITDA from its joint venture. Adjusted results now include amortisation on software and internally developed IP. The prior year has been restated accordingly. Results are for the year ended 30 June. 4

5 19% GROWTH IN EBITDA DRIVEN BY ACQUISITIONS AND ORGANIC GROWTH Financial highlights Adjusted earnings per share* FY p FY17 FY p 45.4p Year ended 30 June Growth Adjusted results* m m Reported Constant currency Revenue % 28% Gross profit % 16% Administrative expenses (65.2) (58.7) 11% EBITDA from joint venture % EBITDA % 19% Depreciation & amortisation (1.7) (1.4) EBITA % Finance cost (5.3) (2.4) Profit before tax % Basic earnings per share 45.4p 41.3p 10% Dividend per share 5.6p 5.0p 12% * Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Adjusted EBITDA includes the Group s share of EBITDA from its joint venture. Adjusted results now include amortisation on software and internally developed IP. The prior year has been restated accordingly. Constant currency is growth applying prior year s actual exchange rate to this year s result. 5

6 EXCELLENT GROWTH BY COMMERCIAL MEDICINES OFFSETTING WEAKNESS IN CTS Gross profit by operation Gross profit FY16 FY17 FY m 122.8m 140.1m Year ended 30 June Growth Adjusted results* m m Reported Constant currency Commercial Medicines % 37% Unlicensed Medicines % 21% Clinical Trial Services (40)% (40)% % 16% * Adjusted results exclude non-underlying items relating to acquisitions. Constant currency is growth applying prior year s actual exchange rate to this year s result. 6

7 ADJUSTMENTS TO PROFIT RELATE TO AMORTISATION AND ACQUISITIONS Reconciliation of adjusted PBT to reported PBT Year ended 30 June m m Adjusted profit before tax Adjustments Amortisation of acquired intangibles and products (22.1) (17.8) Acquisition costs (3.9) - Restructuring costs (5.3) - Stock fair value adjustment re acquisitions (1.4) (0.1) NuPharm legal settlement Link contingent consideration (1.1) (29.1) Tax on joint venture in South Africa (0.3) (0.2) Total adjustments (33.1) (47.2) Reported profit before tax AMORTISATION Relating to acquired intangibles ( 18.4m) and product licenses ( 3.7m) RESTRUCTURING COSTS Relating to the integration of the acquisitions STOCK FAIR VALUE ADJUSTMENT Represents profit margin in carrying value of stock acquired with Quantum (PY: Link) NUPHARM LEGAL SETTLEMENT Represents net proceeds received on an action brought by Quantum against the vendors of the now closed NuPharm business LINK CONTINGENT CONSIDERATION Related to non-cash unwind of discount on Link consideration (PY: 2.1m unwind of discount and 27.0m increase in contingent consideration on Link acquisition) 7

8 GOOD CASH FLOW PERFORMANCE Operating cash flow ( m) Uses of cash flow 76.0 m Quantum & IMMC acquisition 89.7 Final deferred payment on Link 38.7 (10.2) Acquisition & restructuring costs 6.4 (12.6) (3.9) Capex on products 6.6 Capex on ERP 4.8 Other capex 2.4 Dividend 6.3 Other 0.6 Total Financed by: Free cash flow 54.0 Increase in net debt Adjusted EBITDA Working capital Tax paid Interest paid Joint Share venture based payments Other Free cash flow Total NET DEBT AT 30 JUNE 2018: 136.5M (1.8X ADJUSTED EBITDA) Adjusted EBITDA excludes non-underlying items and includes the Group s share of EBITDA from its joint venture. The acquisition costs include cash consideration, net debt and, for Quantum, costs of settling share schemes as part of the deal. 8

9 R I G H T M E D I C I N E R I G H T PAT I E N T R I G H T T I M E BUSINESS OPERATION REVIEW

10 COMMERCIAL MEDICINES acquires global rights, develops, and licenses niche hospital only & critical care medicines FY18 Revenue 87.9m +33% Gross profit 64.0m +35% Gross profit % 72.7% +1.4% Revenue by region 31% 28% 41% Europe Americas Africa & Asia Pacific Gross profit by portfolio Acquired 1 Licensed 2 66% 22% 12% Developed 3 Local, regional and global assets under management Acquired products: Foscavir: Good underlying performance across most geographies Price increase in Japan agreed by MHLW Dexrazoxane portfolio: Cardioxane: strong growth, following EC approval to modify product Savene: performing ahead of expectations Totect: launched in September 2017 and benefited from temporary market shortage Licensed products: Strong growth in the Africa and Asia Pacific region Progress made in conversion of UL2L medicines Garsun launched in South Africa Extension with Eisai to launch three products into 10 African countries Partnership agreement signed with BMS in South Africa Developed products: Strong performance across the portfolio with main product Glyco performing well Leadership strengthened with SVP of Commercial Medicines appointed in March 1 Acquired products refers to Foscavir, Ethyol, Cardioxane, Savene and Totect. 2 Licensed products refers to the local marketed licenses including branded and generic products in the Africa and Asia Pacific region. 3 Developed products refers to the commercial products in Quantum. 4 Number of local, regional and global assets under management includes all products in the Commercial Medicines portfolio. UL2L is unlicensed to licensed. BMS is Bristol-Myres Squibb. MHLW is the Ministry of Health, Labour and Welfare. Glyco is Glycopyrronium Bromide Oral Solution 1mg/5ml. 10

11 UNLICENSED MEDICINES ethical sourcing & supply of unlicensed medicines to hospital pharmacists & physicians for patients with high unmet medical need FY18 Revenue 215.6m +71% Gross profit 62.1m +19% Units shipped by region 67% 32% Europe Americas Africa & Asia Pacific Gross profit by product 22% Top 10 products Other products Hospital pharmacists 78% >10,000 Exclusive supply agreements Product: 110 MAPs (2017: 107) and 39 (2017: 31) exclusive on-demand access client supply agreements 15 new MAPs started in H2 to drive improved performance in FY19 IMMC acquisition enhances on-demand capability and geographical footprint in Japan Quantum ULM business performed in line with expectations Customer/client: Strengthened customer/client base >10,000 hospital pharmacists (2017: > 6,000) Worked with 29 of top 50 pharma companies Pipeline: Early/managed access: 40+ assets across key therapeutic specialist areas with a lifetime gross profit value of 40m Identified and targeted 15 innovator niche products to grow ondemand portfolio via exclusive supply agreements in 2019 Platform: Cliniport responsible for c40% of Unlicensed Medicines activity (2017: c30%)* Leadership strengthened with SVP of Unlicensed Medicines appointed in September MAPs are Managed Access Programs. 1 Number of exclusive supply agreements includes 110 MAPs, 39 exclusive on-demand access client supply agreements and 59 exclusive customer supply agreements in Quantum. Quantum ULM is the Unlicensed Medicines business. * Includes orders placed in Burton and Weybridge sites but excludes orders in the Africa and Asia Pacific region and in Quantum. 11

12 CLINICAL TRIAL SERVICES (CTS) supply & management of quality-assured comparator medicines & services to clinical trials and Investigator Initiated Trials (IITs) FY18 Revenue 77.7m -29% Gross profit 14.0m -40% Units purchased by source Europe Africa & Asia Pacific Gross profit by customer Top 10 customers Other customers 91% Americas 78% 22% Performance incrementally improved through H2 Clients: Breadth of activity good from 100 clients (2017: 93) Fewer larger programme wins Three clients spending > 1.0m gross profit (2017: 6) 48% of gross profit from clients generating > 1.0m (2017: 80%) Gross profit of 18% (2017: 21%) decreased due to change in mix towards lower margin products and activity Services/platform: 10% of CTS gross profit generated from expanded services (2017: 4%) Pipeline: FY19 pipeline (as at September 2018) = c 15m gross profit Leadership strengthened with SVP of CTS appointed in March Units shipped Countries shipped to 295,

13 SUMMARY AND OUTLOOK Strong financial performance Excellent performance by Commercial Medicines Tight control of overheads 10% growth in adjusted EPS* Good cash flow performance 12% growth in dividend per share Current trading in line with expectations and well positioned to drive growth across the business: Commercial Medicines well positioned to build on excellent growth in FY18 and the two new products will add incrementally Unlicensed Medicines will benefit from ramping up of new MAPs and momentum in on-demand business CTS well positioned for recovery in FY19 * Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Adjusted EBITDA includes the Group s share of EBITDA from its joint venture. Adjusted results now include amortisation on software and internally developed IP. The prior year has been restated accordingly. 13

14 R I G H T M E D I C I N E R I G H T PAT I E N T R I G H T T I M E STRATEGY

15 CSM TWO ACQUISITIONS REINFORCE LINKS BETWEEN ALL THREE BUSINESSES PRE-LAUNCH CLINICAL TRIAL SERVICES IITs UNLICENSED MEDICINES COMMERCIAL COMMERCIAL MEDICINES MEDICINES EARLY ACCESS ON-DEMAND ACCESS POST-LAUNCH UL2L Specialist packaging, labelling and distribution EU commercial and medical footprint iqone CLINIGEN SPECIALIST REGULATORY, SUPPLY & DISTRIBUTION NETWORK IITs are Investigator Initiated Trials. UL2L is unlicensed to licensed. 15

16 R I G H T M E D I C I N E R I G H T PAT I E N T R I G H T T I M E PROPOSED ACQUISITION OF CSM

17 CSM OVERVIEW Specialist provider of packaging, labelling, warehousing and distribution services Complementary acquisition ultimately benefits all three Clinigen operations: Strengthens competitive positioning through enhanced capabilities Access to new customers Adds infrastructure in the US and Continental EU extending supply and distribution reach Key terms of the transaction: Initial cash consideration of $150m to be financed through the proposed 80m equity placing and new banking facilities Further contingent consideration of up to $90m in cash payable if CSM achieves growth over a predetermined level of EBITDA in year to 31 December 2019 ACQUISITION IN LINE WITH STRATEGY TO BECOME THE GLOBAL LEADER IN ACCESS TO MEDICINES 17

18 CSM: KEY METRICS Key financials $m 1 Growing backlog $m revenue 2017 adj EBITDA LTM revenue Sep 17 Dec 17 Mar 18 Jun 18 Aug 18 Customer revenue breakdown FY17 Revenue Geographic revenue breakdown FY17 Revenue Top 10 Other 64% 36% US Belgium Germany 22% 38% 40% 1 LTM calculated to August Adjusted EBITDA is stated after adjusting for Malvern facility start-up costs, Belgium integration costs and remuneration costs for legacy owners of acquired companies. 2 Backlog is defined as the monetary value of future revenue from signed contracts with customers. 18

19 STRATEGIC RATIONALE FOR CSM ACQUISITION 1 2 Expands Clinigen s value added capabilities Diversifies global client and customer base 3 4 Adds important continental EU infrastructure Reinforces link between the three Clinigen business operations Supply & distribution and complex regulatory expertise is at the core of Clinigen s competence and provides a competitive advantage 19

20 1 EXPANDS CLINIGEN S VALUE-ADDED CAPABILITIES Meeting unmet/underserved market needs: Increased outsourcing by pharmaceutical and biotech companies of specialist services Increasing demand to provide a broader service at pre approval stage of a medicine s lifecycle Increased focus on IITs Strengthens pre-launch market leading offering Benefits to Clinigen: competitive advantage and geographic expansion CSM specialist capabilities and Clinigen s global supply and distribution network provide a significant competitive advantage Opportunity to cross-sell to customers Increases proportion of higher margin, value added services Opportunity to transfer specialist capabilities into Clinigen s other key regional hubs IITs are Investigator Initiated Trials. 20

21 2 DIVERSIFIES GLOBAL CLIENT AND CUSTOMER BASE Complementary, additive client roster of >120 specialty and mid-sized pharmaceutical and biotech clients Clinigen s focus: top 25 pharmaceutical companies (worked with 19 of top 25 pharmaceutical companies) CSM s focus: specialist to mid-sized pharmaceutical and biotech companies Top 10 clients accounted for 36% of FY17 revenues Ability to sell across the combined client roster Improves access to IITs Increasingly important part of developing and commercialising medicines Packaging, labelling, storage and distribution is the foundation to service the IIT segment CSM accelerates Clinigen s ability to fully exploit a >$1bn 1 growth market opportunity IITs are Investigator Initiated Trials. 1 Visiongain

22 3 EXTENDS INFRASTRUCTURE, ESPECIALLY IN CONTINENTAL EU EU currently is a gap in Clinigen s supply and distribution capability High quality facilities in Germany and Belgium provides extensive EU footprint Initial partnership already established Packaging and labelling a gap in expertise 250 employees across three sites Sites and warehousing operations in Continental EU EU facilities will provide a major competitive advantage, benefiting all three businesses A GLOBAL LIFECYCLE PARTNER Sites and warehousing operations in the US CSM s US capabilities complement Clinigen s US operations 22

23 CSM 4 REINFORCING LINKS BETWEEN ALL THREE BUSINESSES PRE-LAUNCH CLINICAL TRIAL SERVICES IITs UNLICENSED MEDICINES COMMERCIAL COMMERCIAL MEDICINES MEDICINES EARLY ACCESS ON-DEMAND ACCESS POST-LAUNCH UL2L Specialist packaging, labelling and distribution CLINIGEN SPECIALIST REGULATORY, SUPPLY & DISTRIBUTION NETWORK IITs are Investigator Initiated Trials. UL2L is unlicensed to licensed. 23

24 ATTRACTIVE FINANCIAL METRICS Growth Enhances the growth profile of the enlarged Group Underlying EPS accretion Acquisition expected to be accretive in the first full year of ownership before synergies Contingent consideration structured such that as CSM outperforms, and the deferred payment rises, the overall earnings accretion to Clinigen also rises Synergies Expect to deliver cost synergies of at least 1m by the end of the first full year Significant revenue synergies opportunity Return on investment ROIC expected to >10% in third full year of ownership before-synergies 24

25 FINANCING THE PROPOSED ACQUISITION Placing Cash consideration to be part funded through proposed 80m share capital raise Debt Existing debt facilities increased from 220m to up to 300m EBITDA to net debt covenant: initially 3.75x falling to 3.0x after one year Leverage Pro forma leverage of 2.4x (assuming a 80m equity raise) Given strong cash flow generation of the Group, expected to de-lever quickly Leverage expected to reduce towards 2.0x by June

26 CSM: COMPELLING ACQUISITION Accelerates Clinigen s access to the IIT market Cross selling and combination opportunities with ULM creating stickier early phase business EU operation opens up further product acquisition/licensing opportunities Fills an important gap in Clinigen s supply and distribution capability, reducing costs and improving efficiency Potential to roll out CSM s capabilities through existing physical locations in the AAA region IITs are Investigator Initiated Trials. ULM is Unlicensed Medicines. AAA is Africa and Asia Pacific. 26

27 R I G H T M E D I C I N E R I G H T PAT I E N T R I G H T T I M E ACQUISITION OF IQONE

28 IQONE OVERVIEW European infrastructure with commercial roles and Medical Scientific Liaison ( MSLs ) in Switzerland, France, Italy, Spain, Austria and Germany Infrastructure would support growth of Commercial Medicines portfolio (including recent acquisitions) in key EU markets Differentiates early (Managed) access business from competitors with EU MSL support and provides on-the-ground support to secure long-term unlicensed agreements Ability to offer UL2L capability to companies seeking a partner in EU and platform to fully realise UL2L opportunities from Clinigen s pipeline Enhances proposition as commercial partner for pharmaceutical companies in EU and Rest of the World regions Deal metrics: Initial consideration: 5m cash, 2.5m equivalent in Clinigen shares Deferred consideration: based on the achievement of certain future EBITDA targets UL2L is unlicensed to licensed. ACQUISITION IN LINE WITH STRATEGY TO BECOME THE GLOBAL LEADER IN ACCESS TO MEDICINES 28

29 WHY iqone? Reviewed numerous specialty pharma EU businesses and explored build own option All focussed solely on commercialisation Expensive valuations Complicated and time consuming integration Resource would need reconfiguring Build from scratch significant distraction Already operating in the same unlicensed and licensed space Resource made from commercial and MSL personnel Management see UL2L as a major driver of future value Established well run and supported scalable base business BENEFITS Support current and recently acquired Clinigen products Increase in revenue above current forecasts Resource to increase over two year period Increase in licensing or acquisition opportunity from MA pipeline or extended BD activity Integrate EU MSL capability into early access business proposition Develop and implement plan for promotion of Clinigen unlicensed capability across key EU markets MSLs are Medical Scientific Liaison. 29

30 CSM TWO ACQUISITIONS REINFORCE LINKS BETWEEN ALL THREE BUSINESSES PRE-LAUNCH CLINICAL TRIAL SERVICES IITs UNLICENSED MEDICINES COMMERCIAL COMMERCIAL MEDICINES MEDICINES EARLY ACCESS ON-DEMAND ACCESS POST-LAUNCH UL2L Specialist packaging, labelling and distribution EU commercial and medical footprint iqone CLINIGEN SPECIALIST REGULATORY, SUPPLY & DISTRIBUTION NETWORK IITs are Investigator Initiated Trials. UL2L is unlicensed to licensed. 30

31 R I G H T M E D I C I N E R I G H T PAT I E N T R I G H T T I M E SUMMARY

32 SUMMARY Strong set of results, driven by organic and acquisitional growth Good cash flow performance Accretive acquisition of CSM Expands global supply and distribution network in strategically important regions Capabilities will support all three parts of the business Expands value added capabilities Diversifies global client and customer base iqone supports the growth of Unlicensed Medicines and Commercial Medicines in key EU markets ACQUISITIONS IN LINE WITH STRATEGY TO BECOME THE GLOBAL LEADER IN ACCESS TO MEDICINES 32

33 R I G H T M E D I C I N E R I G H T PAT I E N T R I G H T T I M E Q&A

34 R I G H T M E D I C I N E R I G H T PAT I E N T R I G H T T I M E APPENDICES

35 EXECUTIVE DIRECTORS SHAUN CHILTON, CEO MARTIN ABELL, CFO Shaun has the responsibility for the Group achieving its key performance indicators and plays a central role in setting the Group strategy. Shaun joined Clinigen in January 2012 as COO, progressed to Deputy CEO in July 2015 and became CEO in November Shaun has played a pivotal role in the development of Clinigen. He was a key part of the executive team that took Clinigen through IPO and has been a fundamental part of the impressive strategic growth of the company. In 2017, Shaun oversaw the largest M&A healthcare deal of the year in the UK with the successful acquisition of Quantum Pharma. Prior to joining Clinigen, Shaun held senior global strategic, commercial and operational roles at Pfizer, Sanofi, Wolters Kluwer Health and the KnowledgePoint360 Group (now part of UDG Healthcare). Martin is the Group s CFO. Martin joined Clinigen in August 2015 and has over 19 years experience working for international, listed companies. Before Clinigen, Martin worked for Hays plc, Europe's largest professional recruitment business. He began there as Head of Investor Relations and M&A before becoming Finance Director for the Continental Europe and Rest of World division which operated across 21 countries with revenues of over 1bn. Prior to that, Martin held several financial roles at the FTSE 100 logistics group, Exel plc (now part of Deutsche Post). He is a qualified Chartered Accountant, having trained at PwC in the M&A Transaction Services team. 35

36 THE INVESTMENT CASE UNIQUE COMBINATION OF BUSINESSES extending across pharma product lifecycle with clear synergies MARKET-LEADING POSITIONS #1 in CTS and Unlicensed Medicines SIGNIFICANT LONG-TERM GROWTH POTENTIAL both organic and acquisitional growth opportunity HIGHLY CASH GENERATIVE with strong credit control and working capital management UNPARALLELED KNOWLEDGE AND EXPERTISE in supply and distribution of unlicensed medicines GLOBAL CAPABILITY supplying into over 100 countries TRUSTED ETHICAL SUPPLIER deep relationships with physicians and big pharma EXPERIENCED MANAGEMENT TEAM track record of delivering strong growth

37 STRONG TRACK RECORD OF GROWTH The development of Clinigen Adjusted gross profit Adjusted EBITDA M LINK ACQUIRED TOTECT ACQUIRED FOSCAVIR BAG LINE EXTENSION 101M 123M QUANTUM AND IMMC ACQUIRED 140M GROUP FORMED FOSCAVIR ACQUIRED 7M FY10 16M FY11 LIST ON AIM 29M CARDIOXANE ACQUIRED 35M 17M 20M SAVENE & ETHYOL ACQUIRED 41M 25M IDIS ACQUIRED 54M 30M 54M FY12 FY13 FY14 FY15 FY16 65M FY17 76M FY18 * Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Adjusted EBITDA includes the Group s share of EBITDA from its joint venture. Adjusted results include amortisation of software and internally developed IP. CAGR growth covers the eight year period between FY10 and FY18. 37

38 R I G H T M E D I C I N E R I G H T PAT I E N T R I G H T T I M E APPENDICES - FINANCIAL

39 SEGMENTAL REVENUE ANALYSIS Year ended 30 June Change m m Revenue Commercial Medicines % Unlicensed Medicines % Clinical Trial Services (29)% % Revenue excluding pass through Commercial Medicines % Unlicensed Medicines % Clinical Trial Services (29)% % Pass through affects the early access element of Unlicensed Medicines. 39

40 SEGMENTAL ANALYSIS Year ended 30 June Growth Adjusted results * m m Reported Constant currency Revenue Commercial Medicines % 36% Unlicensed Medicines % 73% Clinical Trial Services (29)% (28)% Gross profit % 27% Commercial Medicines % 37% Unlicensed Medicines % 21% Clinical Trial Services (40)% (40)% % 16% * Adjusted results exclude non-underlying items relating to acquisitions. Constant currency is growth applying prior year s actual exchange rate to this year s result. 40

41 FOREIGN CURRENCY ANALYSIS Split by currency REVENUE GROSS PROFIT ADMIN EXPENSES GBP USD EUR ZAR AUD Other 41

42 FOREIGN CURRENCY RATES DURING THE YEAR FX rates Year end FX Rates Change USD / GBP % EUR / GBP (1)% ZAR / GBP % AUD / GBP % Average FX Rates Change USD / GBP % EUR / GBP (3)% ZAR / GBP % AUD / GBP % 42

43 EFFECTIVE TAX RATE OF 21.0% Taxation Year ended 30 June m Reported m Adjusted* m Reported m Adjusted* m Profit before tax Taxation (8.5) (14.5) (10.3) (13.8) Profit after taxation Effective tax rate 21.0% 22.5% Decrease in adjusted effective tax rate due to a higher proportion of earnings in the UK and the reduction in the UK corporation tax rate * Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Adjusted EBITDA includes the Group s share of EBITDA from its joint venture. Adjusted results now include amortisation on software and internally developed IP. The prior year has been restated accordingly. 43

44 ADJUSTED EARNINGS PER SHARE UP 10% Adjusted earnings per share* FY p FY17 FY p 45.4p Basic earnings per share Year ended 30 June Change Adjusted basic earnings* 54.5m 47.5m 15% Weighted average number of shares 119.9m 115.0m 4% Adjusted basic earnings per share* 45.4p 41.3p 10% Reported basic earnings per share 22.9p 3.3p Memo Shares in issue at 30 June m * Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Adjusted EBITDA includes the Group s share of EBITDA from its joint venture. Adjusted results now include amortisation on software and internally developed IP. The prior year has been restated accordingly. 44

45 DIVIDEND Dividend per share FY16 4.0p FY17 FY18 5.0p 5.6p Dividend Year ended 30 June Change Interim dividend 1.76p 1.6p 10% Final dividend 3.84p 3.4p 13% Total dividend 5.6p 5.0p 12% Represents cash payment of 7.2m 5.8m The final dividend will be payable on 30 November 2018 to shareholders on the register on 9 November

46 NET DEBT AT 136.5M (1.8X ADJUSTED EBITDA) Balance sheet analysis 30 Jun 30 Jun m m Goodwill & intangibles Property, plant & equipment Investment in joint venture Net deferred tax liability (28.4) (16.5) Net working capital Corporation tax (6.8) (7.5) Deferred consideration (2.9) (41.8) Other (0.5) Net debt (136.5) (35.0) Net assets GOODWILL & INTANGIBLES 441.1m relates to acquisitions, 45.3m to products & 11.2m to software INVESTMENT IN JOINT VENTURE Acquired as part of the Link Healthcare acquisition ( Novagen ) NET WORKING CAPITAL Increase due to timing of cash flows around year end DEFERRED CONSIDERATION Re Foscavir bags. Decrease versus PY due to the payment of Link contingent consideration in October 2017 NET DEBT Increase due to spend on acquisitions. Bank facilities of 220m 46

47 PY RESTATEMENT RE: SOFTWARE AMORTISATION PY restatement Year ended 30 June 2017 Previously reported Amortisation of software Restated Adjusted results* m m m EBITDA Depreciation (0.6) - (0.6) Amortisation of software and internally developed IP - (0.8) (0.8) EBITA 64.5 (0.8) (63.7) Finance cost (2.4) - (2.4) Profit before tax 62.1 (0.8) (61.3) Taxation (14.0) 0.2 (13.8) Profit after tax 48.1 (0.6) 47.5 Basic EPS (p) 41.8 (0.5) 41.3 * Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Adjusted EBITDA includes the Group s share of EBITDA from its joint venture. Adjusted results now include amortisation on software and internally developed IP. The prior year has been restated accordingly. 47

48 AMORTISATION Amortisation Year ended 30 June Change Software 0.4m 0.8m (37)% Internally developed product licenses 0.1m - n/a Amortisation included in adjusted results 0.5m 0.8m (29)% Acquired intangibles on business combinations 18.4m 13.4m 37% Acquired product licenses 3.7m 4.4m (17)% Total amortisation 22.6m 18.6m 21% Adjusted results now include amortisation on software and internally developed IP. The prior year has been restated accordingly. 48

49 FINANCE COST Finance cost Year ended 30 June Change Net interest, borrowing & facility costs 5.1m 2.0m >100% Unwind of discount on deferred consideration re Totect & Foscavir bags 0.2m 0.4m (50)% Underlying finance cost 5.3m 2.4m >100% Unwind of contingent consideration re Link 1.1m 2.1m (48)% Increase in contingent consideration re Link m - Total net finance cost 6.4m 31.5m <(100)% 49

50 R I G H T M E D I C I N E R I G H T PAT I E N T R I G H T T I M E APPENDICES - OPERATIONAL

51 THREE OPERATIONS IN FOCUS COMMERCIAL MEDICINES UNLICENSED MEDICINES CLINICAL TRIAL SERVICES Gross profit 64.0m +35% Gross profit 62.1m +19% Gross profit 14.0m -40% CHARACTERISTICS CHARACTERISTICS CHARACTERISTICS Portfolio of wholly owned products and licenses held through partnerships Acquires global rights to niche hospital only and critical care products Licenses/provides access to licensed and branded generic medicines in regions such as Africa and Asia Pacific UL2L global strategy Global market leader in ethically sourcing and supplying unlicensed medicines Manages early access programmes to innovative new medicines Provides on-demand access globally to unlicensed medicines Global service offering Specialist supply & management of quality-assured comparator medicines Provides medicines and services to clinical trials and IITs Graphs show % proportion of FY18 Group adjusted gross profit. % growth rates are FY18 versus FY17. UL2L is unlicensed to licensed. IITs are Investigator Initiated Trials. 51

52 A DIVERSIFIED PORTFOLIO Gross profit by type 100% 90% 80% 70% 60% COMMERCIAL MEDICINES LINK HOSPITAL/RETAIL PHARMACISTS ROW USA 50% 40% 30% 20% 10% 0% UNLICENSED MEDICINES CLINICAL TRIAL SERVICES PHARMA COMPANIES EUROPE OPERATION CUSTOMER GEOGRAPHY UK Indicative purposes only based on information for the year ended 30 June

53 KEY PERFORMANCE INDICATORS ADJUSTED GROSS PROFIT ADJUSTED EBITDA ADJUSTED EPS NET DEBT 140.1m UP 14% 76.0m UP 17% 45.4p UP 10% 136.5m LOCAL, REGIONAL AND GLOBAL ASSETS UNDER MANAGEMENT 1 EXCLUSIVE SUPPLY AGREEMENTS IN UNLICENSED MEDICINES 2 MANAGED ACCESS PROGRAMS RELATIONSHIPS WITH BIG PHARMA # 232 UP 18% # 208 UP 51% # OF TOP 50 COMMUNITY OF REGISTERED USERS ON CLINIPORT PRODUCTS ON CLINIPORT COUNTRIES SUPPLIED EMPLOYEES # 11,267 # 420 # 108 # 849 Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Adjusted EBITDA includes the Group s share of EBITDA from its joint venture. Adjusted results now include amortisation on software and internally developed IP. The prior period has been restated accordingly. Results are for the year ended 30 June Number of local, regional and global assets under management includes all products in the Commercial Medicines portfolio. 2 Number of exclusive supply agreements includes 110 MAPs, 39 exclusive on-demand access client supply agreements and 59 exclusive customer supply agreements in Quantum. 53

54 COMMERCIAL MEDICINES STRATEGY ACQUIRED PRODUCTS OWNED COMMERCIAL MEDICINES DEVELOPED PRODUCTS LICENSED LICENSED PRODUCTS Acquire global rights to niche, hospital-only and critical care medicines Focus is to maximise revitalisation Portfolio of seven specialist medicines Demand driven by KOLs Supply in unlicensed and licensed markets Opportunity to out-license Identification, development, licencing and commercialisation of UL2L medicines Pipeline of UL2L products and niche generics identified through unlicensed and licensed supply Range of local/regional licensed products including branded generics Regulatory knowledge to convert UL2L medicines Can hold marketing authorisation on behalf of pharmaceutical partner Africa and Asia Pacific regional infrastructure EXTENDING THE COMMERCIAL MEDICINES STRATEGY UL2L is unlicensed to licensed. KOLs are key opinion leaders. 54

55 FOSCAVIR CARDIOXANE SAVENE ETHYOL TOTECT PROLEUKIN IMUKIN ACQUIRED PRODUCTS REVITALISED Acquisition target characteristics Revitalisation opportunity High long-term patient need exists Revitalisation well advanced Typically specialist medicines, not general practice Revitalisation opportunity Challenging global supply or in shortage SUPPLY CHAIN Global and regional opportunities for revitalisation and growth Medicines no longer a strategic fit for partner company End of lifecycle with high operational and regulatory costs Looking for a global divestment partner M&A driven divestments LICENSED INDICATIONS GLOBAL EXPANSION PRESENTATION PRICE NEW IP CLINICAL USE Proleukin and Imukin acquired in July

56 QUANTUM S DEVELOPED PRODUCTS COMMERCIALISED DEVELOPED PRODUCTS PROFILE develops, licenses and commercialises a pipeline of UL2L medicines Developed products: 13 PIPELINE - Product size and time to launch PEAK ASSET VALUE PIPELINE Products: 16 Total peak asset value: > 35m > 3.0M Products by therapy area: 44% Nervous system Other Products by time to launch: 56% 2.0M 1.0M 4 < 1 year 2-3 years years 1 YEAR 2 YEARS 3 YEARS TIME TO LAUNCH Products are determined by active pharmaceutical ingredient and may include multiple formulations/presentations and strengths. The peak asset value is the annualised gross profit based on the gross profit from the single highest month. UL2L is unlicensed to licensed. 56

57 IDENTIFY LICENSED LICENSED PRODUCTS MARKETED LICENSED PATHWAY UNLICENSED MEDICINES COMMERCIAL MEDICINES EARLY ACCESS AND ON-DEMAND ACCESS > 1,000 PRODUCTS REGISTER LOCAL/REGIONAL MARKETING AUTHORISATION LOCAL MARKETED LICENSES 214 UL2L REGIONAL LICENSES BUSINESS CHARACTERISTICS 28% 6% 214 Africa Aus/NZ Asia Portfolio of exclusive local marketed licenses and branded generics Regional and local regulatory capability and expertise Over 150 experts in six international locations 66% Africa and Asia Pacific regional footprint Local marketed licenses includes branded generic products. UL2L is unlicensed to licensed. 57

58 STRATEGY PRESENT CLINIPORT DRIVING MARKET SHARE PRODUCTS CLINIPORT CLIENTS / CUSTOMERS EXCLUSIVE 110 MAPs 39 on-demand access agreements 7 acquired products 13 developed products NON- EXCLUSIVE > 2,500 Quantum products* > 1,000 on-demand access products 420 PRODUCTS > 11,000 REGISTERED USERS 32,000 ORDERS PLACED IN LAST 12 MONTHS PHARMA & BIOTECH CLIENTS HEALTHCARE PROFESSIONALS Increase number of exclusive agreements Increase number of exclusive agreements Broaden non-exclusive product range Broaden non-exclusive product range Increase number of users Increase number of users driven by exclusivity of driven by exclusivity of product and marketing product and marketing awareness awareness STRENGTHEN MARKET SHARE AND INCREASE EARNINGS MAPs are Managed Access Programs. * Quantum products are individual Stock Keeping Unit (SKUs). 58