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Roadshow Presentation1
1H 2007 resultsSeptember 2007
Roadshow Presentation
Pharmstandard Roadshow Presentation
Roadshow Presentation2
Disclaimer and Confidentiality Requirements
This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of OJSC Pharmstandard (the “Company”) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.
This presentation has been prepared solely for use in connection with the possible offering of ordinary shares (the “Shares”) and global depositary receipts representing shares (“GDRs” and, together with the Shares, the “Securities”) in the Company (the “Offering”). This document is an advertisement and not a prospectus and any purchase of Securities in the Offering should be made solely on the basis of information contained in the prospectus and any supplemental prospectus to be published in respect of the Offering. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of Augment Investments Limited (the “Selling Shareholder”) or the Company or any of their respective 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 the presentation.
This presentation is only for persons having professional experience in matters relating to investments and must not be acted or relied on by persons who are not Relevant Persons (as defined below). Solicitations resulting from this presentation will only be responded to if the person concerned is a Relevant Person.
This presentation is not for distribution in, nor does it constitute an offer of securities in the United States, Canada, Australia or Japan. Neither the presentation nor any copy of it may be transmitted into the United States, its territories or possessions, or distributed, directly or indirectly, in the United States, its territories or possessions. Any failure to comply with this restriction may constitute a violation of US securities laws. The presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. The Company has not registered and does not intend to register any portion of the Offering in the United States or to conduct a public offering of any securities in the United States.
This presentation is made to and directed only at (i) persons outside the United Kingdom, (ii) qualified investors or investment professionals falling within Article 19(5) and Article 49(2) (a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (iii) high net worth individuals, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (such persons collectively being referred to as "Relevant Persons").
This presentation and its contents are confidential and must not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person, whether or not such person is a Relevant Person. Failure to comply with this restriction may constitute a violation of applicable securities laws. If you have received this presentation and you are not a Relevant Person you must return it immediately to the Company. This presentation does not constitute a recommendation regarding the securities of the Company.This presentation is not a public offer or advertisement of Securities in the Russian Federation and is not an invitation to make offers to purchase any Securities in the Russian Federation, and must not be passed on to third parties or otherwise be made publicly available in Russia. The GDRs have not been and will not be registered in Russia and are not intended for “placement” or “circulation” in Russia.This presentation includes 'forward-looking statements'. These statements contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's projects and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation. Each of the Company and the Selling Shareholder and their respective agents, employees and advisers, expressly disclaims any obligation or undertaking to update any forward-looking statements contained herein.
The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.All information not separately sourced is from Company data.
Roadshow Presentation
1. Company Overview
Dr. Igor Krylov, CEO
Roadshow Presentation4
Our Strategy
Promote our market-leading brands to drive sales growth and profitability
Launch new products on a regular basis
Expand sales and marketing effort
Continue to actively control costs
Grow through acquisitions
Exploit opportunities from Federal Reimbursement Programme (FRP) as they arise
Building a top-3 pharmaceutical company in Russia
Roadshow Presentation5
Promote our market-leading brands to drive sales growth and profitability
6 leading brands
“Top of mind” position with consumers
Significant brand loyalty
Exclusively produced by Pharmstandard
Produced by Pharmstandard
Leading domestic pharma trademarks by sales value in 2006
Source: Pharmexpert. Based on consumer prices, Rx and OTC productsNote:1 Masterlek Brands
Trademark Ranking in 1H 2007
Ranking in 1H 2006
Arbidol 1 1
Mexidol 2 3
Pentalgin 3 2
Sodium Chlorid 4 5
Complivit 5 10
Viferon 6 9
Terpincod 7 7
Howthorn 8 4
Cephazolin 9 11
Flukostat 10 13
Glucose 11 17
Phenotropil 12 8
Cortexin 13 26
Hondrolon 14 48
Cyclopheron 15 19
Codelac 16 24
Corvalol 17 18
Bifidumbacterin 18 14
Ascorbic acid 19 20
Miramistin 20 38
Roadshow Presentation6
Product ATC
Sales value 1H 2007USD mln
Market valueUSD mln Key Market brands
Recent product launchesMaxicold ® R05A0-Cold Preparations Without Anti-
Infectives0.5 142.0 Coldrex, Fervex, Teraflu
Passifit ® N05B5-Herbal Hypnotics/Sedatives 0.3 125.0 Novo-Passit, Persen
Immunex ® L03A0-Immunostimulating Agents Excluding Interferons
0.1 85.0 Immunal, Immunorm
Biosulin ® A10C2-Human Insulins And Analogues 2.1 162.0 Humulin, Protaphan, ActrapidRastan ® H04C0-Growth Hormones 1.7 18.0 Genotropin, Saizen, HumatropeArtrozan ® M01A1-Anti-Rheumatics, Non-Steroidal Plain 0.2 199.0 Movalis, Voltaren, Diclofenac
Recent product approvals
Complivit Ca D3® A12A – calcium products 45.0 Calcium D3, Calcium
Benfolipen® A11D (tablets) – vitamin B1 and combinations 15.0 Milgamma, Neuromultivit
Combilipen® A11D (injections) – vitamin B1 and
combinations25.0 Milgamma, Thiamine Chloride
Ondasol® A04A1 – serotonin antagonist
antiemetics/antinauseants16.0 Kytril, Zofran, Navoban
Carditrim® C01D0 – coronary therapy excluding calcium
antagonists and nitrites111.0 Preductal
Launch new products on a regular basis
Source: Pharmexpert,
OTC
Rx
OTC
Rx
New products sales achieved RUR 127 mln or 3.4% from total Pharmaceutical sales in 1H 2007
Roadshow Presentation7
Expand sales and marketing effort
All sales reps have medical education/work experience
Covers 75% of the Russian pharma market
Incentivised sales force—up to 33% bonus of annual salary
In 2007 looking to:
– Increase “feet on the street” to over 350 sales people
– Further specialise sales force by therapeutic area
– Electronic Territory Management System (ETMS) system improving efficiency
Experienced sales force up to 340 sales persons1
Note: 1 As of 30 June 2007
Real ti
me d
ata
- E
TM
S
HQ Sales and marketing
National manager1 manager
Regional manager20 managers
OTC sales force(131)
Rx sales force(157)
National manager2 managers
Regional manager29 managers
OTCRx
(incl. ENDO-Team)
Real tim
e d
ata
- ETM
S
Source: Company
Roadshow Presentation8
Diversified Product Portfolio in 1H 2007
Pharmaceuticals
85% of 1H 2007 sales
Medical Devices
15% of 1H 2007 sales
OTC70% of 1H 2007 sales
Rx1
15% of 1H 2007 sales
Therapeutic focus: Analgesics Cough & cold Vitamins Anti-viral Anti-fungal
Product portfolio includes: Acid pump inhibitors Nitrites & nitrates ACE inhibitors Alimentary tract
metabolism
Product portfolio includes: Sterilisers Distillers Medical disposables
Source: Company
Note: 1 Includes Other sales
52% revenue growth in 1H 2007
63% growth 54% growth 18% growth
Roadshow Presentation9
Other68.8% Servier
2.5%
Nycomed2.5%
Pfizer2.5%
Gedeon Richter2.7%
Sandoz2.8%
Bayer Schering Pharma
2.9%
Berlin-Ch/Menarini
2.9%Sanofi-Aventis
4.5%
Novartis4.2%
Pharmstandard3.7%
Other51.4%
Pharm-Centr4.3%
Otechestvennie Lekarstva
5.4%
Pharmstandard16.8%
Stada Arzneimittel Ag
4.2%
Materia Medika3.6%
Microgene Npo3.5%
Veropharm Zao3.1%
Biotek2.6%
Akrikhin2.7%
Moshimpharmpreparaty2.4%
Market Share of Top-10 Companies in theRussian Pharma Market (% 1H 2007 value)1
Market Share of Domestic Pharmaceutical Producers (% 2006 value)1
#3 pharmaceutical company on Russian market
Source: PharmexpertNotes:1 Based on sales in wholesale prices
#3 pharma company in Russia overall#1 domestic pharma company – more than 3
times the size of the #2 domestic player
Roadshow Presentation10
Other51.2%
Moshimpharmpreparaty2.4%
Pharm-Centr2.5%Akrikhin
2.5%
Veropharm Zao2.7%
Krasnogorsklexredstva
2.7%
Microgene Npo3.4%
Materia Medika4.3%
Pharmstandard19.2%
Stada Arzneimittel Ag
4.6% Otechestvennie Lekarstva
4.5%
A Leader in the Russian Commercial Segment
Market Share—Top 10 Companies1 Market Share—Top 10 Domestic Companies1
Source: PharmexpertNotes:1 Commercial segment 2006, based on sales in wholesale prices
PHS is #1 in commercial segment
(commercial segment is 77% of the total market)
22
Other67.8%
Berlin-Ch/Menarini
3.4%
Sanofi-Aventis4.3%
Pharmstandard4.5%
Novartis3.0%
Sandoz3.0% Gedeon Richter
2.8%
Pfizer2.8%
Bayer Schering Pharma
2.8%
Nycomed2.8%
Servier2.8%
Roadshow Presentation11
Continue to actively control costs
Pharmstandard strong margin rates:
Gross profit remain stable at 57%,
S&D – is constant at 17%,
G&A – decreased by 1% to 6%,
Net profit – remained constant at 22%,
EBITDA margin became 38% (in 1H 2006 EBITDA was 35%).
Source: Company1 Pharmexpert, in wholesale prices2 As at 30 June 2007
Roadshow Presentation12
Pharmstandard 1H 2007 achievements
Leading domestic pharmaceutical company in Russia (measured by sales)
– #3 pharma company overall in Russia by sales value in 1H 20071
– #1 pharma company in the commercial segment by sales value in 1H 20071
Industry leading growth and profitability
– Revenue growth +52% and achieved $169.7 mln in 1H 2007
– EBITDA growth +67% and achieved $65.0 mln in 1H 2007 or 38% as % from sales
Market leading brands
– 6 brands among top-20 best selling domestic brands in Russia1
– Arbidol®, Pentalgin®, Complivit®, Terpincod®, Codelac®, Flucostat®
Experienced sales force and modern and efficient manufacturing facilities
– More than 340 sales reps2
– Russian GMP compliant facilities, including lines at Kursk, some of which are EU GMP compliant
Fully integrated MasterLek company (distribution, SG&A cost, production ahead schedule)
Source: Company1 Pharmexpert, in wholesale prices2 As at 30 June 2007
Roadshow Presentation
4. Financial Overview
Elena Arkhangelskaya, Chief Financial Officer
Roadshow Presentation14
Our Portfolio growth in 1H 2007
Sales 2007 H1 2006 H1 Growth Growth %
Pharmaceutical products 3,777 2,368 1,410 60%
OTC products 3,067 1,879 1,188 63%
Branded generics 2,768 1,596 1,172 73%
Non-branded generics 299 283 15 5%
Prescription products 670 436 234 54%
Branded generics 545 302 244 81%
Non-branded generics 124 134 -10 (7%)
Other sales 41 53 -12 (23%)
Medical equipment and disposables 649 549 100 18%
Sale of goods 4,426 2,917 1,510 52%
Sales 2007 H1 2006 H1 Growth Growth %
Pharmaceutical products 3,777 3,070 708 23%
OTC products 3,067 2,474 593 24%
Branded generics 2,768 2,190 578 26%
Non-branded generics 299 283 15 5%
Prescription products 670 542 128 24%
Branded generics 545 402 144 36%
Non-branded generics 124 140 -16 (11%)
Other sales 41 54 -14 (25%)
Medical equipment and disposables 649 549 100 18%
Sale of goods 4,426 3,619 808 22%
Pro-Forma basis
IFRS basis
Roadshow Presentation15
2,474
1,879
3,067
542
436
670
54
53
41
549
549
649
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1H 2006 PF 1H 2006 1H 2007
RU
R m
ln
.
OTC Prescription Other Medical Equipmuipment
3,619
2,917
4,426
68%
15%
15%
64%
15%
19%
69%
15%
15%
1
Rapidly Growing Revenue Profile
Source: Company
Note:
1 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
Achieved 52% revenue growth in 1H 2007
Roadshow Presentation16
7%
6%
7%
238
249
193
0
50
100
150
200
250
300
1H 2006 PF 1H 2006 1H 2007
RU
R m
ln .
5%
5%
5%
6%
6%
6%
6%
6%
7%
7%
Labour costs Other expenses As % of Sales
16%
17%
17%
752
587
492
0
100
200
300
400
500
600
700
800
1H 2006 PF 1H 2006 1H 2007
RU
R m
ln .
16%
16%
16%
16%
17%
17%
17%
17%
Marketing Labour costs Other expensesAs % of Sales
Competitive Cost Structure 1H 2007
General and Administration CostsSelling and Distribution Costs
Source: Company reports
Note:
1 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
Roadshow Presentation17
1,220
1,017
1,694
38%
35%
34%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1H 2006 PF 1H 2006 1H 2007
RU
R m
ln .
31%
32%
33%
34%
35%
36%
37%
38%
39%
EBIDTA As % of Sales
1,925
1,684
2,535
53%
58%
57%
0
500
1,000
1,500
2,000
2,500
3,000
1H 2006 PF 1H 2006 1H 2007
RU
R m
ln .
50%
51%
52%
53%
54%
55%
56%
57%
58%
59%
Gross Profit As % of Sales
Margin Expansion 1H 2007
EBITDAGross Profit
Source: Company reports
Note:
1 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006
Roadshow Presentation18
617 647
962
22%22%17%
0
200
400
600
800
1,000
1,200
1H 2006 PF 1H 2006 1H 2007
RU
R m
ln
.
0%
5%
10%
15%
20%
25%
Net Profit As % of Sales
Attractive Profitability Growth
HY Net Profit 2006–2007
Source: Company reports
Note:
1 Pro Forma assumes inclusion of Masterlek as part of Phamstandard as of 1 January 2006
21.4%
50% Net Profit growth in 1H 2007 (pro-forma)
Roadshow Presentation19
Consolidated Balance Sheet and Capex
Capital ExpenditureIFRS basis
Debt summary
Facility A: US$91m (maturity Dec-2009/L+150)
Facility B: US$55m (maturity Dec-2011/L+190)
Net debt: US$128m
189
889 890
193
0
100
200
300
400
500
600
700
800
900
1,000
2004 2005 2006 1H 2007
RU
R m
ln .
CAPEX
(in millions of RUR) 30 Jun 2007 31 Dec 2006
Cash and Equivalents 483 193
Other Current Assets 5,183 5,300
Long-term Assets 8,137 8,277
Total Assets 13,804 13,770
Total Debt 3,778 3,875Current Liabilities (excl. short-term debt) 1,558 2,425Non-current Liabilities (excl. long-term debt) 1,165 1,129
Total Equity 7,303 6,340
Total Liabilities & Equity 13,804 13,770
Roadshow Presentation20
Growth Analysis Across Market Segments1
Source: Pharmexpert,
Note:
1 Based on sales in wholesale prices
Dom
esti
c c
om
pan
ies
Inte
rnati
on
al com
pan
ies
Pharmstandard is growing in-line with its peersin the commercial segment
Corporation Commercial FRP Hospital Commercial FRP HospitalTotal sales
1H 2006Total sales
1H 2007Total
Growth Commercial
GrowthTotal Growth
(%) Commercial Growth (%)
Pharmstandard 130,516 13,194 3,519 170,065 6,036 3,626 147,229 179,728 32,499 39,550 22% 30%
Otechestvennie Lekarstva 23,938 13,148 5,562 39,622 8,118 10,413 42,648 58,153 15,505 15,684 36% 66%
Pharm-Centr 15,329 4,706 10,512 22,565 3,893 19,921 30,547 46,379 15,832 7,236 52% 47%
Stada Arzneimittel Ag 37,600 15,159 418 40,689 3,339 585 53,177 44,613 (8,564) 3,089 (16%) 8%
Materia Medika 33,310 0 21 38,100 0 42 33,330 38,142 4,812 4,791 14% 14%
Microgene Npo 25,512 0 5,778 29,961 0 7,776 31,290 37,737 6,447 4,450 21% 17%
Veropharm Zao 20,466 4,307 4,925 23,923 2,542 6,703 29,698 33,168 3,470 3,457 12% 17%
Akrikhin 21,270 9,714 1,378 21,840 5,260 1,397 32,362 28,496 (3,866) 570 (12%) 3%
Biotek 14,715 2,060 5,880 20,508 1,612 5,976 22,655 28,095 5,441 5,793 24% 39%
Moshimpharmpreparaty 19,770 673 2,512 21,497 365 4,146 22,956 26,008 3,051 1,726 13% 9%
Sanofi-Aventis 138,585 74,148 38,834 161,963 20,800 39,650 251,567 222,413 (29,154) 23,378 (12%) 17%
Novartis 91,175 78,568 8,783 111,359 84,642 8,578 178,525 204,579 26,053 20,185 15% 22%
Pharmstandard 130,516 13,194 3,519 170,065 6,036 3,626 147,229 179,728 32,499 39,550 22% 30%
Berlin-Ch/Menarini 106,871 33,654 6,980 126,719 10,054 7,189 147,505 143,963 (3,543) 19,848 (2%) 19%
Bayer Schering Pharma 85,799 39,490 9,994 104,914 25,592 10,954 135,283 141,459 6,177 19,115 5% 22%
Sandoz 75,765 9,573 13,200 110,792 5,234 22,683 98,539 138,708 40,169 35,026 41% 46%
Gedeon Richter 90,266 23,115 14,299 106,582 6,813 18,348 127,679 131,742 4,063 16,316 3% 18%
Nycomed 81,068 11,162 13,639 105,984 5,445 11,179 105,869 122,608 16,739 24,916 16% 31%
Pfizer 88,088 22,651 16,330 106,347 2,477 13,585 127,068 122,409 (4,659) 18,260 (4%) 21%
Servier 84,184 61,812 3,480 103,324 13,389 3,293 149,476 120,006 (29,470) 19,140 (20%) 23%
2006 2007
Roadshow Presentation
Appendix
Roadshow Presentation22
Russia—The World’s Fastest Growing Pharma Market
Source: DSM, EIU
(in retail prices, US$bn)
Russia was the fastest growing pharma market in 2005–2006
28%24%
17%14%
8% 7% 7%5% 5%
3% 3% 2%
(6%)(10)
(5)
0
5
10
15
20
25
30
Rus
sia
Braz
il
Chin
a
Cana
da
Mex
ico
US
Spai
n
Fran
ce UK
Ger
man
y
Ital
y
Aust
ralia
/NZ
Japa
n
2006
gro
wth
rat
e (
%)
Pharma marketsize (US$bn)
8.4 8.4 11.4 13.7 8.1 197.8 11.6 25.6 15.7 27.7 14.9 5.8 56.7
Population (in million) 142 187 1,315 33 108 340 45 61 60 83 58 25 128
Roadshow Presentation23
214
165142
111
47 38
230194
171
119
50 49
0
50
100
150
200
250
300
Hungary CzechRepublic
Slovakia Poland Romania RussiaCo
nsu
mp
tio
n p
er c
apit
a ($
)
2005 2006
Source: Pharmexpert, EIU Market Indicators
Russian Pharma Market Set to Expand
Drug consumption per
capita amongst lowest in
Europe
Rapid market growth
expected to continue
Russia was the fastest
growing market globally
in 2004-2006
Pharmaceutical Consumption Per Capita in Russia($)
2733
3844
58
70
0.00
20.00
40.00
60.00
80.00
2001 2002 2003 2004 2005 2006
Co
nsu
mp
tio
n p
er c
ap
ita
($)
Pharmaceutical Consumption Per Capita by Country($)
Roadshow Presentation24
2003
4Q03:
Acquisition of ICN’s business in Russia (five factories, distribution centres and pharmacy chain)
Q104:
New management team brought in with experience in international and domestic pharma companies
2Q04:
Close Polypharm (pharma production facility)
3Q05:
Sale of Marbiopharm (pharma production facility)
Jan 05:
Acquisition of TZMOI (Tyumen)—manufacturer of medical equipment
3Q06:
Acquisition of Masterlek (3.5% share of domestic Russian Pharma market by sales value)
1H05:
Open centralised warehouse for pharmaceutical products in Moscow
Pharmstandard Key Development Milestones
4Q06:
New production of spray, tablets and capsules; central manufacture laboratory and renovation of production facilities
Total investment since 2004: approximately RUR 600m
Leksredstva plant (Kursk)
2H06:
Termination of production in Oktyabr plant in St Petersburg, production transferred to other existing sites
1H06:
New production of solutions, production of vitamins and insulin
Total investment since 2004: approximately RUR 730m
2007:
New production workshops for Rastan® and Phosphogliv®
Ufavita plant (Ufa)
May 2006:
Legal name changed from Biovit LLC to OJSC Pharmstandard
End 2005:
Creation of holding company/ legal restructuring finalised
Pre 2003:
Group consisted of two manu-facturing facilities (Ufa and Phytopharm) operating under Biovit LLC
2004
2005
2006
2007
Source: Company
Note: OJSC – Open Joint Stock Company, LLC – Limited Liability Company
Roadshow Presentation25
Modern Production Facilities
Source: Company
Note: Capacity in packs. Figures shown are as of 31 December 2006
Tomsk
Tyumen
Moscow
Ufa
Kursk
TomskhimpharmCapacity: 208m
TZMOIUfavitaCapacity: 169m
LeksredstvaCapacity: 645m
Nizhny Novgorod
PhytopharmCapacity: 48m
Pharmstandard HQ
Roadshow Presentation26
Other9.2%
A10-Drugs Used In Diabetes
1.4%
H04-Other Hormones1.2%
A07-Antidiarrhoeals, Oral Electrolyte Replacers And
Intestinal Anti-Inf lammatories
1.5%
V03-All Other Therapeutic Products
1.0%
R02-Throat Preparations0.9%
N06-Psychoanaleptics Excluding Anti-Obesity
Preparations1.8%
C01-Cardiac Therapy2.1%
L03-Immunostimulating Agents2.0%
A05-Cholagogues And Hepatic Protectors
5.7%
J02-Anti-Fungal Infections6.2%
N05-Psycholeptics6.6%
A11-Vitamins8.3%
J05-Antivirals For Systemic Use
20.1%
R05-Cough And Cold Preparations
16.5%
N02-Analgesics15.6%
Pharma Portfolio by Therapeutic Segment
Sales = RUR 4,426 million (1H 2007)OTC = 81% / Rx = 18%
Company sales split as at 1H 2007
Source: Company sales
Roadshow Presentation27
Production Facilities – Summary Overview
Source: Company. Note: Total capacity for pharmaceutical production in 2006 excludes capacity from Oktyabr factory (St. Petersburg) which closed in Q3 2006
Total capacity calculations assume 8-hour shifts and 7 day working week
Factory Approximate size (sq. m.) Formulation Shifts
Capacity 000’s packs Dec 2005
Capacity 000’s packs Dec 2006
14,900 (lease) Syrops & liquid forms 3 52,644 52,644 Tablets 3 361,077 564,406 Sprays 2 10,368 Powders 2 1,260
LEKSREDSTVA (KURSK)
Capsules 3 16,200
5,850 (lease) Ampules 2 7,624 8,595 Frozen-dried preparation 3 2,640 2,640 Syrops & liquid forms 1 6,360 6,360 Tablets 2 63,012 109,973 Vitamin bars (ferrohematogen) 2 14,000 22,680 Insulin 2 14,400
UFAVITA (UFA)
Saline infusin 2 4,500
1,200 (lease) Ointments 2 11,100 1,200 Powders 1 10,280 10,280 Syrops & liquid forms 2 29,187 24,000
PHYTOFARM (N.NOVGOROD)
Tablets 2 12,850 12,850
29,000 (own) Syrops & liquid forms 1 1,200 1,200 TOMSKHIMPHARM (TOMSK) Tablets 3 206,856 206,856
Closed in 2006 Capsules 2 1,384 Sprays 1 4,582 Tablets 2 72,797
OKTYABR (S.PETERSBURG)
857,593 1,070,412
Syringes 2 295 295 Needles 2 624 624 Sterilizing machines < 100 L 2 24,250 24,250 Sterilizing machines > 100 L 2 319 319
Aquadistilling machines 2 7,320 7,320
TZMOI (Tyumen)
Roadshow Presentation28
Breakdown of Sales for 1H 2007 by Distributor
Top 5 distributors accounted for 50% of pharmaceutical product sales in 1H 2007
Typical payment terms for distributors:
– Regional and export distributors: 30–60 days
– National distributors: 60–90 days
– FRP program: 180 days
Source: Company
Note: Manufacturers’ prices
Top 5 Distributors – 2006
Distributor % of sales
Genesis 19
SIA International 9
Katren 8
Protek 8
Rosta 6
Total 50
Roadshow Presentation29
Product StatusATC2
therapeutic segments
As % from total pharmaceutical
sales in 20072007 Sales(RUR mln)
Arbidol® OTC Antiviral 20.0% 756.7
Terpincod® OTC Cough and Cold 11.9% 451.4
Pentalgin - N® OTC Analgesics 8.0% 303.0
Flukostat® OTC Anti-fungal 6.0% 226.6
Phosphogliv® Rx Hepatic protectors 5.4% 202.7
Pentalgin - ICN® OTC Analgesics 5.0% 187.7
Complivit® OTC Vitamins 4.2% 158.9
Codelac® OTC Cough and Cold 3.4% 128.2
Corvalol® OTC Psycholeptics 2.1% 78.4
Amixin® Rx Immunostimulating agents 1.9% 71.4
Biosulin® Rx Diabet care 1.4% 53.0
Rastan® Rx Growth hormon 1.2% 44.3
Askophen-P® OTC Analgesics 1.0% 36.5
Validol® OTC Cardiovascular 0.9% 35.5
Complivit-Activ® OTC Vitamins 0.9% 27.8
Top 15 Pharmaceutical products 73.1% 2,762.2
Other pharmaceutical products 26.9% 1,015.3
Pharmaceutical products total 100.0% 3,777.5
Our Portfolio – Top 15 Pharmaceutical Products
Source: CompanyNotes:1 Sales only formed part of consolidated results from 2 August 2006
1)
1)
Roadshow Presentation30
73
54
9588
7480 81
86 87
941
37
18 4 54 2
18
4 2 5 816 14
9 11
-
10
20
30
40
50
60
70
80
90
100
Sanofi-Aventis Novartis Pharmstandard Berlin-Ch/Menarini
Bayer ScheringPharma
Sandoz Gedeon Richter Nycomed Pfizer
RU
R m
ln .
Commercial FRP Hospital
Low Exposure to FRP
Source: Pharmexpert
Note: Based on wholesale prices in US$
Pharmstandard has a lower exposure to the FRP compared to its peers
Composition of Leading Companies’ Sales in Russia by Market Segment in 2006
Roadshow Presentation31
Product PipelineR
x
Near term pipelineProducts in registration
Products in development
ATC2
Products
Immunostimulating agents 2 Psychoanaleptics excluding anti-obesity preparations 1
Pituitary and hypothalamic hormones 1 Urologicals 1 Anti-asthma and COPD products 2 Antithrombotic agents 1
Total 8
OTC
ATC1
Products
Vitamins 8
Analgesics 1
Cough and cold preparations 1
Laxatives 1
Nonsteroidal products for inflammatory skin disorders 1
Total 12
ATC1 Product applications Formulations
Number of registered
trademarks
Vitamins 4 8 4 Mineral supplements 2 3 2
Wound healing agents 1 1 Immunostimulating agents 1 1 1
Analgesics 2 2 1 Cough and cold preparations 1 2 1
Total 11 17 9
ATC1 Product applications Formulations
Number of registered
trademarks Functional gastro-intestinal disorder drugs 1 1 1 Antiemetics and antinauseants 1 2 1 Cholagogues and hepatic protectors 2 4 2 Drugs used in diabetes 3 9 2 Vitamins 2 4 2 Cardiac therapy 2 2 1 Agents acting on the renin-angiotensin system 1 1 1 Hypolipidaemics/anti-atheroma preparations 1 2 Topical corticosteroids 1 2 Pituitary and hypothalamic hormones 1 1 1 Immunostimulating agents 1 1 1 Analgesics 1 1 1 Psycholeptics 1 1 1 Total prescription 18 31 14
Pipeline of OTC and Rx products supports Pharmstandard’s growth story
Roadshow Presentation32
0%
10%
20%
30%
40%
50%
60%
Phar
mst
anda
rd
Act
avis
Asp
en
Egis
Ged
eon
Ric
hter
Hik
ma
Krk
a
Stad
a
Ver
opha
rm
Zent
iva
0%
10%
20%
30%
40%
Phar
mst
anda
rd
Act
avis
Asp
en
Egis
Ged
eon
Ric
hter
Hik
ma
Krk
a
Stad
a
Ver
opha
rm
Zent
iva
Core Comparables Benchmarking
Sales growth (2006)
Net profit margin (2006)EBITDA margin (2006)
Gross margin (2006)
PHS has industry leading growth and profitability
0%
20%
40%
60%
80%
Phar
mst
anda
rd
Act
avis
Asp
en
Egis
Ged
eon
Ric
hter
Hik
ma
Krk
a
Stad
a
Ver
opha
rm
Zent
iva
Source: Company reports. Veropharm figures based on equity research as 2006 results not available
0%
10%
20%
30%
Phar
mst
anda
rd
Act
avis
Asp
en
Egis
Ged
eon
Ric
hter
Hik
ma
Krk
a
Stad
a
Ver
opha
rm
Zent
iva
Roadshow Presentation33
ARBIDOL (PHARMSTANDARD)
36%
VIFERON (FERON OOO)13%
OCILLOCOCCINUM (LABORATOIRE
BOIRON)9%
ANAFERON FOR KIDS (MATERIA MEDIKA)
9%
CYCLOFERON (POLYSAN)
6%
IMMUNAL (SANDOZ)6%
ANAFERON (MATERIA MEDIKA)
5%
AMIXIN (PHARMSTANDARD)
5%
GRIPPFERON (FIRN-M ZAO)3%
AFLUBIN (RICHARD BITTNER GMBH)
4%
OTHER4%
29.5 40.262.2 74.5
96.9
128.6
53.974.4
12.216.4
44.9
82.9
37.4
54.0
5.53.1
1.231.49
4.30
5.374.72
3.89
3.03
1.91
0
50
100
150
200
250
I H I H
2001 2002 2003 2004 2005 2006 2006 2007
Sale
s (U
S$m
) .
0.0
1.0
2.0
3.0
4.0
5.0
6.0
. Average price (U
S$)
OTHER PHARMSTANDARD $/U
Arbidol®—#1 Pharma Brand in Russia
Arbidol®
Captured #1 brand position, in part, through active promotion by Pharmstandard sales force
Acquired as part of Masterlek transaction
Original product developed in 1987, active marketing launched in 2000
Source: PharmexpertNote: Remodelled to reflect current categories
Leading Products in Anti-infective Systemic Use Segment (1H 2007)
1 Source: Pharmexpert2 Based on consumer prices
Source: Company
Segment Sales Dynamics1,2
Roadshow Presentation34
PENTALGIN-N (PHARMSTANDARD)
15%
PENTALGIN-ICN (PHARMSTANDARD)
8%
TEMPALGIN (SOPHARMA)8%
BARALGIN M (SANOFI-AVENTIS)
7%SEDALGIN-NEO
(ACTAVIS)6%
SEDAL-M (SOPHARMA)5%
CARDIOMAGNYL (NYCOMED)
4%SOLPADEINE (GSK)
3%
ALKA-SELTZER (BAYER SCHERING PHARMA)
3%
NUROFEN PLUS (BOOTS HEALTHCARE
INTERNATIONAL)3%
OTHER38%
73.699.9 102.7 101.1
126.9147.8
69.5 82.6
24.2 30.1
49.5
57.7
25.330.7
23.8
16.5
0.47
0.59
0.20
0.25
0.48
0.41
0.32
0.26
0
50
100
150
200
250
I H I H
2001 2002 2003 2004 2005 2006 2006 2007
Sale
s (U
S$m
) .
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
. Average price (U
S$)
OTHER PHARMSTANDARD $/U
Pentalgin—#1 Pain Reliever (Non-Narcotic)
Source: Company
Pentalgin
Looking to launch new (improved) formulation of Pentalgin in 2007 to capitalise on Pentalgin’s brand recognition
Franchise includes Pentalgin-N® andPentalgin-ICN®
First launched Pentalgin-ICN® in 1999 and followed with launch of Pentalgin-N® in 2002
Steadily gained market share since 2001
Source: Pharmexpert
Top-10 Products in Analgesics Segment (2006)
Annual Segment Sales Dynamics1,2
1 Source: Pharmexpert2 Based on consumer prices
Roadshow Presentation35
ESSENTIALE FORTE N (SANOFI-AVENTIS)
24%
HEPTRAL (ABBOTT LABORATORIES)
21%
CARSIL (SOPHARMA)10%
ESSLIVER FORTE (STADA ARZNEIMITTEL AG)
6%
ESSENTIALE N (SANOFI-AVENTIS)
5%
PHOSPHOGLIV (PHARMSTANDARD)
4%
BERLITHION 300 IU (BERLIN-CH/MENARINI)
3%
HEPABENE (RATIOPHARM INTERNATIONAL)
3%
TYCVEOL (EUROPA-BIOPHARM ZAO)
3%LIV-52 (HIMALAYA DRUG
COMPANY LTD.)3%
OTHER18%
52.069.5 80.1 90.9
129.6
190.5
96.0 94.9
1.21.5
2.5
7.8
3.2 4.20.9
0.6
3.864.55
8.77
9.608.74
6.85
5.90
5.12
0
50
100
150
200
250
I H I H
2001 2002 2003 2004 2005 2006 2006 2007
Sale
s (U
S$m
) .
0.0
2.0
4.0
6.0
8.0
10.0
12.0
. Average price (U
S$)
OTHER PHARMSTANDARD $/U
1 Source: Pharmexpert2 Based on consumer prices
Top products in Hepatic Protectors segment (2006)
Phosphogliv® – Successful Rx Product Launch
Phosphogliv®
Launched in 2005 Novel product in-licensed from the Institute
of Biomedical Chemistry Premium priced product based on superior
efficacy Patent protected until 2018 Clinically validated
– 2nd generation combination therapy with anti-viral, anti-inflammatory andimmunomodulating properties
Annual segment sales dynamics1
Source: Company
Source: Pharmexpert
Roadshow Presentation36
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