Date post: | 18-Dec-2015 |
Category: |
Documents |
View: | 219 times |
Download: | 2 times |
Investor PresentationJanuary 2007
Investor PresentationInvestor Presentation
China Pharma Holdings, Inc. (CPHI)
Slide 2
China Pharma
Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth in this presentation that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand, increased competition, failure to obtain or maintain intellectual property protection, downturns in the Chinese economy, uncompetitive levels of research and development, failure to obtain regulatory approvals, and other information detailed from time to time in the China Pharma Holdings, Inc.’s filings and future filings with the United States Securities and Exchange Commission.
The forward-looking statements contained in this presentation are made only of this date, and China Pharma Holdings, Inc. is under no obligation to revise or update these forward-looking statements.
Slide 3
China Pharma
Investment Highlights
Profitable company with a low cost/high margin business model
Rapid top line growth and increasing profitability
Positioned within the largest segments of the Chinese pharmaceutical market
Robust portfolio and pipeline of approximately 30 drugs that address large patient populations
State-of-art modern manufacturing facilities with multiple production lines and capacity to meet future growth
Industry dynamics support growth strategy
Slide 4
China Pharma
Equity Snapshot
Exchange/Symbol OTC BB: CPHI
Price (1/17/2007) $2.28
Shares Outstanding 34.7 M
Market Capitalization $79.17 M
Revenues (TTM) $18.2 M
Net Income ( 9 mos. 2006) $5.2 M
Slide 5
China Pharma
Corporate Overview
China Pharma is a leading generic drug maker with a growing brand product business• Specialty pharmaceutical company that develops, manufactures,
and markets pharmaceutical products for hospitals and the over the counter (OTC) market in China
Corporate headquarters: Haikou City, China Professional Staff
• 150 employees
• 550 marketing and sales agent network in 16 sales offices
Scalable GMP certified manufacturing facilities in Haikou City, China, with eight production lines with extra capacity
China Pharma is a holding company for Helpson Bio-pharmaceutical Co., Ltd. (Helpson), a specialty bio-pharmaceutical company
Slide 6
China Pharma
The Strong Economy is Fueling Double Digit Growth of the Pharma Market
Growth factors
• Overall growth/strength of Chinese economy
• Increase in disposable household income
• Desire for improved healthcare
• Aging population
• Increasing diagnosis and treatment rates
• Greater government spending on healthcare 8th largest pharmaceutical market in the world
• The pharmaceutical market grew 20.4% in 2005 to $11.7B
• Forecasted to be the 5th largest market by 2010 and largest market by 2050
Projected CAGR of 16% to 19% for 2005-2010
Source: IMS, Pharmexec.com
Slide 7
China Pharma
Chinese Generic Companies Dominate the Industry
About 80% of drugs sold in China are generics
China’s Drug Administration Law
• Drugs that have never been manufactured in China are new drugs
Imported medicines are prohibited or restricted from China’s social medical insurance
Domestic company market share: 65%
Foreign company market share: 35%
Source: VOI Consulting, Inc., 2005 PharmaHandbook, Citigroup SmithBarney
Slide 8
China Pharma
Growing Western Medicines Segment Dominates the Market
Western medicines and biologics segment makes up 74% of China’s drug market, or US$ 11B* and is growing at double digit rates
Traditional Chinese medicines make up 26% of China’s drug market
74%
26%WesternMedicines
TraditionalChineseMedicines
* 2004, ex-manufacturer level Source: VOI Consulting, Inc., 2005 PharmaHandbook, Citigroup SmithBarney, JPMorgan
• China Pharma’s generic drug strategy focuses on Western medicines
• This sector achieved 20% annualized growth between 1996 and 2002
Slide 9
China Pharma
Highly Fragmented Pharma Market Provides Opportunity for Growth
There are over 5,000 companies in the Chinese pharmaceutical market
The top ten companies contribute only 15% of total industry sales
15%
85%
Top 10 Companies Cumulative % of Total Industry Sales
Cumulative % of Total Industry Sales of Remainder of Companies
Source: JPMorgan
• CPHI is positioned to gain market share:
• Robust portfolio and pipeline of new drugs
• Wide distribution network• Modern GMP-certified
production facilities• Expertise and experience
with the SFDA and approval process
Slide 10
China Pharma
Low Cost/High Margin Generic Drug Business Model
Off-patent global drugs with $1+ billion
cumulative sales
Reformulation & Chinese Patent
Protection
5 Year Barrier to Entry
• Select off-patent global drugs
• Each drug has cumulative global sales of $1+ billion
• Reformulate these drugs
• Obtain authorization from China’s State Food and Drug Administration (SFDA)
• Obtain Chinese patent protection
• Chinese patent protection applies for 3 years
• 2-year ramp up period for a competitor to pursue a drug that China Pharma is already marketing
• China Pharma is GMP certified – new competitors must go through the GMP certification process
Slide 11
China Pharma
Patient Marketing Focus Forms a Competitive Advantage
Target patient group
China Pharma customizes the delivery system
andmarketing
for productsbased on the
targetpatient group
Maintaining various patient focused delivery systems enhances China Pharma’s competitive position in the market
Types of delivery include:• Tablets• Capsules• Injectables• Granules• Oral fluids (suspension)
• Freeze dried (Lyopholized injectables)
Slide 12
China Pharma
Strong Pipeline with Therapeutic Focus
Three major therapeutic areas:
Cardiovascular and Cerebrovascular diseases
Infectious diseases
Central nervous system (CNS) diseases
Treats the 1st and 3rd leading causes
of death in China
Source: New England Journal of Medicine, Volume 353:1124-1134, September 15, 2005, Number 11, ”Major Causes of Death Among Men and Women in China”
Slide 13
China Pharma
Diverse Product Portfolio
Treatment Products
CNS and Neurology Neurotrophicpeptide GastrodinOzagrel
Buflomedil
Infectious Diseases CefaclorClarithromycinAndrographolide
RoxithromycinpHGF
Nutritional Supplement rhaFGF Vitamin B6
Flu and Cold Pusen OK – 1st to market OTC product comparable to Aleve
Full list available from China Pharma
Slide 14
China Pharma
Newly Launched Drugs Treat High Incidence Conditions
Pusen OK
Gastrodin
Hepatocyte Growth-promoting Factor (pHGF)
Treatment: Flu (OTC) Launched: Q4 2005
Treatment: Headaches and other CNS symptoms
Launched: Q1 2006
Treatment: Promotes repair and growth in liver cells and is indicated for the adjunct treatment of hepatitis at various stages
Launched: Q1 2006
At 10%, China has one of the highest carrier rates of hepatitis B in the world Source: WHO
Ozagrel Treatment: acute strokes Launched: Q3 2006
Slide 15
China Pharma
Granisetron hydrochloride
Propylgallate
Alginic Sodium Diester
Treatment: prevention of nausea and vomiting associated with radiation treatment and chemotherapy in cancer patients.
Treatment: prophylaxis and treatment for coronary heart
disease, cerebral embolism and thrombophlebitis after surgery
Treatment: ischemic cardiovascular and
cerebrovascular diseases, and high lipid levels in the blood
Cardiovascular & Cerebrovascular
Medicine
Recently Approved Drugs Maintain Focus on Leading Causes of Death
Slide 16
China Pharma
China Pharma (CPHI)
Chinese Academy of Sciences
China University of Pharmaceuticals
Academy of Military Medical Science
Chongqing Pharmaceutical Research Institute
China Sichuan University
Joint R&D
Research and Development is Supported by Leading Institutions
China Pharma retains ownership rights to all resulting intellectual property
Slide 17
China Pharma
Scalable Modern Production Facilities with Multiple Production Lines
Scalable GMP certified manufacturing facilities with multiple product lines in Haikou City, China
China Pharma has invested $6.25M in expansion, upgrades, and GMP certification
Eight modern production lines with capacity to meet future demand
Plans to invest $3M to expand manufacturing capacity in 2007 for a production line dedicated to antibiotics
Slide 18
China Pharma
Expansive Distribution Network Reaches Main Market Channels
China Pharma sells directly to hospitals and drug stores via a dedicated sales and marketing team:
• 16 sales offices and approximately 550 agents
• Products are currently sold throughout China
85%
15%
Drugstores as %total sales
Hospitals as %total sales
Source: VOI Consulting, Inc., 2005 PharmaHandbook, Citigroup SmithBarney
Slide 19
China Pharma
China’s public health insurance regime provides reimbursement for up to 100% of drug prices
The Chinese government recently expanded health insurance coverage to include rural populations in its New Rural Cooperative Medical-care System (CMS), thus opening up a potential new multi-billion dollar drug market
All of China Pharma’s prescription drugs are on the national reimbursement list, and the Company will benefit most from the New Rural CMS
New Rural Cooperative Medical Care System (CMS) Enhances China Pharma’s Market
Positioning
Slide 20
China Pharma
Focus on billion dollar generic drug market Increase development of high margin biotechnology and brand-name drugs Robust and diverse R&D pipeline Increased manufacturing capacity and specialization Expanded marketing and promotion New product lines and related R&D including: • Chemical drugs
• Biologics
• Traditional Chinese medicines
Strategy for Growth
Slide 21
China Pharma
Experienced Management Team
Ms. Zhilin Li
President and CEO
Founder of Helpson (wholly owned subsidiary of China Pharma)Chairman and CEO of Helpson since 1993Formerly the president of Haikou Bio-engineering Institute, and the vice
president of the Sichuan Institute of Biology Graduated from Sichuan University in biology
Mr. Xinhua Wu
CFO
CFO since October 2005CFO of Helpson since 1999CFO and assistant to the CEO at Hainan Guobang Enterprises Inc. from
1992 to 1999Graduated from the University of Wales with an MBA
Ms Yao Huang
CSO
Started at Helpson in 1994Certified senior engineer and registered pharmacistGraduated from Chengdu Chinese Medicine and Pharmaceutics
UniversityOver 20 years professional experience in pharmaceutical manufacturing
Ms. Jian Yang
Secretary of Board
Secretary since October 2005 Founder and director of Helpson Former researcher at the Sichuan Institute of Biology Vice president of Haikou Biomedicine Engineering Co., Ltd. in 1991 Graduated from the University of Wales with an MBA
Slide 22
China PharmaStrong Top Line Growth
Unaudited financial data provided by China Pharma. The information provided is not intended to reflect U.S. GAAP and is provided for informational purposes only. On June 16, 2005, Onny acquired Hainan Helpson Medical & Biotechnology Co., Ltd. (“Helpson”), which is the main operating unit of China Pharma. The financial statements reflected in SEC filings include accounts and operations of Helpson from the date of its acquisition on June 16, 2005. For additional information please refer to the notes accompanying the financial statement in the 10K SEC filings.
$3.76
$7.74
$14.10 $13.72
YE03 YE04 YE05 9 Mos 2006
2 yr CAGR 93.4%
$ million
Slide 23
China PharmaIncreasing Gross Profits
$1.91
$3.12
$6.51 $6.57
YE03 YE04 YE05 9 Mos 2006
Unaudited financial data provided by China Pharma. The information provided is not intended to reflect U.S. GAAP and is provided for informational purposes only. On June 16, 2005, Onny acquired Hainan Helpson Medical & Biotechnology Co., Ltd. (“Helpson”), which is the main operating unit of China Pharma. The financial statements reflected in SEC filings include accounts and operations of Helpson from the date of its acquisition on June 16, 2005. For additional information please refer to the notes accompanying the financial statement in the 10K SEC filings.
2 yr CAGR 84.7%
$ million
Slide 24
China PharmaGrowing Net Income
$1.01
$2.34
$5.78$5.16
YE03 YE04 YE05 9 Mos 2006
Unaudited financial data provided by China Pharma. The information provided is not intended to reflect U.S. GAAP and is provided for informational purposes only. On June 16, 2005, Onny acquired Hainan Helpson Medical & Biotechnology Co., Ltd. (“Helpson”), which is the main operating unit of China Pharma. The financial statements reflected in SEC filings include accounts and operations of Helpson from the date of its acquisition on June 16, 2005. For additional information please refer to the notes accompanying the financial statement in the 10K SEC filings.
2 yr CAGR 133.5%
$ million
Slide 25
China PharmaAttractive Gross and Net Margins
Gross Margin
50.7%40.4%
46.2% 47.9%
YE03 YE04 YE05 9 Mos 2006
Unaudited financial data provided by China Pharma. The information is not intended to reflect U.S. GAAP and is provided for informational purposes only. On June 16, 2005, Onny acquired Hainan Helpson Medical & Biotechnology Co., Ltd. (“Helpson”), which is the main operating unit of China Pharma. The financial statements reflected in SEC filings included accounts and operations of Helpson from the date of its acquisition on June 16, 2005. For additional information please refer to the notes accompanying the financial statement in the 10k SEC filings.
Profit Margin
28.2% 30.2%41.1% 37.6%
YE03 YE04 YE05 9 Mos 2006
Slide 26
China Pharma
Income Statement
In $millions Q32006
% of sales
Q32005
% of sales
9 Mos 2006
% of sales
Revenues 5.0 100% 2.6 100% 13.7 100%
COGS 2.5 50% 1.6 62% 7.2 52%
Gross Profit 2.5 50% 1.0 38% 6.6 48%
Operating Exps. .4 8% 0.3 11% 0.6 5%
Operating Income 2.1 41% 0.7 27% 5.9 43%
Net Income 1.7 34% 0.5 20% 5.1 37%
Slide 27
China Pharma
Solid Balance Sheet with No Debt
In $millions Q3 2006 FY 2005
Current Assets 22.5 14.5
Working Capital 14.2 8.7
Current Liabilities 8.4 5.8
Long-term Liabilities 0.03 0.03
Shareholders’ Equity 17.1 11.7
Slide 28
China Pharma
Investment Highlights
Profitable company with a low cost/high margin business model
Rapid top line growth and increasing profitability
Positioned within the largest segments of the Chinese pharmaceutical market
Robust portfolio and pipeline of approximately 30 drugs that address large patient populations
State-of-art modern manufacturing facilities with multiple production lines and capacity to meet future growth
Industry dynamics support growth strategy