Mayne Group LimitedABN AMRO Global Generic Pharmaceutical Conference
Mr Mark BissetVice President Global Business Development
9 March 2005Mumbai, India
Forward-Looking Statement
Comments will be made that are forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated. Economic, competitive, governmental, technological and other factors that may affect Mayne’s operations are discussed in our Securities and Exchange Commission Form 20F for the year ended 30 June 2004, and are incorporated here by reference. We undertake no obligation to release publicly any revisions to forward-looking statements as the result of subsequent events or developments.
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Agenda
• Mayne Group overview
• Mayne Pharma overview
• The Indian opportunity
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Mayne Group snapshot
Mayne Group Limited
ASX listed: $US 2.0 billion market capitalisation12,000 employees*
Pharmaceuticals Diagnostic Services Pharmacy
Mayne PharmaGlobal specialty and
generic injectable pharmaceuticals
Consumer productsNutraceutical and
OTC productsMedical Centres
Diagnostic Imaging
Pathology
Retail development
Wholesale distribution
4* As at 31 December 2004
Note: $AU amounts converted to $US at $US 0.70/$AU 1.00
Mayne’s business portfolio
• Focused on high growth and high return sectors in health
• Leading market positions established in each business• Portfolio benefits
– Diversification – risk reduction– Capital allocation – strong cash flow from Diagnostic
Services and Pharmacy support Pharma growth• Strong returns – each business is positioned to deliver
returns that build shareholder value
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Relative contribution of businesses
1H05 EBITA Contribution*$US 94 million**
Pharmaceuticals21%Pharmacy
58%
Diagnostics21%
Pharmacy14% Pharmaceuticals
51%
Diagnostics35%
1H05 Revenue Contribution*$US 1,384 million
* Based on 1H05 continuing business revenue and EBITA
** After unallocated items of $US 5.4 million and before significant item of $US 3.5 million
6Note: $AU amounts converted to $US at $US 0.70/$AU 1.00
Mayne Pharma
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Mayne Pharma snapshot
Faulding/DBL has more than 150 years experience in pharmaceuticals
Mayne acquired Fauldingin 2001
History
Americas EMEA Asia Pac40+ 60+ 115+
Approved products(oncology emphasis)
Products
Mulgrave, Australia (cytotoxic)Aguadilla, Puerto RicoBoulder, USA (API processing)Wasserburg, Germany
Manufacturing facilitiesFacilities
Direct: 20 countries, 5 continentsIndirect distribution: 30 countries
Geographic presencePlaces
1,900EmployeesPeople
$US 351 million (5 year CAGR: 22%)19.6% (5 year CAGR: 25%)
FY04 salesFY04 EBITA margin
Financials
Note: $AU amounts converted to $US at $US 0.70/$AU 1.00 8
Global growth strategy
LOW COST SUPPLY CHAIN
SPECIALTY PHARMACEUTICALS FOCUSProprietary products, branded generics, commodity generics, biogenerics
GEOGRAPHIC EXPANSION
INTERNAL DEVELOPMENT
ACQUISITION& IN-LICENSING
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Revenue by therapeutic class*
Hospital (injectable) specialist• Anaesthetics• Analgesics• Anti Infective Agents• Antibacterial Agents• Anticholinergic Agents• Anticoagulants/Antithrombotic Agents• Antidotes• Antiepileptic Agents• Antifungal Agents• Antihistamines• Antipsychotic Agents• Cardiovascular Agents• Diagnostic Agents• Hormone Replacement Therapies• Immunosuppressants• Labour Agents• Muscle Relaxants• Pain Management• Oncology • Vitamins, Mineral Supplements 10
Oncology
Other
Anti-Infectives
AnalgesicsAnaesthetics
Bone Modulating/ Oncology
* Based on FY04 revenues
Portfolio strategy
Moderately competitive, orderly market, longer life cycle, higher margins
Branded genericsHighly competitive, rapid price erosion, low margin
Commodity genericsLittle competition, high margins, long life cycle
Specialty proprietary
Key success factorsKey success factors Key success factors• Product/sales differentiation
provides barrier to entry• Low cost supply chain • Some clinical sales required
• Low cost supply chain/vertical integration
– Efficient R&D– Low cost API– Low cost manufacturing
• Broad portfolio• Broad geographic coverage
• Product efficacy/differentiation• Intellectual property protection• Clinical selling capability
Recent activitiesRecent activities Recent activities• Paxene® arrangement
with Ivax• MVI® acquisition in US• Biogenerics partnership with
PLIVA
• Indian partnerships– Intas, Strides,
Zydus Cadila• Internal development• Vertical integration• ROVI/continued geographic
expansion
• In-licensing activities in Australia (Kytril®, ELIGARD®)
Balance portfolio and profitability11
Current supply chain
R&DFill and finish manufacturing
API sourcing and
development
• Strong internal pipeline• Oncology
specialisation• Over 200 R&D staff
located globally• Regional expertise in
regulatory and IP
• Paclitaxel API processing facility, Boulder, USA
• Close relationships with selected external API suppliers
• FDA approved injectable manufacturing facilities in each of three core regions
• Mulgrave, Australia• Wasserburg,
Germany• Aguadilla, Puerto
Rico• Strong cytotoxic
capabilities at Mulgrave
Existing capabilities
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Product pipeline
Country Launches and Local Market Value* (LMV)
1,162
445
1,604
2,236
254
8277
66
0
500
1,000
1,500
2,000
2,500
FY05 FY06 FY07
LMV
($U
Sm)
0
20
40
60
80
100
Cou
ntry
laun
ches
Approved Submitted Pending submission Country launches
13* IMS data MAT June 04
Mayne Pharma: 1H05 revenue growth
• Continuing business revenue increased 38.3% on 1H04 to $US 228.5 million
• Strong growth in Americas and EMEA driven by:
– New product launches
– Acquisitions undertaken in FY04 (paclitaxel trifecta, MVI®
and Wasserburger)
Revenue
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61.065.6 69.2 73.2
106.2
61.344.5 61.0 54.2
45.447.3 34.9
0
50
100
150
200
250
2H03 1H04 2H04 1H05
($USm)
Asia Pacific Americas EMEA Discontinued
Note: $AU amounts converted to $US at $US 0.70/$AU 1.00
Pharma: 1H05 EBITA growth
• EBITA** growth 44% on 1H04
• EBITA margin** of 18.8% in mid-range of guidance of 17-20%
• 2H04 margin higher due to inclusion of $US 3.0 million Mylan settlement
EBITA*
* Continuing business** Excludes significant items
38.429.834.6 39.5
43.022.3%
18.1%22.0%
18.8%
17.3%
0
10
20
30
40
50
2H03 1H04 2H04 1H05
($USm)
0%
5%
10%
15%
20%
25%
EBITA (excluding significant items)EBITA (including significant items)EBITA margin (including significant items)EBITA Margin (excluding significant items)
15Note: $AU amounts converted to $US at $US 0.70/$AU 1.00
The Indian opportunity
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Pooling of strengths
High quality, low cost R&D and supply chain
Global sales and marketing and regulatory
expertise
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Global distribution platform
Mayne has a unique global footprint in generic injectable pharmaceuticals
Direct presenceDistribution arrangements
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Leading market positions
Mayne has leading market positions around the world in generic hospital pharmaceuticals
Source: IMS data adjusted for discounts & Mayne data. *Ranking excludes Spain, Portugal, Ireland, Greece.
• Clear market leader in generic injectable pharma in Australia
• Established positions in Thailand, Malaysia, Korea, Singapore, Taiwan, Hong Kong and China
Asia PacificRegional Leader
27% revenue
• Market leading position in generic injectables in continental Europe and UK
• #1 generic injectable oncology in UK & France
• #2 generic injectable oncology in Germany & Italy
• Only pan European generic injectable sales force
EMEAEmerging Leader*
46% revenue
• Emerging US business: #4 in generic injectable oncology
• #2 generic hospital player in Canada
AmericasGrowing Presence
27% revenue
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Regulatory expertise
• Global expertise in regulatory and IP across all major markets– Over 50 people employed in regulatory affairs in more
than 15 countries• Increased returns from having same product
approved in different jurisdictions– Five of top ten generic products are registered in all
three regions• Innovative and novel routes to product approval
– E.g. Multiple strengths and/or presentations
India’s quality credentials
• Highly skilled and motivated scientists• Experts in process chemistry through long history of
reverse engineering molecules• Growing experience with FDA / MHRA compliance• High quality manufacturing facilities with relatively low
capacity utilisation
India’s low-cost advantage• Cost benefits of API vertical
integration are not incorporated in the table• Savings of 35% in cost benefits
can be realised in raw materials (conservative estimate)
• Estimated savings in total typical costs of production: >40%
• Intellectual property (IP) constrains several key molecules from manufacture in Australia • India provides an IP advantage
to enable earlier commencement of manufacture to meet emerging markets
100130Total
11Others
527Wages
925Infrastructure
157Utilities
7070Raw Materials
Indian cost
Europe / US cost
Source: UBS report
R&D
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• Maintain control of strategically important molecules• Seeking relationships for R&D in low cost and generic-friendly
environments• Leverage Mayne’s regional expertise in regulatory and IPRecent developments• February 2005: Agreement with Strides Arcolab to develop and
manufacture a range of anti-infective products for Mayne to distribute in the US and Europe
• December 2004: Agreement with Strides Arcolab to contract develop and manufacture six specialised injectable, non-cytotoxic products for Mayne to market and distribute in the US market
• September 2004: Intas development and contract manufacturing agreement for an important cytotoxic pipeline product
R&D Fill and finish manufacturing
API sourcing and development
API sourcing and development
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• Vertically integrate into API development and manufacturing for strategically important molecules
• In-source v out-source: Balancing of objectives• Low development costs• Reliability of supply
Recent developments• December 2004: Zydus Cadila MOU to evaluate API and fill and finish
manufacturing facility in India• December 2003: Acquisition of Napro’s US paclitaxel API business
R&D Fill and finish manufacturing
API sourcing anddevelopment
• Security of IP• Margin enhancement
Fill and finish manufacturing
• Control manufacturing of core molecules• Existing manufacturing facilities – continued investment• Partnership or direct ownership in developing countries
• Contract manufacturing of• Non-core products• Commodity or low value products• Products in areas where Mayne has chosen not to develop expertise
Recent developments• December 2004: Zydus Cadila MOU to evaluate API and fill and finish
manufacturing facility in India• September 2004: Intas contract manufacturing agreement
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R&D Fill and finish manufacturing
API sourcing and development
Summary
• Seeking to marry Mayne Pharma’s unique global sales and marketing capabilities and regulatory expertise with a high quality, globally competitive supply chain– R&D– API development and manufacturing– Fill and finish manufacturing
• Mayne is positioning itself for long term success
Mayne Group LimitedABN AMRO Global Generic Pharmaceutical Conference
Mr Mark BissetVice President Global Business Development
9 March 2005Mumbai, India