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Company Presentation

Company Presentation. August 2012. The leading allergy specialist. with a history dating back to 1923. 9% 5 year CAGR. 75%. 5 year CAGR. 2011 EBITDA of EUR 55 million. 33% of global allergy immunotherapy market. 2011 Revenue of EUR 316 million. Strategic partnerships.

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Company Presentation

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  1. Company Presentation

    August 2012
  2. The leading allergy specialist with a history dating back to 1923 9% 5 year CAGR 75% 5 year CAGR 2011EBITDA of EUR 55 million 33% of global allergy immunotherapy market 2011 Revenue of EUR 316 million Strategic partnerships 1,800 employees Leading R&D pipelinewith proven technology
  3. Global reach through leveraged business platform ALK Merck Torii Expansion opportunities
  4. Modifying the allergic disease with allergy immunotherapy end of treatment Allergy symptoms Year 1 Year 2 Year 3 Year 4 Year 5 Desensitised immune system Control group GRAZAX® Cut the symptoms, treat the cause
  5. ALK’s base business Well-diversified product portfolio 10%*) Allergy diagnosis and treatment for allergic shock (adrenaline pen) 9%*) Tablet immunotherapy (AIT) ALK products: 600,000 patients in Europe 900,000 patients in North America 35%*) Sublingual immunotherapy (SLIT) 46%*) Subcutaneous immunotherapy (SCIT) *) of 2011 product sales
  6. Unmet medical need in allergy Significant burden to patients and society Allergic rhinoconjunctivitis (prevalence) Patients in poor control 17m 1.5m Treated with immunotherapy 12m 85m (23%) 3m 10m 60m (19%) 35m (27%) Population Japan Europe North America
  7. Meeting patient needs Poorly controlled allergy & asthma symptoms Prevention of asthma Underdiagnosis of allergy & asthma Allergy immunotherapy Prevention of new allergies Increasing prevalence of allergy & asthma Limited awareness of allergy immunotherapy Global need for allergy immunotherapy Growth
  8. Advancing the R&D pipeline & expanding into asthma
  9. Progress in R&D MITIZAX® advances in Japan and North America Preclinical Phase I Phase II Phase III Marketed Notes: 1) Merck holds the product rights for the North American markets 2) Torii holds the product rights for the Japanese market 3) Ragweed is currently only developed for North America 4) HDM: House Dust Mite 5) ARC: Allergic Rhinoconjunctivitis 6) Filing of registration application with the FDA expected in 2013
  10. Established partnerships in North America and Japan Clinical development, registration, marketing & sales TORII PHARMACEUTICAL CO., LTD. USD 55 million received in upfront and milestone payments USD 45 million future milestone payments USD 190 million in sales milestones Sales royalties undisclosed EUR 30 million upfront payment EUR 30 million milestones payments Sales milestone payments undisclosed Sales royalties undisclosed Product supply
  11. Expanding reach of GRAZAX® US filing expected in 2013 Disease modifying treatment effect Total daily rhinoconjunctivitis symptom score Licensed to Merck in North America Registration application submitted in Canada On-going Phase III trial to be completed in 2012 GAP: On-going landmark trial to investigate asthma prevention To be completed in 2015 End of treatment 32% 31% 31% 37% 44% Placebo GRAZAX®
  12. 45% Preventing disease progression Reducing risk of asthma 60 Subjects developing asthma at 3, 5, and 10 years(percentage of subjects; n=151) Control Alutard SQ * * * 40 OR=2.5 OR=2.5 OR=3.1 Subjects developing asthma (%) 20 ** p<0.05 0 0 1 2 3 4 5 6 7 8 9 10 10 years 0 3 5 Treatment Follow-up 1. Möller et al. JACI 2002;109:251-6 2. Jacobsen et al. Allergy 2007:62:943-8
  13. AIT’s potential for asthma prevention Randomisation End of GAP study End of treatment GRAZAX® Placebo 2010 2011 2012 2013 2014 2015 Treatment period Follow-up Screening
  14. Documented efficacy with ragweed AIT US filing expected in 2013 First-in-class documentation Two Phase III trials met efficacy endpoints Consistency between trials Well-tolerated treatment Adverse events similar to previous trials, no unexpected findings Large safety trial recently completed Clinical trials conducted by Merck Key efficacy results of ragweed AIT Phase III trials * Percentage reduction in totaldaily rhinoconjunctivitis symptom-medication score (amb 12 dosis), p ≤ 0.05 vs placebo Phase III, multicenter, double-blind, randomised, placebo-controlled. 1,350 adult patients with ragweed induced rhinoconjunctivitis Further data to be published at AAAAI (2-7 March 2012, Orlando) Data published at ACAAI (Nov 2011, Boston)
  15. MiTIZAX®Expanding into asthma treatment
  16. House dust mites - the world’s most common cause of allergy Europe, the USA and Japan: ~90 million sufferers China: ~100 million sufferers ~11% ~9% ~12% ~8% Total sales of HDM vaccines (EU): ~200 million EUR France/Germany: ~70%
  17. Clear link to asthma HDM allergy occurs year-round Strikes early in life UK survey of four year old children 13% sensitised to HDM 50% have already developed asthma 8 x higher risk of developing asthma if sensitised to HDM In general, ~50% of HDM allergics’ also have asthma
  18. A new treatment approach The development of MITIZAX® Phase I and II/III trials in Europe completed Primary endpoint (Phase II/III): reduction in use of inhaled corticosteroids (ICS) compared to placebo ICS reduction of 50% (p=0.004) Licensed to Merck in North America Phase II initiated Licensed to Torii in Japan Phase II/III trials initiated (1,800 patients) European Phase III development accelerated MITRA aimed at allergic asthma (800 pts.) MERIT aimed at allergic rhinitis (900 pts.)
  19. Immunotherapy’s path to mainstream Expanded AIT portfolio Extended indications: prevention of disease progression & of disease Today Sept. ’11 Sept. ’10 Moderate to severe grass allergy Multiple ‘moderate to servere’ allergies Multiple ‘mild, moderate & severe’ allergies and asthma GRAZAX®: 17 clinical trials completed Ragweed: 4 trials completed, 1 on-going HDM: 3 complete, 2 on-going Tree: 1 complete, 1 expected in 2012 Plus: Cat, Japanese Cedar GAP trials ITN trials SIW trials Existing prescriber base: Specialists Broader base of specialist prescribers: Strength of data – Breadth of portfolio Broader base of prescribers: Paediatricians & others
  20. Financial development Results H1 2012
  21. Q2 as expected Outlook 2012 unchanged Sales and earnings as expected Importantadvances in R&D activities in Europe, North America and Japan Unchangedoutlookfor 2012 Reversal of provision with regard to the divestment of Chr. Hansen A/S in 2005
  22. Revenue at 1.1 DKKb 3% growth in vaccine sales Special situations Phasing-out of SLIT sales in the Netherlands (-2 p.p.) Transition to Jext® Extraordinarily high level of income from partners in Q1 2011 Growth drivers SLIT and AIT in France SCIT in Central Europe AIT in Northern Europe +19% +2% 1.258 (1)% (34)% 1.122 (68)% +1 p.p. currency effect H1 2011 SCIT SLIT AIT Other products Other revenue H1 2012 DKKm Indicated growth rates are based on local currencies
  23. Operating profit (EBITDA) of 79 DKKm R&D activities accelerated Reported gross margin of 71% (74) Capacity costs up 11% to 780 DKKm Acceleration of R&D SM&A up due to increasedmarketing efforts in Q2 Negative effect from currencies 285 (11)% +1% 79* +24% +25% +5% Depr. EBITDA H1 2011 Revenue COGS R&D SM&A EBITDA H1 2012 Limited currency impact on EBITDA. *) Including other operating income/expenses. Indicated growth rates are based on reported currency DKKm
  24. Reversal of provision and adjustment of debt obligation Originates from sale of Chr. Hansen A/S in 2005 Usual representations and warranties Warranty period has expired Insurance coverage considered adequate Gain of 155 DKKm as “Net profit, past discontinued operations”
  25. Free cash flow of -166 DKKm Solid financial position +168 754 (162) (77) (95) 492* (91) Cash End 2011 Netprofit Non cash items Change inworking capital Cash flow frominvestingactivities Otherfinancing Cash 30 June 12 *) Including non-realised gain/(loss) on currencies and financial assets carried as cash and cash equivalents DKKm
  26. Delivering the growth strategy
  27. Strong and steady news stream 2012-13 New partnerships for Jext® and AIT outside Europe Results from AVANZ®Phase III clinical trial Base business Sept. ’11 Sept. ’10 Grass AIT regulatory review in Canada MITIZAX® results from MERIT Phase III trial MITIZAX® results from MITRA Phase III trial Tree AIT initiation of late-stage development in Europe HDM AIT initiation of next clinical trials in the USA Tree AIT results from Phase II trial in Europe Grass AIT filing in the USA Ragweed AIT filing in the USA Grass AIT: results from Phase III trial in North America R&D pipeline
  28. Driving long-term value Outlook 2012 2015 Beyond 2015 Vaccine sales +3-5% Revenue ≈ 323 EURm (2,400 DKKm) EBITDA > 40 EURm (300 DKKm) Accelerated R&D Revenue >400 EURm (3,000 DKKm) EBITDA >25% Growth drivers: AIT portfolio in EU, North America and Japan Asthma prevention Jext®outside EU Sales royalties from partnerships Milestone payments from partnerships Sales growth in base business Geographical expansion Accelerated R&D Compliance with regulatory requirements Acquisition of products and companies and new partnerships may provide additional upside
  29. Forward-looking statements This presentation contains forward-looking statements, including forecasts of future revenue and operating profit as well as expected business-related events. Such statements are subject to risks and uncertainties as various factors, some of which are beyond the control of the ALK Group, may cause actual results and performance to differ materially from the forecasts made in this presentation. Without being exhaustive, such factors include, e.g. general economic and business conditions, including legal issues, uncertainty relating to pricing, reimbursement rules, fluctuations in currencies and demand, changes in competitive factors and reliance on suppliers, but also factors such as side effects from the use of the company’s existing and future products since allergy immunotherapy may be associated with allergic reactions of differing extent, duration and severity.

  30. Thankyou for your attention

    Read more: www.alk-abello.com Per Plotnikof Director Head of Investor Relations Phone: +45 4574 7576 E-mail: ppidk@alk-abello.com
  31. Appendix
  32. Financial performance(1 EUR = 7.43 DKK) Figures have beenrestated due to new presentation of accounts in 2011 Total revenue EBITDA Gross profit Research and development Sales, marketing and administration Balance sheet
  33. ALK well-established market leader Global sales of allergy vaccines (800 EURm) Allergy vaccines according to geography Figures are based on internal estimates and analyses of local reporting, surveys and other publicly available material
  34. Market exclusivity secured through know-how, patents and regulation Bulk (API) production Extraction Purification Freeze drying Analysis Raw materials in Pollen House dust mite Animal dander Analysis High barriers of entrance Proprietary rights Patents Licensed rights (e.g. Zydis) Clinical data Trademarks Finished production Unique formulation Filling Analysis
  35. State of the art rawmaterialfacility secures independent sourcingcapacity
  36. New tablet API unit provides proprietary High-qualitypharmaceutical products
  37. Extension of tablet casting unit ensures Full control and capacity
  38. Packaging and distribution Capacity
  39. ALK – equity and shareholderstructure ALK (ALK B) listed on NASDAQ OMX Copenhagen (Reuters: ALKB.CO / Bloomberg: ALKB.DC) Number of sharesoutstanding: 10.1 million Twoshareclasses (A / B) Market Cap: ~460 EURm Largestshareholdergroups Lundbeck Foundation (40%), since 1987 ATP, Danish Labour Market Pension Fund (>5%) Otherinsitutitional investors (~30%) ~14,000 retail investors (~25%) Foreignownership: ~25% Domesticownership: ~75%
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