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Company Presentation John Dawson Maddy Scott July 2004

Company Presentation John Dawson Maddy Scott July 2004. Contents. Introduction Recent Financial Performance Growth Strategy Marketing Investments Development Investments Summary. Alliance Management. John Dawson, Managing Director

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Company Presentation John Dawson Maddy Scott July 2004

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  1. Company Presentation John Dawson Maddy Scott July 2004

  2. Contents • Introduction • Recent Financial Performance • Growth Strategy • Marketing Investments • Development Investments • Summary

  3. Alliance Management John Dawson, Managing Director Pharmacist, MSc Finance; 33yrs sector experience, board member, controlling shareholder, 7 yrs with Alliance • Maddy Scott, Finance Director • ACCA; 16 yrs experience across manufacturing and service industries, board member, company secretary, 5 yrs with Alliance Tony Booley, Sales & Marketing Director BSc Physiology, MBA, Chartered Marketer; 23yrs sector experience, board member, shareholder, 5 yrs with Alliance

  4. Alliance Management Sam Madden, Technical & Regulatory Director BSc Biochem/Toxicol, MSc Biopharmacy, 24yrs sector experience across wide base; board member, shareholder, 7 yrs with Alliance John Barber, Director of Scientific Affairs BSc Pharmacology, MSc Information Science; 18yrs sector experience, 4 yrs with Alliance Andrew Dean, Business Development Director BSc Chemistry and Business; 10yrs sector experience, marketing & sales management, 1 yr with Alliance

  5. Alliance Non Executive Directors • Michael Gatenby, Non Executive Chairman • MA. FCA ex-director of Hill Samuel and Co, ex-vice Chairman of Charterhouse Bank. Holds a number of non executive directorships • Paul Ranson, Non Executive Director • LL.B Barrister Solicitor. 20 years sector experience, board member

  6. Growth via 6 acquisition deals between Jan ‘99 & Feb ‘04 Trading started June 1998 Listed on AIM Dec 2003 Alliance History

  7. Naseptin Occlusal Pragmatar Slow-K Biorphen Distamine Aquadrate Nu-Seals 16 brands Symmetrel Alphaderm Acnisal Broflex Alliance Acquisitions Pentrax Meted Potassiumdeficiencies Rheumatoidarthritis Enteric coated aspirin 4 Derma Brands Parkinson’s disease Creams for dry skin and eczema Fostering arrangement £2.1 M £9 M £0.9 M £2.1 M £0.5 M £4 M

  8. Organisational Development 1. Big pharma experience with small company speed and flexibility £10m sales, 27 brands and 2 development projects run by 13 people Outsourced Operations 2. Progressive, stepwise development of resources and range of operations Manufacturing Strategic HQ Field Force 14 employees 3. Advantageous use of outsourcing Clinical Trials Distribution

  9. Recent Financial Performance

  10. Sales - Growth to date

  11. 03/04 Cash Sales by Brand

  12. 3.Growth to-date- gross margins • From the first fostering deal to date gross margins have more than doubled as fully acquired products deliver substantially higher margins than fostered ones • Now, over 85% of gross margin comes from acquired products

  13. Operational Performance

  14. Operational Financial Performance 25% growth 8% like for like 17% impact of full year on 2002 acquisitions

  15. Amortisation, issue costs & exceptional items

  16. Balance Sheet * Alliance’s acquired brands

  17. Debt structure (gross)

  18. Cashflow 1

  19. Cashflow 2

  20. EPS

  21. Alliance Strategy • Selective acquisition of cash-generative brands • In-licensing of launch opportunities from overseas R&D companies • Creation of launch opportunities by limited end-stage development projects

  22. Strategy 1: Brand Acquisitions • Niche pharma Rx brands have a long life • Target profile: • Stable historic sales pattern • Low promotional investment • Ungenericised • Big impact on P&L

  23. Current Growth Projects Marketing Investment • Nu-Seals 75 – Ireland / Cardiovascular • £0.3m • Symmetrel – UK / Parkinson’s Disease • £0.7m • Dermatology • £0.2m

  24. Nu-Seals Opportunity • Rapidly growing market (28% CAGR) • Heart disease • No. 1 killer in Ireland • Government initiatives • Ageing population 2020: 1m people over 55 2010: 833k people over 55 2002: 782k people over 55 • Nu-Seals 75 • £2.3m sales in Ireland • 15% increase year 02/04 • 70% of antiplatelet market • 84% of low dose aspirin market • Ireland highly branded market

  25. Nu-Seals 75 Sales Ex Irish Warehouse Monthly sales MAT Sales

  26. Symmetrel UK Opportunity • Acquired from Novartis in Oct 2001 • Current sales £1.2m • Parkinson’s disease market • £80m • 120,000 patients • Symmetrel renaissance in PD • 50 papers specifically on amantadine in PD in the last 5 years • The only nmda antagonist for PD • Dyskinesias • Niche segment 15,000 potential patients • Unmet needs

  27. SymmetrelImplementation • Founded new business unit in Dec 2003 • Highly targeted campaign • Key opinion leader endorsement • Neurologist reaction positive • Roll out message to less specialised physicians

  28. Naseptin Dermatology • Acquisition of Dermapharm Ltd • 8 derm brands sales £1.7m • Currently promoting brands ex Dermapharm • Planning additional growth utilising existing infrastructure & alliances Aquadrate Meted Alphaderm Acnisal Pentrax Pragmatar Occlusal

  29. Partner Territory Products Strategy Market Size Apr 2003 UK & RoI Niche Hospital Generics Leverage on hospital tendering £35m Nov 2003 UK, RoI, Scandinavia Dermatology Pipeline Building Dermatology Portfolio* £110m Strategy 2: In-licensing • *Adds to current portfolio: • - Alphaderm, Aquadrate, Pragmatar • - Occlusal, Acnisal, Meted, Pentrax – ex Dermapharm

  30. Strategy 3: Product Developments • Two low risk developments: • APL 202(intra-vaginal misoprostol for induction of labour) • APL 510(1.5mg SR melatonin for sleep disorders) • Smaller investment reaches market first • Proof of principle well known on each • Both already used “off licence” • Developments funded and underway • EU registration strategy • Possible introductions in H2 2005 and H2 2006 • 10 yr data protection for larger opportunity (APL 510) • Commercialisation strategy in place

  31. APL 202 – Market Background • Around 20-25% of labours in UK (150,000 - 175,000 pa)are induced (many more are augmented) • Two drug interventions in assisted labour • 1. Dinoprostone (a prostaglandin) for induction • “Ripens” (softens) cervix • Stimulates uterus to contract • 2. (Syntocinon – Alliance Pharma) for induction and augmentation • Is used to stimulate uterus to contract (if cervix is ripe) • Maintains contractions after labour has been started • Improvements sought over dinoprostone(ex market research) • Greater efficacy (more predictability, more deliveries achieved within 24hrs) • Reduced need for Caesarean sections • No need for refrigeration of the drug • Suitable for home initiation

  32. APL 202 – Current Knowledge on Misoprostol • Originally introduced to reduce gastric acid secretions • Large bibliography in obstetrics • Early usage was given orally • Current preference is for vaginal administration • Local action • Reduced side-effects • Some trials show greater efficacy than dinoprostone • Published trials unsuitable for registration • High awareness • Already used “off-licence” • But requires 3 serial cuts to the oral tablet (200mcg to 25mcg) • Does not require refrigeration

  33. APL 202 – Status of Development • Clinical Trial Application submitted • Ethics Committee Application submitted • Trialists currently being recruited (multi-centre) • Trials expected to commence September 2004 • Marketing Authorisation Application H1 2005 • Possible introduction H2 2005 • Low development cost (<£1m)

  34. APL 202 - Commercialisation • Alliance Pharma to market in UK & Ireland • Existing Specialist Hospital sales force in UK • Existing GP / Hospital sales force in Ireland • Introduction is eagerly awaited • Specialist marketing – low cost • Will probably license out in rest of EU • Current EU labour induction market estimated at £32m

  35. APL 510 – Market Background (Sleep Disorders) • Sleep disorders are of many types • Anti-histamines are available OTC • GPs (and patients) are reluctant to use current therapies • Benzodiazepines • concerns over habituation and hangover effects • seen as unsuitable for children • Nevertheless UK prescription hypnotics market is £46m • Key product improvements desired (ex market research) • Non-addictive, especially for long term usage • No drowsiness or hangover the next day • Particularly for school children, teenagers and working adults • Product that will restore sleep to a normal pattern

  36. APL 510 – Market Background (Melatonin) • Melatonin freely available OTC in USA • Classified by FDA as a nutritional supplement • Melatonin sales banned in EU • Needs to be registered as a medicine • Melatonin used “off licence” in UK • Initiated by NHS specialists • Patient-specific usage continued by GPs • “Named patient” supply regulated by Dept of Health • manufactured under a “Specials” licence • controlled importation • Usage estimated at £3-4m per annum • Currently melatonin used mainly for sleep disorders in • Children with Special Needs ( a wide variety of conditions) • Blind patients

  37. APL 510 – Current Knowledge on Melatonin • Melatonin – hormone that regulates circadian rhythm (body clock) • Therapeutic melatonin has been shown to promote sleep in many different sleep disorders • large bibliography, but unsuitable for registration • Seen as a “natural” product • Current prescribers (ex market research) • Are very enthusiastic about its results • Biggest complaint is restrictions imposed by not having a marketing authorisation • Seek a formulation that is quick acting but has a prolonged release • Highawareness in GPs (ex market research) • 100% awareness • >50% had been involved in its usage via specialists

  38. APL 510 – Status of Development • Special release formulation has been developed • Phase 1 trials in human volunteers completed • Rapid production of therapeutic blood levels • Blood levels then maintained for 5 hours • Phase 3 clinical trials to commence H2 2004 • Regulatory submission planned for H1 2006 • Possible introduction H2 2006 • Will gain 10 yr data protection in EU regulatory system • Moderate development costs (£4-5m)

  39. Pharmacokinetics studyPerformance of surge-sustained formulation

  40. APL 510 - Commercialisation • Alliance Pharma to market in UK & Ireland • To Specialists initially to gain endorsement for GPs • Will need GP sales force to accompany Hospital sales force • Existing GP / Hospital sales force in Ireland • GP marketing – significant investment • License out in rest of EU • Down payments plus royalty stream • EU sleep disorders market estimated at £500m

  41. Summary • Capable & experienced management • Profitable & growing base business • Making good progress on a clear growth strategy • Acquire cash-generative brands • In-license launch opportunities • Develop launch opportunities

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