DUOPHARMA BIOTECH BERHAD (formerly known as CCM Duopharma Biotech - - PowerPoint PPT Presentation

DUOPHARMA BIOTECH BERHAD

(formerly known as CCM Duopharma Biotech Berhad)

INVESTORS RELATION BRIEFING 5 SEPTEMBER 2019

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Disclaimer

This presentation may contain forward-looking statements by Duopharma Biotech Berhad that reflect management’s current expectations, beliefs, intentions or strategies regarding the future and assumptions in light of currently available information. These statements are based on various assumptions and made subject to a number of risks, uncertainties and contingencies. Actual results, performance or achievements may differ materially and significantly from those discussed in the forward-looking statements. Such statements are not and should not be construed as a representation, warranty or undertaking as to the future performance or achievements of Duopharma Biotech Berhad and Duopharma Biotech Berhad assumes no

• bligation or responsibility to update any such statements.

No representation or warranty (either express or implied) is given by or on behalf of Duopharma Biotech Berhad or its related corporations (including without limitation, their respective shareholders, directors, officers, employees, agents, partners, associates and advisers) (collectively, the "Parties") as to the quality, accuracy, reliability or completeness of the information contained in this presentation (collectively, the "Information"), or that reasonable care has been taken in compiling or preparing the Information. None of the Parties shall be liable or responsible for any budget, forecast or forward-looking statements or other projections of any nature or any opinion which may have been expressed in the Information. The Information is and shall remain the exclusive property of Duopharma Biotech Berhad and nothing herein shall give, or shall be construed as giving, to any recipient(s) or party any right, title, ownership, interest, licence or any other right whatsoever in or to the Information herein. The recipient(s) acknowledges and agrees that this presentation and the Information are confidential and shall be held in complete confidence by the recipient(s). No part of this presentation is intended to or construed as an offer, recommendation or invitation to subscribe for or purchase any securities in Duopharma Biotech Berhad.

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Chemical Company of Malaysia Berhad (“CCMB”) acquired Duopharma Biotech Berhad, the listed entity , incorporated in 2000. Duopharma was rebranded to CCM Duopharma Biotech (“CCMD”). CCM Pharma Sdn Bhd acquired the assets and brands of Malayan Pharma. CCMB underwent a corporate restructuring. All of its pharmaceutical subsidiaries were placed under CCMD. CCM Duopharma de-merged from CCMB. Therefore, CCMD became an independent public listed company. CCMD has changed its name to Duopharma Biotech Berhad (“Duopharma Biotech”).

Jo Journey of f Duopharma Biotech Berhad

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FY 2005 FY 2006 FY 2007 FY 2015 28 DEC 2017 25 FEB 2019

Im Implications of f the De-merger

We are UNABLE to carry CCM brand / name We are REQUIRED to change the company name and its subsidiaries We are REQUIRED to have our own corporate identity We are REQUIRED to establish our own vision and mission

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Logo Description

Shape ▪ Modern ▪ Symbolises innovation across every aspect of the business ▪ Six sides represent the company’s six core values Letter ‘D’ and ‘B’ inside the hexagon ▪ D and B stand for ‘Duopharma’ and ‘Biotech’ Colour of the logo ▪ Logo is rendered in bold red, the colour of passion Name of Duopharma at the bottom ▪ Expressed in a font that perfectly balances rounded shapes ▪ “Duo” represents the company’s two main businesses – prescription medicines and consumer healthcare products

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New Vision, Mission and Tagline

Providing smarter solutions for a healthier life A leading Healthcare Group providing quality and innovative solutions

New VISION New MISSION New TAGLINE

Smarter Solutions. Healthier Life.

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Change of f Name of Company

Old Company Name New Company Name Status CCM Pharmaceuticals

• Sdn. Bhd.

Duopharma Marketing

• Sdn. Bhd.

Effective from 26 December 2018 Upha Pharmaceutical Manufacturing (M)

• Sdn. Bhd.

Duopharma Manufacturing (Bangi) Sdn. Bhd. Effective from 26 December 2018 Innovax Sdn. Bhd. Duopharma Innovation

• Sdn. Bhd.

Effective from 26 December 2018 CCM Biopharma Sdn. Bhd. Duopharma HAPI Sdn. Bhd. Effective from 26 December 2018 CCM Pharma Sdn. Bhd. Duopharma Manufacturing (Glenmarie) Sdn. Bhd. Effective from 26 December 2018

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Old Company Name New Company Name Status Duopharma (M) Sendirian Berhad Duopharma (M) Sendirian Berhad No change to company name Sentosa Pharmacy Sdn. Bhd. Sentosa Pharmacy Sdn. Bhd. No change to company name Unique Pharmacy (Penang)

• Sdn. Bhd.

Unique Pharmacy (Penang)

• Sdn. Bhd.

No change to company name Negeri Pharmacy Sdn. Bhd. Negeri Pharmacy Sdn. Bhd. No change to company name

Change of f Name of Company

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Old Company Name New Company Name Status CCM Pharmaceuticals (S)

• Pte. Ltd.

Duopharma (Singapore)

• Pte. Ltd.

Effective from 4 January 2019 CCM International (Philippines), Inc. DB (Philippines), Inc. Effective from 15 February 2019 CCM Duopharma Biotech Berhad Duopharma Biotech Berhad Effective from 25 February 2019 Unique Pharmacy (Ipoh)

• Sdn. Bhd.

Duopharma Consumer Healthcare Sdn Bhd Effective from 21 June 2019

Change of f Name of Company

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Corporate Structure

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Shareholding Stru ructure

PNB, 45.4% Amanahraya Trustees Berhad,ASB, 5.8% EPF, 7.3% Others, 41.5%

Note: Shareholding as at 31 July 2019

DPHARMA (Stock Code – 7148) Market capitalization on 29.08.2019 = RM 965.8 mil Share price = RM 1.42

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Board of f Directors

Non-Independent & Non- Executive Chairman Tan Sri Datin Paduka Siti Sa'diah Binti Sh Bakir Independent Non- Executive Director Encik Razalee bin Amin Independent and Non- Executive Director Dato' Eisah Binti A. Rahman Executive Director Group Managing Director Encik Leonard Ariff bin Abdul Shatar Independent Non- Executive Director Datuk Nik Moustpha bin Hj Nik Hassan Senior Independent Non- Executive Director Dato' Mohamad Kamarudin bin Hassan Independent Non- Executive Director Puan Zaiton binti Jamaluddin Non-Independent and Non-Executive Datuk Mohd Radzif Bin Mohd Yunus

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Board of f Directors

STRUCTURE

Board of Directors

Nomination and Remuneration Committee

Chairman: Dato’ Mohamad Kamarudin bin Hassan

Audit and Integrity Committee

Chairman: Encik Razalee bin Amin

Risk Management and Sustainability Committee

Chairman: Datuk Mohd Radzif bin Mohd Yunus

Halal Committee

Chairman: Datuk Nik Moustpha bin Hj Nik Hassan

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Group Management Committee

Leonard Ariff Abdul Shatar Group Managing Director

Wan Amir-Jeffery Wan Abdul Majid Chief Operating Officer Billy Urudra Chief Commercial Officer Chek Wu Kong Chief Financial Officer Ng Su Yee Chief Technical Officer Krisnakumara-Reddi Chief Manufacturing Officer Ibrahim Hussin Salleh Chief Legal Officer Anita binti Esa Head, Group Risk Management Rama Sockalingam Nagappan Head, Group Internal Audit & Integrity 14

Financial Highlights

(in RM'million) 2016 2017 2018 YTD June 2019 Non-current assets 295.3 348.6 469.0 479.2 Current assets 366.2 356.6 367.3 431.5 Equities 454.5 479.9 481.0 503.7 Liabilities 206.9 225.4 355.3 407.0 Gearing 0.25x 0.27x 0.51x 0.52x Return on Equity 5.9% 8.8% 9.9% 5.6% (H1 2019) Internal Restructuring completed on 24 May 2018 enables the Group to be more nimble in securing potential business opportunities and more tax efficient.

2016 2017 2018 YTD June 2019 PBT 31.5 51.8 59.7 37.1 PAT 26.8 42.5 47.6 28.4 Revenue 312.9 468.0 498.7 295.9 100 200 300 400 500 600 10 20 30 40 50 60 70 RM’million RM’ million PBT PAT Revenue

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YTD June 2019 Revenue : RM 295.85 mil

Export 7%

Local (Private) 41%

Note: Duopharma Biotech’s top export markets for first half of FY2019 (% based on export revenue): 1.Singapore – 29.1% (RM6.4mil) 2.Middle East – 18.1% (RM4.0mil) 3.Philippines – 17.6% (RM3.9mil)

Local (Government) 52%

Fin inancial Hig ighlights – Segmental Sale les

Export 8% Local (Government) 49% 43% Local

(Private)

FY 2017 Revenue : RM 467.99 mil Export 8% Local (Private) 42% Local (Government) 50% FY 2018 Revenue : RM 498.72 mil

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Key Highlights

KEY HIGHLIGHTS

• No. 1 local pharma company in terms of volume and No.2 in terms of sales and market share (Source: IQVIA Report, June

2019). Continuous collaboration and partnering with key pharma players i.e. Biocon, PanGen Biotech, Natco & Becton Dickinson. Expanded our Hepatitis C portfolio with products from Natco. Flavettes maintained its leadership as the No.1 supplement in the Adults Vitamin C market in Malaysia with the Effervescent range overtaking all other brands in terms of market share. Champs maintained its leadership as the No.1 supplement in the Children Vitamin C market in Malaysia with the Champs Vitamin C range overtaking all other brands in terms of market share. Officially the first HAPI Plant in Malaysia, receiving the Certificate of GMP Compliance on 21st August 2019. Completed EPO Phase III clinical trials in April 2017. Completed Malaysia’s first biological pre-filled syringe line to manufacture the biosimilar. Obtained Registration approval for the product called Erysaa from the National Pharmaceutical Regulatory Agency (NPRA) on 31 January 2019. Erysaa has been successfully launched in April 2019.

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Completion of the issuance of 18,225,450 new Duopharma Biotech Shares at RM 1.20 per share on 29 July 2019 pursuant to the Dividend Reinvestment Plan which was applied to the Final Single Tier Dividend of 4 sen per ordinary share for the financial year ended 31 December 2018.

Completed Corporate Exercises

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In Investments in in Korea

Acquisition of 8.39% stake in PanGen Bioetch Inc, a Korean Biopharmaceutical company, from Chemical Company of Malaysia Berhad for RM 59.16 million ( KRW 16.35 billion ) via Share Sale Agreement dated 13 April 2018. Acquisition of 5.8% stake in SCM Lifescience, a Korean stem cell firm for RM 20.24 million (KRW 5.5 billion) via Share Subscription Agreement dated 25 October 2018.

WHY Korea?

• In line with our strategy to diversify into biotherapeutics and high-value niche

products.

• Their technology is applicable in Malaysia.
• Opportunity to have an early stage entry, before it becomes costly later on.
• As Korea recognises biotech technologies, Duopharma Biotech may be able to

monetise the technologies.

• Investee company has proof of concept product.
• Regulation on stem cell in Malaysia to start in 2021; timely to acquire stake in SCM.
• SCM has successfully passed technical evaluation by two Korean technical

evaluation agencies with rating of A and BBB. SCM is expected to proceed with submission of formal application for initial public offering (IPO) on KOSDAQ in Korea.

• Pursuant thereto, Duopharma Biotech will be converting all its Purchased

Redeemable Convertible Preference Shares (RCPS) into Common Shares.

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Bangi Plant

Established Workforce Types of Products

• 1976
• 904 people (including Sales & Marketing team)
• Ethical and CHC Products – mainly in oral solid dosages, soft gels,

effervescent products, liquids and cream forms

Klang Plant

Established Workforce Types of Products

• 1979
• 641 people
• Oral solid dosages, Eye Drops, Haemodialysis & SVI Products, LVI –

Irrigation solution products, dental cartridge and sterile cephalosporin

Glenmarie Plant

Established Workforce Types of Products

• 2008
• 62 people
• HAPI plant for Oncology
• Duopharma Innovation Sdn Bhd : the Group’s R&D Centre, is located in this

plant

Kenanga International Office (HQ)

Established Workforce

• 2018
• 33 people

Facilities Snapshot

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Singapore

Established Workforce

• 2005
• 10 people

Philippines

Established Workforce

• 2007
• 48 people

Indonesia

Established Workforce

• 2011
• 6 people

Regional Offices

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Research & Development (R (R&D)

Duopharma Innovation Sdn Bhd (“DISB”) is the Group’s dedicated in-house pharmaceutical R&D facility, centred independently at Glenmarie, Selangor. DISB is a state-of-the-art R&D centre accredited with the MS ISO/IEC 17025 standard. The centre also houses lab scale equipment for formulation trials, designed towards GMP requirements. DISB provides scientific and technical knowledge and skill in the development of high quality, safe and efficacious pharmaceutical products.

Duopharma Innovation Sdn Bhd

Formulation Analytical Regulatory Affairs Outsource Services

DISB has a pilot batch facility, which is essential during a product’s development and optimisation phase.

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Market Presence

Duopharma Biotech is the

• No. 1 company by Sales

volume Duopharma Biotech is ranked 2nd in terms of sales value, with a growth

• f 11.1%.

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Market Presence (I (International)

Year / RM’mil ASEAN Asia Pacific Rest of World FY 2016 27.0 3.0 6.1 FY 2017 26.6 4.4 6.4 FY 2018 26.1 4.5 7.9 YTD June 2019 15.9 1.7 4.2

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Four-Pronged Strategy

Diversify onto high-value biologicals and niche products Expand our range of Ethical and Consumer Healthcare (CHC) product portfolios Enhance our presence in the ASEAN region Upgrade of manufacturing facilities into world-class assets

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Challenges and Opportunities

• Commercialization of high value product in niche therapeutic areas such as oncology and bio-therapeutics
• Registration of Erysaa, an erythropoietin (EPO) biosimilar, has been approved by National Pharmaceutical

Regulatory Agency (NPRA) on 31 January 2019 and successfully launch in April 2019. Able to bid for government tender worth RM 10 – 15 million

• Registration of Trastuzumab, an oncology product has been approved
• Oncology facility to commence in Q4 2019
• Launch of mySalam, a national health protection scheme to increase access to healthcare services for the B40 income

population

• Launch of PeKa B40, a healthcare scheme which provides benefits for health screening, purchase of medical device aid

and payment incentives for completing cancer treatment

• Growing International Business segment

OPPORTUNITIES

• Insulin tender ( 3 + 2 ) ending in 2019. Engage with Ministry of Health to opt for 2 years extension
• APPL expiring by 30 November 2019
• Reduction in consumption
• Increasing cGMP requirements
• Short term revolving credit from OCBC
• Differences in regional regulations impacting growth of international businesses
• Expanding product portfolios (prohibitive BE and clinical costs)
• Strengthening USD resulting in higher cost of imported raw materials

CHALLENGES

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Proposed Medicine Price Control Mechanism by MOH

• In May 2019, the Cabinet has approved to regulate medicine prices in Malaysia.
• The Ministry of Health (MOH) is currently engaging stakeholders to ascertain the

appropriate model and price to apply.

• This move to curtail the expensive patented drugs will improve access to the

various treatments.

• As we produce affordable generic medicines, we opine that the proposed

medicine price control mechanism will not have major impact to Duopharma Biotech.

• However, further clarifications are pending from the MOH.

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New Products Pipeline

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Oncology Franchise Zuhera CHC New Products Champs Effervescent CHC New Products Flavettes Effervescent Diabetes Franchise Insulin Injection Renal Franchise Erythropoietin (EPO) Diabetes Franchise Insulin Glargine Injection

Project Updates – HAPI Plant

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GMP status

• Business license for Duopharma HAPI Sdn. Bhd is granted on 29th Mar 2019.
• GMP Pre-licensing audit by NPRA conducted on 16-17 Jul 2019. Granted GMP clearance on

8th Aug 2019.

• Quest 3+ system (product registration online system) has been updated to reflect

Duopharma HAPI as GMP certified plant on 9th Aug 2019.

• Official “Certificate of GMP Compliance” issued on 21st Aug 2019.

Product pipeline status ➢Change of site submission for 1st HAPI product done on 9th Aug 2019 and passed site screening on 16th Aug 2019. To proceed with PV batch on 29th August 2019. ➢Method transfer (analytical test qualification) of 2nd HAPI product started on 26th Aug 2019.

Project Updates – HAPI Plant

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Duopharma HAPI Sdn Bhd NPRA inspection on 16th -17th July 2019

Project Updates – K6 K6

• 97.0% completed.
• Remaining works :

➢ Main bridge casting ➢ Relocation of IWK sewerage pipe

• Planned building practical

completion by 8th Sept 2019.

• Tendered CCC inspection notification
• n 31st July 2019
• CCC inspection by Majlis

Perbandaran Klang by September 2019.

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Project Updates – K6 K6

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Project Updates – K6 K6

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Project Updates – K6 K6

Pick and Pack Area with Safety Barriers Installed

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Project Updates – K3 & K5 Substructure Works

K3 & K5

• Substructure works : 65% completed
• K3 basement beam completed.
• K5 basement beam progressing with rebar work.
• Planned completion by Week 1 of October 2019.
• Upon completion of substructure work, site will

be handed over to main building contractor.

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Project Updates – K3 & K5 Substructure Works

Ongoing Pile Cap Construction – Concreting work

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Project Updates – K3 & K5 Substructure Works

Anti-Termite work on Pile Cap Backfilling work

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Project Updates – 33kV SSU Update

33KV SSU

• 33 KV SSU 93.3% completed.
• Transformers and Switch Gears installed.
• Internal Full Load test started and is current
• n-going.
• Remaining works

➢ Construction of K4 Guard House ➢ Execution of HDD and laying of power cables ➢ TNB Energization

• Practical completion planned by September

2019.

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Project Updates – 33kV SSU Update

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Project Updates – 33kV SSU Update

33kV and 11kV Switchgears delivered

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Watsons Health, Wellness and Beauty Awards 2019

1)Best Market Penetration Campaign ( Flavettes Effervescent Glow )

• Effectiveness of the campaign in driving consumer off take

2)Most Wanted Chewable Vitamin C ( Flavettes Vitamin C 500mg )

• Chosen by Watsons customers

3)Most Wanted Garlic Supplement ( Naturalle Garlic 300 mg )

• Chosen by Watsons customers

Awards and Recognitions 2019

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Accreditations & Past Awards

GMP clearance by TGA (Australia) Certificate of GMP by Kingdom of Saudi Arabia FDA GMP – Manufacturing license by the National Pharmaceutical Regulatory Agency (NPRA) Malaysia Indonesian HALAL certification from Majelis Ulama Indonesia Malaysian HALAL certification from JAKIM based on the world’s first Halal Pharmaceutical Standards (MS2424:2012) MSWG ASEAN Corporate Governance Recognition 2017 - Excellence Award for Overall CG & Performance 2017 (Market Cap between RM300 Million to RM1 Billion) HR Asia Awards 2016 & 2017 & 2018 – Best Companies to Work for in Asia, 3 consecutive years.

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Recipient of the 2018 Frost & Sullivan award for the Malaysian “Pharmaceutical Company of the Year” and “Halal Pharmaceutical Company of the Year”.