For personal use only. Acquisition of 23 Approved US Generic Drugs by IDT Australia Ltd November 2014

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1 Acquisition of 23 Approved US Generic Drugs by IDT Australia Ltd November 2014

2 SAFE HARBOUR This presentation contains forward-looking statements that are subject to risks and uncertainties. Such statements involve known and unknown risks that may cause the actual results, performance or achievements of IDT Australia Ltd to be materially different from the statements in this presentation. Actual results could differ materially depending on factors such as the availability of resources, the action of commercial partners, the timing and effects of regulatory activities, the strength of competition and the effectiveness of the Company s commercial strategy. 01

3 TRANSACTION OVERVIEW IDT Australia is acquiring 23 USFDA approved prescription generic drugs from a global generics company Total US Generic IMS market data sales for these product types of US$460m in 2013 Deal terms Total consideration US$18m US$13.5m upon settlement US$1.5m upon re-approval of first product Three US$1m milestones upon achievement of US$20m, US$40m and US$60m in aggregate net sales Acquisition to be funded via fully underwritten placement of A$15m shares to institutional & sophisticated investors & SPP of A$3m General Meeting of shareholders to approve fund raising scheduled for mid December 02

4 PRODUCT RANGE OVERVIEW 23 USFDA approved generic drug products owned by large multinational vendor Therapeutic areas include Neurology Infectious diseases Cardiovascular Respiratory Top 5 products represent ~50% of total IMS sales for the entire suite Rapid path to revenues (12-18 months) for initial cohort of products 03

5 PRODUCT DETAILS Product Dose Form Indication Class Aminophylline Tablet Asthma Respiratory Carbidopa & Levodopa Tablet Parkinson's Disease Neurology Ciprofloxacin Tablet Bacterial Infections Infectious Disease Clarithromycin ER Tablet Bacterial Infections Infectious Disease Dexamethasone Tablet Anti-Inflammatory Steroid Dextroamphetamine Tablet ADHD Neurology Diflunisal Tablet Osteoarthritis NSAID Dipyridamole Tablet Post Surgical Clots Cardiovascular Doxazosin Tablet Prostatic Hyperplasia Urology Etodolac Capsule Rheumatoid Arthritis Immune Etodolac ER ER Tablet Rheumatoid Arthritis Immune 04

6 PRODUCT DETAILS contd. Product Dose Form Indication Class Flecainide Tablet Tachycardia Cardiovascular Fluconazole Tablet Infectious Disease Infectious Disease Leucovorin Tablet Methotrexate Antidote Oncology Methoxsalen Capsule Vitilago Dermatology Mexiletine Capsule Arrhythmia Cardiovascular Nefazodone Tablet Depression Neurology Nortriptyline Capsule Depression Neurology Pindolol Tablet Hypertension Cardiovascular Prazosin Capsule Hypertension Cardiovascular Procainamide Capsule Arrhythmia Cardiovascular Procainamide ER ER Tablet Arrhythmia Cardiovascular Tetracycline Capsule Bacterial Infections Infectious Disease 05

7 US MARKET RE-ENTRY PROCESS Product dossiers will be transferred from vendor to IDT under instruction of the vendor to the FDA Tech transfer of the manufacturing methods to IDT s Boronia manufacturing campus Manufacture of stability batches (10% of commercial batch size) 6 month accelerated stability program Transfer of manufacturing site together with the stability data will be notified to FDA 06

8 MARKET ACCESS The products are all long genericized & have established markets predictable volumes & pricing, little risk of new competitors Initial revenues from the products could be realised H2 FY2015/16 Gross margin shared with marketing/distribution partner Assumed conservative market share & modest discount to existing market prices to assist entry Peak in-market revenues attainable within 3 years & sustainable without further price erosion 07

9 ECONOMIC RETURNS IDT will appoint a strong US distribution partner, deploying a tendering team to access contracts Potential customers include HMO Networks, group purchasing organisations or large pharmacy chains Commercial terms include transfer at cost plus manufacturer s margin, allowance for partner s SG&A costs & profit sharing of gross margin Consistent with several recent deal sheets for other products Discussions commenced with potential distribution partners Average CoGS of 35-40% of wholesale price have been validated via due diligence Key raw materials confirmed available; pricing to be finalised but indicative pricing consistent with CoGS 08

10 PRODUCTS FIT TO IDT FACILITIES IDT Australia has FDA approved solid oral dose form facility with large excess capacity All products acquired are solid oral dose form High containment capable Many require containment manufacture Previously supplied commercial product to global markets Facilities are fit for purpose with minimal CAPEX required Space for installation of further equipment if required with minimal facility or systems work 09

11 IMPACT ON PLANT UTILISATION IDT has three key manufacturing assets with differing capacity utilisation rates Oral tablet/capsule facility key for these assets Improving utilisation rates of these facilities being addressed in different ways Acquisition of these products will lift capacity utilisation of oral facility from negligible to ~35-40% on a 5 day week, single shift week basis Driving operational leverage via increased volumes with little increase in fixed costs (quality/engineering/utilities) is a key to IDT s strategy 10

12 RECENT COMPARABLE TRANSACTIONS ANI Pharmaceuticals purchase of 31 generic assets, Nov 2013 Was a toll manufacturer with underutilised assets, now a speciality generic pharma company Mayne Pharma purchase of Forest Pharma assets Feb 2014 Expansion of existing specialty generic pharma strategy via acquisition 11

13 OTHER STRATEGIC IDT PROGRAMS Temozolomide (US$300m US sales) ANDA filed Nov 2013 Mayne distribution, announced Jul 2014 Launch planning underway for 2017 Project Teton (US$80m global sales) Feasibility studies for manufacture complete Manufacturing partner selection ongoing Timing Temozolomide is an opportunity targeting similar market share to our new generic range & aiming for marketing approval FY2016/17 Project Teton is an opportunity where IDT would target greater market share commencing FY2017/18 12

14 IDT OVERVIEW Founded ,000m 2 advanced manufacturing campus Australian listed company (IDT.AX) since 1988 Acquired CMAX (Phase I unit) 2003 Involved in developing >60 marketed drugs Worked with 9 of top 10 pharma companies Experience with USFDA & US markets 13