Jefferies Global Health Care Conference. June 1, 2015

Transcription

1 Jefferies Global Health Care Conference June 1, 2015

2 Forward-Looking Statements This presentation may contain projections, estimates and other forwardlooking statements that involve a number of risks and uncertainties, including those discussed in the press release issued today and in the Company s filings with the Securities and Exchange Commission. While this presentation represents management s current judgment on the future direction of the Company s business, such risks and uncertainties could cause actual results to differ materially from any future performance suggested herein. The Company undertakes no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arising after the date hereof. 2

3 Fully Integrated Service Platform Spans Drug Development Spectrum from Discovery to Manufacturing Target Discovery Lead Finding Lead Optimization Candidate Selection Pre-Clinical Phase I Phase 2 Phase 3 Product Approval Generic R&D ANDA Development & Approval Discovery & Development Services (DDS) Recognized experts in medicinal and solid state chemistry Flexible, competitive cost structure Development services growing rapidly 2015 Forecast*: $98M API Manufacturing Focusing on high value, niche APIs; brands and high value generics Controlled substances, steroids, proteins, peptides and cytotoxics 2015 Forecast*: $162M Drug Product Manufacturing Focusing on high value, technically challenging areas End-to-end sterile fill/finish capabilities 2015 Forecast*: $92M 3 *Represents mid point of guidance as of May 5, 2015

4 Key Milestones Last Twelve Months Completed and integrated 4 acquisitions Cedarburg API, controlled substances OsoBio Commercial scale sterile injectable manufacturing SSCI/West Lafayette Supplementing development capabilities with physical chemistry, polymorph and DMPK expertise Glasgow, UK Pre-formulation/small scale sterile injectable development Established differentiated, integrated discovery center in Buffalo Advanced growth in generics with multiple development programs across all segments, capturing development, commercial and royalty revenue potential Added key strategic positions in supply chain, IT and international sales Creating sustainable shareholder value by replacing declining royalties with profitable contract business 4 4

5 Entering a New Growth Era as Outsourcing Trends Increase Global pharma simplifying to core competencies Reducing internal resources Generic competition Divesting assets; Reducing fixed cost structures Vendor consolidation programs benefitting integrated providers Early to mid-stage companies accessing outsourcing VCs / Academia / Virtual pharma Increased funding fueling increase in early discovery and development Industry consolidation triggering interest in larger outsourcing partners 5

6 Drug Product API Pipeline of Development and Commercial Contracts Expanding Rapidly Development Supporting these Programs Phase I & II Phase III 505b/ANDAs Commercial 6

7 Q Financial Highlights ($ in millions, except per share amounts) Q Q Growth Y/Y Contract Revenue $75.1 $ % Royalties $6.7 $8.3 (19%) Total Revenue $81.8 $ % Adj. Cost of Contract Revenue* $57.9 $ % Adj. SG&A as a % of Revenue* 18% 19% (1) PPT Adjusted EBITDA* $14.5 $ % Non-GAAP EPS* $0.20 $ % Tax Rate 35.0% 29.1% 6 PPT Adjusted Contract Margin Q Q % 18% 7 *Please refer to tables at the end of the presentation for a reconciliation of non-gaap items

8 Contract Revenue Up 47% Q1 Y/Y ($ in millions) Contract Revenue +47% vs. Q

9 Adjusted EPS Q Q ¹See tables at the end of the presentation for a reconciliation of GAAP EPS to non-gaap EPS.

10 Contract Revenue Projected to Increase Over 40% from $400 $350 $353 $300 $250 $251 $200 $150 $144 $122 $137 $153 $163 $195 $157 $163 $170 $190 $210 $100 $50 $60 $72 $ *2015E 10 *Represents mid point of guidance as of May 5, 2015 DDS API Drug Product Q1 Actual Q2 Q4 Estimate

11 Sustainable Contract Operating Income Offsetting Declining Royalties Operating Income (Ex. Royalties) Royalties Contract Operating Margin % Current (Ex. Royalties) 11 *Represents mid-point of guidance as of May 5, **See tables at the end of the presentation for a reconciliation of GAAP EPS to non-gaap EPS.

12 Strategic Priorities for 2015 Disciplined Capital Deployment Organic Growth Acquisitions Invest in core areas to fuel growth in discovery, development and manufacturing Add capabilities that complement our existing core areas DDS Integrate chemistry and biology in Buffalo API Expand generic portfolio and global footprint Drug Product Increase scale to take advantage of growing market needs Enhance operational efficiencies/integrate AMRI Scope and begin ERP implementation Holywell site transition and closure A Disciplined Deployment of Capital Will Fuel Growth and Shareholder Value 12

13 Thank You

14 Appendix

15 DDS Performance 1Q 2015 ($ in millions) Q Q % Change Y/Y DDS Contract Revenue $19.3 $19.0 1% Cost of Contract Revenue $14.8 $15.6 (6%) Contract Gross Profit $4.5 $3.4 32% Contract Gross Margin 23% 18% 5 PPT Q Contract Revenue: $19.3M, up 1% Operational efficiency programs delivering enhanced margins SSCI on track with integration Initiating development work as part of 10-year NIH award Expanded API & Drug Product capabilities and capacity increasing demand for Development services Supporting development of 67 APIs and 99 Drug Product formulations 15

16 API Performance - 1Q 2015 ($ in millions) Q Q % Change Y/Y API Contract Revenue $37.8 $ % Cost of Contract Revenue $28.6 $ % Contract Gross Profit $9.3 $6.5 43% Contract Gross Margin 25% 22% 3 PPT Q Contract Revenue: $37.8M, up 27% Advancing growth in generics with multiple development programs Expanding controlled substance portfolio Long term supply agreements for commercial business 53 commercial products being manufactured Multiple late stage products and scalable infrastructure for future growth 48 Phase I & II Compounds 13 Phase III Compounds 6-505b2 or ANDAs 16

17 Drug Product Performance - 1Q 2015 ($ in millions) Q Q % Change Y/Y DP Contract Revenue $18.0 $ % Cost of Contract Revenue $14.8 $ % Contract Gross Profit $3.2 $(0.5) 740% Contract Gross Margin 19% (20%) 39 PPT Q Contract Revenue: $18M, up 688% Reflects addition of OsoBio and Glasgow, UK Gained 7 new customers 1Q Expansion of Drug Product leading to increased development projects 14 Commercial Products 29 Products in Phase III 58 Products in Phase I & II b2 or ANDAs 17

18 Contract Revenue Projected to Increase Over 40% in 2015 ($ in millions) Contract Revenue +41% vs *Represents mid-point of guidance as of May 5, 2015

19 2015 Forecast* ($ in millions, except per share amounts) 2015 Y/Y DDS $98 30% API $162 11% Drug Product $92 210% Contract Revenue $ % Royalties $ % Total Revenue $ % Adjusted Contract Margins 25% 6 PPT Adjusted EBITDA $ % Non-GAAP EPS $ $ % 19 *Represents mid-point of guidance as of May 5, See tables at the end of the presentation for a reconciliation of GAAP EPS to non-gaap EPS.

20 About AMRI Albany Molecular Research Inc. (AMRI) is a global contract research and manufacturing organization that has been working with the Life Sciences industry to improve patient outcomes and the quality of life for more than two decades. With locations in North America, Europe and Asia, our key business segments include Discovery and Development Services (DDS), Active Pharmaceutical Ingredients (API), and Drug Product Manufacturing. Our DDS segment provides comprehensive services from hit identification to IND, including expertise with diverse chemistry, library design and synthesis, in vitro biology and pharmacology, drug metabolism and pharmacokinetics, as well as natural products. API Manufacturing supports the chemical development and cgmp manufacture of complex API, including potent, controlled substances, biologics, peptides, steroids, and cytotoxic compounds. Drug Product Manufacturing supports pre-clinical through commercial scale production of complex liquid-filled and lyophilized parenteral formulations. For more information about AMRI, please visit our website at or follow us on Twitter (@amriglobal). Contacts: Investor Relations: Patty Eisenhaur, AMRI Investor Relations, Media: Gina Rothe, AMRI Communications,

21 Fully Integrated Service Platform Spans Drug Development Spectrum from Discovery to Manufacturing Target Discovery Lead Finding Lead Optimization Candidate Selection Pre-Clinical Phase I Phase 2 Phase 3 Product Approval Generic R&D ANDA Development & Approval Discovery and Development Services (DDS) Hit to Lead to Candidate Services Medicinal Chemistry High Throughput Screening In Vitro Biology and Pharmacology Library Design & Custom Synthesis Biocatalysis and Biotransformation Natural Product Libraries Profiling & Structure ID Bioprocess Development Early ADME Metabolite ID Process and Analytical Development Kilo Lab Scale-Up Phase I GMP Salt & Polymorph Investigations Formulation Development API Manufacturing Phase II/III API Commercial API High Value Intermediates High Potency DEA Regulated API Complex API R&D Global Regulatory Niche Generics Drug Product Manufacturing Top 10 US Fill/Finish Manufacturer Formulation Manufacturing Pre-formulation 21

22 Focused on Higher Growth Segments of Discovery/Development Market $25.0 $ in billions Worldwide CRO Discovery / Preclinical Outlook $20.0 $15.0 $10.0 $5.0 $0.0 $9.9 $9.2 $1.9 $2.2 $0.5 $0.5 $2.5 $2.7 $11.1 $12.8 $3.0 $2.6 $0.6 $0.5 $3.8 $3.2 $2.4 $2.8 $1.5 $1.8 $2.0 $15.8 $14.2 $19.7 $17.6 $5.3 $4.7 $3.9 $0.8 $3.5 $0.7 $0.7 $0.6 $5.9 $5.2 $4.7 $4.2 $3.5 $4.0 $3.1 $2.9 $2.7 $2.8 $3.0 $3.1 $3.4 $3.6 $ CAGR % 6% 13% 15% 4% Safety & Tox Lead Pharmacology Early Chemistry HTS Biology 1 22 Source: Kalorama; McKinsey analysis. ¹ High throughput screening.

23 The API Environment Next 5 Years Market Characteristics Global pharmaceutical market to grow from ~$825B to ~$1,000B by Generics driving growth US is growing 5%; 87% of prescriptions generic Japan expected to be at only 31% generics in 2015 Europe is less than 40% generic; branded generics Branded and Generic Drug Market Global Spending (US$, Billions) $1,200 ROW 6.8% CAGR to $62B $1,000 Emerging 16.2% CAGR to $234B $800 Developed 16.7% CAGR to $121B $600 $400 Branded 1.2% CAGR to $631B Branded $594B $200 Trend of outsourcing of API manufacturing by pharmaceutical companies continues Branded companies moving towards core competencies API manufacturing is a different business; some are divesting assets or minimizing efforts Recent record of 41 branded products approved in $ Developed Emerging ROW 23 ¹ Source: IMS Market Research. 2 Source: FDA

24 Earnings Per Share Reconciliation (Dollars in thousands, except for per share data) Non-GAAP Measures First Quarter First Quarter (Dollars in thousands, except for per share data) Non-GAAP Measures Earnings per diluted share, as reported $ (0.07) $ 0.11 Adjustments, net of tax: Impairment charges Restructuring charges Executive transition costs Business acquisition costs Purchase accounting depreciation and amortization Postretirement benefit plan settlement gain - (0.03) Non-recurring professional fees Debt interest and amortization charges Earnings per diluted share, as adjusted $ 0.20 $

25 EBITDA Reconciliation (Dollars in thousands, except for per share data) Non-GAAP Measures First Quarter 2015 First Quarter 2014 Income from operations, as reported $ 1,229 $ 7,465 Impairment charges 2,615 - Restructuring charges 1, Executive transition costs 1, Business acquisition costs 1, Purchase accounting depreciation and amortization 1,003 - Postretirement benefit plan settlement gain - (1,285) ERP Implementation costs Non-recurring professional fees Income from operations, as adjusted $ 9,570 $ 7,372 Add: Non-operating (expense) income net, as reported 469 (40) Add: Depreciation and amortization 4,483 3,761 Adjusted EBITDA $ 14,522 11,093 25