duopharma biotech berhad · 2020. 1. 31. · disclaimer this presentation may contain...

DUOPHARMA BIOTECH

BERHADINVESTOR RELATIONS BRIEFING

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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 variousassumptions and made subject to a number of risks, uncertainties and contingencies. Actual results, performance or achievements may differ materiallyand 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 noobligation 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 (includingwithout limitation, their respective shareholders, directors, officers, employees, agents, partners, associates and advisers) (collectively, the "Parties") asto the quality, accuracy, reliability or completeness of the information contained in this presentation (collectively, the "Information"), or that reasonablecare 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 opinionwhich 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, toany 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 inDuopharma Biotech Berhad.

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In 2005, Chemical

Company of Malaysia Berhad

(“CCMB”) acquired

Duopharma , a pharmaceutical company that

was established since 1979.

In 2006, Duopharma

was rebranded to CCM

DuopharmaBiotech

(“CCMD”).

In 2007, CCMD acquired the assets and brands of Malayan Pharma.

In 2015, CCMB underwent a

corporate restructuring.

All of its pharmaceutical

subsidiaries were placed under CCMD.

On 28 December 2017, CCM

Duopharmade-merged

from CCMB.

Therefore, CCMD became

an independent public listed

company.

On 25 February

2019, CCMD has changed its name to Duopharma

Biotech Berhad

(“DuopharmaBiotech”).

Journey of Duopharma Biotech Berhad

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Implications of 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 – prescribed medicine and consumer

healthcare product

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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 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.


2018

Innovax Sdn. Bhd.

Duopharma Innovation

Sdn. Bhd.


2018

CCM Biopharma Sdn. Bhd.Duopharma HAPI Sdn. Bhd. Effective from 26 December

2018

CCM Pharma Sdn. Bhd.

Duopharma

Manufacturing

(Glenmarie) Sdn. Bhd.


2018

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Duopharma (M) Sendirian

Berhad

Duopharma (M) Sendirian

Berhad

No change to company

name

Sentosa Pharmacy Sdn.

Bhd.

Sentosa Pharmacy Sdn.

Bhd.


name

Unique Pharmacy (Penang)

Sdn. Bhd.

Unique Pharmacy

(Penang)

Sdn. Bhd.


name

Negeri Pharmacy Sdn. Bhd. Negeri Pharmacy Sdn.

Bhd.


name

Unique Pharmacy (Ipoh)

Sdn. Bhd.

Unique Pharmacy (Ipoh)

Sdn. Bhd.


name


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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


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Corporate Structure

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Shareholding Structure

PNB, 46.7%

Amanahraya Trustees

Berhad,ASB,

4.2%EPF, 7.8%

Others, 41.3%

Note: Shareholding as at 31 January 2019

DPHARMA (Stock Code – 7148)

Market capitalization on 30.04.2019 = RM 933 milShare price = RM 1.41

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Board of 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


Datuk Seri Rohani Parkash binti Abdullah


Datuk Nik Moustpha bin Hj Nik Hassan

Senior Independent Non-Executive Director

Dato' Mohamad Kamarudin bin Hassan


Puan Zaiton bintiJamaluddin

Non-Independent and Non-Executive

Datuk Mohd Radzif Bin Mohd Yunus

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Board of Directors

STRUCTURE Board of Directors

Nomination and Remuneration

Committee

Chairman: Dato’ Mohamad Kamarudin bin

Hassan

Audit and Integrity Committee

Chairman: Encik Razaleebin Amin

Risk Management and Sustainability

Committee

Chairman: Datuk MohdRadzif bin Mohd Yunus

Halal Committee

Chairman: Datuk Nik Moustpha bin Hj Nik

Hassan

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Group Management Committee

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Financial Highlights

(in RM'million) 2016 2017 2018

Non-current assets

295.3 348.6 469.0

Current assets 366.2 356.6 367.3

Equities 454.5 479.9 481.0

Liabilities 206.9 225.4 355.3

Gearing 0.25x 0.27x 0.51x

Return on Equity 5.9% 8.8% 9.9%

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

PBT 31.5 51.8 59.7

PAT 26.8 42.5 47.6

Revenue 312.9 468.0 498.7

0

100

200

300

400

500

600

0

10

20

30

40

50

60

70 RM’millionRM’ million

PBT PAT Revenue

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FY 2016 Revenue : RM 312.94 mil

Export 12%

Export 8%

Local (Private) 54%

Note:

Duopharma Biotech’s top export markets in FY2018 (% based on export revenue):

1.Singapore – 22.6% (RM9.3mil)

2.Philippines – 21.1% (RM8.7mil)

3.Middle East – 18.4% (RM7.6mil)

Local (Government)

34%

Local (Government)49%

43%

Local

(Private) 54% 39%

Financial Highlights – Segmental Sales

Export 8%

Local (Private)42%

Local (Government)50%



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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,December 2018).

Continuous collaboration and partnering with key pharma players i.e. Biocon, PanGen Biotech, Natco & Becton Dickinson.

Successfully launched a pre-filled format for an insulin glargine, Basalog One.

Expanded our Hepatitis C portfolio with products from Natco.

Flavettes regained its leadership as the No.1 supplement in the Adults Vitamin C market in Malaysia with the Effervescentrange overtaking all other brands in terms of market share.

Penetrated four new international markets and achieve all-time high sales.

Completed and commissioned Malaysia’s first Highly Potent Active Pharmaceutical Ingredients (HPAPI) manufacturing facility.

Completed EPO Phase III clinical trials in April 2017. Completed Malaysia’s first biological pre-filled syringe line tomanufacture the biosimilar. Obtained Registration approval for the product called Erysaa from the National PharmacyRegulatory Agency (NPRA) on 31 January 2019.

Won a contract from the government to supply Daclatasvir.

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Completed Corporate ExercisesInternal Restructuring was completed on

24 May 2018

(i) the acquisition by Duopharma Biotech of the entire equity interest in Duopharma HAPI Sdn Bhd (formerly known as CCM Biopharma

Sdn Bhd) and Negeri Pharmacy Sdn Bhd for RM 2.5 million and RM 1 respectively from Duopharma Marketing Sdn Bhd (formerly known

as CCM Pharmaceuticals Sdn Bhd)

(ii) the acquisition by Duopharma Biotech of the entire equity interest in Duopharma Manufacuturing (Bangi) Sdn Bhd (formerly

known as Upha Pharmaceuticals Manufacturing (M) Sdn Bhd) for RM 78.37 million from Duopharma (M) Sdn Bhd.

(iii) the increase of the paid up share capital of DuopharmaManufacuturing (Bangi) Sdn Bhd (formerly known as Upha

Pharmaceuticals Manufacturing (M) Sdn Bhd) by way of conversion of a portion of inter-company loan owing by Duopharma

Manufacuturing (Bangi) Sdn Bhd to Duopharma Biotech amounting to RM 90mil.

Purchase of Trade Marks from CCMB was completed on 24 May 2018

Establishment of first Dividend Reinvestment Plan was approved by shareholders during

Extraordinary General Meeting on 31 May 2018

Bonus Issues of 4 Bonus Shares for Every 3 Existing Shares was completed on 20 June 2018

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Acquisition of 806,450 share representing approximately 8.39% stake in PanGen from Chemical Company of

Malaysia Berhad for RM 59.16 million ( KRW 16.35 billion ) was completed on 29 June 2018

Acquisition of 164,016 common shares and 109,344 redeemable convertible preference shares representing approximately 5.8% stake in SCM Lifescience, a Korean

stem cell firm for RM 20.24 million (KRW 5.5 billion) on 23 November 2018.

Completed Corporate Exercises

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Investments 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 )

on 29 June 2018.

Acquisition of 5.8% stake in SCM Lifescience, a Korean

stem cell firm for RM 20.24 million (KRW 5.5 billion) on

23 November 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.• Regulation on stem cell in Malaysia to start in 2021; timely to acquire

SCM. • As Korea recognises biotech technologies, Duopharma Biotech may

be able to monetise the technologies.• Investee company has proof of concept product.

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Bangi Plant EstablishedWorkforceTypes of Products

• 1976• 769 people (including Sales & Marketing team)• Ethical and CHC Products – mainly in oral solid dosages, soft gels, liquids

and cream forms

Klang Plant EstablishedWorkforceTypes of Products

• 1979• 484 people• Oral solids dosages, Haemodialysis & SVI Products, LVI – Irrigation solution

products, dental cartridge and sterile cephalosporin

Glenmarie Plant EstablishedWorkforceTypes of Products

• 2008• 55 people• HAPI plant for Oncology• Duopharma Innovation Sdn Bhd, the division’s R&D centre is located in this

plant

Kenanga Office (HQ) EstablishedWorkforce

• 2018• 26 people

Facilities Snapshot

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Research & Development (R&D)

Duopharma Innovation Sdn Bhd (“DISB”) is the Division’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 ranked 2nd in terms of

market share

Duopharma Biotech is the No. 1 company by Sales

volume

Duopharma Biotech is ranked 2nd in terms of

sales value and has the fastest growth trend

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Market Presence (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

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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 Pharmacy

Regulatory Agency (NPRA) on 31 January 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 Q3 2019• Implementation of National B40 Protection Scheme • 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 31 December 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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New Products Pipeline

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Oncology Franchise

Letrozole

CHC New Products

Champs Effervescent

CHC New Products

Flavettes Effervescent

Renal Franchise

Insulin Injection

Renal Franchise

Erythropoietin (EPO)

Renal Franchise

Heparin

Project Updates – HAPI Plant

Pilot batch for Letrozole 2.5mg tab (1st product)• Successfully conducted Comparative Dissolution Profile “CDP” (against

Natco’s batch) with good result.• Passed all acceptance criteria for 1st month stability study.• Target to conduct Process Validation (PV) batches in Q2 2019.

Other progress• NPRA inspection target by end April 2019.• Collaboration with UTM in waste water deactivation management.

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API dispensing Compression process


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Granulation process Testing done in containment

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Project Updates – K6

• 94.5% completed.

• Remaining works :➢ Main bridge construction ➢ Road widening works

• CCC application in Q2 2019.

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Pick and Pack Area with Safety Barriers Installed

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Project Updates – K3 & K5 Substructure Works

K3• Piling works completed.• Basement level pile cap works will start once

cofferdam installed.• Cofferdam sheet piles currently being installed.• Project timeline to be extended until June 2019.

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Ongoing Pile Cap Construction – Concreting work

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Anti-Termite work on Pile Cap Backfilling work

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Project Updates – 33kV SSU Update

33KV SSU• 33 KV SSU 90% completed.• Transformers and Switch Gears installed.• TNB owned rooms to be handed over after

inspection.• K4 Guardhouse construction next.

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33kV and 11kV Switchgears delivered

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Awards and Recognitions 2018

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

The recipient of the 2018 HR Asian Award for “Best Companies To Work For” in 2018, 3rd consecutive year.

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Watsons Health, Wellness and Beauty Awards 2018

1)CHAMPS – Best Exclusive Campaigni) Extensiveness of the overall campaign – 360 on ground activation, e-commerce, social media, etc. ii) Active participations in Watsons initiated campaign

2)NATURALLE – Most Wanted Garlic Supplementi) Highest sell-out for the particular sub-segment from April 2017 to March 2018

Awards and Recognitions 2018

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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 Pharmaceuticals Control Bureau (NPCB) 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 – Best Companies to Work for in Asia

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