orion building well-being 118.1.2012 anne allo & sirpa pelttari / orion corporation

OrionBuilding well-being

1 18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

2

Your primary source for what Orion is about:

18.1.2012 Anne Allo & Sirpa Pelttari / Orion Corporation

Suomeksi: www.orion.fi

In English: www.orion.fi/en

http://www.orion.fi/

http://www.orion.fi/en

Basics about Orion

• Name: Orion Oyj / Orion Corporation• Businesses: pharmaceuticals (94%) and diagnostic tests

(6%)• Deep roots in Finland:

• Established in 1917 as ‘Lääketehdas Orion Oy’, in Helsinki. Re-established in 2006 after a demerger of the former Orion

• Operational locations in Espoo, Turku, Kuopio, Hanko and Oulu

• European-wide presence with over 20 marketing companies

under names Orion Pharma and Orion Diagnostica

• Products• About 300 medicines and self-care products (Orion Pharma) • Active pharmaceutical ingredients, API (Fermion)• Diagnostic tests (Orion Diagnostica)

• Market leader in Finland with 10% market share• Recognised world-wide as a specialist in Parkinson’s

Disease• Listed on Nasdaq OMX Helsinki• President & CEO: Timo Lappalainen18.1.20123 Anne Allo & Sirpa Pelttari / Orion Corporation

Some figures


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2010 2009

Net sales, EUR million 850 772

International operations, % of net sales 73% 71%

Operating profit (EBIT), EUR million 254 207

EBIT % of net sales 30% 27%

R&D expenses, EUR million 86 95

R&D % of net sales 10% 12%

Employees at the year-end 3 131 3 147

18.1.2012

Orion in the light of key figures

Anne Allo & Sirpa Pelttari / Orion Corporation

In terms of net sales, Orion ranks nr. 78 among global pharma.

The figures for 2011 will be disclosed on 7 February 2012.

Net sales are generated mainly in Europe Breakdown of the EUR 850 million net sales for 2010

18.1.20126

44%

35%

8%

5 %

3 %5 %

Proprietary Products

Specialty Products

Animal Health

Fermion

Contract manufacturing and other

Orion Diagnostica

By business division By market area

Sales through partners 29% 27%

13%

35%

13%

12%

FinlandScandinaviaOther EuropeNorth AmericaOther Markets


7 18.1.2012

Half of Orion shares are held by Finnish households

By number of shares By number of votes

Households50%

Households65%

Altogether 141.3 million shares and over 57 000 shareholders. Both share classes are listed on NASDAQ OMX Helsinki since 1 July 2006– Share A (ORNAV) has 20 votes/share and Share B (ORNBV) has 1 vote/share, in the AGM but they have equal rights to assets and dividends. The market value of Orion Corporation at 31 December 2011 was about 2.2 billion €.

Foreign held andnominee registered 31%

Privatecorporations

8%

Public sector4%

Non-profitOrganisations 6%

Financial and insurancecorporations 1%

Foreign held andnominee registered 6%

Privatecorporations

14%

Public sector7%

Non-profitOrganisations 7%

Financial and insurancecorporations 1%


Broad productportfolio.Some might be familiar to you.


Medicines ’over-the-counter’


Nutritionals


Non-medicinals, for personal care and hygiene



Pharmacy cosmetics

For your pet


Easyhaler® for inhaled asthma medicines


Some background about world pharma industry


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Some facts about the pharmaceutical industry 1(2)

World sales 2010

Big multinationalsand local players

Important role in healthcare

Innovation

IMS Health: USD 875 bn in wholesale value

10 biggest companies make 40% of the world total.(Pfizer, Sanofi, Merck (US), Novartis, GSK, Roche, AstraZeneca, J&J, Lilly, Abbott)

Safe, effective and better - and affordable - medicines. Education of healthcare professionals

Average R&D investment is 10-15% of net sales. The solutions to unmet medical needs are explored in companies, with little if any public financing.


High regulation High product responsibility. Compliance with Good Practices (GxP) in manufacturing, laboratory, R&D and marketing.

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Some facts about the pharmaceutical industry 2(2)

Products registered & authorised

Restrictions oncommunication

Retail salesthrough pharmacies

All medicines shall be officially approved for marketing and clinical use. National lists.

All promotional activities of prescription medicines are addressed to healthcare professionals exclusively.No consumer advertising on prescription medicines. Sales arguments must be based on approved product characteristics (= confirmed study results).

In most countries, medicines are only available via pharmacies.


Challenge of counterfeits

Counterfeit (falsified, fake) drugs are an increasing global challenge. Trade in internet is very difficult to control.

Orion’s strategy

How are we planning to manage?


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ScandinaviaStrong domestic market position

Western and Central EuropeStrong position with proprietary products

Eastern EuropePresence with branded generics

Southern EuropeProgress with proprietary products in hospital markets

FinlandMarket leadership

Orion concentrates own operations within Europe


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Partners and networking

Flexible and efficient operations

Compe

titive

prod

uct p

ortfo

lioStrengthening m

arket position

in Europe

Strategic aim:Profitable growth and increased shareholder valuewhilst keeping business risks under control


M ANAGEMENT OF COMPLEXITY IN COST-EFFICIENT WAYS

21 Anne Allo & Sirpa Pelttari / Orion Corporation

R&D

• R&D partnerships and networks cover all phases from preclinical to product registration

• Balances risks and enables an increasing number of new research projects

Supply Chain

• Supply Chain operations are global and partnerships cover the whole chain of operations

• Improved efficiency by “make or buy” decisions

Networking and partnering throughout the value chain

18.1.2012

We invest in R&D to build our futureandto fight illnesses R&D is part of our mission to build well-being



Our main product looks simple, doesn’t it? … But its road to market took over 10 years.


It’s all about an ideal molecule

Entacapone, Orion’s drug discovery, acts on COMT, a very common enzyme present in the body.

The active substance in a medicine is like a key in a lock: it either opens or closes a pathway, activates or blocks its target, typically a receptor in a cell.

25 Anne Allo & Sirpa Pelttari / Orion Corporation

The 7-17 year-long road of a molecule candidate to a new drug

18.1.2012

Target identification and validation

8–24 months

Lead Moleculeidentification

12–24 months

Lead Molecule optimisation

18–36 months

Molecule candidateselection,

preclinical dev.

12–24 months

Clinical Phase Iin healthy humans

12–14 months

Clinical Phase IIin a small number

of real patients

12–36 months

Clinical Phase IIIin a large number

of real patients

18–48 months

Late stage development

Early developmentResearch

A partner company may join the work at any stage of the project

• In the R&D process, the compound’s efficacy as a treatment option for the target disease and safety for the patient are explored with a purpose to confirm the compound’s superiority to already existing medicines.

• Each step is subject to approval of medicinal authorities (FDA or EMA).• The hundreds of parallel and sequential studies generate an enormous documentation

of detailed data.• If successful, the results are filed into a marketing application to EMA and/or FDA.• The review of the application takes 1-2 years. If OK, a marketing authorisation is granted. • The compound is patented at an early stage. The protection expires after 20 years.

”Pipeline”

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Pharmaceutical R&D takes:

Patience

Time

Money

Expertise

One molecule in a million shows some promise.Only 20-30 completely new drugs (NCEs/NBEs)are approved/introduced annually

It takes at least 10–15 years to develop a completely new drug from idea to market

The average cost of developing a new drug is USD 700 million. The risk of failure is high

Ca. 115 000 scientists and other industry staff members are engaged in pharma R&D in the EU alone


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Pharmaceutical R&D also gives:

New treatments

Knowledge

Money

Healthcare economics

Every new treatment gives more hope to manage with a disease. For the patients and their caregivers it also means improved quality of life.

Understanding of diseases and their mechanisms accumulates with every single study. Even failed projects add our knowledge.

The R&D investment generates earnings some years after the new product’s launch.

Effective medicinal treatments may save expensive days at hospital, e.g.


InnovationDiscoveries generate more disoveries to solve unmetmedical needs of challenging diseases.

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• Orion is one of Finland’s biggest investors in R&D– R&D costs are ca. 10% of our net sales

Research staff accounts for 20% of our total workforce• Our purpose is to introduce new innovative treatments

to global markets• Since late 1980’s we have developed 7 molecules into

commercialised medicines. They now generate 50% of our net sales

• We currently explore new medicinal approaches for:– central nervous system disorders– cancer– critical care– respiratory diseases (inhalable drugs)

18.1.2012

Orion’s R&D activity


Product Indication

EUR million

2010

Stalevo®, Comtess® and Comtan®

(entacapone)Parkinson’s Disease 253

Simdax® (levosimendan) Severe heart failure 40

Easyhaler® product family (beclomethasone, budesonide, formoterol)

Asthma, COPD 28

Dexdor® and Precedex® (dexmedetomidine)

Sedative for patients in intensive care

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Dexdomitor®, Domitor®, Domosedan® and Antisedan® (dexmedetomidine, detomidine, atipamezole )

Animal sedatives 24

Divina® range (estrogen)Menopausal symptoms

13

Fareston® (toremifene) Breast cancer 12

Total 397

% of pharmaceutical net sales 49 %


Proprietary products generated 50% of Orion’s net sales for 2010

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Some helpful terms

OTC product (over the counter)

Can be bought without doctor’s prescription

Proprietary product A medicine developed in-house all the way throughout the pipeline. The originator holds full rights for the product until patent expiry.

Generic medicine Off-patent. A medicine whose patent has expired. Can be copied by anyone.

NCE, NBE New Chemical (Biological) Entity. An active substance based on a completely new chemical or biological mechanism of action

API Active Pharmaceutical Ingredient, the substance that induces the medicinal effect of the drug

Marketing authorisation (MA)

The license granted by a medicinal authority (FDA, EMA, Fimea, e.g.) to sell a drug

Pipeline New drug development process all the way through preclinical and clinical phases


Orion and the environment

Sirpa Pelttari 16.1.2012


• Environmental protection act 4.2.2000/86

— Act on Changing the Environmental Protection Act 647/2011 enters into force 1.5.2012

• Environmental Protection Decree 18.2.2000/169

• Old Waste Act 1072/1993

• New Waste Act 646/2011 enters into force on 1.5.2012• Waste Decree 1390/1993• VOC Decree 435/2001, Government Decree on the limitation of emissions

of volatile organic compounds due to the use of organic solvents in certain activities and installations

• Government Decree on Substances Dangerous and Harmful to the Aquatic Environment 1022/2006

• Government decison on information to be provided on hazardous waste and the packing and labelling of hazardous waste 659/1996

• Ministry of the Environment Decree on the list of the most common wastes and of hazardous wastes 1129/2001

• Chemicals Act 744/1989• Nature Conservation Act 1096/1996

Environmental legislation: important acts, decrees and decisions for Orion


General principles provided in Section 4 for activities that pose a risk of pollution:

1) Pollution prevention and minimizing harmful impact: harmful environmental impact shall be prevented or, when it cannot be prevented completely, reduced to a minimum

2) Caution and care: proper care and caution shall be taken to prevent pollution as entailed by the nature of the activity, and the probability of pollution, risk of accident and opportunities to prevent accidents and limit their effects shall be taken into account

3) Best available techniques, BAT: the best available technique shall be used

4) Best environmental practice: combinations of various methods, such as work methods, shall be used and such raw materials and fuels shall be selected as provide appropriate and cost-efficient means to prevent pollution

• ‘Polluter pays’: It is the duty of parties engaged in activities that pose a risk of pollution to prevent impact and eliminate or minimize harmful environmental effects

Environmental Protection Act


• General duties provided in Section 5

1) Knowledge requirement: Operators must have sufficient knowledge of their activities' environmental impact and risks and of ways to reduce harmful effects

2) Obligation to prevent pollution: If the activities cause or may directly result in environmental pollution, the operator must take the appropriate action without delay in order to prevent pollution, or, if pollution has already resulted, to reduce it to a minimum (385/2009)

3) In addition, the general duties and principles laid down Chapter 2 of the Waste Act (646/2011) must be observed in activities posing a risk of pollution. (647/2011)



• General permit requirement provided in Section 28:

1) Environmental permit: A permit is required for activities that pose a threat of environmental pollution. Activities subject to a permit are prescribed in more detail by decree.



• The new Waste Act and ca. 20 other acts linked to it were confirmed on 17.6.2011.

• Those acts will enter into force on 1.5.2012.

• The acts have been published in Statutes of Finland (Suomen säädöskokoelma), numbers 646-666/2011.

• The purpose is to harmonise the waste legislation in line with today’s waste and environmental policies and the requirements of EU legislation.

New Waste Act 2011


A waste hierarchy which complies with the EU Waste Directive (2008/98/EC) and specifies the priority of measures concerning the amount of waste, harm mitigation, and waste management:

1.Preventing the emergence of waste

2.Re-using items as such, e.g. metal barrels

3.Recycling waste as material, e.g. polyethylene plastic

4.Utilising waste as energy; energy waste is combustible waste

5.Safe landfill disposal of waste

• Waste that cannot be disposed of by other means, e.g. grease trap sludge

Waste hierarchy


Orion operates under environmental permits

• Environmental permits are required for Orion’s pharmaceutical manufacturing operations, as specified in the Environmental Protection Decree of Finland.

• The environmental permits are granted and supervised by regional environmental authorities.



Orion’s site in Espoo is located in Mankkaa, next to the Tapiola sports park. About half of the Group’s employees work here.

Orion’s main site and headquarters are in Espoo


Orion’s Turku site

Orion’s manufacturing operations in Turku include certain tablets, hormonal products, cancer medicines and basic ointments. A major research centre is here too.

Fermion’s Hanko plant


Fermion is a so-called fine chemicals manufacturer. It produces active ingredients for pharmaceuticals in chemical synthesis at its plants in Hanko and Oulu.

Orion’s environmental activities

• Our environmental management focus is on the following areas:

— Waste and materials management

— Air and soil protection— Energy and water consumption— Wastewater — Environmental burden of our

products• We monitor the environmental

impacts of our operations by e.g— measuring and calculating the

volumes of chemicals, solvents and other substances, consumption of packaging materials, water and energy, emissions into water and air and

— keeping track of waste and recording waste statistics.


• Orion wants to overperform the minimum requirements set by laws and regulations for environmental affairs

• Orion publishes GRI-compliant Sustainability Reports since 2009. The ones for 2009 and 2010 are accessible at www.orion.fi/sustainability

— Our management approaches and performance indicators of environmental responsibility are presented here.

• An ISO 14001 based environmental management system is currently being built for Orion, first comprising the pharmaceutical preparations business (Espoo, Turku and Kuopio plants).

More systematic practices and continuous improvement in environmental affairs

• An Environmental Policy will be confirmed for Orion in Q1/2012.

ISO 14001 based system under construction


http://www.orion.fi/sustainability

• Responsible Care (RC)

– Orion is a member of Responsible Care, the global voluntary initiative under which chemical industries work together to continuously improve their health, safety and environmental performance.

– Environmental performance is reported annually to RC

• Energy Efficiency Programme of EK – As a member in the Energy Efficiency Programme initiated and

coordinated by the Confederation of Finnish Industries (EK)Orion aims to cut its proportional energy consumption by 9 per cent by 2016, compared with the 2005 level. This includes the consumption of electricity, heating energy and fuels.

• Carbon Disclosure– Orion reports its CO2 emissions to the Carbon Disclosure

Project, CDP

Orion’s current environmental engagements


Orion’s environmental impacts

• The manufacturing processes of pharmaceutical products, active pharmaceutical ingredients (API) and diagnostics products differ very much from each other.

Accordingly, they also consume materials and generate emissions and waste differently both in terms of amounts and types.

Common to all is

• Uncompromised cleanliness

• Massive air conditioning systems


Absolute cleanliness is a must


• Orion is a heavy user of water. Most of the water goes to washing the production equipment.

• The waste waters from are drained to municipal treatment plants in accordance with agreements with environmental authorities.

• Fermion’s Hanko plant has its own water purification plant where waste water is pre-treated before drained to the municipal treatment system.

Water consumption and discharges


Water consumption Water discharges

• Orion monitors its waste volumes using three indicators:

1) hazardous waste to be transported for disposal

2) recovered waste to be recycled, including energy waste and

3) landfill waste

• All such solid waste as contains pharmaceuticals is classified as hazardous waste and is sent to Ekokem Oy at Riihimäki

— Fermion produces the relatively largest amount of Orion’s total hazardous waste

• The Espoo, Turku and Kuopio operations produce mostly non-hazardous recyclable materials and landfill waste. About 20% of their total solid waste is hazardous.

• Orion aims to reduce waste by all applicable means.

Solid waste


• Orion's objectives to reduce the production of waste are aligned with the priority targets specified in the EU-level waste strategy (waste hierarchy of the Directive 2008/98/EC on waste, Waste Framework Directive), which are included in the New Waste Act.

• Avoiding the production of waste by all possible means

• Efficient sorting and recycling of the produced waste materials

• Hereby we also decrease the cost of waste.

• Seeking ways to re-use materials

• Minimised landfill waste.

Orion’s objectives in waste management


• Since 2007, companies in Finland have had to comply with very stringent emission limits for VOC quantities and concentrations. (Government Decree on the limitation of VOC emissions due to the use of organic solvents in certain activities and installations, 435/2001 at the end of October 2007)

• Orion’s VOC emissions come from several solvents used by Fermion in its chemical synthesis processes, and mainly ethanol used in tablet mass production and tablet coating in the Turku and Espoo plants

― Fermion accounts for ca. 97% of the total solvents used by Orion, and for about 75% of Orion’s total VOC emissions.

― Thanks to process investments in Hanko and Oulu, Orion’s total VOC emissions dropped dramatically from 2007 (in 2010 we experienced some technical problems at Fermion’s Oulu plant).

• Very small amounts of dust.

• Combustion gases from the steam boiler of Espoo and Kuopio. The sulphur content of the oil is low (less than 1%)

• CO2 emissions are reported for direct and indirect energy comsumption

Emissions into air


• We try to minimize the use of volatile organic solvents by changing processes.

• We are studying possibilities to burn the volatile solvents that evaporate from the tablet manufacturing processes and get mixed with the outlet air.

― Today, more than 90% of the volatile solvents in the plants of Espoo and Turku pass through the gas scrubbers into waste waters.

• An important goal for Orion is to continuously reduce emissions in the waste water and particularly the amount of harmful substances in them.

― The means to achieve this include more efficient pre-cleaning of the manufacturing equipment.

• Even better control of energy and water consumption (heat recovery systems, e.g.).

Environmental challenges for Orion to cope with


Orion building environmental well-being with HH students



The world’s top 20 pharmaceutical companies1-10 http://

Pfizer www.pfizer.com

Sanofi www.sanofi.com

Merck & Co www.merck.com

Novartis www.novartis.com

GlaxoSmithKline www.gsk.com

Roche www.roche.com

AstraZeneca www.astrazeneca.com

Johnson&Johnson www.jns.com

Eli Lilly & Co www.lilly.com

Abbott www.abbott.com


The world’s top 20 pharmaceutical companies11-20 http://

Bristol-Myers Squibb www.bms.com

Teva www.tevapharm.com

Amgen www.amgen.com

Bayer www.bayer.com

Takeda www.takeda.com

Boehringer Ingelheim www.boehringer-ingelheim.com

Astellas www.astellas.com

Novo Nordisk www.novonordisk.com

Daiichi Sankyo www.daiichisankyo.com

Eisai www.eisai.com


Finland’s top 20 pharmaceutical companies

1-10 http://

Orion www.orion.fi

Pfizer www.pfizer.fi

(MSD) ( www.msd.fi ) fuusio US-Merckin kanssa

GlaxoSmithKline www.glaxosmithkline.fi/

AstraZeneca www.astrazeneca.fi/

Sanofi www.sanofi.fi

Novartis www.novartis.fi

Roche www.roche.fi

Leiras www.leiras.fi

Abbott www.abbott.fi

www.bmsfinland.fi/


Finland’s top 20 pharmaceutical companies

11-20

Novo Nordisk www.novonordisk.fi

Ratiopharm www.ratiopharm.fi

Bayer Schering www.bayer.fi

Lilly www.lilly.fi

Boehringer Ingelheim www.boehringer-ingelheim.fi

Janssen-Cilag www.janssen.fi

Amgen www.amgen.com

Actavis www.actavis.fi

Lundbeck www.lundbeck.fi

Baxter www.baxter.fi


These companies are also interesting ones

http://

Merck KGaA www.merckgroup.com

Shire www.shire.com

Leo Pharma www.leo-pharma.com

Santen www.santen.com

Meda www.meda.se

Indian pharmaceutical companies

Sun www.sunpharmaceuticals.com

Dr Reddy’s www.drreddys.com

Wockhardt www.wockhardt.com

Aurobindo www.aurobindo.com

Ranbaxy www.ranbaxy.com

Torrent www.torrentpharma.com

Contact Anne & Sirpa

Anne AlloCorporate Responsibility

Officer

Orion Oyj | Orion Corporation P.O.Box 65, 02101 Espoo Orionintie 1 A, 02200 Espoo

+358 50 966 3735+358 10 426 3735

[email protected]

Sirpa PelttariEHS Specialist

Orion Oyj | Orion Corporation P.O.Box 65, 02101 Espoo Orionintie 1 A, 02200 Espoo

+358 50 966 3118+358 10 426 3118

[email protected]


Welcome onboard to building well-being with us!


orion building well-being 118.1.2012 anne allo & sirpa pelttari / orion corporation

Documents

orion diagnosticaproductsabout

names orion pharma

half of orion shares

orion ranks nr

lketehdas orion oy

net sales73q

net sales30

net sales10