Investor Relations

Q3 2017

Key Highlights

3

In Q3‘17, Consolidated sales revenue of KRW 85.9B, operating profit of KRW 18.4B,

and net income of KRW 15.0B(60%, 101.4% and 131.8% Y/Y respectively)

In Q3‘17, Separated sales revenue of KRW 5.8B, operating profit of KRW 1.9B, net profit of KRW

1.5B → Achieved an Op. margin of 33%

Signed a MOU for the export of KRW 100B Hutox with global pharmaceutical companies in

Europe, Russia and Brazil(Aug, 2017)

Botulinum Toxin(‘Hutox’) : Approved for export license, Domestic clinical

trial in phase 3

Dermal Filler(‘Elravie’): Various product lines based on high purity

HA(hyaluronic acid)

Eye Drops(‘Kynex’, ‘Clacier’): Nano Combination(Clinical Phase 2 Completed), TB4 (Planning the US clinical trial), Diquas(Santen) Mono-dose type CMO biz

Osteoarthritis Injection(‘HUMIA’,‘Highhyal Plus’, etc..): One-shot Osteoarthritis Injection, Domestic

clinical trials phase 3 in progress

Medical Devices(‘Derma Shine’ , ‘DermaAkne’, ‘Cryo elsa’): Expansion of market through new product

launches such as acne treatment and fat reduction equipment

State-of-the-art cGMP Level Factory:Expansion of CMO Business based on superior quality

Health Functional Foods: Launch individual certified products using fermentation technology(Honeybush)

InvestmentPoints

Company historyVisionGroup OverviewIdentity

Business- Transition to holdings/Business model - Business Performance- Investment PointsⅠ. Botulinum ToxinⅡ. Dermal FillerⅢ. One-shot Osteoarthritis InjectionⅣ. Eye DropsⅤ. Medical DevicesⅥ. Health Functional FoodsⅦ. State-of-the-art cGMP Level Factory

Subsidiaries - Huons- Humedix- Hubena- Huons Medicare

5

’65.07 Kwang MyungPharmestablished

‘87.07 Converted intoKwang Myung Corporation

‘98.12 Development Korea’s first plastic container Inj.

‘99.01 changed the name to Kwang Myung Pharmaceutical Corp.

‘00.08 Selected as Venture company

‘03.06 Changed the name of Huons Co., Ltd.

‘03.08 Obtained ISO 9001:2000

‘04.11 Awarded ‘5 Million USD Export Tower’

‘05.09 Obtained INNO-BIZ

’06.10 Awarded ‘National Productivity Prime Minister Award’

‘06.12 Listed shares on theKOSDAQ

‘07.12 Awarded ‘CSR’

‘08.01 Arranged a strategicpartnership with Alcon

‘08.12 Hubena incorporated subsidiary

‘09.03 USFDA Approval(510K) with Sodium Chloride Inj.

‘09.10 Obtained New Plant KGMP(Jecheon)

‘10.01 Humedix incorporated subsidiary (Acquisition)

‘10.07 Huniz incorporated subsidiary(Acquisition)

‘11.12 Awarded ’10 Million USD Export Tower’

‘14.06 Selected as ‘World Class 300’

‘14.07 Huonland(JV in China) established the plant

‘14.11 Innovative pharmaceutical company Certification

‘14.12 Humedix Listed shares on the KOSDAQ

‘15.11 Awarded ‘EY Best Entrepreneur’

‘16.05 Huons Natural incorporated subsidiary(Acquisition)

‘16.09 Biotopia incorporated subsidiary (Acquisition)

‘16.09 Panace incorporatedsubsidiary(Acquisition)

‘16.10 Permission to export 100units of Hutox

‘16.12 Awarded ’30 Million USD Export Tower’

beginning ( 1965 ~ )

preparatory ( 2000

~ )

spring ( 2006 ~ )

growing ( 2010 ~ ) Transition to a

holding company

‘16.05 Equity Spin-off‘16.06 Change listed

& re-listed on KODAQ

‘16.08 Finished Transition to Hodings companysystem

Key Achievementssince 1965

GlobalTotal Health Care

SpecializedCompany

Company history

6

Diversification of Business Portfolio

Expanding global business

Operating global standard

management system

Business expansion in light of synergy

Developing Chinese market in cooperation

with affiliates

Promoting new business for future growth

engine

Targeting emerging markets by operating overseas corporation

Enhancing business structure by adjusting

portfolios

Expanding to overseas market with global business alliance

Biomedicine products expansion

Establishing corporate culture of fostering core

leaders

Innovation-Driven Mutual Trust

Developing 6 Innovative New Medicines

Securing 9 Hidden Champions

“Total Healthcare Group Which Purposes Medical Solution For Human Being’s Health”

Vision

Mission

StrategicDirections

Core Values

Year 2025 VISION 3 ∙ 6 ∙ 9

Establishing 3 Global Production Bases

Customer-Oriented SPEED

Managing R&D network in concurrence with industry,

academy and research

Operating integrated management system with

the holding company

Establishing global-level system with management

policy innovation

Procuring research/manufacturing/quality

capability at global level

Innovative tech development & Pipeline

Expansion

VISION

7

Group Overview

CEO : Kim, Wan Seop

Ph.D of Biology, Korea University

GSK Senior Researcher

BMS Senior Researcher

CEO : Yoon, Sung Tae

M.A Project-Management

at Hanyang University Huons Global(Holding Company)

Date of establishment: Kwang Myung Pharm on July 1965 Capital Stock : KRW 4.96B Number of Employees : 82 (as of Sep 2017) Number of Total Issued Stock : 9,911,705

Panace51%

39%

40% 41% 68%41%

<Medical Device>

<Holding company>

Huonland<Eye Drop JV in China>

<Applied Biopolymer>

Humedix

<Medical Container>

Hubena

<Disinfectant>

Huons medicare

<Health Functional Food>

Huons Natural

Huons

<Pharmaceutical>

<Green Bio>

Biotopia

58%

59%

Maximize Transparency of Corporate Governance and Business Stability

Business – Transition to holdings / Business model

Business Structure

8

Goal of transition to holdings

Management of

Subsidiaries

→ Utilize efficient resources

to create synergies

→ Obtain responsible

management system

Establishing a foothold

in a new business

→ Invest and manage the

new business

→ Stabilize the new

business

→ Found lucrative business

structure

Discover a new future

Growth Engine

→ Found a business to create

synergies with the current

business (Health care,

esthetic, etc)

→ Actively discover diverse

business opportunities

1.HoldingsDivision

2.SalesDivision

• Brand Fees

• Export agency Business

• Business agency (Management-related)

• Income from Dividend

• Income from Leasing

• Botulinum Toxin R&D

/ Manufacturing

Establishment of Huons Group New Building' in Pangyo 2nd District

- Plan to move into Affiliated companies and research institutes

→ Collaboration and synergy effect among all affiliates

- Construction will start at the end of 2017 and be completed in

2H 2020

9

Idendity

HA /PDRN /PCL

Elravie

Ellena

Revolline

Global CMO

Osteoarthritis

Category

Business

Product

GrowthChannel

Filler

Domestic Export(Partnership)

Pharmaceutical Beauty·Healthcare

Botulinum Toxin

Medical Device

CosmeticsPharma

HUTOXDermaShine

Derma ShineAcne

CryoElsa

InsulinPatch Pump

HA / PDRN

DermaElravie

HU:ON

HA / PDRN

Humia

HY(HA)

High HyalPlus

ETC

Local anesthetic(lidocaine)

Various injections

Eye Drops

Nano Combinati-

on

Thymosinβ4

Eye drops

Registered about 300

items

Kynex,Clacier

Health functional

food

Fermenta-tion

Honeybush

Red Ginseng

Pharma

Well-being

Obesity/Diet

ImmunityImproved

Nutrition Injection

Disinfectant

VerticalIntegrated Production and sales of medical containers

Disinfecta-nt

Scotelin

Hemoclean

Animal feed

additive

Company historyVisionGroup OverviewIdentity

Business- Business Performance- Investment PointsⅠ. Botulinum ToxinⅡ. Dermal FillerⅢ. One-shot Osteoarthritis InjectionⅣ. Eye DropsⅤ. Medical DevicesⅥ. Health Functional FoodsⅦ. State-of-the-art cGMP Level Factory

Subsidiaries - Huons- Humedix- Hubena- Huons Medicare

11

Business – Financial Performance Ⅰ

“Higher continuous growth rate of sales”

+150% Growth(‘15 ~ ‘16)

※ Since August 2016, earnings of HUONS Co., Ltd. are included in consolidated financial results

Sales (consolidated F/S, Unit : KRW Billion, %)

(consolidated F/S, Unit : KRW Billion, %)

+60% Growth(Y/Y)+4.7% Growth(Q/Q)

65.4

163.7

241.3

2015 2016 Q3'17(YTD)

14.9

21.8

53.6

73.4 73.4

8285.9

Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17

12

Business – Financial Performance Ⅱ

※ The financial statements have been rewritten as a result of the split in 2016, and net income from discontinued

operations for the year ended December 31, 2016 is KRW 506.4B which were operating profit of KRW 14.5B and operating profit of discontinued operations of KRW 491.8B were recognized as fair value.

Profits (Consolidated F/S, Unit : KRW Billion, %)

Op. Margin(%)

Np. Margin(%)

12.1 28.9

45.4 40.5

526.2

34.7

2015 2016 Q3'17(YTD)

Operating Income

Net Income

18.4%17.7%

61.9%

321.4%

Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17

3.7 4.291

13.2

500.9

6.5

24.9%19.2% 17.0%

88.5%

2,300%

12.1%

11.95.7

16.2%

7.7%

11.48.2

15.5%

11.2%

15.611.5

19.1%

14.0%

18.415.0

21.4%

17.5%

18.8%

14.4%

13

Unit : KRW Million Q1‘17 Q2‘17 Q3‘17

Operating Revenue 6,864 5,880 5,777

Service 2,377 2,054 1,982

Brand Royalty 1,357 1,502 1,590

Dividend 1,778 - 2

Product(Hutox) 1,143 2,113 1,991

Others 209 211 212

Operating Expenses 3,845 2,629 3,847

Operating Income 3,019 3,251 1,929

Net Income 2,904 2,053 1,467

1.5% ~ 3.0% brand royalty rate for each

subsidiary

Increased sales due to Hotox exports

Achieved an Op. margin of 33%

Business – Financial Performance Ⅲ

Performance (Separate F/S, Unit : KRW Million)

14

Manufacturer

R&D

Pre clinical

HUTOX

Clinical

Specifications

- Product Name: Hutox

- Advantage : High purity (>99%)

- Efficacy: Glabella wrinkle improvement

- API: Botulinum toxin type A

- Strain history : ATCC3502

Marketing Authorization Holder

Facilities- Established: June 2014- Capacity : 1 million Vials/Annually- New facility under construction

: 5 million Vials/Annually

- Domestic Clinical trial Phase 2 completed, Phase 3 in proceeding

- 150kDa against antibody formation & tolerance in researching

Sales

- Received approval for export license(100units) from KFDA in

Oct 2016

- Awaiting export license

(50units, 200units)

Business – Investment Point Ⅰ (Botulinum toxin Ⅰ)

15

Hutox Business model

Huons global Huons

Sales Revenue(50:50)

50% 100%(in accounting)

Production Marketing

Preclinical trial Clinical trial

synergy Gaining competitive edge by selling bundles of Hutox

and Elravie(filler)

Marketing strategy

Expandingindications

Aesthetic -> Therapeutic

-Expanding Various treatment indications such as cerebral palsy,

strabismus, muscle rigidity

-Various strengths(50 / 100 / 200 units )

-price competitiveness

-Marketing promotion

(Offering package solutions for obesity, wellness, and medical

devices)

Competitivenessedge

Business – Investment Point Ⅰ (Botulinum toxin Ⅱ)

16

Business – Investment Point Ⅱ (Dermal Filler Ⅰ)

<Light> Fine wrinkles, Crow's feet, Lips

<Deep Line> Cheek furrow,Nose, Forehead

<Ultra Volume> Chin,Cheekbone, Facial contour

<Balance> Water light(moisture supply)

[Source : GAI-Global Aesthetic Index]

0

0.5

1

1.5

2

2.5

3

8 weeks 16 weeks 24 weeks

GA

I Sco

re

Elavie Deep Line RestylaneD사Elravie Deep Line

Launched new product ‘Elravie Premier' (Dec, 2016) → Increased stability

HDRM Technology Applied [Patent : KR10-2014-0118582] → Good elasticity and viscosity compared to

competing products, also excellent durability and resistance to enzymes.

‘Elravie’ Filler

Basic type Including lidocaine(Reduced pain)

Comparison of dermal filler properties

Comparison of clinical test (6 months)

100

81

67

90

Humedix

C brand

B brand

A brand

100

71

91

37

Humedix

C brand

B brand

A brand

[Source: Humedix * Comparison of major filler products,

with Humedix's fixed at 100 for reference ]

17

‘HUMIA 14002’ One-shot osteoarthritis injection

Business – Investment Point Ⅲ(Osteoarthritis Ⅰ)

Patient-friendly with the reduction of injection frequency, production

approval and expansion of technology export

Decreases the chances of inflammation and infections by reducing injection

frequency from 3 to 1.

Similar viscosity and elasticity with normal synovial fluids

Excellent biocompatibility from the use of 2.5 million Daltons of cross-linked

hyaluronic acid

Technology export and strategic alliance (HAIBIN, China)

1’st Generation 2’nd Generation 3’rd Generation

(Injected weekly, for 5 weeks) (Injected weekly, for 3 weeks) (Once a week)

Most similar to non-patient joint fluids

(Biocompatible)

Prevention of inflammation

Induction of endogenous HA

formation

Pain relief

Increased convenience of surgical

procedures

Characteristics

Q3 2013 Q3 2015 Q1 2018 Q3 2018

ProductLaunch

ProductionApproval

3rd ClinicalPhase

Research Commencement

Non-clinicalResearch

Completed

Q2 2018

Duration : ≥ 6

months

18

HA Artificial tears

2’nd

IMD/Nano

Nano

Combination

Thymosin β4

3’rd

3.5’th

Cyclosporine

1’st

Generation of dry eye therapies

4’th

Clinical trial Phase III (2017.10~)

Supported by: Korea Ministry of Trade, Industry and

Energy

Total R&D Amount: KRW 3.3B (4 years, 2015.06 ~)

`Developing

Launched Items

Non-clinical Stage, US Pre-IND meeting completed

Entering phase II US clinical trial in 1H 2018

Supported by: Small and Medium Business

Administration ‘World Class 300 Project’

Total R&D Amount: KRW 7.6B (4 years, 2015.08 ~)

Business – Investment Point Ⅳ(Eye Drops Ⅰ)

19

Dual effects of ‘Goblet cell proliferation’ and ‘Anti-inflammation’→ “Thymosin β4

Thymosin β4 derivative effects

Targets MOA(Mode of Action)

Promote cell migration Move the promotion of corneal epithelial cells wound healing

Promote cell survival Promote Goblet cell multiplication stabilization of tear film

Anti-inflammatory Reducing inflammatory of cornea and lacrimal gland

Artificial Tears: Minor dry eye

Cyclosporine : Required long-term medication

Diquafosol : No Goblet cell proliferation

Limitation of other products currently on the market

- Amino acid number: 43, Molecular weight: 4,921 Da

- Proteins found in platelets and wound areas

- Actin binding → angiogenesis, anti-inflammation,

wound healing, cytoprotective effect

Production technology of Recombinant Protein Thymosin β4 derivative using E. coli fermentation

→ Low production cost compared to synthetic peptides

[Expression vector production] [E. coli transformation] [E. coli fermentation] [Enzyme treatment and purification]

GST Tβ4

Cutting Trypsin

Ion exchange resin

Business – Investment Point Ⅳ(Eye Drops II)

20

Expected Total investment amount: About RMB 110M(KRW 20B)

Shareholders: Huons(39%), Northland(51%),

Korea Investment Partners(7%), etc(3%).

Approved product registration(Brimonidine tartrate)

for glaucoma treatment(July 2016) & GMP(Nov 2016)

Multi-dose CMO business plan

Expected to approve artificial tears(HA) in 1H 2018

R&D production Sales / Marketing

Product For useSubmitted the

application Item

approval date

Brimonidine tartrate Glaucoma 2015.09 2016.07(Completed)

Levofloxacin keratitis 2015.12 2018.1H

HA 3 Items Artificial tears 2015.12 2018.1H

Olopatadine Allergic conjunctivitis 2018.1H(E) 2019(E)

Moxifloxacin Antibiotic, keratitis 2018.1H(E) 2019(E)

Ophthalmic perfusatePerfusate(cataract, etc.) during

ophthalmic surgery2017.4Q(E) 2018.4Q(E)

Huonland(JV) established for China eye drops market (KRW 1.4 trillion)

Business – Investment Point Ⅳ(Huonland)

Product Description

DigitalInjectionSystem/ Panace-DS-30

- Auto-sensing injection system

- Forward speed and distance adjustment of the piston

holder according to the operating modes

- Available in 1ml, 3ml and 5ml syringes

Derma Shine Series

Digital Injection System and Multi Needle → Maximizing synergies with dermal filler ‘Elravie’ series

9Pin, 5Pin Multi

Needle(Disposable)

Interface improvements for usability

Intense pulsed light + Radio frequency for acne treatment device

Clinical trials of moderate acne in the dermatology clinic of Chung-AngUniversity

Derma Shine Ⅲ

Cryo elsa

DermaAkne

Device which maintains the low temperature to relax the pain/edema in the affected area and reduce the noninvasive subcutaneous fat

Business – Investment Point Ⅴ(Medical Devices )

EOPatch

“Improving the quality of life of pediatric diabetics with the first patch-type insulin pump in Korea”

- Electro osmosis pump technology Less

noise, Less vibration and precise dose injection

- Easy to carry by reducing size and weight by 20% or more compared to existing products

20

R & D / Production / Sales / Supply of raw materialsMaximize group synergy

22

"Entering Health Functional Food Business"

Huons

R&D

Huons Natural

Manufacturing&Marketing

Biotopia

Ingredients

name effect Intro. of techLaunching

date(E)status

Merit C antioxidant - 2012.12 On sale

zeromateDietary

supplements- 2017.05 On sale

DaeryongHan Sam

Immunity enhancement

On sale

honeybushwrinkle

improvement

KOREA INSTITUTE OF ORIENTAL

MEDICINE2017.07

On saleApproved as

a health functional food by KFDA

HU028 Rhinitis preventionKOREA FOOD

RESEARCH INSTITUTE2019.12

Human applicable test in Progress

HU029 Atopy treatmentKOREA FOOD

RESEARCH INSTITUTE2018.12

Human applicable test in Progress

HU038 climactericKOREA FOOD

RESEARCH INSTITUTE2019.06

Human applicable test in Progress

HU033 prostateChoongnamuniversity

2019.12 Discovery

HUG179 Reduce body fat - - Discovery

GOSImmunity

enhancementCatholicuniversity

- Discovery

Health functional food R&D status

Business – Investment Point Ⅵ(Health Functional Foods Ⅰ)

23

Huons Natural(production & marketing)

Differentiation points

Presenting a new trend of health functional food market using approved raw materials

Cooperation with sub-companies

well-built sales network

Products launched in 2017

Honeybush skin solution Honeybush kalamansi Fermented redginseng honeybush

Business – Investment Point Ⅵ(Health Functional Foods Ⅱ)

24

The new growth engines, “CMO business" and "exports"

Huons Global Botulinum Toxin Plant (Jecheon)

Huons Pharma Plant (Jecheon)Huons Natural Health functional foods plant (Jincheon)

Humedix 1’st Factory (Jecheon) Humedix 2’nd Factory (Jecheon) Hubena Glass Container Factory (Nonsan)

State-of-the-art automation facilities in USA, Germany and Japan

Business – Investment Point Ⅶ(State-of-the-art cGMP level factory)

Company historyVisionGroup OverviewIdentity

Business- Business Performance- Investment PointsⅠ. Botulinum ToxinⅡ. Dermal FillerⅢ. One-shot Osteoarthritis InjectionⅣ. Eye DropsⅤ. Medical DevicesⅥ. Health Functional FoodsⅦ. State-of-the-art cGMP Level Factory

Subsidiaries - Huons- Humedix- Hubena- Huons Medicare(Huniz)

26

27.7 38.6

48.1

63.3 74.4

80.9

95.2 106.6

122.1 131.0

156.5

215.1

244.8

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

SalesCAGR 20%

(2004~2016)

Global total healthcare company providing life innovative solution

Establishing(~2008) Growing(2009~2013) Expanding(2014~)

- Secured growth through local anesthetics / injections business

- Strong growth of pharmaceutical business mainly driven by well-being products

- Listed in the KOSDAQ in 2006

- Eye drops(Kynex) Strategic alliance with Alcon

- Construction of new factory → Growth Platform

- JV established in China for the local eye drops market

- Expansion of high value-added products (Aesthetic, Hutox, Filler etc)

- Expanded the field of health functional food business (Honeybush was approved as functional ingredients by KFDA)

(Unit : Based on Separate financial statements, KRW Billion)

Subsidiaries – HuonsⅠ

27

51.8 60.9

10.2

11.5

Q3'16 Q3'17

62.0

72.4

140.6

178.8

206.7

177.4

15.9

36.3

38.1

30.1

'14 '15 '16 Q3'17(YTD)

Export

Domestic

156.5

215.1

90%

244.8

59.3 60.9

11.6 11.5

Q2'17 Q3'17

70.9 72.4

16%

84%

FYGrowth Rate

+14% Y/Y Growth+16.8%

15%

85%

Q/Q Growth+2.2%

207.5

10%

83%

17%

16%

85%

15%

16%

84%

15%

85%

84%

Portion

Sales

“Sustaining Solid double digit Sales growth”

<Assuming that Huons has not split, 2016 Pharmaceutical business separate F/S>

(Unit : Based on Separate financial statements, KRW Billion)

Subsidiaries – Huons Ⅱ

28

'14 '15 '16 Q3'17(YTD)

Operating income

Net income

21.1

34.3

17.5

27.1

Q2'17 Q3'17

13.5%

15.9%

11.2%12.6%

Q3'16 Q3'17

10.3

8.6

37.0

30.1

15.1%

12.3%

9.5

7.9

16.6% 16.9%

13.9% 14.1%

29.828.9

14.3%

13.9%

12.2

10.2

12.2

10.2

13.3%16.9%

11.2%14.1%

Profits

“Continuous & stable profit”

<Assuming that Huons has not split, 2016 Pharmaceutical business separate F/S>

Op. Margin(%)

Ni. Margin(%)

(Unit : Based on Separate financial statements, KRW Billion)

Subsidiaries – Huons Ⅲ

29

R&D investment

IBD(Inflammatory Bowel)

Target anti-cancer drug

Atopy

Autoimmune disease

Nano combinationeye drops

Dry Eye Syndrome Fatty LiverGlabellar wrinkle(Botulinum toxin)

Discovery Preclinical Phase I Phase II Phase III

Botanical

IMD

Biologics

NCEs

R&DPipeline

(Unit: KRW Billion, %)

Sales

R&D expense

R&D %

8.8 9.813.4

19.7

131.0156.5

215.1

244.8

6.6% 6.3% 6.2%

8.1%

'13 '14 '15 '16

15.5 14.6

180.5

207.5

8.6%7.0%

Q3'16(YTD) Q3'17(YTD)

Subsidiaries – Huons IV

30

Main Products

Possessing world’s best biopolymer original technology

Increase of future value on account of continuous growth

Filler

• Wrinkle improvement → Aesthetic / Healthcare

• Highly purified HA(Hyaluronic Acid)

• HDRM Technology → Excellent elasticity /viscosity

/durability

• China CFDA registration (Mar.2015)

Osteoarthritis

• Hyaluronic acid is a component of joint synovia → improve

joint movements and reduce pain

• 5 Dose Type (High Hyal)/ 3 Dose Type (High Hyal+)

• 1 Dose Type (Humia) Licensing out(China) : Human

synovial similar properties (Clinical Trial Phase III)

Cosmetics

• Change to ‘Cosmeceutical’ Company in 2017

• Activation of ‘Elravie’, ‘HU:ON’ Cosmetics brand

• Launching HA functional cosmetics

• Expansion product lineup and diversification sales channels

ETC

• Pharma : Establish product portfolio focusing on ETC

- Anemia, Endocrine, and Digestive system etc.

• Ophthalmic Drugs: Strengthen distribution channels for eye

drops

• DermaShine : Digital Injection System(Panace) '14 '15 '16 Q3'17(YTD)

Filler

Osteoarthritis

Cosmetics

Pharma

Ophthalmic

ETC

25%

1%

15%

13%

17%

35%

2%

13%

9%

15%

36%

3%

19%

11%

21%

15%

10%

23%

29.2

37.4

26%

29%

27%

23%

45.1

42.1

3%

6%

Subsidiaries – Humedix I

Sales (Unit : Based on Separate financial statements, KRW Billion)

31

First factory Second factory

Reinforcement of prefilled Inj(Joint Inj) facility

Installation of vial freeze drying Inj facility

Installation of ampoule Inj facility

Installation of asepsis cosmetics facility

New Factory Production & Facilities Current Status

+

Subsidiaries – Humedix Ⅱ

1’st factory 2’nd factory Capacity

PFS#1 - 3,500ea/hrs

- PFS#2 8,000ea/hrs

- PFS#3~#4 Future Line

-Vial-FreezeDryer(Vial)

12,000Vial/hrs

- Ampules#1 30,000ea/hrs

- Ampules#2 Future Line

Line of Second Factory

“New growth momentum with new factory”

-Capacity : 4 times bigger than first factory, scheduled to start operation in Dec 2017

Location : Chungcheongbuk-do Je-Cheon

Beginning Date of Construction : March 2016

Completed Date : April 2017

Investment Amount : More than KRW 48B

◆ Biopolymer Application DDS

/Protein New Material

- Leuproreline depot

- ~ Q3 2019

Discovery Preclinical Phase I Phase II Phase III

R&DPipeline

One-Shot

osteoarthritis

(Humia 14002)

- HA based, Natural

Biopolymer

- ~ Q1 2018

Volumizing Filler

- HA based, Natural

Biopolymer

- ~ Q2 2018

1. HA material integration(Manufactory Constructed) → Fermentation technology and HA raw

material production (to be completed : 2017 ~ 2020)

2. Functional Vitamins(Vitamin D conjugates) → Synthesized macromolecules applied,

functional cosmetic certification Dual Function, stability

"Expanding product portfolio and leading the market"

◆ Tissue regenerator

- high purity nucleic

acids from salmon’

sperm

- ~Q2 2018(Launching)

32

Subsidiaries – Humedix Ⅲ

Urology Filler

- HA based

- Improved safety

(versus PLA filler)

- ~ Q3 2018

◆ New material HA derivative

- Enzymatic deacetylation

Changed HA material

- API Conjugate uses

◆ PN Filler

- Tissue regeneration

- HA, PN(Polynucleotide)

- ~Q3 2018

◆ Biphasic Filler

- HA Biphasic filler line

up

- ~Q1 2019

33

Company overview

Strategy

CEO Park, Byung moo

The date of establishment

1996. 10. 29.

Main Products Ampoule, Vial, etc

Ownership 41%

Subsidiaries – HubenaⅠ

Production and sale of specialized medical glass containers (Ampoule, Vial, Cartridge)

Fulfilled with high quality of production and cost competitiveness by installing French automated building system (BMS) → Synergistic effect with safe subsidiary material delivery

New factory, built on April 2013, expanded production (invested KRW 8B).

Expand business field from the scope of current ampoule and vial-related production

into the sales of various pharmaceutical-related raw and subsidiary materials.

(Prefilled syringe, PVC Hole, Rubber closures, Imported caps, etc).

[unit: KRW Million]

12,599

15,037 16,568

12,277

14,562

801 2,199 2,525

1,874 1,431

2014 2015 2016 Q3'16(YTD) Q3'17(YTD)

Sales

Operating Income

CAGR

+15%

Ampoule Production line 10 lines

Vial Production line 10 lines

Vial Printing 1 line

Automatic packing machine(Large) 1 unit

Shrink wrapping machine(Mobile) 3 units15,000

6,700 4,200

180,000

80,400

50,400

Ampoule Vial Cartridge

Monthly

Yearly

Production Capability (Unit : K)

ItemRaw Materials Standard: 9.75Φ , Production Standard: 1.0cc ~ 30.0cc

Type Vertical production method

Spec

Type: Pattern B, C, D(ISO 9187-1) Cutting: One point cutting(OPC ISO 9187-2),

Collar breaking, Scoring cutting Code ring: 1~3 ring Print: Silkscreen Printing

StandardAccording to the specification of the order, Customizing a product

Raw material

German Schott, Europe glass tube

ItemRaw Materials Standard: 8.0Φ ~ 50Φ , Production Standard: 1.0cc ~ 100.0cc

Type Horizontal / Vertical Production Method

Spec Type: Injection(ISO 8362-1), Screw(ISO 11418-7),

Blowback, Freeze-dried Print: Silkscreen Printing

StandardAccording to the specification of the order, Customizing a product

Raw material

For Injection : German Schott, Europe glass tube For Food & Cosmetics: German Schott, Europe

glass tube, China glass tube

Production Facility

Ampoule Vial

Major Products

34

Subsidiaries – HubenaⅡ

35

Company overview

Main products

CEO Lee, Sang man

The date of establishment

1999. 09. 16.

Main Products Disinfectants

Ownership 68%

z

Subsidiaries – Huons MedicareⅠ

Sale and exportation of prescription drugs and disinfectant for medical devices

Operation of specialized medicines business (echo-friendly antiseptic solution, prescription drugs)

Acquired disinfectant business for medical devices from Mtechnology → Expanded business scope from existing

disinfectant medicines to medical devices

Disinfectant for medical devices

- Hemoclean (Sterilizes hemodialysis equipment

→ Approval of US FDA/EUROPE CE)

- Scotelin (Sterilizes endoscope equipment )

Eye Drop

- Rebliss Eye Drop (Sodium Hyaluronate 1mg/mL)

- Riflu Eye Drop (Fluorometholone 1mg/mL)

- Ridifen Eye Drop (Ketotifen 0.5mg/mL)

Oral administration

- Alniz (peptic ulcer)

- L-Stine Soft Cap.(phlegm removal)

- Huniz Levocetrizine HCI Tab.(Antihistamines)

[unit: KRW Million]

5,987

7,823

11,390

7,739

12,448

527 1,495

2,277 2,233 1,755

2014 2015 2016 Q3'16(YTD) Q3'17(YTD)

Sales

Operating Income

CAGR

+38%

36

Products

Outline

- Fast and excellent sterilization effect of medical device

- Extensive coverage

→ Expanding to various medical devices

- Products

• PAA type: Scotelin PLUS

• Aldehyde type : Ophiclean

Specifications

- Formulation: Disinfectant(OTC)

- Disinfection of medical devices(Endoscope and others)

Status

- Scotelin PLUS

• Development of formulation completed (Jan 2017)

• Validation and approval of KFDA in progress

- Ophiclean : Released May 2017

PAA Type

• Hemoclean

• Scotelin RP

• Scotelin

AldehydeType

• Terraclean

Development status of sterilization disinfectant

New Products

Sterilizationdisinfectant

• Scotelin PLUS

• Ophiclean

Developed products that meet the standards of the US Centers for Disease Control and Prevention

Subsidiaries – Huons Medicare Ⅱ

37

Summary of Consolidated Financial Statement

Summary of separatedFinancial Statement

Summary of Financial Statement(Huons Global)

(unit : KRW)

Q3 2017 2016

I. Assets

Current Assets 226,377,312,960 218,792,413,910

Non-Current Assets 366,927,734,925 338,268,578,846

Total Assets 593,305,047,885 557,060,992,756

II. Liabilities

Current liabilities 92,924,833,269 89,603,121,629

Non-current liabilities 21,414,944,414 13,559,623,659

Total Liabilities 114,339,777,683 103,162,745,288

III. Equity

Attribute to: Owner of the company

334,884,514,899 319,799,725,080

Issued capital 4,955,852,500 4,859,236,000

Capital surplus 245,820,354,586 244,416,224,908

Capital adjustments (12,308,950,740) (555,243,129,232)

Accumulated other Comprehensive income

48,884,927 (298,753,675)

Retained earnings 96,368,373,626 626,066,147,079

Non-controlling Interests 144,080,755,303 134,098,522,388

Total Equity 478,965,270,202 453,898,247,468

Total equity and liabilities 593,305,047,885 557,060,992,756

I. Sales Revenue 241,306,999,150 163,712,232,478

II. Cost of Revenue 195,914,442,599 134,815,804,155

III. Operating Income 45,392,556,551 28,896,428,323

IV. Equity method Income (538,098,729) (339,703,419)

V. Other gains 3,758,072,553 813,842,674

VI. Other losses 1,001,422,887 2,663,149,297

VII. Finance income 1,342,484,351 2,532,905,555

VIII. Financial cost 1,344,101,492 2,899,487,769

IX. Profit before tax 47,609,490,347 26,340,836,067

X. Income tax expense 12,897,916,030 6,489,078,889

XI. Net income from continuing operations

34,711,574,317 19,851,757,178

XII. Net income from discontinued operations

- 506,355,524,146

XIII. Net Income 34,711,574,317 526,207,281,324

(unit : KRW)

Q3 2017 2016

I. Assets

Current Assets 11,358,652,962 17,395,778,462

Non-Current Assets 302,145,171,185 287,799,326,859

Total Assets 313,503,824,147 305,195,105,321

II. Liabilities

Current liabilities 7,865,363,792 2,341,397,455

Non-current liabilities 299,130,000 299,130,000

Total Liabilities 8,164,493,792 2,640,527,455

III. Equity

Issued capital 4,955,852,500 4,859,236,000

Capital surplus 242,472,286,564 242,472,286,564

Capital adjustments (5,208,272,686) (548,875,226,098)

Accumulated other Comprehensive income

(512,543,951) (809,237,219)

Retained earnings 63,632,007,928 604,907,518,619

Total Equity 305,339,330,355 302,554,577,866

Total equity and liabilities 313,503,824,147 305,195,105,321

I. Sales Revenue 18,520,475,504 10,740,869,908

II. Cost of Revenue 10,321,712,362 10,711,508,859

III. Operating Income 8,198,763,142 29,361,049

IV. Other gains 13,552,298 17,118,075

V. Other losses 69,358,175 133,366,265

VI. Finance income 116,225,745 855,398,540

VII. Financial cost 141,532,842 253,479,786

VIII. Profit before tax 8,117,650,168 515,031,613

IX. Income tax expense 1,693,233,462 (176,777,030)

X. Net income from continuing operations

6,424,416,706 691,808,643

XI. Net income from discontinued operations

- 505,375,006,113

XII. Net Income 6,424,416,706 506,066,814,756