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TRANSCRIPT
Forward-Looking Statements
This presentation may contain projections, estimates and other forward-
looking 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
Fully Integrated Service Platform Spans
Drug Development Spectrum from Discovery
to Manufacturing
3
• Focusing on high value, technically challenging areas
• End-to-end sterile fill/finish capabilities
2015 Forecast*: $92M
• Focusing on high value, niche APIs; brands and high value generics
• Controlled substances, steroids, proteins, peptides and cytotoxics
2015 Forecast*: $162M
• Recognized experts
in medicinal and solid
state chemistry
• Flexible, competitive
cost structure
• Development services growing rapidly
2015 Forecast*: $98M
Discovery & Development
Services (DDS)
API Manufacturing
Drug Product Manufacturing
Target
Discovery
Lead
Finding
Lead
Optimization
Candidate
SelectionPre-Clinical Phase I Phase 2 Phase 3
Product
Approval
Generic
R&D
ANDA
Development &
Approval
*Represents mid point of guidance as of May 5, 2015
Key Milestones – Last Twelve Months
• Completed and integrated 4 acquisitions
• Cedarburg – API, controlled substances
• OsoBio – Commercial scale sterile injectable manufacturing
• SSCI/West Lafayette – Supplementing development capabilities with physical
chemistry, polymorph and DMPK expertise
• Glasgow, UK – Pre-formulation/small scale sterile injectable development
• Established differentiated, integrated discovery center in Buffalo
• Advanced growth in generics with multiple development programs across all
segments, capturing development, commercial and royalty revenue
potential
• Added key strategic positions in supply chain, IT and international sales
• Creating sustainable shareholder value by replacing declining royalties with
profitable contract business
44
Entering a New Growth Era as
Outsourcing Trends Increase
• Global pharma simplifying to core
competencies• Reducing internal resources
• Generic competition
• Divesting assets; Reducing fixed
cost structures
• Vendor consolidation programs
benefitting integrated providers
• Early to mid-stage companies
accessing outsourcing
• VCs / Academia / Virtual pharma
• Increased funding fueling increase in
early discovery and development
• Industry consolidation triggering
interest in larger outsourcing partners•
5
Phase I & II Phase III 505b/ANDAs Commercial
AP
ID
rug
Pro
du
ct
Pipeline of Development and Commercial
Contracts Expanding Rapidly
6
Development Supporting these Programs
Q1 2015 Financial Highlights
($ in millions, except per share amounts)
Q1
2015
Q1
2014
Growth
Y/Y
Contract Revenue $75.1 $51.0 47%
Royalties $6.7 $8.3 (19%)
Total Revenue $81.8 $59.3 38%
Adj. Cost of Contract Revenue* $57.9 $41.6 39%
Adj. SG&A as a % of Revenue* 18% 19% (1) PPT
Adjusted EBITDA* $14.5 $11.1 31%
Non-GAAP EPS* $0.20 $0.16 25%
Tax Rate 35.0% 29.1% 6 PPT
7 *Please refer to tables at the end of the presentation for a reconciliation of non-GAAP items
Adjusted Contract Margin
Q1 2015 Q1 2014
23% 18%
Adjusted EPS Q1 2014 – Q1 2015
9
¹See tables at the end of the presentation for a reconciliation of GAAP EPS to non-GAAP EPS.
Contract Revenue Projected to Increase
Over 40% from 2014 - 2015
10 *Represents mid point of guidance as of May 5, 2015
DDS API Drug Product Q1 Actual Q2 – Q4 Estimate
$60 $72
$144
$122 $137
$153 $163
$195
$157 $163 $170
$190
$210
$251
$353
$0
$50
$100
$150
$200
$250
$300
$350
$400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 *2015E
Sustainable Contract Operating Income
Offsetting Declining Royalties
11
Operating Income
(Ex. Royalties)Royalties
Contract Operating
Margin % Current
(Ex. Royalties)
*Represents mid-point of guidance as of May 5, 2015.
**See tables at the end of the presentation for a reconciliation of GAAP EPS to non-GAAP EPS.
Strategic Priorities for 2015
12
• 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
Disciplined Capital
Deployment
Organic Growth
Acquisitions
A Disciplined Deployment of Capital Will Fuel Growth and Shareholder Value
DDS Performance – 1Q 2015
• Q1 2015 Contract Revenue: $19.3M,
up 1%
• Operational efficiency programs
delivering enhanced margins
• SSCI on track with integration
• Initiating development work as part of
10-year NIH award
• Expanded API & Drug Product
capabilities and capacity increasing
demand for Development services
• Supporting development of 67 APIs
and 99 Drug Product formulations
15
($ in millions)
Q1
2015
Q1
2014
% 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
API Performance - 1Q 2015
• Q1 2015 Contract Revenue:
$37.8M, up 27%
• Advancing growth in generics with
multiple development programs
• Expanding controlled substance
portfolio
• Long term supply agreements for
commercial business
• 53 commercial products being
manufactured
• Multiple late stage products and
scalable infrastructure for future
growth
• 48 Phase I & II Compounds
• 13 Phase III Compounds
• 6 - 505b2 or ANDAs
16
($ in millions)
Q1
2015
Q1
2014
% Change
Y/Y
API Contract Revenue $37.8 $29.8 27%
Cost of Contract Revenue $28.6 $23.2 23%
Contract Gross Profit $9.3 $6.5 43%
Contract Gross Margin 25% 22% 3 PPT
Drug Product Performance - 1Q 2015
• Q1 2015 Contract Revenue: $18M,
up 688%
• Reflects addition of OsoBio and
Glasgow, UK
• Gained 7 new customers 1Q
• Expansion of Drug Product leading
to increased development projects
• 14 Commercial Products
• 29 Products in Phase III
• 58 Products in Phase I & II
• 12 – 505b2 or ANDAs
17
($ in millions)
Q1
2015
Q1
2014
% Change
Y/Y
DP Contract Revenue $18.0 $2.3 688%
Cost of Contract Revenue $14.8 $2.7 448%
Contract Gross Profit $3.2 $(0.5) 740%
Contract Gross Margin 19% (20%) 39 PPT
Contract Revenue Projected to Increase
Over 40% in 2015
18
Contract Revenue +41% vs. 2014
*Represents mid-point of guidance as of May 5, 2015
($ in millions)
2015 Forecast*
($ in millions, except per share amounts) 2015 Y/Y
DDS $98 30%
API $162 11%
Drug Product $92 210%
Contract Revenue $335 – 370 40%
Royalties $13 – 14 -45%
Total Revenue $348 – 384 31%
Adjusted Contract Margins 25% 6 PPT
Adjusted EBITDA $59 - 65 35%
Non-GAAP EPS $0.80 - $0.90 33%
19
*Represents mid-point of guidance as of May 5, 2015. See tables at the end of the presentation for a
reconciliation of GAAP EPS to non-GAAP EPS.
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
www.amriglobal.com or follow us on Twitter (@amriglobal).
Contacts:
Investor Relations: Patty Eisenhaur, AMRI Investor Relations, 518-512-2261
Media: Gina Rothe, AMRI Communications, 518-512-2512
20
Fully Integrated Service Platform Spans Drug
Development Spectrum from Discovery to Manufacturing
21
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
Target
Discovery
Lead
Finding
Lead
Optimization
Candidate
SelectionPre-Clinical Phase I Phase 2 Phase 3
Product
Approval
Generic
R&D
ANDA
Development &
Approval
Focused on Higher Growth Segments of
Discovery/Development Market
22Source: Kalorama; McKinsey analysis.
¹ High throughput screening.
$2.9 $2.7 $2.8 $3.0 $3.1 $3.4 $3.6 $3.7
$1.5 $1.8 $2.0 $2.4 $2.8
$3.1 $3.5
$4.0 $2.5 $2.7$3.2
$3.8$4.2
$4.7
$5.2
$5.9
$0.5$0.5
$0.5
$0.6
$0.6
$0.7
$0.7
$0.8
$1.9$2.2
$2.6
$3.0
$3.5
$3.9
$4.7
$5.3
$9.2$9.9
$11.1
$12.8
$14.2
$15.8
$17.6
$19.7
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
2009 2010 2011 2012 2013 2014 2015 2016
Safety & Tox Lead Pharmacology Early Chemistry HTS Biology
16%
6%
13%
15%
4%
CAGR
2009 - 2016
1
$ in billions
1
Worldwide CRO Discovery / Preclinical Outlook
The API Environment – Next 5 Years
$0
$200
$400
$600
$800
$1,000
$1,200
2011 2012 2013 2014 2015 2016
Developed Emerging ROW
Global Spending (US$, Billions)
ROW – 6.8% CAGR to $62B
Emerging – 16.2% CAGR to $234B
Developed – 16.7% CAGR to $121B
Branded – $594BBranded – 1.2% CAGR to $631B
Branded and Generic Drug Market 2011–20161
• Global pharmaceutical market to grow
from ~$825B to ~$1,000B by 20161
• 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
• 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 2014.2
Market Characteristics
¹ Source: IMS Market Research.2 Source: FDA
23
Earnings Per Share Reconciliation(Dollars in thousands, except for per share data) Non-GAAP Measures
24
First Quarter First Quarter (Dollars in thousands, except for per share data)
Non-GAAP Measures 2015 2014
Earnings per diluted share, as reported $ (0.07) $ 0.11
Adjustments, net of tax:
Impairment charges 0.08 -
Restructuring charges 0.05 0.01
Executive transition costs 0.03 0.01
Business acquisition costs 0.02 0.01
Purchase accounting depreciation and amortization 0.02 -
Postretirement benefit plan settlement gain - (0.03)
Non-recurring professional fees 0.01 -
Debt interest and amortization charges 0.06 0.05
Earnings per diluted share, as adjusted $ 0.20 $ 0.16
EBITDA Reconciliation(Dollars in thousands, except for per share data) Non-GAAP Measures
25
First Quarter
2015
First Quarter
2014
Income from operations, as reported
$ 1,229
$ 7,465
Impairment charges
2,615
-
Restructuring charges
1,487
230
Executive transition costs
1,325
640
Business acquisition costs
1,090
322
Purchase accounting depreciation and
amortization 1,003
-
Postretirement benefit plan settlement gain
-
(1,285)
ERP Implementation costs
204
-
Non-recurring professional fees
617
-
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