competence

M&A

December 2018

meets

RELATIONS

pharma

Presentation per

Specialty INVESTOR Investor CHEPLAPHARM ATAGLANCE

Company Snapshot Strong Historic Growth

Family‐owned company with > 25 years of pharma sector expertise 47% 56% 59% 61%

Buy and Build strategy 226 M&A know‐how and track record with > 80 products acquired 188 Branded specialty pharma / niche products in over 120 countries 122 134 115 Value creation via scalable platform and Life‐Cycle‐Management 80 68 Asset light business model with strong scientific backbone 38 2015A 2016A 2017A YTD Sep 2018 Revenue growth from < € 1m in 1998 to ca € 226m in 2017 % EBITDA margin Sales EBITDA

Recently Closed Acquisitions Brand Diversification by Area (2018P)

Cardiology 2% 2% 11% Obesity 2% Infection Medicine 29% 5% Opthalmology 09/2018 09/2018 09/2018 09/2018 7% 2018P Oncology Haematology 7% 15% Emergency Medicine 8% Sleeping Disorder 13% 07/2018 04/201802/2018 01/2018 All Other

Average age: ca 25 years 2 PORTFOLIO OVERVIEW

Sales by Products (2018P) Sales by Geography (2018P) 1% 2% 4% 2% 11% 5% 15% Atacand/Plus Questran 2% 6% Xenical Heminevrin/Distraneurin Europe ex Germany 2% Germany 2% Dilatrend Anexate 2% 15% Cymvene VePesid Asia and Oceania 2018P 2018P 50% 4% Visudyne Rohypnol Latin America and Caribbean 28% 5% Deursil/Ursolvan Sotalex North America 5% 12% Fungizone Etopophos Africa 6% Konakion MM All Other 7% 8% 7% Vesanoid

Niche vs. Legacy (2018P) Business Footprint

Legacy • Business in more 22% than 120 countries

Branded Products with competition • Vast network of distribution 47% Branded Products with unique competition 2018P partners globally Branded Products with limited/partial competition • Valuable business 31% partner to Big Niche Pharma

CHEPLAPHARM is well diversified across products and geographies, providing global reach to Big Pharma 3 ORGANISATIONAL STRUCTURE

100% CHEPLAPHARM Arzneimittel GmbH Moody´s B1 / S&P B both stable outlook

CHEPLAPHARM WR Pharmaceuticals Walter Ritter Glenwood LLC France SAS Vertriebs GmbH GmbH & Co KG

RubiePharm RubiePharm Sanavita GmbH Arzneimittel GmbH Vertriebs GmbH

Helm Medical GmbH

4 CHEPLAPHARM‘S BUSINESS MODEL

Life‐Cycle Management Key value levers: (i) overhead cost and complexity reduction, (ii) optimization of production costs, (iii) active pricing strategy and (iv) well‐established partners for production / D&M

Research & Deal Sourcing & Distribution Production Development Due Diligence & Marketing

Lean set‐up given outsourced manufacturing and distribution activities to trusted, qualified and long‐standing 3rd parties

No R&D Focus on inorganic growth acquiring CHEPLAPHARM is principally shifting distribution & marketing to its own activities & branded original off‐patented niche external exclusive distribution network or taking over agreements by assignment associated risks or legacy products from Big Pharma CHEPLAPHARM’s clear focus and key competence is Life‐Cycle Management creating added value vs Big Pharma

BUY –INTEGRATE –BUILD / OPTIMIZE Disciplined identification of right acquisition targets, integration into outsourced supply chain and optimization via professional Life‐Cycle Management

5 UNIQUE, LOW RISK BUSINESS MODEL

1 Development Phase Patent Phase Post‐Patent Phase Management of Key characteristics product Life‐Cycle CHEPLAPHARM’s Business Model • Limited competition, CHEPLAPHARM advantages: no relevant generics • Limited or no competition • 10+ years out of patent Niche • Unlikely to be replaced • Stable sales products by new treatment guidelines • Low risk due to “tried & tested” pharmaceuticals • Stable to little growing sales 2 and cash flows

1 Time Cash • Stable market share following generics competition

Legacy • High brand loyalty being able products to retain customers

• Stable to slightly declining sales and cash flows 2 Niche product ‐ Lower volume – typically no or limited competition (solid and stable sales) Optimization of Legacy product ‐ Higher volume – generic competition (price competitive) cost structure

Acquisition of “tried and tested” pharmaceuticals with sticky customer base, long‐phase out periods and high brand awareness requiring no / less marketing

6 LIMITED COMPETITION MARKET SEGMENT / BARRIERS TO ENTRY

M&A track record Fast ‐ Flexible ‐ and regulatory Reliable competence

Package Global Deals distribution

And many more…!

Strong relationships to Big Pharmas and reliability being key for any upcoming transaction representing a significant barrier to entry for potential new market players

7 DISCIPLINED M&A STRATEGY – INVESTMENT CRITERIA (EXCERPT)

Track record • Established products with proven track record (at least 15‐20 years history)

Remaining • > 10 years economic life

Balanced product • Incremental sales contribution from a single acquired product of max. €100m portfolio

• Secures survival as cash cow Presence of “Pull effect” • Brands should be established in the market and should have a high degree of familiarity

• Either niche position (USP of API and/or indication) with growth opportunity or Market position extremely cheap and offer attractive ROI (legacy deal)

Production • Production must be ensured in the long‐term

Track record of carefully adding new products to the portfolio based on stringent selection criteria that have been successful for 15 years

8 CREATING VALUE FROM LIFE‐CYCLE MANAGEMENT

Schematic presentation for Life‐Cycle Management provides additional upside, illustrationBasis for investment decision i.e. neither included in investment decision nor in (ROI calculation) purposes CHEPLAPHARM’s business plan only

Life‐Cycle Value 1200 of Reduction of Active Price Others CHEPLAPHARM Production Costs Strategy 1000 Overhead Reduction of Reduction complexity 800 Life‐Cycle Value of Big Pharma 600

400

200

0 1234567

Life‐Cycle Management comprises several measures with regular optimization of production costs being the most important value lever

9 STRONG AND SUSTAINABLE EBITDA MARGINS REFLECTING INVESTMENT POLICY

150 100% 134

120 80%

61% 57% 59% 90 56% 60% 50% 52% 48% 48% 46%

€m 68 Average 60 40%

38 27 30 26 20% 11 12 7 8

0 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017

EBITDA EBITDA margin

 Strong operational track record proven by stable EBITDA margins across the cycle  Fluctuation in EBITDA margin mostly driven by M&A activity and related Transitional Service Agreements (TSAs), i.e. in years of stronger M&A activity such as 2013, 2016 and 2017, margins are slightly overstated due to TSA accounting effects  However, through the cycle, EBITDA margins have been fairly stable around 50%

10 SUMMARY ‐ KEY CREDIT HIGHLIGHTS

1 Unique, low risk business model with easy scalability

2 Strong acquisition track record and global distribution

3 Limited competition market segment

4 Diversified sales base and high revenue visibility

5 Limited capex requirements resulting in significant cash generation

6 Highly qualified management with proven operational and M&A track record

11 competence

M&A

meets

pharma

Specialty PPENDIX A COMMENTS FROM THE RATING AGENCIES

“ CHEPLAPHARM runs a profitable and cash flow generative business model

…. good therapeutic and geographic diversity

…. successful track record and established relationships with leading global pharma companies ”

“ CHEPLAPHARM will be able maintain its profitability metrics, supported by management's focus on lifecycle management activities

The main strengths of the company is its established track record of careful product selection ….

…. the company has been able to generate average EBITDA margins of about 55% ”

13 CORPORATE DEVELOPMENT

Vesanoid Japan® Dilatrend® Legend: Roche Roche Product acquired Seller Calcivit® VePesid® Hexal BMS Streptosil® Boehringer Italia Konakion® Sotalex® Roche BMS Reisegold® UCB Package Teva UCB Lariam® Questran® Roche BMS Klosterfrau Package Halbmond® Aldactone® Inhibace® Klosterfrau Teva Atacand® Roche AstraZeneca Baldrian Dispert® Sanofi Package Vesanoid® Anexate® Vemedia Sanofi Cymevene® Roche Roche Fungizone® Roche BMS Distraneurin® / Heminevrin® Rohypnol® Xenical® Visudyne® Etopophos® AstraZeneca Roche Roche BMS

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

120

90

60

30

Number of countries covered 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Building the platform Acceleration of growth

14 VERY BROADLY DIVERSIFIED ACROSS PRODUCTS AND MARKETS (% OF SALES)

Atacand®/Plus 15.0% Xenical® 14.8% Dilatrend® 11.9% Cymevene® 7.9% Visudyne® 6.9% Germany 2.9% Australia 1.7% Italy 1.9% Japan 2.5% China 1.4% Romania 2.8% USA 1.5% Austria 0.9% France 0.6% Japan 1.3% Spain 1.6% Russia 1.0% Spain 0.9% South Korea 0.5% France 0.7% Switzerland 1.5% Canada 0.9% Turkey 0.8% USA 0.4% Italy 0.3% France 1.3% UK 0.6% Mexico 0.6% Turkey 0.3% Hong Kong 0.3% Greece 1.1% Spain 0.6% Japan 0.6% Russia 0.2% Spain 0.3% Finland 0.6% Malaysia 0.6% South Korea 0.6% Taiwan 0.2% UK 0.3% Italy 0.5% China 0.5% Taiwan 0.4% Italy 0.2% Taiwan 0.3% Belgium 0.4% Saudi Arabia 0.5% Thailand 0.3% Thailand 0.2% Canada 0.2% Other 2.3% Philippines 0.5% Belgium 0.3% UK 0.2% Netherlands 0.2% Others 6.3% Others 4.7% Others 2.5% Others 1.8%

Deursil®/Ursolvan® 5.8% Fungizone® 5.2% Konakion® 4.7% Vesanoid® 3.6% Questran® 2.4%

Italy 4.4% France & FOT 3.4% France 0.9% Canada 0.3% France & FOT 0.8% France 0.0% Japan 0.4% Germany 0.5% Germany 0.2% UK 0.4% Switzerland 0.3% Algeria 0.4% Italy 0.3% Italy 0.2% Italy 0.3% Tunisia 0.0% Germany 0.2% UK 0.3% France 0.2% Brazil 0.2% Others 0.0% GPS Sales 0.2% Spain 0.2% Spain 0.2% Germany 0.1% Others 0.6% South Africa 0.2% Brazil 0.2% Mexico 0.1% Morocco 0.2% South Korea 0.2% Others 0.5% Belgium 0.2% UK 0.2% Turkey 0.2% Argentina 0.2% Algeria 0.2% Australia 0.1% Others 1.5% Others 1.5%

Highly diversified portfolio as a result of always acquiring global rights to products

15 OVERVIEW TOP 10 PRODUCTS

Atacand®/ Deursil® / Konakion Xenical® Dilatrend® Cymevene® Visudyne® Fungizone® Vesanoid® Anexate® Vesanoid® Questran® Plus Ursolvan® MM®

2018P 15% 15% 12% 8% 7% 6% 5% 5% 4% 2% 2% 2% Sales

Ophthal‐ Gastro‐ Haemato‐ Emergency Segment Obesity Cardiology Virology Oncology Oncology Oncology Cardiology mology enterology logy Medicine

Treatment Retinal Heart failure, and Haemor‐ disease: age‐ Post‐ Cholesterol Heart failure, hyper‐ prophylaxis Dissolution Antifungal / rhage; Vit K related Acute anaesthetic Acute reducer for Application hyper‐ Obesity tension, of of small supportive Deficiency macular de‐ leukemia recovery leukemia hypercholest tension stable angina cytomegalo‐ gallstones oncology Bleeding in generation period eremia pectoris virus (CMV) new‐born (AMD) disease

Rx / OTC Rx Rx Rx Rx Rx Rx Rx Rx/OTC Rx Rx Rx Rx

1965 Intro 1997 1997 1990 1994 1999 1980 1971 1955 1994 1987 1994 (1980s)

Patent Never 2012 2009 1999 2002 2009(1) 2002 2003 2008 2002 2008 2002(4) Expiry patented

Japan, France, Canada, Canada, Germany, Australia, Japan, Japan, China, France, Japan, Brazil, France, UK, Key Korea, Hong‐ Japan, Germany, Germany, Romania, USA, UK, Austria, Italy, France, Italy, Italy, France Germany, Germany, Italy, Brazil, Countries kong, Italy, Algeria, Italy, Korea, Italy, Korea, Switzerland Canada Korea Spain Italy, UK Korea Germany Russia Germany Brazil Brazil

First‐line Strong API is listed therapy for Strong Stable since brand, Generic in the WHO diarrhea and brand, first many years leading Strong brand market has list of Ampho‐ Strong brand for line therapy First Line as the market for routine Strong brand Strong brand settled essential tericin B is with long management according to therapy in second line position life saving Vit in a niche in a niche quickly with medicines; included in history and of pruritus in USP several major therapy with (especially in K prophylaxis market with market with the product first line the WHO list quality primary national medical niche‐ Italy); in neonates, limited limited available in therapy of essential „made in biliary clinical guidelines position, no dominant with limited competition competition more than according to medicines Europe“ cholangitis , practice generic therapeutic competition 125 markets several second line guidelines competition strategy in guidelines as mono‐ guidelines therapy

16 CONTACT

Request further information

HEADQUARTER ǀ OFFICE  Germany

CHEPLAPHARM Arzneimittel GmbH Ziegelhof 24 17489 Greifswald Internet: www.cheplapharm.com

Jens Remmers Head of Investor Relations Tel.: +49 (0) 3834 8539‐145 Email: investor‐[email protected]

Jens Rothstein Chief Financial Officer Tel.: +49 (0) 3834 8539‐122

17 DISCLAIMER

The information contained in this Document does not purport to be all‐inclusive or to contain all information that is required to properly evaluate a potential transaction. Any recipient of this Document should therefore conduct its own independent analysis of the Company and the data contained or referred to in this Document. The Company, does not expect to update or otherwise revise this Document or other materials supplied herewith.

The Company does not make any representation or warranty as to the accuracy or completeness of any of the information contained herein or with regard to other written or verbal information submitted or made available to the recipient. The Company accepts no liability for possible errors or omissions in this Document. In particular, the Company makes no representation or warranty with respect to any financials (including without limitation management projections) that may be contained in this Document. Where this Document contains forward‐looking statements, these statements involve risks and uncertainties, and the Company's actual results may differ significantly. Such information should therefore not be construed as a representation or prediction that the Company will achieve or is likely to achieve any particular results.

The recipient of this Document must not construe any of the contents of this Document as legal, business, or tax advice. Each recipient should thereforeconsulthis own attorney, business advisor and tax advisor as to legal, business, tax and related matters concerning this Document.

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