Review by the President &

Review by the President & CEO

Timo Lappalainen

Annual General Meeting of Orion Corporation 26 March 2019 Disclaimer

This presentation contains forward-looking statements which involve risks and uncertainty factors. These statements are not based on historical facts but relate to the Company’s future activities and performance. They include statements about future strategies and anticipated benefits of these strategies. These statements are subject to risks and uncertainties. Actual results may differ substantially from those stated in any forward-looking statement. This is due to a number of factors, including the possibility that Orion may decide not to implement these strategies and the possibility that the anticipated benefits of implemented strategies are not achieved. Orion assumes no obligation to update or revise any information included in this presentation.

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 2 2018 January-December in review

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 Important year for future growth

Profitability was good, profit The net sales of Proprietary margin for continuing Products increased slightly 1 operations exceeded financial 2 2 particularly due to strong target. Cash flow was strong. Easyhaler sales. Sales of Dexdor Net sales and operating profit and Simdax remained at a good were lower than in the level. Sales of Parkinson’s drugs comparative period. R&D declined as anticipated. investments increased.

Net sales of Specialty Products Prostate cancer drug declined due to continued darolutamide met primary endpoint in October. 3 intense price competition in 4 generic drugs in Finland and Full data will be presented anticipated lower sales of at ASCO GU biosimilars. on 14 February 2019.

Strategic target in 2019–2023: Dividend proposal: Growing more rapidly than the EUR 1.50 share. 5 growth in the market. 6

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 4

Key figures 1−12/2018 (continuing operations)

Operating Net sales Operating profit Cash flow per share profit margin before financial items**

977 253 26 % 2,32 MEUR (1 034) MEUR (284) (27 %) EUR (1,09) -5 % -11 % +112 % **) Cash flow before financial items: Continuing and discontinued operations

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 5 Orion has a strong balance sheet

MEUR MEUR 1 400 1 400 Gearing ratio Equity ratio 1 200 1 200 1 000 -17 % 1 000 69 % 800 800 600 600 400 400 200 200 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Cash and money market investments Interest-bearing liabilities Receivables Non-interest-bearing liabilities Inventories Equity Non-current assets

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 6 Net sales by business division

EUR million 1−12/2018

-9% 600 5% 2% 519 473 8% 500 +2%

400 351 357 37%

300

200 +6% -1% -55% 48% 76 80 100 51 51 36 16 0 Proprietary Products Specialty Proprietary Animal Fermion Contract Specialty Products Products Products Health manufacturing Animal Health & other Fermion 1−12/2017 1−12/2018 Contract manufacturing & other

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 7 Geographical breakdown and development of net sales

1−12/2018 1−12/2017 1−12/2018

EUR million

15% -5% 350 -2% 32% 6% 300 250 -11% 200 +5%

31% 150 -26% 16% 100 Finland 50 Scandinavia Other Europe 0 North America Finland Scandinavia Other North Other Other markets Europe America markets

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 8 Best-selling pharmaceuticals 1−12/2018 Net sales Change vs . Indication (EUR million) 1−12/2017 1. Parkinson’s disease 100 -3% 2. Asthma, COPD 90 +18% 3. Intensive care sedative 63 -2% 4. Acute heart failure 59 +4%

5. Animal sedatives 34 +10%

6. Intensive care sedative 26 +3% Rheumatoid arthritis, inflammatory 7. Biosimilars bowel diseases, lymphoma 25 -56% 8. Inflammatory pain 23 0% 9. Divina series Menopausal symptoms 19 +1% 10. Anticoagulant 18 -7%

= Products of Proprietary Products business division

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 9 Proprietary Products

Easyhaler Simdax ● Strong growth, investments in ● Sales increased slightly. sales and marketing Possible generic competition particularly in Germany. is not estimated to have a ● Salmeterol-fluticasone material impact on sales Easyhaler sales started. in 2019.

Dexdor Parkinson’s drugs

● Dexdor sales continued to ● Sales were lower than in grow in most of the countries. comparative period, as In 2018 there was significant anticipated. However, the generic competition only in decline in sales was Germany, but competition is significantly slower than in the expected to expand in 2019. long term on average.

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 10 Specialty Products

● Net sales of biosimilars decreased ● Net sales decreased in Finland from record year 2017. and Scandinavia, and grew in ● The decrease was due to tightened Eastern Europe and Russia. competition, declined price level and the situation of tendering competitions. ● Orion won the national tender in Norway in late 2018, deliveries to • In Finland, price competition has led to a decline in the entire start in Q1/2019. market of reference priced prescription drugs. Impact on Orion’s sales was EUR 15 million ● In Finland, sales of Amgevita negative in 2018. (adalimumab), Orion’s first • Prices are expected to continue biosimilar for outpatient use, decline in 2019, but impact on started at the end of the year. sales is anticipated to be slightly lower than in 2018.

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 11 Specialty Products: tightened price competition and lower sales of biosimilars showed as a decrease in net sales

Development of net sales Net sales by region Net sales by product EUR 1−12/2018 1−12/2018 million -7% 350 13% 5% 292 300 273 250 14% 58% 24% 71% 200 -26% 150 +2% 94 100 69 65 66 15% 50 0 Scandinavia Eastern Finland Finland Generic drugs Europe and Scandinavia Russia Self-care products 1−12/2017 1−12/2018 Eastern Europe and Russia Biosimilars Other markets

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 12 In Finland, price competition has led to a decline in the entire market of reference priced prescription drugs

The market of reference priced The sales of Orion’s reference prescription drugs in Finland priced prescription drugs (1–12/2018) in Finland

490 126 MEUR (528) MEUR (139)

Market development Orion’s development

-7% -9%

Source: IQVIA pharmaceutical sales statistics 1–12/2018. Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 13 Reference priced prescription drugs in the pharmacy channel. The prices of prescription medicines have fallen by almost 20% in a decade

Price trend of medicines, food and taxi trips 2009-2018 Prescription medicines Consumer price index 2009=100 last 10 y -17%

Taxi trips last 6 m +4%

Consumer price index Taxi trips Food

Self-care products Prescription medicines Source: Statistics Finland and Association of Finnish Pharmacies (deductible)

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 14 Orion is Finland's most significant provider of pharmaceuticals

Human pharma market in Finland (1−12/2018) Reference Self -care Medicinal and non-medicinal products priced products in hospital and pharmacy channels: EUR 2,746 million prescription Orion market share EUR million drugs in pharmacy Orion market share 350 314 in pharmacy 300 96 25% 250 (26%) 187 200 26% Human 150 123 124 126 105 120 (26%) pharmaceuticals 100 total 50 Orion market share in pharmacy & hospital 0 GSK Roche Pfizer Sanofi MSD Orion Self-care products (pharmacy channel) 11%11% Reference priced prescription drugs (pharmacy channel) (13%)(13%)

Source: IQVIA pharmaceutical sales statistics 1–12/2018 Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 15 Research and development

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 Orion is one of the top Finnish companies investing in R&D

Finnish companies’ R&D expenses in 2018, Proportion of net sales, % EUR mill. Nokia 4 620 -6% Nokia 20.5% Wärtsilä 165 +17% Wärtsilä 3.2% Kone 164 +4% Kone 1.8% Orion 104 +5% Orion 10.6%

Amer Sports 95 +2% Amer Sports 3.5% Cargotec 89 -2% Cargotec 2.7% Valmet 66 +3% Valmet 2.1% Outotec 57 +2% Outotec 4.5% Fortum 56 +2% Fortum 1.1% Neste 48 +9% Neste 0.3%

Source: Tekniikka & Talous Change from 2017

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 17 Orion's key clinical drug development projects

Project Indication Phase Registration

Easyhaler® tiotropium COPD Bioequivalence study

Darolutamide 1) Prostate cancer (nmCRPC) I II III

Darolutamide 1) Prostate cancer (mHSPC) I II III

ODM-109 (oral levosimendan) ALS I II III

ODM-104 (more effective COMT inhibitor) Parkinson’s disease I II

ODM-203 (targeted FGFR+VEGFR inhibitor) Solid tumours I II

ODM-207 (BET protein inhibitor) Cancer I

ODM-208 (CYP11A1 inhibitor) Prostate cancer (CRPC) I

1) In collaboration with Bayer = Completed = Ongoing More information on R&D projects: = Status changed https://www.orion.fi/en/rd/orion-rd/pipeline/

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 18 Financial impacts of darolutamide

● Bayer has the right to commercialize darolutamide globally. ● Orion has the option of co-promoting in Europe. Orion will manufacture the product. ● Milestone payments upon first commercial sales: • EUR 45 million in the US • EUR 20 million in the EU • EUR 8 million in Japan ● Tiered royalties on product sales − Approx. 20%, including production revenue. ● Potential one-off payments if certain sales targets are met.

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 19 Several promising compounds in early-stage research

1. Orion has several early-stage projects 2. More than 10 projects already that study central nervous system in the pre-clinical phase and several disorders, hormonal cancers, chronic interesting molecules in testing. pain and rare diseases of the Finnish 3. Orion is expanding its pharmaceutical disease heritage, among other areas. development competence to biomedicines - new research unit opened in Turku

20 Strategy: Investments in growth

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 The average growth of the global pharmaceutical market is 3%-6% annually

+3-6% The United States will retain its position as the largest market. Growth is Global market in 2023 +1-4% 15% fastest in emerging USD 1 505-1 535 billion markets. Europe, 5 largest -3-0% 6% USD 195-225 billion +4-7% 43% Japan USD 89-93 billion United States +5-8% 25% USD 625-655 billion

Emerging markets USD 355-385 billion

Average annual growth 2019-2023 Europe, 5 largest countries Market share in 2023 = Germany, France, Italy, United Kingdom, Spain

Source: IQVIA’s forecasts 2018 Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 22 Key strategic target in 2019−2023: Growing more rapidly than the growth in the market

Net sales target Own investments in Investments in sales and marketing: 1in 2025 new clinical trials: E.g. EUR 60 million E.g. strengthening investment in the Easyhaler 1.5 Phase III trial on ALS product family (REFALS). sales force in Germany. billion EUR

Capital gain from In-licensing and Investments the sale of Orion product acquisitions: supporting growth estimated Diagnostica, E.g. reacquisition4 of 2EUR 128 million, at EUR 30 million Stalevo sales rights in 2019. supports growth in Europe. opportunities.

Satu Ahomäki Timo Lappalainen Markku Commercial Operations, Huhta-Koivisto Olli Huotari President and CEO Global Sales & Corporate Functions Proprietary Products Growth Projects

Employee representative: Liisa Hurme Jari Karlson Virve Laitinen Christer Nordstedt Jani Korhonen Supply Chain CFO, Animal Health Specialty Products R&D

● The ongoing projects ● This comprises clearly ● At the same time, operating supporting growth are increased depreciation profit is burdened by intense expected to burden Orion’s as well as investments price competition in the market profit in 2019 by an in sales and marketing and gradually expanding generic estimated EUR 30 million. and research. competition for Orion’s old proprietary drugs.

26 Outlook for 2019

Net Sales Orion estimates that in 2019 net sales will be slightly higher than in 2018

(net sales in 2018 were EUR 977 million). The estimated net sales include the possible EUR 45 million + milestone payment associated with the commercialisation of darolutamide.

Operating profit Operating profit is estimated to be at the same level as in 2018 (operating profit in 2018 was EUR 253 million). The estimated operating profit includes the possible EUR 45 million milestone payment associated with the commercialisation of darolutamide as well as = significant investments in actions to generate growth.

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 27 Sustainability is built into Orion’s mission

• Patient safety • Ensuring reliable supply of medications • Manufacturing medications in an environmentally sustainable way: efficient use of materials, energy efficiency, wastewater management

Customer Audits Energy Energy savings complaints undertaken savings target set for 2025 Injury rate (Pharmaceuticals) by Orion achieved

56 238 1 074 40 % 5,5 Ppm (64) (314) MWh (3 725 ) (31 %) LTIF 1 (6,3)

29 Orion is socially responsible

Taxes and withholding taxes, EUR mill.

124 122 113 114 57 45 45 54 45

41 42 43 44 37 27 27 27 32 32 2014 2015 2016 2017 2018*

Corporation tax on operating profit Tax withheld on wages Taxes withheld on dividend paid to Finnish shareholders and paid to the tax authorities by Orion * Orion Diagnostica not included

30 Orion Research Foundation supports Finnish research

For research in 1 004 800 € medicine, vetenary Total grants for medicine, pharmacy research in 2018 and related sciences, such as chemistry and physics

16 x 50 000 € 65 x 5 000 €

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 31 Orion had ~73,000 shareholders on 31 December 2018

By number of shares By number of votes Households (Finnish retail) 3% 5% 5% 9% Non-Finnish holders and 8% nominee-registered 6% Private corporations [VALUE]% [VALUE]% 13% Public sector 62% Non-profit institutions 7%

[VALUE]% Financial and insurance corporations Other

Annual General Meeting of Orion Corporation © Orion Corporation 26 March 2019 32 Working together for a cleaner Baltic Sea

● Protecting the Baltic Sea is one of the main themes of

Orion’s corporate responsibility ● We are committed to doing more than required by law and have invested especially in the management of production wastewater and reduction of pharmaceutical residue emissions. ● Our production plants have pre-rinse water collection systems. Most of the wastewater containing active pharmaceutical substances is incinerated, resulting in 100% destruction of residues. ● Orion is a main partner in the Clean Baltic Sea projects and actively involved in the Residue-free Baltic Sea campaign.

Building well-being