Vistin Pharma – Corporate Presentation October 2016 Content Introduction to Vistin Pharma Operational and financial update Summary & outlook Appendix Snapshot Vistin at a glance Summary Presence in c.40 countries Established in June 2015, when the company was spun off from Weifa and listed on the Oslo Axess stock exchange Norway Leading producer of active ingredients (API) and finished products for diabetes medicine (metformin) and opiates for use in pain relief and cough medicine Vietnam Japan Overview Philippines Significant contract manufacturer (CMO) of solid dosage form (tablets) products Singapore Established client portfolio comprising mix of Big Pharma and leading generics players Long and successful track record with production of codeine API since 1950 and production of metformin since 1969 Headquarters Headquarters Oslo, Norway Sales by geography (2015A)1 Revenue: NOK 213m Financials Other 15% (YTD Q2’16) EBITDA: NOK 24m Japan 5% Norway 31% Metformin (B2B): The company manufactures about 8% of the global consumption of metformin API, the active ingredient in the first-line treatment of diabetes UK 10% Business Opioids (B2B): two key products, codeine phosphate (used in analgesics and cough syrup) and pholcodine areas (used in cough syrup) Germany 11% Swizterland Algeria 17% CMO: Agreement with Weifa, the largest OTC player in Norway, for the production of Weifa’s key pain relief 11% brands Sales by product type (2015A)2,3 Key geographies FDF Metformin Employees c.155 39% API 44% Two manufacturing facilities in Kragerø, Norway − Dedicated metformin plant approved by all significant international bodies including the U.S. Food and Opioids Manufacturing Drug Administration (FDA) API 17% − Finished Dose Forms (FDF) and opioids APIs manufacturing site approved by the European Medicines Agency (EMA) Notes 1 Revenue figures for 2015 consist of B2B segment for Weifa to 31 May, B2B segment for Vistin from 1 June, and annualised revenue for CMO segment 2 Includes Weifa contract. 3. Excludes sale of raw materials Vistin’s key milestones Long and successful track record of producing high quality APIs and FDFs Vistin’s evolution Weifa Vistin Pharma 1940: 1952: 1969: 1986: 2014: 2015: Weiders First Launch of Production Codeine Vistin Pharma Farmasoytiske production metformin API start of Ibux tablets added established as a A/S founded by facility opened to the product separate company Olaf Weider in Kragerø portfolio (Gruveveien) 1940 - 2014 2015 2016 1960: 2002: 2016: 1950: Production 1977: New FDA-approved 2014: Announcement of Production start of Production metformin facility Weifa AS significant expansion start of Paralgin start of opened in Kragero acquired by in capacity at codeine API Forte Paracet (Fikkjebakke) Aqualis ASA metformin plant in Kragerø Content Introduction to Vistin Pharma Operational and financial update Summary & outlook Appendix Vistin – a leading producer of high quality metformin First line treatment for type 2 diabetes Fully integrated metformin supplier One of the few European manufacturers of metformin HCl Producer of three different types of metformin products: Leading independent producer Global manufacturing capacity (MT) globally with 4th largest capacity Metformin HCl (bulk API, “fine, dry powder”) Vistin Pharma Metformin DC (“directly compressible”, a granulated pretablet form) One of only two Western 8% European manufacturers of Metformin tablets (FDF, ready for consumption) metformin HCl and the only one of metformin DC Vertically integrated manufacturer active throughout the entire value chain across API and FDF ~40,000MT Long and established history having been involved in the production of metformin API since 1969 Positioned as a premium producer in a low cost competitive market 1,2 Sales to leading international pharmaceutical companies Strong track record of growth Attractive contract model based on long-term strategic partnerships Revenue, NOKm with key customers 2011-2015 CAGR 13% State-of-the-art plant in Kragerø with expansion potential Certified by all significant international regulatory bodies 176 156 Currently the only company with a listed metformin Drug Master File 149 (DMF) in the USA and Japan 108 116 102 Strategically positioned with close proximity to key customers Excellent customer support with short lead times Delivery time less than 24 hours Competitive edge over Asian producers 2011 2012 2013 2014 2015 6M 2016 Provision of customised products and services Notes 1 Revenue figures for 2011 – 2014 and for 2015 to 31 May are for Weifa 2 Includes sale of raw materials 10 Diabetes - a global epidemic Type 2 diabetes is one of the greatest challenges to healthcare systems around the world – and metformin is expected to maintain its position as the gold standard treatment in the foreseeable future Estimated global growth in diabetes 387 million people live with Growth 82% 86% 65% 51% 47% 28% 33% 53% diabetes – Type 2 diabetes represents c.90% – Estimate that 46% are undiagnosed 592 Global healthcare costs related to treating diabetes amounted to $612bn in 2014 – Represented 11% of total healthcare costs worldwide 387 – Projected to exceed $627 billion by 2035 Cause of death of c.5m people in 2014 202 Estimated to increase by 53% from 2014 to 2035 137 – Largest growth in developing 123 economies 68 74 69 50 52 – Africa and the Middle East are 42 37 38 39 expected to almost double by 2035 23 25 Africa Middle East & SEA Sounth and Western N. America & Europe World N. Africa Central Pacific Caribbean America 2014 2035 Number of people living with diabetes Source International Diabetes Federation, IDF Diabetes Atlas, sixth edition, 2014 Significant upside from additional capacity expansion Vistin plans to capitalise on strong demand in its metformin business by doubling the capacity at its plant in Kragerø Summary Significant long term growth in the metformin market and increased demand from Vistin’s customers – Forecast volumes expected to exceed future capacity in 2018 post the capacity increase programme (3,500MT) Background – Vistin’s target premium market is currently estimated to approx 13,000MT and growing The addition of a new 3,000 MT line at Fikkjebakke (Kragerø) will enable Vistin to meet this growth in demand Action taken to Detailed feasibility study conducted date Business case and investment proposal approved by Board The new production line is expected to become fully operational by 2019 Total capex estimated to be NOK 120m to be spent over 2017-18, financed Expected impact through existing cash, cash generation and loans Based on the forecasted capacity utilization, the project is expected to provide a positive EBITDA contribution in its first year of operations Current status Detailed engineering and project start commenced in September 2016 Vistin – a major opioids “powder-to-pill” supplier The company supplies c.6% of the global market for codeine API, a very commonly used medicinal opioid Overview Leading independent manufacturer of opioids Vistin produces two APIs in the opioid sector Codeine market Pholcodine market – Codeine (used in analgesics and cough syrup) Vistin Pharma ~6% Vistin Pharma ~17% – Pholcodine (used in cough syrup) Vistin is the world’s largest independent manufacturer of codeine phosphate API ~400MT ~12MT Only independent API supplier producing FDF for third parties One third of opioid APIs produced are converted to tablets First commercial sales in 2014 Track record of revenue growtht1 Annual volume of c.270m tablets Revenue, NOKm 2011-2015 CAGR 9% Swift licence procedures and established relationships with regulators 82 81 ensure Vistin is able to deliver short lead times to its clients 75 71 – Typically receives export licences within 24 hours 58 50 Attractive collaborator for raw material companies The company has successfully negotiated a long-term strategic collaboration with a leading Narcotic Raw Material (NRM) supplier at attractive terms 2011 2012 2013 2014 2015 6M 2016 Notes 1 Revenue figures for 2011 – 2014 and for 2015 to 31 May are for Weifa 20 Opioids market overview A protected market with high entry barriers Key features of the opioids market Strong growth in global opioids consumption 1Strong growth in global opioids consumption A protected business owing to tight controls by the 14 International Narcotics Control Board (INCB) and the practice of import quotas in several major markets Protected market – About half of the global markets are closed 12 – Domestic monopolies mainly controlled by local players 10 2 High entry barriers due to tight controls / regulations Difficult for low cost country competitors to enter the High barriers 8 regulated opioids API business to entry Market dominated by producers located in Western countries 6 Billions of S.DDD Billions 3 Increasing wealth in emerging markets drives higher Increased expectations for medication, especially in China and India 4 market demand Most of the growth in opioid consumption comes from emerging countries 2 4 Ageing population and rising prevalence of diseases - Growth – Defined Daily Doses have increased more than 3 times in 2011 1997 driven by 1995 1994 1996 1999 2013 1998 20 years (6.5% CAGR) 2012 2001 2010 2007 2005 2003 2002 2004 2006 2009 2008 developing 2000 countries North America dominates the global market for opioids Opiates Synthetic opioids Opioids S.DDD = Sold Defined Daily Doses Asia expected to account for majority of future growth Source INCB, Narcotic Drugs 2014 Vistin – A leading CMO