![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation1.jpg)
Donald E. Morel, Jr., Ph.D.
Chairman and Chief Executive Officer
William J. Federici
Vice President and Chief Financial Officer
Investor Relations Contact:
Michael A. Anderson
Vice President and Treasurer
mike.anderson@westpharma.com
UBS Global Specialty Pharmaceuticals Conference
June 3, 2009 London, UK
NYSE: WST
westpharma.com
All trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., unless noted otherwise.
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This presentation contains forward-looking statements, within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, that are based on management’s beliefs and
assumptions, current expectations, estimates and forecasts. Statements that are not
historical facts, including statements that are preceded by, followed by, or that
include, words such as “estimate,” “expect,” “intend,” “believe,” “plan,” “anticipate”
and other words and terms of similar meaning are forward-looking statements. West’s
estimated or anticipated future results, product performance or other non-historical
facts are forward-looking and reflect our current perspective on existing trends and
information.
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, that are based on management’s beliefs and
assumptions, current expectations, estimates and forecasts. Statements that are not
historical facts, including statements that are preceded by, followed by, or that
include, words such as “estimate,” “expect,” “intend,” “believe,” “plan,” “anticipate”
and other words and terms of similar meaning are forward-looking statements. West’s
estimated or anticipated future results, product performance or other non-historical
facts are forward-looking and reflect our current perspective on existing trends and
information.
Many of the factors that will determine the Company’s future results are beyond the
ability of the Company to control or predict. These statements are subject to known or
unknown risks or uncertainties, and therefore, actual results could differ materially
from past results and those expressed or implied in any forward-looking statement.
You should bear this in mind as you consider forward-looking statements. A non-
exclusive list of important factors that may affect future results may be found in
West’s filings with the Securities and Exchange Commission, including our annual
report on Form 10-K and our periodic reports on Form 10-Q and Form 8-K.
ability of the Company to control or predict. These statements are subject to known or
unknown risks or uncertainties, and therefore, actual results could differ materially
from past results and those expressed or implied in any forward-looking statement.
You should bear this in mind as you consider forward-looking statements. A non-
exclusive list of important factors that may affect future results may be found in
West’s filings with the Securities and Exchange Commission, including our annual
report on Form 10-K and our periodic reports on Form 10-Q and Form 8-K.
You should evaluate any statement in light of these important factors.
Forward Looking Statements
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Who We Are
• Founded in 1923
• Global Headquarters near
Philadelphia
Philadelphia
• Market capitalization $1.2 billion
• World’s premier manufacturer
of components and systems
for injectable drug delivery
of components and systems
for injectable drug delivery
– Closure systems and prefillable
syringe components
syringe components
– Components for disposable
systems
systems
– Devices and device sub-
assemblies
assemblies
– Safety and administration
systems
systems
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation4.jpg)
West’s Competitive Advantage
• Global manufacturing footprint
• Unmatched experience/expertise: drug - material interface
– Global regulatory and technical support
• Protected IP: Proprietary materials and technology
• Regulatory barrier to entry: US NDA and ANDA filing must
include reference to all packaging/components in contact
with the drug
include reference to all packaging/components in contact
with the drug
1. West Drug Master File (DMF) 1546 is confidential
2. West DMF includes functionality data (multi-year studies)
3. Primary package changes require new stability/functionality
studies for new filing
studies for new filing
• Engineering expertise in high-volume manufacturing, assembly
and vision inspection
and vision inspection
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Diverse, Stable Customer Base
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation6.jpg)
Sales and Income from Continuing Operations
($ in millions)
($ in millions)
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation7.jpg)
Exubera is a registered trademark of Pfizer, Inc.
2008 Overview
• A challenging year
– Exubera, ESA packaging, diagnostic
component lost sales impact
component lost sales impact
– Commodity, currency market instability
– Global economic downturn
• Strong growth in core component sales
• Tech restructuring completed
• China plant construction underway
• Expansion programs on schedule/budget
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation8.jpg)
Outlook for 2009 and Beyond
• Global pharma remains under substantial pressure
• Global growth projected at 2.5-5% (down from 5-7%)
• North America down 1-2%
• Europe 0-1%
• Emerging economies 5-7% (India, China, Brazil)
• US election and government plans for health care
• Pharmaceutical Industry changes - consolidation
• Pfizer - Wyeth
• Roche - Genentech
• AstraZeneca - - Medimmune
• Lilly - Imclone
• Merck Bioventures - Insmed
• Changing order patterns
• Delivering against customer expectations
• Value (price in their world)
• Quality
• How do we best position West for future growth in a dramatically changing marketplace?
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation9.jpg)
Drug Packaging (How it is contained) |
Primary Container Solutions |
Prefillable Syringe Systems |
Drug Delivery (How it gets into the patient) |
Administration Systems |
Advanced Injection Systems |
Development
Primary Package
Administration
Our Growth Opportunities
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation10.jpg)
Autoimmune Disease
Vaccines
Oncology
Diabetes
Market Dynamics Support Future Growth
• Increasing number of patients
with chronic illnesses
with chronic illnesses
• Many of these are treated with
biologic drugs
biologic drugs
• Biologic drugs demand ultra-
clean delivery systems
clean delivery systems
• Point of care shift: Hospital to
specialty clinic to home
specialty clinic to home
• Safe, accurate dosing needs
are pushing the market toward
integrating the container/
closure system into the delivery
system
are pushing the market toward
integrating the container/
closure system into the delivery
system
• Generic growth
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Total
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Total
106
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2007’s 22 Biotech Blockbusters |
Enbrel (Amgen/Wyeth) |
Aranesp (Amgen) |
Remicade (J&J/SP) |
Rituxan (Roche) |
Neulasta (Amgen) |
Erypo/Procrit (J&J) |
Herceptin (Roche) |
Epogen (Amgen) |
Avastin (Roche) |
Humira (Abbott) |
Lantus (Sanofi-Aventis) |
Avonex (Biogen Idec) |
Neorecormon (Roche) |
Gardasil (Merck) |
Rebif (Serono) |
Neupogen (Amgen) |
Novorapid (Novo Nordisk) |
Erbitux (Imclone/Merck KGaA/BMS) |
Lucentis (Roche/Novartis/Genentech) |
Synagis (MedImmune) |
Humalog (Lilly) |
Betaferon (Bayer/Schering AG) |
Sources: IMS 2008 Global Biotech Perspective report and Company
Estimates
Estimates
West participates in all of the 2007
Biotech Blockbuster drug products
Biotech Blockbuster drug products
Global Biotech Blockbusters
(Annual Sales >$1Billion)
(Annual Sales >$1Billion)
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Millions of
insulin
dependents
worldwide
insulin
dependents
worldwide
Compare to
246 million
diabetics
worldwide
246 million
diabetics
worldwide
Year
Source: Company estimate
2005-2010 17% Increase in Projected Number
For Insulin Dependent Diabetics
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation13.jpg)
Drug Packaging (How it is contained) |
Primary Container Solutions |
Prefillable Syringe Systems |
Drug Delivery (How it gets into the patient) |
Administration Systems |
Advanced Injection Systems |
• Build market share in multi-
component systems for drug
administration
component systems for drug
administration
• Expand proprietary product portfolio
through innovation and strategic
technology acquisitions
through innovation and strategic
technology acquisitions
• Market segmentation to generate
organic growth
organic growth
• New product innovation
• Lean manufacturing
• Strategic acquisitions
• Geographic expansion
• Capacity build - Europe, Singapore,
North America
North America
• China plastics
• India rubber site selection
Our Growth Strategy
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West FluroTec®
Components
Components
Seal - - Stopper - Vial
Daikyo Crystal Zenith® Vials
Estimated Market Size - $1.5 billion
CAGR - - 4%
Source: Company estimate for vial systems only
West Spectra™ Seals
Crystal Zenith is a registered trademark of Daikyo Seiko, Ltd.
FluroTec and Crystal Zenith technologies are licensed from Daikyo Seiko, Ltd.
Primary Drug Packaging
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Uncoated 4432/50 V35
$50
$200
4432/50 S2 FluroTec®
Westar RS
Westar RS
$250
4432/50 S2 FluroTec®
Westar RS B2-40 Port Bag
Westar RS B2-40 Port Bag
$300
4432/50 S2 FluroTec®
Westar® RS B2-40
(1000 packs)
Westar® RS B2-40
(1000 packs)
$465
4432/50 Sterile S2 W
(RU) Ready Pack
(1000 packs)
(RU) Ready Pack
(1000 packs)
$2,900
RU Ready Pack System
(small volume sourcing only)
(small volume sourcing only)
$3,500
$360
Core Strategy - Adding Incremental Value per Unit
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West NovaPure™
• Item-specific subvisible particle specification
• Residual moisture specification for lyophilization stoppers
• Helps meet Quality by Design initiatives
• Designed to mitigate risks associated with drug packaging
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China Plastics Facility
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation18.jpg)
Drug Packaging (How it is contained) |
Primary Container Solutions |
Prefillable Syringe Systems |
Drug Delivery (How it gets into the patient) |
Administration Systems |
Advanced Injection Systems |
• Build market share in multi-
component systems for drug
administration
component systems for drug
administration
• Expand proprietary product portfolio
through innovation and strategic
technology acquisitions
through innovation and strategic
technology acquisitions
• Market segmentation to generate
organic growth
organic growth
• New product innovation
• Lean manufacturing
• Strategic acquisitions
• Geographic expansion
• Capacity build - Europe, Singapore,
North America
North America
• China plastics
• India rubber site selection
Our Growth Strategy
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation19.jpg)
Vial2Bag™
Mix2Vial®
MixJect®
NovaGuard™
Safety Needle
Device
Safety Needle
Device
ConfiDose®
Auto-injector
Auto-injector
Daikyo Crystal Zenith®
Delivery Systems - Key Programs
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Packaging & Delivery Systems for Large Molecules Key Driver
• Currently all large molecule drugs are delivered
by injection
by injection
• West components are preferred and used for
the top selling biotech therapeutics
the top selling biotech therapeutics
• Used predominantly to treat chronic diseases
– Diabetes
– Cancer
– Auto-immune
• Fastest growing segment of our business
• Strong profit driver
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Critical Stability Issues for Biotechnology Drugs
• Aggregation
– Silicone, tungsten, glue, mfg. processing
• Adsorption - vials and syringes
– Impacts potency of large molecules
• Immunogenicity/Neurogenicity
• Polysorbate 20 and 80
– Detergents used for mitigating aggregation
– Highly unpredictable
• Too much creates aggregation
• Potential for peroxide creation
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation22.jpg)
Higher extent of aggregation in glass compared to CZ
Daikyo Crystal Zenith
Glass
Daikyo Crystal Zenith® vs. Glass
(Demonstrated employing a model antibody in solution)
(Demonstrated employing a model antibody in solution)
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation23.jpg)
First-in-Human Containers
Bulk Containers
Inserted Needle Syringes
• Stored frozen in
Phase 1
Phase 1
• Ideal cleanliness
• Low adsorption
properties
properties
• Ideal for auto-injectors
• No tungsten, glue or
silicone
silicone
• Ease of handling
Daikyo Crystal Zenith® and Flurotec® are registered trademarks of Daikyo Seiko,
Ltd.
Ltd.
Total Life Cycle Containment
Daikyo Crystal Zenith®
Daikyo Crystal Zenith®
• Polybutadiene
Flurotec® liner
Flurotec® liner
• Low temperature
resistance
resistance
• Ease of handling
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation24.jpg)
Drug Packaging (How it is contained) |
Primary Container Solutions |
Prefillable Syringe Systems |
Drug Delivery (How it gets into the patient) |
Administration Systems |
Advanced Injection Systems |
$2 billion combined markets for safety,
prefilled and autoinjectors:
prefilled and autoinjectors:
• Unit growth 6-12%, varies depending
on segment
on segment
• West 2008 sales: $170 million
• 2013 OP margin: 7%
Strategic Planning Goals - Systems:
• Projected 2013 sales of $550 million
• Projected 2013 OP margin 20%
$1.5 billion market for components
• Unit growth 0-8% per year depending
on segment
on segment
• West 2008 sales: $800 million
• 2008 OP margin: 17.5%
Strategic Planning Goals - components:
• Projected 2013 sales of $1.05 billion
• Projected 2013 OP margin 20%
Five-Year Forecasted Growth Opportunity
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation25.jpg)
2009 | 2008 | |
Net Sales | $242.4 | $270.7 |
Gross Margin | 28.6% | 30.8% |
R&D | $4.3 | $5.4 |
SG&A | $42.9 | $40.1 |
Operating Profit (Non-GAAP) * | $21.9 | $37.8 |
Net Income (Non-GAAP) * | $14.1 | $24.9 |
Diluted EPS (Non-GAAP) * | $0.42 | $0.72 |
*2009 operating profit, net income and diluted EPS excludes a ($0.01) per share impact of Tech restructuring charges and $0.05
per share of discrete tax benefits.
*2008 operating profit, net income and diluted EPS excludes a $0.03 per share net gain on the Nektar contract settlement, a ($0.02)
per share impact of Tech restructuring charges and $0.03 per share of discrete tax benefits.
First Quarter Results
($ in millions, except per share data)
($ in millions, except per share data)
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation26.jpg)
($M) | 3/31/09 | 12/31/08 | 3/31/08 |
Cash | $62.7 | $87.2 | $93.6 |
Accounts Receivable | $137.2 | $128.6 | $151.9 |
Days Sales Outstanding (DSO) | 50.9 | 44.8 | 51.1 |
Inventory | $120.0 | $115.7 | $119.3 |
Days Inventory Outstanding (DIO) | 44.6 | 40.3 | 40.1 |
Asset Management
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation27.jpg)
($M) | 3/31/09 | 12/31/08 |
Total Debt | $387.9 | $386.0 |
Total Equity | $488.6 | $487.1 |
Net Debt to Total Capital | 40.0% | 38.0% |
Capital Expenditures: | ||
YTD Spending | $17.8 | |
Full Year Forecast / Actual | $128.7 | $131.8 |
Capital Management
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Maintaining Our Long-term Focus
• The fundamentals are what matter
– Superior quality and service win
– The Global Quality Initiative is critical
• Margin improvement - lean manufacturing, OEE
• Continue investment for the future
– Innovation
– Capacity and emerging markets
– IT
– Technology & product acquisitions
– People
• Financial
– Operating cash flow
– Prudent spending: discretionary SG&A and Capex
– Maintain a strong balance sheet
– Return on Invested Capital > Weighted average cost of capital
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation29.jpg)
Injectable Container Solutions
Advanced
Injection
Systems
Injection
Systems
Prefillable Syringe
Systems
Systems
Safety and Administration
Systems
Systems
Summary
• Market leader
• Proprietary technology
• Regulatory expertise
• Customer base
• Global footprint
• Partnerships
– Daikyo
– Mexico
• New product pipeline
• Financial position
– Cash flow
– Balance sheet
• People
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation30.jpg)
Each and every day,
more than 80 million
West products are used
to enhance the quality of
healthcare around the world.
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![](https://capedge.com/proxy/8-K/0000105770-09-000029/presentation31.jpg)
Donald E. Morel, Jr., Ph.D.
Chairman and Chief Executive Officer
William J. Federici
Vice President and Chief Financial Officer
Investor Relations Contact:
Michael A. Anderson
Vice President and Treasurer
mike.anderson@westpharma.com
UBS Global Specialty Pharmaceuticals Conference
June 3, 2009 London, UK
NYSE: WST
westpharma.com
All trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., unless noted otherwise.
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