April 2010
Disclaimer
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995:
1995:
This presentation contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations or beliefs, including, but not
limited to, statements concerning the Company's operations, financial
performance and condition. For this purpose, statements that are not
statements of historical fact may be deemed to be forward-looking statements.
The Company cautions that these statements by their nature involve risks and
uncertainties, and actual results may differ materially depending on a variety of
important factors, including those discussed in the Company's reports filed with
the Securities and Exchange Commission from time to time. In addition, the
company disclaims any obligation to update any forward-looking statements to
reflect events or circumstances after the date hereof.
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations or beliefs, including, but not
limited to, statements concerning the Company's operations, financial
performance and condition. For this purpose, statements that are not
statements of historical fact may be deemed to be forward-looking statements.
The Company cautions that these statements by their nature involve risks and
uncertainties, and actual results may differ materially depending on a variety of
important factors, including those discussed in the Company's reports filed with
the Securities and Exchange Commission from time to time. In addition, the
company disclaims any obligation to update any forward-looking statements to
reflect events or circumstances after the date hereof.
No securities regulatory authority has either approved or disapproved the
contents of this presentation.
contents of this presentation.
Equity Snapshot
* Adjusted to exclude stock option amortization expense
Figures as of April 30, 2010 | |
Symbol: | SNBP.OB |
Price: | $0.23 |
Market Cap: | $27.0 million |
Shares Outstanding: | 117,587,608 |
Fiscal Year End | May 31 |
Fiscal 2009 Revenue: | $3.85 million |
Fiscal 2009 Net Income:* | $0.76 million |
Projected Fiscal 2010 Revenue: | $7.7 million |
Projected Fiscal 2010 Net Income: | $3.5 million |
Investment Highlights
Profitable, Fast Growing Chinese Specialty Pharmaceutical Company
Multiple commercialized and pipeline products in muscle relaxant and cardiovascular
markets drive sustainable revenue and profit growth
markets drive sustainable revenue and profit growth
Fiscal 2010 guidance (fiscal year ending May 2010)
$7.7m revenues (103% revenue increase over prior year)
$3.5m net income, $0.03 EPS
High Margin Commercial Business
Lead product KuTai uniquely differentiated as only muscle relaxant stored at room temperature
Current gross margin above 70% and net margin above 40%
Expected sales of $7.3 million in fiscal 2010 (100% increase over prior year)
Strong YiTai product launch in the cardiovascular ACE inhibitor market
Market exclusivity and price premium as first-to-market product
Expected sales of $4 million in fiscal 2011 (launched in fiscal Q3:2010)
Robust Product Pipeline
Commercializing two new products in current year: cardiovascular and parenteral nutrition
Six additional drugs under development
Profitable, Fast
Growing Specialty
Pharma
Growing Specialty
Pharma
Outstanding Financial Performance
*The net income number excludes the stock option amortization charge
Corporate Overview
A fully integrated specialty pharmaceutical
company established in 2004 in Nantong,
Jiangsu. Headquartered in Nanjing, Jiangsu.
Listed on OTCBB in 2008.
company established in 2004 in Nantong,
Jiangsu. Headquartered in Nanjing, Jiangsu.
Listed on OTCBB in 2008.
Specializing in muscle relaxant and
cardiovascular drugs; each category has
total global market of more than $1 billion.
cardiovascular drugs; each category has
total global market of more than $1 billion.
Four marketed products and six major new products in pipeline planned for
commercialization.
commercialization.
SFDA GMP-certified production facilities and established distribution network.
Competitive Advantages
Expanding in fast-growing Chinese healthcare market
Government support includes no-interest loan, tax advantages for five years, and
high-tech corporation benefits
Strong R&D team lead by our Chairman & CEO Dr. Lee Huang, who headed
research team at Bayer Pharmaceutical (USA) for more than 12 years
Proprietary technology enables low cost, high quality API and innovative
formulations for unstable drugs
Experience with Chinese FDA expedites fast approval of first-to-market (FTM) drugs
China Market Opportunity
Population of 1.3 billion consumers with increasing disposable incomes
Chinese government will spend RMB124 billion in the next three years on healthcare
reform
reform
China’s entire drug market estimated at $122B in 2008; projected to be the 5th
largest pharmaceutical market by 2010 and the largest by 2050
largest pharmaceutical market by 2010 and the largest by 2050
Expanding government-backed healthcare policies and reimbursement systems
Growing elderly population is accelerating demand for drugs for seniors
11% of population is over 60 years old; to reach approximately 30% by 2045
Drug Selection Criteria
Development
Commercialization
Distribution →Increasing Market Share
Established networks, Sales infrastructure expansion
>$1B global sales
High-incidence,
high-mortality
diseases
high-mortality
diseases
Potential market
exclusivity
exclusivity
New drugs
First-to-market
branded generic and
innovative drugs
branded generic and
innovative drugs
Experience with
SFDA process
GMP certified
manufacturing
lines
manufacturing
lines
Launch/marketing
expertise
expertise
High margin/low
cost provider
cost provider
High Margin Business Model (>65%)
KuTai ®
(cisatracurium)
(cisatracurium)
YiTai ®
(perindopril)
(perindopril)
KeSu ®
(Clindamycin)
(Clindamycin)
Gueran ®
(L-alanyl-L-
glutamine)
glutamine)
Parenteral
Nutrition
Marketed Products
Market for Muscle Relaxants
Muscle relaxants used in major surgery with anesthesia and pain suppression
Total Chinese muscle relaxant market has 25% CAGR due to increase in
general anesthesia surgeries
Total market value in China is over RMB 1 billion (~$130 million)
Four main types of muscle relaxants in use; KuTai (Cisatracurium) has the fewest
and mildest side effects
Market numbers demonstrate Cisatracurium category is rapidly replacing other
muscle relaxants; will soon lead all muscle relaxants currently in use
Two Competitors (Jingsu Hengrui & GSK); both have lower sales; KuTai is the
leader in Cisatracurium category for total sales
Our Product -KuTai
Launched in 2007, KuTai is sales leader in
Cisatracurium category in Chinese market
Cisatracurium category in Chinese market
World’s first to be stored at room temperature;
convenient for surgeons
convenient for surgeons
Safer, more stable and more effective than
other relaxants
other relaxants
Much lower cost in China compared to Nimbex,
made by GSK
made by GSK
Sales revenue from KuTai was $3.6 million in FY
2009 and $1.4 million in FY 2008; an increase of
157%
2009 and $1.4 million in FY 2008; an increase of
157%
Expected sales revenue in FY 2010 is $7.3
million, an increase of 100%
million, an increase of 100%
Market for Cardiovascular Drugs
Cardiovascular (CV) disease is leading cause of death in the U.S.
Causes an estimated 17.5 million deaths globally every year; about one third
of total annual deaths
According to American Decision Resources research, total Chinese market in
2010 for cardiovascular drug is $800 million
Multiple drugs for treatment of cardiovascular disease in Chinese market;
effectiveness varies by patient types
Main competitor in Chinese market is Acertil from French company Servier
Our Product --YiTai
Launched in third quarter of FY 2010,
estimated sales for FY 2011 is $4 million
A first-to-market drug for which SNBP
enjoys market exclusivity
enjoys market exclusivity
Chinese health insurance covers drug
For some patients, more effective when taken
with other cardiovascular drugs
with other cardiovascular drugs
Protects blood vessels and kidneys
Extensive Distribution Network
Established nationwide sales and marketing network through distributors
Sales force covering all regions
Long-term relationships with hospitals and doctors
Distributes products in 30 provinces and
key major cities
For Dong Ying China
Robust Product Pipeline
Eplerenone
• Cardiovascular drug for high blood pressure and vascular disease
• No comparable drug produced and marketed in China
• First company to receive approval for clinical trials
Rocuronium
• Fast-acting, injectable muscle relaxant drug
• Can be used in cocktail with KuTai; recognized by doctors
Gantacurium Chloride
• Ultra short acting, rapid onset muscle relaxant
• New generation drug; not yet produced anywhere
Clevidipine Butyrate
• Rapidly reduces blood pressure; controls blood pressure in patients with
acute hypertension when use of oral therapy is neither feasible nor desirable
Diapeptide
• Promotes more rapid healing of surgical incisions
• SFDA approval secured
• Company’s third “First to Market” drug
Memantine
• Treats symptoms of Alzheimer’s disease
• SFDA approved for Phase II Clinical Trials
R&D Partnerships
Nanjing University
China Pharmaceutical University
Nanjing Medical University
Cornell University
Strong R&D
Top tier R&D team lead by Dr. Lee Huang
Patented technology and production provide highest quality and safety levels
for our products
Long-term cooperative relationships with a number of world class research
institutions and universities in both China and USA
Access to advanced research lab and devices
Modern, Scalable Manufacturing Facilities
3,000 sq. meter SFDA GMP-certified production facilities
Location in Nantong Economic & Technology Development Zone confer
extensive tax benefits
6 GMP-Certified Production Lines of tablet, capsule, injectable, granule,
dry power, and chemical ATPs
50% capacity used at current production levels
Financials Show Strong Growth
($ in thousands) | Feb. 28, 2010 (Q3 FY 2010) | May 31, 2009 (FY 2009) |
Cash & Cash Equivalents | $ 790 | $ 891 |
Total Current Assets | $ 3,267 | $ 1,692 |
Total Assets | $ 11,415 | $ 5,956 |
Total Current Liability | $ 2,757 | $ 5,179 |
Owner’s Equity | $ 8,658 | $ 777 |
Balance Sheet Highlights
Income Statement Highlights
($ in thousands) | Q1 FY 2010 (Ends Aug 31, 09) | Q2 FY 2010 (Ends Nov. 30, 09) | Q3 FY 2010 (Ends Feb. 28, 10) | Nine Months of FY 2010 (Ends Feb. 28, 10) |
Revenue | $ 1,293 | $ 2,137 | $ 1,993 | $ 5,425 |
Gross Income | $ 963 | $ 1,720 | $ 1,612 | $ 4,295 |
Gross Margin | 74% | 80% | 81% | 79% |
Operating expenses | $ 671 | $ 596 | $ 593 | $ 1,860 |
Operating Income | $ 292 | $ 1,124 | $ 1,019 | $ 2,435 |
Net Income | $ 237 | $ 1,074 | $ 941 | $ 2,252 |
Net Margin | 18% | 50% | 47% | 42% |
Short, Medium and Long-Term Growth Strategy
Leverage patented technology for fast, low-cost drug synthesis
and new drug formulation
Short-term focus on launching high margin, new drugs to Chinese
and other large markets
Medium-term focus on exporting API to U.S. market
Long-term focus on applying the technology platform to identify candidate
compounds from Traditional Chinese Medicines
compounds from Traditional Chinese Medicines
Become the “Chinese Teva Pharma”
Experienced Management Team
Lee Huang, Ph. D Chairman & Chief Executive Officer
More than 12 years research and managerial experience at Bayer Pharmaceutical, USA
Published more than 30 peer-reviewed articles in scientific journals
Holds numerous patents
Earned Ph.D. in Chemistry, Iowa State University, 1987; B.S. Organic Chemistry, Nanjing University, 1981
James Mu, CPA Director & Chief Financial Officer
Director of China Infrastructure Investment Corporation (Nasdaq: CIIC)
Former Chief Financial Officer of Jingwei International Limited (OTCBB: JNGW.OB)
B.S. Hebei University of Science and Technology (Chemical Engineering)
M.B.A. Baruch College, City University of New York
Xuejun Chen Director & Vice President
Former Vice-President of sales at Nanjing Langkun Medicine Co., Ltd.
Marketing Director of Jiangsu Province for both Xiamen Beidazhilu Biotech Co., Ltd. and Shanxi Dongshen
Medicine Co., Ltd.
M.B.A. Nanjing University, 2007; B.S. Lanzhou University
Attractive Valuation
Peer Group Analysis
Sinobiopharma (SNBP-OCT:BB)
Company Name and Symbol | Price Per Share* | Market Cap* | P/E Forward 12 Months | Est. Revenue Growth | Price/Sales Estimate (2011)* |
Sinobiopharma (SNBP-OTC:BB) | $ 0.24 | $ 28.2M | 4.8 | 71% | 2.07 |
Wuxi Pahrmaceutical (WX-NYSE) | $ 17.24 | $1,200.5M | 18.2 | 22% | 4.06 |
Sinovac Biotech (SVA-NASDAQ) | $ 3.96 | $ 214.6M | 8.5 | -17% | 2.62 |
China Sky One Medical (CSKI-NASDAQ) | $ 12.50 | $ 210.9M | 6.1 | 31% | 1.59 |
China Pharma Holdings (CPHI-NYSE AMEX) | $ 2.82 | $ 122.1M | 5.3 | 8% | 1.90 |
*Market Data as of 5/26/10
Investment Summary
Profitable, Fast Growing Specialty Pharmaceutical Company
High Margin Business with Robust Market Opportunities
Strong R & D Creating Rich Product Pipeline
Scalable Production Capacity
Nationwide Distribution Network
Solid Fundamentals
Multiple Competitive Advantages
Extensive Industry Relationships
Attractive Valuation
Experienced management Team that can Execute a Comprehensive
Multi-tier Growth Strategy
Contact Information
Transfer Agent
Empire Stock Transfer Inc.
1859 Whitney Mesa Dr.
Henderson, NV 89014
Auditors
Bernstein & Pinchuk LLP
New York Office
Seven Penn Plaza
Suite 830
New York, New York 10001
Tel: 212-279-7900
Beijing Office
RM. 610, Tower E1, Oriental Plaza
No.1 East Chang An Avenue
Dong Cheng District
Beijing, China 100738
Tel: 86-10-85187992
Legal Counsel
Sichenzia Ross Friedman Ference LLP
61 Broadway, 32nd Floor
New York, NY 10006
Tel: 212-930-9700
Investor Relations Contact
James Mu, CFO
Tel: 86.25.5806.1579
Email:xjmu@sinobiopharma.com
Thank You!
Sinobiopharma, Inc.
OTC BB: SNBP
Dong Ying (Jiangsu) Pharmaceutical Co., Ltd.
2 Huangpu Road,
Nanjing, Jiangsu Province 210000
People's Republic of China
Tel: 86.25.5806.1579 Fax: 86.25.8320.2848
Dong Ying (Jiangsu) Pharmaceutical Co., Ltd.
2 Huangpu Road,
Nanjing, Jiangsu Province 210000
People's Republic of China
Tel: 86.25.5806.1579 Fax: 86.25.8320.2848
www.sinobp.com