Investor presentation January 2019 - BioGaia

 
Investor presentation January 2019 - BioGaia
Investor presentation January 2019
Investor presentation January 2019 - BioGaia
The founders Peter Rothschild and Jan Annwall
                  BioGaia in short

   Founded in 1990              140 employees

 Listed on the Nasdaq         Holds 440 patents
Stockholm (mid cap list)        in 32 families

Products in 100 markets        Offices in Sweden
  through distributors     (Stockholm, Lund, Eslöv),
                            Singapore, USA, Japan

                                                                                                 2
Investor presentation January 2019 - BioGaia
A healthcare company working with probiotics

          MISSION                                 VISION

BioGaia conducts research               BioGaia’s vision is to be a
and development to offer                ground-breaking leader in
consumers clinically-proven,            probiotics
health-promoting, patented
and user-friendly probiotic
products
Investor presentation January 2019 - BioGaia
What are probiotics?

World Health Organization defines probiotics as “Live microorganisms that, when
administrated in adequate amounts, confer a health benefit on the host.”

(WHO/FAO, 2002)                                                                   4
Investor presentation January 2019 - BioGaia
NETWORK
                                                              Researchers
                                                            Preclinical and clinical

     Flexible business model                                 studies at hospitals
                                                               and universities

                                                BioGaia
                                           Product development
                                             Product strategies
                                                  Research
                                          Quality assurance system
                                             Marketing support
                                                      IP

                                   NETWORK                   NETWORK
                                   Partners                  Suppliers
                                 Pharmaceutical or          Production and
                               healthcare companies           packaging
                                     with sales
                                   organizations

BioGaia

Universities and hospitals
where research is conducted

Manufacturing and
packaging units

Partners with sales
of products

                                                                5
Investor presentation January 2019 - BioGaia
BioGaia’s partner network

                     PARTNERSHIP WITH STRONG LOCAL
                             DISTRIBUTORS

           DIETARY                                   BIOGAIA
       SUPPLEMENT                                    BRAND

                            SALES THROUGH
                             PHARMACIES
Investor presentation January 2019 - BioGaia
BioGaia brand

    • Branding for Health professionals
    • Sold in 70 countries
    • 69% of sales of finished consumer products (drops, digestive health tablets, oral health
      tablets, oral rehydration solution) were sold under the BioGaia brand, including co-
      branding, in 2017
    • Build value, less dependence on patents

Protectis                Protectis                 Gastrus                   Prodentis
Investor presentation January 2019 - BioGaia
BioGaia’s Intellectual Property

   440                       Trademarks in
                                              70
    issued
  patents in
                                  66         Internet-
                            countries + EU   domains
  32 families

                                                         8
Investor presentation January 2019 - BioGaia
Clinical trials supporting the use
 of BioGaia probiotics

             202
clinical studies have been carried out to date.
   Results have been published in scientific
          journals and doctorial theses

      17 100
  individuals of all ages have taken part in
    clinical studies with BioGaia’s human
        strains of Lactobacillus reuteri
Investor presentation January 2019 - BioGaia
BioGaia probiotics and indications

Protectis
                    Functional gastrointestinal          Colic
                            disorders

                                                     Regurgitation
                       Acute gastroenteritis
                                                      Constipation
Protectis
                    Support of gastrointestinal   Functional abdominal
                             health                       pain

                    Antibiotic-associated side-
                               effects

Gastrus
                      Eradication treatment
                     associated side-effects

                           HP-infection

Prodentis
                            Gingivitis

                          Periodontitis
                                                                         10
THE BIOGAIA GROUP

                    11
BioGaia Group
     THE MICROBIOME PARTNER

                                     BioGaia Group

                                      BioGaia AB

   BioGaia        BioGaia      BioGaia           BioGaia      CapAble AB   MetaboGen AB
Biologics Inc.   Japan Inc.   Pharma AB       Production AB

                                                                             12
• BioGaia Pharma AB is a subsidiary to BioGaia AB applying 25 years of probiotic
  experience to the research and development of new microbial therapeutic
  platforms.
• Through an established network of research institutions and companies,
  BioGaia Pharma’s mission is to match early research on candidates from the
  microbiome with unmet medical needs to develop drug platforms.

• Formed: June 2017
• Location: Stockholm, Sweden
• www.biogaiapharma.com
• Areas of focus: infectious diseases; inflammatory and gastrointestinal disorders
Development of next generation probiotics
• MetaboGen works to develop products from novel bacterial strains, targeted for precise
  indications and derived from the human gut microbiome
• Products may be food supplements, or drugs, depending on the indication and the
  preference of future partners
• MetaboGen provides BioGaia with access to front-line development of next generation
  microbial products, including regulatory development in this emerging field
DISCOVERY, FINDING              FULL METAGENOME              STRAIN                     PRODUCT          CLINICAL TRIAL
FUNCTIONAL RELATIONSHIPS        ANALYSIS                 IDENTIFICATION               DEVELOPMENT      REGULATORY WORK
                                                                                                          MARKETING

            Jens Nielsen
            Systems Biology
            R&D

            Fredrik Bäckhed
            Metabolic disease
            R&D

                                                Performed in MetaboGen, including
                                   unique technology for producing products of anaerobic strains    Together with partners
•   Production of BioGaia drops, easydropper, MiniPack and samples
•   GMP pharma certified
•   Product development
•   Laboratory

       GMP certified              BioGaia Production          BioGaia Production   15
• Providing innovative packaging solutions allowing the development of new
  unique beverages
• Exclusive LifeTop™ Cap and LifeTop™ Straw supplier
• www.lifetop.eu

        LifeTop™ Cap                LifeTop™ Straw
A Foundation against
                      Antibiotic Resistance

A BioGaia CSR initiative that supports research and
education within the area of antibiotic resistance by:
Giving financial support to research and
education that helps to prevent infections which
reduces the use of antibiotics and the risk of
antibiotic resistance.
Activities
• Twitter account (@ResResistance)
• Monthly newsletter – Resist the resistance
• Meetings with companies, organizations,
  politicians to influence decision makers
• Articles in regional newspapers and appearances
  by BioGaia representatives in media

                                                         17
MARKET AND
COMPETITORS

              18
Our Market: Global probiotic supplement market 2015 ($ 3.8 billion)

                                               0,1

                                   0,6

                                                                                  1,9

                     1,2

                      America          EU       Asia Pacific         Rest of world

               International Probiotics Association 2015, Euromonitor International 2015
                                                                                           19
Our Market: Global probiotic supplement sales
(Sales 2015 projected to 2020)

6
                                                                                         5,4
5

4                                                                           3,8

3                         2,6

2

1

0
                         2010                                             2015           2020
                                                                  Sales ($ in billion)

From 2015 to 2020, CAGR of 7,4% assumed according report from Global Market Insight
International Probiotics Association 2013 & 2015, Global Market Insights 2016
                                                                                                20
What defines a probiotic supplement leader?
            High quality &   Innovative               Consumer
            competitively      dosage                 and HCP    Distribution
Strong IP   priced culture     formats                 loyalty    channels

                Fermen-        Manu-        B2B          Brand      B2C
 R&D
                 tation       facturing   marketing      owner    marketing

                                                                          21
The BioGaia benchmark

             Fermen-       Manu-        B2B         Brand        B2C
R&D
              tation      facturing   marketing     owner      marketing

 •    BioGaia IP, R&D and Product Development have enabled development of the
      BioGaia pediatric brand with unrivaled global distribution channels

 •    BioGaia has decided not have in-house fermentation manufacturing but invested I
      a new center of excellence in Sweden.

 •    BioGaia has focused less on B2C marketing
BioGaia Competitors

•     Companies developing, producing, and selling probiotics (Chr. Hansen)
•     Well studied probiotic strains (L.GG from Valio)

•     Non probiotic products / drugs (Imodium, Simethicone)

•     Probiotic products with strong brands (Enterogermina)

•     Pharma companies (Sanofi)

•     Functional Food (ProViva)

                                                                        23
Importance of strain specificity

                      Probiotic bacteria                 Car

      Group           Lactic acid bacteria               German car

      Genus           Lactobacillus                      Volkswagen

      Species         Lactobacillus reuteri              VW Golf

      Strain          L. reuteri Protectis               VW Golf 2.0 Turbo
                                                                                        Different breeds have different characteristics
                                                                                              and are suitable for different tasks

VW Golf I and the VW Golf VI GTI, similar cars, but you do not expect the same output
                                                                                        Try convincing your teenage daughter that an
                                                                                           iPhone 3 is just as good as an iPhone 6

                                                                                                                                 24
MAJOR SHAREHOLDERS
   AND BOARD OF
    DIRECTORS

                     25
Major Shareholders 31 December, 2018 (source: Euroclear)

                                                                   Share    No. of
                                            A shares   B shares   capital   votes    Capital   Votes

                                               000's      000's SEK 000's    000's        %       %
 1 Annwall & Rothschild Inv. AB                 741        359      1 100    7 766     6,3%    32,4%
 2 Swedbank Robur fonder                                  1 627     1 627    1 627     9,4%    6,8%
 3 Fjärde AP-fonden                                       1 408     1 408    1 408     8,1%    5,9%
 4 Öhman Bank S.A                                         1 164     1 164    1 164     6,7%    4,9%
 5 State Street Bank & Trust co                            713       713      713      4,1%    3,0%
 6 David Dangoor                                           519       519      519      3,0%    2,2%
 7 Banque Pictet &CiE                                      459       459      459      2,6%    1,9%
 8 SSB and Trust company, Boston                           413       413      413      2,4%    1,7%
 9 State Street Bank & Trust com., Boston                  390       390      390      2,2%    1,6%
10 BNY Mellon SA/NV (Former BNY)                           332       332      332      1,9%    1,4%
  Other shareholders                                      9 211     9 211    9 211    53,1%    38,4%

  Total:                                        741      16 596    17 336   24 002    100%     100%

Total number of shareholders 31 December 2018: 8 908
Foreign owners: 49% of capital (36% of votes)

                                                                                                       26
Board of Directors

  Chairman                                                   Inger
Peter Rothschild           David Dangoor                   Holmström

                                                                   Anthon
      Peter Elving                                                Jahreskog
                     Ewa Björling          Brit Stakston
                                                                          27
SALES AND PROFIT
5 YEARS DEVELOPMENT

                      28
BioGaia sales – 5 years development

800

700
                                                                     20%
600
                        CAGR: 16%
                                                         15%
500                                        11%
                            25%
400
                22%
300
       9%
200

100

  0
       2013      2014       2015           2016          2017   Roll 12 q3 2018

                        Total sales   Operating
                                       EBIT     result

                                                                                  29
Q3 2018

          30
Quarter 3 2018 – Executive Summary
•   Sales up with 18% (excluding currency effects 10%)

•   Good sales growth in Pediatrics segment

•   Decrease in Adult segment (excluding currency effects)
    related to Protectis tablets

•   Good sales growth for BioGaia Protectis drops, and also
    good growth for BioGaia Prodentis lozenges

•   Good growth in all three regions

•   Continued investments in marketing activities, staff,
    research and clinical studies

•   Royalty from Nestlé regarding GUM are estimated to
    decrease by SEK 40 million in 2019 compared to 2018       31
Quarter 3 2018 – Key events

•   BioGaia increases further in MetaboGen to 92%

•   Launch of BioGaia Protectis tablets in Australia and
    BioGaia Gastrus tablets in Poland and Hungary

Key events after the end of the quarter

•   MetaboGen reaches development goal – first product
    ready for safety study

                                                           32
Sales per segment (MSEK)

                                Q3     Q3     Change   Change Roll 12 Q3Roll 12 Q3 Change   Change
                                2018   2017     %       % 1)     2018     2017      %        % 1)

         Pediatrics             138    111     24%      15%       577      473     22%       20%

         Adult health            36     36     1%       -7%       124      101     22%       21%

         Other                   0      1      -58%     -58%       2        9      -82%      -82%

         Total sales            175    148     18%      10%       702      584     20%       19%

1) Excluding currency effects

                                                                                                     33
EBIT (MSEK) and EBIT margin

                                       Q3                  Q3       Change   Roll12 Q3 Roll12 Q3   Change
                                      2018                2017        %        2018      2017        %
    EBIT *)                             66                     54    23%       264        218       21%
    EBIT Margin                       38%                 36%                  38%       37%
    Profit after tax                    51                     42    22%       206        179       15%
    EPS                                2.97               2.43       22%       11.86     10.34      15%

*) Excluding revaluation of share in associates 7,0 (0) MSEK

                                                                                                            34
Present focus

•   Continued growth of existing products

•   New products such as Osteoporosis

•   Continued growth in Americas and Asia Pacific

•   Integration of MetaboGen

                                                    35
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