Speech David Ebsworth: Strategic execution


SPEECH
Date
Speaker
Subject
11 March 2014
David Ebsworth, CEO Galenica Group
Strategic execution delivers solid performance in 2013
The spoken word is valid.
STRATEGIC EXECUTION DELIVERS SOLID
PERFORMANCE IN 2013
David Ebsworth
CEO Galenica Group
Media Conference, 11 March 2014
I am proud, ladies and gentlemen, to present the results of the Galenica Group for 2013. During
this presentation you will see that our business performance has been solid thanks to the
consistent strategic execution last year. Our employees demonstrated excellent work throughout
2013.
Successful collaboration within the Group –
Stability in the Leadership Team at Galenica
2 © Galenica Group 11.03.2014
The results we present today were achieved through a stable Leadership Team at Galenica and
continued successful collaboration across the Group. I would particularly like to mention the great
collaboration within the members of the Corporate Executive Committee, or DG.
Galenica Ltd.
Untermattweg 8 · P.O. Box · CH-3001 Bern
Phone +41 58 852 85 17 · Fax +41 58 852 85 58
[email protected] · www.galenica.com
The Galenica Group – excellence in the healthcare market
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Eight major strategic projects will drive success between
2012 - 2017
1. Vifor Fresenius Medical Care Renal Pharma: global leader
2. Injectafer®
3. Ferinject®
4. Velphoro®: USA, EU, Switzerland, Singapore (filed for
registration)
5. Tecfidera®: Toll manufacturing for Biogen Idec
6. Strengthen network of sales affiliates
7. Retail: focus on processes, back office, efficiency,
performance, locations
8. Logistics: strengthen our service offering to customers
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3 © Galenica Group 11.03.2014
In 2013 we made excellent progress with the vast majority of our eight key strategic projects.
These projects will continue to impact our business over the next few years.
I will explain the major achievements in 2013 later on.
Motto 2013 – In tune with the customer
4 © Galenica Group 11.03.2014
The Motto 2013 was incorporated into our culture and we demonstrated it in daily life. Some
examples of being in tune with the customer can be seen here and in the annual report.
Date
11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Solid performance in a challenging environment
Galenica Group
NET Sales
Net sales 2013
in MCHF
% prior year
3,359.4
+ 2.0%
662.7
+ 4.6%
Logistics
2,118.2
+ 0.8%
Retail
1,245.7
+ 4.8%
39.8
- 15.5%
Pharma
HealthCare Information
Consolidation
(707.0)
5 © Galenica Group 11.03.2014
You already know our sales numbers. Nevertheless the solid top line growth which was achieved in
a challenging business environment is worth highlighting. The overall growth of 2.0% was driven
mainly by our important Pharma and Retail sectors.
What was the growth rate of the various parts of the Retail business?
Retail –
Net sales increase in all formats despite further price cuts
 Retail increased net sales by 4.8% vs. previous year.
 Sales like-for-like growth of 1.6%, slightly over market growth (+1.0%).
Important efforts to increase customer traffic.
Net sales
% prior year
Amavita
+ 5.3%
Sun Store
+ 1.4%
MediService
+ 9.9%
Winconcept
+ 10.7%
Coop Vitality
+ 5.7%*
6 © Galenica Group 11.03.2014
* Sales not consolidated
This slide shows that the 4.8% growth was achieved with solid performance across all four formats,
Amavita with 5.3%, Sunstore with 1.4%, CoopVitality with 5.7%, MediService – our specialty home
healthcare and mail order pharmacy – with the growth of 9.9%. In the case of the pharmacy chains,
this growth rate was a result of like-for-like growth and expansion activities.
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11 March 2014
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Strategic execution delivers solid performance in 2013
Expansion and optimisation of pharmacy network
contributes to 2013 growth
 312 own pharmacies.
 483 points of sale including
Amavita and Winconcept
partner pharmacies.
Number of pharmacies and change vs. previous year:
104 (-2)
156 (+4)
1 © Galenica Group 11.03.2014
(incl. Amavita partner)
55 (+4)
160 (+7)
1
The pharmacy network was further expanded and optimised. We now have 312 stores in our own
network, as well as another 171 partner pharmacies, an overall increase of 16 points of sales in the
past year.
Retail strategy designed to improve performance
Physician
Health insurances
Customer
Retail competence
Leadership
Pharmacy services
Supplier
Subject
Process efficiency
8 © Galenica Group 11.03.2014
The Retail management team strengthened their focus across all major elements of the strategy:
Pharmacy Services, Retail Competence, Process efficiency and Leadership effectiveness which
resulted in an improvement of efficiency in each of our pharmacy formats as illustrated on the
following slides.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Major progress in 2013 with Retail projects
 Project Team Performance:
 Team involvement in goal setting,
solution generation and monitoring progress.
 More time for customer service through
greater back office efficiency.
 Pilot project Customer Feedback:
 Systematic customer surveys.
 Planned introduction of the system in
all GaleniCare pharmacies.
9 © Galenica Group 11.03.2014
In 2013, the Retail team made major progress with a focussed project organisation to meet
customer’s needs, identified through systematic surveys and turned into reality through projects
such as Team Performance.
Major progress in 2013 with Retail projects
 Project LoRe:
 Shelf pricing: leaner goods delivery
processes and an increased
transparency for customers.
 More efficient stock management.
 Projects PEP / Alterno:
 Standardisation of processes in Finance
and HR.
 New IT-system for
pharmacies for an electronic staff
resource planning (PEP).
10 © Galenica Group 11.03.2014
The successful implementation of Project LoRe as well as project PEP/Alterno were major steps
forward and help to manage the stock management as well as Human Resources and financial
processes in a standardised way.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Customer focus – Optimal care for the health and
wellness of our customers
 Own brand offer continuously
extended: 54 SKUs
in both formats.
 Successful pilot project „quick allergy test”
in Zurich. Introduction in all Amavita
and Coop Vitality pharmacies in 2014.
 Polymedication checks: benefit for patients and
healthcare system. More than 3,000
tests conducted.
 Category management project: Roll-out OTC
2014 in all Amavita pharmacies.
11 © Galenica Group 11.03.2014
In 2013, further initiatives such as quick allergy tests and polymedication checks were implemented
to ensure the better care of the health and wellness of our customers. The own brand formats were
continuously expanded. The rollout of OTC category management in all Amavita pharmacies in
2014 will further strengthen the portfolio.
Responding to the customers’ needs
 Category management pilot project with category
«oral hygiene».
 Tailor-made management and marketing offers
for independent pharmacies.
 Consulting Services to improve product ranging.
 Expansion of service range in Pharma Care
(new: haemophilia treatments).
 Implementation of guidelines «for good distribution
practice for medicinal products for human use».
12 © Galenica Group 11.03.2014
MediService expanded its service range in Pharma Care in 2013 and other initiatives were
implemented for Sun Store and Winconcept.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Logistics –
Stable net sales due to expansion of customer services




2,118.2 MCHF net sales
+ 0.8% prior year
Acquisition of several new customers.
Expansion of various special ranges
to meet specific customer needs.
Third-party logistics service: positive
reaction in market. Customers and suppliers
can delegate bulk and fine-distribution to
Logistics.
Project Coaxial: Standardisation of
IT-Infrastructures into one data center
in Niederbipp, reduced costs.
% prior year*
Alloga
+ 5.3%
Galexis
+ 0.7%
Unione
- 1.1%
*not consolidated
13 © Galenica Group 11.03.2014
Within Logistics we defended our market share in 2013 and achieved growth in both the Alloga
prewholesale and the Galexis wholesale business whilst suffering in Unione, our Tessin based
wholesale business. Customer acquisition worked well, we increased our productivity and the way
we worked with our partners.
Tailor-made Services for customers
 Acquisition of Medifilm:
 Leader in the field of unit dose packaging
for medicines.
 Increase of compliance and safety
with individual sachets.
 Successful introduction of a range of medical
technology devices: offer with approx. 100
products at Euro prices for doctors.
 Trade brand programme G-Pharma: expansion
of product range (over 100 products):
own brand Retail, product line for Galexis,
trade brands.
14 © Galenica Group 11.03.2014
Through the integration of Medifilm into the Logistics business sector, the range of services has
been expanded. Additional medical technology devices were introduced at Euro prices and the
product range of G-Pharma was expanded.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Increase of efficiency through use of transport synergies
 Good collaboration within Logistics business sector in the area of
transportation – an economically and ecologically efficient solution.
Number of shared
shipments - 2013
4'000
3'500
3'000
2'500
2'000
1'500
1'000
500
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov Dec
15 © Galenica Group 11.03.2014
Alloga already has implemented the new GDP guidelines to guarantee the cool chain in 2013.
Their level of automation in 2013 was 31%. The implementation of the a new version of pharmacy
software was a complete success at Unione. The sales force of Unione was expanded to serve our
customers’ needs and provide additional services for distributors.
A good example for collaboration is Galexis and Alloga working together to increase their efficiency
through the use of transport synergies.
HCI – Impact of changed market conditions observable
 Rollout TriaPharm® in Amavita and Sun Store pharmacies.
 Sales activities for TriaMed® intensified. The system allows the access to
the patient’s medical history for all physicians involved in the patient’s
treatment.
 Documed: over 80% of the pharma market uses our databases through
the software “compendiumPORTAL”.
 e-mediat: ca. 150 software firms use the INDEX products in their
applications. Over 300 hospitals are working with hospINDEX.
Net sales
2012 in
MCHF
2013 in
MCHF
HCI
47.1
39.8
16 © Galenica Group 11.03.2014
The Healthcare Information business continued to successfully enhance various clinical decision
®
®
support systems, and expanded our presence with the TriaPharm and TriaMed software systems.
80% of the pharma market is now using the compendiumPORTAL which is a great achievement.
Furthermore, the business of e-mediat was expanded.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Stable ROS in Santé –
Despite a very competitive environment
ROS
2012
2013
Logistics 1.5%
1.5%
Retail
5.1%
5.1%
HCI
9.1%
10.2%
17 © Galenica Group 11.03.2014
As a result of this strong teamwork, the operational effectiveness and efficiency demonstrated by
all Santé businesses, we have been able to maintain or improve in the return on sales across all
three businesses. With 1.5% in Logistics and 5.1% in Retail our RoS can be considered strong in
the European context.
Vifor Pharma operates in a challenging environment internationally given the increased complexity
of market access, governmental budget restrictions in healthcare, growing regulatory pressures
and increased competition.
Excellent progress made in all Vifor Pharma projects 2013
1. Vifor Fresenius Medical Care Renal Pharma:
Partnership strengthened
2. Injectafer®: FDA approval
3. Ferinject®: Marketing Authorisation received in 15 further
countries
4. Velphoro®: EU, Switzerland, Singapore
(filed for registration) and FDA approval received
5. Tecfidera®: Toll manufacturing for Biogen Idec: Double-digit
sales growth
6. Strengthen network of sales affiliates:
Hospital sales force built in Italy
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18 © Galenica Group 11.03.2014
I am very proud of the achievement of the Vifor Pharma team when I look back at a successful
2013. The partnership with Vifor Fresenius Medical Care Renal Pharma was further strengthened,
®
®
Injectafer and Velphoro were approved by the FDA, 15 new marketing authorisations for
®
rd
Ferinject were received, double-digit sales growth was possible in 3 party manufacturing given
®
the Tecfidera launch and we strengthened further the network of our affiliates.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Vifor Pharma – Solid growth of +4.6% vs. prior year!
2013
in MCHF
± % prior year
662.7
+ 4.6%
Rx
422.3
+ 4.0%
Infectious diseases/OTX
117.0
- 2.0%
CHC International
27.7
+ 9.2%
CHC Switzerland
59.7
+ 12.7%
3rd party manufacturing
36.0
+ 22.1%
Total Vifor Pharma
Core Business
19 © Galenica Group 11.03.2014
Given this, a sales growth rate of 4.6% with a good growth in our core prescription business is
worthy of note. The only business that struggled was our Infectious diseases/OTX franchise.
Destocking at our partners continued to play a role.
Ferinject® was growth driver of the iron franchise in 2013!
2013
±% prior year ±% in volume
in MCHF
Ferinject®
158.2
+ 24.5%
Venofer®
128.8
- 9.8%
+ 37.3%
- 2.5%
Maltofer®
52.6
+ 3.5%
+ 8.9%
20 © Galenica Group 11.03.2014
®
As you would expect, Ferinject was the growth driver within our iron franchise where we achieved
®
a 37.3% volume growth. Our other iron products did well. Venofer declined by 2.5% in volume and
®
9.8% in value and I will return to this topic later. Maltofer was able to strengthen its market
position.
®
There were a number of factors impacting our growth of Ferinject of which one was the
implementation of improved top down education.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Ferinject® –
FIND-CKD study will help improve patient care
 Over 600 patients from 20 countries participating
in the 56 weeks trial.
 Study results:
 Better control of iron deficiency anaemia in
non-dialysis-dependent chronic kidney disease
(ND-CKD) patients.
 Ferinject® reduces the need for other anaemia
management in this patient population: better patient care
and costs reduction in the health care system.
21 © Galenica Group 11.03.2014
The FIND-CKD study is ground-breaking in terms of its scale and reflects the commitment of Vifor
Pharma to grow our iron portfolio by expanding the areas of usage for iron therapies. It is the
largest and longest study ever conducted in patients with ND-CKD to assess the efficacy and long
term safety of intravenous iron for the treatment of iron deficiency anaemia − with over 600 patients
from 20 countries participating in the 56 week trial. The results of the study demonstrate that
®
Ferinject significantly prolongs the time until other anaemia management is needed in patients
suffering from iron deficiency anaemia who have non-dialysis-dependent chronic kidney disease
(ND-CKD). This is a significant finding because iron deficiency anaemia becomes more prevalent
in patients suffering from ND-CKD as the disease progresses.
Vifor Pharma is continuing to set the standard for innovative approaches to iron deficiency therapy,
and this achievement is the latest example of our commitment to transforming the lives of patients
around the world who can benefit from our therapies.
Injectafer® was approved in July 2013 with a
broad label
 750mg iron / 15ml single use vial.
 2 pivotal trials demonstrate clear differentiation for
Injectafer® based on faster and higher haemoglobin
increase compared to the existing intravenous standard
of care or oral iron.
 Focus on Haematology / Oncology centres.
 Luitpold has launched Injectafer® in the US.
 C-code awarded of 1st January 2014.
 Price increase of 3% per 1st January 2014.
22 © Galenica Group 11.03.2014
®
Receiving US FDA approval of Injectafer in July was a major accomplishment: the product is the
first non-dextran intravenous iron therapy to gain US FDA approval for the treatment of iron
deficiency anaemia (IDA) in a broad group of patients, irrespective of the underlying origin. Our
®
partner, Luitpold, launched Injectafer in the US market after receiving the approval, and we
anticipate increased sales momentum in 2014.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
New partnership with Zeria Pharmaceutical for the
development and commercialisation of Ferinject®
for IDA in Japan
 Extensive experience of Zeria Pharmaceutical will drive the launch
of Ferinject® in Japan.
23 © Galenica Group 11.03.2014
We announced an agreement with Zeria Pharmaceutical for the development and
®
commercialisation of Ferinject for IDA in Japan. I am confident of benefitting from their extensive
®
experience when we launch Ferinject in Japan – the world’s second largest pharmaceutical
market.
Ferinject® – Solid volume growth in key countries
% in volume
Ferinject® total
+ 37.3%
Switzerland
+ 13.2%
Germany
+ 15.9%
France
+ 22.8%
UK
+ 44.2%
Spain
+ 20.5%
100mg equivalents
24 © Galenica Group 11.03.2014
®
In our sales affiliates, Ferinject demonstrated a solid volume growth compared to the previous
year.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Ferinject® – New launches will reinforce future growth
6 countries
launched in 2013
1. Cyprus
2. Malta
3. Mexico
4. Pakistan
5. Turkey
6. United States
25 © Galenica Group 11.03.2014
Ferinject ® / Injectafer ® approved,
not yet in the market
Launched in 42 countries
Approved in 58 countries
®
We achieved notable geographic expansion of Ferinject , which is now available in 42 markets
worldwide and registered in 58 countries. New launches will help to accelerate the global growth of
®
Ferinject .
Lifecycle management of Venofer® is ongoing
±% in CHF
Venofer® sales
- 9.8%
USA
- 13.0%
Others
- 6.7%

Volume decline is decreasing.

Impact of Ferinject® in
selected markets.

The new branding will help to
fight for Venofer® in the Iron
Sucrose Similars (ISS)
environment.
1 © Galenica Group 11.03.2014
®
Our teams are providing strong life-cycle product management of Venofer , which continues to
®
maintain leadership in many markets despite decline in volume and the impact of Ferinject in
®
selected markets. The new branding and information will help to fight for Venofer in the Iron
Sucrose Similars (ISS) environment.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Infectious diseases/OTX – Good growth in IMS sales
driven by emerging markets
2013 in
MCHF
±% in LC*
±% in
IMS
BronchoVaxom®
47.6
+ 9.5%
+ 14.3%
Uro-Vaxom®
15.9
+ 6.0%
+ 12.0%
Doxium®
25.7
- 16.4%
+ 8.0%
Dicynone®
17.0
- 5.6%
+ 1.0%
* local currency
27 © Galenica Group 11.03.2014
In market growth (IMS) for all key Infectious diseases/OTX products in 2013 exceeded that of the
reported ex-factory sales due to destocking partners.
Velphoro® to control serum phosphorus levels in patients
with chronic kidney disease (CKD) on dialysis
 US Food and Drug Administration (FDA) approval received in
November 2013.
 Launch in the USA in March 2014.
 Regulatory processes are ongoing in EU, Switzerland and
Singapore and decisions expected mid 2014.
 Marketing Authorisation Application was submitted to Australian
TGA and procedure started 30th November 2013.
 Further submissions are under preparation.
28 © Galenica Group 11.03.2014
®
®
We made excellent progress with Velphoro in 2013. At the end of November, Velphoro
(previously known as PA21) was approved in the US and the launch occurred early in March 2014.
Other marketing authorisation applications are under review in Europe, Switzerland, Singapore and
Australia. Launch preparations for these countries are ongoing and further submissions are under
preparation.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Vifor Pharma third-party manufacturing business –
Production of Tecfidera® intensified
 Third-party manufacturing business: double digit sales growth.
 Tecfidera® has the potential to become the world's leading
treatment for the treatment of relapsing-remitting multiple sclerosis.
 Approval in the USA 27th March 2013.
 European Commission approved Tecfidera® as a first-line oral
treatment for adults with relapsing-remitting multiple sclerosis
(RRMS).
29 © Galenica Group 11.03.2014
I would like to highlight the double digit sales growth of our third-party manufacturing business.
®
Tecfidera was approved in the USA last year and has recently been approved in Europe and it is
®
expected to gain considerable market share. Tecfidera , manufactured at our site in Villars-surGlâne on behalf of Biogen Idec, further demonstrates that we are in tune with our customers and
their needs.
Continued strategic focus as basis for success in 2014
 Accelerate growth with Ferinject®.
 Supporting the launch of Injectafer® in the USA with our partner Luitpold
Pharmaceuticals, Inc.
 Working towards further approvals of Velphoro® and successful
commercialisation with Vifor Fresenius Medical Care Renal Pharma.
 Continuing to strengthen our ID/OTX and OTC products.
 Increase volumes of third-party manufacturing.
 Optimising processes and extension of the range of services in
Logistics.
 Optimising the product range and new services to increase customer
loyalty and to attract new customers in Retail.
30 © Galenica Group 11.03.2014
We are on track with the vast majority of the key strategy projects, whether this be in Santé or Vifor
Pharma.
®
In 2014 we will retain our strategic focus on further growing Ferinject , further supporting the
®
®
launch of Injectafer in the USA, working towards further approvals of Velphoro and its successful
commercialisation as well as strengthening our ID/OTX and OTC franchise. In addition, we expect
to expand production volumes in third-party manufacturing. We will continue to fine-tune our
Logistics activities, optimise our product range and services in Retail to attract new customers and
increase customer loyalty. In all areas of the Swiss business, my team and I will work closely
together to achieve synergies between the various divisions.
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11 March 2014
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Subject
Strategic execution delivers solid performance in 2013
Motto 2014 – Our passion, customer satisfaction
31 © Galenica Group 11.03.2014
A key focus across Galenica is understanding our customers which is why we have decided to
introduce the motto “Our passion, customer satisfaction” for 2014. We will demonstrate passion for
strong performance in 2014 and this will help us to deliver solid results.
Thank you for your attention.

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