Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow...

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Roadshow Presentation 1 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation
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Page 1: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation1

1H 2007 resultsSeptember 2007

Roadshow Presentation

Pharmstandard Roadshow Presentation

Page 2: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation2

Disclaimer and Confidentiality Requirements

This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of OJSC Pharmstandard (the “Company”) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.

This presentation has been prepared solely for use in connection with the possible offering of ordinary shares (the “Shares”) and global depositary receipts representing shares (“GDRs” and, together with the Shares, the “Securities”) in the Company (the “Offering”). This document is an advertisement and not a prospectus and any purchase of Securities in the Offering should be made solely on the basis of information contained in the prospectus and any supplemental prospectus to be published in respect of the Offering. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of Augment Investments Limited (the “Selling Shareholder”) or the Company or any of their respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation.

This presentation is only for persons having professional experience in matters relating to investments and must not be acted or relied on by persons who are not Relevant Persons (as defined below). Solicitations resulting from this presentation will only be responded to if the person concerned is a Relevant Person.

This presentation is not for distribution in, nor does it constitute an offer of securities in the United States, Canada, Australia or Japan. Neither the presentation nor any copy of it may be transmitted into the United States, its territories or possessions, or distributed, directly or indirectly, in the United States, its territories or possessions. Any failure to comply with this restriction may constitute a violation of US securities laws. The presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. The Company has not registered and does not intend to register any portion of the Offering in the United States or to conduct a public offering of any securities in the United States.

This presentation is made to and directed only at (i) persons outside the United Kingdom, (ii) qualified investors or investment professionals falling within Article 19(5) and Article 49(2) (a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (iii) high net worth individuals, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (such persons collectively being referred to as "Relevant Persons").

This presentation and its contents are confidential and must not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person, whether or not such person is a Relevant Person. Failure to comply with this restriction may constitute a violation of applicable securities laws. If you have received this presentation and you are not a Relevant Person you must return it immediately to the Company. This presentation does not constitute a recommendation regarding the securities of the Company.This presentation is not a public offer or advertisement of Securities in the Russian Federation and is not an invitation to make offers to purchase any Securities in the Russian Federation, and must not be passed on to third parties or otherwise be made publicly available in Russia. The GDRs have not been and will not be registered in Russia and are not intended for “placement” or “circulation” in Russia.This presentation includes 'forward-looking statements'. These statements contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's projects and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation. Each of the Company and the Selling Shareholder and their respective agents, employees and advisers, expressly disclaims any obligation or undertaking to update any forward-looking statements contained herein.

The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.All information not separately sourced is from Company data.

Page 3: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation

1. Company Overview

Dr. Igor Krylov, CEO

Page 4: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation4

Our Strategy

Promote our market-leading brands to drive sales growth and profitability

Launch new products on a regular basis

Expand sales and marketing effort

Continue to actively control costs

Grow through acquisitions

Exploit opportunities from Federal Reimbursement Programme (FRP) as they arise

Building a top-3 pharmaceutical company in Russia

Page 5: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation5

Promote our market-leading brands to drive sales growth and profitability

6 leading brands

“Top of mind” position with consumers

Significant brand loyalty

Exclusively produced by Pharmstandard

Produced by Pharmstandard

Leading domestic pharma trademarks by sales value in 2006

Source: Pharmexpert. Based on consumer prices, Rx and OTC productsNote:1 Masterlek Brands

Trademark Ranking in 1H 2007

Ranking in 1H 2006

Arbidol 1 1

Mexidol 2 3

Pentalgin 3 2

Sodium Chlorid 4 5

Complivit 5 10

Viferon 6 9

Terpincod 7 7

Howthorn 8 4

Cephazolin 9 11

Flukostat 10 13

Glucose 11 17

Phenotropil 12 8

Cortexin 13 26

Hondrolon 14 48

Cyclopheron 15 19

Codelac 16 24

Corvalol 17 18

Bifidumbacterin 18 14

Ascorbic acid 19 20

Miramistin 20 38

Page 6: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation6

Product ATC

Sales value 1H 2007USD mln

Market valueUSD mln Key Market brands

Recent product launchesMaxicold ® R05A0-Cold Preparations Without Anti-

Infectives0.5 142.0 Coldrex, Fervex, Teraflu

Passifit ® N05B5-Herbal Hypnotics/Sedatives 0.3 125.0 Novo-Passit, Persen

Immunex ® L03A0-Immunostimulating Agents Excluding Interferons

0.1 85.0 Immunal, Immunorm

Biosulin ® A10C2-Human Insulins And Analogues 2.1 162.0 Humulin, Protaphan, ActrapidRastan ® H04C0-Growth Hormones 1.7 18.0 Genotropin, Saizen, HumatropeArtrozan ® M01A1-Anti-Rheumatics, Non-Steroidal Plain 0.2 199.0 Movalis, Voltaren, Diclofenac

Recent product approvals

Complivit Ca D3® A12A – calcium products 45.0 Calcium D3, Calcium

Benfolipen® A11D (tablets) – vitamin B1 and combinations 15.0 Milgamma, Neuromultivit

Combilipen® A11D (injections) – vitamin B1 and

combinations25.0 Milgamma, Thiamine Chloride

Ondasol® A04A1 – serotonin antagonist

antiemetics/antinauseants16.0 Kytril, Zofran, Navoban

Carditrim® C01D0 – coronary therapy excluding calcium

antagonists and nitrites111.0 Preductal

Launch new products on a regular basis

Source: Pharmexpert,

OTC

Rx

OTC

Rx

New products sales achieved RUR 127 mln or 3.4% from total Pharmaceutical sales in 1H 2007

Page 7: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation7

Expand sales and marketing effort

All sales reps have medical education/work experience

Covers 75% of the Russian pharma market

Incentivised sales force—up to 33% bonus of annual salary

In 2007 looking to:

– Increase “feet on the street” to over 350 sales people

– Further specialise sales force by therapeutic area

– Electronic Territory Management System (ETMS) system improving efficiency

Experienced sales force up to 340 sales persons1

Note: 1 As of 30 June 2007

Real ti

me d

ata

- E

TM

S

HQ Sales and marketing

National manager1 manager

Regional manager20 managers

OTC sales force(131)

Rx sales force(157)

National manager2 managers

Regional manager29 managers

OTCRx

(incl. ENDO-Team)

Real tim

e d

ata

- ETM

S

Source: Company

Page 8: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation8

Diversified Product Portfolio in 1H 2007

Pharmaceuticals

85% of 1H 2007 sales

Medical Devices

15% of 1H 2007 sales

OTC70% of 1H 2007 sales

Rx1

15% of 1H 2007 sales

Therapeutic focus: Analgesics Cough & cold Vitamins Anti-viral Anti-fungal

Product portfolio includes: Acid pump inhibitors Nitrites & nitrates ACE inhibitors Alimentary tract

metabolism

Product portfolio includes: Sterilisers Distillers Medical disposables

Source: Company

Note: 1 Includes Other sales

52% revenue growth in 1H 2007

63% growth 54% growth 18% growth

Page 9: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation9

Other68.8% Servier

2.5%

Nycomed2.5%

Pfizer2.5%

Gedeon Richter2.7%

Sandoz2.8%

Bayer Schering Pharma

2.9%

Berlin-Ch/Menarini

2.9%Sanofi-Aventis

4.5%

Novartis4.2%

Pharmstandard3.7%

Other51.4%

Pharm-Centr4.3%

Otechestvennie Lekarstva

5.4%

Pharmstandard16.8%

Stada Arzneimittel Ag

4.2%

Materia Medika3.6%

Microgene Npo3.5%

Veropharm Zao3.1%

Biotek2.6%

Akrikhin2.7%

Moshimpharmpreparaty2.4%

Market Share of Top-10 Companies in theRussian Pharma Market (% 1H 2007 value)1

Market Share of Domestic Pharmaceutical Producers (% 2006 value)1

#3 pharmaceutical company on Russian market

Source: PharmexpertNotes:1 Based on sales in wholesale prices

#3 pharma company in Russia overall#1 domestic pharma company – more than 3

times the size of the #2 domestic player

Page 10: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation10

Other51.2%

Moshimpharmpreparaty2.4%

Pharm-Centr2.5%Akrikhin

2.5%

Veropharm Zao2.7%

Krasnogorsklexredstva

2.7%

Microgene Npo3.4%

Materia Medika4.3%

Pharmstandard19.2%

Stada Arzneimittel Ag

4.6% Otechestvennie Lekarstva

4.5%

A Leader in the Russian Commercial Segment

Market Share—Top 10 Companies1 Market Share—Top 10 Domestic Companies1

Source: PharmexpertNotes:1 Commercial segment 2006, based on sales in wholesale prices

PHS is #1 in commercial segment

(commercial segment is 77% of the total market)

22

Other67.8%

Berlin-Ch/Menarini

3.4%

Sanofi-Aventis4.3%

Pharmstandard4.5%

Novartis3.0%

Sandoz3.0% Gedeon Richter

2.8%

Pfizer2.8%

Bayer Schering Pharma

2.8%

Nycomed2.8%

Servier2.8%

Page 11: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation11

Continue to actively control costs

Pharmstandard strong margin rates:

Gross profit remain stable at 57%,

S&D – is constant at 17%,

G&A – decreased by 1% to 6%,

Net profit – remained constant at 22%,

EBITDA margin became 38% (in 1H 2006 EBITDA was 35%).

Source: Company1 Pharmexpert, in wholesale prices2 As at 30 June 2007

Page 12: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation12

Pharmstandard 1H 2007 achievements

Leading domestic pharmaceutical company in Russia (measured by sales)

– #3 pharma company overall in Russia by sales value in 1H 20071

– #1 pharma company in the commercial segment by sales value in 1H 20071

Industry leading growth and profitability

– Revenue growth +52% and achieved $169.7 mln in 1H 2007

– EBITDA growth +67% and achieved $65.0 mln in 1H 2007 or 38% as % from sales

Market leading brands

– 6 brands among top-20 best selling domestic brands in Russia1

– Arbidol®, Pentalgin®, Complivit®, Terpincod®, Codelac®, Flucostat®

Experienced sales force and modern and efficient manufacturing facilities

– More than 340 sales reps2

– Russian GMP compliant facilities, including lines at Kursk, some of which are EU GMP compliant

Fully integrated MasterLek company (distribution, SG&A cost, production ahead schedule)

Source: Company1 Pharmexpert, in wholesale prices2 As at 30 June 2007

Page 13: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation

4. Financial Overview

Elena Arkhangelskaya, Chief Financial Officer

Page 14: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation14

Our Portfolio growth in 1H 2007

Sales 2007 H1 2006 H1 Growth Growth %

Pharmaceutical products 3,777 2,368 1,410 60%

OTC products 3,067 1,879 1,188 63%

Branded generics 2,768 1,596 1,172 73%

Non-branded generics 299 283 15 5%

Prescription products 670 436 234 54%

Branded generics 545 302 244 81%

Non-branded generics 124 134 -10 (7%)

Other sales 41 53 -12 (23%)

Medical equipment and disposables 649 549 100 18%

Sale of goods 4,426 2,917 1,510 52%

Sales 2007 H1 2006 H1 Growth Growth %

Pharmaceutical products 3,777 3,070 708 23%

OTC products 3,067 2,474 593 24%

Branded generics 2,768 2,190 578 26%

Non-branded generics 299 283 15 5%

Prescription products 670 542 128 24%

Branded generics 545 402 144 36%

Non-branded generics 124 140 -16 (11%)

Other sales 41 54 -14 (25%)

Medical equipment and disposables 649 549 100 18%

Sale of goods 4,426 3,619 808 22%

Pro-Forma basis

IFRS basis

Page 15: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation15

2,474

1,879

3,067

542

436

670

54

53

41

549

549

649

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1H 2006 PF 1H 2006 1H 2007

RU

R m

ln

.

OTC Prescription Other Medical Equipmuipment

3,619

2,917

4,426

68%

15%

15%

64%

15%

19%

69%

15%

15%

1

Rapidly Growing Revenue Profile

Source: Company

Note:

1 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006

Achieved 52% revenue growth in 1H 2007

Page 16: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation16

7%

6%

7%

238

249

193

0

50

100

150

200

250

300

1H 2006 PF 1H 2006 1H 2007

RU

R m

ln .

5%

5%

5%

6%

6%

6%

6%

6%

7%

7%

Labour costs Other expenses As % of Sales

16%

17%

17%

752

587

492

0

100

200

300

400

500

600

700

800

1H 2006 PF 1H 2006 1H 2007

RU

R m

ln .

16%

16%

16%

16%

17%

17%

17%

17%

Marketing Labour costs Other expensesAs % of Sales

Competitive Cost Structure 1H 2007

General and Administration CostsSelling and Distribution Costs

Source: Company reports

Note:

1 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006

Page 17: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation17

1,220

1,017

1,694

38%

35%

34%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1H 2006 PF 1H 2006 1H 2007

RU

R m

ln .

31%

32%

33%

34%

35%

36%

37%

38%

39%

EBIDTA As % of Sales

1,925

1,684

2,535

53%

58%

57%

0

500

1,000

1,500

2,000

2,500

3,000

1H 2006 PF 1H 2006 1H 2007

RU

R m

ln .

50%

51%

52%

53%

54%

55%

56%

57%

58%

59%

Gross Profit As % of Sales

Margin Expansion 1H 2007

EBITDAGross Profit

Source: Company reports

Note:

1 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006

Page 18: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation18

617 647

962

22%22%17%

0

200

400

600

800

1,000

1,200

1H 2006 PF 1H 2006 1H 2007

RU

R m

ln

.

0%

5%

10%

15%

20%

25%

Net Profit As % of Sales

Attractive Profitability Growth

HY Net Profit 2006–2007

Source: Company reports

Note:

1 Pro Forma assumes inclusion of Masterlek as part of Phamstandard as of 1 January 2006

21.4%

50% Net Profit growth in 1H 2007 (pro-forma)

Page 19: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation19

Consolidated Balance Sheet and Capex

Capital ExpenditureIFRS basis

Debt summary

Facility A: US$91m (maturity Dec-2009/L+150)

Facility B: US$55m (maturity Dec-2011/L+190)

Net debt: US$128m

189

889 890

193

0

100

200

300

400

500

600

700

800

900

1,000

2004 2005 2006 1H 2007

RU

R m

ln .

CAPEX

(in millions of RUR) 30 Jun 2007 31 Dec 2006

Cash and Equivalents 483 193

Other Current Assets 5,183 5,300

Long-term Assets 8,137 8,277

Total Assets 13,804 13,770

Total Debt 3,778 3,875Current Liabilities (excl. short-term debt) 1,558 2,425Non-current Liabilities (excl. long-term debt) 1,165 1,129

Total Equity 7,303 6,340

Total Liabilities & Equity 13,804 13,770

Page 20: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation20

Growth Analysis Across Market Segments1

Source: Pharmexpert,

Note:

1 Based on sales in wholesale prices

Dom

esti

c c

om

pan

ies

Inte

rnati

on

al com

pan

ies

Pharmstandard is growing in-line with its peersin the commercial segment

Corporation Commercial FRP Hospital Commercial FRP HospitalTotal sales

1H 2006Total sales

1H 2007Total

Growth Commercial

GrowthTotal Growth

(%) Commercial Growth (%)

Pharmstandard 130,516 13,194 3,519 170,065 6,036 3,626 147,229 179,728 32,499 39,550 22% 30%

Otechestvennie Lekarstva 23,938 13,148 5,562 39,622 8,118 10,413 42,648 58,153 15,505 15,684 36% 66%

Pharm-Centr 15,329 4,706 10,512 22,565 3,893 19,921 30,547 46,379 15,832 7,236 52% 47%

Stada Arzneimittel Ag 37,600 15,159 418 40,689 3,339 585 53,177 44,613 (8,564) 3,089 (16%) 8%

Materia Medika 33,310 0 21 38,100 0 42 33,330 38,142 4,812 4,791 14% 14%

Microgene Npo 25,512 0 5,778 29,961 0 7,776 31,290 37,737 6,447 4,450 21% 17%

Veropharm Zao 20,466 4,307 4,925 23,923 2,542 6,703 29,698 33,168 3,470 3,457 12% 17%

Akrikhin 21,270 9,714 1,378 21,840 5,260 1,397 32,362 28,496 (3,866) 570 (12%) 3%

Biotek 14,715 2,060 5,880 20,508 1,612 5,976 22,655 28,095 5,441 5,793 24% 39%

Moshimpharmpreparaty 19,770 673 2,512 21,497 365 4,146 22,956 26,008 3,051 1,726 13% 9%

Sanofi-Aventis 138,585 74,148 38,834 161,963 20,800 39,650 251,567 222,413 (29,154) 23,378 (12%) 17%

Novartis 91,175 78,568 8,783 111,359 84,642 8,578 178,525 204,579 26,053 20,185 15% 22%

Pharmstandard 130,516 13,194 3,519 170,065 6,036 3,626 147,229 179,728 32,499 39,550 22% 30%

Berlin-Ch/Menarini 106,871 33,654 6,980 126,719 10,054 7,189 147,505 143,963 (3,543) 19,848 (2%) 19%

Bayer Schering Pharma 85,799 39,490 9,994 104,914 25,592 10,954 135,283 141,459 6,177 19,115 5% 22%

Sandoz 75,765 9,573 13,200 110,792 5,234 22,683 98,539 138,708 40,169 35,026 41% 46%

Gedeon Richter 90,266 23,115 14,299 106,582 6,813 18,348 127,679 131,742 4,063 16,316 3% 18%

Nycomed 81,068 11,162 13,639 105,984 5,445 11,179 105,869 122,608 16,739 24,916 16% 31%

Pfizer 88,088 22,651 16,330 106,347 2,477 13,585 127,068 122,409 (4,659) 18,260 (4%) 21%

Servier 84,184 61,812 3,480 103,324 13,389 3,293 149,476 120,006 (29,470) 19,140 (20%) 23%

2006 2007

Page 21: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation

Appendix

Page 22: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

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Russia—The World’s Fastest Growing Pharma Market

Source: DSM, EIU

(in retail prices, US$bn)

Russia was the fastest growing pharma market in 2005–2006

28%24%

17%14%

8% 7% 7%5% 5%

3% 3% 2%

(6%)(10)

(5)

0

5

10

15

20

25

30

Rus

sia

Braz

il

Chin

a

Cana

da

Mex

ico

US

Spai

n

Fran

ce UK

Ger

man

y

Ital

y

Aust

ralia

/NZ

Japa

n

2006

gro

wth

rat

e (

%)

Pharma marketsize (US$bn)

8.4 8.4 11.4 13.7 8.1 197.8 11.6 25.6 15.7 27.7 14.9 5.8 56.7

Population (in million) 142 187 1,315 33 108 340 45 61 60 83 58 25 128

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214

165142

111

47 38

230194

171

119

50 49

0

50

100

150

200

250

300

Hungary CzechRepublic

Slovakia Poland Romania RussiaCo

nsu

mp

tio

n p

er c

apit

a ($

)

2005 2006

Source: Pharmexpert, EIU Market Indicators

Russian Pharma Market Set to Expand

Drug consumption per

capita amongst lowest in

Europe

Rapid market growth

expected to continue

Russia was the fastest

growing market globally

in 2004-2006

Pharmaceutical Consumption Per Capita in Russia($)

2733

3844

58

70

0.00

20.00

40.00

60.00

80.00

2001 2002 2003 2004 2005 2006

Co

nsu

mp

tio

n p

er c

ap

ita

($)

Pharmaceutical Consumption Per Capita by Country($)

Page 24: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation24

2003

4Q03:

Acquisition of ICN’s business in Russia (five factories, distribution centres and pharmacy chain)

Q104:

New management team brought in with experience in international and domestic pharma companies

2Q04:

Close Polypharm (pharma production facility)

3Q05:

Sale of Marbiopharm (pharma production facility)

Jan 05:

Acquisition of TZMOI (Tyumen)—manufacturer of medical equipment

3Q06:

Acquisition of Masterlek (3.5% share of domestic Russian Pharma market by sales value)

1H05:

Open centralised warehouse for pharmaceutical products in Moscow

Pharmstandard Key Development Milestones

4Q06:

New production of spray, tablets and capsules; central manufacture laboratory and renovation of production facilities

Total investment since 2004: approximately RUR 600m

Leksredstva plant (Kursk)

2H06:

Termination of production in Oktyabr plant in St Petersburg, production transferred to other existing sites

1H06:

New production of solutions, production of vitamins and insulin

Total investment since 2004: approximately RUR 730m

2007:

New production workshops for Rastan® and Phosphogliv®

Ufavita plant (Ufa)

May 2006:

Legal name changed from Biovit LLC to OJSC Pharmstandard

End 2005:

Creation of holding company/ legal restructuring finalised

Pre 2003:

Group consisted of two manu-facturing facilities (Ufa and Phytopharm) operating under Biovit LLC

2004

2005

2006

2007

Source: Company

Note: OJSC – Open Joint Stock Company, LLC – Limited Liability Company

Page 25: Roadshow Presentation 0 1H 2007 results September 2007 Roadshow Presentation Pharmstandard Roadshow Presentation.

Roadshow Presentation25

Modern Production Facilities

Source: Company

Note: Capacity in packs. Figures shown are as of 31 December 2006

Tomsk

Tyumen

Moscow

Ufa

Kursk

TomskhimpharmCapacity: 208m

TZMOIUfavitaCapacity: 169m

LeksredstvaCapacity: 645m

Nizhny Novgorod

PhytopharmCapacity: 48m

Pharmstandard HQ

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Other9.2%

A10-Drugs Used In Diabetes

1.4%

H04-Other Hormones1.2%

A07-Antidiarrhoeals, Oral Electrolyte Replacers And

Intestinal Anti-Inf lammatories

1.5%

V03-All Other Therapeutic Products

1.0%

R02-Throat Preparations0.9%

N06-Psychoanaleptics Excluding Anti-Obesity

Preparations1.8%

C01-Cardiac Therapy2.1%

L03-Immunostimulating Agents2.0%

A05-Cholagogues And Hepatic Protectors

5.7%

J02-Anti-Fungal Infections6.2%

N05-Psycholeptics6.6%

A11-Vitamins8.3%

J05-Antivirals For Systemic Use

20.1%

R05-Cough And Cold Preparations

16.5%

N02-Analgesics15.6%

Pharma Portfolio by Therapeutic Segment

Sales = RUR 4,426 million (1H 2007)OTC = 81% / Rx = 18%

Company sales split as at 1H 2007

Source: Company sales

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Production Facilities – Summary Overview

Source: Company. Note: Total capacity for pharmaceutical production in 2006 excludes capacity from Oktyabr factory (St. Petersburg) which closed in Q3 2006

Total capacity calculations assume 8-hour shifts and 7 day working week

Factory Approximate size (sq. m.) Formulation Shifts

Capacity 000’s packs Dec 2005

Capacity 000’s packs Dec 2006

14,900 (lease) Syrops & liquid forms 3 52,644 52,644 Tablets 3 361,077 564,406 Sprays 2 10,368 Powders 2 1,260

LEKSREDSTVA (KURSK)

Capsules 3 16,200

5,850 (lease) Ampules 2 7,624 8,595 Frozen-dried preparation 3 2,640 2,640 Syrops & liquid forms 1 6,360 6,360 Tablets 2 63,012 109,973 Vitamin bars (ferrohematogen) 2 14,000 22,680 Insulin 2 14,400

UFAVITA (UFA)

Saline infusin 2 4,500

1,200 (lease) Ointments 2 11,100 1,200 Powders 1 10,280 10,280 Syrops & liquid forms 2 29,187 24,000

PHYTOFARM (N.NOVGOROD)

Tablets 2 12,850 12,850

29,000 (own) Syrops & liquid forms 1 1,200 1,200 TOMSKHIMPHARM (TOMSK) Tablets 3 206,856 206,856

Closed in 2006 Capsules 2 1,384 Sprays 1 4,582 Tablets 2 72,797

OKTYABR (S.PETERSBURG)

857,593 1,070,412

Syringes 2 295 295 Needles 2 624 624 Sterilizing machines < 100 L 2 24,250 24,250 Sterilizing machines > 100 L 2 319 319

Aquadistilling machines 2 7,320 7,320

TZMOI (Tyumen)

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Breakdown of Sales for 1H 2007 by Distributor

Top 5 distributors accounted for 50% of pharmaceutical product sales in 1H 2007

Typical payment terms for distributors:

– Regional and export distributors: 30–60 days

– National distributors: 60–90 days

– FRP program: 180 days

Source: Company

Note: Manufacturers’ prices

Top 5 Distributors – 2006

Distributor % of sales

Genesis 19

SIA International 9

Katren 8

Protek 8

Rosta 6

Total 50

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Product StatusATC2

therapeutic segments

As % from total pharmaceutical

sales in 20072007 Sales(RUR mln)

Arbidol® OTC Antiviral 20.0% 756.7

Terpincod® OTC Cough and Cold 11.9% 451.4

Pentalgin - N® OTC Analgesics 8.0% 303.0

Flukostat® OTC Anti-fungal 6.0% 226.6

Phosphogliv® Rx Hepatic protectors 5.4% 202.7

Pentalgin - ICN® OTC Analgesics 5.0% 187.7

Complivit® OTC Vitamins 4.2% 158.9

Codelac® OTC Cough and Cold 3.4% 128.2

Corvalol® OTC Psycholeptics 2.1% 78.4

Amixin® Rx Immunostimulating agents 1.9% 71.4

Biosulin® Rx Diabet care 1.4% 53.0

Rastan® Rx Growth hormon 1.2% 44.3

Askophen-P® OTC Analgesics 1.0% 36.5

Validol® OTC Cardiovascular 0.9% 35.5

Complivit-Activ® OTC Vitamins 0.9% 27.8

Top 15 Pharmaceutical products 73.1% 2,762.2

Other pharmaceutical products 26.9% 1,015.3

Pharmaceutical products total 100.0% 3,777.5

Our Portfolio – Top 15 Pharmaceutical Products

Source: CompanyNotes:1 Sales only formed part of consolidated results from 2 August 2006

1)

1)

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73

54

9588

7480 81

86 87

941

37

18 4 54 2

18

4 2 5 816 14

9 11

-

10

20

30

40

50

60

70

80

90

100

Sanofi-Aventis Novartis Pharmstandard Berlin-Ch/Menarini

Bayer ScheringPharma

Sandoz Gedeon Richter Nycomed Pfizer

RU

R m

ln .

Commercial FRP Hospital

Low Exposure to FRP

Source: Pharmexpert

Note: Based on wholesale prices in US$

Pharmstandard has a lower exposure to the FRP compared to its peers

Composition of Leading Companies’ Sales in Russia by Market Segment in 2006

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Product PipelineR

x

Near term pipelineProducts in registration

Products in development

ATC2

Products

Immunostimulating agents 2 Psychoanaleptics excluding anti-obesity preparations 1

Pituitary and hypothalamic hormones 1 Urologicals 1 Anti-asthma and COPD products 2 Antithrombotic agents 1

Total 8

OTC

ATC1

Products

Vitamins 8

Analgesics 1

Cough and cold preparations 1

Laxatives 1

Nonsteroidal products for inflammatory skin disorders 1

Total 12

ATC1 Product applications Formulations

Number of registered

trademarks

Vitamins 4 8 4 Mineral supplements 2 3 2

Wound healing agents 1 1 Immunostimulating agents 1 1 1

Analgesics 2 2 1 Cough and cold preparations 1 2 1

Total 11 17 9

ATC1 Product applications Formulations

Number of registered

trademarks Functional gastro-intestinal disorder drugs 1 1 1 Antiemetics and antinauseants 1 2 1 Cholagogues and hepatic protectors 2 4 2 Drugs used in diabetes 3 9 2 Vitamins 2 4 2 Cardiac therapy 2 2 1 Agents acting on the renin-angiotensin system 1 1 1 Hypolipidaemics/anti-atheroma preparations 1 2 Topical corticosteroids 1 2 Pituitary and hypothalamic hormones 1 1 1 Immunostimulating agents 1 1 1 Analgesics 1 1 1 Psycholeptics 1 1 1 Total prescription 18 31 14

Pipeline of OTC and Rx products supports Pharmstandard’s growth story

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0%

10%

20%

30%

40%

50%

60%

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Ric

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a

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a

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Zent

iva

0%

10%

20%

30%

40%

Phar

mst

anda

rd

Act

avis

Asp

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Ged

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Core Comparables Benchmarking

Sales growth (2006)

Net profit margin (2006)EBITDA margin (2006)

Gross margin (2006)

PHS has industry leading growth and profitability

0%

20%

40%

60%

80%

Phar

mst

anda

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avis

Asp

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Source: Company reports. Veropharm figures based on equity research as 2006 results not available

0%

10%

20%

30%

Phar

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ARBIDOL (PHARMSTANDARD)

36%

VIFERON (FERON OOO)13%

OCILLOCOCCINUM (LABORATOIRE

BOIRON)9%

ANAFERON FOR KIDS (MATERIA MEDIKA)

9%

CYCLOFERON (POLYSAN)

6%

IMMUNAL (SANDOZ)6%

ANAFERON (MATERIA MEDIKA)

5%

AMIXIN (PHARMSTANDARD)

5%

GRIPPFERON (FIRN-M ZAO)3%

AFLUBIN (RICHARD BITTNER GMBH)

4%

OTHER4%

29.5 40.262.2 74.5

96.9

128.6

53.974.4

12.216.4

44.9

82.9

37.4

54.0

5.53.1

1.231.49

4.30

5.374.72

3.89

3.03

1.91

0

50

100

150

200

250

I H I H

2001 2002 2003 2004 2005 2006 2006 2007

Sale

s (U

S$m

) .

0.0

1.0

2.0

3.0

4.0

5.0

6.0

. Average price (U

S$)

OTHER PHARMSTANDARD $/U

Arbidol®—#1 Pharma Brand in Russia

Arbidol®

Captured #1 brand position, in part, through active promotion by Pharmstandard sales force

Acquired as part of Masterlek transaction

Original product developed in 1987, active marketing launched in 2000

Source: PharmexpertNote: Remodelled to reflect current categories

Leading Products in Anti-infective Systemic Use Segment (1H 2007)

1 Source: Pharmexpert2 Based on consumer prices

Source: Company

Segment Sales Dynamics1,2

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PENTALGIN-N (PHARMSTANDARD)

15%

PENTALGIN-ICN (PHARMSTANDARD)

8%

TEMPALGIN (SOPHARMA)8%

BARALGIN M (SANOFI-AVENTIS)

7%SEDALGIN-NEO

(ACTAVIS)6%

SEDAL-M (SOPHARMA)5%

CARDIOMAGNYL (NYCOMED)

4%SOLPADEINE (GSK)

3%

ALKA-SELTZER (BAYER SCHERING PHARMA)

3%

NUROFEN PLUS (BOOTS HEALTHCARE

INTERNATIONAL)3%

OTHER38%

73.699.9 102.7 101.1

126.9147.8

69.5 82.6

24.2 30.1

49.5

57.7

25.330.7

23.8

16.5

0.47

0.59

0.20

0.25

0.48

0.41

0.32

0.26

0

50

100

150

200

250

I H I H

2001 2002 2003 2004 2005 2006 2006 2007

Sale

s (U

S$m

) .

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

. Average price (U

S$)

OTHER PHARMSTANDARD $/U

Pentalgin—#1 Pain Reliever (Non-Narcotic)

Source: Company

Pentalgin

Looking to launch new (improved) formulation of Pentalgin in 2007 to capitalise on Pentalgin’s brand recognition

Franchise includes Pentalgin-N® andPentalgin-ICN®

First launched Pentalgin-ICN® in 1999 and followed with launch of Pentalgin-N® in 2002

Steadily gained market share since 2001

Source: Pharmexpert

Top-10 Products in Analgesics Segment (2006)

Annual Segment Sales Dynamics1,2

1 Source: Pharmexpert2 Based on consumer prices

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ESSENTIALE FORTE N (SANOFI-AVENTIS)

24%

HEPTRAL (ABBOTT LABORATORIES)

21%

CARSIL (SOPHARMA)10%

ESSLIVER FORTE (STADA ARZNEIMITTEL AG)

6%

ESSENTIALE N (SANOFI-AVENTIS)

5%

PHOSPHOGLIV (PHARMSTANDARD)

4%

BERLITHION 300 IU (BERLIN-CH/MENARINI)

3%

HEPABENE (RATIOPHARM INTERNATIONAL)

3%

TYCVEOL (EUROPA-BIOPHARM ZAO)

3%LIV-52 (HIMALAYA DRUG

COMPANY LTD.)3%

OTHER18%

52.069.5 80.1 90.9

129.6

190.5

96.0 94.9

1.21.5

2.5

7.8

3.2 4.20.9

0.6

3.864.55

8.77

9.608.74

6.85

5.90

5.12

0

50

100

150

200

250

I H I H

2001 2002 2003 2004 2005 2006 2006 2007

Sale

s (U

S$m

) .

0.0

2.0

4.0

6.0

8.0

10.0

12.0

. Average price (U

S$)

OTHER PHARMSTANDARD $/U

1 Source: Pharmexpert2 Based on consumer prices

Top products in Hepatic Protectors segment (2006)

Phosphogliv® – Successful Rx Product Launch

Phosphogliv®

Launched in 2005 Novel product in-licensed from the Institute

of Biomedical Chemistry Premium priced product based on superior

efficacy Patent protected until 2018 Clinically validated

– 2nd generation combination therapy with anti-viral, anti-inflammatory andimmunomodulating properties

Annual segment sales dynamics1

Source: Company

Source: Pharmexpert

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