Investor presentation BioGaia AB Nov 2015

Investor presentation BioGaia AB
Nov 2015
1
BioGaia – a healthcare company
working with probiotics
Mission: BioGaia performs research and
development to provide clinically effective, healthful
and user friendly probiotic products.
Vision: BioGaia aim to be the groundbreaking
leader in probiotics through:
-  Innovative research
-  Unique formulation and packaging
-  Strong brand recognition
-  Excellence in IP
-  Global outreach
-  Attractive workplace
-  Social responsibility
2
BioGaia AB
•  Founded in 1990
The founders Peter Rothschild and Jan Annwall
•  105 employees
•  Officies in Stockholm, Lund, Eslöv, Raleigh, Hiroshima, Shanghai
•  Listed on the OMX Nordic Exchange in Stockholm 1998
•  Products in 90 markets through distributors
•  Contract manufacturing (TwoPac AB 100% owned)
•  Holds 400 patents in 31 families
3
Change of focus
Oral Health
Dietary Supplements
Infant formula
Functional Foods / Dairies
Animal Health
1990
1995
2000
2005
2010
2015
4
BioGaia’s global network
Partners!
Pharma and
Health Food
companies
BioGaia!
Product development,
product strategies,
research, Quality,
market support
Research!
Pre-clinical and
clinical studies in
hospitals and
universities
BioGaia
Universities and hospitals where
research is conducted.
Manufacturing and Production
Partners selling component products
Partners selling finished goods
5
Suppliers!
Contract
Manufacturing
Business model – three networks
Distribution partners
Sales force
Research
Pharmacies
Clinical
Physicians
Preclinical
Innovation & IPR
Product
strategies
Quality systems
Marketing support
Product
development
Indications
Research
Production
Food
supplements
Probiotic
cultures
6
Distribution partner network
Local distributors
with medical
representatives
who promote to
health
professionals
Dietary
supplement
BioGaia
BioGaia brand
Sales through
Pharmacies
7
Bran
Brand
•  Branding for Health professionals
•  Sold in 55 countries
•  62% of sales 2015 (Jan-Sept) of finished
products (incl. co-branding)
•  Build value, less dependence
on distributors and patents
8
Competition Strategy
•  Engaged and competent personnel
challenging existing solutions
•  Clinical trials of high quality
•  Attractive and unique formulations and
packaging solutions
•  Strong partner support
9
Clinical trials supporting the use of
BioGaia Probiotics
Lactobacillus reuteri Protectis, Prodentis and Gastrus
152 completed clinical trials in 12 754 individuals
• 107 randomised, double-blind / blind,
placebo-controlled studies in 8 800 subjects
• 45 open studies in 2 900 subjects
• 52 studies in 0-3y in 6 100 subjects
133 scientific articles and 9 doctoral theses
Updated October, 2015
Efficient BioGaia probiotics
• Functional gastrointestinal disorders
– Colic
– Regurgitation
– Constipation
– Functional abdominal pain
• Acute gastroenteritis
• Support of gastrointestinal health
• Antibiotic-associated side-effects
• Hp-infection
• Eradication treatment
associated side-effects
• Gingivitis
• Periodontitis
11
Colic studies with L. reuteri Protectis
Chau (2014)
140
Placebo (n = 28)
P=0.032
120
100
Placebo (n=40)
P=0.018
P=0.045
P=0.804
80
60
40
20
0
Day 0
Day 7
Day 14
Median crying time per day
(minutes)
Median duration of crying and
fussing (min/day)
L. reuteri (n = 24)
Szajewska (2013)
Day 21
300
250
200
P<0.0001
150
100
50
0
Day 0
300
250
200
P=0.022
150
100
50
Day 7
Day 7
Day 14
Day 21
Simethicone (n=42)
Median crying time per day
(minutes)
Median crying time per day
(minutes)
L. reuteri Protectis (n=25)
350
Day 0
Day 14
Day 21
Day 28*
L. reuteri Protectis (n=41)
250
P=0.005
200
P<0.001
P<0.001
Day 14
Day 21
P<0.001
150
100
50
0
Day 0
Day 7
Reduction in median crying time after 21 days
! Szajewska: 69% reduction with L. reuteri Protectis compared
to 47% with placebo
! Savino: 62% reduction with L. reuteri Protectis compared to
22% with simethicone
! Savino: 90% reduction with L. reuteri Protectis compared to
70% with placebo
! Chau: 54% reductiong with L. reuteri Protectis compared to
16% with placebo
* Follow-up 1 week after termination of intervention
P<0.0001
Savino (2007)
400
0
P<0.0001
P=0.002
Savino (2010)
Placebo (n=21)
L. reuteri Protectis (n=40)
Day 28
84% reduction in diarrhoea incidence with
L. reuteri Protectis compared to placebo
•  Adults in hospital
given a course of
antibiotics were
supplemented with
•  L. reuteri Protectis or
placebo for 4 weeks
•  L. reuteri Protectis
reduced incidence of
diarrhoea by 84%
compared to placebo
13
Cimperman et al, 2011
L. reuteri Protectis effective in
constipated adults
Bowel movements per week (mean)
6
p=0.023
5
5.3
4
3.9
Placebo (n=20)
3
2.9
L. reuteri Protectis (n=20)
2.7
2
1
0
Week 0
Week 4
Prevention?
15
Gutierrez - Diarrhea in Preschool Children and L. reuteri Protectis
L. reuteri Protectis (n=168)
Placebo (n=168)
16
Study outcomes confirm previous results
Reduced number of
days:
Gutierrez, 2014
(n=336)
Weizman, 2005
(n=128)
Agustina, 2012
(n=250)
•  with diarrhoea
•  with antibiotic use
•  with fever
NA
•  absent from day care
•  with respiratory
tract infection
NA
NS
NS
17
Indrio - Act and not React: Prophylactic use of L. reuteri Protectis in
the Prevention of Colic, Regurgitation and Functional Constipation
L. reuteri Protectis (n=238)
Placebo (n=230)
18
Conclusions
!  Preventive use of L. reuteri Protectis in healthy
newborns reduces onset of colic, regurgitation
and constipation
!  Preventive use of L. reuteri Protectis reduces
direct costs for both family and community
!  Preventive use of L. reuteri Protectis is proven
to be valuable for both infants, parents and the
society
19
Indrio 2014.
Attractive and unique formulations
and packaging solutions
20
BioGaia current products
ProTectis
ProDentis
Gastrus
Digestive Health
Oral Health
Stomach Health
ProTectis
ProTectis D3
ProTectis
ProTectis
Baby
Baby
Junior
Baby/Junior
Drops
Drops
Tablets
ORS
ProTectis
Tablets
ProDentis
Drops
ProDentis
Gastrus
Lozenges
Tablets
21
BioGaia partner support
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
Clinical trials
Marketing and PR support
BioGaia Academy
Workshops
www.biogaia.com
Participation in medical congresses
Speakers at symposiums
Education of sales representatives
Social media
Customer support 24/7/365
22
Competitors
Culture suppliers
•  Chr Hansen
•  DuPont (Danisco)
•  Institut Rosell Lallemand
(France)
Probiotic strains
•  Valio (Finland)
•  Probi (Sweden)
Functional Foods
•  Danone
•  Yakult
Pharma
•  Merck (Germany)
•  Novartis
•  Sanofi Aventis
•  Ferrosan (Pfizer)
•  Bayer (USA)
Other
•  P&G
•  Local competitors
23
Cooperation with Nestlé
•  Agreement 2008 (Infant formula)
•  New licence agreement infant formula 2012 (EUR 50.8
million)
•  Drops in U.S and UK
•  Growing Up Milk for children above the age of one (Royalty
agreement 2013, launch end of 2014)
•  Extended collaboration (Royalty SEK 92.0 million over three
years from q2 2014) (New segment)
•  Other ongoing development projects
24
TwoPac AB (Manufacturing
company, 100% owned by BioGaia)
(94.5% owned by BioGaia)
•  IBT has a drug development program for the prevention of
necrotizing enterocolitis.
•  IBT intends to develop a live bacterial therapy for the prevention of NEC in
premature infants in accordance with all pharmaceutical regulations.
•  IBT plans to start a Safety & Tolerability study in the beginning of 2016,
followed by a Pivotal trial in 2017-2018.
•  NEC is the leading cause of death among all preterm infants.
•  Mortality rates ranging between 10% to 50% with the highest mortality
rates are seen in infants born less than 1500 g.
•  There is no definitive prevention or treatment for NEC. Surgical
intervention is used to treat 20-40% of infants with NEC but this can lead
to significant, life-long, morbidity.
(90.1% owned by BioGaia)
•  Providing innovative packaging solutions
allowing the development of new unique
beverages
•  Exclusive LifeTop™ Cap and LifeTop™
Straw supplier
MetaboGen (27% owned by BioGaia) is creating new
opportunities for novel therapeutics and next
generation probiotics.
We use the microbiome to understand more about health
and disease.
Sales development – 5 years
Average growth: 14%
Sales
450.0
+22%
400.0
350.0
+33%
300.0
250.0
+9%
-8%
+16%
Sales
200.0
150.0
100.0
50.0
0.0
2010
2011
20121)
2013
20141)
1) Excluding licence revenue from Nestlé of 356 MSEK / 95,4 MSEK
29
Sales per geographical market 2014
Europe 67% (69)
USA and Canada 8% (7)
Asia 10% (13)
Rest of world 15% (11)
30
Income statement 2014/2013
2014
313,7
69,5
3,2
95,4
481,8
-131,3
Excluding
Licence rev.
2014
313,7
69,5
3,2
386,4
-131,3
2013
238,6
75,6
1,7
315,9
-101,7
350,5
73%
255,1
66%
214,2
68%
19%
-154,7
-6,6
7,7
-154,7
-6,6
7,7
-134,3
1,8
15%
196,9
41%
42%
101,5
26%
28%
81,7
26%
26%
24%
-6,6
2,2
-6,6
2,2
-2,9
5,0
Profit before tax
Profit margin
192,5
40%
97,1
25%
83,8
27%
Tax
-44,5
-23,5
-19,6
Profit after tax
148,0
73,6
64,2
Net sales Paediatrics
Net sales Adult Health
Net sales other
Licence revenue
Total sales
Cost of goods sold
Gross profit
Gross margin
Operating expenses BioGaia
Operating expenses IBT
Exchange gain/loss on operation
Operating profit
Operating margin
Operating margin excl IBT
Exchange gain/loss on forward exchange contracts
Interest income
1) 21 % excluding IBT expenses and currency effects
31%
-8%
Excl
currency
effect:
27%
-12%
22%
18%
16%
15%
31
13% 1)
Balance sheets (MSEK)
Dec, 31
Dec 31,
2014
2013
6,1
-
72,8
60,3
4,0
-
Current assets
122,0
88,8
Cash and cash equivalents
210,7
234,3
Total assets
415,6
383,4
344,5
317,3
0,1
-0,5
344,6
316,8
Deferred tax liability
0,2
0,1
Other provisions
3,9
-
66,9
66,5
415,6
383,4
Assets
Intangible assets
Tangible assets
Other financial assets
Equity and liabilities
Equity attributable to owners of the Parent company
Non-controlling interets
Total equity
Interest-free current liabilities
Total equity and liabilities
Proposed dividend: SEK 5.00 per share
32
5 years development (2012 and 2014: excluding licence revenue from Nestlé)
450
400
350
300
Total sales
Gross profit
250
200
Operating expenses (cost of goods
excluded)
Operating result
150
Profit before tax
100
50
0
2010
2011
2012*)
2013
2014*)
33
Key events 2014
•  Publication of study showing that colic can be prevented
•  No significant differences in BioGaia´s diabetes study
•  New extended agreement with Nestlé
•  Publication of study showing that it is possible to prevent
common infections in children
•  Agreement for the sale of drops in the UK and India
•  Decision to extend production plant in Eslöv
•  Publication of study showing that infants with colic cry less with
BioGaia´s drops
•  Publication of study showing that BioGaia Protectis tablets are
effective in constipated adults
•  Investment in MetaboGen AB
34
January – September 2015
35
Key events January – October 2015
Agreement on rights to sell drops in Vietnam, drops and tablets in Sri Lanka and
oral health tablets in Mexico
Nestlé launched Growing Up Milk with BioGaia’s probiotic
Publication of study showing that Lactobacillus reuteri Prodentis is effective in
patients with dental implants
Publication of a Chinese study showing the efficacy of BioGaia’s drops for infant
colic
BioGaia invests further in IBT and investigates the possibility of a separate listing
Publication of a study showing that Prodentis reduces Candida in elderly patients
TwoPac GMP approved
Study shows that Protectis promotes growth and prevents recurrent diarrhoea.
BioGaia appoints new Managing Director.
36
Income Statement January - September
Exluding
License rev.
Excl.
currency
q1-q3 2015
313,0
54,6
11,3
378,9
-115,6
q1-q3 2014
207,6
46,4
11,0
95,4
360,4
-86,2
q1-q3 2014
207,6
46,4
11,0
265,0
-86,2
Change
51%
18%
effect:
37%
11%
43%
31%
263,3
69%
274,2
76%
178,8
67%
47%
-125,3
-16,2
2,9
-107,7
-4,3
4,1
-107,7
-4,3
4,1
16%
124,7
33%
37%
166,3
63%
47%
70,9
27%
28%
76%
1,5
0,1
-2,7
2,0
-2,7
2,0
Profit before tax
Profit margin
126,3
33%
165,6
62%
70,2
26%
Tax
-26,7
-36,7
-15,7
99,6
128,9
54,5
Net sales Paediatrics
Net sales Adult Health
Net sales other
Licence revenue
Total sales
Cost of goods sold
Gross profit
Gross margin
Operating expenses BioGaia
Operating expenses IBT
Exchange gain/loss on operation
Operating profit
Operating margin
Opeating margin excl IBT
Exchange gain/loss on forward exchange contracts
Interest income
Profit after tax
80%
83%
37
41%
Income statement rolling 12 months
q4 2014q3 2015
406,6
77,6
16,0
500,2
-160,8
q4 2013q3 2014
273,2
70,5
11,5
95,4
450,6
-117,3
Excl. Lic.
rev
q4 2013q3 2014
273,2
70,5
11,5
355,2
-117,3
339,4
68%
333,3
74%
237,9
67%
43%
-172,5
-18,3
6,6
-143,5
-4,6
4,9
-143,5
-4,6
4,9
20%
155,2
31%
35%
190,1
54%
43%
94,7
27%
28%
64%
-2,3
0,3
-5,7
3,1
-5,7
3,1
Profit before tax
Profit margin
153,2
31%
187,5
42%
92,1
26%
Tax
-34,6
-42,3
-21,3
Profit after tax
118,6
145,2
70,8
Net sales Paediatrics
Net sales Adult Health
Net sales other
Licence revenue
Total sales
Cost of goods sold
Gross profit
Gross margin
Operating expenses BioGaia
Operating expenses IBT
Exchange gain/loss on operation
Operating profit
Operating margin
Operating margin excl IBT
Exchange gain/loss on forward exchange
contracts
Interest income
Change
49%
10%
Excl
currency
effect:
36%
4%
41%
30%
34%
66%
68%
38
Balance sheet (MSEK)
Sept, 30
2015
15,1
84,2
4,0
129,3
219,8
452,4
Dec 31,
2014
6,1
72,8
4,0
122,0
210,7
415,6
Equity and liabilities
Equity attributable to owners of the Parent
company
Non-controlling interets
Total equity
374,1
0,1
374,2
344,5
0,1
344,6
Deferred tax liability
Other provisions
Interest-free current liabilities
Total equity and liabilities
0,2
3,9
74,1
452,4
0,2
3,9
66,9
415,6
Assets
Intangible assets
Tangible assets
Shares
Current assets
Cash and cash equivalents
Total assets
39
Sales per business unit (rolling 12 months)
Roll 12
Roll 12-
Change
Change
Sept 15
Sept 142)
%
% 1)
406,6
273,2
49%
36%
Adult health
77,6
70,5
10%
4%
Other
16,0
11,5
39%
39%
500,2
355,2
41%
30%
Pediatrics
Total sales
1)  Excluding currency effects
2)  Excluding licence revenue of SEK 95.4 million
40
Sales per geographical market (MSEK)
(excl. Licence revenue)
12 months
12
months Change
Sept 15
Sept 14
%
287,0
240,4
19%
USA and Canada
37,1
26,4
41%
Asia
50,3
40,8
23%
125,8
47,7
164%
500,2
355,3
41%
Europe
Rest of world
Europe 57%
(68)
USA and
Canada 7% (7)
Asia 10% (12)
Rest of world
25% (13)
41
Sales and result per quarter (rolling 12 months)
(MSEK) (excl licence revenue from Nestlé 2012 and 2014)
600
500
400
Net sales
300
Gross result
Operating expenses
200
Operating profit
Profit before tax
100
0
42
Board of Directors 2015
Paula Zeilon
Stefan Elfving
Chairman
David Dangoor
Ingrid Holmström
Anthon Jahreskog
Jan Annwall
Ewa Björling
Brit Stakston
43
Major Shareholders 30 September, 2015
1 Annwall & Rothschild Inv. AB
2 Sebastian Jahreskog
3 Fjärde AP-fonden
4 Handelsbankens Fonder AB
5 Livförsäkringsaktiebolaget Skandia
6 David Dangoor (inkl bolag)
7 CBNY Norges Bank
8 Mingdale Company
9 State Street Bank & Trust com., Boston
10 Swedbank Robur fonder
Other shareholders
Total:
A
B Share
shares shares capital
SEK
000's
000's
000's
741
759
1 500
1 261
1 261
728
728
621
621
579
579
569
569
482
482
462
462
406
406
395
395
10 334 10 334
741
16 596
17 336
No. of
votes Capital
Votes
000's
8 166
1 261
728
621
579
569
482
462
406
395
10 334
%
8,7%
7,3%
4,2%
3,6%
3,3%
3,3%
2,8%
2,7%
2,3%
2,3%
59,6%
%
34,0%
5,3%
3,0%
2,6%
2,4%
2,4%
2,0%
1,9%
1,7%
1,6%
43,1%
24 002
100%
100%
Total number of shareholders 30 September, 2015: 7,251
Foreign owners: 48% of capital (35% of votes)
44
Probiotic supplements global market
Probiotic supplements – historic global sales and
projections (in billions $)
5.0
4.3
4.5
4.0
3.5
3.0
2.8
2.5
2.0
Probiotic supplements global sales
1.8
1.5
1.0
0.5
0.0
Euromonitor International 2013
2007
2012
2017
45
Launches
-  Drops: Launched in 73 countries
-  Tablets: Launched in 59 countries
-  ORS: Launched in 15 countries
-  Oral health products: Launched in 24 countries
46
Growth potential – existing products
•  3 or more products from our product line
launched in only 25 countries
•  Drops per new-born (from 3% up to 434%,
average 105%)
•  Contract but not launched: UK, India, Sri Lanka
(China, South Korea)
•  White spots: Myanmar, Thailand, Netherlands
47
Present focus
•  Japan, US, UK and India
•  Launch of new packaging solutions during
the year
•  Development program for fermentation and
freeze-drying
•  A number of projects, studies and product
developments with Nestlé
•  IBT, separate listing, new share issue and
licensing
48