IGI Laboratories, Inc. September 2015 Jason Grenfell-Gardner – President and CEO Jenniffer Collins – Chief Financial Officer NYSE MKT: IG
Jan 12, 2016
IGI Laboratories, Inc.
September 2015
Jason Grenfell-Gardner – President and CEOJenniffer Collins – Chief Financial Officer
NYSE MKT: IG
2
Safe Harbor Statement
Except for historical facts, the statements in this presentation, as well as oral statements or other written statements made or to be made by IGI Laboratories, Inc., are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. For example, without limitation, statements about the Company’s anticipated growth and future operations, the current or expected market size for its products, the success of current or future product offerings and the research and development efforts and the Company’s ability to file for and obtain U.S. Food and Drug Administration (FDA) approvals for future products, are forward-looking statements.
Forward-looking statements are merely the Company’s current predictions of future events. The statements are inherently uncertain, and actual results could differ materially from the statements made herein. There is no assurance that the Company will achieve the sales levels that will make its operations profitable or that FDA filings and approvals will be completed and obtained as anticipated. For a description of additional risks and uncertainties, please refer to the Company’s filings with the Securities and Exchange Commission, including its latest Annual Report on Form 10–K and its latest Quarterly Report on Form 10-Q. The Company assumes no obligation to update its forward-looking statements to reflect new information and developments.
3
IGI Overview
Listed on NYSE MKT Symbol - IG
FDA Registered Manufacturing 23K Sq Ft Facility Buena, NJ
Stock Price (9/11/15) || 52-Week Range $8.65 || $4.75 – $12.05
Fully Diluted Shares Outstanding, as converted (6/30/15) 67 million
Debt, including convertible debt of $143.75 million (6/30/15) $147.0 million
Cash (6/30/15), Raised $138 million, net of costs in Convertible Debt offering in 12/14 $150.0 million
Revenue 2013, 2014 $18.2 million, $33.7 million
Full-time Employees 92
Fiscal Year December 31st
Accounting Firm EisnerAmper, LLP
Investment HighlightsSpecialty Generics
Targeting Attractive Markets
Unique fully-integrated specialty generics pharmaceutical company pursuing new TICO Generics strategy
Topical, Injectable, Complex and Ophthalmic markets have increasing opportunities which are highly desirable and growing, often characterized by limited competition and/or drug shortages
Growing Development
Pipeline
29 ANDAs currently on file – including 11 filed in 2014, 7 in 2015 and we plan to file up to 13 more in 2015
Recently acquired 23 previously marketed products – 20 injectable and 2 ophthalmic – to launch broader generics strategy and more diversified commercial portfolio
Re-invigorated development team, targeting more involved bioequivalence and selected 505(b)(2) opportunities to move higher up the value chain
Approval and launch of Diclofenac sodium topical solution 1.5% in July 2015
Validated IGI Commercialization
Platform
2014 Net Sales = $33.7m, 98% CAGR (2012-2014) Currently market seven IGI Label products in 12 presentations
High-quality Manufacturing
23,000 sq ft FDA-approved, cGMP-compliant facility with clean FDA inspection record Flexible and broad capabilities include creams, ointments, lotions, gels, solutions and suspensions Contract services turn-key manufacturing business focused on prescription topical products
Proven, Dynamic Management Team
Experienced specialty pharmaceuticals team with a strong track record of high-growth performance Focused organization committed to Quality, Craftsmanship and Execution
4
Jason brings significant experience in generic sales and marketing, supply chain, and management from his time at West-Ward Pharmaceuticals and Hikma Pharmaceuticals. MBA from INSEAD.
Jason Grenfell-GardnerCEO
Jenniffer has over 20 years of experience in finance and accounting including experience at several public companies and PWC.
Jenniffer CollinsCFO
Sanjay has 20 years of experience in pharmaceutical operations, including Mediatech Inc., a Corning Subsidiary, Qualitest Pharmaceuticals, and at Ciba Vision sterile, a Novartis company.
Sanjay SamudreDirector of Operations
Fred has over 25 years of experience in pharmaceutical quality, including from Medicia, Schering-Plough, and Carter Wallace.
Fred WeissVP Quality
IGI has an experienced management team capable of delivering results
Our Team
5
Peter has over 15 years of strategic planning, operational and corporate affairs experience at Bausch + Lomb in Brazil, Merck, Schering-Plough and the US Navy. MBA from New York University.
Peter GallagherVP Strategic Affairs
Thomas has over 10 years of experience in business development, including experience with Centric Health Resources and West-Ward Pharmaceuticals.
Thomas VandervortVP Business Development
Nadya has been with IGI for over 20 years in a number of roles including VP of Operations, and now leads all technical transfers.
Nadya LawrenceSVP Contract Services
Laying Our Foundation
Our Vision is to become a leading Specialized Generics Company with a diversified portfolio
Submits 4 ANDAs for FDA approval
Enters into supply agreement with NeoStrata
Enters long-term strategic partnership with Medimetriks
Appoints Jenniffer Collins as CFO
2010-2011
Receives first 2 ANDA approvals
Submits 11 ANDAs for FDA approval
Launches TICO strategy for portfolio diversification
Initiates planning for two 505(b)(2) opportunities
Grows net sales by 85% (‘14/’13)
Submits 7 ANDAs for FDA approval, with goal to submit up to 20 in 2015
Initiates CMO development and supply for injectable and ophthalmic pipeline
Will hold first IND meeting on 505(b)(2) project
Submits 9 ANDAs for FDA approval
Appoints Jason Grenfell-Gardner as CEO
Acquires Econazole nitrate
Launches IGI Label portfolio of AGs
Grows net sales by 112% (‘13/’12)
6
IGI is transforming its business model from a focus on contract manufacturing to a value-added, science-driven specialty generics platform.
2012-2013 2014 2015
So far in 2015, we have submitted 7 ANDAs, and are working on up to 13 more ANDAs by December.
Building Our Topical R&D Track Record
Note: ANDA filing and approval figures exclude partnered productsSource: Company data 7
2 approvals
Our R&D engine is coupled with significant top-line growth and a culture of Quality and Execution.
Revenue $6.1 $7.8 $8.6 $18.2 $33.7
People 36 36 42 54 81
2
2010A 2011A 2012A 2013A 2014A
8 1322
Cumulative filingsCumulative approvals
4
Now, Broadening Our Portfolio
TopicalGenerics
Topical +
Our expansion is underway into the TICO Generic space, ensuring a broad, diversified portfolio:
Topicals: Cornerstone of our expertise Injectables: Favorable market opportunities Complex: Unique product/regulatory situations Ophthalmics: High leverage of our infrastructure
IGI has established a compelling, high-productivity development platform, focused on execution to deliver a diversified portfolio:• 29 ANDAs under FDA review with a
TAM of $1.4 billion
Expanding our development and commercial focus to TICO Generics will leverage existing expertise, and deliver a broader product mix to the market.
Expanding Our CapabilitiesBuilding from Our Roots
InjectableComplexOphthalmic
Science-driven Generics Portfolio
8(a). Source: IMS Health, July 2015
The addressable US topical market is $11.8bn, of which generics make up $5.7bn; the generic space has grown rapidly, with a 3-year CAGR of 19%, while volumes have decreased by 2%
The market has 6 major players who control about 60% of the script volume, with significant barriers to entry
Consolidation continues, e.g., Sandoz/Fougera, Watson/Actavis and Akorn/Hi-Tech (TBD on Mylan/Perrigo)
The presence of small players creates a degree of market fragmentation
Market #1: Topicals
(a) Includes OTC and any products that have not been assigned a Brand/Generic value because not enough information is available, (b) Excludes companies with less than 5% of market sales. (b) Source: IMS Health, MAT Jul 2015
US Generic Topical Landscape (b)US Topical Market
9
Sales(a)
Taro
Sand
oz
Perr
igo
Akor
n
Myl
an
Acta
vis
$0
$200
$400
$600
$800
$1,000
(US$
m)
Branded20%
Branded Generic21%
Generic49%
Other10%
Topicals: Cornerstone of Expertise
Attractive Market
$5.7bn US generic market, growing faster than 19% - driven by price
Historical strength and expertise for IGI
Broad Scope of Organic R&D
Opportunities
IGI to file ANDAs for all commercially reasonable AT-rated products and AB-rated corticosteroids (approximately 42 more) by the end of 2016
Development program to expand to products requiring Phase III clinical studies
Initiated two 505(b)(2) projects in the DESI to NDA pathway
Contract to Rx Label
Transition
Strategic focus and P&L shifted to IGI label products, but retain steady cash flow from contract services
Shift to revenue from pharmaceutical partners continues, as pharma was 75% of contract services revenue in Q2 2015
10
IGI Topical Center of Excellence
23,000 sq ft FDA-approved facility to manufacture pharmaceutical products and medical devices
Capability to develop and produce creams, ointments, lotions, gels, solutions and suspensions
Most recent inspection in December 2013 – no 483 observations
Capacity utilization is approximately 70% based on compounding one product per day and filing one product per day
Based on current forecasts, with modest capital expenditures, capacity at the existing facility would be sufficient for IGI’s needs into 2017
R&D lab expansion completed in June 2014
11
Expansion for Future Capacity
As the number of approved ANDAs increases, we will need additional production and lab capacity to meet market demand
Design work is currently underway to expand the number of compounding rooms, packaging lines, labs and warehouse space
Unique capabilities such as high-alcohol compounding and topical foams are under consideration
The expansion will capitalize on our established infrastructure and development expertise
12
Market #2: Injectables
Source: IMS Health, MAT Jul 2015; Wall Street research
The market for generic injectables is vibrant (7% CAGR expected by 2016)
High barriers to entry given required sterile manufacturing and increased regulatory scrutiny by FDA
Industry continues to see consolidation, due in part to “scarcity” value of products (e.g., Pfizer/Hospira)
Difficult formulations result in fewer future entrants, better price consistency and longer life cycles
Sales channel focused on reliability and consistency of supply, and not always price-driven
US Injectable MarketUS Generic Injectable Landscape
13
Sales Units
Hosp
ira
Fres
eniu
s
Sand
oz
Wes
tWar
d
Dr R
eddy
's
Baxt
er
Myl
an
Grifo
ls
Sage
nt
Win
thro
p
Sun
Acta
vis
Teva
Akor
n
Rege
nt
Apot
ex
Intl
Med
Acco
rd
B. B
raun
Padd
ock
Auro
med
ics
X-Ge
n
Herit
age
Linea
ge
WG
Criti
cal
$0$200$400$600$800
$1,000$1,200$1,400$1,600$1,800
(12
mon
th IM
S (U
S$m
)
Brand81%
Branded Generic12%
Generic7%
Brand25%
Branded Generic27%
Generic49%
Injectables: Sizable Opportunities
Attractive Market
• The $7.7bn generic injectable market continues to struggle with drug shortages and regulatory challenges
• 53 molecules for injection/infusion are currently on the FDA drug shortage list, with more reported by ASHP
Compelling Dynamics
Existing market participants focus R&D efforts on newly genericized products and assume that shortages will be resolved by existing players as regulatory issues are remediated
We challenge this assumption and see an upside opportunity
Unique Opportunity
for IGI
Our development and quality infrastructure – driven by our robust commitment to Quality – can be carefully leveraged to build an organic pipeline of overlooked, high-value injectable products
14
Market #3: Ophthalmics
The generic ophthalmic landscape is currently limited, with two players holding 69% of sales (64% of units)
Growth is driven by an aging population and an increased awareness of eye health
The existing combination of older products and blockbusters creates a portfolio of development opportunities through product acquisition and organic R&D
.
(a) Includes OTC, private label and veterinary products Source: IMS Health, MAT Jul 2015; Wall Street research
US Generic Ophthalmic LandscapeUS Ophthalmic Market
(a)
15
Sales
Brand47%
Branded Generic29%
Generic17%
Other8%
Sand
oz
Vale
ant
Pacifi
c
Akor
n
Perr
igo
Lupi
n
Gree
nsto
ne Par
Oth
er
0
100
200
300
400
500
600
(12
mon
th IM
S (U
S$m
)
Ophthalmics: Leverage Infrastructure
We believe the $1.3bn US generic ophthalmic market is similar to the generic topical market that existed in 2010
There is limited competition due to market consolidation
Compelling Dynamics
Existing market participants focus R&D efforts on newly genericized products
Degree of industry consolidation and balance between branded vs. generic markets creates an attractive environment for IGI market entry
Ophthalmics will effectively leverage future IGI plant capacity and internal infrastructure
Products will add to our portfolio diversification with wholesalers/GPOs
Attractive Market
Unique Opportunity
for IGI
16
Injectable & Ophthalmic Progress
Initial driver is speed to market for priority products, by partnering with high-quality contract manufacturers who support our cost structure
We have signed 5 development/supply agreements, with others under review with CRO/CMOs
Expand In-house Development
Talent
With 3rd-party manufacturing capacity available, emphasis shifts to expanding our development and analytical team for in-house formulation
Goal is to establish a robust cycle of in-house lab-to-CMO transfers during the next year, in order to accelerate growth of our commercial portfolio
In-house manufacturing capability strengthens our ownership of the Quality Systems, improves margins, and builds internal expertise
The design master plan is under review, and equipment vendors have submitted proposals
Access CMO Network
Design & Build In-house Fill
Capacity
17
Continued Increase in R&D Productivity
So far in 2015, we are seeing faster response times from the FDA for GDUFA Year 3 Filings
Source: Company dataIncludes partnered FDA submissions 18
< 1 year 1 - 2 years 2 - 3 years > 3 years
0
2
4
6
8
10
12
14
12
10
65
2
Filed Approved
Nu
mb
er
of
filin
gs
Status of Submissions Under ReviewStep-change in FDA Correspondence for GDUFA Year 3 Filings
19
Growing, Increasingly Diverse Pipeline
IGI Label Product & Pipeline Mix
Total number of products: 98Source: Company data 20
Delivery/Therapy Area FocusCommercial/Regulatory Status
Currently marketed products
Approved products
On file Pipeline - on stability
Pipeline
0
5
10
15
20
25
30
7 7
29
14
25
20
2
2
Topical
Injectable
Ophthalmic
Complex
Suppository
Nu
mb
er
of
pro
du
cts
Currently marketed products
7
Previously ap-proved products
23
Filed with the FDA29
Pipeline - on stability
14
Pipeline 25
ClosingSpecialty Generics
Targeting Attractive Markets
Unique fully-integrated specialty generics pharmaceutical company Pursuing the Topical, Injectable, Complex and Ophthalmic markets
Growing Development
Pipeline
29 ANDAs currently on file – with a plan to file up to 13 more in 2015 505(b)(2) opportunities taking shape to deliver higher-value products
Validated IGI Commercialization
Platform
Seven IGI Label products in 12 presentations Strategy to diversify the product mix, and customer base
High-quality Manufacturing
23,000 sq ft FDA-approved, cGMP-compliant facility Flexible and broad capabilities, with expansion plan underway
Proven, Dynamic Management Team
Experienced team with a strong track record of delivering Culture founded on Quality, Craftsmanship and Execution
21
22
The IGI Team
2015 Day of ServiceBuena, New Jersey
Nearly 80 employees participated in the packaging of 22,000 units of Econazole Nitrateantifungal product that was donated to AmeriCares.