EX-99.1 2 presentation.htm PRESENTATION SLIDES UBS ENGLAND presentation.htm
Donald E. Morel, Jr., Ph.D.
Chairman and Chief Executive Officer
William J. Federici
Vice President and Chief Financial Officer
Investor Relations Contact:
Michael A. Anderson
Vice President and Treasurer
mike.anderson@westpharma.com
UBS Global Specialty Pharmaceuticals Conference
June 3, 2009 London, UK
NYSE: WST
westpharma.com
All trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., unless noted otherwise.
 
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This presentation contains forward-looking statements, within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, that are based on management’s beliefs and
assumptions, current expectations, estimates and forecasts. Statements that are not
historical facts, including statements that are preceded by, followed by, or that
include, words such as “estimate,” “expect,” “intend,” “believe,” “plan,” “anticipate”
and other words and terms of similar meaning are forward-looking statements. West’s
estimated or anticipated future results, product performance or other non-historical
facts are forward-looking and reflect our current perspective on existing trends and
information.
Many of the factors that will determine the Company’s future results are beyond the
ability of the Company to control or predict. These statements are subject to known or
unknown risks or uncertainties, and therefore, actual results could differ materially
from past results and those expressed or implied in any forward-looking statement.
You should bear this in mind as you consider forward-looking statements. A non-
exclusive list of important factors that may affect future results may be found in
West’s filings with the Securities and Exchange Commission, including our annual
report on Form 10-K and our periodic reports on Form 10-Q and Form 8-K.
You should evaluate any statement in light of these important factors.
Forward Looking Statements
 
2

 
Who We Are
 Founded in 1923
 Global Headquarters near
 Philadelphia
 Market capitalization $1.2 billion
 World’s premier manufacturer
 of components and systems
 for injectable drug delivery
  Closure systems and prefillable
 syringe components
  Components for disposable
 systems
  Devices and device sub-
 assemblies
  Safety and administration
 systems
 
3

 
West’s Competitive Advantage
  Global manufacturing footprint
  Unmatched experience/expertise: drug - material interface
  Global regulatory and technical support
  Protected IP: Proprietary materials and technology
  Regulatory barrier to entry: US NDA and ANDA filing must
 include reference to all packaging/components in contact
 with the drug
 1. West Drug Master File (DMF) 1546 is confidential
 2. West DMF includes functionality data (multi-year studies)
 3. Primary package changes require new stability/functionality
 studies for new filing
  Engineering expertise in high-volume manufacturing, assembly
 and vision inspection
 
4

 
Diverse, Stable Customer Base
 
5

 
Sales and Income from Continuing Operations
($ in millions)
 
6

 
Exubera is a registered trademark of Pfizer, Inc.
2008 Overview
 A challenging year
  Exubera, ESA packaging, diagnostic
 component lost sales impact
  Commodity, currency market instability
  Global economic downturn
 Strong growth in core component sales
 Tech restructuring completed
 China plant construction underway
 Expansion programs on schedule/budget
 
7

 
Outlook for 2009 and Beyond
 Global pharma remains under substantial pressure
  Global growth projected at 2.5-5% (down from 5-7%)
  North America down 1-2%
  Europe 0-1%
  Emerging economies 5-7% (India, China, Brazil)
 US election and government plans for health care
 Pharmaceutical Industry changes - consolidation
  Pfizer - Wyeth
  Roche - Genentech
  AstraZeneca - Medimmune
  Lilly - Imclone
  Merck Bioventures - Insmed
 Changing order patterns
 Delivering against customer expectations
  Value (price in their world)
  Quality
 How do we best position West for future growth in a dramatically changing marketplace?
 
8

 
Drug Packaging
(How it is contained)
Primary Container Solutions
Prefillable Syringe Systems
Drug Delivery
(How it gets into the patient)
Administration Systems
Advanced Injection Systems
Development
Primary Package
Administration
Our Growth Opportunities
 
9

 
Autoimmune Disease
Vaccines
Oncology
Diabetes
Market Dynamics Support Future Growth
 Increasing number of patients
 with chronic illnesses
 Many of these are treated with
 biologic drugs
 Biologic drugs demand ultra-
 clean delivery systems
 Point of care shift: Hospital to
 specialty clinic to home
 Safe, accurate dosing needs
 are pushing the market toward
 integrating the container/
 closure system into the delivery
 system
 Generic growth
 
10

 
Total
39
Total
106
2007’s 22 Biotech Blockbusters
Enbrel (Amgen/Wyeth)
Aranesp (Amgen)
Remicade (J&J/SP)
Rituxan (Roche)
Neulasta (Amgen)
Erypo/Procrit (J&J)
Herceptin (Roche)
Epogen (Amgen)
Avastin (Roche)
Humira (Abbott)
Lantus (Sanofi-Aventis)
Avonex (Biogen Idec)
Neorecormon (Roche)
Gardasil (Merck)
Rebif (Serono)
Neupogen (Amgen)
Novorapid (Novo Nordisk)
Erbitux (Imclone/Merck KGaA/BMS)
Lucentis (Roche/Novartis/Genentech)
Synagis (MedImmune)
Humalog (Lilly)
Betaferon (Bayer/Schering AG)
Sources: IMS 2008 Global Biotech Perspective report and Company
Estimates
West participates in all of the 2007
 Biotech Blockbuster drug products
Global Biotech Blockbusters
(Annual Sales >$1Billion)
 
11

 
Millions of
insulin
dependents
worldwide
Compare to
246 million
diabetics
worldwide
Year
Source: Company estimate
2005-2010 17% Increase in Projected Number
For Insulin Dependent Diabetics
 
12

 
Drug Packaging
(How it is contained)
Primary Container Solutions
Prefillable Syringe Systems
Drug Delivery
(How it gets into the patient)
Administration Systems
Advanced Injection Systems
  Build market share in multi-
 component systems for drug
 administration
  Expand proprietary product portfolio
 through innovation and strategic
 technology acquisitions
  Market segmentation to generate
  organic growth
  New product innovation
  Lean manufacturing
  Strategic acquisitions
  Geographic expansion
  Capacity build - Europe, Singapore,
  North America
  China plastics
  India rubber site selection
 
Our Growth Strategy
 
13

 
West FluroTec®
Components
Seal - Stopper - Vial
Daikyo Crystal Zenith® Vials
Estimated Market Size - $1.5 billion
CAGR - 4%
Source: Company estimate for vial systems only
West Spectra™ Seals
Crystal Zenith is a registered trademark of Daikyo Seiko, Ltd.
FluroTec and Crystal Zenith technologies are licensed from Daikyo Seiko, Ltd.
Primary Drug Packaging
 
14

 
Uncoated 4432/50 V35
$50
$200
4432/50 S2 FluroTec®
Westar RS
$250
4432/50 S2 FluroTec®
Westar RS B2-40 Port Bag
$300
4432/50 S2 FluroTec®
Westar® RS B2-40
(1000 packs)
$465
4432/50 Sterile S2 W
(RU) Ready Pack

(1000 packs)
$2,900
RU Ready Pack System
(small volume sourcing only)
$3,500
$360
Core Strategy - Adding Incremental Value per Unit
 
15

 
West NovaPure™
 Item-specific subvisible particle specification
 Residual moisture specification for lyophilization stoppers
 Helps meet Quality by Design initiatives
 Designed to mitigate risks associated with drug packaging
 
16

 
China Plastics Facility
 
17

 
Drug Packaging
(How it is contained)
Primary Container Solutions
Prefillable Syringe Systems
Drug Delivery
(How it gets into the patient)
Administration Systems
Advanced Injection Systems
  Build market share in multi-
 component systems for drug
 administration
  Expand proprietary product portfolio
 through innovation and strategic
 technology acquisitions
  Market segmentation to generate
  organic growth
  New product innovation
  Lean manufacturing
  Strategic acquisitions
  Geographic expansion
  Capacity build - Europe, Singapore,
  North America
  China plastics
  India rubber site selection
 
Our Growth Strategy
 
18

 
Vial2Bag™
Mix2Vial®
MixJect®
NovaGuard™
Safety Needle
Device
ConfiDose®
Auto-injector
Daikyo Crystal Zenith®

Delivery Systems - Key Programs
 
19

 
Packaging & Delivery Systems for Large Molecules Key Driver
 Currently all large molecule drugs are delivered
 by injection
 West components are preferred and used for
 the top selling biotech therapeutics
 Used predominantly to treat chronic diseases
  Diabetes
  Cancer
  Auto-immune
 Fastest growing segment of our business
 Strong profit driver
 
20

 
Critical Stability Issues for Biotechnology Drugs
 Aggregation
  Silicone, tungsten, glue, mfg. processing
 Adsorption - vials and syringes
  Impacts potency of large molecules
 Immunogenicity/Neurogenicity
 Polysorbate 20 and 80
  Detergents used for mitigating aggregation
  Highly unpredictable
  Too much creates aggregation
  Potential for peroxide creation
 
21

 
Higher extent of aggregation in glass compared to CZ
Daikyo Crystal Zenith
Glass
Daikyo Crystal Zenith® vs. Glass
(Demonstrated employing a model antibody in solution)
 
22

 
First-in-Human Containers
Bulk Containers
Inserted Needle Syringes
 Stored frozen in
 Phase 1
 Ideal cleanliness
 Low adsorption
 properties
 Ideal for auto-injectors
 No tungsten, glue or
 silicone
 Ease of handling
Daikyo Crystal Zenith® and Flurotec® are registered trademarks of Daikyo Seiko,
Ltd.
Total Life Cycle Containment
Daikyo Crystal Zenith
®
 Polybutadiene
 Flurotec
® liner
 Low temperature
 resistance
 Ease of handling
 
23

 
Drug Packaging
(How it is contained)
Primary Container Solutions
Prefillable Syringe Systems
Drug Delivery
(How it gets into the patient)
Administration Systems
Advanced Injection Systems
$2 billion combined markets for safety,
prefilled and autoinjectors:
  Unit growth 6-12%, varies depending
  on segment
  West 2008 sales: $170 million
  2013 OP margin: 7%
Strategic Planning Goals - Systems:
  Projected 2013 sales of $550 million
  Projected 2013 OP margin 20%
$1.5 billion market for components
  Unit growth 0-8% per year depending
  on segment
  West 2008 sales: $800 million
  2008 OP margin: 17.5%
Strategic Planning Goals - components:
  Projected 2013 sales of $1.05 billion
  Projected 2013 OP margin 20%
Five-Year Forecasted Growth Opportunity
 
24

 
 
2009
2008
Net Sales
$242.4
$270.7
Gross Margin
28.6%
30.8%
R&D
$4.3
$5.4
SG&A
$42.9
$40.1
Operating Profit (Non-GAAP) *
$21.9
$37.8
Net Income (Non-GAAP) *
$14.1
$24.9
Diluted EPS (Non-GAAP) *
$0.42
$0.72
*2009 operating profit, net income and diluted EPS excludes a ($0.01) per share impact of Tech restructuring charges and $0.05
per share of discrete tax benefits.
*2008 operating profit, net income and diluted EPS excludes a $0.03 per share net gain on the Nektar contract settlement, a ($0.02)
per share impact of Tech restructuring charges and $0.03 per share of discrete tax benefits.
First Quarter Results
($ in millions, except per share data)
 
25

 
($M)
3/31/09
12/31/08
3/31/08
Cash
$62.7
$87.2
$93.6
Accounts Receivable
$137.2
$128.6
$151.9
 Days Sales Outstanding (DSO)
50.9
44.8
51.1
Inventory
$120.0
$115.7
$119.3
 Days Inventory Outstanding (DIO)
44.6
40.3
40.1
Asset Management
 
26

 
($M)
3/31/09
12/31/08
Total Debt
$387.9
$386.0
Total Equity
$488.6
$487.1
 Net Debt to Total Capital
40.0%
38.0%
     
Capital Expenditures:
   
YTD Spending
$17.8
 
Full Year Forecast / Actual
$128.7
$131.8
     
Capital Management
 
27

 
Maintaining Our Long-term Focus
 The fundamentals are what matter
  Superior quality and service win
  The Global Quality Initiative is critical
 Margin improvement - lean manufacturing, OEE
 Continue investment for the future
  Innovation
  Capacity and emerging markets
  IT
  Technology & product acquisitions
  People
 Financial
  Operating cash flow
  Prudent spending: discretionary SG&A and Capex
  Maintain a strong balance sheet
  Return on Invested Capital > Weighted average cost of capital
 
28

 
Injectable Container Solutions
Advanced
Injection
Systems
Prefillable Syringe
Systems
Safety and Administration
Systems
Summary
 Market leader
 Proprietary technology
 Regulatory expertise
 Customer base
 Global footprint
 Partnerships
  Daikyo
  Mexico
 New product pipeline
 Financial position
  Cash flow
  Balance sheet
 People
 
29

 
Each and every day,
more than 80 million
West products are used
to enhance the quality of
healthcare around the world.
 
30

 
Donald E. Morel, Jr., Ph.D.
Chairman and Chief Executive Officer
William J. Federici
Vice President and Chief Financial Officer
Investor Relations Contact:
Michael A. Anderson
Vice President and Treasurer
mike.anderson@westpharma.com
UBS Global Specialty Pharmaceuticals Conference
June 3, 2009 London, UK
NYSE: WST
westpharma.com
All trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., unless noted otherwise.
 
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