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Disclaimer
The information contained in this presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Any public offering of the securities to be made in the United States will be made solely by means of the prospectus in the registration statement. The prospectus contains detailed information about the Company and its management as well as the financial statements of the Company. Any decision to purchase securities in the offering for sale in the United States or anywhere else should be made solely on the basis of the information contained in the prospectus. This presentation does not contain all relevant information relating to the Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company, and is qualified in its entirety by reference to the detailed information appearing in the prospectus.This presentation contains forward-looking statements, including statements about the Company’s business outlook, our strategy and market opportunity, and statements about the Company’s historical results that may suggest trends for its business. These statements are individually and collectively forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made only as of the date of this presentation and the Company undertakes no obligation to update or revise. These statements are based on estimates and information available to the Company at the time of this presentation and are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, prospective investors are cautioned that actual results may differ materially from those set forth in any forward-looking statements herein. The information contained in these slides has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein. The information contained in these slides should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments which may occur after the date of the presentation. None of the Company, any underwriter of securities of the Company, or any of their respective directors, officers, employees, agents or advisers shall be in any way responsible for the contents hereof, or shall be liable for any loss arising from use of the information contained in this presentation or otherwise arising in connection therewith.Before you invest, you should read the prospectus in the registration statement the Company filed with SEC and other documents the Company has filed with the SEC for more complete information about the Company and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, you may request the prospectus by sending us a request via our website at www.simcere.com.
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Highlights
III Unique Play on Fast-Growing China Healthcare Market
IIIIIICore Competencies and Differentiated Growth Strategy Ensure Industry Leading Position
IIIIIIIII Track Record of Outstanding Financial Performance and Operational Execution
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Simcere at a Glance
Simcere is a leading manufacturer and supplier of first-to-market branded generic and innovative pharmaceuticals in the rapidly growing China market.
IPO date: April 2007. IPO price: USD14.5. IPO proceeds (net): US$162 million
2007: Revenue RMB1,389.3 million (US$190.5 million); Net Income RMB301.3 million (US$41.3 million)
2008: Revenue guidance RMB2.0 billion – RMB2.1 billion; Net income RMB390 million – RMB400 million
Strategic developments in 2007-2008:Completed acquisition of 10% equity interest in Shandong Simcere Medgenn Bio- Pharmaceutical Company Limited, an existing subsidiary, for RMB27.1 million
Completed acquisition of 51% ownership in Boda Pharmaceutical to capture 100% of the fast-growing injectableedaravone market
Acquired 85% equity interest in Nanjing Tung Chit Pharmaceutical and obtained the market leading chemotherapeutic drug Jiebaishu
Acquired 70% equity interest in Zhong Ren Pharmaceutical, gaining rights to SinoFuan, the only sustained release anti-tumor implant approved by the State Food and Drug Administration (SFDA)
Received SFDA approval to manufacture and sell first-to-market generic Biapenem injection Anxin
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Fast-Growing Market DemandFastFast--Growing Market DemandGrowing Market Demand
Simcere Offers Unique Play on Fast-Growing Chinese Healthcare Market
Source: The Freedonia Group
Key DriversKey Key DriversDrivers
111 GDP & Disposable Income Growth
222 Aging Population & Increasing Lifestyle Related Diseases
333
Government Support & Cost Efficiency444
Improving Health Insurance Program and Coverage
555Fragmented Industry Calling for Consolidation0
100
200
300
400
500
600
700
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
USD BillionAcceleration phase:
2007-2010 > 20%
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Core Competencies and Differentiated Growth Strategy Ensure Industry Leading Position
The Only Large NYSE Listed China Drug Maker Play Into The Fast Growing Pharmaceutical Market
Focused Strategy: First-to-Market and Innovative Drugs
Leader in Marketing Network and Deep Channel Penetration
Increasing In-House R&D
Proven Acquisition and Integration Capabilities
77
Branded GenericsMarketing
&Distribution
Manufacturing
Innovative Drug
1990’s Early 2000’s
FTM Generics
Branded Generics
Marketing &Distribution
Marketing &Distribution
Branded Generics
R&D
Manufacturing
Marketing &Distribution
Branded Generics
Mid 2000’s Now and On
R&D
ManufacturingFTM Generics
Growing from a distributor to a distribution, production and R&D integrated companyShifting from generic to first-to-market and new drug focused product portfolio
Differentiated Business Model Provides Ongoing Stability and Growth
Differentiated Growth Strategy: First-to-Market and Innovative Drugs
Growing from a distributor to a distribution, production and R&DGrowing from a distributor to a distribution, production and R&D integrated companyintegrated companyShifting from generic to firstShifting from generic to first--toto--market and new drug focused product portfoliomarket and new drug focused product portfolio
Differentiated Business Model Provides Ongoing Stability and GroDifferentiated Business Model Provides Ongoing Stability and Growthwth
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Proven Marketing Power & Deep Channel Penetration
Over 1,500 in-house and outsourced sales professionals Specialized in neurology, oncology and cerebrovascularpromotionStrong commercial channel operation experience
Over 2,000 hospitalsOver 2,000 hospitalsOver 2,000 hospitals Over 70,000 retail pharmacies
Over 70,000 retail Over 70,000 retail pharmaciespharmacies
Nationwide Distribution Network – 1,500 distributors
Proven Ability To- Optimize Positioning and Pricing - Execute Large Scale Market Promotions- Build Up Brand and Loyalty - Introduce New Products
Proven Ability ToProven Ability To-- Optimize Positioning and PricingOptimize Positioning and Pricing -- Execute Large Scale Market PromotionsExecute Large Scale Market Promotions-- Build Up Brand and Loyalty Build Up Brand and Loyalty -- Introduce New ProductsIntroduce New Products
Brands & Brand LoyaltyBrands & Brand LoyaltyBrands & Brand Loyalty
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Amoxicillin with clavulanate potassium antibiotic granules, tablets and injections
Amoxicillin capsules, dispersible antibiotic tablets, granules and injections
Diclofenac sodium capsules for anti-inflammation
Smectite powder for anti-diarrhea
Product Portfolio with Focus on Oncology and Cerebrovascular Diseases
Products in OtherProducts in OtherTherapeuticTherapeutic
AreasAreas
OncologyOncology
CerebrovascularDiseases
An innovative anti-cancer product, recombinant human endostatin injection
Edaravone injections, free-radical scavenger for stroke management
Nedaplatin a platinum based chemotherapeutic drug
5-Fu sustained release anti-tumor implant
EnduEndu
Bicun & Bicun & YidashengYidasheng
JiebaishuJiebaishu
SinofuanSinofuan
ZailinZailin
AnqiAnqi
YingtaiqingYingtaiqing
BiqiBiqi
1010
Building Oncology Product Line– Innovative Drug Endu
Endu revenue expected to grow 40-50% in 2008
Phase IV interim report of over 600 patients expected to be published in June 2008
3.4 6.614.6
29.5
58.8
0
20
40
60
80
100
1995 2000 2005 2010 2015
(RM
B i
n bi
llion
)
Exciting Performance of Endu Since LaunchExcitingExciting Performance Performance ofof EnduEndu SinceSince LaunchLaunch Demand for Antineoplastic AgentsDemand for Demand for AntineoplasticAntineoplastic AgentsAgents
34.8
216.1
40% to 50%growth
0.0
60.0
120.0
180.0
240.0
300.0
360.0
2006H2 FY2007 2008E
(RM
B i
n m
m)
Quick adoption by approximately 800 hospitals in China
Over 10,000 patients already treated by Endu, all paid out of own pockets
1111
Fast-Growing Cerebrovascular & Cardiovascular Product Line – Bicun & Yidasheng
Source: IMS Health
Patients Treated with Edaravone
8.8%
According to statistical research, China has 1.8 million cases of stroke being treated each year
Full year 2007 sales RMB443.4 million; Q1 sales RMB 152.0 million, an increase of 89% year on year
Drug of choice for treating stroke
Therapeutic use expanding from neurology to other hospital departments
Boda acquisition enabled Simcere to stabilize price of both edaravone injections in the market
Integrated marketing capabilities of the two brands, expect over 80% total sales growth in edaravone market for 2008
Raised barrier of entry for future competitors; price remains stable post-monitoring period
Sales of Bicun & YidashengSales of Sales of BicunBicun & & YidashengYidasheng
Edaravone Market ShareEdaravoneEdaravone Market ShareMarket Share
230.9
443.5
80% growth
0.060.0
120.0180.0240.0300.0360.0420.0480.0540.0600.0660.0720.0780.0840.0
2006 2007 2008 (E)
(RM
B i
n m
m)
1212
Key Product Candidate
Key Product Key Product CandidateCandidate
Therapeutic Areas
Therapeutic Therapeutic AreasAreas
Expected Time of
Introduction
Expected Expected Time of Time of
IntroductionIntroduction
StatusStatusStatus
SFDA Approval May 2008
Pre-clinicalPrePre--
clinicalclinicalPhase
IPhasePhase
IIPhase
IIPhasePhase
IIIIPhase
IIIPhasePhase
IIIIIINew Drug ApplicationNew Drug New Drug ApplicationApplication
2008
2009
Drug Optimization
Drug Drug OptimizationOptimization
Lead Discovery
Lead Lead DiscoveryDiscovery INDINDIND
2009
2009
2009(IND)
2009(IND)
2009(IND)
2009(IND)
2009(IND)
2009(IND)
Serious Infection Biapenem injection
Anti-inflammatory Iguratimod tablets
Oncology Palonosetron injection
Oncology Endu combined with TC Therapy
Oncology Endu combined with NP Therapyv
Oncology (Docetaxel Liposome for Injection)
Oncology SIM6802(protein tyrosine kinaseinhibitor)
Oncology SIM060301 (protein tyrosine kinase inhibitor)
Oncology SIM0710 (PEG-Endostarfor Injection)
Oncology SIM0702(Endostar Depot for Injection)
CerebrovascularDiseases
SIM071201
Expanding Pipeline to Secure Sustainable Growth
1313
19.9 16.334.3
100.0
68.3
020406080
100120
2004 2005 2006 2007 2008(E)
(RM
B M
)
R&D Expenses
R&D InvestmentR&D InvestmentR&D InvestmentR&D ApproachR&DR&D ApproachApproach
R&D strategies:
Source product candidates in China and overseas
Carry out extensive development on existing key products
Collaborate with domestic and international pharmaceutical companies and institutions
Competitive advantages:
Low R&D and clinical trial cost advantage
Leading R&D facilities in China and well trained research staff (more than 20 staff with PhDs)
A leading new drug developer in China, demonstrated by successfully developed Bicun
Increasing R&D Investment
Intellectual PropertyIntellectual PropertyIntellectual Property
Authorized Patents : 37
Pending Patents (China): 46
Trademarks: 269
National Brand Name Trademarks: 2
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Successful Acquisition & Integration Strategy- Leveraging proven consolidation capabilities to capitalize on fragmented market
Simcere Dongyuan Pharmaceutical Co., Ltd.
Boda Pharmaceutical Co., Ltd.
Hainan Simcere Pharmaceutical Co., Ltd.
Simcere Tung Chit Pharmaceutical Co., Ltd.
Wuhu Zhong Ren Pharmaceutical Co., Ltd
2001
2003
2006 Shandong Simcere MedgennBiopharmaceutical Co., Ltd.
2007
2007
2008
M&A Targets
Quality products with blockbuster potential First-to-market new drugs and branded genericsProducts that will leverage existing resources
Simcere is capable of financing and integrating acquisition target
Strong working capital reserve to support potential transactionsStrong cash balance of RMB950 millionMore strategic acquisitions to come in 2008
1515
301
172
103
46
395
0
50
100
150
200
250
300
350
400
2004 2005 2006 2007 2008(E)
(RM
B M
)
Net Income
Outstanding Financial Performance – Five consecutive years of robust revenue and net income growth
RevenueRevenueRevenue Net IncomeNet IncomeNet Income
564
737
951
1389
2050
0
500
1,000
1,500
2,000
2004 2005 2006 2007 2008(E)
(RM
B M
)
Revenue
2008(E)* being the median of the range of estimated revenue and 2008(E)* being the median of the range of estimated revenue and net income guidance provided.net income guidance provided.
CAGR=71%
CAGR=38%
1616
Growing FTM and Innovative Drug Revenue – Driving Higher Gross Margin
FY2007FY2007FY2007
Innovative 4%
FTM Generic
24%
Branded Generics
72%FTM Generic 33%
Innovative 16%
Branded Generics
51%
FTM Generic
19%
Branded Generics 81%
2008Q12008Q12008Q1
82.3%79.9%
76.8%
72.7%
70%
75%
80%
85%
2004 2005 2006 2007
Gross Margin
FY2005FY2005FY2005 FY2006FY2006FY2006
Innovative 16%
FTM Generic 39%
Branded Generics
45%
1717
Investment Highlights
Unique Opportunity For Exposure To Fast-Growing Chinese Healthcare Market
The largest Chinese drug maker listed on the NYSE
Strong upside potential
Extensive marketing network and proven sales capabilitiesKey to success in China healthcare market
Expanding product pipeline and increasingly diversified portfolio
Successful consolidator in fragmented market