Indonesia Pharmaceutical Market

PT. Kimia Farma Tbk, Indonesia

Jasmine K. Karsono, Ph.D
24 Februari 2022
1
COMPANY
PROFILE
Corporate Structure
*Dec 31, 2019 *Present

90.025% 9.975% 90.025% 1 Saham Seri A 9.975%

Government Public PT Bio Farma Dwiwarna Public
(Persero) Government

2003 2003 2011 2014 2016 2018 2019

KF : 99.99% KF : 99.99% KF : 51.00% KF : 10.00% KF : 80.67% KF : 60.00% KF : 56.77%

KFA: 0.01% YKKKF : 0.01% PTPN VIII: 49.00% Jasindo : 10.00% SWP : 19.33% MBM : 40.00% Public : 43.23%
Bank Mandiri : 80.00%
(Equity Capital)

PEHA: 90.25%
Others: 9.75%
PEHA : 20.00%
Others: 80.00%
KFA : 99.99%
YKKKF: 0.01% Lucas: 99.91%
Others: 0.09%
Integrated Business Chain

*Q2/2021
Kimia Farma has a fully integrated, seamless healthcare network covering all 34 provinces in Indonesia –
cementing its position as the biggest upstream-downstream (end to end) pharmacy player in Indonesia

10 Plants

49 Distributors

National Clinic &

Trading &
Manufacture of Production Distribution Retail Clinical Customer
Distributio
API Facility Center
n
Pharmacy Laboratory 1.233 Pharmacies
(NDC)

400 Clinics

72 Clinical
Laboratories
Production Facility
KIMIA FARMA
SUNGWUN PHARMACOPIA
SINKONA INDONESIA
LESTARI RAPID TEST -BALI PHAPROS
• Pregnancy Test • Non Betalactam
• Syphilis Test • Betalactam
• Hepatitis C Test • Cephalosporin
• Covid–19 Test • Herbal

• Quinine & Derivatives

• Active Pharmaceutical
• Essential Oil &
Ingredients (API)
Derivatives
• High Function Chemical
• Disinfectant
(HFC)

WATUDAKON

JAKARTA SEMARANG
BANDUNG BANJARAN
• Non Betalactam
(Semisolid & Semisolid
Sterile, Soft Capsule)
• Antiseptic
• Non Betalactam (Tablet, • Iodine and IodineSalt
Capsule, Cream, Syrup / • Castor Oil & Edible Oils
Suspension) • Cosmetic
• Injection(SVP)
• Non Betalactam(Tablet, Powder, • Non Betalactam (Tablet, Capsule,
• Antiretroviral (ARV)
Syrup/Suspension) Powder, Syrup/Suspension)
• Narcotics
• Herbal (Tablet, Oral Liquid, • Herbal (Tablet, Capsule, Liquid,
• Radiopharmaceutical
External Liquid) Powder)

8
 Roles During Covid – 19 Pandemic

In House Drug Vaccination Medical Devices &

Development “Gotong Royong” PKRT
Antiviral, supportive, Providing Health
Accelerating Herd
Supplement, Rapid Rapid test Antibody
Immunity by
test Rapid test Antigen
Providing Vaccine
Mask
and Vaccination
Sanitizer
Services

Ensuring
Drug Development Vitamins & Supplement Import Medicines and
Collaboration Medical Suplies
New Chemical Entity Providing Suplement , Importing product
Development with university. to maintain health through licence and Across the Nation
against the Pandemic Special access
Vitamin C, D, B, Remdesivir,
supplement etc Tocilizumab, IVIg etc.
 Exclusive license for Molnupiravir patent
Kimia Farma is the only company in Southeast Asia who has obtained a Raw Ingredients &
Finished Drug license for Molnupiravir from the Medicines Patent Pool (MPP), a public health
organization backed by the United Nations.

Through this exclusive license, Kimia Farma will be able to serve both local and global market
demand, especially the Southeast Asia market
Global Molnupiravir – MPP sublicenses owner

Source: Company information.

2
MARKET
OVERVIEW
 Global Market Trend
Top 10 Therapeutical Class in 2026 Global Market
Anti-Rheumatics, MS Therapies, Anti-Virals, Bronchodilators, Anti-Diabetics, Sensory
Organs, Vaccines, Dermatologicals, Immunosupresants, Oncology

Worldwide Prescription Drug Sales & Global FMCG Market

Off Patent Products 2026 Outlook 1
The global FMCG market size was valued
• Prescription (Rx) drug sales are set to grow at at $10,020.0bn in 2017 and is projected to
a CAGR of +7.4% between 2020 and 2026, reach $ 15,361.8bn by 2025, registering a CAGR
with sales expected to reach almost $1.4trn. of 5.4% from 2018 to 2025.
• Consensus forecasts indicate that $252bn of
sales are at risk between 2020 and 2026
2
5

Global Market
Trend Biotech vs Small Molecule Drugs
Narkotics Market Biotechnology products are forecast to take majority
• The use of narcotics in Indonesia continues to share in the top 100 drugs by sales by 2026, with 55%
increase every year for medication therapy of the total top 100 product sales in 2026, up 16%
• Choice of narcotics products in Indonesia is less compared to 2012.
varied than narcotics products circulating in other 4 3
countries
Key Trends in Global Healthcare & Pharmaceutical Industry

Increase in Non-Communicable Diseases Focus on Cost Control

• Payors (government, insurance companies and
• Non-communicable diseases (e.g. cancer, patients) save costs as spending on healthcare
diabetes, cardiovascular disease) are on the rise increases
– driving demand for healthcare
• Payor promotes product transition from patent to
• A higher elderly population is correlated with generic / biosimilar
an increase in the number of non- Global
communicable diseases Healthcare • Research-based pharmaceutical companies are under
Tren pressure on prices, so they are looking for ways to
• Healthcare providers are implementing increase efficiency and maintain margins
new business models to meet this
demand
New Therapeutic Discovery
• Scientific understanding allows drugs to be more
Middle Class Growth precise and suitable for each individual (eg
personalized drugs, cell and gene therapy)
• Increasing middle class population,
especially in developing countries in • Increased R&D productivity (e.g. AI drug discovery,
Asia organ-on-chip, and genome sequencing)
Increased Customer Expectations
• Increasing demand for access to quality and
• Empowered consumers strive to improve well-being and health
reliable healthcare
• Consumer demand is not limited to pharmaceuticals, but Digital Inovation
• The flow of tourism for medical needs extends to the health sector - preventing disease rather than
increases - patients seek health treating disease • Health services are delivered through digital applications,
services abroad AI, wearable technology, telemedicine & online peer-to-
• Growth of ‘lifestyle’ products such as health food, vitamins peer discussions
and • Digital & big data technology supports personalized
supplements marketing as well as consumer data processing to
• Availability of information related to health and lifestyle online support business growth
Market leading positions across healthcare in Indonesia
#5 player in the Indonesian pharmaceutical industry(1) #1 player in pharmacies(1),(3)

Dexa Medica 5.6%

32%
Sanbe 4.5%
2020 Revenue:
Kimia Farma Group 3.7% IDR16.4tn
68%
Kalbe Farma 3.1% Others

Novell Pharm 3.0%

Fahrenheit 2.7% #2 player in clinical laboratories(1),(3)

Hexpharm Jaya 2.6% #2

In unbranded generics Others
Soho 2.1% 24%
#24 36%
Lapi 2.1% In branded generics 2020 Revenue:
IDR5.1bn
✓ Plans to focus on
Biofarma increasing presence in
2.0% branded generics via 25%
partnerships and R&D
4 Players 15%
Combined(2)
Source: Company information, IQVIA analysis.
(1) Based on MAT 4Q 2021
(2) Includes Pramita, Parahita, BioMedika and Citott.
(3) Market share calculated for independent pharmacies and clinical labs.
Government Support & Partnerships in Indonesia

The strong link to Government / SOEs grants a strong business platform, at the same time,
provides a significant upside to tap the non-Government / Private sector market

A B C

Licenses to distribute Potential to expand Potential to expand

& import COVID-19
medicines
✓ Hold licenses issued by the
Indonesian Government to distribute
COVID-19 medicines
✓ Benefits from duty-free imports when
procuring vaccines from overseas
business model through
managed services
✓ Uniquely positioned to tap on its SOE
status to partner with other SOEs
✓ Potential to provide pharmacy
management and IT integration
across IHC-owned hospitals and
clinics
distribution network
and reach
✓ Potential to become master
distributor and to provide medical
supplies to IHC-owned hospitals, as
well as non-IHC owned clinics

✓ Largest and one of the few license ✓ Potential captive customer base from
holders amongst pharmaceuticals to IHC hospitals and clinics converted to
distribute narcotics KF mobile users
Partnership and collaboration to drive business growth
Joint-Venture Opportunities
✓ In 2016, Kimia Farma established a joint
venture with Sungwun Pharmacopia, one of
the leading global API producers to form
Kimia Farma Sungwun Pharmacopia
(“KFSP”) which focuses on the
production of API and HFC products
✓ KFSP is 80.67% owned by Kimia Farma and
19.33% owned by Sungwun Pharmacopia
✓ KFSP commenced its commercial
production in 2018 and since then has
played significant role in provision of key
ingredients for Kimia Farma’s production
✓ This partnership also allows KFSP to tap
into South Korean export market since
2020
Source: Company information.
API Partnership Opportunities
✓ KFSP is constructing new Paracetamol
and ARV plants as key growth project with
annual plant capacities of 3,800 MT and 100
MT respectively
✓ Future growth driver of KFSP with
estimated 2025 revenue of IDR336bn from
Paracetamol and IDR205bn from ARV
✓ KFSP partners with Pertamina who will
engage in provision of Benzene, the key raw
material of Paracetamol production for its
upcoming Paracetamol plant
✓ This partnership with Pertamina allows
KFSP to secure raw materials at
competitive price and dominate the local,
and potentially the Asian export market
Partnership with IHC and SOEs to
unlock Healthcare SOEs synergies
✓ Partnerships with Pertamedika IHC and
other non-IHC Indonesian SOE provides
captive customer base and discovers
additional revenue streams:
– Become master distributor and supplier
for IHC and non-IHC SOEs owned
hospitals and clinics
– Partnership with non-IHC SOEs on the
non-medicine products and services,
e.g. hand-sanitizer, essential oil, other
well-being products, etc.
✓ Partnership allows for accelerated growth
considering the scale of the IHC and
non- IHC SOEs (73 hospitals and 145
clinics network across Indonesia for IHC
alone)
Synergies with Indonesia Healthcare Corporation
and State Owned Enterprises

Indonesia Healthcare Indonesia SOE

Corporation (”IHC”)
In 2020, all state-owned hospitals are consolidated under
Pertamedika IHC, aiming to standardize the service quality
and operations across the group. Integrations were done
through joint venture & acquisitions
There are 84 SOEs which are not part of Pertamedika
IHC, in which most of them operates their own
independent / on- site clinic to serve their internal
employees. On average, each SOE operates 3

Customer Base
independent clinics

73 hospitals 145 clinics network Example of SOEs

Captive
with non-
across Indonesia consolidated clinic
assets
29 10
Example of Example of
Sumatra Kalimantan 1 SOEs with SOEs with
Sulawesi
Papua acquired joint
hospital venture
No. of IHC Java 33 assets model
#
owned hospitals
Significant support from Government to develop
local API production
Roadmap of API Product Development Halal certified as key differentiation
Significant support from government to develop and strengthen its API portfolio,
in line with government agenda to reduce API import reliance and increase local
content

▪ Pantoprazole ▪ Paracetamol ▪ Ceftriaxone

▪ Risperidone ▪ Cefadroxil
▪ Meloxicam
▪ Esomeprazole
▪ Telmisartan
▪ Cefixime
▪ Cefotaxime
▪ Ceftazidime
æ 21,42% 2024

▪ Glimepiride ▪ Rifampicin
▪ Bisoprolol
▪ PVP Iodine æ 10,53% 2023

Halal API System Certification

▪ Efavirenz ▪ Tenofovir
▪ Lamivudine
▪ Zidovudine æ 9,33% 2022 Issued: March 24th, 2021

Expired API: March 21st, 2023

▪ Efavirenz

æ 6,96%
▪ Lamivudine 1. Atorvastatin 6. Efavirenz
▪ Zidovudine 2021
▪ Tenofovir 2. Simvastatin 7. Lamivudine
3. Rosuvastatin 8. Zidovudine
▪ Simvastatin
4. Clopidogrel 9. Tenovofir
æ 3,10%
▪ Atorvastatin
▪ Clopidogrel 2020
▪ Entecavir 5. Entecavir 10. Remdesivir

Legend: æ Target cumulative decline of Indonesia API import (%)