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FT HEALTHCARE INVESTMENT FORUM 8 DECEMBER, 2008. Alan Yu Vice President & Chief Operating Officer CK Life Sciences Int’l., Inc. Agenda. Global healthcare market – nutritional supplements CK Life Sciences’ extensive nutraceutical portfolio AG Natural Health Vitaquest Lipa.
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FT HEALTHCARE INVESTMENT FORUM8 DECEMBER, 2008 Alan Yu Vice President & Chief Operating Officer CK Life Sciences Int’l., Inc.
Agenda • Global healthcare market – nutritional supplements • CK Life Sciences’ extensive nutraceutical portfolio • AG Natural Health • Vitaquest • Lipa
Nutritional Supplements • One of the fastest growing segments of the healthcare industry • They are preparations intended to supply nutrients, such as vitamins, minerals, fatty acids or amino acids that are missing or not consumed in sufficient quantity in a person’s diet • Estimates of dietary and nutritional supplements market range from US$40 – 50 billion
Growth in Major Markets: North America • Paul Zambetti of Capsugel: size of the US market is US$16.4 billion, over 32% of the world • Supplements on the rise include: fish oil, CoQ10, probiotics, glucosamine, lutein and resveratrol • Supplements that claim to support eye, joint and heart health for aging baby boomers account for almost half of the market • In 2007, some 68% of US adults say they used nutritional supplements
Growth in Major Markets: Asia • The Asia Pacific region is the global sales leader worth US$22.6 billion, or 44.2% market share • Asian market for herbal supplements and medicines (excluding Japan) doubled between 2003 and 2005 • In Japan alone, the market is worth well over US$2.6 billion today
Growth in Major Markets: China • Domestic supplement market expanded to US$6.7 billion in 2006, already a 10% slice of the global pie • Per capita intake is 50% lower than that of other Asian countries – the consumer market for vitamins and supplements is therefore in its infancy • Consumer sales in the nutrition industry are enjoying healthy double-digit growth, reaching over US$8 billion in sales in 2007
Growing Market Demand • Continued growth in the nutritional supplement markets in both developed and developing markets – driven by consumer demographics and health concerns • This growth is underpinned by: • Aging population • Since 1900 the percentage of Americans 65+ has tripled (from 4.1% in 1900 to 12.4% in 2006), and the number has increased twelve times (from 3.1 million to 37.3 million) • Continued sedentary and hectic lifestyles of industrialized regions of the world • Escalating healthcare costs – especially in current economic climate, there is strong interest in preventative health measures • Increasing affluence and improved consumer education
CK Life Sciences – Nutraceutical Operations • Given growing global demand, CK Life Sciences has accelerated the expansion of its nutritional supplement businesses around the world • It is now one of the major players in the global nutraceutical arena
AG Natural Health – A Global Nutraceutical Brand from Canada
Santé Naturelle Adrien Gagnon, Quebec, Canada • Founded by Adrien Gagnon 60 years ago • The largest provider of natural health products in Quebec, Canada and the fifth largest in Canada • Market leader in joint health and significant player in Omega and probiotics • Strong distribution network of mass-market retailers and pharmacies
Launch of AG Natural Health in Hong Kong • AG Natural Health launched at Watson’s stores in Hong Kong market in April 2006 • Over 60 SKUs now available
AG Natural Health in Hong Kong • Well received and obtained the “Bestselling Western Nutraceutical Brand Gold Award” from Watson’s
European Debut in Holland • CKLS’ first foray into Europe with launch of AG Natural Health across 700 Kruidvat stores in the Netherlands • First major development in Dutch nutraceutical market in the last decade
Vitaquest Operations in the US • 80%-owned subsidiary Vitaquest International Holdings LLC is the largest custom contract nutraceutical manufacturer of nutritional products in the US
Lipa Operations in Australia • Acquired and privatized 100% of Lipa Pharmaceuticals Limited in Nov 2007 • Lipa is the leading contract manufacturer of complementary healthcare and over-the-counter medicines in Australia
In summary… • Nutraceuticals are a big market with good growth • Driven by • Aging population for whom health is priority • Growing affluence of emerging markets • Increasingly “Western” lifestyles • CK Life Sciences ready to ride the crest of the wave