2017 company profile(eng)

2017 COMPANY PRESENTSTION Healthful WORLD! Dynamic DAEHWA!

Copyright 2017 DAEHWA Pharmaceutical Co., Ltd. All pictures cannot be copied and revised without permission.

Contents

Company Overview Main Business R&D VISION 2020

2

Company Overview

3

Value Vision Company History Company Introduction

4

Value Vision

As value of company DAEHWA, certified as innovative pharmaceutical company by MoHW, has established solid foundation as the high-potential mid-sized enterprise.

Also, with the better value created by continued management innovation, We do our best to be the global pharmaceutical company in the world.

5

Value Vision

As purpose of company With philosophy of respecting life and thinking environment-friendly, DAEHWA tries to contribute to the health and well-being of the human race with advanced technology that leads pharmaceutical industry.

6

Value Vision

Company History Company Introduction

7

Company History

Beginning Of business

Growth period

‘84/01 Established on Jan. 19, 1984 ‘86/03 Soo-Ji Kim and Woon-Jang Kim were inaugurated as CEO ‘87/07 Selected as promising small-medium sized company (The institute for Chemical Research)

1st Quantum leap

2nd Quantum leap

Company History

Beginning Of business

Growth period

1st Quantum leap

‘01/08 Designated as promising “Venture company” (Technical evaluation) ‘01/12 Establishing new drug research institute ‘02/11 Purchasing Hoengseong Factory area

2nd Quantum leap

Company History

Beginning Of business

Growth period

‘03/02 Listed in KOSDAQ market ‘03/02 Completed office building in Daejeon ‘04/07 Added C-Tri Pharmaceutical Co. as affiliation ‘06/09 Completed merging of DS&G Pharmaceutical Co.

‘07/05 Added DH Horim Company as subsidiaries (Drug wholesaler) ‘07/07 Added S-Med Corp. as subsidiaries (Medical contents supplier)

‘08/01 Approved Liporaxel® phase Ⅰ clinical trial(MFDS) 1st

factory as cGMP(MFDS) for oral ‘09/11 Got the approval of Formulation and external ointment, gel and creams

1st Quantum leap

2nd Quantum leap

‘10/06 Approved Liporaxel® phase Ⅱ clinical trial(MFDS) ‘11/04 Got the approval of 2nd factory as cGMP(MFDS) For TDDS products ‘11/08 Newly opened Pankyo R&D Center ‘11/12 Liporaxel® approved as NET (New Excellent Technology) by MoHW ‘12/06 Certified as Innovative Pharmaceutical Company

By MoHW ‘13/02 Approved Liporaxel® phase Ⅲ clinical trial(MFDS) ‘13/05 Liporaxel® designated subject of a research by MOTIE ‘13/08 Takeover Redox-Bio Corp.

Company History

Beginning Of business

Growth period

1st Quantum leap

2nd Quantum leap

‘15/02 Liporaxel® Re-approved as NET(New Excellent Technology) by MoHW

‘15/12 Affiliate company, C-tri Listed on the KOSDAQ

‘15/06 Beginning construction of anticancer factory which is dedicated for Liporaxel®

‘16/03 DH1401 Designated as Advanced medical technology development project by MoHW

‘15/06 Re-certified as Innovative pharmaceutical company(MoHW)

‘16/08 Purchasing new office building in Bangbae to move

‘15/10 Completed construction of anticancer factory which is dedicated for Liporaxel®

‘16/09 Liporaxel® approved by MFDS as world firstly

‘15/11 Finalizing Liporaxel® phase Ⅲ clinical trial

‘16/12 DH1401 Started phase Ⅱ clinical trial

‘15/12 Got the 5 million dollar exporting prized from Government

Value Vision Company History

Company Introduction

12

Company Introduction

COMPANY NAME

DAEHWA PHARMACEUTICAL CO., LTE.

FOUNDATION DATE

JAN. 19TH 1984

CEO

Byung-Tae Noh / Eun-Seok Kim

KOSDAQ LISTED DATE

FEB. 12TH 2003

STOCK

18,224,974

CAPITAL

9,112,487,000KRW(USD 8,000,000)

ADDRESS

495, Hanu-ro, Hoengseong-eup, Hoengseong-gun, Gangwon-do, Republic of Korea

EMPLOYERS

About 350 people

WEBSITE

www.dhpharm.co.kr

MAIN PRODUCTS

CEPHAMETHYL tab. FLOSPAN tab. CEFACLOR cap. AMALIAN filler

Company Introduction CEO

Chairman & CEO

Byung-Tae Noh Academic background Bachelor’s in manufacturing design at Daegu Univ.

President & CEO

Eun-Seok Kim Academic background Bachelor’s in Psychology at Sungkyunkwan Univ.

MBA at Sungkyunkwan Univ.

Career

Career

DAEHWA Pharmaceutical Co., Ltd.

BUKWANG Pharmaceutical Co., Ltd. DAWHWA Pharmaceutical Co., Ltd. 14

Company Introduction

CEO

Organization chart

(Chairman) Full time auditor

Board of directors

CEO (President)

Business Management HQ

Seoul sales ∙Marketing HQ

General affairs

Gangnam 1,2,3

Busan

Finance & accounting

Gangbuk 1,2,3,4

Daejeon

Information system

Gyeonggi 1,2

Gwangju

Province sales HQ

Legal

Incheon 1,2

Daegu

Advertising

Sales management

Jeonju

Marketing

General hospital /Wholesales HQ Hospital 1∙2∙3

Wholesales

DDS sales HQ

Production HQ

R&D HQ

DDS sales

1st factory

Central research center

CMO

2nd factory

Pankyo research center

3rd factory

Development

Clinical research

Overseas Business

Company Introduction Affiliates status

DH HORIM

REDOX-BIO

SHARE RATIO : 61.91% MAIN BUSINESS : Pharmaceutical Domestic Wholesaler

SHARE RATIO : 59.58% MAIN BUSINESS : Produce HA and synthesizing APIs Development of medical device and related Trading SHARE RATIO : 61.24%

S-MED

C-TRI

(Listed in KOSDAQ)

MAIN BUSINESS : Medical Information System Contents Service SHARE RATIO : 12.82% MAIN BUSINESS : R&D and Pharmaceutical manufacturer focusing on Bio products (Peptide related)

16

Company Introduction

R&D center

Office building

Seoul

Daejeon

Pankyo

Head office/Facilities

Head office/ 1st Factory

2nd Factory

3rd Factory

Central

Factory Introduction

Hoengseong

1st 2nd factory 18

Factory Introduction

2nd factory 1st

Maintenance building

factory

Management building

Hoengseong

1st 2nd factory 19

Factory Introduction

Hoengseong

3rd factory

Factory Introduction

1st factory

Square measure

2nd factory

Manufacturing site : 3,900㎡

Manufacturing site : 1,971㎡

Manufacturing site : 259.1㎡

Storage : 1,318㎡

Storage : 846㎡

Storage : 12.7㎡

Quality control site : 684㎡

Others : 1,575㎡

Quality control site : 10.2㎡

Others : 5,128㎡

Total : 4,392㎡

Others : 306.8㎡ Total : 588.8㎡

Total : 11,030㎡

Dosage form of product

Capacity (per year)

3rd factory

Oral formulation(tablet, capsule)

Plaster, cataplasma, patch

Oral solution

Tablet 600,000,000 tablets

Plaster 52,500,000 sheets

1,800,000 vials

Capsule 120,000,000 capsules

Cataplasma 36,000,000 sheets

Ointment(Gel, Cream) 50 tons

Patch 12,000,000 sheets

Ointment(ointment, cream, gel) ODF

Factory Introduction Product category

9% Aseptic preparation as injection Ceftriaxone sodium inj. 1g

8% Ointment(Gel, Cream) Kebanon gel, Demacot-s cream, Softia ointment etc.

Cefuroxime sodium inj. 1.5g etc.

13% TDDS patches Hyemingo cataplasma, Loxona plaster Resnalin patch etc.

66% Oral formulation Flospan tab. Cephamethyl tab.,

4%

Cephamethyl cap., Gastric Cap. etc.

Others Suppository, diagnosis reagent, Sanitary aid etc.

22

Pankyo Research Center

Research of LASED/TDDS/BIO/natural products Research of LASED(Lipid-bAsed Self-Emulsifying Drug) Research of IMD & New Dosage Form Anti-cancer, Antivirus and ODF

Research of Natural Products and Health Supplements Dementia treatment, improvement of recognition and blood pressure Research of Transdermal Drug Delivery System Patches (Patch / Plaster / Cataplasma)

Supporting of building on Product dossiers Preparing CTD and conducting MV

Central Research Center

Formulation Study Formulation study of IMD and Generic Focus on oral dosage formulation study (IMD & Generic)

Formulation study and Pilot study Support of building on products dossiers LASED Scale-up Study

Main Business

25

Business Overview ETC/ OTC etc

Business Strategy

26

Business Overview

OTC

ETC

29.8%

Total 130 items

TDDS(OEM)

Antibiotics, Digestive MAIN PRODUCTS

Total 50 items

62.2%

MAIN PRODUCTS

1H 2016 USD 35,826,000

Anti-imflammatory Patches 1H16 USD7,139,130

Cephamethyl Anti-biotics 1H16 USD 4,034,782

5%

Flospan Gl(Antispasmodic) 1H16 USD2,139,130

Medical device Amalian

Filler(Medical device) 1H16 USD1,000,000 ETC

OTC

Others

Business Overview

2016 FIRST HALF YEAR SALES PROPERTY

OVERSEAS

$1.6Mil.

TDDS

ANTIBIOTICS

(M/S of external Patches as 65%)

ETC

$7.6Mil.

$26.6Mil.

SALES (Growing 13.6% Compared to last first half year)

$35.9Mil.

Business Overview

2016 FIRST HALF YEAR SALES PROPERTY

Focusing on prescription drug products OVERSEAS

$1.6Mil.

Specialized Pharmaceutical Company TDDS

ANTIBIOTICS

(M/S of external Patches as 65%)

ETC

$7.6Mil.

$26.6Mil.

SALES (Growing 13.6% Compared to last first half year)

$35.9Mil.

29

Business Overview

ETC/ OTC etc Business Strategy

30

ETC/OTC etc

ETC

ETC` Infectious disease

6,226,086 4,782,608

Digestive disease

3,434,782

Cardiovascular OEM Anti-inflammatory Respiratory disease others

OTC

OTC

(Unit : USD)

3,400,000

(Unit : USD)

External application (OEM)

6,626,086 3,191,304

OTC etc.

756,521 1,895,652

1,652,173 1,078,260 2,817,391

ETC Antibiotics Sales USD 6,260,869 External application(patches) Sales etc. USD 7,391,304

External application (Own business)

Medical device etc

ETC/OTC etc

ETC

ETC` Infectious disease Digestive disease Cardiovascular OEM

6,226,086

23

4,782,608 3,434,782 3,400,000

Million 1,652,173 USD

OTC

OTC

(Unit : USD)

External application (OEM)

6,626,086 3,191,304

12

756,521

others

OTC etc.

External application (Own business)

Million USD Medical device etc

1,895,652

Anti-inflammatory

Respiratory disease

(Unit : USD)

1,078,260 2,817,391

ETC Antibiotics Sales USD 6,260,869 External application(patches) Sales etc. USD 7,391,304

Business Overview ETC/ OTC etc

Business Strategy

33

Business Strategy Domestic

Focusing on development of long term prescription Drugs and marketing Cardiovascular / Endocrine disease(hypertension, diabetes) etc

Strengthen sales by selection and concentration strategy Strategically selecting ETC products and doing concentrated marketing

Strengthen development on ETC patches product pipeline Enhancement of network and relationship with leading company

Diversification of sales Extension of business fields like medical device(Amalian) and so on

34

Business Strategy Domestic

Advanced to Cosmetic & Plastic beauty market

Developing TDDS formulations

2015 sales turnover USD 1,913,043

Largest transdermal OEM company in Korea (For 29 companies : Yuhan, CKD, Ildong, Boryong, Ilyang etc)

2016 sales objective USD 3,130,434

TDDS Sales turnover USD 14,000,000

Reinforce ON and OFF line marketing

2 ETC Patches was launched

Line extension related to Hyaluronic acid

Developing ETC patch narcotic analgesics, smoking cessation, Urinary incontinence etc

Amalian filler was launched on Feb. of 2014

(Cosmetic, Adhesion preventions etc)

Target marketing to Drugstore and CVS

2017’s sales goal

2017’s sales goal

35

Business Strategy Overseas

Exporting to 20 countries Additional 28 countries are in progress

Export award USD 5M from government

A contract with big market player Preparing of entering to China, US, Europe and middle east

Technical transfer of TDDS / Planning of building overseas manufacturing facilities Iran, China

36

Business Strategy Overseas Distribution contract with Prorepharm

US

CHINA

Distribution contract with Zhijun Pharmaceutical Co.(Launching target as 2018)

Preparing for US cGMP Preparing for US registration

Middle East Malaysia Technical transfer contract with ATRA UAE and other 10 countries : Supplies agreements with NOVOSCI

Distribution contract with Ocean One Pharma (BIDICA and 9 products)

Business Strategy Overseas

Europe

France, Bulgaria, etc

America

USA, Bolivia, Ecuador, etc

Asia

Africa

Ethiopia, Ghana, Algeria, etc

48 countries

China, Myanmar, Vietnam, Cambodia, Philippines, Thailand, Mongolia, Iran, etc

R&D

39

R&D OVERVIEW DH-LASED NATURAL DRUG PRODUCT

OTHERS (TDDS, ODF) 40

R&D OVERVIEW R&D Networks Pankyo Research center

Central Research Center Formulation Study

Formulation study & development

Pilot Study and Formulation development

LASED study

Support and product registration Scale-up for LASED technique product

IMD study (Oral solid form)

R&D Networks

Transdermal Drug Delivery System Natural new drug IMD study Antibody new drug

Redox-Bio Synthesize study (High purity HA & API )

Synthesize study of raw material Process development IMD synthesize study High purity HA product

C-tri Research center R&D on Bio/Synthesizing Peptide/Antibody

Cooperation organization KAIST ASAN MEDICAL CENTER Kyunhee univ Catholic univ Seoul national univ Dongguk univ Chung-ang univ

41

R&D OVERVIEW PIPELINE Product Name

Code name

[Oct. 2016] Indication

Liporaxel® (DHP107, Paclitaxel Oral Solution) DHP107

Gastric cancer

- DHP107A

Breast cancer (domestic)

- DHP107B

Breast cancer (overseas)

DH-LASED DHP21001 DHP23001

Solid Tumor

DHP23002

Solid Tumor

DHP23007

Anti-virus

DHP33001

Diabetes

DHP1401

Dementia

DH-BIO/ DHP32001 HERBAL DHP32002 DHP42001&42002 DHP26001 DH-ODF DHP26002

DH-TDDS

Solid Tumor

ALS Rare disease

Solid Tumor Impotence Antiemetics

DHP26007

Hepatitis B

DHP26003

Narcotic Analogesics

DHP26005

Dementia

DHP27006

Urtication

DHP27008&27010

Inflammation

Research

Nonclinical

Clinical PhaseⅠ

PhaseⅡ

임 상

PhaseⅢ

Approval

Marketing

R&D OVERVIEW

DH-LASED NATURAL DRUG PRODUCT

OTHERS (TDDS, ODF) 43

DH-LASED Based technique

DH-LASED DaeHwa Lipid bAsed Self Emulsifying Drug delivery technology Magic Bullet Weak absorption drug

Insoluble drug Unmet needs drug

DH-LASED

Old-fashioned drug

DH-LASED is highly potential !!

Innovative drug controlled market

DH-LASED / Liporaxel®(DHP107) History and plan Development of DHP107 dosage form

DREAM study

GOFDA Project

(Informational patent)

2006

2008

2010

2013

2015

2016

2017

Launch Liporaxel® GLP Non-clinical (Covance, KIT

Clinical phaseⅠ (AMC)

Clinical phaseⅡ (AMC)

Clinical phaseⅢ (12institution)

Finalized Clinical study

(DHP107)

Approved License Liporaxel® (DHP107)

by MFDS

Add indication Start clinical study

Start US clinical study

DH-LASED / Liporaxel®(DHP107) STRONG POINTS

Taxol@ (Intravenous Injection)

DHP107

Convenience

Require hospitalization

Home care

Diluting agent

Severe hypersensitivity caused

By Cremopher EL

Using edible oils, no hypersensitivity

Over 3hours

Single-dose by oral

Needed

No needed

Administration Intravenous administration

Premedication

1 cycle

3 Weeks

4 Weeks

Sole oral formulation

The world’s first single oral dosage formulation of paclitaxel Improving

quality of Patient’s life

Better safety

(3W on, 1W off)

46

DH-LASED / Liporaxel®(DHP107) MASTER PLAN OF OVERSEAS DEVELOPMENT

2016

2020

Get the approval on world’s 1st oral paclitaxel product

The first year of GLOBAL DAEHWA pharmaceutical

Raising value of DAEHWA’s

Maximizing value of

Brand name

DAEHWA’s brand name

Liporaxel® Domestic Approval

Export to More than 5 Countries abroad

Export to More than 20 Countries abroad

2025

Sales of Whole world would be Exceeding 1trillion won Per year

2030 Take the 40% of market Portion in whole paclitaxel market

Sales would be coming from all contracted countries Settlement of virtuous cycle structure from ordinary profit to R&D

47

DH-LASED / Other project Under going project based on DH-LASED

DHP23002 DHP23003

DHP21001

Oral solid cancer

Oral solid cancer Oral solid cancer

First Oral paclitaxel on the world

Oral solid cancer

DHP23005 DHP23006

DHP42001

Oral solid cancer

Oral solid cancer

Oral diabetes

LiporaxelÂŽ (DHP107)

DHP23001 DHP23006

DHP33001

Oral solid cancer

Oral solid cancer

DHP23007 Oral antivirus

R&D OVERVIEW DH-LASED

NATURAL DRUG PRODUCT OTHERS (TDDS, ODF) 49

NATURAL DRUG PRODUCT Natural drug development for Dementia treatment Launching target as 2022 Confirming efficacy of memory improvement on Dementia model Passive Avoidance Test

β-Amyloid protein injection method

Intracerebroventricular Injection(3�)

Ref.) Biomol Ther. (Seoul) 2013 Jul. 30;21(4):299~306

50

NATURAL HEALTH FUNCTIONAL FOOD Health functional food development on Memory improvement for preparing Aging society

Launching target as 2018 Confirming efficacy of recognition ability improvement (in vivo) Passive Avoidance Test

Y-maze Test

Ref.) Ministry of Agriculture, Food and Rural Affairs, Higher value-added food technology development business, Development subject of health supplement which contains 51 active ingredients as Spine date seed for memory improvement of adults to prepare an aging society.

R&D OVERVIEW DH-LASED NATURAL DRUG PRODUCT

OTHERS (TDDS, ODF) 52

OTHERS TDDS

Plaster

Transdermal Drug

Cataplasma

Delivery System

Entry stage 01.1-06.12

Building Research and Business System

Growing stage 07.1-11.12

Establishment of foundation for growing and leaping

Transdermal Drug Delivery System Advance to Global Market

Quantum leap 12.1-20.12

Advance to Global Market

Laboratory Establishment

Product item Expansion and

Strategic product development

Acquiring source core technology

Business Diversification

for Global Market

Release of Plaster products

Development of new growth engine

Constructing Partnership with Multi-

By strengthening R&D Investment

National pharmaceutical companies

53

OTHERS TDDS, ODF Ketoprofen Plaster

2002

Traditional Chemical Cataplasma

2004

SMEDDS Technology Development

2006

Loxoprofen Patch First in Korea (Loxona)

2008

Narcotic analgesic Dementia treating Fentanyl Patch medicine Development development (Dufenyl) (Rivamensa Patch)

2010

Plaster development All-in-One Tulobuterol Patch Of Hot-melt Type Cataplasma (Resnalin) Development And Production System build-up

2012

BeKool Itch Relief Patch

2014

2016

Roll Type plaster Coin plaster Production & development

OTHERS Vision of TDDS

Needle Manufacturing Technology

Applying to New drug

Healthcare / Cosmetic

Base Adhesive

Hot-melt Patch Technology

Biodegradable macromolecules

Applying to

Microneedle

New drug

Technology Drug Application Technology

Healthcare / Cosmetic

55

OTHERS ODF Special merits

Fast Disintegration, Fast Dissolution ODFilm Administration without water

Convenient for children and elderly

Fast medicinal effect

56

OTHERS Vision of ODF / DH-ODF platform Development

DHFast film DHDHSlow film Muco film

Establishment of patients Customized drug delivery System ODF platform Technology.

57

58

R&D

Market advance to Beauty and Cosmetic surgery

Overseas Market

59

Liporaxel® (DHP107) Finalized Phase Ⅲ clinical trial Overseas Licensing-out progress Approved license by MFDS in 2016

R&D

Launch in 2017 Application of US FDA clinical IND Ⅰ& Ⅲ for breast cancer

REDOX-BIO CO., LTD

Market advance to Beauty and Cosmetic surgery

Acquired 100% of SHARE RATIO on Aug, 2013 Hyaluronic acid Manufacturing Facility build-up Certified for EU GMP(Germany) For Hyaluronic acid Sales Goal: USD 26M (within 3 years) Acquirement of DAEHWA Hyangnam factory Expand area with cosmetic production Capital increase for value to third party Target 13M sales in 2018 / IPO in 2020

DHP1401 (Natural dementia medicine) DHP1401 indication & mechanism study Safety establishment through toxicity test Set up the manufacturing process of raw material & finished product Clinical trial II IND approval by MFDS on Aug. 2015 Domestic patent 2 , overseas patent 8 cases

Amalian Filler Hyaluronic acid as raw material Domestic Market Scale: USD 87M Additional portfolio for Amalian With Lidocaine, SCM2, TheraSTem-Derma and so on

National Project 7 National Projects including Anti-cancer drug Total Business Expense: USD 10M The Government Grants: USD 7M

Focusing On Overseas Market expansion

TDDS Product Various specialized product Release Export to Product and Technology

Focusing on Overseas Market expansion Advance to Large Market including China, America, Europe and so on Diversification (Technology transfer and foundation of Joint-stock Company and so on)

61

Healthful WORLD! Dynamic DAEHWA!

DAEHWA makes every effort to provide accurate and up-to-date information and due care has been used in preparation of this presentation. Nevertheless, this presentation may be subject to technical inaccuracies, information that is not up-to-date or typographical errors. DAEHWA does not assume liability for relevance, accuracy and completeness of the information provided. DAEHWA reserves the right to change, supplement, or delete some or all of the information on this presentation without notice.

Content point Address Attn

DAEHWA Bldg., 2145 Nambusunhwan-ro., Seocho-gu, Seoul, Republic of korea Overseas Business Dept.

Website

www.dhpharm.co.kr

Tel

+82-2-6716-1071~4

Fax

+82-2-588-3422