TMFHelical (99.02)

More on West Pharmaceuticals.

September 30, 2007 – Comments (1)

I just listened to the West presentation at the UBS Global Life Sciences Conference earlier this month

http://events.streamx.us/US/Event/PresentationList.aspx?id=46&rid=84425&s=633267533649437394
(registration likely required to access the slate of presenters and archived presentations).

Here are my scribbled notes:

Note that the company did a very nice job of explaining the competitive advantage, barrier to competition, and growth drivers in the industry.  I will do some financial write-up on the company for a future blog.

West at UBS

9/26/07

Donald Morel - Chairman

Pennsylvania Company

Manufacturer of components for injectable drug delivery and disposable medical products.

Rubber stoppers, syringe plunger tips.

Serves wide range of customers - BD is largest.

Manufacture globally.  Building manufacturing in China.  Key manufacturing partners in Mexico and Japan.

Got out of clinical services and other non-core businesses, focus on manufacturing.  Looking for acquisitions in the field - increased dividend and buying back shares.

Pharmaceutical systems - 70% sales

Technology group - 30% of sales

40% of sales in Europe, 9% from Asian

Check on overseas growth.

Sold into China and India for 25 years, but just now looking into manufacturing there.

Growth drivers - demographics, biologics (FDA pipeline) - more packaging / high margin products.  Shift to 'point-of-care' (uses more disposable West products) with self contained systems (example West produces components used in ~95% of insulin packaging used today - including inhalable insulin - Nektar/Pfizer). Diabetes is ~110M revenue.

HUGE competitive barriers.  Regulatory system barrier to component changes (he explains this well).  Patents too, but not as large a barrier as regulatory.

Nest generation systems being developed including anti-counterfeiting / RFID.  Simpler 'home-use' systems.  All-plastic syringe (2010-2011) more compatible with biologics (silicone free / glass free).

New markets - building in China (a bit delayed - Ground breaking early 08).  A few customers  in place.  Also rubber manufacturing for China domestic market.