Milan, 17 December 2001

1
Business on track 2002 objectives
AIAF PRESENTATION
Milan, 17 December 2001
2
KEY EVENTS IN 2001

• Lercanidipine
• A success in France and Germany
• NDA filed in the USA
• NDS filing expected in Canada
• New in-licensed products
• Significant improvement in profitability

1
3
RESULTS FIRST NINE MONTHS
(million euro)
2000
2001
Change
Net Sales
246.0
308.9
25.5
142.2 57.8
179.5 58.1
Gross Profit as of sales
26.3
Selling Expenses as of sales
67.8 27.5
89.4 28.9
31.9
20.7 6.7
RD Expenses as of sales
26.7 10.9
(22.5)
EBITDA as of sales
47.1 19.1
70.0 22.7
48.6
EBIT as of sales
30.2 12.3
45.0 14.6
48.9
Net Income as of sales
16.9 6.9
23.6 7.6
39.7
2
4
FIRST NINE MONTHS COMPOSITION OF SALES
(million euro)
2001
2000
Change
181.9 73.9
247.3 80.1
PHARMACEUTICALS
35.9
PHARMACEUTICAL CHEMICALS
64.1 26.1
61.6 19.9
(4.0)
246.0 100.0
308.9 100.0
TOTAL
25.5
112.4 45.7
122.6 39.7
ITALY
9.0
186.3 60.3
133.6 54.3
INTERNATIONAL
39.4
3
5
SOURCES OF GROWTH
Price / Exchange
( change, nine months 2001 over nine months 2000)
Volume
Total
Pharmaceuticals
10.9
10.8
0.1
Pharmaceutical Chemicals
- 4.0
-1.2
-2.8
7.0
Organic Growth, total
7.7
-0.7
Acquisitions
18.5
18.5
Total Growth
25.5
26.2
-0.7
4
6
FIRST NINE MONTHS COMPOSITION OF PHARMACEUTICAL
SALES
(million euro)
2001
2000
Change
114.9 46.5
106.0 58.3
Pharmaceuticals Italy
8.5
64.7 26.2
32.2 17.7
Pharmaceuticals France
101.2
12.8 7.0
15.0 6.1
Pharmaceuticals Spain
17.5
46.9 19.0
31.0 17.0
International licensees
51.2
5.7 2.2
-
Sophartex
-
75.9 41.7
132.4 53.5
International pharmaceuticals
74.3
181.9 100.0
247.3 100.0
35.9
TOTAL PHARMACEUTICALS
5
7
MAIN PRODUCTS
Breakdown of first nine months 2001
pharmaceutical sales
Zanidip 17 (lercanidipine)
Tora-Dol 8
Other Products 26
Elopram 7
Main Products
Hexa line 4 (biclotimol)
Exomuc 4
Isocef 4
Ulcotenal 4
Diezime 3
Neo Codion 3
OTC 5
Acequin/quide 3
Urispas 3 (flavoxate)
Lomexin 2 (fenticonazole)
Amodex 2
Other revenue 5
6
8
FIRST NINE MONTHS EBITDA BY BUSINESS AREA
(million euro)
Change
2001
2000
Pharmaceuticals as of sales
32.2 17.7
56.3 22.8
74.8
Pharmaceutical Chemicals as of sales
14.9 21.4
13.7 20.2
- 8.1
Total as of sales
47.1 19.1
70.0 22.7
48.6
Operating depreciation
19.2
12.2
14.6
Goodwill amortization
10.4
4.7
123.7
EBIT as of sales
30.2 12.3
45.0 14.6
48.9
Including inter-company sales
7
9
CAPITAL EMPLOYED
2000 31 DEC
2001 30 SEP
(million euro)
Net Working Capital for Operations
94.1
82.8
194.4
212.9
Net Non-current Assets
Reserves for Long - term Liabilities
(22.2)
(29.4)
266.3
266.3
CAPITAL EMPLOYED
129.2
67.5
Net Debt
137.1
Shareholders Equity
198.8
FINANCING OF CAPITAL EMPLOYED
266.3
266.3
0.94

• 0.34

NET DEBT / EQUITY RATIO
8
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ZANIDIP (LERCANIDIPINE)

• Latest generation calcium-channel blocker
• Natural once a day
• Efficacy as best in class, superior tolerability
• Hypertension market gt 30 billion, CCBs about
  10 billion
• Leader is Norvasc (amlodipine) with over one
  third market share

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ROLL OUT HISTORY
1998
1999
2000
2001
AUSTRIA GREECE ISRAEL ITALY LUXEMBOURG NETHERLANDS
SPAIN UK
BELGIUM BRAZIL LEBANON
CHILE CYPRUS DENMARK FINLAND GERMANY KOREA KUWAI
T NORWAY PAKISTAN PHILIPPINES SWEDEN
ARGENTINA AUSTRALIA ECUADOR FRANCE HONG
KONG HUNGARY LITHUANIA RUMANIA VENEZUELA
Dec. 1997
10
12
LERCANIDIPINE SALES - FIRST NINE MONTHS
(million euro)
41.8
30.1
23.3
19.9
18.5
10.2
Total sales
Direct sales
Sales to licensees
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LERCANIDIPINE IN ITALY - Market share as a of
all CCBs
12
14
LERCANIDIPINE AS A OF ALL CALCIUM CHANNEL
BLOCKERS
IMS data - 3Q 2001 - bubble size represents
market value of CCBs
13
15
LERCANIDIPINE - IMS DATA FIVE MAIN EUROPEAN
MARKETS
share of CCBs
million per quarter
14
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ROLL OUT PLAN
Status Today
LAUNCHED 31 countries, representing approx. 30
of world market (of which 15
in last 12 months)APPROVED 9
additional countriesPLANNEDLAUNCHES IN 2002
Algeria, China, Estonia, Mexico, Paraguay,
Portugal, Singapore,
Taiwan, Turkey, UruguayFILED FORAPPROVAL 40
additional countriesLICENSED gt25 additional
countries
15
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ROLL OUT PLAN
Key countries where regulatory development is
ongoing
CHINA (approved, launch early 2002)
USA (filed 4Q 2001)CANADA (filing
expected 4Q 2001)JAPAN (local phase III
studies)
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ZANIDIP (LERCANIDIPINE)U.S. POTENTIAL

• Hypertension affects over 50 million people in
  the U.S.. The market exceeds 13 billion of
  which CCBs account for over 4 billion
• Lercanidipine is licensed to Forest Labs for the
  U.S. market
• NDA filed October 1st 2001
• Early analysts estimates of peak sales in the
  U.S. range from 100 million to over 400
  million

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PRODUCT PIPELINE
FENTICONAZOLE (antifungal) France
LERCANIDIPINE / ACE-I COMBINATION (hypertension)
5 HT1A ANTAGONIST (overactive bladder/ urinary
incontinence) with Pharmacia
LERCANIDIPINE (hypertension)
LERCANIDIPINE (hypertension) 2nd brand Italy
LERCANIDIPINE 20 mg
REC 2615 (female sexual dysfunction)
Japan and others
40 countries incl. USA
9 countries
PRECLINICAL/ EXPLORATORY DEVELOP.
PRE-FILING
APPROVED
MARKETED
PHASE II
FILED
PHASE III
PITAVASTATIN (hypercholesterolemia) Italy / Kowa
PANTOPRAZOLE (antiulcer and other
indications) Italy / Byk Gulden
ESCITALOPRAM (depression) Italy / Lundbeck
NITROGLYCERINE PATCH (angina) France / Mylan
VALGANCICLOVIR (antiviral) Italy / Roche
NITROGLYCERINE PATCH (angina) Italy / Mylan
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NEW PRODUCTS LERCADIP (lercanidipine)

• As of December 2001 a second brand of
  lercanidipine, Lercadip will be sold directly on
  the Italian market
• A new sales force, under the company name Innova
  Pharma, will re-launch Lercadip
• Lercadip was marketed previously by AstraZeneca
  booking sales of around 6 million annually

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NEW PRODUCTS PEPTAZOL (pantoprazole)

• Peptazol (pantoprazole), an anti-ulcer drug
  (PPI) originated by Byk Gulden, for Italy
• Pantoprazole, under the brand name Ulcotenal, is
  Recordatis main product in Spain
• The anti-ulcer drugs market in Italy is worth
  around 470 million with growth rate of around
  25 in the last 12 months
• Peptazol was already marketed in Italy with
  annual sales of around 5 million and will be
  re-launched in 2002

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FILLING THE PIPELINE PITAVASTATIN

• Pitavastatin, a cholesterol lowering drug, was
  licensed from Kowa in semi-exclusivity for Italy
  (currently extended Phase II)
• The statins market in Italy is worth around 330
  million with an average annual growth rate of 33
• Cholesterol lowering drugs are able to reduce the
  risk of major cardiovascular events by one third

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FILLING THE PIPELINEONGOING RD

• Lercanidipine
• - Advantageous clinical profile consolidates
• - Patent life in extension, two new patents
  filed
• - 20mg strength under registration

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FILLING THE PIPELINEONGOING RD

• Lercanidipine-ACEI fixed combination
• - New aggressive targets for blood pressure
• control
• - Combination of drugs needed for most patients
• - Patient compliance
• - Fixed combinations will play a significant
  role
• in the future hypertension market
• - Currently in phase III

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FILLING THE PIPELINEONGOING RD

• Urology
• - Collaboration agreement with Pharmacia
• - Lead optimization in the area of overactive
• bladder is at an advanced stage
• - Formulation activities are underway on a lead
• compound for female sexual dysfunction
• - Satisfactory progress
  
  

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Basis for 2001 - 2004 targets(May 2001, Milan)

• Current business
• Current products/late stage projects
• Current geography
• Zanidip in U.S., Japan not included

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27
2001-2004 TARGETS(May 2001, Milan)
CAGR 2000-2004
(million euro)
2000
2001
2004
542
355.9
426
11.1
Net Sales
206.3 58.0
249 58.5
326 60.1
Gross Profit as of sales
12.1
36.9 10.4
36 8.5
54 10.0
RD as of sales
10.1
70.6 19.8
EBITDA as of sales
89 21.0
120 22.2
14.3
46.6 13.1
57 13.5
88 16.3
EBIT as of sales
17.3
26
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EVOLUTION OF NET SALES EBIT(May 2001, Milan)
(million euro)
16.3
15.2
14.1
13.5
13.1
13.0
12.1
11.0
10.4
EBIT
Net Sales
EBIT prior targets
27
29
OUTLOOK FOR 2001

• Business objectives achieved
• Sales substantially in line
• Operating margins better than target

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30
OUTLOOK FOR 2002

• Meet or exceed financial targets set out in May
  2001
• Significant marketing effort required in 2002 to
• Ensure success of lercanidipine in France
• Re-launch Lercadip and Peptazol in Italy
• Launch Nitrocor in Italy and in Spain
• RD expense increases

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IMPROVED PROFITABILITY
AS PRESENTED MAY 2001
CURRENT OUTLOOK
(million euro)
2001
2002
2002
2001
Net Sales
426
467
gt467
430
EBIT
57
66
gt60
gt66
30
32
OUTLOOK FOR 2002

• Lercanidipine approval in the US is an upside
  which could represent up to 15 of extra EBIT

31