Formosa Laboratories Inc 2016 Q 3 Overview TWSE

Formosa Laboratories, Inc. 2016 Q 3 Overview TWSE 4746

Disclaimer This material has been prepared by Formosa Laboratories Inc. (“Formosalab”). Any opinions expressed in this material are subject to change without notice as a result of using different assumptions. Formosalab is under no obligation to update or keep current the information contained herein. The information contained in this presentation is Formosalab’s confidential information. Any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on it is prohibited and may be unlawful. No representation or warranty, express or implied, is or will be made in or in relation to, and no responsibility or liability is or will be accepted by the Company as to, the accuracy or completeness of this material and any liability therefore is hereby expressly disclaimed. Statements made in this material include forward-looking statements, which include, without limitation, statements about the issues, plans and expectations of Formosalab. Without limiting the foregoing, statements including the words “believes”, “anticipates”, “plans”, “expects” and similar expressions are also forward-looking statements. Forward-looking statements reflect, among other things, management’s plans and objectives for future operations, current views with respect to future events and future economic performances and projections of various financial items. These forwardlooking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those implied by such forward-looking statements. 2

Agenda u. Introduction u. Business Overview u. Business Outlook u. Investment List 3

Introduction

• Established on Dec. 29, 1995 • SHO： 87. 5 M • Employee headcount：Total 660 ppl, R&D 89 ppl (13%) • Area： 45, 508 m 2 • Business scope ：APIs (37 US DMFs, 16 EU DMFs, 10 JMFs) UV Filters Contract API RD & Manufacturing • Inspected by TFDA, US FDA, Japan PMDA, German BGV, EDQM and Mexican COFEPRIS 5 5

Enhanced R&D Capacity 9. 0% 8. 0% 7. 0% 86 83 7. 9% 69 50 8. 0% 8. 5% 100 90 80 70 60 7. 2% 50 6. 0% 40 30 5. 0% 20 10 4. 0% 0 2013 2014 RD headcounts 2015 up to 2016 Q 3 % RD Expenditure to Revenue 6

Business Overview

API: Strong & Steady Growth 76% 2, 500 69% 62% 2, 000 1, 690 NT$: M 1, 000 834 33% 981 1, 779 40% 70% 60% 1, 543 1, 493 1, 500 2, 184 80% 50% 40% 953 818 692 30% 20% 500 10% 0 0% 2012 2013 2014 API UV 2015 up to 2016 Nov API% 8

Optimized API Product Mixture 100% 5% 6% 6% 21% 11% 2% 8% 9% 1% 5% 7% 4% 90% 80% 70% 4% 60% 20% 50% 2% 40% 16% 19% 15% 5% 5% 3% 7% 8% 2% 10% 19% 5% 18% 4% 5% 2% 4% 7% 4% 8% 18% 21% 23% 0% 5% 2012 Antibiotics Respiatory agents Oncology agents 24% 10% Others CNS agents 30% 20% CDMO 35% 38% 46% Vit. D Derivatives 10% 2013 2014 2015 Anti-inflammatory up to Nov. 2016 Cholesterol Phosphate Binders 9

Expansion in the Developed Market 100% 90% 80% 70% 60% 2% 1% 5% 3% 18% 19% 5% 2% 10% 15% 23% 50% 40% 1% 1% 2% 3% 1% 1% 4% 4% 7% 1% 8% 4% 4% 7% 6% 11% 12% 17% 18% 21% Africa Japan Central-South America Other region in Asia Mid-East Taiwan 30% 40% 20% 10% China 48% 47% 29% EU US By Sales Region 0% 2013 2014 2015 up to Nov. 2016 10

API GM 2011~now Cholesterol and Phosphate Binders 80% Vit. D Derivatives API Average 85% 74% 73% 72% 64% 65% 67% 49% 50% 46% 39% 42% 54% 48% 30% 35% 27% 34% 20% 10% 5% 2011 8% 2012 2013 2014 2015 up to 2016 Q 3 11

Improved Profitability 45. 0 39. 8 40. 0 35. 0 20. 0 15. 0 2013 2014 2015 2016 Q 1~3 27. 5 22. 3 21. 3 15. 5 13. 7 11. 0 9. 3 10. 0 5. 0 (3. 0) Gross Margin 14. 4 12. 6 1. 5 0. 0 (5. 0) 2012 31. 0 30. 0 25. 0 2011 Operating Margin 10. 9 10. 5 8. 8 0. 2 (2. 8) Net Margin 12

2016 Q 3 Consolidated Income Statement 13

2012~2016 Q 3 Consolidated Income Statement NTD$ M (except for EPS) Revenue Gross Profit Gross Margin Operating Expenses Operating Income Operating Margin Non-operating Income Net Profit after Tax Earning before Tax Net Margin after Tax EPS 2012 2013 2014 2015 2016 Q 1~3 2, 524 391 15% 354 37 1% -16 5 1% 0% 0. 08 2, 474 339 14% 414 -75 -3% 17 -69 -2% -3% -0. 97 2, 496 687 28% 413 274 11% 36 262 12% 10% 3. 11 2, 597 806 31% 480 326 12% 18 282 13% 11% 3. 32 2, 409 958 40% 445 513 21% -70 346 19% 14% 3. 95 audited 14

2012~2016 Q 3 Consolidated Balance Sheet NT$ M 2012/12/31 Cash & cash equivalents 255 Receivable-net 672 Inventories 697 Long-term Investment 67 Total fixed asset 1, 835 Other asset 507 2013/12/31 2014/12/31 2015/12/31 2016/9/30 6% 17% 2% 46% 12% 413 779 679 270 2, 307 543 8% 16% 14% 5% 46% 11% 405 684 957 554 2, 562 528 7% 12% 17% 10% 45% 9% 419 909 1, 113 786 2, 640 589 7% 14% 17% 12% 41% 8% 498 766 946 1, 087 2, 848 560 8% 12% 14% 16% 42% 6% Total Asset 4, 033 100% 4, 991 100% 5, 690 100% 6, 456 100% 6, 705 100% Total current liabilities Long-term liabilities Other liabilities 1, 409 465 500 35% 12% 1, 772 520 183 36% 11% 3% 1, 469 673 513 26% 12% 9% 1, 893 585 516 29% 9% 8% 2, 037 727 25 31% 11% 0% 2, 374 59% 2, 475 50% 2, 655 47% 2, 994 46% 2, 789 42% 1, 659 41% 2, 516 50% 3, 035 53% 3, 462 54% 3, 916 58% Total Liabilities Total Shareholders’ Equity Book Value per Share audited 24. 74 　 　 　 29. 93 　 　 35. 96 　 　 39. 58 　 　 44. 18 　 15

2012~2016 Q 3 Consolidated Cash Flow Summary NT$ M 2012 2013 2014 2015 2016 Q 1~3 Cash and cash equivalent at beginning of period 73 255 413 405 419 　Cash flow from operating activities 171 32 280 255 803 　Capex -487 -549 -457 -392 -257 　Cash flow from investing activities -348 -124 -71 -81 -141 　Cash flow from financing activities 846 799 240 232 -326 Cash and cash equivalent at end of period 255 413 405 419 498 audited 　 　 　 16

Jan~Nov 2016 Performance 　NT$ M Category UV filters up to Nov. 2015 up to Nov. 2016 Sales % % Yo. Y 691. 9 31% 692. 1 24% 0% API 1, 560. 1 69% 2183. 5 76% 40% Sum 2, 252. 0 100% 2875. 6 100% 28% 1. Cholesterol and Phosphate Binders NT$ 9. 95 M YOY 69% 2. Vit. D Derivatives NT$ 4. 20 M YOY 24% 3. Anti-Inflammatory NT$ 1. 78 M YOY 5% 4. CNS NT$ 1. 51 M YOY 65% 5. Respiratory NT$ 0. 96 M YOY -19% 6. Oncology NT$ 0. 89 M YOY 164% 17

Investment List

Investment Company Business Scope Eir. Genix Biosimilar、CDMO Formosa Pharmaceuticals Senhwa Biosciences New Drug Development Glory Biotech Fermentation Epione Pharmaceuticals New Drug Development Anti-tumor treatment Development Tai. Rx TOT Biopharm Total Year of Investment 2012 Investment (NT$ M) 209 2010 158 100. 0% 2011 68 6. 4% 2012 18 2. 8% 2011 30 9. 9% 2015 30 100. 0% 2015 84 3. 0% % 16. 3% 597 ＊ updated by： 2016/09/30 19

Q&A