Foreword CEO Vifor Pharma

Dear Shareholders,
Ladies and Gentlemen,

Vifor Pharma sustained strong momentum in the first half year 2016 on its way to
become a leading global specialty pharmaceutical company. In order to optimally exploit this drive, the Galenica Board of Directors decided end of May 2016 to further strengthen the management of Vifor Pharma by appointing a new CEO. Due to this change, the division of Galenica has been postponed to 2017 when the new CEO of Vifor Pharma has been appointed and is settled into their role.
In recent months, we successfully expanded our portfolio of products by concluding further licensing and commercialisation agreements. Vifor Pharma entered into a licensing contract with Pfizer for Retacrit™ for the US dialysis market, currently under review by the US Food and Drug Administration (FDA). Once the product is approved, the arrangement will allow us to exclusively offer a second EPO in the USA in addition to Roche’s Mircera® and to build a leading position in the US EPO market in the medium-term.
In addition, Vifor Pharma licensed rights from ChemoCentryx, Inc., to commercialise CCX168, a Complement 5a Receptor (C5aR) inhibitor ready for phase III development for orphan and rare renal diseases, in Europe, Canada, Mexico, Central and South America and South Korea. CCX168 has the potential to address major unmet medical needs of patients in a number of different orphan indications, including anti-neutrophil cytoplasmic antibody (ANCA)-associated vasculitis (AAV). In the area of rare diseases, current treatment options are often limited and can be associated with serious, even fatal side effects. In June 2016, ChemoCentryx announced positive top line results from the phase II study, with the start of phase III development programme planned by end of the year. Furthermore, CCX168 has been granted orphan drug designation for AAV in the USA and EU and also received European Medicines Agency (EMA) PRIority
MEdicines (PRIME) designation for accelerated assessment.
In May 2016, Vifor Fresenius Medical Care Renal Pharma (VFMCRP), a common company of Galenica and Fresenius Medical Care, entered into a collaboration and licensing agreement with OPKO Health to develop and commercialise modified-release calcifediol capsules (“Calcifediol”; US brand name RAYALDEE®) for the treatment of secondary hyperparathyroidism (SHPT) in patients with chronic kidney disease (CKD) and vitamin D insufficiency. The clinical data for calcifediol show promising safety and efficacy and we strongly believe that calcifediol will become a cornerstone therapy to better address key co-morbidity and improve the well-being of chronic kidney disease patients. In June 2016, the FDA approved the new drug application (NDA) for RAYALDEE® and OPKO Health plans to launch the product in the USA in the second half of the year.
Vifor Pharma is clearly poised for strong growth with Ferinject®, a product that combines excellent patient outcomes with a differentiated profile. Ferinject® is instrumental in the success of our iron business, showing strong momentum particularly in the important US market. In the first half year of 2016, global net sales of Ferinject® (US brand name Injectafer®) generated by Vifor Pharma affiliates and our partners totaled CHF 163.3 million (+45.7%).
The rollout of our new phosphate binder Velphoro® in the USA and major European markets continues to strengthen our position in the broader nephrology market. Offering the advantage of a substantially lower pill burden compared to the current standard treatment of hyperphosphatemia in CKD, Velphoro® saw net sales increase strongly by 53.1% to CHF 21.9 million.
These achievements, and the contribution from other business activities, resulted
in a total net sales increase for Vifor Pharma of 42.4% to CHF 550.6 million. Earnings before interest and taxes (EBIT) increased by 28.0% to CHF 185.2 million.
In Europe’s key markets, VFMCRP has been very effective in commercialising some of the best-known nephrology brands from Fresenius Medical Care. VFMCRP has also submitted a Marketing Authorisation Application (MAA) for Patiromer powder for oral suspension (US brand name Veltassa®) to the European Medicines Agency (EMA) for the treatment of hyperkalaemia (elevated
blood potassium levels).
Our overall business is performing strongly and I am confident that Vifor Pharma will develop dynamically in the future. On top of the robust sales performance, we have made substantial progress in preparing the organisation for its future as a stand-alone business. Let me thank all employees of Vifor Pharma and Vifor Fresenius Medical Care Renal Pharma for their contribution to making the first half year a successful start to 2016.

Bern, 9 August 2016

Gianni Zampieri
Vice-CEO Vifor Pharma


Galenica Ltd.

Untermattweg 8
CH-3027 Bern

+41 58 852 81 11
+41 58 852 81 12

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