Joseph Pantginis, Ph.D., of ROTH Capital upgrades NEPT price target on July 5th, 2012

1. Joseph Pantginis, Ph.D., (646) 358-1907
jpantginis@roth.com
Raluca Pancratov, Ph.D., (646) 358-1914
rpancratov@roth.com
Sales (800) 933-6830, Trading (800) 933-6820
COMPANY NOTE | EQUITY RESEARCH | July 5, 2012
Healthcare: Biotechnology
Neptune Technologies & Bioressources | NEPT - $4.92 - NASDAQ
| Buy
Company Update
Estimates Changed, Target Price Changed
Stock Data NEPT: Raising Estimates on New Orders and
52-Week Low - High $2.02 - $5.14 Anticipated Growth; Target to $10.30
Shares Out. (mil) 49.77
Mkt. Cap.(mil) $244.8 Based on increasing demand for NKO, we are raising our revenue estimates
3-Mo. Avg. Vol. 259,400 for Neptune's core business. Neptune is enjoying a strong IP portfolio position.
12-Mo.Price Target $10.30 We expect a significant "coming out party" for Neptune's subsidiary Acasti with
Cash (mil) $16.5 Phase II data readouts starting later this year for CaPre. We reiterate our Buy
Tot. Debt (mil) $2.8 rating and are raising our price target to $10.30 from $9.
EPS $
Event
Yr Feb —2011— —2012— —2013E— We are raising our estimates for Neptune's core NKO business. The driver for
Curr Prev Curr Prev our changes is the recent announcement that the company has received an
1Q 0.01A (0.03)A (0.03)A (0.00)E (0.01)E additional order for ~$25 million for NKO. This order came primarily from Asia
2Q 0.01A (0.04)A (0.04)A (0.00)E (0.01)E
with some contribution from Neptune’s E.U. and North American distributors.
3Q 0.04A (0.01)A (0.01)A (0.00)E (0.01)E
We believe that financial impact from this order will start to be realized in F2014
4Q (0.04)A 0.03A 0.03A (0.01)E 0.00 E
YEAR (0.01)A (0.04)A (0.09)A (0.02)E (0.03)E
and have increased our projected revenues for NKO (discussed below).
P/E NM NM NM NM NM
Shares may not add to full year due to rounding, increases in share Impact
count and basic vs. diluted calculations We believe that Neptune's recent share price gain is based primarily on the
Revenue ($ millions) core fundamentals getting stronger (NKO projected growth) at the company
and also potentially to a lesser extent in sympathy based on positive news
Yr Feb —2011— —2012— —2013E—
coming out of Amarin - AMRN - Buy (IP news and upcoming PDUFA).
Curr Prev Curr
1Q 4.2A 4.3A 4.3A 6.0E
We believe that our updated revenue estimates are conservative based on
2Q 4.1A 4.4A 4.4A 6.3E projected capacity at the Sherbrooke manufacturing plant which is undergoing
3Q 4.3A 5.1A 5.1A 6.5E a broad expansion. A success for Amarin is helpful for Neptune and the
4Q 4.1A 5.4A 5.1A 7.8E Omega-3 space, especially when Neptune already has 1) a strong IP portfolio
YEAR 16.7A 19.1A 18.9A 26.5E in hand, 2) growing NKO demand and 2) a potentially differentially product in
CaPre (Acasti subsidiary) compared to AMR101 and Lovaza. We anticipate
NEPT One-Year Price and Volume History that CaPre is poised for a solid entrance into the pharmaceutical Omega-3
1.6 6.00 space. Results of an open label study of CaPre are anticipated by year end
1.4
1.2 5.00 2012, while a randomized Canadian Phase II study of CaPre could read out
1.0 4.00 in 1H13. While much focus is on Acasti, Neptune has also laid the regulatory
0.8
0.6 3.00 groundwork for a spin-out of its second major subsidiary, NeuroBioPharm,
0.4 2.00 which is developing krill oil formulations for neurological disorders.
0.2
0.0 1.00
Action
Aug-11
Sep-11
Nov-11
Dec-11
May-12
Feb-12
Mar-12
Oct-11
Jan-12
Jun-12
Apr-12
Jul-12
Vol (m) Price
We reiterate our Buy rating and are raising our price target to $10.30 from
$9. Based on the revenue growth potential for the multiple krill oil initiatives,
we believe Neptune warrants a higher valuation. We see Neptune as a solid
story bolstered by underlying growth of NKO sales and further by what we
anticipate to be the big "coming out party" for Acasti and CaPre in the U.S. on
the pharmaceutical side.
Important Disclosures & Regulation AC Certification(s) are located on page 7 to 8 of this report.
Roth Capital Partners, LLC | 888 San Clemente Drive | Newport Beach CA 92660 | 949 720 5700 | Member FINRA/SIPC

2. NEPTUNE TECHNOLOGIES & BIORESSOURCES Company Note - July 5, 2012
Raising estimates on Neptune’s Core Business (NKO Growth)
We are raising our estimates for Neptune, which also impacts our valuation (discussed below) to the upside. The
driver for our changes is the recent announcement that the company has received an additional order for ~$25 million
for NKO. This order came primarily from Asia with some contribution from Neptune’s E.U. and North American
distributors. We believe that financial impact from this order will start to be realized in F2014. For F2013, we believe
that Neptune’s core operations will run just around break even and cut its loss in half from F2012; ($0.04) to ($0.02)
based on current projected NKO revenue growth (excluding the recent $25 million additional order).
Manufacturing capacity is projected, by management, to be able to support ~$80 million in NKO revenue in 2014.
Taking into account the additional order from Asia (excludes SKFC potential) and the expected growth from current
supplier initiatives we are adjusting our revenue estimates in the following manner:
• 2014 - $34.61 million raised to $39.59 million
• 2015 - $37.31 million raised to $44.34 million
• 2016 - $42.72 million raised to $55.43 million
We believe our estimates could be conservative based on the anticipated additional capacity, and look forward to
Neptune’s ability to hit a strong stride in strengthening its NKO franchise. There are two key areas of specific potential
upside
1. Inclusion of revenues from the SKFC collaboration in China. We are not including revenue estimates from
this broad collaboration currently and look toward further visibility of manufacturing buildout.
2. We are conservative in our current NKO revenue estimates, in our belief, taking into consideration that they
do not approach full capacity estimates for the Sherbrooke plant as well as the overall competitive
landscape for Omega-3 products.
From a valuation perspective, our revenue changes impact our EPS estimates. We still value Neptune’s core
business based on projected 2016 EPS however have raised our estimate from $0.22 to $0.30 ($2.55 per share
contribution raised to $3.80 per share contribution to our valuation). Our new $3.80 per share portion of our valuation
is based on a 20x multiple on projected 2016 EPS of $0.30 discounted at 20%. The remainder of our valuation
contributing to our new $10.30 price target (increased from $9) comes from the Acasti subsidiary and the potential for
CaPre (discussed below).
Acasti
Neptune’s subsidiary Acasti has received feedback following discussions with the FDA for CaPre (pharmaceutical
grade krill oil). The agency recommended the addition of a 4 gm dose in hypertriglyceridemia, and Acasti has
included a treatment arm for the 4 gm dose for the ongoing open label, dose escalation Canadian study of CaPre in
patients with moderate to high triglycerides (TGs). Results of this study are anticipated by year end 2012, while a
randomized Canadian Phase II study of CaPre could read out in early 2013. Management has noted that enrollment
is progressing well for both studies, and we believe PK/PD as well as clinical data from these studies may support the
smooth transition to the planned U.S. clinical program.
Phase II Open Label Study (ongoing)
The primary endpoint of the study is to test the dose-dependent effect of increasing doses of CaPre on fasting
plasma triglycerides in patients with hypertriglyceridemia (TG >2.28 and <10 nmol/L or 200-877 mg/dL). It is an open
label prospective study testing doses of 0.5, 1, 2 and 4 gm per day for 8 weeks and will be compared to current
standards. The first patient enrolled in the study in December 2011 and will enroll ~276 patients, each followed for 8
weeks.
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3. NEPTUNE TECHNOLOGIES & BIORESSOURCES Company Note - July 5, 2012
Phase II Randomized Study (ongoing)
The primary endpoint of this study is to test the dose-dependent effect on fasting triglycerides per day as compared to
placebo in patients with hypertriglyceridemia. It is a blinded prospective, randomized study testing doses of 1 and 2
gm per day compared to placebo (patients with 200-877 mg/dL TGs at baseline). The first patient was enrolled in the
study in October 2011 and will enroll ~429 patients, each followed for 12 weeks.
The main focus for Acasti now is to move the CaPre program quickly into the U.S. To this end, the company has the
following objectives in F2013:
• Product development
o Molecular characterization
o Pilot GMP production plant design and development
• IND-enabling studies
o Complete preclinical studies for U.S. IND filing
• Clinical Trials
o Report data from the randomized Phase II Canadian study
o Report data from the open label Phase II Canadian study
o Select and hire a CRO to manage the planned U.S. Phase III
o Recruit Principal Investigator for planned Phase III
• Regulatory
o GMP validations of process and packaging
o Prepare IND package for U.S.; including drug master file, CMC optimization and Phase II results
• Business Development meetings ongoing
From a corporate standpoint, Acasti is also looking to list on the Nasdaq in the U.S. as well as secure financing for
the planned Phase III study.
NeuroBioPharm
NeuroBioPharm is Neptune’s other major subsidiary, along with Acasti. Recently the company has made significant
progress in navigating the regulatory filing process with SEDAR in Canada regarding the planned spin-out of the
company. In short, a final prospectus has been filed defining the framework of the terms to Neptune investors. ~2
million “units” will be distributed to Neptune shareholders. One “unit” equals 24.9 Neptune shares under the current
framework. The unit will be defined as 1 share of NeuroBioPharm and 2 warrants. One warrant has a strike price of
$0.40 per share, which is attributable to NeuroBioPharm and the second warrant has a strike price of $0.35 per share
and is attributable to Neptune. Neptune will still own approximately 76% of NeuroBioPharm after the anticipated spin-
out.
NeuroBioPharm is developing omega-3 products based on data to date from different groups which have shown
initial promise in neurological disorders. The business model is a bit of hybrid between Neptune and Acasti
(described below) in that the company is looking at both functional food (OTC) formulations of omega-3 as well as
prescription pharmaceutical grade omega-3. The subsidiary is looking to 1) grow short term revenues through the
sales of medical foods and OTC products, 2) successfully develop the pharmaceutical grade product and initiate a
Phase II study, 3) achieve regulatory approval for a Phase III clinical trial towards an NDA for the treatment of
neurodegenerative disorders and 4) within one to two years, apply to list its Class A Shares on the TSX Venture
Exchange.
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4. NEPTUNE TECHNOLOGIES & BIORESSOURCES Company Note - July 5, 2012
VALUATION
We reiterate our Buy rating and are raising our price target to $10.30 from $9.00. Our valuation of Neptune is
based on a sum of the parts analysis:
s Probability weighted clinical net present value (NPV) model of the pharmaceutical, CaPre, initial cardiovascular
opportunity with Neptune’s Acasti subsidiary.
s A discounted earnings valuation on Neptune’s core revenue and earnings on the sale of bulk krill oil (primarily
NKO currently).
Factors that could impede shares of Neptune from reaching our price target include negative data readouts
from ongoing clinical studies, any perceived delays in the CaPre regulatory path as well as Neptune's ability to
continue to fund its operations and monetize its expansion plans for NKO manufacturing.
RISKS
s Capacity expansion. Neptune is currently at or near full capacity in the manufacturing of NKO. The company
is now in the expansion phase for its Sherbrooke Canada facility with the goal of taking the current capacity of
130,000 kg per year to >400,000 kg per year in 2014 and approximately doubled over the next year. In line with
this capacity expansion is the expectation for increased revenue growth. Any potential delays in the timelines
in building out the expansion could have a deleterious effect on the company’s business model.
s Time behind the competition. The medical benefits of omega-3’s, specifically pharmaceutical grade
formulations (Lovaza, AMR101, CaPre) have been shown in multiple clinical trials. Drugs such as Lovaza
have laid important groundwork as the market prepares for additional and differentiated products. To this end,
AMR101 has the potential to significantly impact Lovaza’s market share, in our belief. Neptune/Acasti’s CaPre
is entering a large Phase II study in high triglyceride patients. Therefore the product is several years behind
AMR101 for potential commercialization.
s Market perception and education for differentiated profile of krill oil (NKO/CaPre). While potential CaPre
pharmaceutical sales should be driven by physician prescribing habits for patients with high triglycerides, we
believe patients still need to be educated about the differentiation of krill oil compared to the multitude of
omega-3 products available both off the shelf and through Lovaza and potentially AMR101 prescriptions. While
we do not believe this is a large risk for the company, Neptune/Acasti will need to be cognizant of addressing
the market properly.
s Financing and clinical trial risks. As with all drug development companies the need to continually fund drug
development exists. Should Neptune not be able to secure sufficient funding to grow its underlying business, it
could significantly impact the valuation of the shares. The company does have the potential to offset this risk by
having a revenue stream which is expected to grow from the sale of bulk krill oil to distributors and subsidiaries.
Additionally the pharmaceutical development pathway being pursued by Acasti and NeuroBioPharm are critical
to Neptune's success. Any failed or inconclusive clinical trials could significantly impact Neptune's shares.
COMPANY DESCRIPTION
Neptune Technologies & Bioressources Inc. researches, develops and commercializes proprietary bioactive
ingredients and products with the goal of superior added-value and clinically proven health benefits. The
Company extracts a range of bioactive ingredients such as novel proprietary omega-3 phospholipids from
abundant yet underexploited marine biomass including Krill, a cold deep water zooplankton. Neptune’s
first commercially available product is Neptune Krill Oil (NKO®), which represents marine based omega-3
phospholipids with potential in cardiovascular, cognitive and anti-inflammatory disorders. Neptune is pursuing
market opportunities in the nutraceutical market including dietary supplements and functional foods. The
Company is also pursuing opportunities in the pharmaceutical market through its pharmaceutical subsidiaries,
Acasti and NeuroBioPharm (including medical food, over-the-counter and prescription drug applications).
Page 4 of 8

5. NEPTUNE TECHNOLOGIES & BIORESSOURCES Company Note - July 5, 2012
(Cdn$ in millions except per share data) - February fiscal year
Profit & Loss 2010A 2011A 2012A 2013E 2014E 2015E 2016E
License and milestone 0.0 0.0 0.0 1.0 1.8 4.5 8.2
Contract manufacturing 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Product and royalty 12.7 16.6 19.1 25.5 39.6 44.3 55.4
Other revenues 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Revenues 12.7 16.6 19.1 26.5 41.4 48.8 63.6
CoGS 11.2 7.4 9.1 13.0 19.8 22.2 27.7
Gross Profit 1.5 9.2 10.1 13.5 21.6 26.7 35.9
Gross margin 12% 56% 53% 51% 52% 55% 56%
G&A 0.0 8.1 11.9 12.1 12.4 12.7 13.0
R&D 2.7 2.8 3.9 4.1 4.2 4.4 4.7
Other op ex 1.9 0.0 0.0 0.0 0.0 0.0 0.0
EBIT (3.1) (1.6) (5.7) (2.7) 5.1 9.6 18.2
EBIT margin nm nm nm nm 12% 20% 29%
EBITDA (3.1) (1.6) (5.7) (2.7) 5.1 9.6 18.2
EBITDA margin nm nm nm nm 12% 20% 29%
Non operating expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net Interest Income/Other 2.3 1.8 3.2 2.0 0.4 0.6 1.1
Interest expense 0.7 0.6 0.4 0.4 0.2 0.2 0.2
EBT (1.5) (0.4) (2.9) (1.1) 5.3 9.9 19.1
EBT margin nm nm nm nm 13% 20% 30%
Provision for taxes 0.0 0.0 (1.0) 0.0 0.0 0.0 1.0
Net Income (1.5) (0.4) (1.9) (1.1) 5.3 9.9 18.1
Participation of preffered stock (0.0) (0.0) (0.0) 0.0 0.0 0.0 0.0
Net Income to common (1.5) (0.4) (1.9) (1.1) 5.3 9.9 18.1
net margin nm nm nm nm 13% 20% 29%
NoSH -basic 37.9 40.5 48.2 49.0 50.5 55.0 55.5
NoSH-diluted 37.9 40.5 48.2 49.0 53.5 59.0 60.0
EPS - basic (0.04) (0.01) (0.04) (0.02) 0.10 0.18 0.33
EPS - diluted (0.04) (0.01) (0.04) (0.02) 0.10 0.17 0.30
Source: Company documents and ROTH Capital Partners estimates
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6. NEPTUNE TECHNOLOGIES & BIORESSOURCES Company Note - July 5, 2012
Quarterly P&L May Aug Nov Feb May Aug Nov Feb
February fiscal year (Cdn$) Q1'12A Q2'12A H1'12A Q3'12A 9M'12A Q4'12A FY'12A Q1'13E Q2'13E H1'13E Q3'13E 9M'13E Q4'13E FY'13E
License and milestone 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0.00 0.00 0.50 0.50 0.50 1.0
Contract manufacturing 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.0
Product and royalty 4.28 4.35 8.64 5.12 13.76 5.37 19.1 6.00 6.25 12.25 6.48 18.73 6.81 25.5
Other revenues 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.0
Revenues 4.28 4.35 8.64 5.12 13.76 5.37 19.1 6.00 6.25 12.25 6.98 19.23 7.31 26.5
CoGS 2.06 2.13 4.19 2.39 6.58 2.48 9.1 3.00 3.10 6.10 3.25 9.35 3.65 13.0
Gross Profit 2.22 2.22 4.45 2.73 7.17 2.89 10.1 3.00 3.15 6.15 3.73 9.88 3.66 13.5
Gross margin 52% 51% 51% 53% 52% 54% 53% 50% 50% 50% 53% 51% 50% 51%
G&A 2.46 2.75 5.21 2.88 8.09 3.80 11.9 2.94 2.99 5.93 3.06 8.99 3.14 12.1
R&D 0.74 1.50 2.23 1.71 3.94 -0.03 3.9 0.78 0.90 1.68 1.15 2.83 1.27 4.1
Other op ex -0.01 0.00 -0.01 0.00 -0.01 0.01 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.0
EBITDA (1.0) (2.0) (3.0) (1.9) (4.8) (0.9) (5.7) (0.7) (0.7) (1.5) (0.5) (1.9) (0.8) (2.7)
EBITDA margin nm nm
Non operating expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.0
Net Interest Income/Other 0.14 0.25 0.40 1.36 1.75 1.44 3.2 0.50 0.50 1.00 0.50 1.50 0.50 2.0
Interest expense 0.44 0.00 0.44 0.00 0.44 (0.06) 0.4 0.00 0.00 0.00 0.00 0.00 0.40 0.4
EBT (1.3) (1.8) (3.0) (0.5) (3.5) 0.6 (2.9) (0.2) (0.2) (0.5) 0.0 (0.4) (0.7) (1.1)
EBT margin nm nm
Provision for taxes 0.00 0.00 0.00 0.00 0.00 (1.00) (1.0) 0.00 0.00 0.00 0.00 0.00 0.00 0.0
Participation of preferred stock
Net Income to common (1.3) (1.8) (3.0) (0.5) (3.5) 1.6 (1.9) (0.2) (0.2) (0.5) 0.0 (0.4) (0.7) (1.1)
net margin nm nm
NoSH-basic 48.3 49.0 48.69 49.58 48.99 49.10 48.21 50.0 50.0 50.00 50.00 50.00 50.00 49.00
NoSH-diluted 48.3 49.0 48.69 49.58 48.99 50.00 48.21 52.0 52.0 52.00 52.00 52.00 52.00 49.00
EPS - basic (0.03) (0.04) (0.06) (0.01) (0.07) 0.03 (0.04) (0.00) (0.00) (0.01) 0.00 (0.01) (0.01) (0.02)
EPS - diluted (0.03) (0.04) (0.06) (0.01) (0.07) 0.03 (0.04) (0.00) (0.00) (0.01) 0.00 (0.01) (0.01) (0.02)
Source: Company documents and ROTH Capital Partners estimates Joseph Pantginis, Ph.D. jpantginis@roth.com
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7. NEPTUNE TECHNOLOGIES & BIORESSOURCES Company Note - July 5, 2012
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies
the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about
the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be,
directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures:
ROTH makes a market in shares of Neptune Technologies & Bioressources and as such, buys and sells from customers on
a principal basis.
On September 28, 2010, ROTH changed its rating system in order to replace the Hold rating with Neutral.
On May 26, 2011, ROTH changed its rating system in order to incorporate coverage that is Under Review.
Each box on the Rating and Price Target History chart above represents a date on which an analyst made a change to a
rating or price target, except for the first box, which may only represent the first note written during the past three years.
Distribution Ratings/IB Services shows the number of companies in each rating category from which Roth or an affiliate
received compensation for investment banking services in the past 12 month.
Distribution of IB Services Firmwide
IB Serv./Past 12 Mos.
as of 07/05/12
Rating Count Percent Count Percent
Buy [B] 206 72.28 72 34.95
Neutral [N] 66 23.16 5 7.58
Sell [S] 2 0.70 0 0
Under Review [UR] 10 3.51 5 50.00
Our rating system attempts to incorporate industry, company and/or overall market risk and volatility. Consequently, at any
given point in time, our investment rating on a stock and its implied price movement may not correspond to the stated 12-
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Not Covered [NC]: ROTH does not publish research or have an opinion about this security.
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8. NEPTUNE TECHNOLOGIES & BIORESSOURCES Company Note - July 5, 2012
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