2 Zydus Cadila- One of India’s leading integrated pharma companies Ranked 5th in the domestic formulation market. (as per ORG IMS MAT Dec-05)Formulations exports grew by ~35% in last three years and by 102% in current year (upto Dec-05).Rapid growth in the developed generic markets (US, France and Brazil), which will further accelerate formulations exports growth.Leveraging strengths through contract manufacturing.Consolidated revenues of US$ 300mn, PAT US$28mn and market capitalization of U$0.7b.
3 Core business areas Domestic dosage forms High end APIs + intermediatesEmergingmarketsDeveloped generic marketsContract manufacturingResearch & DevelopmentRevenue break up by segmentRevenue break up by regionBased on Apr-Dec 05
5 Overall strategy Continued focus on domestic market Grow rapidly in key global generics markets- US, Europe & Latin AmericaLeverage strengths through contract manufacturing opportunitiesFocus on innovation- R&D
6 Domestic formulations market Top 10 Indian CompaniesAs evident from the list, the Indian formulations market is very fragmented, with top company accounting for less than 6% share.However, considering the current scenario, the possibility of consolidation within top rung companies seems less, since right now they are more interested in having their base in US and EU markets through acquisitions.However, we might see some consolidation happening within mid sized and small companies - either some of them get merged or get acquired by any MNCs, who are keen on setting up their base in India, or to strengthen it if they already have, to get maximum out of “India Cost Advantage”Source : ORG IMS MAT Dec-05
7 Domestic market strategy Maintain overall position and market share through:Focus on faster growing chronic/ lifestyle segments.Continued new product introductions.In-licensing arrangements- Schering AG, Boehringer Ingelheim, Bio Sidus, Viatris etc.Marketing excellence.Portfolio shift to life style and chronic segments
8 Achievements in domestic market Zydus Cadila ranks 5th with Rs ~8bn sales in domestic formulations market.Large sales force and 7 specialty divisions servicing ~ 0.15 m doctors or about 60% doctors in the country.No. 1 in high growth segments like Cardiovascular, Gastrointestinal and Female Healthcare; No. 2 in Respiratory.12 Zydus brands feature amongst the top 300 brands.Top 3 brands have > 25% Market Share, and out of the top 20 brands, 17 brands have > 10% Market Share.Featured in top launches every year - Penegra, Pantodac, Mifegest, and now Nucoxia, adjudged best launch of (as per ORG IMS).Recently restructured marketing divisions to increase participated market size and enhance presence in specialty and high growth segments.
9 International business- two fold focus Developed generics marketsUS- the largest generic market in the worldZydus Pharmaceuticals (USA) - for formulationsZydus Healthcare (USA) - for APIsEurope- Zydus France SASSpain, Italy ( planning to enter)Emerging marketsCIS - Russia , UkraineAsia Pacific- Sri Lanka, Vietnam, MyanmarAfrica, Middle EastBrazil, South America60200110International sales projectionFormulations-emergingmarketsFormulations- developedmarketsAPIs/intermediates- exportsUS$ 72 mn2010E US$ 370 mn
10 Key factors affecting success in US and our initiatives so far US - the key marketKey factors affecting success in USand our initiatives so farProduct selection~60 products prioritizedProducts includeexisting generics,would-be generics including block bustersNDDS basedCost excellence through backward integrationSignificant proportion of own APIsAPI and FDF facilities in India with US cGMP quality controlTransactional excellenceStrong team- experienced in US generics marketCustomised solutionsFocus on high service levelsUnique distributionTie up with Mallinkrodt for distribution in USSell under joint labelShare revenues and profitsSelect customers- service directly
11 Current status of filings US - robust filings30 ANDAs represent ~ US$ 20b in current market size.ANDAs filed- half for matured products. Include 6 blockbusters and 2 NDDS.Half the products envisage own API.Product Approvals by USFDAAtenolol (L)ClindamycinMetformin (3 ANDAs) (1-L)Divalproex sodium DRRibavirin Tabs. & Caps. (2 ANDAs) (L)Promethazine Tabs. (L)Gatifloxacin Tabs.Sertraline HCL Tabs.Current status of filingsFiled 30 ANDAs and 35 DMFs so far.Received 11 product approvals, of which 5 have been launched.Plan to file 6-8 more ANDAs by the end of FY ‘06, taking total to ANDAs for FY ‘06.(L) = Launched
12 US - marketing planMarketing and distribution through Mallinckrodt, which is 7th largest generic player in US.Also doing direct marketing through own US subsidiary.Launched 5 products in Response has been excellent with initial market share > 10% in all products.Plan to launch another products in 2006.Aggregate current market size of branded products of these ~ 20 products is ~ US$ 15b.Expect to multiply sales in 2006 even as pricing pressure continues
13 Major patent expiries in France Generics to drive our French business France- first step in EuropeMajor patent expiries in France~US $ 2bn generics market, grew by 29% in 2004 (Source IMS)~40 major drugs going off patent in France during Aggregate current size ~3bn EuroExpected to drive ~ 20% per annum growth in the generics marketGenerics to drive our French businessFrench business segmentsBranded generics businessLaunched pure genericsExport businessBusiness thru a large buying group with whom agreement is likely to be signed soon.
14 Key initiatives for France Launch of genericsLaunched 76 generic presentations so far.Plan to boost the basket to ~ 85 presentations by end 2006Leveraging India’s low costNew product filings- first approval received in 05-06, more in pipelineSite variation- current 3 filings, 2 approvalsRelationship withpharmacistsBuilding special relationship with pharmacistsSupporting a health awareness program for the Zydus club of pharmacists
15 International business- new markets Spain/ ItalyLow generics penetration, high growthLooking for suitable entry opportunitySouth AfricaBranded generics- commenced operationsMarketing and distribution partner finalizedReceived 5 product approvals so farPlan to launch 4-5 products in , 8 inBrazilGenerics market size of ~US$0.5bReceived 13 generic product approvals, of which 10 products have been launched so far.Plan to increase basket to 11 products inPlan to file for and launch products every year
16 Contract manufacturing - exciting prospects World class state of the art manufacturing facilities -Finished dosage formulations plant at Moraiya with approvals from USFDA, AFSSAPS, ANVISA, MHRA, MCC (capacities in all forms except tablet dept. is available.)Two API plants (300 KL) with approval from USFDADedicated dossier filing and IPR team, enabling rapidity in site transfer projects and competency in development projectsZydus’ experience with global partners -Cost efficient and high quality products and servicesWorking with several US and European multinationalsOperational transparency with these partnersDedicated project management teams
17 Contract manufacturing - achievements so far Altana JV - benchmark in contract manufacturingState of the art manufacturing facility set up as an EOU near Mumbai.Supplying 2 key starting materials of Pantoprazole to its worldwide patent holder, Altana AG, Germany.60% of global requirements are met from this plant.Recently increased capacity by 20% from 48 tons to 60 tons.Mayne Pharma (Australia) - JV for oncology injectibles (Generics)Setting up an integrated cytotoxic facility located in an SEZ near Ahmedabad.Construction of the plant in full swing now.Commercial production expected in FY08.Full capacity utilisation in FY09.11 other contracts with big innovator and generic MNCs signed so far with peak revenue potential of US$ 23.6 Mio.Few more contracts in Pipeline.
18 Research - investing for the future R& D pipelinePhase I clinical trials of ZYH1, our first IND, completed successfully.Phase II trials to start inSecond IND (ZYI1) filed in Q , which will go for clinical trials soon.Expect to file one more IND in next financial year.2 more molecules in pre-clinical stage.State of art R&D centerRich talent pool -technical strength >230Developed infrastructure for pre-clinical research and developmentR&D expense- projected at 6-7% of salesR & D % to SalesNCEPre ClinicalPhase 1Phase 2Phase 3ZYH1DyslipidemiaZYI1InflammationPhase I Clinical trial to start soonZYH2ZY01DiabetesObesity
19 Recent DevelopmentsSet up a JV with M/s Bharat Serum and Vaccines Ltd., one of the top 10 biotech companies in India, to develop, manufacture and market a non-infringing and proprietary Novel Drug Delivery System (NDDS) of an approved anti-cancer product for global markets.Got first approval from French regulatory authority, AFSSAPS for new product Sertraline Caps. Supply to France from our Moraiya plant has also commenced with Paracetamol.
20 Summary of Growth drivers Long-term >5 yearsMedium-term 2-5 yearsShort-term < 2 yearsCapitalise on existing strengths to drive growth in domestic marketRegulated generics markets – APIs and formulations in Europe and USAExpand business in regulated generic markets- organically /inorganicallyIn-licensing and out-licensingContract manufacturing, in-sourcing and leveraging on alliancesInnovation- research driven (NCE and NDDS) global pharma company
21 Leveraging the India advantage US - regulatory filings + formulation manufacturing base in India + high level backward integrationFrance- Shift manufacture to India gradually through site variation/new filingsContract manufacturing-lower cost manufacturingR&D- phase I /IIa clinical trials in IndiaBio-equivalence studies- potential to carry out in India
23 Our visionOne of India’s leading healthcare players, we aim to be a global research driven company by We shall achieve sales of $400mn by 2006 and We shall be a top ten global generics company with a strong R&D pipeline and sales in excess of $ 1b by 2010
24 Thank You. www.zyduscadila.com No part of this presentation may be reproduced, quoted or circulated without prior written approval from Cadila Healthcare Ltd..This presentation may include certain “forward looking statements” , based on current expectations, within the meaning of applicable laws and regulations. Actual results may differ and the company does not guarantee realization of these statements.The Company also disclaims any obligation to revise any forward-looking statements . The viewers may use their own judgement and are advised to make their own calculations before deciding on any matter based on the information given herein