2Zydus Cadila- One of India’s leading integrated pharma companies Ranked 5th in the domestic formulations market. (as per ORG IMS MAT Feb-07).Formulations exports grew by ~69% in last three years and by 91% in FY 06-07, on the back of rapid growth in developed / semi regulated generics markets of US, France and Brazil.Focusing on Research & Development – spending 6-7% of the revenues on R&D every year.FY % Gr FY % GrConsol. Revenues $ 410 mn % $ 329 mn 19% Consol. PAT $ 52 mn % $ 34 mn 46%Market Capitalisation of ~ $ 970 mn.
3Revenue break-up by segment Revenue break-up by region Core Business Areas and theirRevenue Break-upRevenue break-up by segmentRevenue break-up by regionBreak-up of Revenue (FY )
4State of the art facilities and infrastructure Formulations – four manufacturing plantsMoraiya (Gujarat)Largest integrated facility in Asia; facilities for producing almost all types of dosage formsApproved by US FDA, MHRA, ANVISA, AFSSAPS, BFAD & MCCBaddi (Himachal Pradesh) – for catering to domestic marketGoa – for catering to both domestic and non regulated marketsOne more facility at Sikkim for domestic market on the verge of completionAmongst few in India to make lyophilised products, vaccines, aerosols, hormones and cytotoxic products,Only producer of transderamal patches and suppositories in IndiaAPIs and Fine Chemicals – four plantsAnkleshwar & Dabhasa (Gujarat) – US FDA approved multi purpose plantsPatalganga (Maharashtra) – multi purpose with GMP certificationFully dedicated fine chemicals facility at Ahmedabad (Gujarat)Contract ManufacturingMumbai (Zydus Altana JV) – dedicated facility for pantoprazole intermediatesGoa – dedicated facility for manufacturing Agiolax for Madaus AGTwo more facilities under construction near Ahmedabad (Gujarat) –Cytotoxic production facility for Zydus Mayne JVCytotoxic facility for NDDS product for Zydus BSV JV
5Overall 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
6Domestic market strategy Maintain overall position and market share through:Focus on faster growing chronic/ lifestyle segmentsContinued new product introductionsIn-licensing arrangements- Schering AG, Boehringer Ingelheim, Meda Pharma etc.Marketing excellencePortfolio shift to life style and chronic segments
7Achievements in domestic market Zydus Rank *Therapeutic AreaZydus Cadila ranks 5th with Rs ~9.6bn sales. (Source : ORG IMS MAT Feb-07)17 Zydus brands feature amongst the top 300 brands. (as per ORG IMS MAT Feb-07)Recently launched ‘Novolizer’, a third-generation refillable, breath actuated multiple dose dry powder inhaler device for Asthma and COPD, which is 1st of its kind. The technology for the device has been provided by Meda Pharma of Sweden.In all, launched 39 new products in FY 06-07, of which 8 were 1st in India.Run-rate of new products’ launch to continue for next 2-3 years.With recent acquisition of Liva Healthcare, we entered Rs. 15 bn dermatology market.Cardiovascular1Gastrointestinal1Female Healthcare1Respiratory2* Segment ranking and Market Share refer to participated market. Source:ORG-IMS MAT Feb 07
9International business- two fold focus Developed generics marketsUS- the largest generic market in the worldZydus Pharmaceuticals USA Inc.Europe- Zydus France SASPlanning to enter Spain & ItalyJapan- Zydus Pharmaceuticals Inc. (Japan)Recently acquired Nippon Universal Pharmaceuticals Ltd.Emerging marketsCIS - Russia , UkraineAsia Pacific- Sri Lanka, Vietnam, MyanmarAfrica, Middle EastBrazil, South AmericaInternational sales projectionFormulations-emergingmarketsFormulations- developedmarketsAPIs/intermediates- exportsUS$ 134 mn2010E US$ 370 mn
10US – marketing plan and achievements so far Robust regulatory pipeline Marketing and distribution through Mallinckrodt, which is 7th largest generic player in US.Also doing direct marketing to select customers through own US subsidiary.Launched 9 products so far (incl. Day 1 launches of Meloxicam & Simvastatin). Plan to launch products every year.Response has been excellent with initial market share > 10% in 8 out of 9 products.With sales > $ 31 Mio. (FY 06-07), Zydus is now rated a top tier generics company among peers in US.ANDAs filed - half for matured products. Include 6 blockbusters and 2 NDDS.Half the products envisage own API.Plan to file ANDAs every year for next 2-3 years
11Generics to drive our French business France – key initiatives so farComplete focus on Pure GenericsDirect business with pharmaciesAttained ~1.92% share in the participated generics market, within 3 years of start of generics biz. (IMS MAT Dec-06)Launch of genericsLaunched over 90 generic presentations so far.Plan to boost the basket with over100 generic presentations by end 2007Relationship withpharmacistsBuilding special relationship with pharmacistsSupporting a health awareness program for the Zydus club of pharmacistsLeveraging India’s lower costGenerics to drive our French business21.811.65.1
12Emerging Global Markets Continuous Growth MomentumPresence in over 26 semi / non regulated emerging markets.Amongst the top three Indian pharma companies in Sri Lanka, Myanmar, Philippines, Uganda and Sudan.Focusing and developing base in rapidly growing markets of Brazil, Russia and South Africa.Exports to these markets grew by ~33% in last three years and crossed Rs. 1 bn mark in FYSouth AfricaBranded generics- commenced operationsMarketing and distribution partner finalizedFiled 34 submissions, received 10 product approvals so farLaunched 8 products so far, plan to launch 6-8 products every yearBrazilPharma market size of ~US$7 bn., growing at ~18% (Source : ESPICOM)Filed 19 pure & branded generics product dossiersReceived 11 generic product approvals, and all have been launched.Plan to file for and launch 8-10 products every year
13Contract manufacturing - exciting prospects Zydus is uniquely positioned on Contract Mfg. Front :World class state of the art manufacturing facilities.Dedicated dossier filing and IPR team, enabling rapidity in site transfer projects and competency in development projects.Zydus’ experience with global partners -Cost efficient and high quality products and servicesWorking with several US and European multinationalsOperational transparency with these partnersDedicated project management teams
14Contract manufacturing - achievements so far Altana JV - benchmark in contract manufacturing.State of the art manufacturing facility set up as an EOU near Mumbai.Supplying 2 key starting materials of Pantoprazole to its worldwide patent holder, Altana AG, Germany.60% of global requirements are met from this plant.Recently increased capacity by 20% from 48 tons to 60 tons.Mayne Pharma (Australia) - JV for oncology injectibles (Generics).Setting up cytotoxic facility located in an SEZ near Ahmedabad.Construction of the plant completed.Commercial production expected in FYFull capacity utilisation in FY23 other contracts with big innovator and generic MNCs signed so far with peak revenue potential of US$ 34 Mio.Few more contracts in pipeline.
15Research Focus Zydus Research Centre (ZRC) Scientific Talent Pool ~ 600Zydus Research Centre (ZRC)Located in AhmedabadFocused on NME Research & NDDSNME & DrugDiscovery250Generics /Developmental250Pharmaceutical Technology Centre (PTC)Located in AhmedabadFocused on Finished Dosage Form Development & NDDSAPI & Others100Revenue R&D Spends – FY 06-07NME & DrugDiscovery933API Process ResearchLocated in Ankleshwar/AhmedabadFocused on Process Development69%Generics /Developmental28213021%API & Others10%Rs. 1,345 Mio. (~ $ 30 Mio.) (~7% of revenues)
16Zydus Research Center - investing for the future NME Research, Biologicals (Biogenerics) & NDDS.Therapeutic Area: Diabetes, Dyslipidemia, Obesity, Inflammation.Infrastructure for target identification to pre-clinical research / early clinical development.Lead lipid lowering drug candidate ZYH1 in Phase II clinical trials.ZYI1, the Anti-inflammatory & Pain Management compound, completed Phase I trials, while ZYH2, the novel agent for treating diabetes will start Phase I clinical trials soon.Recently filed 4th IND - ZYO1, a novel drug candidate for treating Obesity and related disorders.Multiple candidates under preclinical stage.NME PipelineNMEPre ClinicalIND FilingPhase 1Phase 2Phase 3ZYH1DyslipidemiaZYI1InflammationZYH2DiabetesZY01Obesity
17PTC – New Product Development Team Product Development team of 250 scientistsInfrastructure:Development labsPilot PlantAnalytical SupportStability studiesPharmacokineticsIn-house Regulatory, IPR & Packaging development GroupPTC : Scientific Team115108025155Formulations DevelopmentAnalytical DevelopmentPharmacokinetics & Project Mgmt.Regulatory AffairsIPRPackaging Development
18Other Recent Developments Opened up a new subsidiary in Japan - "Zydus Pharma Inc., Japan" to kick start Japanese operations. The subsidiary will market APIs and formulations in Japanese market, and start product registration process in 2007.Recently acquired Nippon Universal Pharmaceuticals Ltd., which has got countrywide reach to more than 4000 hospital and clinics in Japan, which will give us critical access to a ready manufacturing and marketing base as well as a strong distribution network.Acquired controlling stake in Liva Healthcare Ltd., a mid sized Indian pharma company with a derma focused product portfolio. With this, we entered hitherto unexplored Rs. 15 bn dermacare market, which is 7th largest therapeutic segment in Indian pharma market, and has grown at CAGR of 14% over last three years. (Source : ORG IMS)Set 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.Acquired ~ 62% stake in Carnation Nutra-Analogue Foods Ltd., the manufacturers of “Nutralite”, India’s largest selling margarine, currently enjoying a market share close to 60%, which is free from cholesterol and is healthier substitute for butter. This will complement our “Sugar Free”, which is brand leader in life style segment.
19Financial Highlights Rs. Mio. USD Mio Consolidated Growth FY 06-07 y-y%Domestic Sales (Net)11,80310,73410.0%261237Exports Sales6,0523,71962.7%13482Total Net Sales17,85514,45323.5%395319Total Operating Income18,28814,84523.2%404328Total Income18,55214,88124.7%410329PBIDT3,7852,91329.9%8464PBIDT % to Total Income20.4%19.6%Net Profit2,3381,52453.5%5234NP % to Total Income12.6%10.2%EPS Rs. ##18.6212.130.410.27## EPS of FY is adjusted for bonus shares issued in theratio of 1:1 in Aug-06.As on 31st Mar 07Rs. Mio.US $ Mio.Net Worth8,655199Total Debt4,934113Net Fixed Assets9,783225Net Current Assets4,824111
20Our visionZydus shall be a leading global healthcare provider with a robust product pipeline and sales of over $1 bn by 2010;we shall achieve sales of over $3 bn by 2015 and be a research-based pharmaceutical company by 2020.
21Thank 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