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1 Cadila Healthcare Ltd Investor Presentation October 2006.

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Presentation on theme: "1 Cadila Healthcare Ltd Investor Presentation October 2006."— Presentation transcript:

1 1 Cadila Healthcare Ltd Investor Presentation October 2006

2 2 Zydus Cadila- One of Indias leading integrated pharma companies Ranked 5th in the domestic formulation market. (as per ORG IMS MAT Sep-06). Formulations exports grew by ~35% in last three years and by 114% in last year. 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 (FY 05-06) of US$335 mn, PAT of US$34 mn and market cap. of ~US$ 900 mn.

3 3 Core business areas Research & Development Contract manufacturing Emerging markets High end APIs + intermediates Developed generic markets Domestic dosage forms Revenue break up by segmentRevenue break up by region For FY 05-06 Rs. 15 bn. ($ 335 mn)

4 4 Facilities and infrastructure

5 5 Distinctive capabilities in manufacturing and distribution Moraiya- largest facility in Asia - capable of producing 3 bn tablets/pa (single shift) Amongst the few in India to make Lypholised products Vaccines Aerosols Hormones Cytotoxic products Only producer in India Transdermal patches Suppositories Country wide distribution Large sales force and 7 specialty divisions Servicing ~0.15m doctors or about 60% doctors in the country Capability for cold chain products Distributing high-end in- licensed products ManufacturingDistribution

6 6 Overall strategy Continued focus on domestic market Grow rapidly in key global generics markets- US, Europe & Latin America Leverage strengths through contract manufacturing opportunities Focus on innovation- R&D

7 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, Meda Pharma etc. –Marketing excellence 2000-01 2005-06 Portfolio shift to life style and chronic segments

8 8 Achievements in domestic market Zydus Cadila ranks 5th with Rs ~8bn sales. (Source : ORG IMS MAT Sep-06) 14 Zydus brands feature amongst the top 300 brands. (as per ORG IMS MAT Sep-06) Top 3 brands have > 25% MS, and out of the top 20 brands, 17 brands have > 10% MS. (Source : ORG IMS MAT Sep-06) Launched 34 new products in FY 05-06. New products introduced in last 3 years contribute ~10% of domestic formulations sales. Featured in top launches every year - Penegra, Pantodac, Mifegest, and now Nucoxia, adjudged best launch of 2004-05. Plan to launch over 35 products in FY 06-07 also. Recently launched Novolizer, a third- generation refillable, breath actuated multiple dose dry powder inhaler device for Asthma and COPD. The technology for the device has been provided by Meda Pharma of Sweden. Launched Project Phoenix for - Strengthening pillar brands Rejuvenating mature brands Enhancing product management skills Improving business health Recently restructured marketing divisions to increase participated market share and enhance presence in specialty and high growth segments.

9 9 Top rankings in key therapeutic areas Cardiovascular Gastrointestinal Female Healthcare Respiratory 1 1 1 1 1 1 2 2 * Segment ranking and Market Share refer to participated market Source:ORG-IMS Jun 06 (MAT) Zydus Rank * Zydus MS * 10.7% Segment MS * Segment growth * 9.1% 5.8% 4.4% 14.1% 18.9% 15.7% 11.7% 7.0% 6.0% 8.3% 7.7% 27,007 Participated Segment Value (Rs. Mio) 22,939 14,723 11,151

10 10 International business- two fold focus Developed generics markets US- the largest generic market in the world Zydus Pharmaceuticals Inc. - for formulations Zydus Healthcare LLC - for APIs Europe- Zydus France SAS Spain, Italy (planning to enter) Emerging markets CIS - Russia, Ukraine Asia Pacific- Sri Lanka, Vietnam, Myanmar Africa, Middle East Brazil, South America Formulations-emerging markets Formulations- developed markets APIs/intermediates- exports 2005-06 US$ 83 mn 2010E US$ 370 mn International sales projection

11 11 US - the key market Product selection ~60 products prioritized Products include existing generics, would-be generics including block busters NDDS based Transactional excellence Strong team- experienced in US generics market Customised solutions Focus on high service levels Unique distribution Tie up with Mallinkrodt for distribution in US Sell under joint label Share revenues and profits Select customers- service directly Cost excellence through backward integration Significant proportion of own APIs API and FDF facilities in India with US cGMP quality control

12 12 US - robust filings Filed 41 ANDAs and 45 DMFs so far. 41 ANDAs represent ~ US$ 21b in current market size. Received 17 product approvals, of which 7 have been launched. ANDAs filed- half for matured products. Include 6 blockbusters and 2 NDDS. Half the products envisage own API. Plan to file 10-12 more ANDAs by the end of FY 06-07, taking cumulative total to over 50 ANDAs.

13 13 US - marketing plan Marketing and distribution through Mallinckrodt, which is 7th largest generic player in US. Also doing direct marketing through own US subsidiary. Launched 7 products so far. Response has been excellent with initial market share > 10% in all products. Sales in first year (FY 05-06) ~ US$ 11 mn., operations were profitable in the very first year. Plan to launch another 6-8 products in FY 06-07. Aggregate current market size of branded products of these ~ 15 products is ~ US$ 11b. Expect to multiply sales in FY 06-07 even as pricing pressure continues

14 14 France- first step in Europe Generics to drive our French business Major patent expiries in France ~US $ 2bn generics market, grew by 29% in 2004 (Source IMS) ~40 major drugs going off patent in France during 2004-7.Aggregate current size ~3bn Euro Expected to drive ~ 20% per annum growth in the generics market Pure generics Business thru Evolupharm, a large buying group representing ~ 2250 pharmacies. Exports business Branded business, which has been sold off recently, to have total focus on generics French business segments

15 15 Key initiatives for France Launch of generics Launched over 85 generic presentations so far. Plan to boost the basket to ~ 90 presentations by end 2006 Leveraging Indias low cost New product filings- first approval received in 05- 06, more in pipeline Site variation- current 12 filings, 4 approvals Relationship with pharmacists Building special relationship with pharmacists Supporting a health awareness program for the Zydus club of pharmacists

16 16 International business- new markets Brazil Pharma market size of ~US$7 bn., growing at ~18% (Source : ESPICOM) Filed 26 pure & branded generics dossiers Received 13 generic product approvals, and all have been launched. Plan to file for and launch 8-10 products every year Spain/ Italy Low generics penetration, high growth Looking for suitable entry opportunity South Africa Branded generics- commenced operations Marketing and distribution partner finalized Filed 33 submissions, received 10 product approvals so far Launched 3 products in 05-06, plan to launch 6-8 products in 06-07

17 17 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 services Working with several US and European multinationals Operational transparency with these partners Dedicated project management teams Contract manufacturing - exciting prospects

18 18 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 an integrated cytotoxic facility located in an SEZ near Ahmedabad. Construction of the plant in full swing now. Commercial production expected in FY 07-08. Full capacity utilisation in FY 08-09. 17 other contracts with big innovator and generic MNCs signed so far with peak revenue potential of US$ 25.5 Mio. Few more contracts in pipeline. Contract manufacturing - achievements so far

19 19 Research Focus Zydus Research Centre (ZRC) Located in Ahmedabad Focused on NME Research Pharmaceutical Technology Centre (PTC) Located in Ahmedabad Focused on Finished Dosage Form Development API Process Research Located in Ankleshwar/Ahmedabad Focused on Process research Revenue R&D Spends - FY 06 Scientific Talent Pool ~ 600 250 100 250 NME & Drug Discovery Generics / Developmental API & Others 237 80 479 NME & Drug Discovery Generics / Developmental API & Others 60% 10% 30% Rs. 797 Mio. (5.5% of net sales)

20 20 Zydus Research Center - investing for the future NME Research & Biologicals (Biogenerics). 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. Multiple candidates under preclinical stage. NME IND Filing Phase 1 Phase 2 Phase 3 ZYH1 Dyslipidemia ZYH2 ZY01 Diabetes Obesity ZYI1 Inflammation Pre Clinical NME Pipeline

21 21 PTC – New Product Development Team Product Development team of 250 scientists Infrastructure: –Development labs –Pilot Plant –Analytical Support –Stability studies –Pharmacokinetics In-house Regulatory, IPR & Packaging development Group PTC : Scientific Team 80 10 115 25 15 5 Formulations Development Analytical Development Pharmacokinetics & Project Mgmt. Regulatory Affairs IPR Packaging Development

22 22 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, Indias 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. 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. Recent Developments

23 23 Leveraging the India advantage Contract manufacturing : lower cost manufacturing R&D : phase I /IIa clinical trials in India US : regulatory filings + formulation manufacturing base in India + high level backward integration France : shift manufacturing to India gradually through site variation & new filings Bio-equivalence studies : potential to carry out in India

24 24 Summary of Growth drivers Short-term < 2 years Medium-term 2-5 years Long-term >5 years Capitalise on existing strengths to drive growth in domestic market Regulated generics markets – APIs and formulations in Europe and USA Expand business in regulated generic markets- organically /inorganically In-licensing and out- licensing Contract manufacturing, in-sourcing and leveraging on alliances Innovation- research driven (NCE and NDDS) global pharma company

25 25 Financial Highlights

26 26 Our vision One of Indias leading healthcare players, we aim to be a global research driven company by 2020. 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

27 27 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 Thank You.

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