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Lupin Limited
Corporate Presentation
January 2010
Corporate Highlights
Q3 09-10
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Fourteenth successive quarter of growth in sales and profit.
Growth secular across geographies.
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US Business grew by 36% in $ terms.
India sustained high growth rate @ 21%.
South Africa grew at 66%..
Working capital optimisation measures yield results.
Capex spends sustained at over Rs. 110 crs to meet expected demand in
capacities.
Financial Trend Q3 09-10….
Rs. In Millions
Particulars
Net Sales
Q3 09-10
Q3 08-09
Growth
12,554
9,618
31%
EBIDTA
2,619
1,761
49%
EBIT
2,261
1,542
47%
PBT
2,152
1,396
54%
PAT
1,606
1,165
38%
Balance Sheet Trends
Q3 09-10
Rs. In Millions
Particulars
YTD 09-10
YTD 08-09
Operating Working Capital
11,061
11,111
Working Capital no. of days
87
110
ROCE (%)
24.9%
23.6%
Debt Equity Ratio
0.46
0.63
Business Break up Q3 09-10
Business Mix Q3 09-10
Geogrpahy Mix Q3 09-10
Outside India
68%
Formulaton
85%
API
15%
Within India
32%
Market DiversificationFormulations Q3
Formulation Sales Break up
Advanced
Market
61%
Emerging
Market
7%
Within India
32%
Corporate Highlights
FY 08-09
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Eleventh successive quarter of growth.
Growth has been secular across SBUs and regions
Particularly strong in US,EU, Japan and India
Year of geographical expansion: Acquisitions in Germany, South Africa,
Australia and Philippines. Strategic beach heads at a prudential cost…
VRS at Aurangabad sets the tone for cost reduction endeavours
Creates momentum for our vision of being a significant world player over
the next few years!!!
Prudential strategies employed in
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Optimizing Working Capital
Managing Leverage
Acquisitions
Business Update
USA
Market Characteristics
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Largest Pharma market in the world. Generic Pharma market estimated at $ 48 billion (Dec
’08).
Operations
Branded
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Suprax Continues to reflect Strong Growth;
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Value growth robust - over 50%.
Acquisition of rights to Antara and Allernase.
Generics
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Leading Market Share
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Market leader in 10 products of the 23 products in market.
Among top 3 in Market Share in 18 of these products.
105 ANDA’s filed; 35 approved to date
No. of ANDAs filed in the FY 09-10: 15
Emphasis on difficult to make products.
Highlights :
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Per product revenues amongst Indian peers is the highest.
9th largest prescription base amongst generic companies operating in the US. Highest
amongst Indian Peers
Sales Growth US FY 08-09 & Q3 09-10
US (Net) Sales Brand Growth Q3 09-10
35,000
30,000
Growth
25,000
20,000
15,000
10,000
100,000
78%
41,226
23,157
USD 000
USD 000
45,000
40,000
Branded Sales FY 08-09
80,000
60,000
40,000
20,000
5,000
Q3FY09
FY 08-09
US Net Sales FY 08-09
300,000
Growth 36%
250,000
80,000
60,000
95,857
70,375
USD 000
USD 000
31,562
FY 07-08
120,000
40,000
74,005
-
Q3FY10
US (Net) Sales Growth Q3 09-10
100,000
Growth 134%
Growth 52%
200,000
150,000
100,000
20,000
272,587
178,973
50,000
Q3FY09
Q3FY10
FY 07-08
FY 08-09
JAPAN
Market Characteristics :
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Japan Pharma Market – $65 bn , Generics – 5% by value
Operations:
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Sales force of 55 salesman focusing on CNS, CVS, GI.
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Our early entry into Japan stand vindicated – market at inflection point
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Profit enhancement measures to yield greater results in the days to come
Highlights:
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Tenth largest company in Generic space in Japan
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Launched Levofloxacin and Bicalutamide in the current year.
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Launched10 products in FY08-09: Market leader in Risperidone in terms of no. of
units. Significant player in Amlodipine.
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Gross Margin up by 5%
EUROPE
Market Characteristics
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Heterogeneous market
Operations
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Cefpodoxime Proxetil - France
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Over 60% market share through partners
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Cefpodoxime Proxetil France Suspension launched.
Lisinopril
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Launched in UK; Secured 15% market share
Acquired Hormosan in the second quarter.
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Back ending production would enhance profitability
Total Filings in EU : 55
Highlights:
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Success in the AOK bids in Germany for Setraline.
AUSTRALIA
Market Characteristics:
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Market for generics and branded generics – A$ 3 bn
Operations:
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Generic Health - Strategic Equity Participation at 47%
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Merged With Max Pharma to gain critical mass in operations.
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Among the top 10 generic companies in Australia
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Significant minority stake acquired
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Healthy pipeline of filings
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Participatory market size – A$ 850m
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Revenues commenced from Max Pharma (sale of 6 products currently.)
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Total Filings in Australia/NZ: 27
Highlights:
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Evaluating options for challenging IPs in Australia.
In Licensing four molecules from Actavis.
SOUTH AFRICA
Market Characteristics :
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South African Pharma market - $ 2.5bn, Generics – 33% by value
Operations:
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Acquisition of majority stake in Pharma Dynamics
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Sixth largest generic company in the South African Pharma Market
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Leading presence in CVS
Alliance with Aspen – the largest generic company in RSA continues
Highlights:
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Amongst the fastest growing company among generics (5 year CAGR over 30%).
Growth sustained at over 35%.
Leaders in Amlodipine and Bilocor by unit sales.
INDIA - IRF
Market Characteristics:
Size of Indian Pharma Market : USD 10 Billion. The market is fragmented in nature.
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Operations:
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Continue to be the fastest growing Pharma company in the domestic space. Growing at twice the industry average
at 21%
Field expansion accompanied by productivity increase, currently stands at 3598.
54 new products were introduced in the year 08-09 of which
6 are In-licensed from within and outside India
3 products were introduced for the first time in the country
The growth rate in some of the major therapeutic segment viz. Cardiology, Diabetology, Anti Asthma, Anti-Infective
are the best in industry (H1 09-10)
New Therapy areas to further propel growth : Bio Similars, Female Health
Launched a new marketing division called “Femina”
Highlights:
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Continued strong growth leads to 5th Rank (MAT IMS Mar 09) from 6th rank in previous year.
Exclusive Collaboration with
American Institute of Cardiology
Joslin Institute of Diabetology at Massachusetts
European Institute of Neurology
In licensed 12 products till date
Sales Growth India (Gross)
India (Net) Sales Growth Q3 09-10
4,000
3,500
Growth 20%
Growth 21%
Rs. in Mn.
3,000
2,500
2,000
1,500
3,446
2,838
1,000
500
Q3 08-09
Q3 09-10
Other Emerging Markets
CIS
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Actual Turnover for the last fiscal up by 33%
Steady increase in product registrations
Expanding Field Force –
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Russia, Ukraine, Azerbaijan, Kazakhstan, Uzbekistan
Increased market penetration
Focus on building brands
Increased product registration to enhance volumes in the next few quarters.
API & Intermediates
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Global Leadership in chosen therapies
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One of the most profitable API business in Indian Pharma
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Robust operating performance
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ROCE comparable to the best in the segment at 33%
Efforts on to widen therapeutic presence
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Novodigm provides a step up to the CRAMS initiatives
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Focus on Cost & Quality Leadership and Reliability
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Effective asset utilization
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Strategic input to formulations business with over 70% backward integration
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Steady increase in filing of DMFs/ EDMFs/ CoS
The Way Ahead…
R & D:
• Over 500 scientists on our payroll
•Revenue Expenditure (Q3 09-10): Rs 939 Mn – 7.5 % of net sales
Country
Total submissions
Approvals
US
105
35
EU
55
27
Australia/ NZ
27
21
NCE Program:
• In Clinical trials – anti migraine, anti psoriasis and anti TB.
•Pre Clinical Programs
•Metabolic Disorders
•Inflammation
•CNS
•Necessary infrastructure is being strengthened & skill set enhanced
• HTS, SMPM, Electro-physiology
US Generic Pipeline
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105 products filed, 35 approved. Market size USD 90 Billion.
Para IV addressing market size of USD 30 Billion
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F2F:
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Desloratadine, Memantine, Duloxetine, Eszopiclone, Ziprasidone and
Pregablin
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With Natco: Lanthanum Carbonate
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Potential Exclusive : Metformin (Fortamet)
Differentiated/Difficult products
 Oral Contraceptives – 12 filed.
 Niche Products : Niacin XR (Niaspan) – second filter after Barr,
 Products with technology barriers: Fenofibrate(Tricor), Sevelamer
 Liquids – 2 filed
Lupin: Summary of
Strategies
Scaling and gaining critical mass
• Garnering market share in all markets,
Replicating our Branded business
model in new markets
becoming bigger and noticeable
Differentiation/niche products
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• Portfolio going beyond standard generics
• Increasing share of products with some degree of
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exclusivity
Geographic Presence, organic/inorganic
• Broad and deep, covering established and
emerging markets
• Proven skills to adapt rapidly to changing
environment
Consolidation in existing markets
• Consolidate through acquisitions in Japan, USA, India
Vertical integration & Operational Excellence
• Constant focus on high quality at lowest cost
Increased Focus on Bio Similars
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Developing our specialty
business, bio-similars
Focusing the US business on
more specialised products
Strategic investments in APIs
will support growth across all
businesses
Targeting doubling of sales
growth every 4 years while
improving operating margin
Proven Capabilities Across
the Value Chain
Product Identification
Differentiated products , Successful
litigation experience
Sourcing
Innovative sourcing of products, RM
Execution Skills
Executing trials/projects at low cost
Regulatory
Experience in working with regulators
Manufacturing
First class capabilities , Synergies leveraging
expertise of Generic R&D
Marketing and Sales
Proven strategies that drive market share,
highly –productive sales force
Being present in key markets around
the globe
• Lupin sees itself as a
transnational with sizable
presence in various
geographies of strategic
interest
• These would be a mix of
branded generic and INN
markets
• Whilst geographical
diversification would involve
acquisitions, it would be
based on prudence- ‘buy at a
cost and not at all costs’.
Lupin :the road ahead
Near- Medium Term Value Creation
Generics
Branded
Products
Challenges & Imponderables
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Challenges common to all
generic players – the changing
Medium-Long Term Value Creation
(Proprietary Products)
landscape
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Challenges of scale, growth
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Integration of subsidiaries
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People challenges
Thank You