50581917 investor presentation 2010
TRANSCRIPT
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December 2010
Investor Presentation
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2
Except for the historical information contained herein, statements in this presentation and the subsequent
discussions, which include words or phrases such as “will”, “aim”, “will likely result”, “would”, “believe”,
“may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”,
“future”, “objective”, “goal”, “likely”, “project”, “should”, “potential”, “will pursue” and similar expressions
or variations of such expressions may constitute "forward-looking statements". These forward-looking
statements involve a number of risks, uncertainties and other factors that could cause actual results to
differ materially from those suggested by the forward-looking statements. These risks and uncertainties
include, but are not limited to our ability to successfully implement our strategy, our growth and
expansion plans, obtain regulatory approvals, our provisioning policies, technological changes, investmentand business income, cash flow projections, our exposure to market risks as well as other risks. Claris
Lifesciences Limited does not undertake any obligation to update forward-looking statements to reflect
events or circumstances after the date thereof.
Disclaimer
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Industry Overview1
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Industry Size
USD 773 bn global pharmaceutical market
USD 143 bn global injectables
USD 20 bn
generic Injectables
Claris is present in the injectables space - a lucrative market segment, given a much smaller number of
competitors and hence high profitability margins
Source: CII-KPMG, Pharma Summit 2009,Avalon Global Research, The Global Generic Injectables Business, December 2009
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Injectables – Key Characteristics
• The Global Pharma industry has grown at a
steady pace of 8% CAGR over 2004-2008,
while generics market; which is ~14% of the
overall Pharma market; grew at an
impressive 18% CAGR in the same period.
• The injectables industry, as compared to
orals industry, is characterized by less
competitive intensity, low price erosion and
higher profit margins in comparison to oral
formulations; 86% molecules have less than
5 competitors
0 10 20 30 40 50 60 70
1
2
3
4
5
6
7
8
9
10+
N u m b e r o f
c o m p a n i e s
Number of Injectable Generic Drugs (in the US) Source: CRISIL Report Mar 2010, IMS, Cygnus, Industry Insight – Global Generics, March 2009)
55
62
80
92
105
30
90
2004 2005 2006 2007 2008
Global Generic Market Growth
560
605 648
715773
300
500
700
900
2004 2005 2006 2007 2008
Global Pharma I ndustry Market Size (USD bn)
CA G R 8 %
CA G R 1
8 %
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Injectables – Geographic Segmentation
• USA and EU are the largest regulated markets for
injectables, accounting for 90% of the regulated markets
• USA is the largest market for generic and non-biological
injectables, accounting for about 51% of the global
market, whereas emerging markets account for 20% of
the global generics injectables market
• Injectables is a specialized and niche area within the
pharmaceuticals industry:
- High complexity involved in formulating a large
and complex product portfolio across various
therapeutics based on multiple technology
platforms and multiple delivery mechanisms
- High capital intensity
- Governed by tougher regulations
- Customer segments are almost exclusivelyhospitals with distinct decision making process
and criteria
Manufacturing facilities w ith sustainable cost
leadership that meet the requirements of relevant
regulatory agencies
51%
24%
6%
20%
54%
26%
3%
17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Generic Non-Biological
Injectables
US
EU
ORM
EM
Geographical Breakdown of Global InjectablesMarket, 2009
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Injectables – India Story
• India has emerged as one of the top generic drug supply hubs globally as low production costs give
India an edge over other generics-producing nations
• The Indian pharma industry is expected to grow at a CAGR of 12.2% over 2008 to 2013
• Generics accounted for 88% of the market share in value terms and 90-95% in volume terms of
the market in India in 2008
• Within injectables, the Indian market size is estimated at USD 1.86 billion
Source: Cygnus, Industry Insight – Global Generics, March 2009)
311.8
247.5
76.6
7.7
773.2
6.4%
14.6%
6.6%
2.7%
5.7%
0
200
400
600
800
North America Europe Japan India Global scale0%
10%
20%
30%
Market size CAGR (2003-08)
India P harma industry market size
(USD bn): 2008
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Claris Overview2
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Claris Lifesciences: Evolution
• Claris commencesbusiness as a TradingCompany in Blood
Products
• Successfullypenetrates the Indianhospitals market
• Creates the core teamand supportinfrastructure
• Launches SpecialityProducts developmentprograms
• Commencesmanufacturing project
• Regulatory teams andmanufacturinginfrastructure in place
• Achieves leadershipposition in India
• International expansionin emerging markets
• Manufacturing facilityapprovals by ANVISA
Brazil, INVIMAColombia, MHRA UK andothers
• Unveils strategy forregulated markets
• Carlyle invests Rs.905.06 million in the
Company for 13.89%stake
• US FDA approval for sterileinjectables manufacturingfacility
• Emerges as a significant playerin emerging markets
• Launch of a range of infusionproducts in non-PVC bags
• Commenced own sales andmarketing activities in the US
• Scale up of productdevelopment andmanufacturing facilities
• Commencement of Oncologyvertical in India
• Received approval for four
ANDAs in the United States
• Received letter from theUSFDA in relation to theregistration of our asepticmanufacturing line
• Enhanced focus on regulatedmarkets
• In-License ANDAs fromcompanies that are looking tosell them and reduce the leadtime to launch new productsin the US
• Increase penetration inmarkets such as Russia andTurkey
• Regulatory filing for complexand high potential productssuch as Propofol and IronSucrose
• US FDA approval for ClarionIV and Clarion V
Claris has evolved from an Emerging Market focused injectables company to one of the leading
pure play global injectables players
1999-2002 2007-2010 Going Forward2003-2006
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Claris Lifesciences: An Overview
• One of the largest Indian sterile injectablespharmaceutical companies
• 128 products across multiple markets and
therapeutic areas
• 5 manufacturing facilities in Ahmedabad,India ; 4 operational and 1 underconstruction
• Approvals by foreign regulatory authoritiesincluding US FDA, MHRA(UK), TGA(Australia) & GCC FDCA
• Strong domestic and internationalmarketing & distribution networkcomprising an appropriate mix of multipledistribution channels / formats / layers
• Customer base primarily includesgovernment and private hospitals, aidagencies and nursing homes
Claris has evolved from an emerging market-
focused injectables company to one of the
leading pure play globalinjectables players
International business
(55%)
Business mix 2009
Domestic business
(45%)
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Claris Lifesciences: An Overview
Businessmodel
Productauthentication
Therapy and drugtarget action
Formulationstage
Deliveryroute
Markets
R&D
Development, manufacturing,marketing
Contract developmentand/ or manufacturing
Outsourcing, marketing anddistribution
Patented BrandBranded GenericsGeneric
Life saving and supportCritical care and SupportPrimary Healthcareand OTC
NDDSFormulationsAPIs
InjectablesInhalations and oralsOintments
Regulated marketsSemi-Regulated / Emerging
marketsUnregulated
DiscoveryDevelopmental/
InnovativeGeneric product formulation
Claris’ PresenceClaris’ business focus is higher up in the value chain of the pharmaceutical industry in terms
of Therapy & Drug Target Action, Formulation Stage, Delivery Systems & Market Focus
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Integrated Business Model
Scale and profitability ina niche segment
Committed
management team andwell qualified workforce
In house regulatory andR&D Capabilities
Established sales &
distribution network
Broad product portfolioacross therapeuticareas, technologyplatforms
Capability to
manufacture complexAPIs for captive use
Manufacturing facilities,with sustainable costleadership, that meetthe requirements of
relevant regulatoryagencies
Presence in 76 countries worldwide
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Key players in the industry
Company Product MixMcap
(USD bn)
Sales Fy09
(USD bn)
Key
comments
Medication management systems,I.V. Sets, solutions & irrigation, drugdelivery systems, in-patient glycemiccontrol, pharmaceuticals, invasivemonitoring systems, suction products
Anesthesia, bio surgery, clinicalnutrition, critical care, hemophila,immunoglobulin, infusuion systems
/ IV tubing, pharmaceuticals,solutions and drug delivery,pulmonology, renal, subcutaneousfluid administration, vaccines
Anesthesia, clinical nutrition,continence care, diabetes care,
extracorporeal blood treatment,infection prevention, infusiontherapy, neurosurgery, orthopaedics
Hemodialysis, acute dialysis,peritoneal dialysis, dialysis care,spectra laboratories, liver supporttherapy, therapeutical apheresis
14.8
3.8
12.5
N/A
16.2
8.9
28.7
N/A
Globally Claris,competes withthese majorplayers
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Complex & Niche ProductPortfolio3
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Wide Product Range
• Filed 280 applications for product registrations in regulated
markets, including 37 applications in the US
• Received 161 product registrations, including 25 in the US
• Products across various therapeutic segments - anesthesia,critical care, anti-infective, renal care, infusion therapy,
enteral nutrition, parenteral nutrition and oncology
• Multiple technology platforms – aqueous solutions as well
as complex colloidal solutions, liposomal products and
emulsions
• Multiple delivery systems – glass and plastic bottles, vials,
ampoules, pre-filled syringes and non-PVC and PVC bags
• Presence across 76 countries worldwide
• Developed and registered dossiers for countries across the
world
Registrations (Excluding Variants)
Registered Applied
1166
331
Breakup of Registrations
Registered Applied
India & EM RM
1005 189
161 142
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Delivery Systems and Technology Platforms
• Glass Ampoules
• Glass Vials
• Glass bottles
• PVC bags
• Non-PVC bags
- Single chamber bags
- Double chamber bags
- Triple chamber bags
Current delivery systems
• Emulsion technology
• Aqueous technology
- SVP
- LVP
• Form-Fill-Seal technology for bags
- Non-PVC bags
• Blow-Fill-Seal technology for plastic bottles
Current technological capabilities
Strong capabilities in a range of delivery systems
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Manufacturing & DevelopmentCapabilities4
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Manufacturing Infrastructure
• 5 manufacturing plants across a 78 acre campus
• Certain facilities have been approved by Foreign Regulatory Authorities including US FDA, MHRA(UK),
TGA (Australia) & GCC FDCA
• One of the few manufacturers in India and other emerging markets to have facilities approved by
multiple regulatory authorities in the regulated markets for:
- Large volume parenterals in glass bottles
- Emulsions manufacturing and
- Bag manufacturing (PVC & Non PVC)
• Over 100 successful audits from regulatory authorities; WHO GMP, ISO 9001-2000 and regulatory
compliance certifications
• Cost leadership – These facilities have a significant cost advantage over the facilities set up by
international competitors in North America or Western Europe
• Technologies purchased from international suppliers such as a double pass reverse osmosis system
from Christ (Switzerland), distillation columns from Stillmas (Italy), manufacturing vessels from Diesel
(Germany), glass vials washing and sterilization tunnels from Groninger (Germany), etc.
• Received Indian Drug Manufacturer Association’s Quality Excellence Award and ‘Frost and Sullivan’
award for manufacturing excellence
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Manufacturing Infrastructure
• Manufactures sterile
injectable products
• 5 Manufacturing
lines for:
- Glass Ampoules &
Vials
- LVP in Glass
- Emulsion
Manufacturing
- Non-PVC Bags
- PVC Bags
• Manufactures Sterile
Infusion Products
• Blow, Fill & Seal
(BFS) Technology
• Equipped to
manufacture
products in various
volumes in the IV
fluids and antibiotic
segments
• 6 LVP Lines and 1
CAPD bag line(Peritoneal dialysis)
• Dedicated to
manufacturing highly
complex and difficult
to source APIs
meant solely for
Captive
Consumption
• 2 lines - iron sucrose
and starches
• Same manufacturing
lines as Clarion I for
LVP
• More sophisticated &
advanced equipment
achieving higher
manufacturing
capacities
• A bag manufacturing
line which can be
used to produce
Multi-Chamber bags
World class manufacturing facilities provide a long term sustainable competitive advantage
Clarion I Clarion I I Clarion II I Clarion IV
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Excellent R&D Facilities & Track Record
• R&D facility approved by the Department of Science and Technology, GOI
• R&D capability and experience to develop, manufacture and register products across various delivery
systems to increase the efficiency of drug delivery and make the products better suited to market
requirements
• We currently employ approximately 75 scientists and specialists in India for R&D activities
• Expertise in developing complex and difficult to develop products such as propofol, iron sucrose,
hydroxyl ethyl starch and glutamine I.V. and complex and difficult to develop delivery systems, such as
multi-chamber bags etc. signifies its excellent R&D track record
• 116 registered trademarks and 85 trademarks applied-for in India; 38 registered trademarks and 39
pending applications internationally
• 3 registered process patents and 15 pending applications for process patents in India
• 12 copyright registrations in India and applications for 2 copyright registrations
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Sales and Marketing Strategy & Network
Philosophy Tier I Countries Tier II Countries
• Tiered approach for international
markets based on clearly defined
criteria:
- Nature of the market,
attractiveness of the market
and relative position of the
players in the supply chain
• Allows Claris to leverage itsproduct development, regulatory
and manufacturing strengths
• Distributor manages the
supply chain
• Claris has a dedicatedsales team for on the
ground sales.
• Countries like Brazil,
Mexico, Venezuela,
Columbia, Chile, Vietnam,
Uzbekistan, etc. follow this
model.
• Supply chain and sales are
both managed by the
Distributor.• The Distributor has a
dedicated sales team for
Claris Products
• Sales team of approximately 422 people in India who supply mainly to hospitals
• Network of approximately 43 clearing and forwarding agents, 40 distributors, 16 consignee agents and
1,120 stockists in India
• Total sales force of about 107 people in the international markets
• Business arrangements with local companies in regulated markets to grow the distribution network and
to strengthen the sales and marketing presence across 76 countries
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Board of Directors6
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• Holds a Master of Commerce degree from Maharaj Shivajirao University,
Vadodara
• Appointed as an Executive Director in July , 2009, he has been with the
company since April 1, 1999
• Has around 13 years of experience in the pharmaceutical industry
Chandrasingh
Purohit
Executive Director
(Finance)
Board of Directors
Amish Vyas
Executive Director
• Holds a Post-graduate degree in Mathematics and a Graduate degree in Law
from Punjab University and has completed his training in Public
Administration from the National Academy of Administration
• Served in the Indian Administrative Service for about 35 years• Retired from Public Service as Chairman of the Board for Industrial and
Financial Reconstruction
Surrinder Lal
Kapur
Independent Director
Eminent & Experienced directors bring extensive knowledge and best practices, assisting in attaining
higher levels
• Hold a Bachelor of Electronics and Communication degree from Gujarat
University, Ahmedabad and holds MBA degree from Gujarat University
• Been with the Company since February 1, 2003 and has about 15 years of
experience in the pharmaceutical industry
• Responsible for spearheading Company’s foray in to the regulated markets
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Board of Directors
• Holds a Post-graduate diploma in management from Indian Institute of
Management, Ahmedabad and B.Com (Hons) from the University of Delhi
• Nominee director of First Carlyle Ventures III
Nikhil Mohta
Non-Executive
Non-Independent
Director
• Management team includes senior executives, a majority of whom have worked with the Company for
over five years
• Total Employee strength of 1,614
• We have around 1,539 employees in India, out of which 75 employees worked for R&D and
approximately 493 were post graduates and around 805 were graduates
• We employed around 75 foreign nationals in the country and around 1,841 contract labourers
Eminent & Experienced directors bring extensive knowledge and best practices, assisting in attaining
higher levels
• Holds a Master of Science degree in Biomedical engineering from the Indian
Institute of Technology, Chennai, and is a graduate in mechanical
engineering from the Indian Institute of Technology, Chennai
• Has over 35 years of experience in manufacturing and consulting
T. V.
Ananthanarayanan
Independent Director
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Business Strategy7
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ObjectivesObjectives
Establish and expand
presence in key emerging
markets
StrategiesStrategies
• Increase presence in emerging markets, such as Brazil, Mexico, South Korea and Saudi
Arabia, as well as to establish presence in new emerging markets, such as China, Russia,
Turkey
• Increasing the portfolio of product registrations and filings
• Increasing customer and distributor base through marketing arrangements with local
pharmaceutical companies
Focus on increasing market
share for certain key and
high potential products
• Certain key products such as propofol, iron sucrose and hydroxyl ethyl starch, ciprofloxacin
and metronidazole have large markets worldwide
• These products are manufactured in India only by a few companies, for the global markets
• To focus sales and marketing efforts on these product groups to capture larger market share
• Only company in India to produce UNIBAG non-PVC infusion system which are a preferred
delivery system in regulated markets
Business Strategy
Maintain cost leadership byexpanding capacities
• Plans to expand Clarion manufacturing facilities in Ahmedabad, India
• These facilities are in a low-cost location as compared to the facilities set up by international
competitors in North America or Western Europe
• Focus is to ensure that company continues to maintain and grow margins and maintain its
cost leadership in the generic injectables business
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Objectives
Increase product range
across existing and new
technology platforms and
delivery systems
Strategies
• Filed 280 applications for product registrations in regulated markets, including 36
applications in the United States as of August 31, 2010
• Intend to apply for additional approvals from the USFDA and other regulatory authorities formanufacturing facilities and products to increase product range
• Primarily targeting injectable products which have or are due to go off-patent in regulated
markets
• Also initiated its foray into the oncology segment
Business Strategy
Grow sales in regulated
markets through business
arrangements
• Increase presence in regulated markets such as the United States, Western Europe,
Australia, New Zealand, Canada and South Africa
• Plans to establish business presence in Japan
• Further grow business in the US and other regulated markets by expanding the sales and
distribution network through business arrangement with the Pfizer group
• To get in license and other supply arrangements with companies that have an establishedpresence in the relevant markets, to further increase presence
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Growth Drivers8
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Growth Drivers
• Future Outlook:
– Global generic injectables are expected to
grow rapidly and are estimated to reach
USD 33 billion in size in 2014, up from USD
20 billion in 2009
– This growth is driven by
- a large number of innovator injectable
products going off-patent (both
oncology and other therapies) in the
non-biological segment and
- limited price erosion in these
products, even after becoming
generics, due to limited competition
compared to oral dosage products
– Products generating revenues of USD 70
bn are expected to go off-patent in US in
the next 3 years
Source :- Datamonitor, Epsicom Business Intelligence, Avalon Global Research, The Global Generic Injectables Business, December 2009
Future Trends – Global Generic I njectables
20
33
2009 2014
CA G R 1
0 %
20 20
28 28 27
2008E 2009E 2010E 2011E 2012E
Patent Expirations (USD bn)
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Financial Highlights9
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Financial Highlights
2,924
4,027
6,2387,639 7,594
3,379
0
1,000
2,000
3,0004,000
5,000
6,000
7,000
8,000
9,000
2005 2006 2007 2008 2009 31st May,
2010
390
881
1,620
2,101
2,295
1,031
13%
22%
26%28%
30% 31%
0
500
1,000
1,500
2,000
2,500
2005 2006 2007 2008 2009 31st May,
2010
0%
5%
10%
15%
20%
25%
30%
35%
Total Income (mn) EBITDA (mn)
PAT (mn)
CA G R –
2 7 % CA G R – 5
6 %
EBITDA Margin (% )
185
508
893
1,0791,250
577
6%
13%14% 14%
16%17%
0
200
400
600
800
1,000
1,200
1,400
2005 2006 2007 2008 2009 31st May,
2010
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
19%18%
26%
24%
22%21%
22% 23%
30%
27%
24% 24%
10%
15%
20%
25%
30%
35%
2005 2006 2007 2008 2009 31st May,
2010*
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
ROCE ROE
ROE (% ) ROCE (% )
* Annualised
CA G R –
6 1 %
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Thank you
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