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Cadila Healthcare Ltd
Presentation at“Global Generic
Pharmaceutical Conference 2006”
MumbaiMarch 8, 2006
Presentation by : Ganesh Nayak, ED
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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.
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Core business areas
Research & Development
Contract manufacturing
Emergingmarkets
High end APIs +intermediates
Developed generic markets
Domestic dosage forms
Revenue break up by segment Revenue break up by region
Based on Apr-Dec 05
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Facilities and infrastructure
Formulations Dosage forms CertificationMoraiya (Ahmedabad) Tablets, Soft & hard gel capsules,
Metered dose inhalers, Dry powder inhalers, Injectibles, Lyophilised vials, Trans dermal patches and Vaccines
US FDA (for tablets), MHRA, Anvisa , AFSSAPS, BFAD, MCC
Baddi ( Himachal Pradesh) Tablets and capsules GMP
Goa Orals,injectables and suppositories
GMP
Bulk Drugs & Fine Chemicals Type
Ankleshwar (Gujarat) - API Multi-purpose US FDA
Vadodara (Gujarat) - API Partially dedicated US FDA
Patalganga ( Maharashtra) - API Multi-purpose GMP
Ahmedabad (Gujarat) - Fine Chem Fully dedicated
Contract manufacturing
New Mumbai ( Zydus Altana JV- pantoprazole intermediates)
Dedicated facility GMP
Manufacturing facilities
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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
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Domestic formulations market
Source : ORG IMS MAT Dec-05
Top 10 Indian Companies
Value (Rs. B.)
%
TOTAL MARKET 230.4 1 GLAXOSMITHKLINE 13.0 5.66%2 CIPLA 11.8 5.11%3 RANBAXY 11.3 4.91%4 NICHOLAS PIRAMAL 10.1 4.36%5 ZYDUS CADILA 8.2 3.54%6 SUN PHARMA 7.5 3.27%7 ALKEM LABORATORIES 6.9 2.98%8 PFIZER 6.2 2.69%9 SANOFI AVENTIS 5.6 2.41%
10 ARISTO PHARMA 5.5 2.37%
# Name of the co.Market Share
• As 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”
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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.
2000-01 2004-05Portfolio shift to life style and chronic segments
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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 2004-05 (as per ORG IMS).
Recently restructured marketing divisions to increase participated market size and enhance presence in specialty and high growth segments.
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International business- two fold focus
Developed generics markets• US- the largest generic market in the
world• Zydus Pharmaceuticals (USA) - for
formulations• Zydus Healthcare (USA) - 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
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9
13
Formulations-emergingmarkets
Formulations- developedmarkets
60
200
110
APIs/intermediates- exports
2004-5 US$ 72 mn 2010E US$ 370
mn
International sales projection
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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
Key factors affecting success in USand our initiatives so far
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US - robust filings
30 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.
Current status of filings Filed 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 12-14 ANDAs for FY ‘06.
Atenolol (L)
Clindamycin
Metformin (3 ANDAs) (1-L)
Divalproex sodium DR
Ribavirin Tabs. & Caps. (2 ANDAs) (L)
Promethazine Tabs. (L)
Gatifloxacin Tabs.
Sertraline HCL Tabs.
Product Approvals by USFDA
(L) = Launched
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11
30
35
0 5 10 15 20 25 30 35
ANDAs pendingapproval
ANDA approvals
ANDA filings
DMF filings
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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 5 products in 2005. Response has been excellent with initial market share > 10% in all products.
Plan to launch another 12-15 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
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France- first step in Europe
4.95.7
10.5
0
2
4
6
8
10
12
Sales (mn Euro)
CY2003 CY2004 CY2005E
Generics to drive our French business
804
592
809731
0
100
200
300
400
500
600
700
800
900
Patent expiries (mn Euro)
2004 2005 2006 2007
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
Branded generics business
Launched pure generics
Export business
Business thru a large buying group with whom agreement is likely to be signed soon.
French business segments
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Key initiatives for France
Launch of generics Launched 76 generic
presentations so far. Plan to boost the basket
to ~ 85 presentations by end 2006
Leveraging India’s low cost
New product filings- first approval received in 05-06, more in pipeline
Site variation- current 3 filings, 2 approvals
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56
7685
0
10
20
30
40
50
60
70
80
90
Generics products- cumulative
CY2003 CY2004 CY2005 CY2006E
1
7
2 3
0
1
2
3
4
5
6
7
New product filingsfrom India
Site variation filings
2004-5 2005-6 E
Relationship with
pharmacists Building special
relationship with pharmacists
Supporting a health awareness program for the Zydus club of pharmacists
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International business- new markets
Brazil Generics market size of ~US$0.5b Received 13 generic product
approvals, of which 10 products have been launched so far.
Plan to increase basket to 11 products in 2005-6
Plan to file for and launch 10-12 products every year
Spain/ Italy
Low generics penetration, high growth
Looking for suitable entry opportunity
South Africa Branded generics- commenced
operations
Marketing and distribution partner finalized
Received 5 product approvals so far
Plan to launch 4-5 products in 2005-6, 8 in 2006-7
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World class state of the art manufacturing facilities -
Finished dosage formulations plant at Moraiya with approvals from USFDA, AFSSAPS, ANVISA, MHRA, MCC (capacities in all forms except tablet dept. is available.)
Two API plants (300 KL) with approval from USFDA
Dedicated dossier filing and IPR team, enabling rapidity in site transfer projects and competency in development projects
Zydus’ experience with global partners -
Cost efficient and high quality products and services
Working with several US and European multinationals
Operational transparency with these partners
Dedicated project management teams
Contract manufacturing - exciting prospects
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Altana JV - benchmark in contract manufacturing
State of the art manufacturing facility set up as an EOU near Mumbai.
Supplying 2 key starting materials of Pantoprazole to its worldwide patent holder, Altana AG, Germany.
60% of global requirements are met from this plant.
Recently increased capacity by 20% from 48 tons to 60 tons.
Mayne Pharma (Australia) - JV for oncology injectibles (Generics)
Setting up an integrated cytotoxic facility located in an SEZ near Ahmedabad.
Construction of the plant in full swing now.
Commercial production expected in FY08.
Full capacity utilisation in FY09.
11 other contracts with big innovator and generic MNCs signed so far with peak revenue potential of US$ 23.6 Mio.
Few more contracts in Pipeline.
Contract manufacturing - achievements so far
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Research - investing for the future
R& D pipeline• Phase I clinical trials of ZYH1, our first
IND, completed successfully.• Phase II trials to start in 2006-7.• Second IND (ZYI1) filed in Q3 05-06,
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 center Rich talent pool -technical
strength >230 Developed infrastructure for
pre-clinical research and development
R&D expense- projected at 6-7% of sales
4.80%
5.60%
4.40%
4.60%
4.80%
5.00%
5.20%
5.40%
5.60%
2003-4 2004-5
NCE Pre Clinical Phase 1 Phase 2 Phase 3
ZYH1 Dyslipidemia
R & D % to Sales
ZYH2
ZY01
Diabetes
Obesity
ZYI1 Inflammation Phase I Clinical trial to start soon
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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.
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.
Recent Developments
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Summary of Growth drivers
Short-term < 2 years
Short-term < 2 years
Medium-term 2-5 years
Medium-term 2-5 years
Long-term >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
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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 manufacture to India gradually through site variation/new filings
Bio-equivalence studies- potential to carry out in India
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Financial Highlights
** Not Annualised.
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Our vision
One of India’s 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
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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
www.zyduscadila.com
Thank You.