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CORPORATE PRESENTATION

August 2009

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Cipla – A Global Leader in Generics

• Leading pharmaceutical company in India in terms of retail sales and


one of the largest exporters of pharmaceutical products from India

• Legacy of innovation and an entrepreneurial spirit, ingrained by the


founder, Dr. K.A Hamied, and propounded by the present Chairman
and Managing Director, Dr. Y.K. Hamied

• Wide range of products across all major therapeutic categories and in


most dosage forms

• Business model based on international strategic alliances and focus on


pursuing organic growth while reducing capital commitment and
regulatory/litigation risks

• Result driven R&D ensuring efficient utilization of resources and


generating substantial technical know-how fee income

• Modern manufacturing facilities and adherence to international quality


standards
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Growth Opportunities in Pharma Industry
Global Generics Industry Market Size Estimates
• Global generics market is RoW Rest of Americas Japan
forecasted to grow at over 9% Eastern Europe Western Europe US

p.a. to US$ 135 billion in 2013 160 (US$ bn)


135
140

120 22
• Growth opportunities exist in both
86 16
unbranded generics in developed 100
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markets and branded generics in 80 17
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60 14
emerging markets 18
14
40 3
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20 48
• Regulators have been pushing for 27
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greater generic penetration to 2008 2013
reduce healthcare-related costs Source: IMS Health estimates 2008

Generic Penetration Over 2001-2007


65 (%)
• Generic penetration has
increased substantially over last 60

seven years 55

50
• Strong prospects in emerging
45
markets, driven by lower
40
regulatory barriers, limited
competition and better profitability 35
2001 2002 2003 2004 2005 2006 2007
Source: Kaiser Family Foundation, September 2008 2
Leading Domestic Presence
• With over seven decades of operations, ‘Cipla’ brand has gained significant market reputation
within the Indian medical fraternity
• Largest market share of 5.3% (FY09) in terms of retail pharmaceutical sales in India
• 20 product brands ranked within Top 300 pharmaceutical brands in India (as on June 30, 2009)
• Market leader in certain categories, including respiratory care (52.0%), anti-viral (50.1%) and
urological (18.2%) in FY09
• Extensive distribution network consisting of 42 exclusive and dedicated sales depots, that
service doctors, as well as 2,300 stockists and 160,000 chemists pan-India
• Field force of over 4,300 personnel in 14 divisions, actively promoting Cipla’s specialty products
• Long-standing relationships with hospitals and institutions, continues to be an important
channel of distribution

Market Share of Major Indian Pharma Companies


C ipla Ranbaxy Sun Dr. Reddy's
6.0 (%)

5.0

4.0

3.0

2.0
2004 2005 2006 2007 2008 2009
Source: ORG IMS June 2009 3
Strategic Partnership Model

• API and formulations exported to approximately 175 countries through strategic alliances,
including partnerships and agency arrangements

• Export sales contributed 51.5% and 49.5% to FY09 and Q1 FY10 revenues, respectively

• Total of approximately 7,000 product registrations in place across various export markets

• International partnerships with governments and social service organizations to supply products
and/or technology, which helps strengthen relationships abroad

• Strategic partnership model structured as per:

– Developed markets which are highly regulated and exposed to litigation risks

– Emerging markets which offer higher growth opportunities, due to lower entry barriers,
limited competition and higher profitability
Q1 FY10 Export Income
• Partnership model helps in:
MIDDLE EAST 9%
– Leveraging in-depth local expertise of
partners EUROPE 17% AFRICA 35%

– Limiting the need to set up own facilities or


sales and distribution networks
– Lowering fixed costs and capital
NORTH,CENTRAL & AUSTRALASIA 10%
commitment SOUTH AMERICA
29%
– Reducing potential risks from litigation,
• Total Income: Rs 13,880 mn
regulatory or employee related matters • Total Export Income: Rs 6,875.70 mn
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Comprehensive Product Offering
• With approximately 150 APIs and more than 1,600 formulation products in its portfolio, Cipla
offers a wide range of products across several major therapeutic categories

• Not dependent on any particular product with no single product accounting for more than 2% of
the total income in FY09

• Therapeutic categories served include anti-asthma, anti-inflammatory, cardiac, anti-retroviral,


anti-cancer, eye/ear preparations, dermatology, anti-ulcerant, anti-malaria and critical care

• Product range covers most dosage forms including solids, liquids, injectables, ophthalmic
preparations, topical preparations, nasal preparations, inhalers and devices, rectal preparations
and buccal preparations

Therapeutic Breakdown of Cipla’s Revenue – Q1FY10 (Rs 13,880 mn) & FY09 (Rs 53,260 mn)
% (Q1 FY10) % (FY09)
17.41% 19.27%
ANTI-ASTHMA
32.32% ANTIBIOTICS
36.66% ANTIRETROVIRAL
CARDIOVASCULAR
14.13% ANTIDEPRESSANTS
15.13% ANTI-INFLAMMATORY
ANTIULCERANTS
ANTICANCER
2.77%
HORMONE - RELATED
10.71% 3.09%
2.53% OTHERS
2.91% 3.33% 12.11%
2.97% 5.24% 4.12%
3.58% 3.86% 2.34% 5.53%
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Leader in the Respiratory Care Category
• One of the leading players globally in respiratory care, with over three decades of experience in
developing complex technologies in inhalation therapy
• One of the largest producers of inhalers in the world – respiratory care products sold in
approximately 90 countries
• Leader in the Indian respiratory care category with market share of 52.0% in anti-asthmatic
products in FY09
• Wide range of drugs, delivery systems and add-on devices for patients, supported by an
aerosol research and development team and manufacturing facilities
• Wide range of respiratory care products, including preventer and reliever drugs and their
combinations
• Developed several proprietary and patented delivery systems and devices

Some of Cipla’s Respiratory Care Products

Autohaler Multihaler Foracort Forte Maxiflo

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Modern Manufacturing Facilities

Baddi (2005)
Domestic market

Sikkim (2008)
Domestic market

Indore SEZ (2011)


Under construction

Patalganga (1983)
US FDA approved

Goa (2002) Kurkumbh (1994)


US FDA approved US FDA approved

Bangalore (1972)
US FDA approved

Invested approximately Rs. 19 bn in upgrading/expanding existing manufacturing facilities


and developing new facilities during three years ended March 31, 2009
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Result Driven Research and Development
• Four in-house R&D centers at Vikhroli, Patalganga, Kurkumbh and Bengaluru – each well
equipped with modern technology and analytical instruments

• Team of 600 scientists, headed by Dr. Y.K. Hamied, to enhance existing and develop new
processes for APIs and formulations and develop new drug delivery systems

• Introduced more than 130 products in India since January 2008, as per ORG IMS

• 7,000 product registrations globally – 55 patents in India and 225 patents internationally

• R&D team works with strategic alliance partners to file DMFs and ANDAs, in the U.S., seek
marketing authorizations in Europe and file product registrations in other jurisdictions

• R&D undertaken to provide customers with technical dossiers, plant layouts for pharmaceutical
manufacture, R&D processes and regulatory batches

Filings and Approvals R&D Expenditure Trend


R&D Expenditure (Rs mn) % of Revenue
Approvals 3,000 6.0%
Category Applications Filed 2,515
Received 5.5%
2,500 2,323 5.0%
Patents (India) 162 55 4.5%
2,000 1,757
4.0%
Patents (International) 991 225
1,500 3.5%
DMF 140 NA 3.0%
1,000 2.5%
670
ANDA 64 36 2.0%
500
Marketing authorization 1.5%
(Europe) 410 292 0 1.0%
FY07 FY08 FY09 Q1 FY10
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Experienced Management Team
• Led by a qualified and experienced management team that has the expertise and
vision to manage and grow the business

• Dr. Y.K. Hamied, Chairman and Managing Director, has been awarded the
Padma Bhushan, one of the highest civilian awards in India in 2005, for his
distinguished service and contributions to the pharmaceutical industry

• Senior management team is highly experienced in the Indian pharmaceutical


industry, with an average of around 25 years experience with Cipla

• Stable and experienced mid-level management team with an average experience


of approximately 17 years experience with Cipla

• Healthcare domain knowledge and experience of the senior and middle-


management provides a significant competitive advantage

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Significant Milestones in the History of Cipla
2008 Commenced commercial production for formulations at the Sikkim facility

New formulation plant at Baddi, Himachal Pradesh commenced commercial


2005 production
Second phase of the manufacturing facilities at Goa, involving five more
2003 independent manufacturing units, commenced commercial production

2002 Set up four technologically advanced manufacturing facilities in Goa

1994 Commenced manufacturing operations at the fifth plant at Kurkumbh

1985 Received approval from the U.S. FDA for the bulk drug facilities

1983 Commenced manufacturing operations at the fourth plant at Patalganga

1977 Commenced manufacturing operations at the third plant at Bengaluru

1974 Commenced manufacturing medicinal aerosols

1960 Commenced operations at the second plant at Vikhroli, Mumbai

1952 Established the first research and development division for development of
pharmaceutical products

1936 Commenced manufacturing operations at the first plant at Bombay Central,


Mumbai
Founded by Dr. Khwaja Abdul Hamied as The Chemical, Industrial and
1935 Pharmaceutical Laboratories Limited – subsequently changed to Cipla Limited
on July 20, 1984
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Awards and Recognitions
• In November 2007 and October 2006, respectively, ranked as the “best under a
billion” amongst the top 200 companies in India by Forbes Asia

• Received the “scrip best company in an emerging market 2006” award from Scrip
World Pharmaceutical News

• Received the Dun and Bradstreet, American Express corporate award 2006

• Received the “pharma excellence” award for sustained growth from GIDC in June
2006

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Financial Snapshot

Healthy Asset Growth

Gross Block (Rs mn) Net Current Assets (Rs mn) • Gross Block CAGR: 22%
35,000 • Net Current Assets CAGR: 26%
30,000 • Strong liquidity position, with the
25,000 Current Ratio steady at ~ 3x

20,000

15,000

10,000
FY07 FY08 FY09

Growing Domestic and Exports Sales Steady Earnings Growth


Revenue from India (Rs mn) Revenue from outside India (Rs mn) PAT (Rs mn) EBITDA* (Rs mn)

35,000 12,000

30,000 10,000

25,000
8,000
20,000
6,000
15,000
4,000
10,000
2,000
5,000

0 0
FY07 FY08 FY09 FY07 FY08 FY09

• Domestic Revenue CAGR: 12% • EBITDA* CAGR: 9%


• Exports Revenue CAGR: 27% • Net Income CAGR: 7%
* EBITDA = PBT + Depreciation + Interest 12
Highlights

Leading pharmaceutical company in India and the largest


exporter of pharmaceutical products from India

Comprehensive product offering across major therapeutic


categories in most dosage forms and leader in certain
therapeutic categories

Business model based on international strategic alliances,


focuses on organic growth and leads to reduced capital
commitment and regulatory / litigation risks
Highlights
Modern manufacturing facilities, compliant with international
quality standards, being further upgraded / expanded to support
business growth

R&D targeted at ensuring efficient utilization of resources and


focused at developing and launching niche products

Strong balance sheet and consistent earnings performance to


help enter a phase of stronger growth

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