50581917 investor presentation 2010

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December 2010

Investor Presentation



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



Industry Overview1



4

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



5

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 %



6

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



7

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



Claris Overview2



9

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



10

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%)



11

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



12

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



13

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



Complex & Niche ProductPortfolio3



15

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



16

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



Manufacturing & DevelopmentCapabilities4



18

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



19

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



20

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



22

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



Board of Directors6



25

• 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



26

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



Business Strategy7



28

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



29

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



Growth Drivers8



31

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)



32

Financial Highlights9



33

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 %



34

Thank you

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