sun pharma company

8/10/2019 Sun Pharma Company

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Sun Pharmaceutical Industries Limited

Corporate Office: Acme Plaza, Andheri Kurla Road, Andheri (E), Mumbai - 400 059.

Tel: 91-22-66969696 Fax: 91-22- 28212010 www.sunpharma.com

Creating Lasting Value

Investor PresentationFeb 2010


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Creating Lasting Value - Investor Presentation 2

Disclaimer

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, investment and

business income, cash flow projections, our exposure to market risks as well as other

risks. Sun Pharmaceutical Industries Limited does not undertake any obligation to update

forward-looking statements to reflect events or circumstances after the date thereof.


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Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations

GeographiesAPI, FinishedDosage &Manufacturing

Research &Development

Management& Governance

Financials

2

3

4

5


4/43


Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

3

4

5


5/43Creating Lasting Value - Investor Presentation5

Revenue Composition

45%

35%9%

11%

India

Branded Generics

5 Year CAGR 25%

US Generics

5 Year CAGR 47%

APIs5 Year CAGR 20%

International Branded

Generics (ex-US)5 Year CAGR 42%

Finished Dosagesales 89%5 year CAGR 34%

Internationalsales 53%5 year CAGR 43%

2008-09 Annual sales : Rs 43,751 million

5 Year CAGR 32%


6/43Creating Lasting Value - Investor Presentation6

Creating Value, Continuously

1983

Began with5 products

1993

First Research CentreSPARC, Baroda

1994

IPO - Rs. 550 Mnraised

1995

First APIPlant Panoli

1997

Went Global,$7.5Mn investedin Caraco

2004

USD 350mnFCCB raised

2007

Demergerof innovativeR&D to SPARC

The performance continues

2010

5 Key operatingsubsidiaries8,000+ Employees

Invested Rs. 17 billionin Research

19 Manufacturing facilitiesin 4 Continents

More than 50% of sales from international markets

PART OFSun Pharma Today

83 10


7/43Creating Lasting Value - Investor Presentation 7

Key Operating Subsidiaries

Caraco Pharmaceutical

Laboratories

Develops, manufactures, market

and distributes generic andprivate label pharmaceuticals

and markets them throughout

the United States.

Chattem

Chemicals, Inc.

Narcotic raw material

importer and manufacturerof controlled substances

with a facility in Tennessee,

US

Sun Pharmaceutical Industries Limited

Sun Pharmaceutical

(Bangladesh)

Owns and operates a pharmaceutical factory and

makes pharmaceutical products that are sold in

the local market.

Sun Pharmaceutical

Industries, Inc. (SPI)

US based wholly owned subsidiary

of Sun Pharmaceutical IndustriesLimited, India.

Alkaloida Chemical

Co. Exclusive Group Ltd

ICN Hungary acquired in 2005, now renamed;

one of the few units worldwide, authorized to

make controlled substances



Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

34

5



Strategy and Approach

Create sustainablerevenue streams

Focus: Chronic therapies

Differentiation: Technically

complex products

Speed to market

Seek cost leadership

Vertical integration :

Development through

Manufacturing (API and

Finished Dosage) to Marketing

Optimize operational costs

Balance profitability andinvestments for future

Acquisitions yielding high ROI

Development of complex generics


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Growing SteadilyConsistent top-line and bottom-line growth;

continuing the trend despite increasing size

Net Sales Net Profit

1,500

11,853

3,96215,

000

00-01 01-02 02-03 03-04 04-05

0

4,500

42,723

18,177

004-05 05-06 06-07 07-08 08-09

0

20,000

55,

000

0

5,435

1,352

0

6,

000

96-97 97-98 98-99 99-00 00-01

(Figures in Rs million)


11/43


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Successful At AcquisitionsAcquired 14 high potential yet under-performing businesses*; successful

turnarounds

Net Sales (MINR) Operating Margin(%) Operating Profit (MINR)

0

2,000

4,000

6,000

8,000

10,000

95-96

96-97

97-98

98-99

99-00

00-01

01-02

02-03

03-04

0

9

18

27

36

45

8 Early Acquisitions


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Key Acquisitions & RationaleYear Acquisition Country Rationale

2008Caraco acquired some products ofForests Inwood business

US Increased generic product offerings

2008 Acquired Chattem Chemicals, Inc. Tennessee, USImport registration with DEA, API Plantapproved by DEA in Tennessee, US

2005 Assets of Able labs New Jersey, US Dosage form plant (NJ, US) and IP

2005 Formulation plant in Bryan Ohio, US Dosage form plant (Ohio, US)

2005 Acquired ICN Hungary Hungary API and dosage form plant (Hungary)

2004 Womens Health Brands US Brands in womens health (US)

2004 Merged Phlox Pharma Baroda, India API Plant

2000Merged Pradeep DrugCompany Ltd (PDCL)

Chennai, India API Plant

1999 Merged Milmet Labs India Ophthalmology brands

1998 Brands from Natco India Respiratory brands

1997 Acquired Caraco Detroit, US Dosage form Plant

1997Merged Tamilnadu DadhaPharmaceuticals Ltd (TDPL)

Chennai, IndiaGynecology and oncology brands; API anddosage form plant

1996 Acquired MJ Pharma Halol, India Dosage form plant (now USFDA approved)

1996 Acquired Gujarat Lyka Ankleshwar, India API plant

1996 Bulk Drug plant from Knoll Pharma Ahmednagar, India API plant (now USFDA approved)


14/43


Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

34

5


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India Branded Generics : Strong Base

Market Share3.6%

Leadership in chronic

segment;

Top 3 in over 50% of more

than 500 brands

Neuro-Psychiatry

29%

Cardiology

20%Diabetology

11%

Gastroenterology

11%

Gynaecology &

Urology - 7%

Musculo-Skeletal

& Pain - 4%

Antiasthamatic &

Antiallergic4%

Ophthalmology - 4%

Others10%

Therapywise Break-up


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Relentless Customer Focus

1998 Market Share indexed to 100 for all companies

Therapy focused marketing

2,500+ sales representatives

covering 130,000 specialist doctors

Strong increase in

prescription and

sales market share

60

100

140

180

220

260

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Sun Cipla Ranbaxy Nicholas Cadila DRL


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Therapy Focused MarketingDelivering promotional message to specialty customers.

Cardiology, DiabetologyGastroenterology,

Orthopedics

Oncology

Rheumatology,Dermatology

Asthma,COPD

InterventionalCardiology

Fertility, Gynecology,Urology

Psychiatry, Neurology GynecologyOphthalmology


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Well diversified growth Growth not dependent solely on launch of new products

Over 60% of growth from products launched prior to 2005

(20%)

0%

20%

40%

60%

80%

Dr Reddy's Lupin Cipla Piramal Ranbaxy Cadila Sun

Source: ORG IMS, Nomura Research


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No Blockbuster Risk

Top 10 brands contribute 21% of sales

Top 50 brands contribute 55% of sales growth

0%

20%

40%

60%

80%

100%

Ranbaxy

Dr Reddy's

Cipla

Cadila

Piramal

Sun

Lupin

Other products

Top 50 productsSource: ORG IMS, Nomura Research


20/43


Preferred Choice of Doctors

Our Top 10 BrandsLeadership in key therapeutic areas*

Specialist Oct '04 Oct '09

Psychiatrists 1 1

Neurologists 1 1

Cardiologists 3 1

Orthopaedic 3 1

Ophthalmologists 2 1

Gastroenterologists 1 2

Diabetologists 3 2

Chest Physicians 6 4

Nephrologists 5 4

Consulting Physicians 6 4

Gynaecologists 10 4

Oncologists 9 6

Urologists 8 8

ENT Specialists 7 16

Brand Name Therapy area

Glucored Oral antidiabetic

PantocidProton pump inhibitor/antiulcerant

Susten Women's healthcare

Aztor

CVS, cholesterol reducing

agent

Pantocid-DProton pump imhibitor/antiulcerant

Strocit CNS, stroke

Repace CVS, Hypertension

Gemer Oral antidiabetic

Encoratechrono

CNS, epilepsy

Repace H CVS, Hypertension

*Ranks based on prescription share


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US Generics

Integrated generic manufacturer

with flexibility for manufacture

onshore / offshore

The 76% owned US generics subsidiary,

markets own and Sun Pharma ANDAs

Sun Pharmaceutical

Industries, Inc. (SPI)

Caraco Pharmaceutical

Laboratories Ltd.

A wholly owned subsidiary of

Sun Pharma in US

ApprovalsTherapy wise summary

As on Dec-09

Endocine, 1

Gastro, 2

Urology, 1

Allergy, 2

Antibiotic, 2

Oncology, 10

CVS, 13

Pain, 14

CNS, 29


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ANDA Pipeline : Significant ramp up

Products Filed and Approved Status

As of Dec 09, ANDAs for 108products await approval

(including 12 tentative approvals)

81 Products pending

(with 8 tentative approval)

Sun Pharma

27 Products pending

(with 4 tentative approval)

Caraco

40

59

95

142

176

191

1520

29

53

69

83

0

50

100

150

200

Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Dec-09

Cumulative Products Filed Cumulative Products Approved


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US Generics

Bethanechol Chloride Tabs

Bicalutamide Tablets

Caffeine Citrate Injection

Caffeine Citrate Oral Solution

Carbidopa Levodopa OD Tablets

Cetrizine HCl Syrup (RX)

Ketorolac Tromethamine Opthalmic

Leuprolide acetate Injection

16 ANDA Approvals in last 12 months

Nicardipine HCl Injection

Oxaliplatin for Injection

Oxycodone HCl Tabs

Promethazine HCl Oral Solution

Quinapril Tablets USP

Sumatriptan Succinate Tablets

Topiramate Tablets

Vecuronium Bromide for Injection


24/43

i k


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Europe Generic Markets

Plan to enter key markets

Working on complex generic

products, including injectables

Filings from Indian site

Acquired an API and Finished Dosage

manufacturing company in Hungarywith controlled substance capacity

Focus Countries

I t ti l B d d G i M k t


26/43


International Branded Generic Markets

Less Regulated Markets

Product basket width and

technology based products as

growth drivers

Replicating the speciality template

30+ countries, 1600 products registered

and 1000 awaiting registration

400 strong local sales force promotes

brands to doctors

CIS Countries

China

Sri Lanka

Map Not to Scale

Mexico

South AfricaOther Markets

Focus Markets

Brazil

Myanmar

S i lit API


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Speciality API

High Margin Regulated Markets

Business largely with end users inregulated markets

Over 160 speciality APIs across 8 plants

Strong regulatory capability

148 DMF / CEP filed

84 approved

St R l t C bilit


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Strong Regulatory CapabilityInternational level quality processes and documentation

75

90

133

148

33

40

81 84

0

50

100

150

Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09

DMF/CEP Filed DMF/CEP Approved

Man fact ing Locations


29/43


Manufacturing LocationsPlants across four continents enables us to compete with a tight

handle on cost and time to market across the geographies

Jammu

Ahmednagar

Maduranthakam

BangladeshPlant

Sikkim Plant

Americas

Cranbury

Detroit

Bryan

Tennessee

Goinia(Brazil)

Iztapalapa(Mexico)

Tiszavasvari(Hungary)

Europe

API and Formulations API Formulations

Halol

Ankleshwar

Panoli

DadraSilvassa

Karkhadi

India

Finished Dosage Manufacturing


30/43


Finished Dosage Manufacturing

13 Manufacturing sites

worldwide

India : 6, US : 3

Over 750,000 sq. ft. area

Capacities available for a variety of

finished dosage

Tablets /

Capsules

Semisolids

Liquids

Suppository

Injectables / Sterile

Vials Dry powder

Ampoules Eye drops

Pre-filled Syringes MDIGels Aerosols

Lyophilized Units

API Manufacturing


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API Manufacturing

8 World class locations with all sites

ISO 14001, ISO 9002 approved India : 6, US : 1, Hungary : 1

Reactor capacity 1200 KL with over

650,000 sq ft area

Over 25 API processes

scaled up annually

APIKey Plants

Panoli & Ahmednagar(both India)

International regulatory

approvals: USFDA, European

Stand alone units for

peptides, anti-cancer,

steroids, sex hormones

Hungary &

Tennessee (US)

Controlled substances

manufacture

Agenda


32/43


Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

3

4

5

Research and Development


33/43


Research and Development

Generic R&D spend around 8% of net sales

Strong research teams in generics, finished

dosage development, biological support,chemistry

2 R&D centers with about 600 scientists Mumbai

Balancingthe risk

Medium term

Drug delivery systems

Immediate term

ANDA, DMF, Products for India

Baroda

R&D Infrastructure


34/43


Pharmacokinetics

Clinical Research

Analytical Method

DevelopmentFormulation

Development

Organic Synthesis

State of the art

research Labs

R&D Infrastructure

Baroda

16 acre campus with nearly

330,000 sq. ft research area

Mumbai

50,000 Sq. ft research campus

Develops Dosage forms and

generics for US, Europe

World-class equipment for instrumental, chemical and

microbiological analysis; Equipment include: NMR, XRD,

LC-MS/MS, HPLCs etc.


35/43

Corporate Governance


36/43


Corporate Governance

Our philosophy on corporate governance envisages

working towards high levels of transparency,accountability and consistent value systems across

all facets of operations

Committee chaired by Keki Mistry

comprises Hasmukh Shah and

S. Mohanchand Dadha

Audit CommitteeEminent Independent Directors

Hasmukh Shah

Chairman Gujarat Gas

Former Chairman and

Managing Director, IPCL

Keki Mistry

Vice Chairman and

CEO, HDFC

S. MohanchandDadha

Former Chairman &

Managing Director, TDPL

Ashwin DaniVice Chairman and

Managing Director,

Asian Paints Ltd.

Agenda


37/43


Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

3

4

5

Shareholding Pattern


38/43


Shareholding Patternas on Dec 31, 2009

Rs 1,000 Invested in

the 1994 IPO is

currently worth morethan Rs. 120,000

Earned dividend of

Rs. 4,000Mutual Funds3%

Promoter andpromoter group

64%

Bodies Corporate5%

Individuals and Others6%

Financial Inst / Banks3%

FIIs / Foreign Banks19%

Financials


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FinancialsMarket capitalisation Rs. 312 billion / USD 6.7 billion*

2004-05 2005-06 2006-07 2007-08 2008-09

P&L Summary

Net Sales 11,853 16,368 21,359 33,565 42,723Gross Profit 8,619 11,492 15,592 26,344 34,154

EBITDA 4,167 4,914 6,724 15,511 18,639

Net Profit 3,962 5,733 7,843 14,869 18,177

R&D Spend 1,428 2,014 2,787 2,990 3,320

Fully Diluted EPS (Rs.) 20.7 27.7 38.9 71.8 87.8

BS Summary

Shareholders Funds 11,307 15,902 27,728 49,915 70,449

Loan Funds 18,230 18,745 11,144 1,436 1,789

Net Fixed Assets 6,213 8,977 10,122 11,040 16,196

Investments 6,485 3,541 2,543 7,560 18,595

Cash and Bank Balances 11,809 15,324 13,802 12,389 16,690

Inventories 3,173 5,117 6,645 7,723 9,757

Sundry Debtors 2,511 3,609 6,789 14,177 8,811

Sundry Creditors 1,063 1,110 968 2,393 2,543

Cash Flow Summary

Net Cash from Operating Activities 3,754 1,852 2,395 5,048 21,651

Net Cash used in Asset Creation Activities 1,666 3,387 2,000 1,995 5,900

Figures in Rs million

*Exchange Rate : 1 USD = Rs 46.37

Financial Ratios


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Financial Ratios

2004-05 2005-06 2006-07 2007-08 2008-09

Growth (%)

Net Sales 25.5 38.1 30.5 57.1 27.3

Gross Profit 22.2 33.3 35.7 69.0 29.6

EBITDA 5.9 17.9 36.8 130.7 20.2

Net Profit 25.5 44.7 36.8 89.6 22.2

Margins (%)

Gross Margin 72.7 70.2 73.0 78.5 79.9

EBITDA Margin (%) 35.2 30.0 31.5 46.2 43.6

Net Margin 33.4 35.0 36.7 44.3 42.5

Return (%)

Return on Average Capital Employed 20.1 18.7 22.7 35.5 31.5

Return on Average Net Worth 48.6 45.6 37.0 38.3 30.2

Others

Debt / Equity 1.61 1.18 0.40 0.03 0.03

R&D Spend % of Net Sales 12.0 12.3 13.0 8.9 7.8

Revenue 8.5 9.4 11.4 8.5 7.3

Capital 3.5 2.9 1.6 0.4 0.5

Q3 and 9m FY10 Update


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Q3 and 9m FY10 UpdateFigures in Rs million

International sales are 46% and India sales at 54% of total sales

68.7

8.2%

2,572.0

45.3%

14,228.5

47.5%

14,893.3

79.6%

24,975.8

22,196.1

9m FY09

46.2

6.4%

1,906

32.0%

9,566.0

31.5%

9,443.0

72.2%

21,619.5

29,936.2

9m FY10

(32.8%)

(25.9%)

(32.8%)

(36.6%)

(13.4%)

(4.6%)

ChangeQ3 FY10 Q3 FY09 Change FY 0809

Net Sales 10,208.6 9,182.8 11.2% 42,723.0

Gross Profit 7,351.3 7,410.2 (0.8%) 34,154.2

Gross Margin 72.0% 80.7% 79.9%

EBITDA 3,684.1 4,134.3 (10.9%) 18,638.8

EBITDA Margin 36.1% 45.0% 43.6%

Net Profit 3,389.5 4,086.4 (17.1%) 18,177.3

Net margin 33.2% 44.5% 42.5%

R&D 514.6 945.7 (45.6%) 3,320.4

R&D as % of Net Sales 5.0% 10.3% 7.8%

EPS (Diluted) INR 16.4 19.7 (17.1%) 87.868.7

8.2%

2,572.0

45.3%

14,228.5

47.5%

14,893.3

79.6%

24,975.8

22,196.1

9m FY09

46.2

6.4%

1,906

32.0%

9,566.0

31.5%

9,443.0

72.2%

21,619.5

29,936.2

9m FY10

(32.8%)

(25.9%)

(32.8%)

(36.6%)

(13.4%)

(4.6%)

ChangeQ3 FY10 Q3 FY09 Change FY 0809

Net Sales 10,208.6 9,182.8 11.2% 42,723.0

Gross Profit 7,351.3 7,410.2 (0.8%) 34,154.2

Gross Margin 72.0% 80.7% 79.9%

EBITDA 3,684.1 4,134.3 (10.9%) 18,638.8

EBITDA Margin 36.1% 45.0% 43.6%

Net Profit 3,389.5 4,086.4 (17.1%) 18,177.3

Net margin 33.2% 44.5% 42.5%

R&D 514.6 945.7 (45.6%) 3,320.4

R&D as % of Net Sales 5.0% 10.3% 7.8%

EPS (Diluted) INR 16.4 19.7 (17.1%) 87.8

Taro Update


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p

Latest

Background

Taro sent Sun Pharma a notice for purported termination of the merger agreement

saying US $10.25 per share, was too low in view of the dramatic turnaround

Sun Pharmas cash injections of approx. $60 million last year was a major factor,

otherwise Taro would have virtually negative cash

75% of Taro shareholders who are not identified with either Levitt family or Sun

objected to the continued control of the Company by the Levitt family and itsrepresentatives on the Board in the 31 Dec 2009 AGM

Despite this, the entire Board was re-elected on account of the voting majority of the Levitts

Shareholders voted decisively against the election of Taros external director

Prior to the AGM, Sun Pharma exercised its warrant to purchase 3,787,500 ordinary

share of Taro

Taro refused to issue such shares

Supreme Court judgment related to the temporary injunction & STO litigation is

awaited


43/43


For updates and specific queries, please visit www.sunpharma.com

or feel free to contact

Uday Baldota

Tel : +91 22 6645 5645, Ext 605

Tel Direct : +91 22 66455605

Mobile : +91 98670 10529

[email protected]

Mira Desai

Tel : +91 22 6645 5645, Ext 606

Tel Direct : +91 22 66455606

Mobile : +91 98219 23797

[email protected]

2010 Sun Pharmaceutical Industries Limited., All Rights Reserved.

SUN Pharma, The Sun Pharmaceutical Industries Logo are trademarks of Sun Pharmaceutical Industries Limited.

In addition to Company data, data from IMSORG, CMARC, Stock Exchanges and industry publications has been used for this presentation.

This material was used during an oral presentation; it is not a complete record of the discussion. This work may not be used, sold, transferred, adapted, abridged, copied or

reproduced in whole on or in part in any manner or form or in any media without the prior written consent. All product names and company names and logos mentioned

herein are the trademarks or registered trademarks of their respective owners.

sun pharma company

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