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TRANSCRIPT
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GROWTH OPPORTUNITIES IN
PHARMACEUTICAL SECTOR
Presented by
Gayatri Limbachiya A-1OPriyam Mhashilkar A-23
Pallavi Edakhe A-6
Sheetal Pawar A-31
Ashwin Soni A-47
Farhan Siddiqui A-45
Akhlaque Shaikh A-54
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INTRODUCTION
The Pharmaceutical Industry in India is one of the largest in the world
By 2015 it is expected to reach top 10 in the world beating Brazil, Mexico,South Korea and Turkey
The estimated worth of the Indian Pharmaceutical Industry is US$ 20billion
Almost most 70% of the domestic demand for bulk drugs is catered by theIndian Pharma Industry
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The growth rate of the industry is 13% per year
Healthcare grew from 4 per cent of average household income in 1995 to 7
per cent in 2005 and is expected to grow to 13 per cent by 2025
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The Indian Pharmaceutical Industry is one of the biggest producers of the
active pharmaceutical ingredients (API) in the international arena
Indian bulk drug industry will expand at an annual growth rate of 21
percent to reach $16.91 billion by 2014.
Around 40% of the total pharmaceutical produce is exported
55% of the total exports constitute of formulations and the other 45%
comprises of bulk drugs
There are approximately 250 large units and about 8000 Small Scale Units,
which form the core of the pharmaceutical industry in India (including 5
Central Public Sector Units).
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PHARMA INDUSTRY STUCTURE
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Active Pharmaceutical Ingredients (APIs) examples Orchid Chemicals,
Elder Pharma etc.
Formulationsexamples Sun Pharma, Cipla, Dr. Reddys etc.
Contract Research and Manufacturing Services (CRAMS)Examples
include companies like Divis Labs, Jubilant Life Sciences etc.
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Export from India March -2011
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CHANGING FOCUS IN CRAMS
Contract research is increasing at the rate of 25% per year
CRAMS sector to the level of $7.6 billion by 2012 from $3.8 billion a yearago
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Contract Research Organizations(CROs) provides services including
drug discovery, new product development, formulation, pre-clinical
trial
The main factors for the growth of the CRAMSHigh Number of USFDA and UKMHRA approved plants
Well-developed chemistry skills
Low production & R&Dcost
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Under WTOs TRIPS Agreement(2005), Developing countries to provide
product patents on pharmaceuticals.
India decided to enforce a product patent regime since 2005, which banned
copying and selling of patented drugs launched after 1995.
This gave them confidence to take on global generic companies and went
ahead to acquire numerous overseas units to enter newer markets
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Biosimilars
48% of global revenues of the top 100 drug
will be from biomolecules by 2016
Biggest product could be Humira rheumatoid
arthritis drug in 2020
Patented Biologicals costlier demand less,
Companies keen on Biosimilar
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Challenges
Tougher to produce
Manufacturing processes cant be altered
cost of developing a biosimilar higher than
chemical generics
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Biosimilars in India
15 epoetin, 4 insulin also other Anti Cancer
Biosimilars
Market estimated with CAGR 30%+
Success Story: Dr Reddy's Reditux, biosimilar
of Roche's cancer drug Rituxan
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Mergers
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Alliance and Partnership
Research
Co Develop Drugs
buy or in-license molecules
Manufacturing
cost advantage
highest number USFDA-approved plantsoutside US
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Innovation DrivesPharmaceuticals Business
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Stratified Medicine
the move from mass market therapy to
specialized therapies to treat smaller groups
of patients
Companies with great science and deep
pockets are developing high tech compounds.
Pfizers Xalkori (crizotinib)
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Convergence Of Drug Device
opportunity to combine the biological and/or
biomechanical properties of drugs and devices
e.g. direct in situ delivery of therapeutic
agents
It requires a highly specialized marketing and
sales
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Reviving Dormant Compounds
a major growth opportunity lay in revisiting
dormant compounds
some companies are re-evaluating and re-
visiting them
opportunities in reviewing data, reviewing all
aspects of past clinical data
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E.g. Thalidomide
approved by the Federal Drug Administrationfor treatment of leprosy
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Embracing Change In Organization
a shift in mind set hence in behaviours is
needed in order to redefine success
daring to propose and implement stepwise
new ways of working, of competing should be
part of a firms DNA.
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CHALLENGES
delivering affordable health care to India's
billion-plus people
the regulatory environment
to create access to a reasonable quality healthcare for all
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FUTURE PROJECTIONS
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Divis laboratory Limited
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Introduction
Established in the year 1990
Headquarters and Registered Office
at Hyderabad
four multi-purpose manufacturing facilities withall support infrastructure like Utilities,
environment management and safety systems.
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Fundamentals and strength
As a Prime fundamental, focused on developingnew processes for the production of ActivePharma Ingredients (APIs) & Intermediates.
Complete turnkey solutions to the domesticIndian pharmaceutical industry.
With 5 years of experience, expertise and aproven track-record of helping many companieswith its turn-key and consulting strengths,
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It undertakes custom manufacture of APIs andadvanced Intermediates offering a competitiveadvantage to its clients over the entire life cycle of
the products.
Transparency in operation
Great benefit from Divis Research Center givesclients the advantage to concentrate on actualinvention
Invested heavily in knowledge, equipment and man-power to expand in technology area which issophisticated, challenging and rewarding. Currently,Divis is a major manufacturer of protected amino-
acids.
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Stock Analysis
Q1 Net profit up
67% Y-o-Y to
Rs167 cr
Q4 net profit up24% Y-o-Y to
Rs 216 cr
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Key financial indicators
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Financial Ratios
Net Profit ratio : 28.57 %
Expense Ratio : 63%
Current ratio : 3.181
Return on Asset : 25 %
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About Sun Pharma
Established by Mr. Dilip Shanghvi in 1983 inKolkata
57% sales (US).
fourth largest pharma company in India
The company markets over 200 generics, withanother 150 awaiting approval from the USFDA.
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Manufacturing is across 23 locations
Canada
U.S
Mexico
Brail
Isral
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A planned acquisition of Israeli Taro Pharmaceuticalsinitiated in March 2007 completed in Sept 2010.
Acquisition via Alkaloida
Sun's subsidiaries has stake in Taro to 66.5 per cent asper the deal
Proposes acquiring remaining stake (33.5%) in Oct2011
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1 Not interested in taking over
Wockhardt: Sun Pharma
2 Lupin's acquisition
agenda for the future
With Sun Pharma-Merck
striking JV, why is SPARC
shining?
The good, the bad &
the ugly of Q4
earnings(12%
increase442 cr)
Sun Pharma to
acquire Taro, to pay
$367m for 33.5%
stake
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6 Wockhardt to
conclude nutrition
business sale by
20127 Wockhardt to conclude
nutrition business sale by 201
8 Sun Pharma to
acquire Taro, to pay
$367m for 33.5%
stake
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Financial Analysis
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2010 2011 2012
PAT
Operating Profit
Income
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Highlights
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Reasons
Sales in India were Rs. 19,334 million, down 6%.
Caraco, Sun pharmas 75%
us-base subsidiary
Stopped manufacturing
operations from June 2009
Total Income
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0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,500.00
4,000.00
4,500.00
5,000.00
2010 2011 2012
Total Income
Total Income
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0
100
200
300
400
500
600
700
800
900
2010 2011 2012
R&D
R&D
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R&D
Creating new molecules
537 products
Developed APIs in cost effective manner
Anticancer ,steroid
Generic formulation (nasal sprays , dose inhaler )
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Initiated exports to Europe for the first time
received 11 product approvals in Europe up to
March 2010.
Received approvals for eight APIs from various
regulatory authorities; this took the total
regulated market-approved APIs to 89 out of155
Net Block
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0
200
400
600
800
1000
1200
2010 2011 2012
Net Block
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0
5
10
15
20
25
30
35
40
45
50
2010 2011 2012
Earning Per Share (Rs)
Earning Per Share (Rs)
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COMPANY ANALYSIS:
DRL
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Company was founded by Dr. Anji Reddy.
Pharmaceutical company global generics segment, API segmentand proprietary products segment.
Reddys manufactures and markets a wide range ofpharmaceuticals in India and overseas.
Co. has 190 medications, 60 API for drug manufacture, diagnostickits and biotechnology products.
1st pharma company from Asia (except Japan) to be listed on NYSE.
DRL d B t h i iti
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DRL and Beta pharma acquisition DRL acquire 100% equity of the German drug major.
Benefits to DRL DRL immediately got access to the generic market of germany.
66% market in Europe was held by Germany.
DRL gained strategic presence in EU.
There was not much liability linked to this acquisition.
Stock market, Jan 16, 06 1030, Feb 16,06 1260.
Synergy
Distribution
Manufacturing
Pipeline
Branding
Presence
Size
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DRLs acquisition of GSK's penicillin facility in US
Completed the acquisition of Glaxosmithkline (GSK) oral penicillin facility
in US on Nov10. The buy was in line with its strategy to scale up its generic business in
North America.
It also brought an opportunity to explore additional synergy with itsbusiness.
Dr Reddys scrip gained 2.93% to end at Rs 1680 on BSE.
DRL and Merck Serono announce collaboration to develop
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p
and commercialize Biosimilars
DRL has been pioneer in Biosimilar space as launched 4 Biosimilarmolecules till date.
The partnership with Merck Sereno expands DRLs presence in theBiosimilar space select emerging markets and enables partnershipglobally.
With FDA guidance, any significant player in the field will need strongbiologics, development, manufacturing and commercialization
capabilities. Merck Serenos & DRLs Joint expertise in these fields makes for a powerful
global partnership.
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DRL to acquire Octoplus pharma
DRL announced to acquire Octopus pharma, a service based
pharmaceutical company of Netherlands for 27.39 million in cash on 22October, 2012.
DRL offered to acquire 100% of the issued and outstanding shares of
octopus with a premium of 30%.
DRL already got commitment from over 50% of share holders of Octoplus.
Deal would help expand the companys expertise and scientific capabilities
as DRL is aiming to build a research base in Leiden (Netherlands).
DRLs New molecule
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DRL s New molecule
DRLs stock surged about 4% on announcement of encouraging phase III
trials of an anti diabetic drug and tie up for manufacturing obesity
management drug, Orlistat. DRL and its research partner, Rheoscience announced that the initial trials
of phase III stage of its anti diabetic compound, Balaglitazone is effective
in reduction of HbA1c.
HbA1c test is carried out to test blood sugar levels and it is the first Indian
molecule to reach this stage. The company will have to prove the superiority of its molecule over
Pioglitazone, a $3 billion drug launched a decade ago in trial, if it is to have
a commercial launch which is estimated to be 1 year from now.
DRL is in a tie up with Indian Bio technology company Transgene Biotek to
manufacture and market Orlistat, an obesity management drug.
The market size from obesity management drugs accounts for $2
billion worldwide.
Molecule
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Molecule
Takeda filed patent infringement suit
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p g
Global pharma major Takeda Pharmaceuticals Ltd. had filed a
patent infringement suit in New york court over the latters
efforts to manufacture generic version of acid refluxtreatment drug Dexilant (Dexlansoprazole) in April 2011.
According to Takeda, the 2 patents which it alleged Dr. Reddy
infringed would expire in June 2020 & August 2026.
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Crosses USD 2bn in
revenuesFuji film & Dr. Reddy - JV
Expands R&D centre in
cambridge, UK
Key Financial Trends
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Key Financial Trends
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Key Financial Highlights
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Key Financial Highlights
Rs in crore
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Balance Sheet of Dr Reddys Laboratories
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Balance Sheet of Dr Reddys Laboratories
Mar 201212 mths Mar 201112 mths Mar 201012 mths
Rs Cr
Reserves 6,633.00 5,935.60 5,830.20
Net worth 6,717.80 6,020.20 5,914.60
Net Block 1,896.80 1,691.00 1,315.60
Total Assets 8,251.20 7,465.00 6,477.80
Ratios
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Ratios
Mar 12 Mar 11 Mar 10
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Mar 12 Mar 11 Mar 10
l
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Financial
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