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INVESTOR PRESENTATION September 2005

Cadila Healthcare Ltd. INVESTOR PRESENTATION September 2005. Zydus Cadila- One of India’s leading integrated pharma company. Ranked 5th in the domestic formulation market with 4% market share Foraying into the developed generics markets Leveraging strengths through contract manufacturing

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INVESTOR PRESENTATION September 2005

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  1. Cadila Healthcare Ltd INVESTOR PRESENTATION September 2005

  2. Zydus Cadila- One of India’s leading integrated pharma company • Ranked 5th in the domestic formulation market with 4% market share • Foraying into the developed generics markets • Leveraging strengths through contract manufacturing • Consolidated revenues of US$ 300mn, PAT US$28mn and market capitalization of U$0.7b

  3. Core business areas Domestic dosage forms High end APIs + intermediates Emerging markets Developed generics markets Contract manufacturing Research & Development Revenue break up by segment Revenue break up by region Based on 1Q 2005-6- Altana JV’s contribution was low

  4. Facilities and infrastructure

  5. Moraiya- largest facility in Asia - capable of producing 3 bn tablets/pa (single shift) Amongst the few in India to make Lyophilised products Vaccines Aerosols Hormones Cytotoxic products Only producer in India Trans dermal patches Suppositories Country wide distribution One of the largest sales force in the country Servicing ~0.15m doctors or about 60% doctors in the country Capability for cold chain products Distributing high-end in-licensed products Distinctive capabilities in manufacturing, distribution Manufacturing Distribution

  6. Overall strategy • Continued focus on domestic market • Grow rapidly in key global generics markets- US and Europe • Leverage strengths through contract manufacturing opportunities • Focus on innovation- R&D

  7. 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 • Marketing excellence 2000-01 2004-05

  8. New products- a key driver of growth • New products introduced in last 3 years contribute ~15% of sales • Plan to introduce 40 new products 2005-6 including 3 in- licensed products • Towards marketing excellence -Project Phoenix • Strengthening pillar brands • Rejuvenating mature brands • Enhancing product management skills • Improving business health

  9. Achievements in domestic market • Zydus Cadila ranks 5th with Rs ~8bn sales • Market share of ~4% in a highly fragmented market • Market growth slowed to 1.8% ( ORG-IMS MAT June 05) #5 Source: ORG-IMS MAT June-05 Rs. mn • 15 Zydus brands feature amongst the top 300 brands • Half of top 20 brands still growing and 90% have >10% MS • Feature in top launches every year -Best launch of 2004- Nucoxia

  10. Top rankings in key therapeutic areas Segment/ Total market Segment growth Zydus MS Zydus Rank Cardiovascular 10.6% 9% 8.1% 1 Gastrointestinal 7.1% 1% 8.7% 1 Female Healthcare 1.5% 5.7% 22% 1 Respiratory 3% 4.4% 10% 2 Pain Management 3 5.2% 2% 5.3% * Segment ranking and Market Share refer to participated market Source:ORG-IMS Jun 05 (MAT)

  11. 60 110 200 International business- two fold focus • Developed generics markets • US- the largest generic market in the world • Zydus Pharmaceuticals (USA) • Zydus Healthcare LLC • 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 Formulations-emerging markets Formulations- developed markets APIs/intermediates- exports 2005 2010E

  12. US - the key market • Cost excellence through backward integration • Significant proportion of own APIs • API and FDF facilities in India with US cGMP quality control • 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

  13. US - robust filings • 27 ANDAs represent ~ U$ 20b in current market size • ANDAs filed- half for mature products. Include 6 blockbusters and 2 NDDS • Half the products envisage own API Product Approvals by FDA Current status of filings • Atenolol • Clindamycin • Metformin HCI • Metformin ER-750 mg • Metformin ER-500 mg • Filed 27 ANDAs and 30 DMFs so far • Received 5 product approvals • Plan to file 12-15 ANDAs and DMFs annually

  14. US - marketing plan • Plan to launch 4-5 products in 2005 • Atenolol, Metformin- first shipments sent, more orders on hand • Launch another 12-15 products in 2006 • Aggregate market size of these ~ 20 products US$ 15b in current brand size • Expect to multiply sales in 2006 even as pricing pressure continues

  15. France- first step in Europe 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 Generics to drive our French business French business segments • Branded generics business • Launched pure generics • Export business

  16. Key initiatives for France • Relationship with • pharmacists • Building special relationship with pharmacists • Supporting a health awareness program for the Zydus club of pharmacists • Leveraging India’s low cost • New product filings- first dossier submitted in 2004-5, more in pipeline • Site variation- current 3 filings, 2 approvals • Launch of generics • Launched 67 generic presentations • Plan to boost the basket to 80 presentations by end 2005

  17. International business- new markets • Spain/ Italy • Low generics penetration, high growth • Looking for suitable entry opportunity • South Africa • Branded generics- commenced operations • Marketing and distribution partner finalized • Plan to launch 4-5 products in 2005-6, 8 in 2006-7 • Brazil • Generics market size of ~US$0.5b • Launched 5 generics products in Q105-06 • Plan to increase basket to 11 products in 2005-6 • Plan to file for and launch 10-12 products every year

  18. Altana JV- the benchmark in contract manufacturing • Successful JV, high profitability • Contributed 47% of consolidated PAT in 2004-5 ( annualized basis) • Contribution volatile in last few quarters due to change in dispatch, expansion related closure in 1Q 2005-6 • Post-expansion in 1Q 2005-6- expect operations to be smoother, subject to Euro • Expect JV contribution to account for lower proportion of consolidated profits in future, as other segments grow

  19. Contract manufacturing - exciting prospects • Mayne Pharma (Australia) - JV model for oncology injectibles (Generics) • Breaking ground for an integrated cyto toxic facility near Ahmedabad • Commercial production expected in FY08 • 4 contacts signed in 1Q 2005-6 with peak revenue potential of US$13 m. • Discussing with various pharma companies currently

  20. Research - investing for the future • R& D pipeline • 3 in pre-clinical stage • First IND filed and phase I clinical trials started in house • Start phase II in 2006-7 • Expect to file one more IND in 2006 • NDDS- novel release, inhaled, trans-dermal • 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 R & D % to Sales NCE Pre Clinical Phase 1 Phase 2 Phase 3 ZYH1 Dyslipidemia ZYH2 Diabetes ZY01 Obesity ZYI1 Inflammation

  21. Summary of Growth drivers Long-term >5 years Medium-term 2-5 years Short-term < 2 years • Innovation- research driven (NCE and NDDS) global pharma company • Expand business in regulated generic markets- organically /inorganically • In-licensing and out-licensing • Contract manufacturing, in-sourcing and leveraging on alliances • Capitalise on existing strengths to drive growth in domestic market • Regulated generics markets – APIs and formulations in Europe and USA

  22. Leveraging the India advantage US - regulatory filings + formulation manufacturing base in India + high level backward integration France- Shift manufacture to India gradually through site variation/new filings Contract manufacturing-lower cost manufacturing R&D- phase I /IIa clinical trials in India Bio-equivalence studies- potential to carry out in India

  23. Consolidated Financial Highlights 2004-5 was affected by de-stocking by the channel in the run up to VAT implementation from April 1, 2005, leading to 24% lower domestic formulation sales in Q4, affecting FY 2004-5 sales, profits and growth Note: Consolidated numbers of 2004-5 include 15 months of operations for foreign subsidiaries and Altana JV and as such, not strictly comparable.

  24. Highlights Q1 2005-6 consolidated result *Altana JV’s contribution was lower due to expansion related closure, lower lifting by Altana and weaker Euro.

  25. 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

  26. Thank You 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

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