Ranbaxy Laboratories Limited To become a Research based International Pharmaceutical Company UBS...
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Ranbaxy Laboratories LimitedTo become a Research based International
Pharmaceutical Company
UBS Global Generic and Specialty Pharmaceuticals Conference
New York
May 8, 2007
Safe HarborExcept 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. Ranbaxy does not undertake any obligation to update forward-
looking statements to reflect events or circumstances after the date thereof.
Key Drivers of Growth
• Significant patent expiries
through 2011
• Rationalizing Healthcare costs
- key priority for Governments
• Increasing genericisation
0
5
10
15
20
25
30
35
2006 2007 2008 2009 2010 2011
France Spain Italy
Russia South Africa India
$ Bn
Value of Drugs going off patent 2006 - 11
Source : IMS
• Accelerating branded generics
Key Issues
• Increasing competition
• Increasing focus on costs
Consolidation - Changing Landscape
Source: UBS, Business World, 30th October 2006
The India Pharma Story – Davos 2006
Source – Financial Times
Scientific Manpower Output Number of Higher Education Institutions
05/06 18,123 +59%
00/01 11,412
90/01 5,932
80/01 4,861
Source: Indian University Grants Commission
Number of Students enrolled in
Higher Education Institutions
05/06 10,500 +40%
00/01 7,500
90/01 4,000
80/01 3,000Source: Indian University Grants Commission
Number of Institutions courses
05/06 99/00
Pharmacy 1478 669 +120%
Medicine 229 174 +32%
Physiotherapy 205 52 +294%
Source: Pavan Agarwal (2006) based on data
from professional councils
PhD Degree awarded in Science
03/04 5408 +44%
00/01 3734
90/01 2950
(USA 03/04 25,000)
Source: Indian University Grants Committee
The Education Advantage
Engineers/Science graduates p.a. – India 0.7 mn, China 0.5 mn, EU 0.5 mn, USA 0.4 mn, Japan 0.3 mn
India in Global Generics% Share of USA DMF filings
India China
2004 27% 9%
2005 37% 10%
2006 44% 14%
Q4’06 47% 9%
Source: US FDA / J P Morgan Research
FDA Approved
Plants in India
Highest No
of DMF filings
0
40
80
120
160
2002 2003 2004 2005
ANDA Filings in USA by Indian Companies
24
46
64
144
One in every four ANDAs filed by Indian Companies in top US FDA filers (Source: KPMG)
No Chinese generic company has yet filed a US FDA ANDA but expected
in 2008
India in Global Generics
Ranbaxy Today
• Amongst Top 10 Global Gx companies
• Ground presence in 49 countries, products sold in > 125
• International business ~ 80% of sales
• Manufacturing locations in 11 countries
• > 11,000 employees, 51 nationalities
• Strong Generics & Innovative research capabilities
2001 2003 2006
$ 553
$ 972
$ 1339
CAGR 19 %
Global Sales
Worldwide Presence
Highlights - 2006
Financials
Markets
2006 2005^ %
Sales 1339 1145 +17%
EBIDTA* 16% 7% -
PAT 114 60 +90%
* % sales, ^ excludes sales from discontinued operations .i.e . Allied Businesses divested in 2005
Strong growth in USA
Leadership position in home market
Robust performance in Branded Gx
markets
Exclusivity in Simvastatin 80 mg tablets
Inorganic impetus
$ Mn
Increasing Focus on Costs
* Estimate, ^ Bio-Analytical / Bio - Equivalence
2005 2008*
• Increasing sourcing from low cost countries .i.e. India & China
• Improving R&D cost efficiencies
• Optimizing SG&A cost structures
65% 80%35%20%
2006 2005
In-House 71% 28%
Overseas CRO 8% 61%
Indian CRO 21% 11%
% Bio-Studies (BA/BE^) conducted
2006 2005
Sales growth +17%
SGA growth - Nil
Advanced Markets Low Cost Countries
Geographic Sales Split - 2006
Asia$367, +19%
Americas $440, +18%
Europe$332, +23%*
Africa $85, +24%
* Including CIS, RoW – Rest of the World
Global Sales – 2006 (US$ Mn)
DF 1224 +20%
API 115 - 9%
Total 1339 + 17%
Sales 2006 – Dosage Forms US$ 1224 Mn
Key New Markets – Canada, Spain, Italy, Australia & Japan
33%
25%27%
6%
Geographic Sales Split – Q1 2007
Asia$367, +19%
Americas $440, +18%
Europe$332, +23%*
Africa $85, +24%
* Including CIS, RoW – Rest of the World
Global Sales – Q1 2007 (US$ Mn)
DF 332 +30%
API 23 - 25%
Total 355 + 24%
Sales Q1 2007 – Dosage Forms US$ 332 Mn
29%
31%27%
7%
USA
• Strong growth in USA, +15%
• Simvastatin 80 mg 180 day exclusivity
- Market Share (MS) of 56%
• Increasing No of Prescriptions
- Q1 2005 - 10.8 Mn
- Q1 2006 - 12.5 Mn
- Q1 2007 - 14.1 Mn
• Cumulative chain store listings at 1057 (44 added in Q1 ’07)
• Branded business growth at 20%
2006 2005
OTC Brands Generics
+15%
$ 332
$ 380
Source (Market Share) : IMS
Sales
USA Product Pipeline
• 199 cumulative filings
• 111 approvals
• 88 pending approval
• ~ 20 FTF ANDAs
Cumulative ANDA Filings
Source (Market Size) : IMS
• 2006 - 27 filings
- 10 approvals
• Innovator Market Size
- 88 ANDAs – US$ 56 Bn
- 20 FTF – US$ 26 Bn
USA
Products pending approval
Source: Merrill Lynch Equity Research, February 2007
0
40
80
120
160
200
Teva Ranbaxy Sun Mylan Watson DRL Barr Par
0
40
80
120
160
200
Teva Ranbaxy Sun Mylan Watson DRL Barr Par
# o
f A
ND
As
Second largestpipeline
Potential FTF Challenges
0
9
18
27
36
45
0
9
18
27
36
45
# o
f F
TF
s
Second largestFTF pipeline
Source: Merrill Lynch Equity Research, February 2007
USA
European Union
• Presence in 23 of the 27 EU countries
• Regulatory changes & price impacted
Western European markets
• Strong product flow in ’07 with
multiple Day 1’s
• Major countries
- Germany : AOK business
- France : Supplies from India
- UK : Gabapentin launch
• RoE to maintain growth momentum
0
50
100
150
200
250
300
2006 2005
Sales
$ 267
$ 214
$ Mn
Romania
India
• Fastest growing Company in India on MAT basis (Source :ORG-IMS Mat Mar 2007)
• 65 new products introduced in 2006
• No 1 NDDS Company with 8% MS. Contribution to total sales ~ 9%
• Dedicated task forces for Specialized & Chronic therapies
• Chronic share contribution at 21% (2005 : 20%)
• 21 brands in Top 300 of Industry ( 2005 :19)
First to market 10
NDDS 6
In-licensed 8
Source : ORG – IMS Audit Nov 2006, Moving Quarter Basis
GSKCipla
Ranbaxy
5.0%
4.9%
5.1%
Source : IMS - ORG
Research & Development
New R&D facility for Drug
Discovery Research (DDR)
R&D I
R&D III
R&D II R&D IV
Research & Development• Dedicated Facilities for Innovative & Generics Research
• > 1400 R&D Personnel ( ~ 250 PhD’s)
• 8 - 10 NCE molecules in pipeline
• NDDS based products ( 4 platform technologies)
• R&D collaborations
Alliance / Collaboration in DDR
Out-licensing
in NDDS
Out-licensing
in DDR
Ranbaxy – GSK Collaboration
• Expansion of strategic alliance established in 2003
• Take leads beyond candidate selection to POC* in man
• Therapeutic area focus of AI, Metabolic, Anti-inflammatory
and Oncology
• > US$ 100 mn in milestone payments and double digit
royalties on commercialization of a product
• Co- marketing rights in India
• First candidate identified for Respiratory Inflammation
Proof of Concept
Ranbaxy – NCE Pipeline
RBx 11160 (Malaria)
Agreement for part
funding by DST*
Molecule Status Remarks
Under Phase II B trials
(with Piperaquine)
RBx 10558 (Dyslipidemia)
Out-licensed to PPD Inc.IND approval received
from DCGI* (India) in May ‘06
RBx 9841 (Urinary Incontinence)
Out-licensing opportunity
being explored
Phase I trials
Candidate Selection
GSK Program - COPD / Asthma
RBx 10017876 - Inhalation PDE IV B, COPD/ Asthma
RBx 10020025 - Tiotropium like , MRA inh., COPD / Asthma
RBx 10019821 - Diabetes, DPP IV
RBx 10014255 - Anti infective, Macrolide / Ketolide
5 molecules under lead
optimization including
1 with GSK
* Department of Science & Technology, Drug Controller General of India
Ranbaxy – NCE Progress• Department of Science & Technology (DST) part funding on 3 molecules
• Scientific Advisory Board comprising 6 globally
renowned scientists
• GSK – 1 milestone triggered
• Therapeutic Focus -
- Anti-infectives (Malaria)
- Anti-inflammatory (COPD/ Asthma)
- Metabolic diseases (Diabetes)
- Oncology
• Unprecedented : Precedented targets ratio – 40:60
Generic Research & Development• 27 ANDA filings in USA
• 33 Filings in the European Union
Key Country / Region Filings Approvals Filings Approvals
USA 27 10 15 5
European Union 33 32 100 117
BRICS 95 71 14 12
Rest of World 462 474 42 22
Total 617 587 171 156
Dosage Forms API
Excludes India for API approvals, EU filings and approvals include Mutual Recognition Procedure (MRP) and
De-centralized Procedure (DCP) filings and approvals.
2006 Product Filings & Approvals
Recent Acquisitions & Alliances
Terapia (Romania)
Be-Tabs (South Africa)
Allen (Italy)
Ethimed (Belgium)
Mundogen (Spain)
Zenotech (India)
Krebs (India)
Jupiter Biosciences*(Ind.)
Cardinal Drugs (India)
Auto-injector Tech.(USA)
* Subject to due diligence
Niche Alliances
• Increasing focus on chronic / lifestyle diseases segment
• High entry barriers - technology & resource intensive
Fermentation
based products
Bio-similars &
Oncologics
Peptides
KrebsZenotech Jupiter*
* Subject to due diligence
Enhancing In-house Technologies
Penems
Limuses
Oral High PotencyNon-cytotoxics
Market size worldwide of ~ US$ 1.5 bn
Imipenem + Cilastatin launched in India, China, Africa,
APAC
Key US / EU launches beginning 2009
Global market size in excess of US$ 1.5 bn
Ex - US / EU launches beginning 2008
Well placed for US / EU launches
Worldwide market in excess of US$ 5 bn
Patents expiring from 2008 onwards
Day 1 launches planned for US / EU
Financials
Particulars
Sales
EBITDA% sales
OPBT*
PBT
PAT
* 2005 sales excludes sales from discontinued operations .i.e Allied Businesses. OPBT – Operating profit before tax
Figures in US$ Mn
Q1 2007 %
355 24%
4312%
35%
36 102%
37 94%
29 81%
2006 %
1339 17%
20716%
144%
131 481%
144
226%
114 90%
In Summary• A strong 2006 performance on all parameters
• Buoyant performance across key geographies
• Continuing focus on cost optimization
• Robust product flow
• Growth through organic & inorganic
• Discovery pipeline progressing well
• Global Generic rank – 9th / 10th
Thank You …
Ranbaxy at the UBS Global Generic and Specialty Pharmaceuticals Conference
New York
May 8, 2007