Indian Pharmaceutical Export Market - Top Export Destinations for Indian Pharma Companies

Indian Pharmaceutical Export Market
Perspective on key export destinations
July 2015
1
Report by
Mr. Irish Pereira
Pharma Market Analyst

2
Table of Contents
 Indian Pharmaceutical Industry – Snapshot
 Indian Pharmaceutical Industry – Overview
 Indian Pharmaceuticals Export Market
 Key players in Indian pharma industry
 Pharma players and their export destinations
 Emerging trends in Indian Pharma Market
 Bibliography

3
India
Indian Pharmaceutical Industry - Snapshot
The Indian pharma market is
expected to grow at a CAGR of
23.9% to USD 55 bn by 2020
from USD 12 bn in 2013
Domestic Market size
Indian pharmaceutical
industry accounts for about
 1.4 % of the global
pharmaceutical industry
 Ranks third in terms of
volume of production
 14th largest by value
Global Contribution
 There are around 3,000
pharma companies
 About 10,500
manufacturing units in India
Industry structure
 1,400 WHO GMP approved
manufacturing units
 584 sites USFDA approved
(Highest number of
approved plants outside US)
 1,105 CEPs,
 950 TGA approvals
Regulatory Status
 India exports to more than
200 countries of the World
 Indian Pharmaceutical
Exports amounted to USD
15.2 bn in 2014-15
 US alone accounted for
around 27% of total pharma
exports followed by
European Union and Africa
Exports
 Domestic growth driven by
higher penetration in tier-II
& III cities and the largely-
untapped rural market
 Increased health Insurance
penetration
 Rising healthcare spending's
 Growth in the number of
lifestyle diseases
 Government’s Pharma
Vision 2020 to make India a
major hub for end-to-end
drug discovery
Growth Drivers
* 1 USD = 63 INR

4
Table of Contents
 Bibliography

Expected to grows to USD 55 billion by 2020, Indian pharma
market…
5
6 12
24
55
2005 2013 2015F 2020F
Indian Pharmaceutical Sector Market Size (USD bn)  The Indian pharmaceutical sector which started in 1930 with
Bengal Chemical and Pharmaceutical Works, was virtually non
existent till 1970
 The Indian pharmaceuticals market which was valued at USD 6
billion in 2005, increased at a CAGR of 9.4 per cent to USD 12
billion in 2013 and is expected to expand at a CAGR of 24 per cent
to USD 55 billion by 2020
 By 2020, India is likely to be among the top three pharmaceutical
markets by incremental growth and sixth largest market globally
in absolute size
 Anti-infective drugs command the largest share (16 %) in the
Indian pharma market
 The cardiovascular segment represents 13 per cent of the market
share; its contribution is likely to rise due to the growing number
of cardiac cases in India
 Top five segments contribute nearly 57 per cent to the total drugs
consumption
Source: PWC, Mckinsey, Aranca Research, Extracted from IBEF Report dated August 2014, * 1 USD = 63 INR
All Indian Origin Chemists & Distributors, Department of Pharmaceuticals, Planning Commission Report, Aranca Research
Indian pharmaceutical market segments by value (Feb 2014)
16%
13%
11%
9%8%
7%
7%
29%
Anti- infectives
Cardiovascular (CVS)
Gastro-intestinal
Respiratory
Vitamins, Minerals
Pain/analgesic
Anti diabetic
Others
Source: Mckinsey, IBEF India
Source: IBEF India
* 1 USD = 63 INR

6
 Branded Generics which are identical, or bioequivalent to
innovator drugs continue to dominate the Indian pharma market
 While the patent law will encourage the launch of new and more
patent protected products, the effort on innovation is still led by
the foreign players rather than indigenous companies
 As per Mckinsey India “Patent share model”, Patented products
are expected to capture 10% share of total Indian pharma market
in 2015 and the growth is attributed to an improvement in the
implementation of patent laws and spread of health insurance
 By 2015, Mckinsey expects the top five therapeutic areas namely
neuropsychiatry, oncology, anti-infective, gastro-intestinal, CVS to
contribute 60-70 % of total patented product launched
Source: * Mckinsey Reports titled “India Pharma Inc. Capitalising on India’s Growth Potential” Dated 2010 &
Report “ India Pharma 2015 Unlocking the Potential of the Indian, Pharmaprojects
Patented (Innovator) Vs Generics Scenario*
…will be continued to be dominated by Branded Generics
10%
90%
2015E
Patented
Generic
2%
98%
2010
Share of Global Patent Pipeline (By therapeutic area)
27%
17%
10%
10%
7%
29%
Anti- Cancer
Central Nervous System
Anti -lnfective
Gastro- Intestinal
Cardiovascular
Others
Any non patented molecule with
brand name, which is other than
the innovator’s name, is termed as
a branded generic
What are ‘Branded
Generics’ ?
Substitution (when
an innovator product goes off-patent)
is the key driver
Drivers of ‘Branded Generics’
Indian Context
Global Context
Difference in Brand Equity of a
product (which is created by adopting
superior communications strategies
with physicians) is the key driver
Source: Mckinsey India
Source: Mckinsey India

7
Active
Pharmaceutical
Ingredients (APIs)
• India is expected to be the third largest global generic
API merchant market by 2016, with a 7.2 per cent
market share
• In 2012, drug companies from India filed 49 per cent
of the overall Drug Master Filings (DMFs) in the US
Indian
Pharmaceutical
Industry
Contract Research &
Manufacturing
Services (CRAMS)
• Fragmented market with more than 1,000 players
• CRAMS industry is estimated to have reached USD8.0
bn in 2015, up from USD4.0–4.5 bn in 2012
Formulations
• Largest exporter of formulations in terms of volume,
with 14 per cent market share and 12th in terms of
export value
• Domestic market size currently valued at USD11.2 bn
• Double-digit growth expected over the next five years
Biosimiliars
• Biosimilar’s sector is expected to touch USD 1.4 bn by
2016 from USD 482 mn in 2011
• The government plans to allocate USD 70 mn for local
players to develop biosimiliars
Source: BMI, Datamonitor, Kemwell Biopharma, Chemical Pharmaceutical Generic Association, ICRA Report Estimates, Aranca Research,
pharmanewsprwire.com. Extracted form IBEF report dated August 2014
API is the largest segment of the Indian Pharmaceutical Market
* 1 USD = 63 INR

8
• Reduction in approval
time for new facilities
• Focus on specialised
pharma education
• Improved accessibility
for BPL (Below Poverty
Line) people
• Pharma Vision 2020 by
the Indian
government’s Dept. of
Pharmaceuticals aims
to make India a major
hub for end-to-end
drug discovery
• MoUs with USFDA,
WHO, Health Canada,
etc. is expected to
boost growth in the
Indian Pharma sector
• India a major manufacturing hub for generics
• Cost advantage - India’s cost of production is nearly 60
% lower than that of the US and almost half of that of
Europe; Expected to create opportunities for Indian
companies in emerging markets and Africa
• 546 sites registered at USFDA
• Patent drugs worth USD 171 bn are estimated to go
off patent Between 2010 and 2015 providing great
opportunity to Indian companies
• Increasing penetration of health insurance
• Accessibility of drugs to greatly improve
• Growing number of stress related diseases due to
change in lifestyle
• Better diagnostic facilities
• Per capita sales of pharmaceuticals is expected to
expand at a CAGR of 16.3% to USD 27 by 2016 from
USD 16 in 2011
Indian Pharmaceutical Sector
Supply side drivers
Growth
Drivers
Indian Pharmaceutical sector is driven by confluence of demand,
capabilities and policy
Source: Pharmaceutical Export Promotion Council. Extracted from IBEF Report Dated August 2014
Demand side drivers
Policy Support
* 1 USD = 63 INR

9
 Qualified English-speaking manpower
 Fair protection of intellectual property rights.
 India has skilled scientists / technicians / management
personnel at affordable cost leading to low cost of innovation
/ manufacturing / capex costs / expenditure to run cGMP
compliance facilities and high quality documentation and
process understanding
 Low investments in innovative R & D
 Majority of companies lack the ability to compete with
MNCs for New Drug Discovery, Research and
Commercialization of molecules on a worldwide basis due to
lack of resources.
STRENGHTS
SWOT
WEAKNESS
Indian Pharmaceutical sector – SWOT Analysis
Source: Extracted from Report “Can India be the Leader in Global Generics “
 India has significant export
opportunities. US$40 billion
worth of drugs in the USA and
US$25 billion worth of drugs in
Europe are going off patent .
 Product patent regime poses serious
challenge to domestic industry unless
it invests in research and
development.
OPPURTUNITIES THREATS
 Data management functions for clinical trials
 Strength in Chemistry which are essential for
drug discovery.
 Rapidly increasing costs of skilled manpower such
as scientists / regulatory compliance personnel /
pharmaceutical lawyers / International business
development
 Improper systems and issues complicates conducting clinical
trials scope in India
 MNCs play different strategies to pull down Indian
companies
 Drug Price Control Order puts unrealistic on product prices
and profitability
 This translates to an opportunity of additional export of
USD 19.5bn
 Cost advantage in contract manufacturing & Research
multi-national companies find it compelling to shift their
production bases to countries offering such cost advantage.
 India has a very high potential for developing as a centre
for international clinical trials due to rich diversity.

10
PHARMEXCIL – Facilitating agency for Indian Pharma Exports
Facilitation of exports of Drugs, Pharmaceuticals, Biotechnology
products, Herbal medicines and Diagnostics etc.
Authorized to issue Registration-cum-Membership Certificate (RCMC)
which is one of the requirements for the importers and exporters of
commodities
Concerned with giving export thrust to the various products through
visits of delegations to various markets abroad, organizing of seminars,
workshops and exhibitions
Pharmexcil also holds Buyers/ Sellers meets and compiles detailed data
base on pharma exports and problems in exporting pharma products
The Pharmaceutical Export Promotion Council of India (PHARMEXCIL) has been set up in 12.5.2004.
by Government of India to promote the Indian pharmaceuticals industry around the world
Key functions of PHARMEXIL
Source: Department of Pharmaceuticals – Government of India – Annual Report 2014-15
Indian
Pharma
Exports

11
Table of Contents
 Bibliography

12
8.67
8.96
10.43
13.20
14.59
14.84
15.20
17.20
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16E
Export of Drugs, Pharmaceuticals & Fine
chemicals
Indian Pharmaceutical Exports (USD bn)  US accounted for ~ 27% of India's pharmaceutical exports in FY'14
as against 25.5 per cent in FY'13, making it the single largest
export destination
 Major share (~55%) of Indian Pharmaceuticals is exported to
regulated western markets, highlights not only about excellent
quality of Indian pharmaceuticals but also about reasonableness
of the prices
 As per India Ratings & Research, India's pharma exports are
expected to grow at 10-12 per cent and reach ~ USD 17.2 bn by
2015-16 from USD 15.2 bn last fiscal
 Exports growth are likely to be driven by fully operational USFDA
facilities, led by restored regulatory approvals and thereby
increased exports to US and regulated markets
Source: Pharmaceutical Export Promotion Council of India (Pharmexcil), Department of Pharmaceuticals, India Ratings & Research
Formulations share in Total Pharma Exports (2014-15)
71%
29%Formulations
API & Others
India continues to be a hub for low cost pharma research and
production in turn aiding manufacturing for exports
Top Pharmaceuticals Export Destinations (Value wise USD mn)
Source: Pharmexil
Source: Pharmexil
Source: Ind – Ra Research, CMIE
* 1 USD = 63 INR
* 1 USD = 63 INR

13
India’s Pharma Industry is aptly known “Global pharmacy of the
world”, with exports to more than 220 countries around the globe
Top 25 destination countries of India’s pharmaceutical exports during 2013-14 (INR mn)
“India is the pharmacy of
the world…We hope to
achieve 10-15 per cent
growth in export of
pharmaceutical products
during 2015-16,"
PV Appaji,
Director General,
Pharmexcil
Source: Pharmexcil Annual Report 2013-14, Department of Pharmaceuticals, Economic Times article

14
Table of Contents
 Bibliography

Key players in Indian Pharma Industry
15
457
517
664
773
900
921
1120
1,283
1664
1760
2091
2571
PIRAMAL
IPCA
TORRENT
WOCKHARDT
GLENMARK
JUBILANT…
CADILA
AUROBINDO
CIPLA
LUPIN
DR REDDY'S
SUN PHARMA
FY 2014
Major Indian Pharma Companies (By Revenue-USD mn)
Multinational Pharma Companies (By Revenues-USD mn)
137
176
305
372
419
NOVARTIS
PFIZER INDIA
SANOFI INDIA
ABBOTT* INDIA
GSK INDIA
FY 2014
Source: Company Annual Report 2013-14, Research Report By Centrum Broking, Pharmabiz.com article titled” Current scenario and future challenges in pharma
segment” dated Jan 2013
 The Indian pharmaceutical industry is highly fragmented with about 24,000
players (330 in the organised sector). The top 10 companies make up for
more than a third of the market.
 Sun pharma and Abbott represent top Indian and Multinationals pharma
companies respectively
 Sun pharma acquired Ranbaxy in 2014-15 to be largest Indian pharma
company
 Till 2014 MNC’s had 74 brands (25% of total) among the top 300 brands in
the domestic market.
Indian Pharma Market – Market share
73%
27%
2014
Indian Pharma Companies
Multinational Pharma companies 56%
2.7%
2.9%
3.0%
3.4%
3.6%
3.6%
4.2%
5.0%
6.2%
8.9%
Others
Emcure+Zuvetus
Macleods
Pfizer
Lupin
Mankind
Alkem+ Subsidiaries
Zydus Cadila
Cipla
Abbott + Subsidiaries
Sun Pharma + Ranbaxy
Branded Generic Sales March 2015
Source: AIOCD AWACS MAT March 2015
* 1 USD = 63 INR
* Excluding subsidiaries revenues
* 1 USD = 63 INR

16
Table of Contents
 Bibliography

Sun Pharma
17
Key Company Facts
 Market leader in India & Strong
positioning in Emerging Markets
 Highly leveraged in US with 64% of
total revenues
 Sun Pharma is the 5th largest Global
Specialty Generic Pharma Company
Differentiating Strategy of the company
Geographical Revenue Mix (% of Net Formulation Sales)
Name SUN PHARMA
Headquarters Mumbai India
Employees 30,000
Revenues (USD mn)
FY 15 4,376
FY 14 2,571
Global Presence 150 Countries
Website http://www.sunpharma.com/
24
25
52
64
14
7
9
6
FY 14
FY 15
India US Emerging Markets ROW Markets
Geography Focus Therapeutic Areas
India CNS, CVS, Diabetology
US Dermatology, oncology, controlled
substances, ophthalmology
Europe: Complex generics and differentiated
products
Emerging Markets:
Mexico, Brazil,
Russia & CIS, South
Africa
Chronic therapies like the metabolic
syndrome, diabetes, neurology and
cardiology
Source: SPIL Financials Q4 FY15,SUN’S Investor Presentation June 2015, Annual Report 2013-14
 597 ANDAs filed & 438
approved ANDAs across
multiple therapies in US
 159 ANDAs pending
FDA approval, including
complex generics, FTF
and pure generics
Company’s Strategic plans
 US Business:
 Enhance share of specialty/branded business
 Continue to focus on complex generics and high entry
barrier segments
 Gain critical mass in key therapeutic segments
 ROW Business:
 Gain critical mass in key emerging markets
 Enhance product basket in emerging markets
 Improve profitability in developed European markets
 Future markets for particular focus will include Latin
America, Russia & CIS, South Africa and a few Asian
markets with focus on specialty products
Source: Company Annual Report

Dr. Reddy’s Lab
18
Key Company Facts
 Dr. Reddy’s Laboratories' revenue model is
based on global markets rather than Indian
pharma market and its prime focus is on
building a sustainable Biosimilar business
 US and Europe markets alone accounts for ~
56% of the company revenues as against 12 %
from India
Geographical Revenue Mix (% of Net Sales)
Name DR. REDDY’S LABORATORIES
LIMITED (DRL)
Headquarters Hyderabad, India
Employees 20,000
Revenues (USD mn)
FY 15 2,352
FY14 2,091
Website http://www.drreddys.com/
41.8
43.7
15
12
11.9
12.1
5.3
4.9
5.6
8.8
FY 14
FY 15
North America Generics Russia & CIS
India Europe
India Oncology, Nephrology, Urology,
Hepatology and Rheumatology
Russia Gastro – intestinal, Anti-
infective, Oncology, Pain &
Dermatology
North America: US Diﬀerentiated Formulations and
discovery & development of 'New
Chemical Entity' or 'NCEs'. In the
following therapeutic areas:
• Neurology
• Dermatology
• Pain management
• Anti-Infectives
• Gastro- Intestinal
Europe
CIS: Ukraine,
Kazakhstan, Uzbekistan
and Belarus
ROW: Venezuela, South
Africa, Australia, New
Zealand and markets in
Southeast Asia
Source: Company Annual Report 2013-14, DRL’s Investor Presentation, Financial Analyst report by Prabhudas Lilladher dated May 2015,
 Complex Generics leverage to Russia, CIS, Venezuela
 Complex Generics enabled entry in Brazil, Colombia, East. Africa
 Expand 2025 China potential through First Generics to launch
 Leverage innovator Oncology, Gastro-intestinal to Emerging Mkts.
 68 pending
ANDAs & 2
pending
NDAs of
which 43
para-IV and
14 are first to
file products

Lupin
19
Key Company Facts
 US & Europe markets remain the
principal growth engines for the Company
and are the major contributors to Lupin’s
global revenues and overall profitability
 Lupin is targeting total complex generics
filings in US market worth USD 51.2bn
Name LUPIN LIMITED
Headquarters Mumbai India
Employees 14,000
Revenues (USD mn)
FY 15 2,000
FY 14 1,760
Website http://www.lupin.com/
 Lupin has made Acquisitions a vital route to their growth strategy
and are targeting geographies, complementary product portfolios
and therapies absent in their current portfolio
 Primary Focus US / EU / potentially Japan
 Therapy Focus on Pediatrics, Dermatology, GI, Ophthalmics
 Future Expansion areas: EU, Russia) & LatAm
 Lupin enetered into starategic partnership with Merck Serono to
leverage their distribution in major markets such as Brazil,
Mexico, Indonesia, Phillipines, Africa,and Central Eastern Europe
and Emerging markets
 Lupin entered into a distribution agreement with Salix
Pharmaceuticals Inc, USA to gastroenterology products for Canada
India Cardiology, CNS, Diabetology, anti-
asthma, Gynaecology, anti-infective,
Gastro-intestinal and Oncology
US & Canada Anti-asthama and COPD, Dermatology,
Ophthalmology, Pediatrics, CNS
Europe CNS
Japan CNS, Cardiovascular, Gastroenterology
and injectable segments
South Africa Cardiovascular, CNS & OTC segments
Philippines Oncology
Mexico & LATAM Ophthalmic
25
26
49
50
3
3
13
12
4
4
6
6
FY 14
FY 15
India USA Europe Japan South Africa ROW
 Total of 210
ANDA filings till
date, of which 111
have been
approved (18
approvals in FY15)

CIPLA
20
Key Company Facts
 More 200 formulation development
projects underway
 Increased R&D spending ~6.2% of
revenue for FY 2014-15
 Received ATMP classification from EMA
and granted process patent in China and
North America
 Formulation filings: North America (12),
Europe (78), International (>1800)
 36 DMFs filed in Europe, North America
and International
Name CIPLA LIMITED
Headquarters Mumbai, India
Employees 20,000
Revenues (USD mn)
FY 15 1,801
FY14 1,664
Website http://www.cipla.com/
North America Respiratory, oncology and
anti-infectives
Europe Respiratory, HIV, pain
management, OTC
South Africa ARV, Respiratory, Mental
Health, Cardiovascular,
Women’s Health
Source: Company Annual Report 2013-14, Cipla Investor Presentation 2015
 Business de-risked via front end build in 17 select markets eg.
Yemen, Iran, Sri Lanka, Myanmar, Morocco and Algeria;
Integration of operations on track
 Tender wins in South Africa- Respiratory, ARV and newer areas
such as mental health and cardiovascular
 Launch of Salmeterol Fluticasone in select European markets:
Croatia, Germany, Sweden, Slovakia, Czech; added Belgium and
Hungary in recent month
44.0
44.0
15
9
8.0
14
33
36
FY 13
FY 14
India USA South Africa ROW Markets
 Total ANDA’s
filed: 147
 Approved: 79
 Tentative
approval/
awaiting
approval:68

Aurobindo
21
Key Company Facts
 A global company
with more than 85%
of operating income
coming from
international
operations
Name Aurobindo Pharma Limited
Headquarters Hyderabad, India
Employees 9500
Revenues (USD mn)
FY 15 1,923
FY14 1,283
Global Presence 125 countries
Website http://www.aurobindo.com/
US Oncology, Hormones, Peptides, Non-
betalactam, CNS, CVS, ARV, Anti –Infective,
OTC (Anti –Allergy, laxatives, oral
antiseptics and rinses, first aid care,
sunscreen & ophthalmic)
Europe (Post
Actavis
Acquisition)
Hormone, Oncological Penem, Oral
Contraceptive, Dermatological, Ophthalmic
 Aurobindo plans to strengthen business presence in potentially
large markets such as Japan, Brazil, South Africa, Canada,
Australia, North & West Africa and Middle East
 Other focus markets being developed are Mexico, Columbia
Ukraine, Russia Kenya, Tanzania, Ethiopia, Nigeria Vietnam,
Malaysia, Philippines
 Total ANDAs (USA) – 376 - Approved –
193 - Under review - 183
 Formulations Dossiers in key advanced
markets (incl. Multiple registration into EU.
SA and Canada) - 2184
63
51
12
33
9
6
16
10
FY 14
FY 15
USA Europe ROW Anti -Retrovirals

Cadila Healthcare
22
Key Company Facts
 Cadila Healthcare(Zydus) is one of the
oldest players in the Indian formulations
market with strong positions in key
segments of Cardiovasculars,
Gastrointestinals, Women’s Healthcare.
 Globally, Cadila has a strong presence in
the regulated markets of the US, Europe,
Latin America and South Africa
Name Cadila Healthcare
Headquarters Ahmedabad, India
Employees 16,000
Revenues (USD mn)
FY 15 1144
FY14 998
Global Presence US, Europe (France & Spain) LatAm,
South Africa. +25 Emerging markets
Website http://zyduscadila.com/
India CVS, Female healthcare Respiratory, Gastro
Intestinal and Dermatology
Brazil Branded Products in Female healthcare,
Hepatology, Diabetes, CNS, CVS and
Nutraceuticals
Mexico Cardiology and Central Nervous System
 Cadila Healthcare aims to be a leading global healthcare provider
with a robust product pipeline; achieve sales of over USD 1600
mn by 2015 and to be research-based pharmaceutical company
by 2020
 According to Industry sources Cadila Healthcare, is in late-stage
talks to acquire smaller rival Claris Lifesciences which has
speciality generic drugs including blood products and anti-
infectives, as well as the delivery systems for such products, such
as vials, ampoules and intravenous bags.
 The deal if successful is expected to fortify Cadila’s Global
expansion as half of the Claris’s sales come from 70 emerging
markets, including Brazil and Russia.
 US formulation:
235+ ANDA
fillings of which
85+ approvals
 Brazil - 100+
filings- 40
approvals
44
40
28
35
7
6
6
6
5
4
FY 13
FY 14
India USA Europe Emerging Markets Brazil

Torrent
23
Key Company Facts
 Torrent Pharma has
strong presence in
domestic market with
focus and leadership in
CVS and CNS segments
 Torrents US revenues
grew by 44% in 2014-15
Name Torrent Pharma
Headquarters Ahmedabad, India
Employees 8600
Revenues (USD mn)
FY 15 739
FY14 664
Website http://www.torrentpharma.com/
 Torrent pharma plans to acquire dermatology business of
Mumbai-headquartered Encore group to tap both domestic as
well as the developed markets like US and Europe
 The company is increasingly focusing on Chronic segments like
cardiac, CNS, anti-diabetic which has registered huge growth
potential in domestic market
 US: 48 ANDA approvals (including
5 tentative approvals)
 Pipeline consists of 22 pending
approvals and 47 products under
development
 Brazil : Approvals - 31 products
whereas 25 products under approval
31
37
20
19
25
21
14
14
10
9
FY 14
FY 15
India USA Europe Brazil ROW
US Metabolic disorders and Vascular Diseases
India Cardiology, Diabetology, Oncology
Gastroenterology, Derma,, Gynaecology
and Pain
Asia
(Excluding
India)
CVS, Neuropsychiatry & Diabetalogy,
Gastro Intestinal and Anti-Bacterial
Europe CNS, CVS, and Gastro Intestinal
Russia & CIS cardiovascular , Central Nervous System
and Gastrointestinal
Brazil CVS, CNS, Oral Anti Diabetic/obesity (OAD)
Thailand Cardiovascular, Neuro-Psychiatry and Anti-
Diabetic segmentSource: Company Annual Report

Wockhardt
24
Key Company Facts
 Wockhardt is a leading Indian
Pharma company with most of its
revenues leveraged on major
international markets
 Post Import alerts by US FDA in
2013-14,company has realigned its
global business model
Name Wockhardt Limited
Headquarters Mumbai, India
Employees 8600
Revenues (USD mn)
FY 15 711
FY14 767
Website http://www.wockhardt.com/
India Pain Management, Anti -Diabetes,
Respiratory and CNS
UK OTC & Dental
France Osteoarthritis, Rheumatology, Arterial
hypertension & chronic heart failure and
Phlebotonic Vasculoprotector.
Ireland OTC & Nephrology
 Wockhardt aims to capitalise the generic and biotech
opportunities in the Regulated and Emerging Countries
 The company has focussed on LATAM as major global expansion
destination
 Company has boosted its R&D focus with 14% y-o-y growth in
research expenditure
 US Business: Total 14
ANDA’s during FY15 and a
total of 69 ANDA’s
pending approval till date
 UK(Europe): 11 new
filings in FY14-15
27
36
45
25
29
39
FY 14
FY 15
India & Emerging Markets USA Europe

25
Table of Contents
 Bibliography

Key market trends
26
1 Chronic segments poised dominate the Indian pharma market in future
2 Consolidation in US Markets has forced Indian Pharma Multinationals to
diversify to Non US Markets
3 Indian pharma companies eye US complex generics market; boosting its R&D
spend
4 Indian pharma majors line to tap the Japanese Generic Opportunity

27
Chronic segments poised dominate the Indian pharma
market in future
Source: Economic Times article titled “Chronic illness sees a spurt in business opportunity for pharma market
“ dated 19 November 2014
 The chronic segment has witnessed significant growth in last five
years as compared to acute segment which continue to dominate
the of Indian pharma market
 According to data from industry body AIOCD, the last five years
have seen the highest volume/value growth in chronic therapies
like anti-diabetic medicines followed by urology and dermatology
and have grown at more than double the industry growth rate
 The trend is likely to sustain, given the increased incidence of
chronic lifestyle disorders in a steadily prospering economy
 Moreover value wise growth of chronic segment was partly due to
the government's drug price control policy (DPCO) which capped
the prices of many of the drugs in the acute therapies portfolio
 Gearing up for the growth of chronic illnesses in the country,
Indian pharma companies have been gradually changing their
portfolio from being predominantly acute therapies focussed to
include more of the higher-margin chronic therapies
Target companies to tap Indian
Chronic opportunity
The Great Indian Chronic Opportunity
7.1
8.7
10.5
11.3
11.5
12.2
12.9
13.3
16.1
16.3
19.1
20.5
11.3
ANTI -INFECTIVES
PAIN & ANALGESICS
RESPIRATORY
GASTRO INTESTINAL
STOMATOLOGICALS
NUEROLOGY/CNS
CARDIAC
VITAMINS/NUTRIENTS/MINERALS
DERMATOLOGY
UROLOGY
ANTI - NEOPLASTICS
ANTI- DIABETIC
INDIAN PHARMA MARKET
% Value growth terms - 5 Year CAGR
• Sun Pharma
• Lupin
• Torrent Pharma
• Dr. Reddy’s
Key segment sin Chronic
segment
Cardiovascular
Neurology
Anti – Diabetes
Gastro
Intestinal
Oncology
Increased incidence of chronic lifestyle
disorders such as Diabetes, cardiac disorders
Chronic
growth ?
Source: AIOCD AWACS

28
Consolidation in US Markets and rise in USFDA alerts has
forced Indian Pharma to diversify to Non US Markets
 Indian Pharma companies have begun to diversify to Non US Markets to outset
slowdown in product approvals and channel consolidation in US market
 In recent years here has been extensive consolidation between pharmacy
managers (Drug distributors) and retail chains with around 16 mergers and
acquisitions in 2012 and 10 in 2013
 It has started to hurt revenues of Indian generics players, whose sales come
mainly from the US market, as with falling number of players in the wholesale
and retail space their bargaining power has risen
 Moreover drug exports to US which accounts for 25 per cent of the country’s
cumulative drug exports, are struggling with decreased product approvals,
increased audit inspections and resultant import alerts From USFDA
 Hence major Indian pharma companies which are witnessing muted revenue
growth rate than previous year, are diversifying to new geographies
 Few pharma companies are focussing on European countries with aim to
counterbalance the heavy reliance currently on the US market for export of API’s
and niche formulations from the country
7 9 21
32
2011 2012 2013 MAR-14
USFDA Import Alerts to Indian Pharma Companies
Indian Pharma Firms
affected by
Consolidation in US
Mkt
• Dr. Reddy’s,
• Sun Pharma,
• Glenmark
Indian Pharma Firms
affected by USFDA Import
Alerts
Sun Pharma
Ranbaxy Labs
Wockhardt
Lupin
Aurobindo
New Target
Geographies
for Indian
Pharma Firms
Brazil,
Mexico,
Venezuela
Japan
Russia,
Kazakhstan
Spain, Greece,
Germany,
France
Italy
Source: Indian Express article titled “Consolidation in US hurts Indian generic firms Dr Reddy’s Lab, Sun Pharma“ dated 24 Nov 2012, Financial Express
article titled “Indian drug firms may lose out as US pharma supply chain consolidates” dated 3 March 2014
Dr. Reddy’s
Cadila
Glenmark
Ipca
Reduce overall dependence on US
Market due to:
• Retail CONSOLIDATION
affecting margins
• Slow rate of FDA APPROVALS &
increased FDA IMPORT ALERTS
Why
Diversify
to Non US
Markets ?
Source:USFDA

29
207
253 235
162
203 209
2013
171
2013 2014 2015 2016 2017 2018 2019 2020
US Patent Expiry Forecast
Source: Indian Express article titled “Consolidation in US hurts Indian generic firms Dr Reddy’s Lab, Sun Pharma“ dated 24 Nov 2012, Financial Express
article titled “Indian drug firms may lose out as US pharma supply chain consolidates” dated 3 March 2014
Source: USFDA Orange Book, Oct 2011)
 As the US complex generics segment growing at twice the pace of
the commoditised generics, Indian drug makers are investing in
R&D to develop complex products
 The complex generics market accounts for ~ 50% of the US generics
market and is valued at USD 25 bn with the potential to outperform
the growth rate of the overall market by at least two times
 Pharmaceutical companies to enjoy higher pricing power as
competitive intensity in the complex generics segment is relatively
low with four to seven sellers per product
 Evidently, Indian Pharma companies to tap the potential in the
opportunity have reinvested their cash flow in establishing
dedicated facilities and raised their R&D expenses towards
development of niche complex products such as injectables, oral
contraceptives, and transdermals
 For example, Lupin has invested in a dedicated facility for
ophthalmic and oral contraceptives in Indore, (Madhya Pradesh
state),
 Dr Reddy’s Laboratories has set up an injectables facility in Vizag
(Andhra Pradesh State)
 Wockhardt aims to continue supplies from the Shendra facility
(Maharashtra state) once it is inspected and approved
 Between 2009 and 2014 Indian pharmaceutical companies have
monetised opportunities from US market arising from rising
healthcare costs and due to blockbuster drugs going off patent
registering a healthy growth in sales to reach USD 5 bn in FY14
from USD 1.4 bn in FY 09
Low Competitive intensity in the complex
generics segment allows pharmaceutical
companies to enjoy higher pricing power
Complex
Generic
Interest ?
With growing complex generic opportunity in US, Indian
drug makers are investing in R&D of complex products
Indian Pharma Firms targeting Complex
Generic Opportunity
• Lupin
• Dr. Reddy’s
• Sun Pharma (dermatology, oncology,
controlled substances, ophthalmology)
• Wockhardt
India has the second
highest number of US
FDA approved plants
after the US and
accounts for 22% of
overall US FDA
approved facilities
Complex generics are large and complex in
comparison to unbranded, branded, and company-
branded generics—formulations or active ingredients
used to treat chronic and life threatening diseases
like cancer, Hepatitis C, and HIV
What are
‘Complex
Generics’ ?

30
 The Japanese pharmaceutical market is the second largest
pharma market in the world and is valued at over USD 115 bn
 However according to industry sources, India’s exposure to
Japan is a mere one per cent
 With its healthcare reforms aimed to reduce healthcare
budgets and generic friendly policies adopted by the Japanese
government, the market is gradually opening up to generics
 The Japanese Govt. aims to increase generic penetration to ~
34 % by 2017
 Among Indian drug makers, Lupin has a significant presence in
the Japanese pharmaceutical market
 Indian government through Pharmexcil is incentivising Japanese
entry for Indian firms for API’s and formulations
73%
27%
Japan Pharma Market -
2013
Patented Generic
Target companies
interested to tap Japanese
generic market
Source: Economic Times article titled “The Japanese Are a Brand Conscious People, Says Lupin MD“ dated 10 May 2012, Business Standard article titled “How Lupin
cracked the Japanese pharma market” dated 19 Jan 2012, Lupin Website , Pharmexcil stands for ‘Pharmaceuticals Export Promotion Council of India’
Indian pharma majors line to tap the Japanese
Generic Opportunity
Lupin
Dr Reddy’s
Cadila
Intas
Sun Pharma
Glenmark
Shasun Pharma
Sami Labs
Aurobindo Pharma
• Low generic penetration offering huge potential
• Japanese market offers PREMIUM for generics
Japanese
Interest ?
Source: Lupin Estimates

31
 Bibliography

 Databases/Reports
 Mckinsey Reports titled “India Pharma Inc. Capitalising on India’s Growth Potential”
Dated 2010
 Mckinsey Report “ India Pharma 2015 Unlocking the Potential of the Indian of the
Indian pharmaceuticals market”
 All Indian Origin Chemists & Distributors
 Department of Pharmaceuticals, Government Of India
 Websites
 www.pharmexcil.com/
 www.idma-assn.org ((Indian Drug Manufacturers' Association)
 www.pharmabiz.com/
 Company Annual reports, Investor presentations
 Press articles from Economic Times, Indian Express
32
Bibliography

33
Contact Details
Mr. Irish Pereira
Pharma Market Analyst
Email: irishpereira@gmail.com
Mob: +91-8087068343
Feedback & suggestions
are welcome

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