Marksans Pharma Limited Investor Presentation February 2008
Disclaimer q Materials and information provided during this presentation may contain ‘forward-looking statements’. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties which could cause actual outcomes and results to differ materially from these statements. q Risks and uncertainties include general industry and market conditions, and general domestic and international economic conditions such as interest rate and currency exchange fluctuations. Risks and uncertainties particularly apply with respect to product-related forward-looking statements. Product risks and uncertainties include, but are not limited, to technological advances and patents attained by competitors, challenges inherent in new product development, including completion of clinical trials; claims and concerns about product safety and efficacy; obtaining regulatory approvals; domestic and foreign healthcare reforms; trends toward managed care and healthcare cost containment, and governmental laws and regulations affecting domestic and foreign operations. q Also, for products that are approved, there are manufacturing and marketing risks and uncertainties, which include, but are not limited, to inability to build production capacity to meet demand, unavailability of raw materials, and failure to gain market acceptance. q The Company undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. 2
Contents Section 1 Highlights Section 2 Industry Overview Section 3 Company Overview Section 4 Strategy Section 5 Financial Highlights 3
Highlights Mumbai based vertically integrated player with strong presence across the entire value chain - APIs to formulations to biopharmaceuticals Incorporated in 2001 as a wholly owned subsidiary of Glenmark Pharmaceuticals Ltd. and later spun-off into a separate entity in March 2003 Straddles across key therapy areas and markets its products in both evolving and developed markets Actively engaged in R&D and offers CRAMS to global pharmaceutical companies Operates world class manufacturing facilities for API and Formulations, built per US FDA guidelines and approved by UK MHRA, Australia TGA and Brazilian ANVISA health authorities Reported sales of USD 63. 4 million and net profit of USD 1. 75 million in FY 2007 4
INDUSTRY OVERVIEW
The Global Pharmaceutical Market Worldwide pharmaceutical market expected to grow at 5 -6% to USD 665 -685 billion in 2007 Moderate growth in the US and EU markets Asia and Latin America are growth drivers Expiry of patent protection driving Generics market – In 2008, products with sale value of more than USD 20 billion are likely to lose patent protection Leading Therapy Classes by Global Sales, 2006 Global Pharmaceutical Sales by Region 2006 Sales (USD billion) % Growth North America 289. 90 8. 00% Europe 181. 80 4. 80% Japan 56. 70 -0. 70% Asia, Africa & Australia 52. 00 9. 80% Latin America 27. 50 12. 90% Total IMS Audited 607. 90 6. 50% Market Source: IMS Health 6
Indian Pharmaceutical Market India is one of the fastest growing large pharmaceuticals market Projected Indian Pharmaceutical Market, 2007 -2012 (USD Billion) India is also the world’s fourth largest producers of pharmaceuticals by volumes Competitive Advantage: Upfront capital cost lower by 25 -30% Clinical trials cost 50% less Source: Espicom Drug production cost lower by 40 -50% Contract Research & Contract Manufacturing (CRAMS) India Pharmaceuticals Market 2007 India has emerged as a key destination for CRAMS Global manufacturing outsourcing opportunity is estimated at USD 20 billion Formulations constitute about 78% of total sales. 32% of formulation sales are exports Source: www. indiahealth. com 7
COMPANY OVERVIEW
Marksans Pharma Limited is a niche Formulations, Bulk drugs and Biopharmaceutical player with presence across the entire value chain Incorporated in 2001 as a wholly owned subsidiary of Glenmark Pharmaceuticals Ltd. and later spun-off into a separate entity in March 2003 The Company straddles across key therapy areas and actively engages in R&D and offers CRAMS to global pharmaceutical companies The Company is listed on The Bombay Stock Exchange and the National Stock Exchange of India Limited with a market capitalisation of Rs 9. 24 billion (USD 234 million) as of 8 February 2008 The Company has an employee strength of 1296 out of which more than 100 are engaged in R&D Reported sales of Rs 2, 399 million (USD 60. 7 million) and net profit of Rs 69. 3 million (USD 1. 75 million) in FY 2007 9
Business Overview API Manufacturing DOMESTIC MARKET FORMULATIONS Pharmaceuticals + Biologics BIOLOGICS Marketing Niche Focus Large Product portfolio NDDS, NCE In-licensing A Complete R&D Player ANDA Filings And Dossier Development Clinical Trials DMF/COS Filings and Dossier Development Custom Chemical Synthesis Formulation Development & NDDS Drug Discovery & Development Services 10 EXPORT MARKET Supply tie-ups Joint marketing CRAMS Out-licensing
Business Segments Revenues (Rs millions) FORMULATION Significant presence in major therapeutic areas in the domestic market with over 250 products Strong marketing capabilities with 450 representatives across India Foreign markets: US, EU, UK, Australia, and other emerging markets. Plans in place to tap huge Russian and CIS markets Collaborations: MPL’s products are available through collaborations with big MNC companies Revenues (Rs millions) ANDA filings: List of proprietary products identified which are to be developed post patent expiry - Is filing 10 ANDAs with US FDA by June 2008 Combination of organic and inorganic growth ACTIVE PHARMACEUTICAL INGREDIENT Second largest producers of Ciprofloxacin and Ranitidine in India Provides contract manufacturing services to world’s leading generic pharmaceutical companies Key Focus Area: CVS, Ant diabetic, CNS, Pain management& Gastro Intestinal Expanding production in CNS, CVS, anti-diabetic and pain management therapeutic segments Capacity expansion already underway to meet domestic demand 11
Business Segments RESEARCH AND DEVELOPMENT State of the art R&D laboratory at Goa (approved by DSIR) and New Delhi for innovation in the area of new molecule and formulation development and drug delivery New research laboratory set up at Kurkumbh to provide chemical synthesis and development services The company is also working towards developing API's which are likely to go off patent in the next few years as their market size is estimated at USD 20 billion Joint product development pacts in place with reputed international and local institutions for biopharmaceuticals GENERIC DRUG DEVELOPMENT PIPELINE Filing 10 ANDA’s with USFDA by June 2008, having aggregate market size of 17 billion in US, into CVS, CNS, Pain management & Gastro Intestinal Segments 12
Manufacturing Capabilities FORMULATION Marksans state of the art manufacturing facilities in Goa are of international standards adhering to stringent quality norms and are USFDA compliant. Its world class manufacturing capabilities cater to APIs as well as formulations. Adhering to USFDA guidelines with approvals from UK MHRA, Australian TGA and Brazilian ANVISA health authorities One of the biggest manufacturing facility for soft gelatin capsules and tablets in Asia (Capacity of 2. 50 billion tablets/line/annum for tablets, 4. 8 billion capsules / line / annum) respectively ACTIVE PHARMACEUTICAL INGREDIENT Marksans has two large multi-product API manufacturing facilities located at Kurkumbh, Maharashtra which are rebenchmarked to CGMP standards USFDA approval expected in next 9 -12 months MPL has increased the annual capacity of its flagship product Ciprofloxacin from 600 MT to 1000 MT and for Ranitidine from 360 MT to 600 MT 13
Recent Acquisitions HALE GROUP - UK The Company has entered into a share purchase agreement with UK's Hale Group to acquire its entire share capital, along with its subsidiary company Bell Sons & Co (“Bell”) Bell is a well-established manufacturer of a broad range of OTC pharmaceuticals having full approval of the UK MHRA and currently holds 38 product licenses. Licensed products contribute over 45% of Bell’s total turnover The company clocked a turnover of £ 8. 03 million and £ 8. 94 million respectively for FY’ 05 and FY’ 06 (year ending December). The EBITDA margins for the said period stand at 12% and 14% respectively Rationale: Bell is an established player with strong goodwill Access to the regulated UK & Europe market Synergies and cost saving in manufacturing and R&D NOVA PHARMACEUTICALS - AUSTRALIA MPL acquires Nova Pharmaceuticals (NP), a company that specializes in R&D and marketing of generics NP has a basket 14 products, with additional 25 products filed for TGA approvals NP has presence in the top pharmacies and major chain stores for the supply of generics and OTC Rationale: Gain foothold in a key pharmaceutical market New product introduction and cost saving by shifting production to India 14
STRATEGY
Vision Strategy aimed at differentiation, high margin niche areas, life cycle extension and product innovation Global strategy – global alliances, innovator partnerships collaborative R&D, licensing deals, M&A Multi-product, multi-specialty, multi-geography, fully integrated enterprise Product Innovation – reformulation, Controlled release Therapeutic area expansion – critical care, respiratory, CNS, anti-infectives, immunology, life style, neutraceuticals Product expansion – NCEs, biologics, controlled /high potency substances Geographic expansion – Semi and Regulated Markets Niche Player Enterprise Maturation Current State Integrated Player Future State 16 Vertical Integration on & Va lu e C ha in Tr av er sa l Business expansion – CRAMS
Geographical Strategic Goals Europe, US & Emerging Markets § Become preferred manufacturing partner for large MNC pharma companies § Establish a strong presence in the US generic pharmaceutical market through acquisition of a target company to exploit MPL’s low cost API, drug formulation and R&D capabilities § Focus on building IP assets specially in Niche dosage forms § Out-License IP to drive growth / scalability § Build and launch portfolios of generic products in niche segments, technology driven products. In parallel, seek out newer markets with potential § Build significant OTC presence in regulated markets § Integrating & leveraging acquired company strengths to fuel internal growth § Become a top 10 fully integrated pharmaceutical company with a diverse portfolio of ethical, branded, generic and OTC products § Continue building presence in speciality markets such as oncology and CNS § Continue evolution as an innovative developer of patented, NDDS, and in-licensed products (RISUG, GCSF, EGF) and post-patent products India 17
Key Growth Drivers l Rapid filing of ANDAs / MAs, DMFs/COSs into US, Europe & Emerging Markets l Expand CRAMS services in the Regulated Markets l Acquisitions of growing, profitable pharmaceutical companies and/or products. l Commercialize strong pipeline of over 10 new API products l Leverage economies of scale and integrating API and formulation manufacturing l Pursue additional product in-licensing opportunities for domestic markets l Enter into out licensing arrangements with big pharma company in US, Europe to manufacture & market post patent & off patent drugs 18
Strategy THRUST ON EXPORTS DOMESTIC FORMULATIONS BIO PHARMACEUTICALS CRAMS R&D – NCE PIPELINE 19
Thrust on Exports VISION: To become a leading player for APIs and formulations supply to global companies COMPETITIVE EDGE: Vertical integration from R&D to API to formulations NORTH AMERICA: Aggressive roadmap to develop sales and distribution network Remain focused on high value of generics Organic and inorganic buildup of portfolio EUROPE: Tie-ups in place with top 7 -8 generic formulations companies for CRAMS Focus on selected market – UK, Germany, Central and East EU UK Acquisition: £ 8 -10 m sales with strong product pipeline and brand equity § AUSTRALIA: Acquired a marketing company with basket of 14 products, with additional 25 products filed for TGA approvals § EMERGING MARKETS: Expanding to countries and across products 20
Domestic Formulations CURRENT STATUS AND STRATEGY Mark Remedies caters to the GI disorders and Respiratory infections segment. This is a mass segment category with promises of large volumes Enhance presence in Oncology and creating a base in lifestyle therapeutic segments Focus on Biotechnology drugs, antineoplastics and immunomodulators In-licensing to be one of the major growth drivers 21
Biopharmaceuticals CURRENT STATUS Number of in-licensing / joint R&D agreements in place with international agencies and local research institutes for product development and / or marketing Some of the products approved / under development Interferon Alpha 2 b: world market ~ USD 1 billion Granulocyte Colony Stimulating Factor (GCSF): World market ~ USD 2 billion Epidermal Growth Factor (EGF) - NDDS Interlucin 2 STRATEGY Aggressively scouting for more in licensing opportunities with the innovator companies Increase the marketing infrastructure on PAN India basis to market the products 22
Research & Development ~ 45 products already developed. > 40 products under development Building IP assets and registering them internationally Focus on end to end solutions, to develop core API’s for ANDA products inhouse. Concentrating on development of Niche Liquid gel products Leveraging expiry of patents: developing products for growth areas such as cardiovascular and anti diabetics Tie ups in place with big MNC & Generic companies for first to launch status on many products following patent expiration Joint product development pacts in place with reputed international and local institutions for biopharmaceuticals MPL is already working on two NCEs in collaboration with Original patent holders, along with Indian Council of Medical Research, Govt. of India 23
CRAMS CURRENT STATUS The Company has alliances with the top 7 -8 MNC generic companies for contract manufacturing of ~ 30 generic products for the European markets Licensing agreements in place with numerous companies for development and supply of products for 7 -10 years STRATEGY The company plans to enhance its product portfolio with the addition of 12 -13 products p. a. Offering CRAMS services for existing and emerging markets is envisaged as one of the major driver and revenue earner for the company 24
FINANCIAL HIGHLIGHTS
Financial Highlights PROFIT AND LOSS Particulars FY 2005 FY 2006 FY 2007 9 M FY 2008 USD Millions (Audited) (Unaudited) Total Income 62. 78 76. 49 63. 39 42. 01 Total Expenditure 51. 78 63. 82 56. 21 34. 28 EBITDA 11. 00 12. 66 7. 18 7. 73 Depreciation 1. 76 2. 04 1. 85 1. 60 Interest 2. 94 2. 68 2. 91 2. 55 PBT 6. 29 7. 95 2. 42 3. 58 Tax 1. 13 2. 15 0. 67 0. 35 PAT 5. 17 5. 79 1. 75 3. 24 EBITDA Margins (%) 17. 5% 16. 6% 11. 3% 18. 4% PAT Margin (%) 8. 2% 7. 6% 2. 8% 7. 7% Ratios USDINR 39. 5 26
Financial Highlights BALANCE SHEET USD Millions FY 2005 FY 2006 FY 2007 Shareholders' Funds 25. 82 30. 38 32. 15 Secured Loans 21. 01 20. 51 25. 57 Unsecured Loans 1. 01 56. 46 55. 19 Total Debt 22. 28 76. 96 80. 76 Total Liabilities 48. 10 107. 34 112. 66 Net Block 25. 82 31. 65 35. 19 Investments 0. 00 Inventories 12. 41 20. 00 31. 14 Sundry Debtors 14. 43 12. 91 13. 42 Cash and Bank Balance 2. 53 50. 13 40. 00 Loans and Advances 3. 29 5. 06 Total Current Assets 32. 41 86. 08 90. 13 Current Liabilities 9. 11 8. 35 11. 14 Provisions 0. 51 1. 27 0. 25 Misc. Expenses 0. 51 Net Deferred Tax -1. 01 -1. 52 -2. 28 Total Assets 48. 10 107. 34 112. 66 USDINR 39. 5 27
Background for FY 2007 Results KEY REASONS Stiff competition in APIs namely Ciprofloxacin and Ranitidine due to dumping from China Price erosion ~ 35% Reduced production in these APIs resulted in decrease in sales STRATEGY ADOPTED COS approval obtained for Ciprofloxacin, expected for Ranitidine & Metformin shortly to enable exports to Europe with 50% more margin More high value products like Losartan, Metformin, Naproxen, etc with COS Filings US FDA approval expected for all these products Focus on high growth life style segment formulations mainly in domestic market, which are exhibiting strong growth rates Integrating API operations with formulations OUTCOME Extremely bullish trend in domestic life style segment Rise in prices of Ciprofloxacin, Ranitidine in China MPL’s CRAMS business in Europe is growing 20 ANDA filings expected by Dec 08 and 30 by Dec 09, resulting in Business from USA in excess of US$ 100 million in FY 2011 -12 Exclusive Out licensing arrangements with leading generic companies to give a boost to its Exports 28
Equity Capital Structure Shareholders fund USD 32. 15 million No. of issued Shares 35. 94 million Listed at BSE and NSE Market Price Rs. 257 as on 8 February 2008 Market Capitalisation Rs. 9. 24 million (US$ 234 million) 52 weeks high / Low High: Rs 351. 6 Low: Rs 44. 2 Category Promoters Share Holding Pattern (31 December 2007) Holding 47. 41% Banks/FIs/MFs 1. 46% Corporate Bodies 27. 61% Public 23. 52% Total 100. 00% USDINR 39. 5 29
Investment Highlights ü Fully integrated company with strong presence across entire value chain from APIs to formulations to biopharmaceuticals and across key therapy areas and both the evolving and developed markets ü Strong R&D focus strategically positions MPL in the new patent regime ü Aggressive foray into new geographies and regulated markets through acquisitions (UK and Australia) to expand global footprint ü Focus on high-growth therapeutic segments such as lifestyle, anti-diabetic, cardiovascular to advantage from strong demand from US and EU markets ü Thrust on Biotechnology: Entered the lucrative segment with 8 products in the pipeline of which 3 are already approved by Drug Controller of India ü World class manufacturing facilities and strong marketing and distribution network in India 30
THANK YOU 31
APPENDIX Company’s Operations Formulations API R&D § World class manufacturing facilities: § Two manufacturing facilities. § Strategy to focus on end-to-end • DSIR approved research labs in Goa, Pune and New Delhi. approvals - UK MHRA, Australian TGA. US FDA approval expected shortly. § Tie-up with big MNCs globally for offering CRAMS. § Product basket covering wide therapeutic areas. § Developing post-patent products mostly supported by in house API’s for global markets. § Out-licensing tie-ups with big pharma companies for long term manufacturing and marketing. § Setting up own front ends in major global markets – US, Europe, Australia, Russia and emerging markets. § Strong marketing presence in the domestic markets - wide range of over 250 products in the domestic markets. § Speciality segment focus in domestic market. § Specialised state of the art Soft gel manufacturing plant. § Expanding registration process across geographies § § § solutions and to develop APIs for ANDA products in-house. Rapidly filing COSs/DMFs into Europe and US markets. Exporting its products to more than 30 countries. Provides API contract manufacturing to many of the world’s leading generic pharmaceutical companies. Key focus areas • CVS • Anti-diabetic • CNS • Pain Management • GI Expanding its API business by shifting from predominantly domestic market to highly regulated markets of USA and Europe. 32 • Key focus on: • Building IP assets and their global registration. • End to end solutions , to develop core API’s for ANDA products in-house. • Development of technology driven products for the global markets (Sustained release, extended release and Soft gel delivery systems). • Development of Niche Liquid gel products (Differentiating plank as very few key players offer the same). • Tie ups in place with big multinationals & Generic companies for first to launch status on many products following patent expiration. § MPL is already working on two NCE’s in collaboration with Original patent holders, along with ICMR, Govt. of India.
SWOT Strengths Opportunities l World class fully integrated manufacturing Regulated markets, API and formulations CRAMS for Global markets Lifestyle therapeutic segment in domestic market Increasing rural penetration in domestic markets facilities l Strong research & regulatory capabilities l Continuous identification and launch of new markets to expand geographies l Market leader position in certain key bulk drugs with strong presence in exports l Highly competent, experienced professional management team Threats and Attrition. l Strong R&D skills so as to enable in-house product development Competition l Strong marketing platform for pan-India presence R&D speed and managing launch Changing regulatory requirements l Strong development pipeline to cater to company’s future growth Weaknesses API operations were focused on Ciprofloxacin and Ranitidine which have suffered substantial price erosion 33
BUSINESS SEGMENT - Capabilities across the value chain Drug Discovery R&D Preclinical Research Clinical Research Marksans Footprint V al ue C ha in Tr av er sal Process Engineering Synthetic Chemistry Custom Synthesis Contract Research Pharma Development Contract Manufacturing ANDAs, DMFs/COSs Post Patent Filings Product Patent Formulations Global Exports (Regulated Markets) Regulatory Approvals / services (US FDA, UK MHRA, EDQM, TGA, ANVISA) Strategic Alliances & Partnerships In-house R&D (Goa, Pune, IITD) First-to-file (Para IV) Global Acquisitions In-/Out-Licensing deals Bulk Actives (API) Drug Intermediaries Process Engineering 1970 Innovator Products (NCE, Inorganics, NDDS) 2005 2010 34 Industry Maturation (Value Creation)
BUSINESS SEGMENT - Global Formulations Global Foray: Key features: Main markets: US, Europe, United Kingdom, Australia, and other emerging markets. Plans in place to tap huge Russian and CIS markets. Initiated dossier filling in these countries Collaborations: MPL’s products are available through collaborations with big MNC companies Quality Manufacturing: Its robust product basket and quality control measures as well as manufacturing accreditations such as UK MHRA and Australian TGA approved facilities enable MPL to establish its presence in the global markets ANDA filings: List of proprietary products identified which are to be developed post patent expiry - It is filing 10 ANDAs with US FDA by June 2008 Sales Front ends: Rapidly built up a generic sales front end in the USA with investments in sales distribution. Acquisitions & approvals: The Company intends to grow inorganically in the global markets: l Already acquired an Australian company - Nova Pharmaceuticals. MPL plans to grow inorganically in the US and Europe markets as well l Already received approval for 5 products in Australia With a strong focus on the US markets, the company has entered into an agreement with Pharmgen LLC, US for the development and filing of 11 ANDA's. The product list is a mix of off-patent and post patent protected molecules with cumulative annual sales of about USD 17 billion in the US 35
BUSINESS SEGMENT - Domestic Formulations Coverage and Divisions Significant presence in major therapeutic areas in domestic market Wide range of over 250 products in the domestic markets (80 feature in the ORG list) These products are marketed through 5 distinct divisions as enumerate below: Sr. No Speciality Market Size (Rs millions) Expected Market Growth % Revenues FY 2007 (Rs Crore) 1 Cerebella: CNS (Neuro-Psychiatry) 19, 340 12 110 2 Criticare: Oncology + Critical care 9, 000 14 130 3 Mark Remedies: Gastro, Respiratory and Gynaecology 81, 230 12 150 4 & 5 Zenmark and Marksans: GP & Institutions 124, 430 11 400 Others 290 Total Market 230, 400 12 1080 Marketing Capabilities: Pan India Field force of ~ 450 MRs Carved a distinctive image for its products with innovative and aggressive marketing strategies 36
BUSINESS SEGMENT - API § Second largest producers of Ciprofloxacin and Ranitidine in India (Both COSs filed). Together the Ciprofloxacin Hydrochloride and Ranitidine Hydrochloride rank amongst the top 20 highest selling drugs in the world. COS already received for Ciprofloxacin § Provides API contract manufacturing services to world’s leading generic pharma companies § Key Focus Area: CVS, Ant diabetic, CNS, Pain management& Gastro Intestinal § The company is addressing antibiotic and antiulcerant therapeutic segments and in the process in expanding production into CNS, CVS, anti-diabetic and pain management therapeutic segments which are growing radically. These segments are estimated to be worth approximately US $ 20 billion over the next five years § In the domestic markets MPL has embarked on ambitious expansion projects to scale up its existing capacity, to enter new therapeutic segments covering high growth lifestyle-related diseases § MPL has reputed clientele and has been supplying and exporting its products regularly to big pharma companies & to various countries like Japan, Latin America, Bangladesh, Spain, Egypt, Jordan, Iran, Mexico, Germany and Africa 37
BUSINESS SEGMENT - API Strategy l Expanding its API business by shifting from predominantly domestic market to the highly regulated markets of US and Europe l New API’s to be developed based on key products formulation development with focus on Post patented Products l Develop several API’s to provide cost and time advantage to complement MPL’s US and Europe generic filings l Continue to be the preferred third party API supplier to the generic industry l Rapidly file COSs/DMFs into Europe and US markets (5 DMFs and 5 COSs in 2008 -09) l New Product introductions: § Commenced commercial supply of new products during the year § Several validation pivotal batches have been sent to global generic players for their dossier filings 38
MANAGEMENT - Organization Chart Board of Directors MD & CEO Formulations API R&D/RA CFO Domestic Manufacturing Formulation Purchases Global Sales API Distribution RA CS and Legal Manufacturing Accounting, taxation and IT 39 Head HR
MANAGEMENT - Board of Directors Mr. Mark Saldanha – Managing Director & CEO V Nagraj – Wholetime Director Dr. Kim Tan – Director, nominee of Springhill Bio-Venture Fund Mr. Ajay Mittal – Director, nominee of UTI Venture Fund Mr. Mahesh Parekh - Independent Director Mr. Kumar Nair Independent Director - 40
MANAGEMENT - Promoter The Company was set up by Mr. Mark Saldanha, a first generation entrepreneur and is rapidly expanding its business operations Mark Saldanha Managing Director & CEO Mr. Mark Saldanha, was associated with Glenmark Pharmaceuticals Ltd. as a whole time director and was instrumental in the growth of the company in mid and late nineties, before promoting this venture. He is well versed in the overall management of the company and has vast experience in managing the marketing, production and finance function of the company The Promoter is currently engaged in the Pharmaceutical business only 41
MANAGEMENT - Key Management Personnel Name Designation Profile Director - Sales & Marketing He has done Graduation in Science and PGDMM. He has around 25 years of experience in Sales & Marketing. He is responsible for entire sales & marketing of Domestic Market Jitendra M Sharma Chief Financial Officer He is a qualified chartered accountant and cost accountant and is having 13 years of experience in resources mobilization, developing systems, MIS and taxation R. K. Jhingan Sr. Vice President -Business Development He is a bachelor of pharmacy. He has vast experience of over 20 years in pharmaceutical industry. He looks after molecules and co-development and entering into research alliances Bela Bhandari Chief Marketing Officer She is a PGDBM, B. Pharma and has a good exposure in Export marketing. She is involved in the international marketing Dr. P. B. Deshpande Director – API He has done Doctorate in Organic Chemistry. He has around 24 years of experience in R&D, Product Development & Plant Operations. He is responsible for Strategic Business Development of APIs & overall in-charge of API operations at Kurkumbh Plant Dr. Balwant S. Desai Director – Quality and Regulatory Affairs He has done Doctorate in Analytical Chemistry. He has around 20 years of experience in Quality Control/Assurance/Regulatory Affairs. He is responsible all Q. A. /Q. C. /R. A. activities Mr. A. V. S. Ravishankar General Manager - Operations He is a master of pharmacy. He has handful in experience and plant operations. He is responsible for the entire plant at Verna, Goa Mr. Rajan Sawant Head – Human Resources He has Master's Degree in labour Study from M. I. L. S. Mumbai. He has also done B. G. L. & D. M. M. He has excellent track record of 15 years in H. R. He is heading entire gamut of HR initiatives for the organization V. Nagaraj 42
PRODUCT RANGE - Cerebella: CNS (Neuro - Psychiatry) l Introduction § § New Launches Division dedicated to neurosciences for treatment of psychiatry and neurological disorders Risperidone This market is poised for rapid growth due to Piracetam lifestyle changes and growing awareness Lorazepam l Vision To achieve a growth of 100% in the turnover Citicoline by 2010 Methyl § Be amongst the top 5 players over a period Prednisolone of five years Lamotrigine § l Segment addressed § § Antidepressant § Antiepileptic § Anxiolytic § Memory Enhancer § IVIG Antipsychotic Stroke 43 Indication Market Size Rs mio Atypical Antipsychotic 900 Memory enhancers 1200 Ataractic / anxiolytic 2200 Cerebral strokes 1200 Stroke/ spinal cord injury 450 Epilepsy 2400 Immune dysfunction (GBS) 1500
PRODUCT RANGE - Criticare: Oncology + Critical care l Introduction § Globally Oncology is the fastest growing therapeutic segment § MPL is carving out a niche position in Oncology through its Criticare division § Criticare division focuses on Cardio care and Life saving higher end antibiotics § In - licensing is expected to be the key growth driver for this division l Vision § Marksans to have the first mover advantage of introducing First time niche molecules like EGF, IL 2, Oncophage, INF-Gel, EPO and Cancer Vaccine under this division. In-licensing products like Enoxaparin are to be the key growth drivers for cardio care § Biotechnology drugs, antineoplastics and immunomodulators to be the front runners § To launch one to two in-licensed biotech products every year in the domestic market through its Criticare division § To capture 4% of Indian Oncology market by 2010 & 6% of domestic Critical care market by 2010 New Launches Indication Market Size (Rs mio) Voriconazole Systemic Aspergillosis and Candidiasis. 700 Capecitabine Metastatic CRC and Breast Cancer 2, 000 Gefatinib NSCLC as Fourth Line treatment 1, 000 44
PRODUCT RANGE - Mark Remedies Introduction New Launches A multi- specialty division dedicated to GI disorders and Respiratory infections ~ 40% of domestic pharma market of Rs 28, 000 crore is attributed to these two disorders MPL markets Prescription/Ethical products focused on women's health, geriatric disorders, internal medicine, nutritional support and lifestyle disorder associated with gastro-intestinal, cardiology and diabetology under this division Indication Market Size Rs mio Gastro, Respiratory, Antibiotics, Gynaecology + Others 45 Adefovir Depivoxil Hepatitis B 1000 Ursodeoxycholic Acid Cholestatic Liver Disease 2200 Terlipressin Variceal Bleeding 240 Constipation, Hepatic Encephalopathy 2000 Pantoprazole + Sodium Bicorbonate GERD, Ulcers 3000 Antispasmodic 2200 Codans Antitussive 4600 Rabemark (Rabeprazole) Segment Addressed 1200 Drotavarine To reach a turn over of INR 37 crores and emerge as a strong player in the segment Osteoporosis Lactitol Monohydrate Vision Salmon Calcitonin Anti Ulcerant 3000
PRODUCT RANGE - Zenmark and Marksans: GP & Institutions l These divisions are focused on branded generic products and OTC and have 150 products covering almost the entire Pharmaceutical segment l They mainly cater through tender business to private hospitals, government hospitals, public sector undertakings, AFMSD, Indian Railways, Port Trust, etc l The current product range contains wide spectrum of products to capture maximum business in Institutional sector l The current business is around Rs. 40 Crore l The basket includes orals, parentrals and topicals l Health insurance is gaining wide acceptance and will further give an impetus to Institutional business 46
Biopharmaceutical Pipeline 47
ACQUISITION - Hale Group: Overview l Marksans Pharma has entered into a share purchase agreement with UK's Hale Group to acquire its entire share capital, along with its subsidiary company Bell Sons & Co (“Bell”). Marksans is acquiring Hale through its 100% subsidiary Marksans Pharma UK. The company is equally owned via the holding company by Philip Hale and Linda Shepherd l Bell is a well-established manufacturer of a broad range of OTC pharmaceuticals having full approval of the UK MHRA and currently holds 38 product licences. Licensed products contribute over 45% of Bell’s total turnover l Bell manufactures licensed products both as own branded products and, for certain customers, in own label form together with a range of unlicensed products. Customers include retailers, pharmacies, chemist wholesalers and cash and carry outlets l The company employs 106 people at its freehold licensed manufacturing site in Southport, Merseyside and has further 12 employees providing sales administration, buying and technical support l The company had clocked a turnover of £ 8. 03 million and £ 8. 94 million respectively for FY’ 05 and FY’ 06 (year ending December). The EBITDA margins for the said period stand at 12% and 14% respectively 48
ACQUISITION - Hale Group: Products Product Basket: Cough and cold remedies Galenicals Vitamins Palliative and healthcare items Oils Antiseptics and disinfectants The Company currently holds 38 product licences registered with MHRA. Licensed products contribute over 45% of the Company’s turnover Under the OTC pharmaceuticals, the Company supplies its “own label” pharma products to all of the UK’s leading supermarket chains. The own label market now accounts for more than 45% of the Company’s total turnover 49
ACQUISITION - Hale Group: Markets The company is a preferred supplier to more than 300 customer all over the country, including the leading retail sector brands and major chemist wholesalers UK markets represents 80% of the customer base and two third of total sales. The company’s largest customer accounts for 6% of total sales only. Thus the business is not customer centric The Company has been in the export markets for more than 80 years now. Its products are well recognised and respected in the overseas markets The company products are sold in more than 40 countries. Key markets are West Africa and Middle East 50
ACQUISITION - Hale Group: Financial Summary P&L Summary Pounds in million l The company has shown steady and sustained growth over the past 5 years, with turnover increasing by over 40% from £ 6. 3 million in 2001 to £ 8. 9 million in 2006. Based on the current performance growth is currently running at 5% per annum l The slight decline in gross margin and profitability in 2005 reflects the impact of the new manufacturing plant installed in that year leading to an increase in salary and depreciation costs. The gross margin going forward is likely to improve as the fixed elements of salary and depreciation would form a smaller percentage of cost of sales as turnover increases 51
ACQUISITION - Hale Group: Financial Summary Balance Sheet Summary Pounds in million 52
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