Generic Pharmaceutical Industry Yearbook GPhA Conference Edition, February 2016
Generic Pharmaceutical Industry YearbookGPhA Conference Edition, February 2016
2
Table of Contents
1. Key Trends in the Generic Industry 2015-2016 4
2. M&A Activity in the Generic Industry 22
3. Approach to Ranking Generic Companies by Value 27
4. Ranking of the Top 75 Generic Companies with a U.S. Presence by Value 32
5. Ranking Global Top 100 Generic Companies by Value 35
6. Profiles of the Top Twenty Global Generic Companies by Value 41
Appendix: About Torreya Partners 67
This document was prepared by Torreya Partners for attendees of the GPhA conference. Underlying datasets and information are
available for Torreya Insights customers (contact Suzanne Schultz at [email protected]) or reach out to Torreya Insights at
555 Madison Avenue, Suite 1202, New York, NY 10022. (212) 257-5801.
www.torreyainsights.com
© Torreya Partners, 2016
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Preface
We at Torreya Partners are engaged in providing strategic advice to many companies in the global generic industry and have found
ourselves again and again hampered by the lack of information on the players in the industry and a sense of overall trends shaping the
sector. Thus, with our sister research company, Torreya Insights, we set out to compile a comprehensive global database of companies
in the pharmaceutical industry which includes over 2,000 players involved in the generics sector. This database is fundamentally
different than the widely used IMS prescription data because it approaches the industry at the company level rather than at the drug
level. Our approach has inherent limitations because we are not able to parse aggregated company level data into country level
information or information by therapeutic class. However, there are a number of advantages to our approach. First, prescription audit
data misses substantial swaths of economic activity in the generics sector due to direct shipments to clinics and physicians and the
way products enter the hospital distribution channel. Second, because companies report net revenues in their financials we are able to
determine the economic value of shipments rather than just gross revenue amounts as are reported in IMS.
This compendium of commentary, information, and data on the global generic pharmaceutical industry was compiled by Torreya
Partners and its sister company Torreya Insights in the Fall of 2015 and builds on a global pharma database that Torreya has maintained
since 2012.
We are grateful to many individuals who helped us with the insights in this report and the underlying database used herein including:
Bernard Berk, President, Nostrum Pharmaceuticals; Jonathan Berlent, Managing Director, Torreya Insights; Alexander Deardorff,Analyst,
Torreya Insights; Benjamin Garrett, Executive Director, Torreya Partners; Kylor Hua, Associate, Torreya Partners; Nitin Lath, Managing
Director, IDFC; Ketan Mehta, Chief Executive Officer, Tris Pharma; George Stephenson, Chief Executive Officer, Kremers-Urban
Pharmaceuticals and Carl Whatley, Chief Executive Officer, Vitruvias Pharmaceuticals.
All errors and omissions are our own and the information in this report, particularly that on private companies, may be inaccurate,
dated or, at best, directional.
Allen Lefkowitz
Managing Director, Generics
+1 (917) 558-1477
Tim Opler
Partner, Pharma
+1 (212) 257-5802
Vimal Vaderah
Analyst, Generics
+1 (212) 257-5822
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1. Key Generic Industry Trends
5
1. Teva’s Acquisition of Allergan’s
Generic Business for $40 billion
2. Pfizer’s Acquisition of Hospira
for $16 billion
3. ENDO’s Acquisition of Par
Pharmaceuticals for $8 billion
4. Concordia’s Acquisition of
Amdipharm for $3.5 billion
5. Hikma’s Acquisition of Roxane
Labs for $2.6 billion
6. Teva’s Acquisition of RIMSA for
$2.3 billion
7. Lannett’s Acquisition of
Kremers-Urban for $1.2 billion
8. Lupin’s Acquisition of Gavis for
$880 million
9. Bidvest’s Acquisition of Adcock
Ingram for $823 million
10. CVC’s Acquisition of Alvogen
he U.S. generic industry continued to experience dramatic growth in
2015 as the share of generic prescriptions approaches 90%, driven by
an unprecedented set of recent patent expirations.
This growth was accompanied by the rapid expansion of emerging players
such as Alvogen, Amneal, ANI Pharmaceuticals and ENDO. Foreign market
entrants such as Aurobindo, Dr. Reddy’s Laboratories, Huahai and Lupin also
saw their share of the U.S. generic sector grow healthily in the last year. More
than half of all pills sold in the United States now originate from a non-U.S.
based generic pharmaceutical company.
2015:AYear of Consolidation
The U.S. generic industry continued to experience dramatic change and
consolidation in 2015 as the largest incumbent firms expanded. Most notably,
Teva acquired the Allergan generic platform to position itself as an even
larger player in the sector. Pfizer, which has the world’s largest branded
generic platform, termed Pfizer Established Products, alongside its substantial
Greenstone business, also took a significant step to bulk up with its $16
billion acquisition of Hospira. Other consolidators of non-branded generics
and branded off-patent products continued to grow by acquisition. Most
notably, ENDO International acquired Par Pharmaceuticals for $8 billion,
adding substantial heft to an already large and growing business. In total, the
top ten generic industry M&A deals of 2015 exceeded $75 billion in value,
making the year the most important for M&A in the short history of the
generic pharmaceutical industry.
Overview
Top Generic Pharmaceutical
Industry Acquisitions in 2015T
6
Close to a Trillion Dollar Industry
Torreya Insights has analyzed over 2,000 generic pharmaceutical
companies on a global basis, including both publicly-traded and
privately-held companies. We define a generic company as one
whose primary revenues are either from INN generics or brands
that no longer have patent protection or market exclusivity.
Torreya then imputed valuations based on revenue multiples or
EBITDA multiples for private companies. The implicit assumption is
that the underlying factors driving valuations for private companies
are similar to the determinants for public companies.
With this valuation approach it then becomes possible to value all
known companies in the generic sector.
Interestingly, in January 2016, we saw the aggregate value of the
generic sector on a global basis exceed $900 billion for the first
time. In particular, our real time estimate indicates that as of
February 16, 2016 the aggregate industry value was $929 billion.
Just a decade ago, the aggregate value of the sector was under $150
billion, indicating that there has been massive sector growth in a
short period of time. We would not be surprised to the sector run
to over $1 trillion in value this year.
We believe the generic pharma sector will experience
extraordinary growth in the years ahead. While the share of
generics in the U.S. is high, there is substantial room for growth
elsewhere. And, there will be many opportunities to genericize
more complicated products, including biologics, in the years ahead.
Rank Company Value
1 Pfizer Established Pharma $84,621
2 Teva Generics (including Allergan Gx) 70,301
3 Sandoz / Novartis 36,495
4 Sun Pharma 30,035
5 CR Pharmaceutical 29,047
6 Yangtze River Pharma 28,185
7 Mylan 28,170
8 EMS 16,464
9 Abbott Established Pharma 14,582
10 Hengrui 13,235
Rest of industry 578,056
Total Industry Value $929,129
Top Ten Generic Companies Worldwide
By Value ($ millions), Feb 16, 2016
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Figure 1. Value Share of Top Ten Companies
This chart shows the enterprise value (or imputed value for private players) of each company as opposed to the total value of companies in the generic sector as of Feb 15, 2016.
Pfizer Established Pharma
9%
Teva
8%
Sandoz
4%
Sun Pharma
3%
CR Pharmaceutical
3%
Yangtze River Pharma
3%
Mylan
3%
EMS
2%
Abbott
2%Hengrui
1%
Rest of industry
62%
8
Industry Remains Fragmented
* Pfizer has not provided guidance on GEP revenue and cash flow for 2016 so it is not possible to make an apples to apples comparison of the two businesses for this year.
Figure 1 on the previous page shows the share of the
value pie held by the top ten companies. Several facts
about the generic sector are readily apparent.
Generic Sector is Not Concentrated
It is readily apparent that the generic pharmaceutical
segment is not highly concentrated. The value share of
the top ten firms is less than 40% and the largest
company, Pfizer occupies only 9% of the value pie.
A widely used measure of industry concentration and
competitiveness is the Herfindahl Index (HHI). We
compute that the global HHI Index as of February
2016 was 0.021, well below the U.S. DOJ threshold of
0.25 that demarcates a highly concentrated industry –
where caution would be exercised by antitrust
authorities on horizontal mergers.
Few Players Have a Global Footprint
What is also noteworthy in Figure 1 is that only a few
of the top players in the generic sector are truly
global. Two companies (CR Pharma and Yangtze River)
are giants in their home country of China but have no
meaningful presence elsewhere. Only Pfizer, Teva,
Sandoz and Sun have a truly global presence.
Perhaps with the exception of Teva and Pfizer, none of
these firms are truly operating at global scale.
Pfizer is theWorld’s #1 Player
Some observers might be surprised to see that Pfizer
is the #1 global player in generics. In fact, Pfizer has
the world’s largest portfolio of off-patent brands
(branded generics) in their GEP (Global Established
Pharma) group. Pfizer’s U.S. non-branded generic
businesses (Greenstone and Hospira) are considerably
smaller. Notably, Pfizer’s GEP segment generates $12.5
billion in cash flow before taxes whereas we project
that Teva will generate approximately $9 billion in
total operating cash flows in 2016. We attribute
roughly $2.5 billion in cash flows to Teva’s on patent
brands implying that post-Allergan their generic
business generates roughly half of the cash flow of
Pfizer’s business.*
Following the close of the Allergan merger, we expect
Pfizer will continue to aggressively build its portfolio
of branded and non-branded generic products on a
substantial scale. Pfizer has a very real chance to
increase its lead as the world’s top player in both
branded pharma and generics.The pattern of the last
9
Living in a Big Two World
five years where four companies have been bunched
together in the overall global pharma rankings (Pfizer,
J&J, Roche, Novartis) will change with Pfizer as the
lone leader in 2016. We doubt that other players will
stand by idly; thus we believe that substantial
incremental consolidation in the pharmaceutical
industry will take place in 2016 and beyond.
The last year has obviously completely reshaped the
generic pharmaceutical industry.
In particular, the Teva / Allergan transaction has been
transformational and has created a global player with
both horizontal and vertical economies of scale. Teva
has full API, formulation and marketing infrastructure
on a global basis. Teva’s remaining areas of relative
weakness are few. For example, the only major
markets where Teva is absent are China and a few
countries in Latin America.
Teva’s communication in its press release regarding
the acquisition did not overstate the importance of
the development: “The [Allergan generics] transaction
will create a leader in the INN and branded generics
industry with an overall product portfolio that leads
the industry in terms of differentiation and durability
and offers promising growth opportunities.The new
Teva will further transform the global generics space
through its best-in-class generics pipeline, R&D
capabilities, operational network, supply chain, global
commercial deployment and infrastructure to achieve
greater efficiencies across the healthcare system…”
And, starting in 2012, Pfizer began to report segment
data on its Global Established Pharmaceutical
franchise. Pfizer writes in its 10K: “The GEP segment
deals with products that have or are expected to lose
market exclusivity through 2015 in most major
markets. These also include the generic
pharmaceuticals, sterile injectable products, and
biosimilar development portfolio.” The description is
unmistakable. The GEP portfolio is generic by our
definition: off patent branded or INN generics.
…the generic
industry will live
in a “Big Two”
world for some
time to come.
10
Recent Developments in the U.S. Market
The GEP segment has been shrinking since it was first
broken out in 2012, as Pfizer’s key legacy brands have
been experiencing generic incursion (e.g., Celebrex® /
Lipitor®).
We do not see how a #3 or #4 player can, in the near
term, aggregate enough revenue to match either Pfizer
or Teva in scale.
Sandoz would need to merge with one of the larger
Chinese domestic players, Sun Pharma and either a
Mylan or Perrigo to become the #2 player. Given how
unlikely this is, the generic industry will live in a “Big
Two” world for some time to come. Interestingly, Sun
is also close to Sandoz in value ($30bn value for Sun
vs $36bn for Sandoz). Perhaps Sun will be the next
company to design a strategy to challenge the Big Two.
While we count more than 70 companies with a U.S.
presence as of February 2016, the count is down as
numerous mid-sized and smaller companies were
acquired in the 2013-2015 period. We expect this
consolidation to continue apace in 2016. While new
companies are coming online all the time, they are not
building up revenue fast enough to replace the groups
that have ceased to be independent.
Pricing to Remain an ImportantValue Driver
There are a number of notable trends. While we
expect U.S. price increases to moderate in this
election year, we do not foresee any substantial scale
back of pricing on differentiated generic products.
There are, of course, areas in topicals and injectables
where prices of generics are historically high. And we
expect to see price increases take place selectively
over time. And while approvals of complex generics
are speeding up, we do not expect substantial price
reductions to take place in the near term for such
products. This is because there are many individual
drugs where the competitive dynamics are not strong.
The story for commoditized generics in the U.S. is
somewhat different. The arrival of sourcing groups in
2015 has had a major impact on pricing and results for
companies like Lannett and Qualitest. Red Oak
Sourcing, a JV of CVS and Cardinal Health, has driven
costs down for commoditized products by creating
competition among generic players. One Stop,
McKesson’s sourcing team, has also been an aggressive
player in driving price competition among generic
manufacturers in 2015. Sourcing groups will create
additional downward price pressure in 2016 in
competitive situations.
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Regulatory Developments in the U.S. Market
Fig 2. Source: Janet Woodcock, Feb 4, 2016, “ Implementation of the Generic Drug User Fee Amendments of 2012 (GDUFA),” Testimony Before the House Comm on Oversight and Govt Reform.
Regulatory Factors
The driving factor in ongoing drug shortages and
pricing actions remains the FDA crackdown on
manufacturers in the U.S. and abroad (e.g., Bedford,
Hospira, Dr. Reddy’s, Wockhardt and many others). As
more facilities have received warning letters and 483’s
in the past several years, the availability of FDA-
certified CGMP manufacturing facilities operating at
scale has shrunk, particularly in injectables, liquids and
topicals. This is true both in the manufacture of
formulations and in the manufacture of API. We have
increasingly seen shortages emerge of API, especially
in selected areas of steroids, opioids and cytotoxics.
GDUFA has the potential to significantly improve
industry prospects and raise prices but the ANDA
backlog at the FDA remains unusually long and we
hear repeated discussion of files that have been under
review for three years or more with no initial actions
yet to be taken. Some companies have refiled
applications more recently in order to take advantage
of the Agency’s pledge to deliver 18 month review
times on recently filed ANDAs.
With a persistent 42 month backlog, the FDA’s Janet
Woodcock recently testified before Congress (Feb 4,
2016) that the Agency would continue to staff up to
work down the backlog.
Dr. Woodcock presented the chart that follows
(Figure 2) indicating that while the FDA has
substantially ramped up its FTE count on ANDA
reviews, the volume of ANDA filings has also risen
dramatically, somewhat offsetting the benefits of
additional staff.
Under GDUFA, FDA has now pledged to improve
ANDA review times and has recently been meeting or
exceeding the goals laid out in Figure 3.
Dr. Woodcock testified before Congress on Feb 4 that
“To date, the FDA has met or exceeded all
performance goals outlined in the GDUFA
Commitment Letter”.
The reality is more complex. Our industry contacts
indicate that the FDA has made some progress in
catching up on the pre-2015 backlog but we have
spoken to filers who have yet to even hear a first
meaningful communication from the FDA.
12
352
300339
308332
404378
462
551
326 335307
361
449
563
766793
880830
859813
893
1103
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Number of Applications
Figure 2. FDA Generic Program FTE’s and ANDA Filings, 1990-2012
Generic Program Staff (FTE) Ceiling
13
Figure 3. FDA ANDA Review Time Goals under GDUFA I
Source: Janet Woodcock, Feb 4, 2016, “ Implementation of the Generic Drug User Fee Amendments of 2012 (GDUFA),” Testimony Before the House Committee on Oversight and Govt Reform.
Goal FY2015 FY2016 FY2017
Original ANDA 60% in 15 months 75% in 15 months 90% in 10 months
Tier 1 first major amendment 60% in 10 months 75% in 10 months 90% in 10 months
Tier 1 minor amendments (1st –
3rd)
60% in 3 months 75% in 3 months 90% in 3 months
Tier 1 minor amendments (4th-5th) 60% in 6 months 75% in 6 months 90% in 6 months
Tier 2 amendments 60% in 12 months 75% in 12 months 90% in 12 months
Prior approval supplements 60% in 6 months 75% in 6 months 90% in 6 months
ANDA teleconference requests Close-out 200 Close-out 250 Close-out 300
Controlled correspondences 60% in 4 months 70% in 2 months 90% in 2 months
ANDA, amendment and PAS in
backlog on Oct 1, 2012 Act on 90% by end of FY 2017
14
Figure 4. FDA ANDA Approvals, January 2014 to December 2015
Source: Janet Woodcock, Feb 4, 2016, “ Implementation of the Generic Drug User Fee Amendments of 2012 (GDUFA),” Testimony Before the House Committee on Oversight and Govt Reform.
15
Strategic Trends for 2016 – Continued Consolidation
Recent Channel Consolidation
Further, we have heard persistent complaints that the
FDA has substantially increased the frequency of
Refuse to File (RTF) Letters – rejecting ANDA
applications that do not follow CFR filing rules, such
as formatting of ANDA’s and completed Tables of
Contents.
But, despite the complaints, there is no doubt that
substantial progress has been made. As illustrated in
Figure 4, the pace of ANDA approvals is up
dramatically in the last six months.
We are optimistic that FDA approvals will continue to
accelerate with added resources and recent
reductions in filing volumes.
This changing regulatory picture will obviously impact
pricing for many products, ultimately benefitting
consumers while making life more difficult for some
companies.
We see a number of key strategic trends playing out
in 2016 in the global generic sector.These are:
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Strategic Trends for 2016 – Technology Emphasis and Globalization
Trend 1. Continued Consolidation
The economic case for consolidation in the U.S. generic
sector is strong. As noted by Teva in their investor
presentation following the Allergan Generics acquisition
(see chart on previous page), there has been dramatic
consolidation on the distribution and retail side of the
business.
The effect of this consolidation is to advantage larger
players who have more leverage in discussions of
pricing and supply with wholesalers, retailers and PBMs.
Teva, for example, saw the market share of its top 3
customers grow from 52% in 2009 to 83% in 2013.
We expect to see continued consolidation among
generic players, particularly among companies that are
in the more commoditized product categories. We
further expect to see added vertical integration.
Trend 2. Continued Focus onTechnologies
An important, if not widely heralded trend in recent
years, has been the emergence of more technological
sophistication in formulation among generic companies.
This is seen, for example in the microsphere area.
Companies needing to introduce generics against the
Alkermes / J&J depot products will need to be able to
produce sophisticated PLGA microspheres. This is
true for blockbusters like Risperdal Consta® and for
other less widely used products.
We have seen Amneal, Dr. Reddy’s and Lupin, for
example, make major investments in this area. Lupin
acquired Nanomi B.V., a technology company
specializing in monosphere’s and complex
At Least Three Companies Have Made a Major Investment
in PLGA Microsophere Technology for Complex Injectibles
17
Strategic Trends for 2016 – Generics Benefitting from Global Growth
injectable technologies in January 2014. A year earlier,
Dr. Reddy’s Laboratories made a similar acquisition of
OctoPlus N.V.
In the complex liquids area, we have seen an arms race
emerging among a number of players with Tris Pharma
in a leadership position. Its extended release liquids
technology has allowed it to be one of two companies
to successfully genericize Tussionex® and introduced
superior formulations of branded products in the
cough/cold and ADHD areas.
We expect to see increased competition and
investment in technologies for more sophisticated
products rise ahead. Key areas of focus now include
respiratory products, injectable products and
controlled release solid oral dose products.
Trend 3. Continued Globalization
As noted earlier, few companies have truly taken
advantage of the economies of scale afforded by
globalization. Pfizer and Teva, for example, have a fully
integrated supply chain in generic cytotoxic drugs
allowing them to produce API inexpensively, formulate
a full line of cytotoxics and then supply these products
around the globe. The economies of volume in this
product line are considerable and allow both
companies to experience substantial profit. China and
India have a number of high quality, low cost
producers in API and formulations that have the
potential to globalize operations substantially,
including in the United States. This is true for
companies in other geographies such as Europe and
Japan. To date, we have not seen Chinese, European or
Japanese generic pharmaceutical players make
substantial inroads into the U.S. market but we expect
this to change in 2016 and the years ahead.
There are two key types of globalization activities to
Heather BreschChief Executive Officer
Mylan, N.V.
“The fevered pitch
of globalization has
gone to a whole
other level.”
February 2016
Speech, GPhA
18
Strategic Trends for 2016 – Continued Benefit to Consumers
note. The first, of course, is seen when companies like
Cipla or Sun Pharma build up a presence in the U.S.
market. The progress made by Indian-domiciled
companies has been spectacular in the last decade.
Lupin now sells over $900 million of generic product
each year in the United States. The U.S. is the key profit
center for them.
The second is to build up global capabilities across
markets. There are numerous large, growing and
lucrative markets around the globe including territories
like Russia, India, China, Korea, Mexico, Brazil and South
Africa. Selected consolidators such as Abbott, Acino,
Alvogen, Amneal, Glenmark, Lupin, Mylan, Stada, Teva
and Torrent understand the economics of globalization
very well and are likely to continue the pursuit of
organic and inorganic growth strategies globally to
leverage their product platforms. Key players in 2015 in
globalization were Alvogen, Lupin, and Teva. We expect
many others such as Abbott, Mylan and Sun to continue
to globalize their operations in 2016 given the growth
of emerging markets and the benefits from supplying
products to these markets.
Emerging market economies are of increasing interest.
The OECD forecasts that the fraction of the world’s
GDP from the world’s 29 most developed economies
will shift from 60% in 2000 to 43% in 2030.
Rapid growth in emerging markets will continue to
lead to shifting of budgets into generic pharmaceutical.
Generic drugs benefit disproportionately from this
economic growth as they have a lower cost entry
point for emerging middle class consumers than
branded products. Figure 5 shows the experience of
the U.S. itself, where spending on medical products
rose disproportionately with GDP.
Trend 4. Continued Benefit to Consumers
The GPhA and IMS Health have done very nice work
documenting the gains for consumers generated by
“Rapid growth in emerging markets will
continue to lead to dramatic shifting of
budgets into pharmaceutical products.”
19
Strategic Trends for 2016 – Consumer Surplus Delivered by Pricing Pressure
The widespread availability of generic drugs has
undoubtedly had a massive positive effect on
humankind. We are struck by Cipla who state the
following mission: “Cipla is a global pharmaceutical
company whose goal is to ensure that no patient shall
be denied access to high quality & affordable medicine
and support.”
Cipla supplies inexpensive generic medicines on a
global basis from plants that have a consistent high
quality of production. Plants that make products for
unregulated markets in Africa are the same that are
used for product destined for Europe or the U.S.
Thanks to Cipla and hundreds of other global generic
companies like Lupin, Mylan, Sandoz,, Teva, Torrent and
Zydus Cadila, the availability of life saving medicines at
a reasonable price has spread massively over the last
several decades.
We do not doubt that widely observed improvements
in human life spans can be attributed at least in part to
the spread of generic pharmaceuticals.
Our prediction is that the benefit to consumers
(consumer surplus) in the next two decades will
exceed that of the last two decades.
Source: U.S. Bureau of Economic Analysis, National Income and Product Accounts
0
500
1,000
1,500
2,000
2,500
0
2,000
4,000
6,000
8,000
10,000
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1929 1935 1941 1947 1953 1959 1965 1971 1977 1983 1989 1995 2001 2007
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are S
pendin
g (C
urr
ent
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illio
n)
GD
P (
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ent
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illio
n)
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Figure 5. Medical Spending in the U.S. and GDP
1929 to 2010
Once consumers have
covered the basics of food
and shelter they direct
marginal dollars to
superior goods such as
investments in life
extension (medical care).
generic in the United States. Of course, this analysis applies
equally well on a global basis.
20
Strategic Trends for 2016 – Consumer Surplus Delivered by Pricing Pressure
Companies like HuaHai, Hisun and Humanwell are
now on the ground in the U.S. market and are building
up their organizations in the same way as the Indian
generic players did ten to twenty years ago. As these
companies begin to achieve critical mass in the U.S.
we expect to see much more downward pressure in
the U.S. on pricing of both high volume oral solid dose
products and other categories such as injectables and
liquids in the years ahead.
Pricing pressures in the API market are becoming ever
more intense and competition from large players in
both China and India has impacted the market. We
have been impressed by the emergence of specialty
players in the API market such as Ipca, Laurus, and
Symbiotec who are pursuing “last man standing”
strategies to achieve dominance an API category.
Ultimately, these strategies should have a profound
benefit on human life spans and the quality of life.
If the first cause of improving consumer surplus
relates to improving scale economies and greater
supply at a given price then the second relates to
human population growth and just as importantly
growth in wealth.According to the IMF GrossWorld
There are several reasons for this. One is that scale
economies in both API manufacture and production
have not yet been fully achieved. There are some low
cost producers in the U.S. for commoditized products
such as ENDO, but the real low cost producers in
China and India have far to go in realizing the
potential of their cost advantage. The push by the FDA
on manufacturing quality has impacted supply in the
short and medium term, leading global suppliers to
deliver quality products in the pattern followed by
Cipla. Ultimately, there should be substantial gains in
share by low cost producers as more and more
product categories are commoditized. We expect to
see prices for generic products in the U.S. ultimately
decline as these economies are achieved.
A particularly important trend for U.S. consumers has
been the entry of Chinese generic pharmaceutical
players into the market. To date, Chinese participation
in any market outside of China has been modest, but a
number of companies are going beyond their cost
advantage in API to develop low cost formulations in
order to market them on a global basis. While modest
today, we expect this trend to pick up substantially
over the next decade.
21
Strategic Trends for 2016 – Consumer Surplus Delivered by Pricing Pressure
payor pressures for less expensive products are
supplemented by consumer demand for the same. With
advances in big data analytics and product traceability,
generic players should be better positioned globally to
be able to correlate the availability and usage of their
medicines with population health statistics. The ability
to document direct health benefits in both developed
and developing markets should be an important tool in
driving greater utilization of these products and
associated reimbursement.
Product (GWP) has grown by between three and five
percent per annum after inflation since 2010 to more
than $90 trillion today. The IMF does not see this
growth rate slowing down in the foreseeable future.
The implication is obvious: rising wealth, rising
populations and longer life spans all spell
disproportionately high growth in generic
pharmaceutical volumes in the years ahead benefiting
the world’s people.
These benefits coincide with the advent of big data
methods which have been increasingly used to
determine health outcomes.
In particular with the advent of Accountable Care
Organizations (ACOs) in the United States we are
seeing an increased interest on the part of health
systems and employers to contract around health
outcomes for employees while capitating costs.
Former HHS Secretary Michael Leavitt noted in his
keynote address at the GPhA 2016 Annual Meeting
that this interest could profoundly impact the generic
pharma sector.
In the future, we believe that the favorable cost profile
of generic drugs will become even more important as
Michael LeavittFormer Secretary of HHS
ACO’s and
performance-based
reimbursement
could profoundly
impact the U.S.
generic sector.
22
2. Generic Pharma M&A Activity Update
23
Key Developments in M&A: 2015 Versus 2014
Record Volume
2015 set an all time record for M&A volume in the
generic pharmaceutical industry with a total of $78
billion in reported volume
Two giant transactions did not close and are not
counted here (Teva / Mylan & Mylan / Perrigo)
Unreported transactions sizes (e.g., CVC / Alvogen)
would have grown 2015 volume number even more
Reported M&A volume in global generics, by contrast,
in 2014 was $12 billion
Average revenue multiple of 5.3 times in 2015 versus
3.8 times in 2014
Average multiple of Enterprise value to EBITDA of
15.1 times in 2015 versus 14.2 times in 2014
Despite toughening credit conditions and a volatile
market for generic companies equities, thus far in
2016 we do not see multiples coming down
Mylan’s recent 14x EBITDA bid for Meda in 2016
shows the appetite for paying healthy valuations is
unchanged
Higher Valuations
$12
$78
2014 2015
3.8x
5.3x
2014 2015
Dollar Volume of Generic M&A ($ Billions),
2014 vs. 2015
Average Revenue Multiple in M&A
2014 vs. 2015
24
Generic Pharma M&A Volumes, 2007 to 2015
The explosion in generic M&A deal volume in 2015 was historically unprecedented
78
5
8
5 56
27
32
$12.1
$17.1
$3.3
$15.5
$2.1
$7.2$3.2 $12.0
$78.0
-20
-10
0
10
20
30
40
50
60
70
80
0
5
10
15
20
25
30
35
40
45
2007 2008 2009 2010 2011 2012 2013 2014 2015
Global Generic Deal Count and Volume, 2007-2015
Deal Count Dollar Volume ($ billions)
25
Generic Pharma M&A – 2015
Consolidation in the generics industry continues at sky-high valuations for quality assets
Source: Capital IQ, Press Release and Torreya estimates
Ann. LTM EV/LTM
Date Target Acquirer EV ($mm) Revenue ($mm) EBITDA ($mm) Revenue ($mm) EBITDA ($mm)
12/10/15 Laboratories Vannier Stada $13.0 NA NA NA NA
12/04/15 Osmotica Avista NA NA NA NA NA
11/17/15 VistaPharm Warburg Pincus NA NA NA NA NA
11/16/15 Intrapharm Laboratories RIEMSER Pharma NA NA NA NA NA
10/13/15 Alveda Teligent 34.0 12.0 4.1 2.8x 8.3x
10/01/15 Rimsa Teva Pharmaceuticals 2,300.0 227.0 NA 10.1x NA
09/20/15 Solus & Solus Care Div. (Sun) Strides Arcolab 25.1 NA NA NA NA
09/08/15 Amdipharm Concordia 3,523.4 446.0 NA 7.9x NA
09/08/15 EIMA United Pharmaceuticals Hikma Pharmaceuticals NA 1,489.0 NA NA NA
09/03/15 InvaGen Cipla 550.0 225.0 50.0 2.4x 11.0x
09/02/15 Kremers Urban Lannett 1,230.0 413.0 133.0 3.0x 9.2x
08/26/15 4 Products (Pfizer) Alvogen NA NA NA NA NA
07/28/15 Roxane Hikma Pharmaceuticals 2,650.0 765.0 132.5 3.5x 20.0x
07/27/15 Allergan Generics Teva Pharmaceuticals 40,500.0 6,600.0 2,382.4 6.1x 17.0x
07/24/15 Temmler's Specialty Product Portfolio Lupin NA NA NA NA NA
07/23/15 GAVIS and Novel Laboratories Lupin 880.0 96.0 36.7 9.2x 24.0x
07/23/15 22 ANDAs (Teva) ANI 25.0 NA NA NA NA
06/30/15 Time-Cap Laboratories Marksans NA NA NA NA NA
06/02/15 Nostrum Mylan 75.0 27.0 9.0 2.8x 8.3x
06/02/15 Primegen Amdipharm NA NA NA NA NA
05/21/15 Aspen Australia Gx Assets Strides Arcoab 299.9 NA NA NA NA
05/20/15 Silarx Lannett 42.0 27.5 NA 1.5x NA
05/18/15 Par Pharma Endo 8,050.0 1,310.0 487.9 6.1x 16.5x
05/13/15 Medquimica Lupin NA 31.0 NA NA NA
05/11/15 Pharmacare Litha Pharma 132.5 30.1 NA 4.4x NA
04/10/15 Aurobindo Australian Business Eris Pharma NA NA NA NA NA
03/31/15 Actavis Australian Gx Business Amneal NA NA NA NA NA
03/05/15 Flecainide ANDA (Teva) ANI NA NA NA NA NA
02/23/15 Adcock Ingram (65% Stake) Bidvest 823.2 411.6 4.0 2.0x NM
02/05/15 Hospira Pfizer 16,323.0 4,463.7 746.8 3.7x 21.9x
02/02/15 Famy Care Mylan 800.0 58.3 NA 13.7x NA
01/26/15 Auden Mckenzie Actavis 461.1 NA NA NA NA
1st Quartile: 1.5x 8.3x
Median: 3.7x 16.5x
Mean: 5.3x 15.1x
3rd Quartile: 7.0x 20.0x
26
Generic Pharma M&A – 2014
2014 was an active year for generic M&A but did not come close to 2015 in the level of activity
Source: Capital IQ, Press Release and Torreya estimates
Ann. LTM EV/LTM
Date Target Acquirer EV ($mm) Revenue ($mm) EBITDA ($mm) Revenue ($mm) EBITDA ($mm)
12/09/14 Valeant Asset IGI Labs $0.5 NA NA NA NA
11/14/14 Uman Pharmascience 29.2 NA NA NA NA
11/03/14 Sandoz ANDAs IDT 18.0 NA NA NA NA
10/09/14 Tower Holdings (CorePharma) Impax Labs 700.0 220.0 82.5 2.6x 11.6x
10/01/04 Omega Labs Sagent Pharma 85.3 32.8 7.4 1.8x NA
09/30/14 Focus Pharma AMCo 113.6 64.9 NA 1.4x 10.9x
09/29/14 Shasun Pharma Strides Arcolab 295.1 218.2 27.0 2.6x NA
09/08/14 Soft Gel ANDAs (Par) Aceto (Rising) 8.2 NA NA NA NA
08/20/14 2 ANDAs Lannett NA NA NA NA NA
07/16/14 InnoPharma Pfizer 360.0 NA NA NA NA
07/07/14 Dream Pharma Alvogen 187.0 87.5 NA 2.1x NA
06/30/14 2 Gx Assets (Actavis) Impax Labs NA NA NA NA NA
06/26/14 Globalpharma Pfizer 158.8 NA NA NA NA
06/24/14 DAVA Pharma Endo 600.0 131.0 99.0 4.6x 6.1x
06/23/14 Veropharm Abbott 631.0 150.0 NA 4.2x NA
06/11/14 Medreich Meijia Seika 290.0 157.0 24.0 1.8x 12.1x
05/28/14 Bedford Labs Hikma Pharma 300.0 19.0 (22.0) 15.8x NM
05/16/14 CFR Pharma Abbott 3,351.4 782.3 121.6 4.3x 27.6x
05/09/14 VersaPharm Akorn 440.0 95.0 NA 4.6x NA
04/29/14 Somar Endo 268.8 100.0 NA 2.7x NA
04/06/14 Ranbaxy Labs Sun Pharma 4,084.0 1,796.1 183.9 2.3x 22.2x
04/02/14 Alvogen Pamplona NA NA NA NA NA
04/01/14 Silommedical Actavis 100.0 NA NA NA NA
03/27/14 PACK Pharma Aceto (Rising) 100.0 46.0 11.4 2.2x 8.8x
03/24/14 Upsher-Smith Assets Vertical Pharma NA NA NA NA NA
02/06/14 25 Gx Assets (Cypress) Breckenridge NA NA NA NA NA
01/17/14 Certain Gx Assets (Actavis) Aurobindo 40.7 NA NA NA NA .
1st Quartile: 2.1x 9.9x
Median: 2.6x 11.6x
Mean: 3.8x 14.2x
3rd Quartile: 4.3x 17.2x
27
Revenue Multiples at Historically High Levels
The median M&A value to revenue multiple of 5.1x was almost double the median multiple seen in 2011
2.6x2.8x
4.0x3.8x
5.1x
2011 2012 2013 2014 2015
Median Reported Revenue Multiple
28
3. Generic Industry Company Valuation Approach
29
Ranking Approach
This section provides rankings based on valuation of publicly traded and private companies in the U.S. generic
pharma sector.
Inclusion / Exclusion Criteria
We have chosen to include not just companies headquartered in the United States, but have instead focused on
the value of those who have a significant presence in the United States market, including companies from many
countries such as China, India, Israel and Switzerland
We excluded companies such as Prestige Brands whose businesses are almost entirely in the OTC space
We excluded companies such as AMRI or Cambrex whose businesses involve manufacture of API but not in
marketing formulations in the United States
For large public companies that have a generic pharma division (Abbott Labs, Teva or Fresenius) we broke out
the division. But, for other companies where we were not able to fully separate the business based on segment
data, our estimates of value may included some activity from on-patent generics
Estimating Value
For public companies, valuations were determined by computation of enterprise value (market value of equity +
debt – cash). Enterprise value gives a view of the market’s valuation of a business independent of its balance
sheet
We then calculated global average ratios of enterprise value to revenue and enterprise value to EBITDA
(earnings flow before cash, depreciation and amortization) for publicly traded companies as of February 16,
2016
We checked to see if these valuation ratios followed country specific patterns
30
Ranking Approach
Interestingly, while we had seen higher ratios systematically in China six months ago, this valuation differential
has disappeared due to a fairly sharp downdraft in Chinese equities in 2016
– There were no other major areas in the developed world with statistically significant differences in valuation ratios from global
averages
Valuing Private Companies
For private companies, we typically have available a revenue estimate obtained from news stories, the company’s
own web site, industry participants etc. Data on a number of private companies such as Alvogen or Amneal that
access debt markets, were available from Moody’s Investor Service:
– In a few cases, such estimates were not available and we looked at prescription data in order to obtain our best estimate of a
company’s revenue in 2015 or 2014
– We know that some of these estimates will be incorrect and certain companies are missing due to the lack of financial data
Based on these data we then imputed valuations for private companies as a function of their estimated revenue.
If EBITDA data were available and implied a different value estimate, we then used an EBITDA value imputation
approach instead, based on the view that the market is ultimately valuing companies for the cash flows that they
produce. Obviously, our imputation approach provides a crude view of valuation given that we do not have
visibility into a private company’s growth prospects, pipeline etc. and thus are simply assuming that any given
private company can be valued as the average public company
We employed a revenue multiple of 3.9 times to impute valuations of private companies based on median
multiples observed in the valuation table of public-traded generic pharmaceutical companies with a U.S.
presence as of Feb 16, 2016. that follows
In a few cases, we have been made aware of private valuations for pre-revenue companies and have included
such companies in the value ranking where we had the data
31
Valuation of Publicly-Traded Generic Companies with a U.S. Presence, Feb 2016
Valuations as of Feb 15, 2016.
Company LTM EV/LTM
Name Exchange:Ticker Headquarters EV ($mm) Revenue ($mm) EBITDA ($mm) Revenue ($mm) EBITDA ($mm)
Sun Pharma NSEI:SUNPHARMA India $29,530 $3,888 $1,111 7.6x 26.6x
Mylan NasdaqGS:MYL Ireland 27,818 9,429 2,718 3.0x 10.2x
Perrigo NYSE:PRGO Ireland 26,105 5,350 1,443 4.9x 18.1x
Endo NasdaqGS:ENDP Ireland 19,862 3,354 782 5.9x 25.4x
Lupin BSE:500257 India 11,390 1,874 506 6.1x 22.5x
Dr. Reddy's BSE:500124 India 7,314 2,263 598 3.2x 12.2x
Cipla NSEI:CIPLA India 6,254 1,987 416 3.1x 15.0x
Aurobindo BSE:524804 India 6,110 1,941 446 3.1x 13.7x
Hikma LSE:HIK United Kingdom 5,739 1,460 433 3.9x 13.3x
Zydus Cadila BSE:532321 India 4,837 1,370 332 3.5x 14.6x
Akorn NasdaqGS:AKRX United States 3,994 593 208 6.7x 19.2x
Torrent Pharma BSE:500420 India 3,311 846 249 3.9x 13.3x
Glenmark BSE:532296 India 3,289 1,055 171 3.1x 19.2x
Huahai Pharma SHSE:600521 China 3,116 416.8 77 7.5x 40.4x
Hisun Pharma SHSE:600267 China 2,765 1,628 197 1.7x 14.1x
Impax NasdaqGS:IPXL United States 2,279 596 133 3.8x 17.1x
Lannett NYSE:LCI United States 1,802 407 236 4.4x 7.6x
Wockhardt BRSE:WBIO India 1,337 590 95 2.3x 14.1x
Mayne Pharma ASX:MYX Australia 691 109 23 6.4x 30.7x
Amphastar Pharma NasdaqGS:AMPH United States 477 211 (3) 2.3x NA
Sagent Pharma NasdaqGS:SGNT United States 392 289 28 1.4x 14.2x
Coherus NasdaqGM:CHRS United States 375 31 (64) 12.1x NA
Momenta NasdaqGS:MNTA United States 335 52 (91) 6.4x NA
ANI Pharmaceuticals NasdaqGM:ANIP United States 298 56 24 5.3x 12.5x
Teligent AMEX:IG United States 283 34 4 8.4x 64.0x
Claris Lifesciences Limited BSE:533288 India 125 112 23.8 1.1x 5.2x
1st Quartile: 3.1x 13.3x
Median: 3.9x 14.6x
3rd Quartile: 6.3x 20.8x
32
4. U.S. Generic Company Value Ranking
33
Top 25 Generic Companies with a U.S. Operating PresenceGeneric Sector Value Ranking – Torreya Insights
Value
Rank Name Exchange:Ticker HQ - Country Company Type
Enterprise Value /
Imputed Value ($mm)
Revenue
($mm)
EBITDA
($mm)
1 Pfizer Established Pharma NYSE:PFE United States Public Company 84,621 21,587 12,885
2 Teva Generics (including Allergan Gx) NYSE:TEVA Israel Public Co Segment 70,301 9,546 2682
3 Sandoz / Novartis SWX:NOVN Switzerland Public Co Segment 36,495 9,310 3985
4 Sun Pharma NSEI:SUNPHARMA India Public Company 30,035 4,021 1149
5 Mylan NasdaqGS:MYL United Kingdom Public Company 28,170 9,429 3010
6 Lupin BSE:500257 India Public Company 11,019 1,831 603.1
7 Fresenius - Kabi Generic Drugs Public Segment Germany Public Co Segment 10,463 2669 561
8 Endo Generics NasdaqGS:ENDP Ireland Public Co Segment 9,549 2,436 NA
9 Perrigo - Prescription Pharma NYSE:PRGO Ireland Public Co Segment 7,868 1,073 540
10 Sanofi Generics Public Segment France Public Co Segment 7,775 1,984 495.9
11 Dr. Reddy's BSE:500124 India Public Company 7,317 2,368 562.4
12 Hikma LSE:HIK United Kingdom Public Company 6,503 2,058 327.0
13 Apotex Private Company Canada Private Company 6,388 1,630 NA
14 GSK Mature Brands Public Segment United Kingdom Public Co Segment 6,272 1,600 1440
15 Cipla NSEI:CIPLA India Public Company 6,164 2,018 442
16 Zydus Cadila BSE:532321 India Public Company 6,164 1,384 282.5
17 Aurobindo BSE:524804 India Public Company 5,942 1,930 466
18 Akorn NasdaqGS:AKRX United States Public Company 5,600 593 208.3
19 Glenmark BSE:532296 India Public Company 5,345 1,055 171.4
20 Torrent Pharma BSE:500420 India Public Company 4,418 846 249.0
21 Chemo Private Company Spain Private Company 4,312 1,100 NA
22 Humanwell SHSE:600079 China Public Company 3,728 1,137 326.6
23 Intas Pharma Private Company India Private Company 3,042 776 NA
24 Alvogen Private Company Luxembourg Private Company 2,940 750 187.5
25 Huahai Pharma SHSE:600521 China Public Company 2,899 417 77.1
34
Generic Companies with a U.S. Operating Presence Ranked #26-50Generic Sector Value Ranking – Torreya Insights
Value
Rank Name Exchange:Ticker HQ - Country Company Type
Enterprise Value /
Imputed Value ($mm)
Revenue
($mm)
EBITDA
($mm)
26 Amneal Private Company United States Private Company 2,881 735 NA
27 Prasco Private Company United States Private Company 2,588 660 NA
28 Impax NasdaqGS:IPXL United States Public Company 2,499 596 133.1
29 Wockhardt BRSE:WBIO India Public Company 2,361 590 94.9
30 Alembic BSE:533573 India Public Company 2,062 329 63.9
31 Alkem / Heritage Pharma Private Company India Private Company 1,993 498 89.46
32 Ajanta Pharma BSE:532331 India Public Company 1,972 237 80.7
33 Breckenridge Pharma Private Company United States Private Company 1,568 400 NA
34 Lannett NYSE:LCI United States Public Company 1,537 407 236.1
35 Momenta NasdaqGS:MNTA United States Public Company 965 52 (90.7)
36 Coherus NasdaqGM:CHRS United States Public Company 851 31 (63.9)
37 Osmotica / Vertical Private Company United States Private Company 840 210 NA
38 Hetero Private Company India Private Company 751 188 NA
39 G & W Laboratories Private Company United States Private Company 624 156 NA
40 Mayne Pharma ASX:MYX Australia Public Company 624 109 22.5
41 Sagent Pharma NasdaqGS:SGNT United States Public Company 584 289 28
42 Amphastar Pharma NasdaqGS:AMPH United States Public Company 557 211 (3.1)
43 ANI Pharmaceuticals NasdaqGM:ANIP United States Public Company 505 56 23.9
44 Nephron Pharmaceuticals Private Company United States Private Company 500 125 NA
45 Epic Pharma, LLC Private Company United States Private Company 475 60 24.0
46 KVK-TECH Private Company United States Private Company 380 95 NA
47 Teligent AMEX:IG United States Public Company 371 34 4.42
48 County Line Pharma Private Company United States Private Company 356 45 18
49 Ingenus Pharma Private Company United States Private Company 324 81 NA
50 X-Gen Pharma Private Company United States Private Company 248 62 NA
35
Generic Companies with a U.S. Operating Presence Ranked #51-73Generic Sector Value Ranking – Torreya Insights
Value
Rank Name Exchange:Ticker HQ - Country Company Type
Enterprise Value /
Imputed Value ($mm)
Revenue
($mm)
EBITDA
($mm)
51 Vertice Pharma Private Company United States Private Company 240 60 NA
52 Blu Pharmaceuticals LLC Private Company United States Private Company 224 56 NA
53 Sterimax Private Company Canada Private Company 200 50 NA
54 PII Private Company United States Private Company 160 NA NA
55 Citron Pharma LLC Private Company United States Private Company 157 40 NA
56 Claris Lifesciences Limited Private Company India Public Company 102 103 NA
57 Amerigen Pharmaceuticals Limited Private Company China Private Company 100 NA NA
58 Banner Life Sciences Private Company United States Private Company 96 24 NA
59 Virtus Pharma Private Company United States Private Company 92 23 NA
60 Granard Private Company United States Private Company 90 NA NA
61 Vista Pharma Private Company United States Private Company 84 21 NA
62 Lehigh Valley Technologies Private Company United States Private Company 80 20 NA
63 Stratus Pharma Private Company United States Private Company 80 20 NA
64 EPIRUS Biopharmaceuticals NasdaqCM:EPRS United States Public Company 76 0 (31.5)
65 Ritedose Pharma Private Company United States Private Company 64 16 NA
66 Vensun Pharmaceuticals, Inc. Private Company United States Private Company 60 0 NA
67 Bayshore Pharma Private Company United States Private Company 50 0 NA
68 CANDA Pharma Private Company United States Private Company 50 0 NA
69 Vitruvias Therapeutics, LLC Private Company United States Private Company 40 0 NA
70 Stason Pharmaceuticals, Inc. Private Company United States Private Company 33 8 NA
71 Amring Pharma Private Company United States Private Company 30 0 NA
72 Slayback Pharma Private Company United States Private Company 30 0 NA
73 Oakwood Laboratories LLC Private Company United States Private Company 26 6 NA
36
5. Global Generic Company Value Ranking
37
Top 25 Generic Companies WorldwideGeneric Sector Value Ranking – Torreya Insights
Value
Rank Name Exchange:Ticker HQ - Country Company Type
Enterprise Value /
Imputed Value ($mm)
Revenue
(2015, $mm)
EBITDA
(2015, $mm)
1 Pfizer Established Pharma NYSE:PFE United States Public Company 84,621 21,587 12,885
2 Teva Generics (including Allergan Gx) NYSE:TEVA Israel Public Co Segment 70,301 9,546 2682
3 Sandoz / Novartis SWX:NOVN Switzerland Public Co Segment 36,495 9,310 3985
4 Sun Pharma NSEI:SUNPHARMA India Public Company 30,035 4,021 1149
5 CR Pharmaceutical Private Company China Private Company 29,047 7,410 345
6 Yangtze River Pharma Private Company China Private Company 28,185 7,190 NA
7 Mylan NasdaqGS:MYL United Kingdom Public Company 28,170 9,429 3010
8 EMS Private Company Brazil Private Company 16,464 4,200 NA
9 Abbott Established Pharma Segment: NYSE:ABT United States Public Co Segment 14,582 3,720 711
10 Hengrui SHSE:600276 China Public Company 13,235 1,401 376
11 Lupin BSE:500257 India Public Company 11,019 1,831 603.1
12 Fresenius - Kabi Generic Drugs Public Segment Germany Public Co Segment 10,463 2669 561
13 Aspen Pharmacare JSE:APN South Africa Public Company 9,864 2,236 553
14 Endo Generics NasdaqGS:ENDP Ireland Public Co Segment 9,549 2,436 NA
15 Celltrion KOSDAQ:A068270 South Korea Public Company 9,534 452 192.0
16 Perrigo - Prescription Pharma NYSE:PRGO Ireland Public Co Segment 7,868 1,073 540
17 Sanofi Generics Public Segment France Public Co Segment 7,775 1,984 495.9
18 Dr. Reddy's BSE:500124 India Public Company 7,317 2,368 562.4
19 Sinopharm - Rx Segment Private Company China Private Company 7,208 2,044 NA
20 Hikma LSE:HIK United Kingdom Public Company 6,503 2,058 327.0
21 Apotex Private Company Canada Private Company 6,388 1,630 NA
22 GSK Mature Brands Public Segment United Kingdom Public Co Segment 6,272 1,600 1440
23 Cipla NSEI:CIPLA India Public Company 6,164 2,018 442
24 Zydus Cadila BSE:532321 India Public Company 6,164 1,384 282.5
25 Aurobindo BSE:524804 India Public Company 5,942 1,930 466
38
Top Generic Companies Worldwide, Ranked 26-50 by ValueGeneric Sector Value Ranking – Torreya Insights
Value
Rank Name Exchange:Ticker HQ - Country Company Type
Enterprise Value /
Imputed Value ($mm)
Revenue
($mm)
EBITDA
($mm)
26 R-Pharm Private Company Russia Private Company 5,880 1,500 NA
27 Akorn NasdaqGS:AKRX United States Public Company 5,600 593 208.3
28 Huadong Medicine SZSE:000963 China Private Company 5,558 3,295 268
29 CSPC Pharma SEHK:1093 Hong Kong Public Company 5,473 1,413 290.9
30 Glenmark BSE:532296 India Public Company 5,345 1,055 171.4
31 PT Kalbe JKSE:KLBF Indonesia Public Company 4,929 1,209 213.0
32 Fosun Pharma Generics Business SHSE:600196 China Public Co Segment 4,781 1,220 229.4
33 Eurofarma Laboratórios Private Company Brazil Private Company 4,761 823 326.8
34 GPC SEHK:874 China Public Company 4,553 3,031 226.0
35 Torrent Pharma BSE:500420 India Public Company 4,418 846 249.0
36 Chemo Private Company Spain Private Company 4,312 1,100 NA
37 Laboratorios Bagó Private Company Argentina Private Company 4,312 1,100 NA
38 Salubris Pharmaceuticals SZSE:002294 China Public Company 4,122 507 220.09
39 Roemmers Private Company Argentina Private Company 4,116 1,050 NA
40 Polpharma Private Company Poland Private Company 3,920 1,000 NA
41 Qilu Pharma Private Company China Private Company 3,834 978 NA
42 Dongbao Pharma SHSE:600867 China Public Company 3,829 234 74.3
43 Neptunus Group Private Company China Private Company 3,747 956 NA
44 Humanwell SHSE:600079 China Public Company 3,728 1,137 326.6
45 Stada DB:SAZ Germany Public Company 3,693 2,496 555.8
46 Kanghong Pharma SZSE:002773 China Public Company 3,561 270 61.0
47 Livzon Pharmaceutical Group Inc. SZSE:000513 China Public Company 3,504 894 134.8
48 Conba Pharma SHSE:600572 China Public Company 3,463 578 126.4
49 Piramal Enterprises BSE:500302 India Public Company 3,412 843 171.1
50 Hualan Biological Engineering SZSE:002007 China Public Company 3,397 201 100.2
39
Top Generic Companies Worldwide, Ranked 51-75 by ValueGeneric Sector Value Ranking – Torreya Insights
Value
Rank Name Exchange:Ticker HQ - Country Company Type
Enterprise Value /
Imputed Value ($mm)
Revenue
($mm)
EBITDA
($mm)
51 Haisco Pharma SZSE:002653 China Public Company 3,378 195 69.3
52 Kelun Pharma SZSE:002422 China Public Company 3,371 1,241 288
53 Hypermarcas BOVESPA:HYPE3 Brazil Public Company 3,287 1,196 296.0
54 Aodong Medicine SZSE:000623 China Public Company 3,280 361 70.7
55 Unilab Private Company Philippines Private Company 3,273 835 NA
56 Joincare Pharma SHSE:600380 China Public Company 3,243 1,196 195.5
57 Genomma BMV:LAB B Mexico Public Company 3,155 932 172.3
58 Gloria Pharmaceuticals SZSE:002437 China Public Company 3,084 307 96.7
59 Harbin Pharma SHSE:600664 China Public Company 3,056 2,662 118.3
60 Intas Pharma Private Company India Private Company 3,042 776 NA
61 Wuzhou Pharm SHSE:600252 China Public Company 3,026 518 179.7
63 Alvogen Private Company Luxembourg Private Company 2,940 750 187.5
62 Pharmascience Private Company Canada Private Company 2,940 750 NA
64 Huahai Pharma SHSE:600521 China Public Company 2,899 417 77.1
65 Amneal Private Company United States Private Company 2,881 735 NA
66 Dahuanong Animal Health SZSE:300186 China Public Company 2,875 164 24.7
67 Hisun Pharma SHSE:600267 China Public Company 2,807 1,628 196.5
68 SL Pharmaceutical SZSE:002038 China Public Company 2,753 200 119.4
69 China Medical System SEHK:867 China Public Company 2,729 475 147.4
70 Gedeon Richter BUSE:RICHTER Hungary Public Company 2,601 1,352 264.3
71 Prasco Private Company United States Private Company 2,588 660 NA
72 Aché Laboratórios Private Company Brazil Private Company 2,524 533 173.2
73 Yiling Pharma SZSE:002603 China Public Company 2,524 471 75.9
74 Xinbang Pharma SZSE:002390 China Public Company 2,523 399 45.9
75 Hybio Pharma SZSE:300199 China Public Company 2,519 68 34.6
40
Top Generic Companies Worldwide, Ranked 76-100 by ValueGeneric Sector Value Ranking – Torreya Insights
Value
Rank Name Exchange:Ticker HQ - Country Company Type
Enterprise Value /
Imputed Value ($mm)
Revenue
($mm)
EBITDA
($mm)
76 Impax NasdaqGS:IPXL United States Public Company 2,499 596 133.1
77 Pharmstandard Private Company Russia Private Company 2,449 625 188.0
78 Dingli Tech SHSE:900907 China Public Company 2,443 205 22.7
79 Chase Sun Pharma SZSE:300026 China Public Company 2,434 462 85.2
80 Tecnoquimicas Private Company Colombia Private Company 2,411 603 NA
81 Luye Pharma SEHK:2186 China Public Company 2,409 509 130.3
82 Mega Labs S.A. Private Company Uruguay Private Company 2,400 600 NA
83 Wockhardt BRSE:WBIO India Public Company 2,361 590 94.9
84 ZBD Pharma SHSE:603567 China Public Company 2,356 257 104.9
85 Jiangzhong Pharma SHSE:600750 China Public Company 2,356 457 72.2
86 Chongqing Zhifei Bio SZSE:300122 China Public Company 2,340 129 29.0
87 North China Pharma SHSE:600812 China Public Company 2,330 1,516 104.6
88 Hisoar Pharma SZSE:002099 China Public Company 2,320 213 38.8
89 Sawai TSE:4555 Japan Public Company 2,238 879 221.3
90 Zhongxin Pharma SHSE:600329 China Public Company 2,236 1,143 74.8
91 KrKa LJSE:KRKG Slovenia Public Company 2,170 1,442 404.6
92 China Traditional Chinese Medicine SEHK:570 Hong Kong Public Company 2,135 434 107.3
93 Yibai Pharmaceutical SHSE:600594 China Public Company 2,101 509 99.4
94 Mankind Pharma Private Company India Private Company 2,100 525 NA
95 Alembic BSE:533573 India Public Company 2,062 329 63.9
96 Changchun High & New Tech SZSE:000661 China Public Company 2,059 365 97.4
97 Jiangsu Wuzhong Group Private Company China Private Company 2,016 514 NA
98 Alkem / Heritage Pharma Private Company India Private Company 1,993 498 89.5
99 Sihuan Pharma SEHK:460 China Public Company 1,989 497 340
100 Ajanta Pharma BSE:532331 India Public Company 1,972 237 80.7
41
6. Profiles of Top Twenty Global Generic
Pharmaceutical Companies
42
#1: Pfizer Global Established Pharma (GEP)
Pfizer Inc. manufactures, and sells ethical and OTC pharmaceutical products across
the world. The company operates three divisions: Global Innovative Pharmaceutical
(GIP); Global Vaccines, Oncology and Consumer Healthcare (VOC); and Global
Established Pharmaceutical (GEP) segments.
The GEP segment offers patent-protected products that have lost marketing
exclusivity in various markets; and generic pharmaceuticals, and sterile injectable and
biosimilar development products. Key products in the Pfizer GEP business are off
patent brands such as Lipitor®, Celebrex® and Lyrica®. In total, Pfizer GEP markets
over 200 so-called branded generics across the globe. GEP also includes Hospira
and has a world class portfolio of generic injectable pharmaceutical products.
The top products in the GEP segment are branded generics, including Lipitor, Lyrica,
Zyvox, Pristiq, Premarin, Norvasc, Xalatan, Zoloft, Relpax, EpiPen, Effexor, Zithromax,
Medrol, Superazon. Also included are a portfolio of biosimilar products, Pfizer’s
Greenstone generic business and Hospira’s biosimilar business.
Pfizer has indicated a willingness to separate GEP into a new spun off company
sometime around 2018, although the final decision to go forward with this decision
has not been made.
Pfizer serves wholesalers, retailers, hospitals, clinics, government agencies,
pharmacies, and individual provider offices, as well as centers for disease control and
prevention. Pfizer Inc. was founded in 1849 and is headquartered in New York, New
York.
Address:
Pfizer Inc.
235 East 42nd Street
New York, New York 10017
United States
Main Phone: 212-733-2323
Website: www.pfizer.com
Type of Company: Public Company Segment
Exchange and Ticker: NYSE:PFE
Business Head: John Young
Summary Financials ($ millions)
Revenue (2015) $21,587mm
EBITDA (2015) $12,885mm
Imputed Value $84,621mm
Company Overview
Company Details
Ranking (as of Feb 27, 2016)
Generic Value Rank #1
Generic Revenue Rank #1
Notes: Data for Revenue and EBITDA for FY ending Dec 2015.
These data were extracted from Pfizer's segment data for 2015
which were reported by press release on Feb 2, 2016. Imputed
market value is computed as 2015 revenue times the median
multiple for comparable publicly traded generic companies. The
median multiple was computed as of Feb 15, 2016.
43
#2: Teva Generics
Teva Pharmaceutical manufactures and markets pharmaceutical products around the
world. Teva’s Generic Medicines segment offers generic or branded generic
medicines; specialized products, such as sterile products, hormones, narcotics, high-
potency drugs, and cytotoxic substances; and active pharmaceutical ingredients.
Teva’s generic products include a wide variety of therapeutics, ranging from
cardiovascular, anti-infective, central nervous system, anti-inflammatory, oncolytic,
anti-diabetic, analgesic, dermatologic, respiratory, and women's health, with dosage
forms including tablets, capsules, injectables, creams, ointments, liquids and inhalables.
In 2015 Teva acquired Allergan’s generic business for $40.5 billion. Teva wrote in its
press release announcing the transaction (July 27, 2015): “When combined with
Teva’s strong generics portfolio, Allergan Generics’ world-class generics pipeline,
which holds a leading position in first-to-file opportunities in the U.S., will further
enhance Teva’s goals of delivering the highest quality generic medicines at the most
competitive prices and cultivating the best development pipeline in the industry. The
resulting world-class product portfolio will be complemented by a significantly
expanded and more efficient global footprint, including leadership positions and
strengthened operations, sales and R&D platforms in attractive markets around the
world.” Teva has a large API business with a leading position in a number of specialty
API categories such as cytotoxics.
Teva Pharmaceutical Industries Limited is based in Petah Tikva, Israel and was
founded in 1901.
Address:
Teva Pharmaceutical Industries Limited
5 Basel Street, Box 3190
Petach Tikva, - 49131
Israel
Main Phone: 972 3 926 7267
Website: www.tevapharm.com
Type of Company: Public Co Segment
Exchange and Ticker: NYSE:TEVA
Business Head: Siggi Olafsson
Summary Financials ($ millions)
Revenue (2016) $17,934
EBITDA (2016) $7,000
Imputed Value $70,301
Company Overview
Company Details
Notes: Market value estimate tied to 2016 numbers for Teva’s
generic segment after the Allergan Generics acquisition using
estimates in press release announcing the Allergan deal.
Because this transaction has not yet closed, the numbers are
pro forma. Imputed market value is computed as 2016 revenue
times the median multiple for comparable publicly traded
generic companies.
Ranking (as of Feb 27, 2016)
Generic Value Rank #2
Generic Revenue Rank #2
44
#3: Sandoz
The Sandoz division of Novartis offers generic pharmaceuticals comprising active
ingredients and finished dosage forms.
Sandoz has more than ten major global development centers and a worldwide
network of more than 30 manufacturing sites, and its products are available in more
than 160 countries.
Sandoz’s portfolio of approximately 1,100 generic molecules is already available to
more than 90% of the world’s population.
Sandoz’s portfolio ranges from standard generics to complex value-added products.
These generic products range in complexity from oral solids, gels and patch
technologies, to complex injectables, inhalers and biosimilars. Sandoz is a leading
global provider and producer of essential anti-infective medicines
Other key product groups include cardiovascular medicines, treatments for central
nervous system disorders, gastrointestinal medicines, oncology and respiratory
therapies, as well as medications for blood and blood forming organ disorders.
Sandoz was the first company to develop and market follow-on versions of
biopharmaceuticals.
Novartis is shifting $900mm in revenue of mature products to Sandoz in 2016. This
will raise the value of the segment considerably.
Novartis AG was founded in 1895 and is headquartered in Basel, Switzerland.
Sandoz employs 26,500 people.
Address:
Novartis AG
Lichtstrasse 35
Basel, Basel-Stadt 4056
Switzerland
Main Phone: 41 61 324 11 11
Website: www.sandoz.com
Type of Company: Public Company Segment
Exchange and Ticker: NYSE:NVS
Business Head: Richard Francis
Summary Financials ($ millions)
Revenue (2015) $9,310
EBITDA (2015) $3,985
Imputed Value $36,495
Company Overview
Company Details
Notes: Market value estimate tied to 2015 Sandoz segment
numbers taken from Novartis’ financials which were reported
on January 27, 2016. Imputed market value is computed as 2015
Sandoz revenue times the median multiple for comparable
publicly traded generic companies.
Ranking (as of Feb 27, 2016)
Generic Value Rank #3
Generic Revenue Rank #3
45
#4: Sun Pharma
Sun Pharmaceutical Industries Limited, a specialty pharmaceutical company,
manufactures and markets pharmaceutical formulations and active pharmaceutical
ingredients (APIs) in India and internationally.
Sun provide high-quality, affordable medicines trusted by healthcare professionals
and patients in over 150 countries of the world.
Sun’s presence in 65 key markets around the world is supported by 45
manufacturing facilities, across five continents.
Sun has a multi-cultural workforce, comprising more than 30,000 employees of over
50 nationalities.
Sun’s portfolio includes generics, branded generics, complex or difficult to make
technology intensive products, over-the-counter (OTC) products, anti-retrovirals
(ARVs), Active Pharmaceutical Ingredients (APIs) and intermediates.
It’s portfolio of over 2000 high quality molecules covers multiple dosage forms,
including tablets, capsules, injectables, inhalers, ointments, creams and liquids. Our
presence extends across a vast range of therapeutic segments covering psychiatry,
anti-infectives, neurology, cardiology, orthopaedic, diabetology, gastroenterology,
ophthalmology, nephrology, urology, dermatology, gynaecology, respiratory, oncology,
dental and nutritionals.
Sun Pharmaceutical Industries Limited was founded in 1983 and is based in Mumbai,
India. Sun’s Ranbaxy subsidiary was founded in 1961.
Address:
Sun Pharmaceutical Industries Limited
Acme Plaza, Andheri Kurla Road
Mumbai, Maharashtra 400059
India
Main Phone: 91 22 6696 9696
Website: www.sunpharma.com
Type of Company: Public Company
Exchange and Ticker: NSEI:SUNPHARMA
Business Head: Dilip Shangvi
Summary Financials ($ millions)
Revenue (2015) $4,021
EBITDA (2015) $1,149
Enterprise Value $30,395
Company Overview
Company Details
Notes: Data for Revenue and EBITDA for LTM ended Dec 31,
2015. Sun Pharma has March 31 fiscal year end. Enterprise value
as of Feb 24, 2016. Computed as market cap plus debt minus
cash.
Ranking (as of Feb 27, 2016)
Generic Value Rank #4
Generic Revenue Rank #9
46
#5: CR Pharmaceutical
CR Pharma is the largest pharmaceutical company in China, registered in Beijing,
and engaged in the whole drug industrial chain including marketing of
formulations, manufacturing of API and formulations and distribution.
CR Pharma is structured as a holding company for many subsidiary companies
which market generic pharmaceutical products across China. CR Pharma does not
have a presence in markets outside of China. One of its subsidiaries, Beijing
Pharma, is one of the largest distributors of drugs in the world.
CR Pharma does business across more than 30 provinces in China, providing
generics across therapeutic areas such as cardiovascular, diabetes, women health
and pediatrics. CR Pharma also manufactures and markets API, biosimilars,
Traditional Chinese Medicines (TCM), OTC products and medical devices.
CR Pharma owns many pharmaceutical marketing companies including including
China Resources Pharmaceutical Commercial Group Company, China Resources
Sanjiu Medical & Pharmaceutical Co., Ltd., China Resources double-Crane
Pharmaceutical co., Ltd., Shandong Dong-E-E-Jiao Pharmaceutical Co., Ltd., China
Resources Saike Pharmaceutical Co., Ltd., China Resources Zizhu Pharmaceutical
Co., Ltd., China Anhui World-best Pharmaceutical Co., Ltd., China Resources
PienTze Huang Pharmaceutical Co., Ltd.
CR Pharma is one of the seven core strategic business units of China Resources
(Holdings) Company Limited, which was founded in 1938.
This company is a state-owned enterprise.
Address:
China Resources Pharmaceutical Group Ltd.
27/F,Block A,Phoenix Plaza,No.A-5,Shu
Guang Xi Li, Chaoyang District
Beijing, 100028
China
Main Phone: 86-10-57985000
Website: www.crpharm.com
Type of Company: Privately held
Business Head: Wang Chuncheng
Summary Financials ($ millions)
Revenue (2015) $7,410
EBITDA (2015) NA
Imputed Value $29,047
Company Overview
Company Details
Notes: CR Pharma reports its 2013 revenues and financials on its
website. However, because Beijing Pharma is a big source of this
revenue and is primarily in distribution, we have reduced the company’s
revenue estimate by 50% and have converted hem from HKD to USD.
We do not have access to financial numbers since 2013 and thus have
assumed zero growth since then. In reality, CR Pharma may well be a
substantially larger company than portrayed here. Imputed value is
computed as 2015 revenue times the median revenue multiple for
publicly traded generic companies in Feb 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #5
Generic Revenue Rank #5
47
#6: Yangtze River Pharma
Yangtze River Pharmaceutical Group (YRPG) is a fully-integrated generic
pharmaceutical company in China with marketing, R&D and manufacturing
capabilities.
YRPG does not market generics outside of China.
This state-owned group achieved $7.19 billion in revenue in 2014 with CAGR of
19% for the past 10 years.
YRPG has 24 branch companies with over 10,000 employees across China.
YRPG’s facilities cover 2 million square meters and its sales network spans all
over China.
Yangtze River Pharma may have the largest campus of any pharmaceutical
company in the world. It’s campus is over a mile wide and is best crossed by car.
More than 130 products have been registered and marketed in China, covering 10
major therapeutic areas with great emphasis in the fields of Infection, CNS, GI,
Respiratory, CNS and Oncology.
YRPG invests 3% of its annual sales revenue into technological innovation, and it
has built the Jiangsu New Medicine Institute through industry-university-
institution cooperation. Its 400-person R&D platform includes a world class
technological center, a key state-level laboratory of pharmaceutical preparation,
and an engineering R&D center for traditional Chinese medicine.
YRPG was founded in 1971.
Address:
Yangtze River Pharmaceutical Group
Bld 8, Lane 67, Libing Road, Zhangjiang High
Tech Park
Shanghai, 201203
China
Main Phone: 86-10-57985000
Website: www.yangzijiang.com
Type of Company: Privately held
Business Head: Xu Jingren
Summary Financials ($ millions)
Revenue (2015) $7,190
EBITDA (2015) NA
Imputed Value $28,185
Company Overview
Company Details
Notes: Revenue estimate provided by the company in its profile
at BioPharm America in September 2014. The estimate is
assumed to be for 2013. We have carried this number forward
assuming zero growth through 2015. It is likely, in fact, that
revenues have grown substantially for Yangtze River. Imputed
value is computed as 2015 revenue times the median revenue
multiple for publicly traded generic companies in Feb 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #6
Generic Revenue Rank #6
48
#7: Mylan
Mylan offers a portfolio of more than 1,400 generic and branded pharmaceuticals
which are marketed in approximately 165 countries and territories.
Its global R&D and manufacturing platform includes more than 50 facilities. Mylan
is also one of the world’s largest producers of active pharmaceutical ingredients.
Through its global manufacturing facilities Mylan has manufacturing capacity
capable of producing approximately 65 billion oral solid doses, 3,600 kiloliters of
APIs, 500 million injectable units, 260 million patches and 15 million semisolid units
per year. Mylan reaches many channels including retail, hospital and direct.
Mylan holds the number two ranking in the U.S. generics prescription market both
in terms of sales and prescriptions dispensed.
Approximately one in every 13 prescriptions dispensed in the U.S. is a Mylan
product. Mylan’s sales are derived primarily from the sale of oral solid dosages,
injectables, transdermal patches, gels, creams, ointments and unit dose offerings.
Mylan has built up through acquisitions over time starting with Matrix for HIV
drugs and Merck KGAA’s generic business which created a more global platform
in 2007. Other key acquisitions include Famycare and Agila Specialties. The recent
large acquisition of Abbott’s European branded generics business has helped to
create critical mass for its business in Europe. Mylan will be further transformed
via its acquisition of MEDA, announced in February 2016.
Mylan was founded in 1961 and has 30,000 employees.
Address:
Mylan N.V.
Albany Gate, Darkes Lane
Potters Bar, Hertfordshire EN6 1AG
United Kingdom
Website: www.mylan.com
Type of Company: Public Company
Exchange and Ticker: NYSE:MYL
Business Head: Heather Bresch (CEO)
Summary Financials ($ millions)
Revenue (2015) $9,421
EBITDA (2015) $3,010
Enterprise Value $28,170
Company Overview
Company Details
Notes: Data for Revenue and EBITDA for FY ending Dec 2015.
Market value estimate as of Feb 27, 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #7
Generic Revenue Rank #3
49
#8: EMS
EMS S.A sells generic pharmaceutical products in Brazil. It’s products include both
branded generics and INN generics.
EMS is the top-ranked domestic producer of generic pharmaceutical products in
Latin America. EMS has achieved this position through very rapid growth over years.
EMS’ portfolio of 2600 products includes analgesics, antibiotics, anti-inflammatories,
antihypertensive, anti-anemics, immunosuppressants, contraceptives, and others.
It serves hospitals, clinics, and health agencies. Many of EMS’ Rx products are
distributed through pharmacies.
EMS has also started Brace Pharma which invests in innovative biopharmaceutical
companies worldwide in partnership with Ray Schinazzi, one of the world’s leading
innovators in drug development.
EMS has over 1500 sales reps in Brazil who make over 5mm medical visits a year.
EMS exports its products to Latin America, Africa, Asia, MidEast, Canada and Europe.
Founded 52 years ago, EMS began its history with the São Bernardo plant do
Campo (SP) in 1964, expanded to Hortolandia (SP) in 1999 and implemented the
Research and Development Center in 2002. More recently, EMS expanded to
Manaus where it built a high volume formulation facility called the Novamed with
capacity to produce more than 18 billion tables a year.
EMS has more than 7,000 employees.
EMS S.A. was founded in 1964 and is based in Hortolândia, Brazil.
Address:
EMS S/A
Rodovia SP 101, Km 08
Hortolândia, São Paulo 13186-901
Brazil
Main Phone: 55 19 3887 9800
Website: www.ems.com.br
Type of Company: Private Company
Business Head: Carlos Sanchez (Owner)
Summary Financials ($ millions)
Revenue (2015) $4,200
EBITDA (2015) NA
Imputed Value $16,464
Company Overview
Company Details
Notes: A $4bn revenue estimate is from the Brace Pharma
website as of September 2015. This number is assumed to be
for FY 2014. Confirmed by EMS. Based on historical growth but
also adjusting for recent weakness in the Brazil market, Torreya
has estimated $4,200 in revenue for 2015 (5% growth only).
Brace also reported $3500mm in revenue for 2013. Wikipedia
indicates that 2012 revenue was 2700mm. Imputed market
value is computed as 2015 EMS revenue times the median
multiple for comparable publicly traded generic companies.
Ranking (as of Feb 27, 2016)
Generic Value Rank #8
Generic Revenue Rank #7
50
#9: Abbott Established Pharmaceuticals Division (EPD)
Abbott’s Established Pharmaceuticals Division (EPD), headquartered in Basel,
Switzerland, is a leader in the sale of branded generics in emerging markets.
Operational sales in the company’s 14 key emerging markets, which include Brazil,
China, Russia and India, have grown rapidly over the last five years.
EPD brings value to its patients and customers through a growing portfolio of high-
quality established pharmaceutical products and by building country-specific
portfolios of trusted products to suit local needs.
EPD has a broad portfolio of established pharmaceuticals – high-quality, affordable
branded generic medicines that have been successfully treating patients for many
years. This portfolio covers several therapeutic areas, including gastroenterology,
women’s health, cardiology, metabolic disorders and primary care: • Cardiology and
metabolic: Lipanthyl® (fenofibrate), Omacor®, Teveten®, Tarka®, Synthroid®,
Isoptin® • Primary care: Klaricid®, Influvac®, Serc®, Luvox®, Brufen® • Women’s
health: Duphaston®, Femoston® • Gastroenterology: Creon®, Adomet®,
Duphalac®, Dicetel® patient needs.
Abbott made two substantial strategic acquisitions in 2014 to expand its presence in
the generic pharmaceuticals market in emerging economies. The company bought
Chile-based CFR Pharmaceuticals for $2.9 billion in May 2014, followed by Russian
pharmaceutical company Veropharm for $631 million in June 2014.
Abbott was founded in 1888 and employs approximately 69,000 employees in 150
countries.
Address:
Abbott Product Operations AG
Hegenheimermattweg 127
4123 Allschwil
Switzerland
Main Phone: +41 61 487 02 00
Website: www.abbott.com
Type of Company: Public Company Segment
Business Head: Michael Warmuth
Summary Financials ($ millions)
Revenue (2015) $3,720
EBITDA (2015) $711
Imputed Value $14,880
Company Overview
Company Details
Notes: The revenue and EBITDA number for 2015 was
obtained from Abbott's 2015 financials in the segment data
section of its press release for Q4 2015 results (Jan 28, 2015).
Imputed market value is computed as 2015 revenue times the
median multiple for comparable publicly traded generic
companies.
Ranking (as of Feb 27, 2016)
Generic Value Rank #9
Generic Revenue Rank #9
51
#10: Hengrui
Jiangsu Hengrui Medicine Co., Ltd. (“Hengrui”) researches, manufactures, and sells
pharmaceutical products in China.
Hengrui is the largest Chinese pharmaceutical company that is not state owned.
Hengrui is the top marketer of generic cancer drugs and injectables in China.
It offers antineoplastic, angiomyocardiac, antibiotic, and other drugs in the form of
tablets, injectables, injections, oral solutions, capsules, and ointments.
Hengrui has revenue of $1.2 billion and is highly profitable.
The company stock was officially listed on the Shanghai Stock Exchange in 2000.
Its API and finished drugs manufacturing facilities have passed Chinese GMP
authentication. In addition, its plants which manufacture API of Etoposide,
Ifosfamide and Irinotecan HCl, and finished drugs of Irinotecan HCl Injection,
Letrozole Tablet and Cabapentin Capsule have passed the USFDA inspection.
Hengrui was the first Chinese manufacturer of injectables to export its products
to the U.S., Europe and Japan.
Hengrui has over 2900 sales reps that cover 80 major cities across China.
Hengrui invests 10% of its annual revenue in research and development, and has
constituted a thorough innovation system with R&D centers and clinical division
in New Jersey, Shanghai, Chengdu, and Lianyungang. Its R&D is focused on cancer
drugs and endocrinology.
Hengrui was founded in 1970 and is headquartered in Lianyungang, China.
Address:
Jiangsu Hengrui Medicine Co., Ltd.
Lianyungang Eco & Tech Development Zone
Lianyungang, Jiangsu Province 222047
China
Website: www.hrs.com.cn
Type of Company: Public Company
Exchange and Ticker: SHSE:600276
Business Head: Piaoyang Sun
Summary Financials ($ millions)
Revenue (2015) $1,401
EBITDA (2015) $376
Enterprise Value $13,235
Company Overview
Company Details
Notes: Data for Revenue and EBITDA for 2015 were based on
the company’s first nine months reported through Sep 30, 2015
and then annualized. Market value estimate as of Feb 27, 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #10
Generic Revenue Rank #32
52
#11: Lupin
Lupin’s generic drug business encompasses the entire pharmaceutical value chain,
ranging from branded and generic formulations, APIs, advanced drug
delivery systems to biotechnology.
Lupin’s drugs reach 70 countries with a footprint that covers advanced markets
such as USA, Europe, Japan,Australia as well as emerging markets including
India, the Philippines and South Africa.
Lupin has been an outstanding financial performer, exhibiting consistent 20%+
annual growth driven by its record of developing new generic drugs and in
commercial globalization.
Lupin markets generic drug formulations in the areas of cardiovascular,
diabetology, asthma, pediatric, central nervous system (CNS), gastro-intestinal,
anti-diabetic, anti-infective, pain, anti- tuberculosis, cephalosporin, gynecology, and
other therapeutic areas.
Lupin has a growing branded business in the U.S. and is investing in NCEs.
The company was formerly known as Lupin Chemicals Limited and changed its
name to Lupin Limited in 2001.
Lupin was founded in 1968 by Dr. Desh Bandhu Gupta, then an Associate
Professor at BITS-Pilani, Rajasthan. Named after the Lupin flower because of its
inherent qualities and what it personifies and stands for, the company was
created with a vision to fight life-threatening infectious diseases and to
manufacture drugs of the highest social priority.
Address:
Lupin Limited
Laxmi Towers, B Wing
Mumbai, Maharashtra 400051
India
Website: www.lupin.com
Type of Company: Public Company
Exchange and Ticker: BSE:500257
Business Head: Vinita Gupta (CEO)
Summary Financials ($ millions)
Revenue (2015) $1,831
EBITDA (2015) $603
Enterprise Value $11,019
Company Overview
Company Details
Notes: Data for Revenue and EBITDA for FY ending March 31,
2015. Financials converted to USD from INR at exchange rate
on Feb 27, 2016. Market value estimate as of Feb 27, 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #11
Generic Revenue Rank #23
53
#12: Fresenius Kabi IV Generic Drugs
The Kabi division of Fresenius specializes in intravenously administered generic
drugs, infusion therapies, clinical nutrition, and related medical devices, achieved in
2015 total sales of €5.95 billion.
Kabi’s generic IV drug revenues in 2015 were $2.7 billion making it a giant in
hospital generics on a global basis. It’s revenues are diversified, roughly a third each
in North America, Europe and the emerging markets.
Fresenius Kabi markets more than 100 product families for critically and chronically
ill patients.
Fresenius Kabi has a global footprint with 61 sales and marketing organizations, 72
production sites and 16 R&D centers around the world.
Fresenius Kabi has more than 33,000 employees.
Fresenius Kabi Oncology Plc. It produces generics of intravenous oncology products
such as Paclitaxel, Irinotecan, Oxaliplatin, Gemcitabine, Cytarabine, Carboplatin,
Topotecan, Docetaxel and Epirubicin. Kabi is also a world leader in cytotoxic API
manufacture.
Fresenius Kabi also does contract manufacturings for companies all around the
globe. With over 40 years of experience in contract manufacturing, we have
developed active partnerships with an impressive number of top-tier pharmaceutical
multinationals as well as start-ups and biotech companies.
Kabi’s roots go back more than 100 years to the founding of Fresenius SE in Bad
Homburg, Germany, where the company is headquartered today.
Address:
Fresenius Kabi Rx Segment
Else-Kröner-Straße 1
Bad Homburg, Hessen 61352
Germany
Phone: 49 61 72 686 0
Website: www.fresenius-kabi.com
Type of Company: Public Company Segment
Business Head: Mats Henriksson
Summary Financials ($ millions)
Revenue (2015) $2,669
EBITDA (2015) $561
Imputed Value $10,667
Company Overview
Company Details
Notes: The Fresenius Kabi IV segment includes generic IV drugs
revenue as reported in Fresenius financials which were
reported on February 24, 2016. Imputed market value is
computed as 2015 Kabi IV drugs revenue times the median
multiple for comparable publicly traded generic companies.
Revenue in Euros was converted to USD at the Feb 27, 2016
exchange rate. EBITDA is computed using the EBITDA margin
of 21% reported for the Kabi segment times IV drug revenue.
Ranking (as of Feb 27, 2016)
Generic Value Rank #12
Generic Revenue Rank #12
54
#13: Aspen Pharmacare
Aspen Pharmacare Holdings Limited, through its subsidiaries, manufactures, markets,
and distributes branded and generic pharmaceutical products.
Aspen is publicly-traded and headquartered in South Africa. The company is
increasingly focused on globalization and has expressed interest in entering the U.S.
generic market.
The company offers branded, generic, over-the-counter, consumer, and infant
nutritional products. It provides various product types, including tablets, capsules,
eye drops, injectable products, oral contraceptives, form-filled seals, suppositories,
liquids, creams, ointments, infant nutritional products, and specialist active
pharmaceutical ingredients.
Aspen is represented in 47 countries including South Africa, Australia, Hong Kong,
Malaysia, Philippines, Taiwan, Japan, Kenya, Nigeria, Tanzania, Uganda, Ireland, United
Arab Emirates, Germany, France, the Netherlands, Mauritius, Brazil, Mexico,
Venezuela and the United States.
Acquisitions announced in recent years further extended the Group’s emerging
market presence to the Commonwealth of Independent States (“CIS”), comprising
Russia and the former Soviet Republics as well as to Central and Eastern Europe.
Aspen has 26 manufacturing facilities at 18 sites on 6 continents and more than 10
000 employees.
Aspen Pharmacare Holdings Limited was founded in 1997.
Address:
Aspen Pharmacare Holdings Limited
Aspen Park
Durban, KwaZulu-Natal 4019
South Africa
Main Phone: 27 31 580 8600
Website: www.aspenpharma.com
Type of Company: Public Company
Exchange and Ticker: JSE:APN
Business Head: Stephen Saad
Summary Financials ($ millions)
Revenue (2015) $2,236
EBITDA (2015) $553
Enterprise Value $9,864
Company Overview
Company Details
Notes: The revenue and EBITDA for 2015 are for the FY
ending on June 30, 2015. Converted from South African Rand
to USD on Feb 26, 2016 exchange rate.
Ranking (as of Feb 27, 2016)
Generic Value Rank #13
Generic Revenue Rank #18
55
#14: ENDO Generics / Par Pharma
Endo International plc is a global specialty pharmaceutical company focused on
improving the lives of patients while creating value. Endo develops, manufactures,
markets and distributes quality branded pharmaceutical and generic
pharmaceutical products as well as over-the-counter medications through its
operating companies.
ENDO’s Par Pharmaceuticals (generic) segment offers products in the pain
management, urology, CNS disorders, immunosuppression, oncology, women’s
health, hypertension, generic lidocaine patch, and other markets.
Par has a strong manufacturing base in both Alabama and New York.
Par has an excellent pipeline of U.S. generic products including numerous first to
file products and Paragraph IV’s.
The combination in 2015 of ENDO’s Qualitest and newly acquired Par
businesses (known collectively as Par Pharmaceutical) expands Endo’s generics
business to be an industry leader. ENDO had previously acquired Boca and Dava
Pharma.
Par Pharmaceuticals sells its generics directly to large pharmacy chains; and
through wholesale drug distributors to pharmacies, hospitals, governmental
agencies, and physicians.
Endo International plc was founded in 1920 and is headquartered in Dublin,
Ireland.
Address:
Endo International plc
Minerva House
Dublin, Co. Dublin 4
Ireland
Website: www.endo.com
Type of Company: Public Company
Exchange and Ticker: NASDAQ:ENDP
Business Head: Paul Campanelli
Summary Financials ($ millions)
Revenue (2015) $2,436
EBITDA (2015) NA
Imputed Value $9,549
Company Overview
Company Details
Notes: Data for Revenue for FY ending Dec 2015. These data
were obtained from ENDO’s YE press release dated Feb 29,
2016. We annualized Q4 revenue to obtain full year revenue
given the integration of Par Pharma in financials took place in
Q3 2015. Imputed value is computed as 2015 revenue times the
median revenue multiple for publicly traded generic companies
in Feb 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #14
Generic Revenue Rank #15
56
#15: Celltrion
Celltrion, Inc. develops and produces various therapeutic proteins including
oncology treatment drugs by bioengineering mammalian cell-culture technology.
Celltrion is a world leader in biosimilar monoclonal antibodies and was the first
company to get a biosimilar antibody approved in 2013.
Celltrion markets Remsima, the first approved biosimilar mAb and tumor necrosis
factor antagonist that is used to treat rheumatoid arthritis, ankylosing spondylitis,
ulcerative colitis, adult Crohn’s disease, plaque psoriasis, and psoriatic arthritis.
Celltrion’s product pipeline includes CT-P6 for the treatment of breast cancer; CT-
P10 for the treatment of non- Hodgkin’s lymphoma and rheumatoid arthritis; and
CT-P27, a therapeutic antibody for treatment against universal influenza, which has
completed Phase IIA clinical trials.
Celltrion is also jointly developing mAbs for rabies with the Center for Disease
Control and Prevention in the United States; antibodies against various virus
subtypes and drug resistant hepatitis B viruses; Anti–GP88, mAbs for treatment of
breast and lung cancer diseases; antibody-drug conjugate. In addition, it offers
contract manufacturing services to biopharmaceutical companies.
Celltrion boasts one of the world's lagest state-of-the-art mammalian cell culture
plants with a total production capacity of 140,000L. These plants were designed and
constructed to comply with US FDA cGMP and EMA GMP regulations.
The Company’s head office is located in the Incheon Free Economic Zone.
Celltrion, Inc. was founded in 2002.
Address:
Celltrion, Inc.
23, Academy-ro
Incheon, - 406-840
South Korea
Main Phone: 82 3 2850 5000
Website: www.celltrion.com
Type of Company: Public Company
Exchange and Ticker: A068270 (KOSDAQ)
Business Head: Jung-Jin Seo
Summary Financials ($ millions)
Revenue (2015) $452
EBITDA (2015) $192
Enterprise Value $9,534
Company Overview
Company Details
Notes: Data for Revenue and EBITDA for FY ending December
31, 2015. Market value estimate as of Feb 27, 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #15
Generic Revenue Rank #106
57
#16: Perrigo Prescription Pharmaceuticals Segment
Perrigo Company plc markets generic drugs and OTC products worldwide.
Perrigo operates through Consumer Healthcare (CHC), Branded Consumer
Healthcare (BCH), Prescription Pharmaceuticals (Rx Pharmaceuticals), Specialty
Sciences, and Other segments.
Perrigo’s business is mainly focused on OTC products. We have valued its
prescription pharmaceutical segment which is almost entirely comprised of generic
products.
Perrigo’s Prescription Pharmaceuticals segment offers generic and specialty
pharmaceutical prescription drugs in various dosage forms, such as creams,
ointments, lotions, gels, shampoos, foams, suppositories, sprays, liquids, suspensions,
solutions, powders, controlled substances, injectables, hormones, women's health
products, oral solid dosage forms, and oral liquid formulations; and ORx products.
Perrigo serves wholesalers; retail drug, supermarket, and mass merchandise chains;
hospitals; and pharmacies.
Perrigo’s Rx segment is particularly strong in the topicals and opthalmics area.
Perrigo offers the largest line of generic dermatologicals in the United States.
Perrigo was the subject of a hostile takeover in 2015 from Mylan who was
interested in its large global OTC business and its generic exposure. Perrigo’s
shareholders voted down the Mylan offer.
Perrigo was founded in 1887 and is headquartered in Dublin, Ireland.
Address:
Perrigo Company Public Limited Company
Treasury Building, lower Grand Canal Street
Dublin, Co. Dublin 2
Ireland
Main Phone: 353 1 709 4000
Website: www.perrigo.com
Type of Company: Public Company
Exchange and Ticker: NYSE: PRGO
Business Head: Joe Papa
Summary Financials ($ millions)
Revenue (2015) $1,073
EBITDA (2015) $540
Imputed Value $7,868
Company Overview
Company Details
Notes: Calendar year data for 2015 and 2014 prescription
pharmaceuticals are included. These data were reported in a Feb
18, 2016 press release and a bridge 10KT on Feb 25, 2016. This
segment is valued using an EBITDA multiple given its abnormally
high margin. EBITDA for the segment is computed as operating
income plus an adjustment for noncash items as reported in the
10KT of 39% of depreciation and amortization less a non-cash tax
adjustment. We used 39% because 39% of 2015 CY operating
income of Perrigo was from the Rx segment.
Ranking (as of Feb 27, 2016)
Generic Value Rank #16
Generic Revenue Rank #45
58
#17: Sanofi Generics
Sanofi S.A. is a global pharmaceutical company headquartered in Gentilly, France.
The company was formed as Sanofi-Aventis in 2004 by the merger of Aventis and
Sanofi-Synthélabo, which were each the product of several previous mergers. It
changed its name to Sanofi in May 2011.
Sanofi has a substantial generics business which comprises Zentiva in Europe
(recently renamed Sanofi Generics); Winthrop in the United States; Medley in Brazil;
Genfar with a presence across South America; and Global Pharma based in Dubai.
Medley, based in Brazil, has approximately $1 billion in revenue while Zentiva does
does approximately $1 billion Euros in annual sales. Revenues of Winthrop in the
U.S. are also substantial while revenues of Genfar and Global Pharma are less
important.
Key transactions historically have been:
– Sanofi acquired Genfar S.A. in 2012. At the time of the acquisition Genfar was
the second largest generic company in sales and leader in units in Colombia and
has a commercial presence in Venezuela, Peru, Ecuador and ten other countries
in Latin America
– In 2009 Sanofi acquired Medley of Brazil for it’s generics business
– In 2014 Sanofi Acquired Globalpharma of Dubai for it’s generics business
– In 2008 Sanofi Acquired the Czech Generic drug maker Zentiva NV for $2.6B
Sanofi has indicated that it is open to divesting its European generic operations.
Address:
54, rue La Boétie
75008 Paris
France
Main Phone: +33 (0)1 53 77 40 00
Website: www.sanofi.com
Type of Company: Public Company
Exchange and Ticker: NYSE: SNY
Business Head: Olivier Brandicourt
Summary Financials ($ millions)
Revenue (2015) $1,984
EBITDA (2015) $496
Imputed Value $7,775
Company Overview
Company Details
Notes: Sanofi disclosed revenues of its generics business as being
1805mm Euros in 2014. Given that Sanofi has indicated that this
business is under some pressure we have estimated flat revenues
for 2015. This was on p. 210 of its document entitled "Meet
Sanofi Management". Sanofi has indicated that its EBIT margins are
approximately 20%. We have thus estimated EBITDA margins to
be approximately 25%. Imputed value is computed as 2015
revenue times the median revenue multiple for publicly traded
generic companies in Feb 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #17
Generic Revenue Rank #22
59
#18: Dr. Reddys
Dr. Reddy’s Laboratories Limited operates as a vertically integrated generic
pharmaceutical company across the world.
Dr. Reddy’s has three segments: Global Generics, Pharmaceutical Services and
Active Ingredients (PSAI), and Proprietary Products. The Global Generics segment
produces and markets finished pharmaceutical products as branded formulations or
generic finished dosages. This segment also has a biosimilars business.
The PSAI segment develops active pharmaceutical ingredients (APIs) and
intermediaries, which are used as ingredients for finished pharmaceutical products.
Dr. Reddy’s has 10 manufacturing facilities of which 5 are FDA inspected. These
facilities have capacity to generate over 25 billion generic units a year.
Dr. Reddy’s generics business offers over 200 high-quality generic versions of
expensive innovator medicines—at a fraction of the cost—in over 20 countries
around the world. Key therapeutic areas include anti-infective, metabolic disorders,
and pain and inflammation.
Dr. Reddy’s recently received an FDA warning letter that impacted 3 manufacturing
facilities in India. The company is aggressively moving to remedy the situation.
Dr. Reddy’s generic business is 54% North America; 15% India and 12% Russia.
Dr. Reddy’s has achieved 18% annualized top line growth over the last decade.
Dr. Reddy’s has approximately 20,000 employees.
Dr. Reddy’s was founded in 1984 and is headquartered in Hyderabad, India.
Address:
Dr. Reddy's Laboratories Ltd.
8-2-337, Road No. 3
Hyderabad, Andhra Pradesh 500034
India
Main Phone: 91 40 4900 2900
Website: www.drreddys.com
Type of Company: Public Company
Exchange and Ticker: BSE:500124
Business Head: Satish Reddy
Summary Financials ($ millions)
Revenue (2015) $2,368
EBITDA (2015) $562
Enterprise Value $7,317
Company Overview
Company Details
Notes: Data for Revenue and EBITDA for FY ending March 31,
2015. Market value estimate as of Feb 27, 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #18
Generic Revenue Rank #16
60
#19: Sinopharm Rx Segment
Sinopharm is the largest integrated pharmaceutical company in China with more
than $40 billion in revenue in 2015; more than $2bn in EBITDA and approximately
$5 billion in cash.
Sinopharm is a state-owned enterprise that is supervised by the State-Owned
Assets Supervision & Administration Commission Of The State Council.
Sinopharm’s activities are principally in pharmaceutical distribution. However, among
its many subsidiaries are three companies which are publicly listed that sell non-
patented RX medicines in the fields of biosimilars, vaccines and Traditional Chinese
Medicine.
Sinopharm owns 11 wholly-owned or holding subsidiaries, and 6 listed companies:
Sinopharm Group Co., Ltd., China National Medicines Co., Ltd., Sinopharm Accord
Medicines Co., Ltd., Beijing Tiantan Biological Products Co., Ltd., Shanghai Shyndec
Pharmaceutical Co., Ltd. and China Traditional Chinese Medicine Co. Ltd.
The Sinopharm Rx Segment includes Beijing Tiantan; Shanghai Shyndec and China
TCM.
In Chinese pharmaceutical industry, Sinopharm is the first, the largest and the most
successful enterprise to cooperate with foreign companies. Sinopharm has
established dozens of successful Sino-foreign pharmaceutical joint ventures since
1980’s, e.g. China Otsuka Pharmaceutical Co., Ltd. , Sino-Swed Pharmaceutical Co.,
Ltd. (SSPC), Xian Janssen Pharmaceutical Co., Ltd., Sino-American Squibb
Pharmaceutical Co., Ltd. and Suzhou Capsugel Ltd.
Address:
China National Pharmaceutical Group Corp.
No.20 Zhichun Road Haidian District
Beijing, China 100088
Main Phone: 86 10 6203 3332
Website: www.sinopharm.com
Type of Company: Private Company
Exchange and Ticker: BSE:500124
Business Head: Zheng Hong
Summary Financials ($ millions)
Revenue (2015) $2,043
EBITDA (2015) NA
Imputed Value $7,208
Company Overview
Company Details
Notes: Data for Revenue is based on 2014 financials. Market
value estimate as of Feb 27, 2016 and is computed as the sum of
the market caps of Beijing Tiantan Biological Products Co., Ltd.,
Shanghai Shyndec Pharmaceutical Co., Ltd. and China Traditional
Chinese Medicine Co. Ltd. Imputed value is computed as 2015
revenue times the median revenue multiple for publicly traded
generic companies in Feb 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #19
Generic Revenue Rank #20
61
#20: Hikma
Hikma Pharmaceuticals PLC develops, manufactures, and markets a range of generic
and in-licensed pharmaceutical products in solid, semi-solid, liquid, and injectable
final dosage forms in the Middle East and North Africa, the United States, Europe,
the United Kingdom, and internationally.
Hikma Pharmaceuticals is a multinational pharmaceutical company based in London,
that manufactures branded and non-branded generic and in-licensed pharmaceutical
products.
Hikma was first listed on the London Stock Exchange in 2005 is now a constituent
of the FTSE 100 Index. Hikma is the largest regional pharmaceutical company in the
MENA region and has a major presence in the U.S. generics marketplace.
Hikma was founded in Amman, Jordan in 1978 by Samih Darwazah.
Hikma operates through three segments: Branded, Injectables, and Generic. The
Branded segment offers over 450 products across a range of therapeutic areas.
These products are largely branded generics. The Injectables segment markets over
200 branded and non-branded products in many dosage strengths. This segment
also offers sterile liquid, lyophilized, and cytotoxic products. The Generics segment
provides 11 products in 44 dosage strengths and forms for various therapeutic
areas including analgesic, anti-infective, anti-inflammatory, cardiovascular, CNS,
respiratory, hormonal, and others.
Hikma Pharmaceuticals PLC was founded in 1978 and is based in London, United
Kingdom.
Address:
Hikma Pharmaceuticals PLC
13 Hanover Square
London, Greater London W1S 1HW
United Kingdom
Main Phone: 44 20 7399 2760
Website: www.hikma.com
Type of Company: Public Company
Exchange and Ticker: LSE: HIK
Business Head: Said Dawarzah
Summary Financials ($ millions)
Revenue (2015) $2,058
EBITDA (2015) $327
Enterprise Value $6,503
Company Overview
Company Details
Notes: The 2015 revenue estimate is pro forma for the Roxane
acquisition. In particular we annualized first half reported revenue
for Hikma and then added $650mm in Roxane 2015 revenue
(based on a news story issued in 2015).
Ranking (as of Feb 27, 2016)
Generic Value Rank #20
Generic Revenue Rank #19
62
#21: Apotex
Apotex is the largest Canadian owned pharmaceutical company with over 10,000
employees globally and with estimated sales of approximately $2 billion.
With its manufacturing sites, Apotex can produce up to 24 billion dosages per year.
It produces 300 medicines in 4,000 dosage forms and formats that are exported to
115 countries.
Extensive investments in Canadian facilities include over 3 million square feet in
manufacturing and R&D facilities in Richmond Hill, Toronto, Etobicoke, Brantford,
Windsor and Winnipeg.
The success of Apotex has been built not only on developing a broad product
portfolio but also in launching the difficult to do generics — taking on challenges of
developing difficult APIs and formulations, products with difficult clinical and
regulatory pathways, and patent challenges.
Apotex operates along 3 core Lines of Business: (1) Global Generics: Responsible
for the delivery of the generics portfolio to all global markets; (2) Global Specialty
Pharma: Responsible for the development, manufacturing and global
commercialization of Biosimilars and other specialty products and (3) Global Active
Pharmaceutical Ingredients (API).
Apotex has 500 products under development and will spend $2 billion in R&D
between 2015 and 2025.
Apotex Inc. was founded in 1974, and is the largest Canadian-owned pharmaceutical
company.
Address:
Apotex, Inc.
150 Signet Drive
Toronto, Ontario
M9L 1T9
Main Phone: 1-800-268-4623
Website: www.apotex.com
Type of Company: Private Company
Business Head: Barry Sherman (Chairman)
Summary Financials ($ millions)
Revenue (2015) $1,630
EBITDA (2015) NA
Imputed Value $6,388
Company Overview
Company Details
Ranking (as of Feb 27, 2016)
Generic Value Rank #21
Generic Revenue Rank #25
Company disclosed revenues of approximately $2bn CAD in
March 2015 press release. Press release:
http://www.apotex.com/global/about/press/20150316.asp. The
company reports revenue of more than $2bn on its website in
Feb 2016. Because IMS MIDAS shows $3bn in gross revenue we
suspect that Apotex’s revenue is considerably higher than
reported. We converted CAD to USD using exchange rates as
of Feb 27, 2016 and imputed the value by multiplying 2015
revenue by the median multiple for public traded comparables.
63
#22: GSK Mature Brands
GlaxoSmithKline plc is a global pharmaceutical company with expertise in
therapeutic areas, including respiratory, anti-virals, central nervous system,
cardiovascular and urogenital, metabolic, anti-bacterials, and emesis, dermatology,
rare diseases, immuno-inflammation, vaccines, and HIV.
GSK also has a large separately managed portfolio of mature brands.
These brands are off-patent and are generic for all intents and purposes.
GSK went through a sale process for its established products brands in 2014 that
was eventually pulled. During the sale process the dimensions of the established
products portfolio became public.
The drugs that were in the sale process had a revenue base of approximately $1.6
billion.
GSK established brands include antidepressant Paxil, migraine treatment Imitrex,
Zantac for stomach acid and Zofran for nausea.
Our revenue estimate understates the size of the portfolio because there are
additional revenues from these products that have not been publicly disclosed for
emerging markets.
GlaxoSmithKline plc was founded in 1935 and is headquartered in Brentford, the
United Kingdom.
Address:
GlaxoSmithKline Pharmaceuticals PLC
980 Great West Road
Brentford Middlesex TW8 9GS
United Kingdom
Main Phone: 44 20 8047 5000
Website: www.gsk.com
Type of Company: Public Company
Exchange and Ticker: LSE: GSK
Business Head: Andrew Witty
Summary Financials ($ millions)
Revenue (2014) $1,600
EBITDA (2014) NA
Imputed Value $6,272
Company Overview
Company Details
Notes: The 2014 revenue estimate was disclosed in a Reuters
story in 2014 describing a potential sale of the GSK products.
Imputed value is computed as 2015 revenue times the median
revenue multiple for publicly traded generic companies in Feb
2016. One could argue that this process overstates the value of
these products since they are declining. However, these products
are considerably more profitable than traditional generics.
Ranking (as of Feb 27, 2016)
Generic Value Rank #22
Generic Revenue Rank #27
64
#23: Cipla
Cipla is a global generic pharmaceutical company which uses cutting edge
technology and innovation to meet the everyday needs of all patients.
Its portfolio includes more than 1,500 generic pharmaceutical products provided to
150 countries across therapeutic categories with one quality standard globally.
Cipla has an 80 year history and a well-respected brand for delivering generics.
Cipla’s emphasis on access for patients was recognized globally for the pioneering
role played in HIV/AIDS treatment as the first pharmaceutical company to provide a
triple combination anti-retroviral (ARV) in Africa at less than one dollar a day and
thereby treating many millions of patients since 2001.
Cipla acquired Invagen, a U.S. generic company, from Hetero in February 2016
which adds $230mm in revenue. Cipla’s press release announcing the Invagen
acquisition noted: “The acquisition of InvaGen pharmaceuticals also provides Cipla
with about 40 approved ANDAs, 32 marketed products, and 30 pipeline products
which are expected to be approved over the next 4 years. In addition, InvaGen has
filed 5 first-to-file products. Dosage forms include immediate release, modified
release and extended release tablets and capsules. With a manufacturing footprint of
~350,000 sq.ft of GMP area, InvaGen has 3 units located in Long Island, NY, with a
total production capacity of 12 billion tablets and capsules per annum and about
500 employees. “
Cipla was founded in 1935 Dr. K A Hamied, with a vision to make India self-
sufficient in healthcare.
Address:
Cipla Limited
Cipla House
Mumbai, Maharashtra 400013
India
Main Phone: 91 22 2482 6000
Website: www.cipla.com
Type of Company: Public Company
Exchange and Ticker: NSEI:CIPLA
Business Head: Yusuf Hamied (Chairman)
Summary Financials ($ millions)
Revenue (2015) $2,018
EBITDA (2015) $442
Enterprise Value $6,164
Company Overview
Company Details
The revenue and EBITDA for 2015 are annualized based on
quarterly results. These numbers are converted from INR to
USD based on exchange rates as of Feb 27, 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #23
Generic Revenue Rank #21
65
#24: Zydus Cadila
Cadila Healthcare Limited engages in the research, development, production,
marketing, and distribution of pharmaceutical products.
This company is sometimes confused with Cadila Pharma which is a separate player
with a common lineage, also based in Ahmedabad. To avoid confusion, we refer to
Cadila Healthcare as Zydus Cadila.
Zydus’ portfolio includes active pharmaceutical ingredients, veterinary, and human
generic drug formulations.
Zydus has over 20 manufacturing sites which produce more than 15 bn pills / year.
Zydus markets its products in the U.S. through its Accord Health subsidiary.
Zydus has seen 43 fold in revenue over the last 20 years.
Zydus is developing a pipeline of 24 biologics comprising 20 biosimilars and 4 novel
biological products; and new drugs in cardio-metabolic, inflammation, pain, and
oncology therapeutic areas. Recently, Zydus launched Exemptia, the first biosimilar
for Adalimumab, the largest selling therapy worldwide for inflammatory arthritis.
Zydus also has a vaccine portfolio, an animal health portfolio and a formidable NCE
portfolio. Zydus is also the only Indian pharma company to launch its own patented
NCE – Lipaglyn, which has been approved for the diabetic dyslipidemia.
Zydus has over 16,000 employees and is headquartered in Ahmedabad, India.
The group’s origin can be traced to 1952 when it was founded by Late Mr.
Ramanbhai B. Patel.
Address:
Cadila Healthcare Limited
Satellite Cross Roads, Sarkhej-Gandhinagar Hwy
Ahmedabad Gujarat 380015
India
Main Phone: 91 79 2686 8100
Website: www.zyduscadila.com
Type of Company: Public Company
Exchange and Ticker: BSE:532321
Business Head: Pankaj Patel
Summary Financials ($ millions)
Revenue (2015) $1,384
EBITDA (2015) $283
Enterprise Value $6,164
Company Overview
Company Details
Notes: The 2014 revenue estimate was disclosed in a Reuters
story in 2014 describing a potential sale of the GSK products.
Imputed value is computed as 2015 revenue times the median
revenue multiple for publicly traded generic companies in Feb
2016. One could argue that this process overstates the value of
these products since they are declining. However, these products
are considerably more profitable than traditional generics.
Ranking (as of Feb 27, 2016)
Generic Value Rank #24
Generic Revenue Rank #33
66
#25: Aurobindo
Aurobindo, headquartered in Hyderabad, India, is a generics and API manufacturing
powerhouse:
– High-growth company with a large ANDA pipeline in multiple therapeutic areas
and formulations
– Major presence in the US with a rapidly growing injectable business
Increased revenues from nearly $950M in FY2013 to over $2 Billion in 2015.
– Generic sales account for 65% of revenue, with API manufacturing accounting
for the rest
Aurobindo’s manufacturing facilities are approved by several leading regulatory
agencies like US FDA, UK MHRA, Japan PMDA, WHO, Health Canada, MCC South
Africa and ANVISA Brazil. The company’s robust product portfolio is spread over 6
major therapeutic/product areas encompassing Antibiotics, Anti-Retroviral, CVS,
CNS, Gastroenterological,
US generic sales comprised over 60% of total generic sales in FY2014, with sales
over $550M
AuroMedics, arm that markets injectable products in the US, is expected to grow by
over 120% and account for 27% of total Aurobindo sales in FY2015
Unlike other Indian domiciled generic players, Aurobindo does not have a significant
domestic presence
Aurobindo began operations in 1988-89 with a single manufacturing unit
Address:
Aurobindo Pharma Limited
Water Mark Building
Hyderabad, Andhra Pradesh 500 084
India
Main Phone: 91 40 6672 5000
Website: www.aurobindo.com
Type of Company: Public Company
Exchange and Ticker: BSE:524804
Business Head: N.Govindarajan
Summary Financials ($ millions)
Revenue (2015) $1,930
EBITDA (2015) $466
Enterprise Value $5,942
Company Overview
Company Details
Notes: Data for Revenue and EBITDA for FY ending March 31,
2015. Market value estimate as of Feb 27, 2016. INR financials are
converted to USD using exchanges rates as of Feb 27, 2016.
Ranking (as of Feb 27, 2016)
Generic Value Rank #25
Generic Revenue Rank #23
67
Appendix A-1. About Torreya Partners
68
Top Rank#1 Ranking by Number of
Strategic Advisory
Transactions Closed in the
Pharmaceutical Sector
Worldwide in 2015.
25 Dealsclosed in 2015 across the
pharma sector.
$7.6 Billionin transactions closed in 2015
across the pharma sector. Over
$100bn in transactions across
180+ deals closed since 2007.
Top ranked across numerous
subsectors in this time.
An Investment Bank Focused on Pharmaceuticalswith 34 Employees Across 2 Offices + Strong Global Coverage
and deep sector expertise focused on long-term interest of our clients
19 Senior
AdvisorsMost with industry experience.
Examples of Transaction Work in 2015
69
Selected Torreya Advisory Roles in Branded Generics, Formulations and API
Acquired assets of
January 2016
$10 mm
Sale of ANDA
Portfolio to
November 2015
Sale of ANDA
Portfolio to
July 2015
$25 mm + Profit Share
Sale of Zonalon®
to
February 2015
$9.5 mm
Sale to
December 2015
Terms Undisclosed
(Vertice Pharma)
Acquisition of
November 2015
CAD$47 mm
Divestiture of
injectable assets of
Bedford
LLaboratories
February 2016
Terms Undisclosed
Advisor to owner in sale
to
January 2015
$2.1 bn
Acquisition of US Rights
to Zonegran® from
September 2014
$90 mm
Sale of Pessac Liquids /
Intermediates Plant to
October 2014
$26 mm
Sale of ANDA
Portfolio to Unnamed
Buyer
October 2014
Sale of ANDA
portfolio to
October 2014
$18 mm
Sale of ANDA
portfolio to
December 2013
$12.5 mm +
profit share
Sale to
October 2010
Sale to
December 2007
$7 mm
Sale of US Rights of
Naprelan to
November 2013
Terms Undisclosed
Acquisition of Six Off
Patent Drugs to form
Actient Pharma from
July 2010
$87 mm
Acquisition of Donnatal
from
May 2014
$325 mm$275 mm
70
Details on Selected Recent Advisory Roles
Torreya is one of the most active advisors in the generic space
ANI acquired 22 previously
marketed ANDAs from Teva for
$25 million in cash at closing a %
of future gross profit from
product sales upon re-launch
This acquisition expands ANI’s
pipeline to 68 products with a
total market value of ~$4 billion
Torreya acted as financial advisor
to Teva following our work on its
last ANDA divestiture to ANI in
December 2013
Crown raised $20 million in senior
secured term loan from Hayfin
Advisors
This allows Crown to double its
sales force and focus on growing
its branded and generic
prescription businesses
Hayfin has also agreed to partner
with the management on further
acquisitions
Torreya acted as financial advisor
to Crown Labs
IGI acquired Alevda Pharma, a
Canadian injectable generic
company for CAD$ 47 million in
cash
This acquisition expands IGI’s
geographic footprint and brings it
a complementary portfolio
The company sees the opportunity
to register and sell each other’s
products cross-border
Torreya acted as financial advisor
to IGI
A public generic pharma acquired
a portfolio of injectable ANDAs
from Hikma
Hikma was required by the FTC to
divest the portfolio to satisfy as
one of the closing conditions for
the pending acquisition of Bedford
The goal was to sign the deal
quickly while maximizing the value
Torreya acted as financial advisor
to Hikma and identified a highly
motivated buyer
July 2015
$25 mm + Profit
Share
Sale of ANDA
Portfolio to
September 2015
$20 mm
Debt Financing from
October 2015
CAD$47 mm
Acquisition of
October 2015
Sale of ANDA
Portfolio to
Public Generic
Pharma
71
Excellence in Both M&A and Licensing Transactions
Torreya has advised on more than 50 M&A transactions… … and is the advisor of choice on business development deals.
Sale to
July 2014
$557 mm
($75 mm upfront)
Sale to
September 2013
$250 mm
($35 mm upfront)
License WW Rights
of pidilizumab to
October 2014
$335 mm
August 2013
$550 mm
Oncology
Partnership with
Sale to
July 2014
$688 mm
($538mm upfront)
July 2015
$605 mm
($95 mm upfront)
Sale to
January 2015
$470 mm
Sale of FXR
Programs toLicense of TGFβ
October 2015
$517 mm
($37mm upfront)
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