Lupin Limited Corporate Presentation November 2009.

Lupin LimitedCorporate

Presentation

November 2009

Thirteenth successive quarter of growth in sales and profit. Growth secular across geographies.

US Business grew by 20% in $ terms. India sustained high growth rate @ 20%. South Africa grew at above 35%..

Working capital optimisation measures yield results. Capex spends sustained at over Rs. 112 crs to meet expected demand in

capacities. Acquisition of Rights to Antara

Corporate Highlights Q2 09-10

Financial Trend Q2 09-10….

Rs. In Millions

Particulars Q2 09-10 Q2 08-09 GrowthNet Sales 11,147 9,084 23%

EBIDTA 2,180 1,802 21%

EBIT 1,938 1,601 21%

PBT 1,847 1,474 25%

PAT 1,603 1,156 39%

Balance Sheet Trends Q2 09-10

Rs. In MillionParticulars Q2 09-10 Q2 08-09Operating Working Capital 12,117 10,421 Working Capital no. of days 100 106 ROCE (%) 25.0% 24.2%Debt Equity Ratio 0.54 0.61

Business Break up Q2 09-10

Business Mix Q2 09-10

Formulation83%

API 17%

Geogrpahy Mix Q2 09-10

Outside India63%

Within India37%

Market Diversification-Formulations Q2

Formulation Sales Break up

Advanced Market53%

Within India39%

Emerging Market

8%

Corporate Highlights FY 08-09

Eleventh successive quarter of growth. Growth has been secular across SBUs and regions Particularly strong in US,EU, Japan and India Year of geographical expansion: Acquisitions in Germany, South Africa,

Australia and Philippines. Strategic beach heads at a prudential cost… VRS at Aurangabad sets the tone for cost reduction endeavours Creates momentum for our vision of being a significant world player over the

next few years!!! Prudential strategies employed in

Optimizing Working Capital Managing Leverage Acquisitions

Business Business UpdateUpdate

USAMarket Characteristics Largest Pharma market in the world. Generic Pharma market estimated at $ 48 billion (Dec

’08).

OperationsBranded Suprax Continues to reflect Strong Growth;

Value growth robust - over 50%. Acquisition of rights to Antara and Allernase.Generics Leading Market Share

Market leader in 9 products of the 22 products in market. Among top 3 in Market Share in 19 of these products.

98 ANDA’s filed; 35 approved to date No. of ANDAs filed in the FY 09-10: 8 Emphasis on difficult to make products.

Highlights : Per product revenues amongst Indian peers is the highest. 9th largest prescription base amongst generic companies operating in the US. Highest

amongst Indian Peers

Sales Growth US FY 08-09 & Q2 09-10

Branded Sales Q2 09-10

12,956

23,097

-

5,000

10,000

15,000

20,000

25,000

Q2 08-09 Q2 09-10

US

D '0

00

Branded Sales FY 08-09

31,562

74,005

-

20,000

40,000

60,000

80,000

100,000

FY 07-08 FY 08-09

US

D 0

00 Growth 134%

US Net Sales FY 08-09

178,973

272,587

-

50,000

100,000

150,000

200,000

250,000

300,000

FY 07-08 FY 08-09

US

D 0

00

Growth 52%

Growth 78%

Net Sales Q2 09-10

59,52371,645

-

20,000

40,000

60,000

80,000

Q2 08-09 Q2 09-10

USD

'000

Growth 20%

JAPANJAPAN

Market Characteristics : Japan Pharma Market – $65 bn , Generics – 5% by value

Operations: Sales force of 55 salesman focusing on CNS, CVS, GI. H1 09-10 turnover over USD 50 Million – 34% growth yoy. Market Growth at 11%. Our early entry into Japan stand vindicated – market at inflection point• Profit enhancement measures to yield greater results in the days to come

Highlights:• Seventh largest company in Generic space in Japan• Launched Levofloxacin and Bicalutamide in the current year. Launched10 products in FY08-09: Market leader in Risperidone in terms of no. of

units. Significant player in Amlodipine. Gross Margin up by 5%

EUROPEEUROPE

Market Characteristics• Heterogeneous market

Operations• Cefpodoxime Proxetil - France

• Over 60% market share through partners• Cefpodoxime Proxetil France Suspension launched in Q3

• Lisinopril• Launched in UK; Secured 15% market share

• Acquired Hormosan in the second quarter.• Back ending production would enhance profitability

• Total Filings in EU : 54

Highlights:• Success in the AOK bids in Germany for Setraline.

AUSTRALIAAUSTRALIAMarket Characteristics:• Market for generics and branded generics – A$ 3 bn

Operations:• Generic Health - Strategic Equity Participation at 47%

• Merged With Max Pharma to gain critical mass in operations.• Among the top 10 generic companies in Australia• Significant minority stake acquired• Healthy pipeline of filings• Participatory market size – A$ 850m

• Revenues commenced from Max Pharma (sale of 6 products currently.)

• Total Filings in Australia/NZ: 26

Highlights:• Evaluating options for challenging IPs in Australia.• In Licensing four molecules from Actavis.

SOUTH AFRICA

Market Characteristics : • South African Pharma market - $ 2.5bn, Generics – 33% by value

Operations:• Acquisition of majority stake in Pharma Dynamics

• Sixth largest generic company in the South African Pharma Market• Leading presence in CVS

• Alliance with Aspen – the largest generic company in RSA continues

Highlights:• Amongst the fastest growing company among generics (5 year CAGR over 30%).• Growth sustained at over 35%.• Leaders in Amlodipine and Bilocor by unit sales.

INDIA - IRFINDIA - IRF

Market Characteristics: Size of Indian Pharma Market : USD 10 Billion. The market is fragmented in nature.

Operations: Continue to be the fastest growing Pharma company in the domestic space. Growing at twice the industry average

at 20%• Field expansion accompanied by productivity increase, currently stands at 3598.• 54 new products were introduced in the year 08-09 of which

o 6 are In-licensed from within and outside Indiao 3 products were introduced for the first time in the country

o The growth rate in some of the major therapeutic segment viz. Cardiology, Diabetology, Anti Asthma, Anti-Infective are the best in industry (H1 09-10)

o Cardiology : > 13% , Diabetology : > 28% , Asthma: 28%o New Therapy areas to further propel growth : Bio Similars, Female Health

• Launched a new marketing division called “Femina”

Highlights:• Continued strong growth leads to 5th Rank (MAT IMS Mar 09) from 6th rank in previous year.• Exclusive Collaboration with

• American Institute of Cardiology• Joslin Institute of Diabetology at Massachusetts• European Institute of Neurology

• In licensed 12 products till date

Sales Growth India (Gross)

Within India Formulation Sales FY 08-09

949611412

0

2000

4000

6000

8000

10000

12000

FY 07-08 FY 08-09

Growth 20%

Within India Formulation Sales Q2 09-10

3117 3667

0

1000

2000

3000

4000

5000

Q2 08-09 Q2 09-10

Rs. i

n M

n

Growth 18%

Other Emerging MarketsOther Emerging Markets

CIS• Actual Turnover for the last fiscal up by 33%• Steady increase in product registrations• Expanding Field Force –

• Russia, Ukraine, Azerbaijan, Kazakhstan, Uzbekistan• Increased market penetration• Focus on building brands• Increased product registration to enhance volumes in the next few quarters.

API & IntermediatesAPI & Intermediates

Global Leadership in chosen therapies

One of the most profitable API business in Indian Pharma

Robust operating performance

ROCE comparable to the best in the segment at 33%

Efforts on to widen therapeutic presence

Novodigm provides a step up to the CRAMS initiatives

Focus on Cost & Quality Leadership and Reliability

Effective asset utilization

Strategic input to formulations business with over 70% backward integration

Steady increase in filing of DMFs/ EDMFs/ CoS

The Way Ahead…

R & DR & D:

Country Total submissions Approvals

US 98 35

EU 54 23

Australia/ NZ 26 21

• Over 500 scientists on our payroll

•Revenue Expenditure (Q2 09-10): Rs 822 Mn – 7 % of sales

NCE Program:• In Clinical trials – anti migraine, anti psoriasis and anti TB.•Pre Clinical Programs

•Metabolic Disorders•Inflammation•CNS

•Necessary infrastructure is being strengthened & skill set enhanced • HTS, SMPM, Electro-physiology

US Generic Pipeline

98 products filed, 35 approved. Market size USD 90 Billion. Para IV addressing market size of USD 30 Billion

F2F: Desloratadine, Memantine, Duloxetine, Eszopiclone, Ziprasidone and

Pregablin With Natco: Lanthanum Carbonate Potential Exclusive : Metformin (Fortamet), Fenofibrate (Antara)

Differentiated/Difficult products Oral Contraceptives – 7 filed, 14 more to be filed Niche Products : Niacin XR (Niaspan) – second filter after Barr, Products with technology barriers: Fenofibrate(Tricor), Sevelamer Liquids – 2 filed

Scaling and gaining critical mass

• Garnering market share in all markets,

becoming bigger and noticeable

• Portfolio going beyond standard generics

• Increasing share of products with some degree of

exclusivity

• Broad and deep, covering established and emerging markets

• Proven skills to adapt rapidly to changing environment

• Constant focus on high quality at lowest cost

Geographic Presence, organic/inorganic

Differentiation/niche products

Vertical integration & Operational Excellence

Replicating our Branded business model in new markets

Developing our specialty business, bio-similars

Focusing the US business on more specialised products

Strategic investments in APIs will support growth across all businesses

Targeting doubling of sales growth every 4 years while improving operating margin

Lupin: Summary of Strategies

Consolidation in existing markets

• Consolidate through acquisitions in Japan, USA, India

Increased Focus on Bio Similars

Proven Capabilities Across the Value Chain

Sourcing

Execution Skills

Innovative sourcing of products, RM

Regulatory

Manufacturing

Marketing and Sales

Executing trials/projects at low cost

Experience in working with regulators

First class capabilities , Synergies leveraging expertise of Generic R&D

Proven strategies that drive market share, highly –productive sales force

Product Identification Differentiated products , Successful litigation experience

Being present in key markets around the globe

• Lupin sees itself as a transnational with sizable presence in various geographies of strategic interest

• These would be a mix of branded generic and INN markets

• Whilst geographical diversification would involve acquisitions, it would be based on prudence- ‘buy at a cost and not at all costs’.

Lupin :the road ahead

Challenges & Imponderables

Challenges common to all

generic players – the changing

landscape

Challenges of scale, growth

Integration of subsidiaries

People challenges

Near- Medium Term Value Creation

Generics

BrandedProducts

Medium-Long Term Value Creation (Proprietary Products)

Thank You