Alembic Pharmaceuticals Ltd Investor Presentation July-2016
Contents 1. Milestones 2. Quarterly Highlights 3. Business - International - India Branded 4. Strategy 5. Financials - Annual - Latest Quarter
Safe Harbor Statement Materials and information provided during this presentation may contain ‘forward-looking statements’. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties which could cause actual outcomes and results to differ materially from these statements. Risks and uncertainties include general industry and market conditions and general domestic and international economic conditions such as interest rate and currency exchange fluctuations. Risks and uncertainties particularly apply with respect to product-related forward-looking statements. Product risks and uncertainties include, but are not limited, to technological advances and patents attained by competitors, challenges inherent in new product development including completion of clinical trials; claims and concerns about product safety and efficacy; obtaining regulatory approvals; domestic and foreign healthcare reforms; trend towards managed care and healthcare cost containment and governmental laws and regulations affecting domestic and foreign operations. Also, for products that are approved, there are manufacturing and marketing risks and uncertainties, which include, but are not limited, to inability to build production capacity to meet demand, unavailability of raw materials and failure to gain market acceptance.
Milestones 1907 Established by Amin family 2006 FDA approves API facilities 2007 Acquired Dabur’s Indian cardiology, GI and gynaecology brands 2008 FDA approves Formulation facility 2010 Pharmaceuticals business demerged from Alembic – APL listed. 2012 Formed a JV for NCE research Launched first NDA with a partner 2013 Commenced filing in EU, Australia and Brazil 2014 Formed 50:50 JV in Algeria 2015 Launched Aripiprazole on day-1. Established US front-end: transition to own marketing. 2016 JV with Orbicular Inc.
Quarterly Highlights – Q1 FY 17 Financial Highlights India Branded Formulations (Rs. 2777 mn) Net Sales up 25% to Rs 7358 mn Business grew by 6% Specialty Segment grew by 16% and Acute EBITDA margins at 21% at Rs 1570 mn Segment de-grew by 10%. Net Profit up 45% to Rs 1020 mn Strengthening the share of specialty therapies in the overall revenue basket. R&D spend is Rs 795 mn for the quarter which is 11% of net sales. This is up by 66 % (YOY) API Business (Rs. 1282 mn) International Formulations (Rs. 3085 mn) Business grew by 7% Business grew by 72% 1 new product launch in USA 1 DMF application was filed during the quarter, taking cumulative DMF filings at 82 1 ANDA final approval was received during the quarter, taking cumulative approvals at 47 2 ANDA applications were filed during the quarter, taking cumulative ANDA filings at 78
Business Sales CAGR% Manufacturing: Rs 15bn Rs 32bn 21% 16% 25% API 9% Formulation: Baddi and Sikkim for India market FDA approved Oral Solids in Vadodara 38% Doubled capacity in 2014 12% India 53% 3 FDA approved facilities in Vadodara API: Expansion in 2015 46% 22% 46% International FY12 FY16 R&D: HQ, Vadodara Formulation: Vadodara and Hyderabad Vadodara API: Brands, Mumbai Generics, Vadodara Biocentre: Vadodara India 150 beds International Generics Ex-India Total 500 scientists API
International Formulations Sales (Rs bn) ANDA Filed Filings: 78 Approval: 47* 14.6 13 * Incl 4 tentative CAGR 46% 8 7 7 5.9 5.6 4 3.2 3.0 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 R&D Spend (Rs bn) Milestones and Update 10.9 7.0 6.7 Focus on day-1 launches 5.1 4.8 3.5 Aripiprazole R&D% US front-end in place, 23 products already launched Existing relationships being evaluated 1.4 1.3 Some are non-exclusive, some expiring, some continuing 0.8 0.7 Ex-US remains driven by partnerships FY12 FY13 FY14 FY15 FY16
India Branded Sales (Rs bn) Marketing Organisation CAGR 14% 11.0 5000 + marketing team 9.8 Added 1000 over last two years 8.5 7.5 6.6 17 marketing divisions Added new divisions in gynaecology, cardiology , GI, urology 170 products Launch 20-25 products every year FY12 FY13 FY14 FY15 FY16 Therapy Split Key Achievements % of Domestic Formulations Leadership in Macrolides 40 43 46 51 54 33% share of the segment with Althrocin, Azithral, Roxid Decent share in key new launches Tellzy, Rekool, Gestofit, Ovigyn D, Rosave, Richar 60 57 54 49 46 5 brands in top 300 Azithral, Althrocin, Wikoryl, Roxid, Gestofit FY12 FY13 FY14 FY15 FY16 Specialty Acute
Therapy-wise Performance Q1 FY17 JUN QTR 2016 JUN QTR 2015 Therapy Market Alembic Alembic Therapy Market Alembic Alembic Therapy Growth Share Growth Growth Growth Share Growth Growth (ORG) (ORG) (ORG) (PRIM) (ORG) (ORG) (ORG) (PRIM) Cardiology 10 2.01 18 16 15 1.87 49 35 Anti Diabetic 15 1.84 42 31 19 1.49 40 31 Gynaecology 10 2.83 26 31 13 2.48 38 22 Gastrology 7 1.89 (6) 4 16 2.17 13 16 Dermatological (7) 26 14 0.41 (12) 20 0.53 45 Orthopaedic 12 20 6 0.99 3 13 1.01 3 Ophthalmology 11 1.43 16 18 16 1.37 (14) (17) Nephro / Uro 12 2.02 30 42 20 1.75 11 5 8 Anti Infective 4 2.57 (9) (3) 7 2.95 4 Cold & Cough (5) 4.55 (15) (27) 8 5.12 13 23 OVERALL 6 18 9 1.51 5 14 1.57 19 (Source : ORG June 2016)
Strategy Competitive position Growth drivers Skills US: Rapidly expand breadth and quality of pipeline Doubled internal OSD grid, half of grid is external – injectable, dermatology and ophtahalmics High Partnerships to gain time and leverage financial resource Build manufacturing capacities rapidly, use CMOs , de-risk Ex-US: Selective commercialisation Model under evaluation Low India: Focus on chronic segment Aim for reasonable share in identified therapy-important molecules Resource High Low Pipeline Enablers Skills People: Renewed focus on HR Mix of high-risk Skill gaps identified and low-risk High Talent acquisition and retention projects. Building skill sets Process: Simple, clear structures organically and Clear goals and empowerment inorganically. Focus on compliance Low De-risk with systems Close monitoring Risk High Low Focus on supply chain
Financials – 5 years Sales (Rs bn) EBITDA (Rs bn) Margins% 32% 19% 19% 31.8 17% 15% CAGR 21% 10.1 20.7 18.7 15.3 14.7 4.0 3.6 2.5 2.2 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Capital employed (Rs bn) Net Profit (Rs bn) 23% ROCE% 53% 40% 31% 30% Margins% 25% 14% 13% 7.2 11% 9% 17.8 11.9 8.1 2.8 7.6 7.0 2.4 1.7 1.3 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16
Financials - Quarter Sales (Rs bn) EBITDA (Rs bn) 25% 50% 7.4 1.6 5.9 1.0 Q1FY16 Q1FY17 Q1FY16 Q1FY17 Business Sales PAT (Rs bn) 45% 30% 1.0 42% International 0.7 India 49% 41% API 20% 17% Q1FY16 Q1FY17 Q1FY16 Q1FY17
Latest Shareholding Pattern % of Total Shareholding 12 Promoter & Promoter group 14 FI/FII/MF Public 74 Market capitalization INR 108 bn Total paid-up share capital 377.03mn Total number of shares O/S 188.52mn No. of shareholders >50 K Free float market INR 28 bn capitalization
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