Cipla: Transforming for a new horizon Presented by: Umang Vohra - - PowerPoint PPT Presentation

Confidential JP Morgan Healthcare Conference, Jan 2018

Presented by: Umang Vohra Date: 9th Jan 2018

Cipla: Transforming for a new horizon

Presented by: Umang Vohra Date: 9th Jan, 2018

Confidential JP Morgan Healthcare Conference, Jan 2018

Disclaimer

Except for the historical information contained herein, statements in this presentation and the subsequent discussions may constitute "forward- looking statements". These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, our growth and expansion plans, our ability to obtain regulatory approvals, technological changes, fluctuation in earnings, foreign exchange rates, our ability to manage international operations and exports, our exposure to market risks as well as other risks. Cipla Limited does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date thereof. Information relating to any medical products or medical devices contained herein is provided by Cipla for general information purposes only. Information on any of the medical products or medical devices may vary from country-to-country. A reference to a medical product or a medical device does not imply that such medical product or medical device is available in your country. The commercial availability of the medical products

• r medical devices listed herein in your country is dependent on the validity and status of existing patents and/or marketing authorizations related

to each. An independent enquiry regarding the availability of each medical products or medical device should be made for each individual country The product information contained herein is not intended to provide complete medical information, and is not intended to be used as an alternative to consulting with qualified doctors or health care professionals. Nothing contained herein should be construed as giving of advice or the making of a recommendation and it should not be relied on as the basis for any decision or action. It is important to only rely on the advice of a health care professional

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Confidential JP Morgan Healthcare Conference, Jan 2018

Established in 1935, Cipla is a pioneer in the Indian pharmaceutical industry

Cipla started as a small Indian enterprise, committed to the nation's quest for self-sufficiency – today it has transformed into a world-class global pharmaceutical player

3rd largest in India4 3rd largest in South Africa5 Among top 10 most dispensed generic companies in US6

Cipla Today8

Markets

80+

Revenue

~ $2.2bn

R&D investment

~ 7%

EBITDA margin

~ 18%

Among the top 5 in some of the key emerging economies7 1 in 3 HIV* patients take Cipla ARVs# 1 One of the world’s largest inhalation portfolios One of the world’s largest suppliers of anti-malarials Partner of choice for Donor Funded / Tender Agencies

• 1. Based on combined sales in the generic accessible market | 2. Rx + Gx business, as per IMS MAT Nov ‘17 + business estimates | 3. As per IMS MAT Nov ‘17 |4. By market share, India sales, IMS MAT Nov ’17 | 5. As per IMS MAT

Nov ’17, including tender business | 6. As per IMS MAT Nov ‘17 – by TRx | 7. As per IMS MAT Sept ’17 | 8. Trailing 12 months (TTM) – H2 FY’17 + H1 FY’18 | * HIV - Human Immunodeficiency Virus | # ARV – Anti Retrovirals

Amongst the top 2 largest dispensed companies in India2 8 out of every 10 doctors in India prescribe at least 1 Cipla medicine3 3rd most dispensed company in South Africa3

Patient access at the center of Cipla’s success Healthy business performance in key markets

YEARS OF CARING

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Confidential JP Morgan Healthcare Conference, Jan 2018

Scorecard - Cipla has made significant achievements against its key strategic objectives (1/2)

Grow US towards a billion dollar enterprise with focus on Specialty

• 95 ANDAs* pending for approval including 25

tentative approvals

• 20+ annual filing run rate since FY ’17 - to be

maintained in the coming years

• Approvals for differentiated products such as

Budesonide, Decitabine and Sevelamer demonstrate capability in niche areas

• Committed to build a Specialty franchise in the US.

Multiple assets under evaluation for partnership

Drive growth in markets like India, South Africa and

• ther key markets
• Healthy growth rates last year for India (~10%1) as well as

South Africa (~17%2)

• Multiple in-licensing deals in India and South Africa to

strengthen key therapies like Diabetes, Cardiology, Respiratory, and CNS#

• Artesunate Rectocaps (paediatric Anti-Malarial) and Q-Tib (TB

in HIV Patients) launched during the year under Cipla Global Access

• Biosimilars - partnerships in emerging markets and South

Africa

*ANDA – Abbreviated New Drug Application | # CNS – Central Nervous System

• 1. Rx + Gx, FY ‘17 | 2. FY ‘17

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Confidential JP Morgan Healthcare Conference, Jan 2018

• 23 successful audits1 this year

across our facilities including 7 USFDA audits

• Manufacturing and R&D sites

remain in a state of compliance

• Fresh talent onboarding and

continuous skill upgradation at manufacturing sites

Maintaining high standards

• f quality & compliance

`MDI – Metered Dose Inhaler | ^^ FPSM - Fluticasone Propionate/Salmeterol | *DTM – Direct-To-Market | # B2B – Business-To-Business | ^ SA – South Africa | ~ SSA – Sub-Saharan Africa | ** CGA – Cipla Global Access

• 1. Including Invagen facility audits

Scorecard - Cipla has made significant achievements against its key strategic objectives (2/2)

Expanding Respiratory franchise

• Respiratory in India: shaping the

ecosystem – over 2Mn patients counselled over the last year

• Synchrobreathe (breath-actuated MDI`)

successfully launched in South Africa

• FPSM^^ launched in Australia and 8

European markets this year FPSM now sold in 40+ countries

• Leadership position in Respiratory in

markets like India and Sri Lanka

Business optimization to bring focus and drive synergy

• 25+ markets optimized in the last 2

years in emerging markets

• Strategic divestitures executed to

increase focus on core business

• 5+ markets converted from DTM* to

B2B# model in Europe

• African footprint consolidated by

merging SA^, SSA~ and CGA** into SAGA

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Confidential JP Morgan Healthcare Conference, Jan 2018

20% 23% 25% FY '16 FY '17 H1 FY '18

Optimization efforts have led to increased margins, as well as synergies and efficiencies in the system

• Cost containment initiatives in direct and indirect spends have resulted in significant margin improvement and driven

synergy, simplification and efficiency

• Supply chain optimization efforts have led to an increase in OTIF* and reduction in stock-outs
• 1. Margins exclude one-offs (like Esomeprazole, accounting based reclassifications, restructuring cost and Indigo), Cipla Health and Biotech business |

* On Time In Full

Generics base business EBITDA margin (ex-R&D)1 has shown considerable improvement in the last few years

~ ~ ~ + 3% + 2%

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R&D expected to grow in the near future Fuel for further innovation and for pursuing other growth opportunities

Confidential JP Morgan Healthcare Conference, Jan 2018

Upcoming growth opportunities for Cipla are predicated around multiple levers across geographies

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India:

• Portfolio strengthening
• Patient engagement

North America:

• Commercial strength
• Differentiated pipeline
• Specialty focus

SAGA:

• Market expansion
• Partnerships
• Tender business

Other Key Markets:

• Strengthen DTMs
• Expand in newer markets

Diversified portfolio & pipeline in regulated markets High standards of manufacturing, regulatory and compliance Cipla’s core principles – guiding its culture of excellence Share of revenue1

• 1. Revenue share as per H1 FY’18 | 2. SAGA includes South Africa, Cipla Global Access and Sub-Saharan Africa | 3. Includes vet, India API and others

# EM – Emerging Markets | ^ EU – Europe | * API – Active Pharmaceutical Ingredient

*

2

3

# ^

Others 2% API 4%

Confidential JP Morgan Healthcare Conference, Jan 2018

India will continue to be a key component of Cipla’s growth story, providing a strong base for global expansion

Rx therapy share and market performance1

• 1. As per IMS sales data Nov‘17 | 2. As per overall therapy ranking in IMS as on Nov’17 |

* SGLT-2 - Sodium-Glucose Co-Transporter 2 | # OTC – Over-The-Counter | ^ BPH - Benign Prostatic Hyperplasia

Growth outlook for India business

Therapy Strengthening:

• Cardio-Metabolic: Focus on progressive products like betablockers and

SGLT-2* Inhibitors

• Dermatology: Expand in topical segments – 10+ upcoming launches including

topicals and emollients

• Urology: Strengthen prescriber base with focus on BPH^, build Uro-Oncology

Portfolio Acceleration through inorganic initiatives:

• Executed partnerships with MNCs for Respiratory, Cardiology, and Diabetes

segments

• Advanced discussions underway for partnerships in Oncology, Dermatology

and Vaccines

Respiratory 30% Anti- infectives 21% Cardio- Metabolic 13% Gastro Intestinal 6% Urology 5% Neuro / CNS 4% Ophthal / Oto 3% Anti-virals 5% Others 13% #1 #3 #1 #5 #5 #1

• 4 therapies ranked amongst top 32 – contributing to

61% of Cipla’s revenue share

• Ranked 3rd in chronic segment and 2nd in acute
• 17 first-to market brands in inhalation market

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Confidential JP Morgan Healthcare Conference, Jan 2018

Driving volume growth in India by increasing the patient funnel - Cipla is running various initiatives and programs to expand awareness and improve diagnosis & compliance

Over 80 Mn Asthma and COPD patients in India

Of the diagnosed population, 20% are still untreated Only 24% of patients on treatment are on inhalation therapy

<10% of the total population is on inhalation therapy and of those,

• nly ~40% are compliant

BEROKZINDAGI BEROKZINDAGI

Note: Nebules not included | Source: Cipla estimates basis market studies

1 2 3

~8 Mn patients

• n inhalation

therapy ~30 Mn patients

• n treatment

BerokZindagi aims for conversion from oral to inhalation therapy + targeting diagnosed patients not on treatment

• Campaign targeting

asthma awareness and management

• Over 11 million people so

far have come in touch with the campaign through digital mediums Breathefree addresses patients not on treatment as well as undiagnosed patients Cipla’s innovative handheld Spirometer helps in diagnosing & educating patients Partnered with a large diagnostic chain to provide Spirometry test to all patients – pilot with 5 centres & 40 doctors Breathefree reached 2Mn patient touchpoints through ~640 educators and 4000 Breathefree chemists

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Undiagnosed 51% Diagnosed 49% On treatment 80% Not on treatment 20% Oral 76% Inhalation 24%

Confidential JP Morgan Healthcare Conference, Jan 2018

North America, with its current low base, is set to grow disproportionately and have a higher contribution to Cipla’s top-line

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• Amongst top 3 in 32 out of 47 products; market leader in 121
• Launched limited competition products like gPulmicort and

gDacogen

• On track for 20+ filings this year

* FY ‘18 onwards, for illustrative purposes only - not to scale | 1. Market statistics as per IMS MAT Nov ’17

Grow the US business to contribute ~30% towards Cipla’s revenues 18% 30%

FY '17 FY '18 FY '19 FY '20 FY '21 FY '22 US Contribution* Portfolio Expansion and Diversification:

• Build differentiated pipeline with focus on HIV, Respiratory

& Oncology

• Accelerate growth through in-licensing and multi-product

partnerships to diversify risk (5 partnerships executed) Focus on Specialty (Respiratory and CNS):

• Use Tizanidine patch (Phase 1A study completed, results

under analysis) as a launchpad for Specialty business

• Multiple assets at an advanced stage of evaluation for

Respiratory and CNS CNS, Oncology CNS, Respiratory Respiratory Growth Portfolio Oncology, CNS

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Focus on innovative platform technologies to build a robust pipeline which will drive future growth in North America

Innovative technology platforms No of pipeline products Market size (US$)

Inhalation technology

15

14Bn

Suspension based liquids

12

3.7Bn

Liposome injections

2

308Mn

Nanotechnology

1

656Mn

1 2

Over 100 patents granted, including respiratory

Patent filing includes drug substances & products, platform technologies, polymorphs & crystals, and medical devices

Over 1500 dedicated and talented scientists

Developing proprietary medical devices for respiratory medicines

MDIs, nasal sprays, respules

Pipeline snapshot

Anti- inflammatory,

• phthalmic, CNS

Anti-fungal,

• ncology

Technologically complex nano- paclitaxel

Confidential JP Morgan Healthcare Conference, Jan 2018

Filings for under-development products in the US will bolster future growth

Split of top 50 projects

6 8 10 4 22 16 15 6 9 4 11 22 17 18 28 4

Of the 200+ development projects, top 50 have market size of > US$ 35bn Respiratory

Therapy Dosage form

Dermatology Oncology CNS Others Orals Solids Injectables Inhalation Others Simple Medium Complex

Complexity Market potential

(innovator sales)

> $ 500mn $100-500mn < $100mn Topicals

16 Para IV Filings

primarily in Respiratory, Oncology and Dermatology

15+ limited

competition products

CNS, Respiratory and Oncology pipeline has a

brand market size of

>US$ 25bn

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FPSM DPI under

development for regulated markets ~80% ~40%

Limited competition products – indicative only1

~50% ~80% ~30% ~30% ~40%

• 1. Competition stats are Cipla estimates

Confidential JP Morgan Healthcare Conference, Jan 2018

SAGA will continue to advance through private market expansion and institutional partnerships

SAGA to continue being a key business contributor, as well as home to first-of-its-kind initiatives by Cipla

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• 4th largest in South Africa in the private market1
• Leading position in 5 out of the 14 therapies in South Africa2 in

which we have a presence Market expansion:

• 6 new first-to-market products to be launched over the next few

months addressing a brand market of > US$ 30Mn

• Target tenders in ARVs, malaria, tuberculosis, hepatitis-C &

reproductive health

In-licensing and partnerships:

• ~10 partnerships executed for biosimilars, OTC and other select
• molecules. Further tie-ups being evaluated.
• 1. As per IMS MAT Nov ‘17, by value | 2. As per IMS MAT Nov ’17 & WWP

After providing ‘dollar-a-day’ HIV drugs in Africa, Cipla now partners with Clinton Health to provide access to affordable cancer treatment in Africa

• American Cancer Society & Clinton Health Access Initiative

announced collaboration with Cipla to increase access to lifesaving cancer treatment in Africa

• Cipla has pledged to make select common cancer medicines

available at agreed upon affordable prices

Confidential JP Morgan Healthcare Conference, Jan 2018

Cipla’s presence in other key markets will serve as our demographic dividend by bringing in high volumes and cushioning against market volatility

Increased focus on going deeper in certain chosen markets and strengthening current portfolio

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• Strengthened front ends in Australia and UK
• Executed biosimilar partnerships in several emerging markets

Build and deepen newer markets for incremental volume growth:

• Australia, Colombia – Expand presence through Respiratory portfolio
• Brazil & China – Develop presence through Oncology and Respiratory

pipeline Strengthen DTM Markets to build base for growth:

• Strengthen key DTM markets like Sri Lanka and UK through new

Respiratory launches (MDIs and DPIs*)

• Build biosimilar partnerships across markets

Strengthen existing DTMs New markets + new molecules

Volume growth across other key markets

* DPI – Dry powder inhaler

Confidential JP Morgan Healthcare Conference, Jan 2018

Cipla continues to maintain quality and compliance standards across manufacturing locations

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521 successful audits conducted by global regulatory bodies across our facilities2

17 12 6 4 3 3 2 1 1 1 5 3 2 1 5 2 5 1 1 2 1 1 7 7 1 1 2 1 1 2 1

USFDA PIC/S WHO (Geneva) TGA (Australia) MHRA (UK) APVMA (Australia) INVIMA (Colombia) ANVISA (Brazil) EMA EDQM (Europe) PMDA (Japan) 2015 2016 2017

2 23 successful audits in 2017 alone including 7 USFDA audits

Finished formulations

▪ 30+ formulations facilities ▪ 50+ dosage forms ▪ 1500+ products

• 1. Total of 2015,2016 and 2017; includes Invagen facility audits for 2016 & 2017
• 2. Select sites also have approvals from Denmark, France, Uganda, Singapore, Latvia, Tanzania, Kenya and various other countries

Increased automation to further strengthen quality and control processes

APIs

▪ 5+ API facilities ▪ 1000+ tons capacity

Confidential JP Morgan Healthcare Conference, Jan 2018

Cipla intends to achieve its key strategic goals in order to grow sustainably with a better

• verall financial profile

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1

Grow US towards a ~30% contribution to Cipla’s revenues via continued traction on filings & launches; ramp up Specialty through in-house capabilities and partnerships

3

Leverage existing Respiratory capabilities globally to expand our footprint, both in emerging and developed markets

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Continue momentum on ambitious cost optimization programs in order to boost margin profile and future growth

2

Bolster growth and leadership position in India, South Africa and key emerging markets through consumer access programs, inorganic partnerships and therapy shaping initiatives

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Build a leaner operating model and continue our focus on excellence in quality, compliance, patient access and talent pool

Confidential JP Morgan Healthcare Conference, Jan 2018

Cipla’s Credo – The center of Cipla’s culture of excellence

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Unveiled earlier this year, Cipla’s credo is being embodied everyday by its 23000+ employees as the base principles for guiding life at Cipla

Confidential JP Morgan Healthcare Conference, Jan 2018

Thank You

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Confidential JP Morgan Healthcare Conference, Jan 2018

Contact Details

Registered Office : Cipla Limited, Cipla House, Peninsula Business Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013 For any general queries, Reach us at: Naveen.bansal1@cipla.com Investor.Relations@cipla.com For more information please visit www.cipla.com

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