Cipla: Transforming for a new horizon Presented by: Umang Vohra Presented by: Umang Vohra Date: 9 th Jan, 2018 Date: 9 th Jan 2018 JP Morgan Healthcare Conference, Jan 2018 Confidential
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 or 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 2 JP Morgan Healthcare Conference, Jan 2018 Confidential
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 82 YEARS Cipla Today 8 OF CARING Patient access at the center of Cipla’s success 80+ One of the world’s One of the world’s Markets Partner of choice for 1 in 3 HIV* patients largest inhalation largest suppliers of Donor Funded / take Cipla ARVs # 1 portfolios anti-malarials Tender Agencies ~ $2.2bn Revenue 8 out of every 10 3 rd most dispensed Amongst the top 2 doctors in India largest dispensed company in South prescribe at least 1 companies in India 2 Africa 3 Cipla medicine 3 R&D ~ 7% investment Healthy business performance in key markets Among the top 5 in Among top 10 most 3 rd largest in South some of the key 3 rd largest in India 4 dispensed generic EBITDA Africa 5 emerging ~ 18% companies in US 6 margin economies 7 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 3 JP Morgan Healthcare Conference, Jan 2018 Confidential
Scorecard - Cipla has made significant achievements against its key strategic objectives (1/2) Grow US towards a billion dollar enterprise Drive growth in markets like India, South Africa and with focus on Specialty other key markets 95 ANDAs * pending for approval including 25 Healthy growth rates last year for India (~10% 1 ) as well as South Africa (~17% 2 ) tentative approvals 20+ annual filing run rate since FY ’17 - to be Multiple in-licensing deals in India and South Africa to strengthen key therapies like Diabetes, Cardiology, Respiratory, maintained in the coming years and CNS # Approvals for differentiated products such as Budesonide, Decitabine and Sevelamer demonstrate Artesunate Rectocaps (paediatric Anti-Malarial) and Q-Tib (TB capability in niche areas in HIV Patients) launched during the year under Cipla Global Access Committed to build a Specialty franchise in the US . Multiple assets under evaluation for partnership 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 4 JP Morgan Healthcare Conference, Jan 2018 Confidential
Scorecard - Cipla has made significant achievements against its key strategic objectives (2/2) Maintaining high standards Expanding Respiratory Business optimization to bring of quality & compliance franchise focus and drive synergy Respiratory in India : shaping the 23 successful audits 1 this year 25+ markets optimized in the last 2 ecosystem – over 2Mn patients years in emerging markets across our facilities including 7 counselled over the last year USFDA audits Strategic divestitures executed to Synchrobreathe (breath-actuated MDI`) Manufacturing and R&D sites increase focus on core business successfully launched in South Africa remain in a state of compliance 5+ markets converted from DTM* to FPSM ^^ launched in Australia and 8 B2B # model in Europe Fresh talent onboarding and European markets this year continuous skill upgradation at FPSM now sold in 40+ countries manufacturing sites African footprint consolidated by merging SA ^ , SSA ~ and CGA ** into Leadership position in Respiratory in SAGA markets like India and Sri Lanka `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 5 JP Morgan Healthcare Conference, Jan 2018 Confidential
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 Generics base business EBITDA margin (ex-R&D) 1 has shown considerable improvement in the last few years Fuel for further innovation and for + 2% pursuing other growth opportunities + 3% 25% ~ 23% ~ 20% ~ R&D expected to grow in the near future FY '16 FY '17 H1 FY '18 1. Margins exclude one-offs (like Esomeprazole, accounting based reclassifications, restructuring cost and Indigo), Cipla Health and Biotech business | * On Time In Full 6 JP Morgan Healthcare Conference, Jan 2018 Confidential
Upcoming growth opportunities for Cipla are predicated around multiple levers across geographies Share of revenue 1 3 Others Diversified portfolio * API Other Key Markets: 2% & pipeline in ^ 4% • Strengthen DTMs regulated markets • Expand in newer markets India: • Portfolio strengthening # • Patient engagement High standards of manufacturing, regulatory and compliance 2 SAGA: • Market expansion Cipla’s core • Partnerships principles – guiding North America : • Tender business its culture of • Commercial strength excellence • Differentiated pipeline • Specialty focus 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 7 JP Morgan Healthcare Conference, Jan 2018 Confidential
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 performance 1 Growth outlook for India business #1 Therapy Strengthening: Anti-virals Others #5 5% 13% • Cardio-Metabolic : Focus on progressive products like betablockers and Ophthal / Oto #1 SGLT-2 * Inhibitors 3% Respiratory #5 Neuro / CNS 30% • Dermatology : Expand in topical segments – 10+ upcoming launches including 4% topicals and emollients Urology #1 5% • Urology : Strengthen prescriber base with focus on BPH ^ , build Uro-Oncology Anti- Gastro Portfolio Cardio- infectives Intestinal Metabolic 21% 6% 13% #3 Acceleration through inorganic initiatives: • Executed partnerships with MNCs for Respiratory, Cardiology, and Diabetes 4 therapies ranked amongst top 3 2 – contributing to segments 61% of Cipla’s revenue share Ranked 3 rd in chronic segment and 2 nd in acute • Advanced discussions underway for partnerships in Oncology, Dermatology 17 first-to market brands in inhalation market and Vaccines 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 8 JP Morgan Healthcare Conference, Jan 2018 Confidential
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