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Investor Presentation June 2011
BSE: 524372 NSE: ORCHIDCHEM Bloomberg: OCP@IN Reuters: ORCD.BO
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Disclaimer
This presentation is strictly confidential and may not be copied, published, distributed or transmitted. The information in this presentation is being provided by the company.
This presentation has been prepared for information purpose and is not an offer or invitation to buy or sell any securities, nor shall part, or all, of this presentation form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities.
This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of Orchid Chemicals & Pharmaceuticals Limited, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of Orchid Chemicals & Pharmaceuticals Limited or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to:
the ability to successfully implement our strategies, our research and development efforts, growth and expansion plans and technological changes;
changes in the value of Rupees and other currencies;
changes in laws and regulations that apply to our customers, suppliers and the pharmaceutical industry;
increasing competition in and the conditions of our customers, suppliers and the pharmaceutical industry; and
general economic conditions affecting our industries.
Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements.
This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. No shares or other securities may be offered or sold other than in compliance with the laws of relevant jurisdictions, including the United States Securities Act of 1933, as amended.
Orchid Chemicals & Pharmaceuticals Limited disclaims any obligation to update these forward-looking statements to reflect future events or developments. By viewing this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of Orchid Chemicals & Pharmaceuticals Limited and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of Orchid Chemicals & Pharmaceuticals Limited.
The information contained in this presentation is only current as of the date of this presentation and is subject to change without notice. Orchid Chemicals & Pharmaceuticals Limited may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. Persons relying on the information in this presentation should do so at their own risk and Orchid Chemicals & Pharmaceuticals Limited shall not be responsible for any kind of consequences or liability to any person arising out of, relying and acting upon any such information.
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Table of Contents
1. Situation Overview
2. Key Highlights
3. Key Growth Strategy
Appendix
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Situation Overview
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Company Overview
Overview
Key Business Segments
DM – Developed Markets; EM – Emerging Markets
Revenue Break-up (FY11) Shareholding Pattern (March ’11)
Overview
Key Offering
Facilities
Key Clients
Vertically integrated global pharmaceutical company - capabilities spanning discovery to deliveryEstablished research, manufacturing and marketing capabilitiesPresent across 70+ countries through alliances, joint ventures and partnerships
Active pharmaceutical ingredients (API), finished dosage forms (FDF), new drug discovery (NDD), novel drug delivery systems (NDDS) and custom research and manufacturing services (CRAMS)Oral AntibioticsDiverse (oral) multi-category non-antibiotic product range (Non-Penicillin/Non-Cephalosporin)Focus areas include anti-infective, anti-inflammatory, anti-oxidants, anti-ulcerants, CNS, CVS, nutraceuticals and other oral and sterile products
2 API manufacturing sites in India and 1 API manufacturing site in China3 formulations manufacturing sites in India, and 3 research campuses in IndiaManufacturing facilities approved by US FDA, UK MHRA, EDQM, DMA, MCC and TGAR&D facility accredited by National GLP Authority of India (aligned to OECD principles of GLP)
Hospira, Pfizer, Biovitrum, Merck
Orchid Chemicals & Pharmaceuticals Limited
API for orals
Cephalosporin Penicillin injectables Carbapenems
NPNC (non-penicillin
and non- cephalosporin)
Orals (FDFs) API for injectables
API for injectables Orals (FDFs)
API for injectables API for orals
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Corporate Structure
Wholly owned subsidiary for drug discovery and development
Wholly owned subsidiary for business development (generics and CRAMS) in Japan
50:50 joint venture for manufacture of sterile cephalosporin APIs in China
Wholly owned subsidiary for rendering select services in US
Wholly owned subsidiary for undertaking South African generics foray
Wholly owned subsidiary for drug discovery and development in US
Affiliate (planned to be a subsidiary) for discovery and development of new cardiovascular drugs
Wholly owned subsidiary for generics foray in Europe
Wholly owned subsidiary
Chennai, India
China
Tokyo, Japan
London, UK
Delaware, USA
Princeton, NJ, USA
South Africa
Union City, CA, USA
San Diego, USA
Orchid Research Laboratories Ltd.
NCPC Orchid Pharmaceuticals Company Ltd.
Orchid Pharma Japan K K
Orchid Europe Ltd.
Orchid Pharmaceuticals, Inc.
Orgenus Pharma Inc.
Orchid Pharmaceuticals SA (Pty) Ltd.
Bexel Pharmaceuticals Inc.
Diakron Pharmaceuticals Inc.
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100%
50%
100%
100%
100%
100%
100%
100%
Orchid Chemicals & Pharmaceuticals Ltd.
Wholly owned subsidiary for marketing of products in US & Canada
New Jersey, USA
Karalex Pharma LLC 100%
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Global Presence
Global Headquarters Manufacturing Facilities R&D Subsidiaries Joint Ventures Marketing Offices Affiliates
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Orchid has a global presence with offices spread across both the emerging & developed markets
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Key Highlights
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Key Highlights
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State of the Art
Infrastructure
Fully Integrated
Pharma Company
Strong R&D Focus & Pipeline
Experienced Management
Consistent Financial
Performance
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Fully Integrated Pharma Company
Segments:APIs to multiple dosage
forms
Markets: Regulated and semi-regulated
Value chain: Drug
discovery to drug delivery
Products: Multi-
therapeutic versatility
Integrated Pharma Player
Orchid is one of the leading vertically integrated player in the pharma segment with presence across pharma sub segments
Factors Description
Segments
Presence across pharma value chain
Products / Therapeutic Focus
Markets
Global presence across 70+ countries through alliances, joint ventures and partnerships
Entered into several marking / licensing agreements to introduce products in multiple markets
Diversified business model with focus across Emerging as well asdeveloped markets
Value chain
Strong vertically integrated capabilities
Accredited bulk manufacturing facilities – long term supply contracts for global pharma companies
Strong R&D team - Focus on NCEs and NDDS
ANDA pipeline
Acquisition of Karalex Pharma to strengthen front end presence in US
Integrated Pharma Play
Anti-infectivesAnti-inflammatoryAnti-oxidantsAnti-ulcerantsCNSCVS
NutraceuticalsOral and sterile productsAnti-allergicsOsteoporosisAnti – allergicsAnti – depression
Anti – parinsonAlzheimer’sDiabetesOncologyClotting disordersObesity
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Time, cost, risk and value
Global API
Domestic formulation Global
generics CRAMS NDDS NCEs
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State of the Art Infrastructure
Formulation facilities – advanced marketsoral dosage form complex with multi-therapeutic facilities; oral cephalosporin formulations; NPNC (non-antibiotic) dosage formsStrong regulatory pipeline including FTFsUS FDA and UK MHRA approved
Largest cephalosporin API manufacturing complexVariety of non-sterile and sterile (crystalline and lyophilised) APIsUS FDA, UK MHRA, WHO – GMP, EDQM, MHRA , Hamburg Health Authority, Australian-TGA, ISO 9001:2000, ISO 14001, Danish Medicines Agency, PMDA, Japan
Sterile Carbapenem API facilityMulti-site API complex with dedicated facilities for penicillins, sterile carbapenems, non-penicillin, noncephalosporins (NPNC)UK MHRA; US FDA; OHSAS 18001: 1999; Danish Medicines Agency EU-GMP; WHO GMP Audit
Drug Discovery Centre, Biology Centre, Animal House cum Pre-clinical Facility, CMC Facility, Analytical Centre, Formulation Facility in Chennai, IndiaGLP accredited by National GLP Authority of India, aligned with OECD PrinciplesScientific base of 130 plus with several doctoral and post-doctoral scientistsAccess to 200 plus scientists in other R&D and technical domains
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Irungattukottai (Chennai), Tamil Nadu
Alatur (Chennai), Tamil Nadu
Aurangabad, Maharashtra
ORLL (Chennai), Tamil Nadu
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ORLL - Orchid Research Laboratories Limited
Sterile cephalosporin API manufacturingStrong market share in the local market50:50 Joint Venture
Shijiazhuang, Hebei Province (China)
City, State
TypeProductApprovals
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Strong R&D Focus & Pipeline
Orchid undertakes its drug discovery and development through its wholly owned subsidiary -Orchid Research Laboratories Limited (“Orchid Research” or “ORLL”)
Orchid Research, based in Chennai, is an integrated research company with end-to-end capabilities in drug discovery and development with focus on
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Discovery and development of New Chemical Entities (NCEs)
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Custom Research and Manufacturing Services (CRAMS)
Follows one of the following business models
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Out-licensing of NCEs (early phase or proof-of-concept phase)
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Co-development of NCEs
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‘FTE’ based or ‘Fee for Service’ based Projects
Strong R&D team of 130 plus with several doctoral and post-doctoral scientists and leverage additional 200+ scientists in other R&D and technical domains of the Company
Strong NCE Pipeline and a strong IPM system
Overview Intellectual Property Management
Regulatory Pipeline
Strong IPM systems to protect inventions, secure intellectual property and assureclient confidentiality
644 patent applications filed in various national and international patent offices; 226 patents published
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Patent Applications Filed: Total – 644 Patents Published: 226
Orchid's – FTF pipelline
Products TAPossible launch Brand name
Peak sales (US$m)
Desloratadine ODT Tabs Anti-allergics Jan-12 Clarinex 20
Ibandronate Sodium Tabs Osteoporosis Mar-12 Boniva 1,200
Desloratadine Tabs Anti-allergics Apr-12 Clarinex 275
Eszopiclone Tabs CNS Jun-12 Lunesta 250
Duloxetine DR Cap-Pellets Anti Depression Jun-13 Cymbalta 3,000
Rasagiline Mesylate Tabs Antiparkinsonian Nov-13 Azilect 200
Memantine Tabs Alzheimer's Jan-16 Namenda 1,200
Gemifloxacin Tabs Disease Jun-16 Factive 30
Regulatory status - FDFs (1)
Product segmentMarket NPNC Cephs TotalUS 29 (10) 13 (11) 42 (21)EU 12 (8) 13 (9) 25 (17)Grand total 41 (18) 26 (20) 67 (38)
Products under development - FDFsProduct segment
Market NPNC Cephs TotalUS 41 2 43EU 15 3 18RoW 42 8 50Grand total 98 13 111
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1 – figures in brackets indicate total FDFs already approved; as of Match 2011
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Discovery Early Pre-clinical Late Pre-Clinical Regulatory Toxicology
Phase 1 Clinical
Phase II Clinical
Tyrosine-TZD, Non-PPAR molecule
DPP IV Inhibitor
Novel
Th1 / Th2 Cytokine Synthase Inhibitor
Diabetes
Therapeutic Segment
Inflammation
Oncology (Non-Cytotoxic)
PDE IV Inhibitor
TNF ∝
Inhibitor
STAT 3 / IL-6 Inhibitor
HDAC Inhibitor
Anti-InfectivesOxazolidinone
Cephalosporin
Betalactamase Inhibitor
CNS
Obesity Novel
Novel
Oral Direct Thrombin InhibitorClotting Disorders
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Strong R&D Focus & Pipeline (cont’d)3
NCE Pipeline
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Consistent Financial Performance (Consolidated)
Revenues (1) (4)
PAT (2) (3) (4)
1 – excludes other income and other non recurring income; 2 – Reported net profit and margins based on total income; 3 – Includes profit of US$225mn on account of sale of assets ; 4 - USD / INR - 45
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PAT (US$mn)
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EBITDA (1) (4)
EBITDA (US$mn)
33%
2009 2010 2011Post Hospira Transaction
Orchid reported growth in FY11 financials on account of higher volumes, new product launches and cost management strategies
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Consistent Financial Performance (Consolidated)
1 – USD / INR - 452 – Debt includes only principal amount of FCCB (excludes any redemption premium)
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Debt Break up (1) (2)
438
581
365408
Net Debt / Equity (2)
Significant reduced leverage post Hospira transaction, disciplined financial and working capital management has improved the financial profile of the Company
Post-Hospira DealPre-Hospira DealPost-Hospira DealPre-Hospira Deal
Improvements in Working CapitalDebtor Days Inventory Days
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Growth Strategy
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Growth strategy
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New niche Initiatives
Existing Business
Inorganic Strategies
Growth Strategy / Focus Areas
Focus on long term supply contracts, new product approvals and development of new product segments to be the key growth drivers in the short – medium term
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Appendix
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Process & Pharma Research
Focused on developing patentable processesCovers antibiotic and non-antibiotic segments for domestic, emerging and regulated markets
New Drug Discovery
Channeled through – ORLL and Bexel Pharmaceuticals IncORLL: multi-therapeutic, multi-lead portfolio and selective partnerships Bexel is working in the areas of diabetes, inflammation, obesity, multiple sclerosis, cardiovascular and auto-immune diseases
Pre-clinical Research
Undertakes a wide range of studies, including regulatory toxicity Other tests / researches undertaken include - animal toxicology, microbiology andpharmacology studies
Novel Drug Delivery Systems
Undertakes development of new dosage forms and strengths to enhance the efficacy and safety of existing drugsDevelops novel combinations of existing drugs for better compliance and / or synergistic effectStrategy focuses on developing NDDS on bench scale and establishing limited proof-of-concept Business strategy envisages collaborative approaches with MNCs and specialist delivery companies for further studies andeventual commercialization
Biotech Research
Focused on replacing existing chemical methods of manufacturing various intermediates, with fermentation and enzymatic based transformations PCR and Directed evolution of proteinsGene cloningProtein expression and purificationHigh-throughput screeningDevelopment of assays for proteins in the cephalosporin pathway
CRAMS
Custom Research and Manufacturing Services (CRAMS) as a discrete initiative and advanced, especially in the areas related to new drug products, NDDS and NCEs.With CRAMS, we also reinforce our position as a preferred global partner with the potential to undertake a wide range of projects on a 'FTE' or 'fee for service' basisOffering dedicated teams and manufacturing lines for full-scale commercial manufacture
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R&D Capability
Orchid has R&D capabilities across multiple segments
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THANK YOU
© 2011 Orchid Chemicals & Pharmaceuticals Ltd., All Rights Reserved.
This material was used during an oral presentation; it is not a complete record of the discussion. This work may not be used, sold, transferred, adapted, abridged, copied or reproduced in whole on or in part in any manner or form or in any media without the prior written consent. All product names and company
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For any information or clarifications, please visit www.orchidpharma.com
or call
Ch Ram, Head - Communications & Investor Relations
on +91 98400 11626 / ram@orchidpharma.com
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