Chapter VI

Lupin In The Pharma Market

Begining in 1968, Lupin has travelled a long way in becoming the fastest

growing among the Top 5 India pharma companies. Lupin laboratories Pvt. Ltd.

was incorporated in (1972). Lupin commissioned a Formulations plant and an

R&D centre at Aurangabad in (1980). Ethambutol production started in (1981).

Cephalexin plant at Mandideep and the Ankleshwar plant went on stream in

(1987). Lupin Human Welfare and Research Foundation (LHWRF) was founded in

(1988). Ankleshwar and Mandideep received US FDA approvals in (1989).

Injectable Cephalosporins was commissioned at Mandideep in (1992).

Fermentation plant was established at tarapur in (1992). Lupin Chemicals

(Thailand) Ltd. was established in (1989). Injectable Cephalosporins Production

initiated at Mandideep in (1991). Fermentations plant of Lupins chemicals was

established at tarapur, in Maharastra in (1992). Three plants-Mandideep, Tarapur

and Ankleshwar got US FDA approvals in (1997). Mandideep plant obtained UK

MCA approval in (1997). In 2001 Lupin commenced supply of Cephaloshporin

bulk active to its partners in the US.

Lupins Recent Milestones Are Listed Bellow:

Year Milestones

2009 Lupin acquired its majority state in multicare pharmaceuticals

Philippines Inc.

2008 Lupin expanded its product basket in japan-Kyowa and received ten

products approval from ministry of Health & Labour Welfare, Japan.

Lupin acquired Hormosan Pharma GmbH, a Generic Company in

Germany.

Lupin acquired stake in Generic Health Pty Ltd. in Australia.

Lupin acquired Pharma Dynamics in South Africa.

2007 Lupin acquired Vadodara based Rubamin Laboratories Ltd

(rechristened to Novodigm Ltd.)

Lupin acquired Kyowa Pharmaceutical Industry Company Limited, a

leading Generic Company in Japan.

Commercial production was started at the new finished dosage facility

at Jammu.

Lupin received "Best new manufacturer of the year" award from

Amerisouce Bergen.

2006 A New facility was set up at Jammu.

Maiden Bonus share were issued in the ratio of 1.1

Maiden are issues of Foreign Currency Convertible Bonds (FCCB)

aggregating US & 100 mn, which are listed on Singapore Stock

Exchange.

2005 Maiden Employees Stock Option Plan was implemented.

US FDA and MHRA (UK) approvals were received for Goa.

New Lovastatin plant at Tarapur was approved by the US FDA.

2004 WHO approval was received for State of the art formulation Plants at

Goa and Aurangabad.

2003 Lupin had successfully implemented SAP ERP across the Company to

unify all business functions and processes.

Introduced collaborative massaging and workflow solution are on the

internet.

Oral Cefaclor injectible Plant at Mandideep was approved by US

FDA.

Lupin Pharmaceuticals Inc. USA, was formed for trading, marketing

and development activities in the US.

2002 Exports to the Advanced Markets crossed Rs. 1000 mn.

Rising are trend of exports as a% of total revenue-up 33% year-over-

year.

Patent filings crossed 100.

Five ANDAs were filed.

New Anti-TB facility was commissioned at Aurangabad.

As listed below during the last five years, Lupin has won several awards

for its outstanding performance as a major pharma company

Year Awards

2010 Indian Pharmaceutical Company of the Year 2010" by Frost &

Sullivan India Excellence in Healthcare Awards

2010 Best Drug Development Company, Asia by The New Economy

Pharmaceutical & Healthcare Awards 2010

2009 International Excellence Award by Institute of Economic studies.

Outstanding Expert Performance by Pharmexcil (Pharmaceuticals

Export Promotion Council of India)

2008 Amerisource Bergen, one of the largest and leading wholesalers in the

US Conferred the "Best New Manufacturer of the Year, Generics Rx"

to Lupin Pharmaceuticals Inc.

Cardinal Health conferred two awards- the "Trade Representative of

the Year" and the "Quality Supplier Award" to Lupin Pharmaceuticals

Inc.

In previous years Lupin received numerous awards as listed bellow:

Awards and Achievements:

Some of the milestones of LHWRF are:

Year Awards

1990 Merit certificate by the District Administration for Excellent Social

Service & Rural Development of Independence Day.

1991 FICCI Award outstanding achievement in rural development by prime

Minister of India.

1992 ICMA Award for innovative and purposeful programs for social

progress.

1993 PHD chamber of commerce award for Corporate Citizen.

1994 Jamuna Lal Bajaj Award for outstanding contribution in Rural

Development.

1995 Bhamashah Award for contribution in the field of Education by Chief

Minister of Rajasthan .

1996 World Bank recognized LHWRF as specialist social assessment

Agency.

1997 Represented NGO's from India to present Indian NGO scene, at

United Nations.

1998 Merit certificate by the Chief Minister of Rajasthan for voluntary and

social services.

1999 RMK recognized LHWRF as a Nodal Agency for Northern India for

micro credit for women.

2000 Nominated as Member of the State level Grant-in -Aid Committee at

lok jumbish.

2001 Nominated in FICCI and CII's Rural Development care Group.

2002 Nominated in CAPART's governing body.

2003 Business world FICCI-SEDF Corporate Social Responsibility Award

2003 by Ex-President of India Shri KR Narayanan.

2004 Appointed as outreach office of Rashtriya Mahila Kosh.

2005 Selected by CII for representing India on Strengthening of South

Asian Alliance for Responsibility Business (SARB) at Kathmandu.

Selected by State is Government as lead NGO for Jal Abhiyan (Water

Compaing) for Bharatpur division.

2006 FICCI Ladies Organization Award-Outstanding Institution for

Women Welfare by FICCI's Secretary General shri Amit Mitra and

FLO's president Mrs Usha Agarwal.

Best NGO Award from NABARD for Significant work done in area

of SHG formation and Bank Linkages.

RMK selected Lupin as one of the member of the delegation to

participate the Global micro Credit Summit 2006 at Halifax, Canada.

Selected as the specialist NGO Member in the State level Committee

of jal Abhiyan Water Campaign) Phase-2

2007 Amer Source bergen declared Lupin the "Best new manufacture of the

year Generix Rx"

2008 Wal mart's supplier Award of exulince.

2010 Indian Pharmaceutical Company of the year 2010. Best Drug

Development Company Asia, by the New Economy Pharmaceutical

and Health care.

Lupin: An Overview:

As a socially responsible organization, Lupin strive to take care of the less

privileged sections of our society. We extend our expertise to transform the lives of

our people and make a difference to the society. Lupin is committed to the

challenging task of becoming a proactive partner in nation building through the

lupin Human Welfare & Research Foundation (LHWRF). Lupin Human Welfare

& Research Foundation was set up on October 2, 1988 with the objective of

providing an alternative model of rural development in the country, which is

sustainable, replicable and ever evolving. Initiating the program of Rural

Development within a small number of 35 villages, LHWRF has now succeeded in

ravitalizing revamping and recreating life in 2,200 villages in Rajasthan, Madhya

Pradesh, Maharashtra and Uttarakhand States of India, which has led to LHWRF

emerging as one of the largest NGO in the country. The Foundation has been

successful in making a big difference in the development of poverty-ridden

villages, and especially in the life of the poorest of the poor and empowerment of

large number of women in these areas. Today LHWRF on its part is a catalyst, and

an observer of self-evolving, self-sustaining spectacular transformation.

Background:

Lupin Human Welfare & Research Foundation is an independent entity of

Lupin implementing Lupin CRS activities all over India. This organization has

been registered under Societies act/trust acts and exempted under 35 AC and 80G.

LHWRF is also entitled to take foreign funding through its FCRA account.

LHWRF has staff of 65 permanent employees along with the 700 project based

employees. CSR staff of LHWRF is engaged fully & Singularly for CSR activities.

Objectives:

Social

* To develop proper social, cultural, scientific and spiritual attitudes amidst

the rural community.

* To instill in villagers, especially women, children youth and older people an

urge, and keenness to work for their own development.

* To develop an attitude towards living a healthy life and taking concrete steps

in that direction.

Economic:

* To help create more job opportunities particularly for unemployed youth and

women.

* To strengthen primary occupations like agriculture and animal husbandry

through higher output and value addition.

* To strengthen secondary occupations such as cottage industry, handicrafts

and service sector through quality enhancement and wider market acceptability.

Infrastructure:

* To create basic infrastructure facilities

* Provision for drinking water

* Building internal roads

* Basic Sanitation

* Formal Education

* Community centers

* Electrification

* Training cum production centers etc.

Scale Up Strategy:

The Company believes that to have visible impact of its CSR operations

scalability is important. Therefore, company closely works with Central or State

Government departments as well as with international organizations to achieve its

objectives. The convergence and collaborations are the integral part of its strategy.

Funding:

The investments made in the CSR activity are mobilized from the company

and from Central and State Governments. The monitoring is being carried out by

the resource giving agencies which are mobilized from Central and State

Government are being audited by respective government departments.

* The Company has also carried out its social audit from the external

organization like Deloitte & Touche, for all the resources deployed from State or

Central Government departments & the Company.

Initiatives:

Lupin HWRF has taken following innovative and new initiatives under its

CSR activities.

* Building local level institutions- LGVP

* Convergence for scalability

* Identification of potential areas for futuristic development

* Conversion of problems into potentials

Institution Building: Lupin Gram Vikas Panchayat:

To implement & execute the activities at village level, local level institutions in

the name of lupin Gram vikas panchayat (LGVP) (Village Development

Committee) have been formed. LGVP consists of representatives from different

village communities, who are dedicated to the cause of service and village

development. Impact: The world Bank has replicated our model under the program

of District poverty Initiative Program (DPIP) by forming Common Interest Groups

of the pattern of the LGVP.

Civil & Infrastructure work:

The contribution in the form of man, material and cash is must for any

developmental work. Villagers were motivated to contribute certain percentage of

estimated cost of the work, rest of the money come from Lupin and Government.

This work of infrastructure was executed by the committee of villagers namely

LGVP. Their contribution and execution of work by them gave a sense of

ownership to the developmental activities.

Impact:

Government has announced a policy intervention in the name of Apna Gaon

Apna Kam. Lupin's pattern of working with community's contribution has

impressed the State Government

Lupin's Branding And Marketing Strategy :

During the last ten years, Lupin has been building brands that are key driver's

for value creation. In 2006, the Company witnessed a healthy growth in sales to

Rs. 2233 million, for its finished dosages in the us markets effected through Lupin

pharmaceuticals, Inc. (LPI), a wholly owned subsidiary.

The advanced markets, particularly those of the US and the EU, are the

Company's Key growth drivers for the future. As part of the global strategy to

increase its Participation in the high-margin and high-value regulated markets, over

the years, Lupin has created appropriate infrastructure by upgrading its facilities in

conformity with global regulatory standards. It has also invested in Research and

created capability of filing and introducing a steady stream of products specific to

market requirements. Further, to strengthen its US focus, LPI was expanded in

terms of strength. LPI is committed to developing a branded pharmaceutical

presence for the paediatric practice in the US market and become a leading

generics powerhouse.1

The regulated markets continued to witness strong growth momentum in sales,

driven by higher off take of its branded generic product and launch of 7 new

1 Lupin Limited Annual Report 2005-06, P. 30

generic formulation products, in 2006 In March 2004, Lupin launched its maiden

branded generic "Suprax" (Cefixime)' in the US for the paediatric segment. After a

steady start, Suprax has seen its prescription rate increase significantly to over

5000 new scrips per week. This base has now created a launch pad for the branded

generics business in the US for the Company.

Lupin's maiden branded generic Suprax has seen its prescription rate increase

to over 5000 new scrips per week. This base has provided a launch pad for a strong

branded generic business in the US. "LPI" hit a very important milestone in 2005

commencing its own direct-to-market presence. Led by a focussed team, it is now

well poised to capitalise on the generic opportunities with increased filings and

approvals, the US business was all set to grow.

Lupin's Goa and Tarapur facilities were also inspected in 2009 and found to be

acceptable. The US FDA also inspected Lupin's Aurangabad (Liquids) & Indore

(Oral Solids and Oral Contraceptives) sites. Both inspections were found

acceptable and these inspections bring the Company a step closer to launching

liquids and Oral Contraceptive in the US market. With these recent inspections, all

Lupin's facilities catering to Advanced Markets have now been inspected in the

past year and have been found to be in good shape and in line with the expectations

of regulators across the world.

US Branded Business:

Lupin's Branded business contributed 37% of the overall US revenues with a

turnover of USD 127 million, growing by 72% during FY 2010 as compared to

USD 74 million during the last fiscal. 2010 saw Lupin expanding its branded

portfolio by acquiring the worldwide rights for the intra-nasal steroid (INS)

product, Aller Naze TM (triamcinolone) Nasal Spray, 50 mcg, from Collegium

Pharmaceutical, Inc. The US FDA has already approved Aller Naze TM, an

aqueous based intranasal steroid indicated for the once daily treatment of nasal

symptoms associated with both seasonal allergic rhinitis (SAR) and perennial

allergic rhinitis (PAR) in adults and children above 12 years of age and older.

AllerNaze TM offers a quality intranasal steroid option to physicians as they deal

with adherence and compliance issues when treating allergic rhinitis. The

intranasal steroid market generated USD 2.5 billion in annual sales in the United

States alone (IMS). During 2010 the Company made its second branded

acquisition by obtaining US rights for Antara ® (Fenofibrate Capsules 43 mg and

130 mg) from Oscient Pharmaceuticals under the procedures of the US Bankruptcy

Court. Antara® recorded net sales of USD 70 million for 2008 (IMSDec'08)

Antara ® hasstrong brand equity with primary care physicians and is prescribed for

treatment of hypercholesterolemia (high blood cholesterol) and hyper trigly

Ceridemia (high triglycerides). In the US Fenofibrate product market, at around

USD 1.9 billion, Antara® has 4.5% share of the market and grew 20% in revenue

in the past year. The Company's experience, sound market understanding and

effective marketing strategies are reflected in the success of our flagship brand,

Suprax® During FY 2010. Suprax® continued its upward growth trajectory. The

Suprax basket now encompasses Suprax® (Cefixime)for Oral Suspension

100mg/5ml, 200mg/5ml and Suprax® 400mg Tablets. The Compnay has

strengthened its portfolio of offerings by value-added line extensions and will

continue to invest in developing new products and product line extensions using its

proprietary controlled release and taste making platforms.

Reaching the Market world Wide:

Lupin’s Advanced markets business in US and Europe continued its upward

growth momentum during the year with total sales of INR 18,570 million, up from

INR 13,567 million during the previous fiscal, a growth of 37%. The company's

Formulations sales in the US market grew to INR 16,497 million during Fy 2010,

Up from INR 11,894 million during the previous Year. The Company continues to

register impressive growth in the European Market where Formulations sales grew

36% to INR 1,395 million for FY 2010 up from INR 1,023 million during Fy 2009.

US Market:

Riding high on the momentum built up in our branded Business and sustained,

consistent growth in Generics, Lupin's Formulations business in the US emerged as

the Key growth driver for the Company, recording sales of INR 16,497 million

during FY 2010 as compared to INR 11,894 million in FY 2009, up 39%.

US Generics:

The Company's Generics business reported growth of 16% in the US, up from

USD 187 million in FY 2009 to USD 217 million in FY 2010. Today, Lupin is the

8th

largest Generic player in the US in terms of prescriptions. The Company is also

the fastest growing Top 10 Generic player in the US for the second year running,

growing at 51% by prescriptions (IMS Health). "The company now has 26 generic

products in the US out of which 13 are market leaders. Lupin also holds Top 3

positions for 25 of these 26 products”

Top the US Generic Drug Manufacturers Market share by Prescription (Tolat

Rxs):

Manufacturer Total Rxs %change (2009) %Share

Teve 634,415 1.70% 25.20%

Mylan 331,562 11.90% 13.60%

Watson 251,970 6.40% 10.30%

Sandoz 218,891 10.90% 9.00%

Qulitest 109,802 11.30% 4.50%

Greenstone 102,316 24.80% 4.20%

Apotex 99,841 4.80% 4.10%

Lupin 92,757 51.10% 3.80%

Malinckdrodt 90,824 -4.90% 3.70%

Actavis-purepac 73,524 -10% 3.00%

Source: Ims Data

Source: Ims Data

Market leaders, ranked No.1 by market share. Lupin holds the Top 3 positions

in terms of market share for 25 of the 26 marketed products (IMS Health). What

has been unique about Lupin is its ability to increase and build on existing market

shares for most of the 26 marketed products in the US on the back of flawless

execution and excellent relationships with trade partners, all serviced by an agile

and responsive supply chain. The Company continues to record the highest per

product revenues amongst its Indian peers. The Company received 7 approvals

from the US FDA during Fy 2010, out of which 3 were tentative approvals. The

approvals received in the year were Levofloxacin Tablets, Ethamlrtol Tablets,

Mewantine Tablets, Perindopril Tablets, Amlodipine and Benazepril Capsules,

Imipramine Tabelets and Eszopiclone Tablets. Lupin's exemplary success has

prompted Vinita Guptta, Group president and CEU Of Lupin USA to boast, Lupin

has Clearly broken away from the vest to emerge as the 8th largest and the fastest

growing Top 10 generic business in the US (in RXS)- the only Indian pharma

major to even achieve this feat"2

Europe:

Lupin has developed a solid foundation to grow its Formulations business in

the European markets with a robust product pipeline. Having built its presence

across- select EU markets through a blend of direct-to market initiatives,

acquisitions and strategic partnerships, the Company is today well placed to

address the unique demands of the fragmented and diverse EU market. During

2010, the Company's Formulations business in Europe recorded a growth of 36%

additionally, during the Year, Lupin filed as many as 11 MAAs and 3 EDMFs and

2 Luptin, Annual Report 2009,P. 14

COSs across Europe. The total cumulative finished product filings within the EU

stands at 65, with 31 total approvals.

Germany:

Lupin made strategic inroads into the German Market by acquiring Hormosan

Pharma Gm bH (Hormosan), a German Generics company, specialized in the

supply of pharmaceutical products. Hormosan enjoys a strong brand identity in

Germany, especially in the CNS area with the change to a Substitution-driven

market, the Company has completely realigned its focus and is now geared towards

capitalising on the right Generic opportunities. Hormosan registered a growth of

over 100% during 2010.

UK:

Lupin's direct-to-market initiative has worked well in the UK, which is evident

from the success of the company's flagship brand, Lisinopril that commands a

market share in excess of 15% Lupin is now looking at introducing several new

value-added products. The Company has a strong pipeline of 22 filings in the UK

and received approvals for Valsartan Tablets and Perindopril+Indapamide tablets

during 2010.

France:

Having built successful partnership over the past year, Lupin continues to make

inroads into the French market with its Cefpodoxime Proxetil tablets, accounting

for over 72% market share. The Company also launched Cefpodoxime Proxetil

Suspension in 2010. Overall Lupin is well on its way to grow its direct-to-market

business as well as its partnered business in Europe. In addition to UK, Germany

and France, the Company is also focused on building its position in the markets of

Italy, Spain, Portugal, Poland, Czech Republic, Hungary and Turkey. During 2010

Lupin received approval for two dosscirs through its 100% subsidiary Lupin

Australia. The company is planning to introduce value added generic initiative into

the Australian market.

UK-Direct to Market:

Lupin launched its direct to-market initiative under its own label during the

year. Its flagship product Lisinopril has been well received and has achieved

market share of 15% in the first four months of product introduction.3

The Company has a strong pipeline of 21 MAAs for various products. The

Company expects to repeat the successful launch of lisinopril with a host of

additional offering. Lupin launched its direct-to-market initiative in UK under its

own label, during the year. Its flagship product lisinopril has been well received

and has achieved a market share of 15% in the first four months or product

introduction.

France and other European Markets:

Lupin is forging ahead in France and other markets, leveraging its partnership

business model. During the year, Cefpodoxime proxetil tablets introduced in

France through multiple partners garnered over 50% market share. The Company

is looking forward to replicate this success with the launch of Cefpodoxim proxetil

powder for suspension amongst other products.

Additional Sale of IP:

3 Lupin Limited Annual Report 2007-08, P. 25

Lupin also received Euro 20 Mn for the sale of additional, patent as

applications on perindopril toLaboratoires Servier of France. Having set its foot on

European soil, the Company is considering every avenue of value creation. As a

result, it has entered into several out-licensing arrangements for its products across

the region. Lupin has planned 10-15 dossier filings and an estimated 5-7 launches

in the European Union in the near term.

Russia and Nightbars:

Though fragmented, the CIS region continues to be a very lucrative market,

with an estimated market size of USS 16.4 Bn. On account of their steadily

increasing per capita income, the fast emerging, economies of Azerbaijan, Russia

and Ukraine, in particular, have played a deciding role in increasing Lupin's

business into these regional markets within CIS. With Lupin all set to tap the

markets in Tajikistan, Turkmenistan, Kyrgyzstan (TTK), the prospects look even

better going forward. Changing lifestyles, an ageing population and increased

Government spend makes it a lucrative market. Lupin's product portfolio for the

CIS market is a very judicious mix of volume as well as value business. With an

eye on future potential, the Company has entered into synergistic partnerships with

leading local players in respective regional markets within CIS, as well as

selectively following a direct to market strategy. During 2008-09, the Company's

CIS business recorded sales to the tune of Rs. 503 Mn, a growth of 33% over

2007-08. Considering changing trends Lupin is laying added emphasis on Brand

building exercises for its products such as IXIME, Dr. KASHEL, SOFTOVAC,

RIBAVIN, ONE BE and GATISPAN. The Company's branded business recorded

a healthy growth over the previous year. Brands such as One Be and Gatispan are

fast gaining market share in the region.

Lupin continues to strengthen its base in the CIS region by continuously

working on increasing its field force, forging trade relationship and enhancing its

distributor networks across the CIS with its filings. The Company is looking

forward to building new brands that will drive value in the years to come.

Looking towards Latin America:

In a bid to scale greater heights in the next few years, AAMLA has a focused

approach to establish on-shore presence in promising emerging markets and

geographies by way of planned organic growth, acquisitions or by forging strategic

alliances and partnerships. Brazil and Mexico have been identified as two of the

emerging markets for an onshore presence. The Brazilian market is valued at

around USD 15.4 billion and great 15% (IMD Dec 2009). The market presents

attractive opportunities in high growth, specialty segments like gynaecology,

cardiology, Oral Contraceptives and biotechnology. The Mexican Pharma market

is currently pegged at MS 140 billion (USD 11.4 billion).

During 2010, Lupin's business from these markets accounted for 16% of our

total consolidated revenues. Ex-India operations along with our subsidiaries

Kyowa-Japan, Pharma Dynamics-South Africa and Multicare-Philippines,

recorded revenues of INR 7,741 million, a growth of 32% from the previous year.

The Company started filing DMF's of in house API's for Japan, sourced 18 new

products for the Philippines and negotiated better sourcing rates for its products in

South Africa. The division also introduced value added, differentiated and novel

products in multiple therapy areas across various countries. These concerted efforts

are already resulting in success across key geographies, specifically in advanced

markets such as japan and Australia as well as the emerging markets of South

Africa and South East Asia.

Lupin's current formulations business within these markets addresses chronic

therapies and lifestyle segments like Cardiovascular, Paediatric, Central Nervous

System, Gastro Intestinal and women's Health as well as Anti-Infectives, Anti-

Asthma, and Anti-TB treatments. In a span of four years our achievements in the

AAMLA geographies have already helped build strong foundations for the

sustainable future growth of the Company.

JAPAN:

Valued at USD 75 billion, Japan is the second largest pharmaceutical market in

the world. Almost 100% of Japanese citizens are covered through National Health

Insurance, funded by the Japanese Government. To reduce the health care

expenditure burden, the Government has introduced a series of reforms that would

expand Generic penetration to 30% of the overall Japanese pharmaceutical market

by 2012 with an estimated market size of USD 6.5 billion. Kyowa, Lupin's 100%

subsidiary in Japan focuses on tapping into this emerging opportunity and has

identified Neurology, Cardiovascular, Gatroenterology and Respiratory segments

as core therapeutic areas of focus for drug development and marketing. Kyowa is

amongst the fastest growing generic pharmaceutical companies in Japan. Today, it

markets over 200 products through its 75 strong sales and marketing team. Kyowa

is one of the largest generic players in the Neurology segment with 95 products

and covers 94% of psychiatry with 95 products and covers 94% of psychiatry

hospitals in japan.

For 2010, Kyowa reported consolidated sales of JP 10.4 billion (INR 5,341

million) contributing to 11% of Lupin's consolidated revenues a growth of 9% over

the previous fiscal. Kyowa's conscious drive for cost optimisation through API

prices has resulted improvement in gross margins by 4%.

In FY 2010, Kyowa launched 6 new products and filed applications for an

additional 8 products. With a view to augment product filings and optimise R&D

costs, Lupin has also started developing products in-licensing arrangements and

strategic alliances with various Japanese, European and Indian companies to

introduce new products into the Japanese market. APIs have been identified as a

key area synergy between Lupin and Kyowa and the Company has started

developing and filing the APIs required by Kyowa. The Company filed and

received approvals for 2 Drug master Files for the Japanese market during 2010.

The supply of these APIs to Kyowa would commence shortly and would help

Kyowa achieve significant savings and better margins. The Company is already

working on augmenting the pipeline of APIs from India and many more DMFs will

be filed in the next few years.

The global Active Pharmaceutical Ingredients (API) space is driven by the two

Asian giants China and India. While India has fewer API Players than China, it is

more prolific than its counterpart in the API industry largely because of India's

Quality and credentials as the best manufacturer of generic formulations

worldwide. Lupin is one of the select few API players from India that have made

an indelible mark on the global stage. Lupin is also amongst one of the very few

pharmaceutical companies globally that are strong players on both fronts of the

pharmaceutical business-APIs and Formulations. This makes Lupin a fully-

integrated global pharmaceutical company.

In 2010, the Company's API business generated INR 7,772 million in revenues,

representing growth of 9% YOY. This was achieved by focus on improving

operational efficiencies with a careful and meticulous product selection strategy. 4

4 Lupin Limited Annual Report 2010

By maintaining cost leadership and competitiveness in its chosen therapeutic

domains, Lupin's API business has been ensuring the profitability and growth of

the Company's Formulation business.

Lupin's AAMLA:

(Asia, Africa, Middle East & Latin America) Division helped the company. In

its pursuit to be an innovation led transnational pharmaceutical company, Lupin

has ventured and penetrated into chosen markets represented by its AAMLA

Initiatives taken in the past two years have fortified the Company's position and

paved the way for accelerated growth in this region. The focus in most of these

markets is to offer world-class products with key differentiation, niche value-added

generics and products from therapeutic segments of Anti-TB, Anti-Infective and

Cardiovascular. Sales for this division in 2006 are increased by 2.5 times over the

previous year. The Company has adopted the strategy of entering into alliances,

joint ventures and synergistic partnership with some of the leading players in the

respective markets. These efforts have enabled the Company to breach the

otherwise high entry barriers as well as the gestation period for starting off in these

markets. The AAMLA geographies provide unique challenges and opportunities.

On one hand, there are highly regulated markets such as Japan, Australia, South

Korea, Mexico, U.A.E., Saudi Arabia etc., while, on the other, there are less

regulated markets such as Myanmar, Nigeria, Kenya and Peru. TB has recently

been declared an emergency in Africa, where 1500 TB deaths occur everyday. This

disease kills half a million African people every year, largely young men and

women. Africa is the only continent, where incidence of TB is increasing and in

just 15 years, it has more than doubled in high HIV areas. Lupin's alliances with

Ranbaxy laboratories Ltd. ans Aspen Pharmacare Holdings Ltd. are directed

towards Lupin's quest to make available TB drugs to geographies most afflicted

with the disease. The Company's formulations have reached more than 30

countries through GDF procurement and play a vital role in treatment of TB

patients in high burden countries identified by the WHO.

South Africa:

For FY 2010, Pharma Dynamics recorded revenues of ZAR 218 million (INR

1,328 million) registering a growth of 34% over the previous fiscal. The growth

was achieved by a planned focus on growing market shares in key therapy

segments such as Cardiovascular (CVS) and the OTC segments. Pharma Dynamics

remains the fastest growing Top 10 Generics player in the South African Market

and is the 6th largest Generic Company in the country.

Lupin plans to improve the consolidated entity's profitability and margins

through backward integration and and back ending production into our

manufacturing facilities in India as well as supporting pharma Dynamics in terms

of patent issues, regular reliable supplies and overall process optimisation and

control.

PHILIPPINES:

The Philippines market is valued at about USD 2.7 billion. Lupin's subsidiary,

Multi Care Pharmaceuticals is a premium branded generics company with a strong

position in the women's health and childcare segments. With strength of 165 highly

trained sales personnel, Multi Care has created significant brand equity and a

commendable franchise with the medical fraternity in the Philippines, which is

further augmented by strong distribution alliances. For FY 2010, Multi Care

recorded revenues of PHP 328 million (INR 328 million) More importantly Multi

Care pharmaceutical emerged as the 10th largest and the fastest growing Top 10

generic pharma company in the Philippines.

AUSTRALIA:

With an estimated size of USD 11 billion and a growth rate of around 7% the

Australian market presents a significant opportunity for Lupin. The Australian

Generics industry accounts for around 10 % of the total market. Top selling

medicines expected to go off patent are opening avenues for new business

opportunities. Also, there is active generic substitution by pharmacists and one in

every four prescription presented to pharmacists in Australia is now filled with

Generic medicines.

An ageing Australian population, are an expanding OTC market combined

with almost all citizens being covered by the National Health Insurance further

make this an interesting generic market. It is estimated that over half of the Top

100 selling prescription medicines in Australia are expected to come off patent in

the next 4 years. In a move to consolidate its position, Lupin increased its stake in

Generic Health Pty. Ltd. to 49.9% in FY 2010 from erstwhile 36.6% .

To circumvent the geographic and product portfolio risk, the Company has

ventured into various regions of the world, covering advanced and developing

markets. It aims to capitalise its strengths in API, by converting them into value

added finished dosages for the advanced markets, thereby enhancing product

competitiveness through lower cost. Lupin's traditional strength has been in Anti-

TB segment. To circumvent the risk of over dependence on a few therapeutic

segments, the Company has developed products catering to a wide range of

therapeutic segments.

The long term alliances with leading global players, relationship driven model,

qualitative products manufactured by internationally accredited plants, product

offerings in niche therapeutic segment and value added products, add sustainability

to sales and provide a strong hedge to sales risk.

Lupin consciously adopts the de-risking strategy of having multiple suppliers

of raw materials, services and finished goods such that inability of any supplier

does not affect delivery schedules of quality expectations. The Company has an

effective quality control system to ensure adherence to quality standards.

Through focus on value added generics, accent on introduction of products

based on modified release and NDDS platforms, extending the brand franchise in

Advanced Markets through introduction of line extensions, accent on cost control

through backward integration, timely launches and prudent product selection, the

Company believes that it can limit the risk, of price erosion of generics by

enhancing its competitive position.

To mitigate the regulatory risk Lupin has a dedicated regulatory department

staffed by a competent team, well versed with the diverse regulatory requirements.

The Company hedges its risk from exchange contracts and derivatives. It is also

conscious of its role in protection of environment and has adopted suitable policies

and measures to secure safety and health of the environment in which it operates.

Diversified Portfolio:

According to Naresh Gupta, President API & Global TB section, Lupin

successfully retained its global leadership position in the Anti-TB segment, during

the current fiscal. With products such as Rifampicin, Pyrazinamide and

Ethambutol as well as Cephalosporins such as Cephalexin, Cefaclor and their

Intermediates, the Company has written its success story in the Anti-TB space and

Cephalosporins space for the years to come.5

In 2008-09 two mainstay Cephalosporins intermediates 7 ADCA and 7 ACCA

recorded significant growth in volumes. Further, Lupin continued to remain a

strategic supplier of TB products to the Global Drug Facility (GDF).

Novodigm - A Prominent API/Crams Player in the Making:

The 2008-09 marked the first full year of operations for Lupin's subsidiary,

Novodigm. Despite a global downturn, Lupin has effectively transformed

Novodigm into a profitable entity that is of course a steady and defined growth

path. Novodigm sales doubled during 2008-09.

Having identified products that are growth drivers, Lupin significantly

revamped Novodigm's product portfolio to develop a concerted and differentiated

approach. The Company also infused its expertise at the operational level to

enhance efficiency. With integrated strengths in terms of manufacturing, marketing

and sales, Novodigm is expected to emerge as a prominent API and CRAMS

player in the years to come. A case at hand is Novodigm’s progress in the

Optically Active Building Blocks (OABB) segment during the bygone fiscal, an

amalgamation of assets resulted in a unique and efficient process for the

development of intermediates belonging to the Cetam family.

Lupin has also effectively enhanced the safety, compliance and documentation

standards as well as the GMP practices at Novodigm. Primarily a company that

produces intermediates, Novodigm has upgraded its basket of offering to initiate

the production of new APIs. As a key research asset, Novodigm is also engaging in

5 Lupin Annual Report 2009, P. 44

B 2B opportunities of supplying value added solutions to other pharmaceutical

companies that manufacture finished dosages.

In a bid to chart greater heights in times to come, the Company has a focused

marketing approach for its API business by establishing an on-shore presence in

select geographies in the near future. It plans to launch severd new API Products

along with PZP finished product In a bid to tap into the lucrative Chinese market,

Lupin is exploring strategic joint venture opportunities in China. Lupin's Indian

Formulations business continues to witness exemplary growth, where the

Company continues to outpace and outperform the Indian Pharmaceutical, Market

(IPM). During 2008-09, Lupin's domestic Formulations business recorded sales of

Rs. 11,412 Mn, as compared to Rs. 9,496 Mn (FY 2008-09), registering a growth

of over 20% which was twice that of the IPM, which grew at just 10% (ORG IMS

Man 09). The Company continues to gain at just 10% (ORG IMS Mar 09). The

Company continues to gain wide market acceptance, with most of its flagship

products being market leaders in their respective segments. Six of Lupin's products

are amongst the top 300 brands in the country. Riding high on gains made during

the year, Lupin improved its ranking to No. 5 in the IPM (ORG IMS Mar 09)

moving up one notch from No. 6 in Fy 2007-08. The Company today is the fastest

growing company amongst the top 5in the IPM, with an overall market share of

2.73% (ORG IMS Mar 09)

Top Ten Lupin Brands

PRODUCTS THERAPEUTIC SEGMENT

SEGMENT RANKING

TONACT CVS 2

GLUCONORM ANTI-DIABETIC 3

RCINEX ANTI-TB 1

RABLET GASTRO INTESTINAL 1

AKT ANTI-TB 2

RAMISTAR CVS 2

CLOPITAB CVS 1

L-CIN LEVOFLOXACIN 1

ODOXIL ANTI-INFECTIVE 1

LUPENOX CVS 2

New medicines through Formulation Research:

The Company's expertise in product research has translated into accelerated

regulatory filings. Barely four years from the initial filing of 2 and as in FY 2002,

Lupin has come a long way in producing tangible results in expanding its generics

dosages portfolio. The Company not only succeeded in ramping up the number of

regulatory filings, but also developed expertise to penetrate newer geographies,

hitherto unexplored due to complex regulatory requirements.6

Through the NDDS route, it aims to move up the value chain by offering value

added products for our branded initiatives as well as for licensing our. The

Company has already created capabilities in oral controlled release systems that

would help delivering products offering convenience and patient compliance,

which helps reduce the risk of drug resistance. It has created a dedicated

'Innovation Cell' to focus on this section of its research.

While Lupin has created capabilities in controlled release systems, which is the

biggest space in drug delivery, the aim is to move up the value chain beyond

6 Lupin Limited Annual Report 2005-06 P. 38

controlled release to other delivery systems, through the Innovation Cell. The

creation of intellectual property through New Chemical Entity (NCE) research is

one of the pillars of the Company's strategic growth plans and it has the distinction

of having four NCE molecules in various stages of clinical trials, addressing three

different disease areas of Migraine Psoriasis and Tuberculosis. The Company has

further advanced on its programmes in the areas of Diabetes (Synthetic & Herbal),

Anti-bacterial & Rheumatoid arthritis.

IN- LICENSING:

Partnership and in-licensing arrangements are integral to the Company's India

Region Formulations growth strategy. Successful in-licensing deals have enabled

Lupin to emerge as the 'first-to-market' for several important products.

Recognising the importance of in-licensing to its growth objectives, the Company

has set up a dedicated team to identify and pursue novel and potential in-licensing

opportunities.

In the last few years, the Company has introduced 19 in-licensed products and

of these, 6 products were first of their kind to be introduced into the Indian market.

During FY 2010, five in-licensed products were launched covering the

Gynaecology, Arthritic, Anti-Asthmatic and the Anti-Phrombotics segments.

Lupin within the Medical Community:

Lupin has always focused on working with the medical fraternity to creating

knowledge sharing platforms to keep them abreast of the latest technological

advances and breakthroughs. 2010 marks the 5th year of the acclaimed

International Symposium on Diabetes (ISD), a Platform created by Lupin in

association with faculty from the JOSLIN Diabetes Centre, USA. ISD continues to

be the largest platform for Indian doctors to exchange and share thoughts with

renowned Diabetologists from the Joslin Diabetes Centre. The event is attended by

up to 5,00 doctors from across India. The Symposium clearly highlights Lupin's

endeavor in keeping doctors abreast the latest developments and practices in

medical science. Lupin was the first to enable Indian doctors to tap into the vast

knowledge resource of Global medical institutions such as the European

Neurological Society (ENS) and the American college of Cardiology (ACC).

Novel Drug Discovery And Development:

The essence and the soul of Lupin's vision in the Novel Drug Discovery and

Development (NDDD) space is to discover, develop, out-license and

commercialise novel drugs that address disease areas with significant unmet

medical need. Having made its mark in the Generics space, the Company has

consistently invested in NDDD over the last few years to make a similar impact in

this field. The Company is in the process of creating new molecular entities for

accelerated development in identified markets globally. These novel products

would utilise Lupin's newly acquired strengths in drug discovery and development

complemented by Lupin's drug delivery expertise. A slew of such exclusive

products will provide the bridge for the Company's transition from a generic

powerhouse to an innovative drug discovery and development organisation. During

FY 2010, the Company completed its overhaul of the NDDD setup. Lupin has now

built very sophisticated infrastructure, has acquired cutting-edge technologies and

has built the right pool of talented scientists with the necessary skillsets to make

this endeavor a success. It has identified molecular targets from which 9 new

research programs have been initiated. In FY 2010, the Company created a new

Medicinal Research facility at Hinjewadi, in Pune. It also initiated the validation of

its new biology facility at Lupin Research Park, where highly sophisticated robotic

'FLIPR' Functional Assaying machines and high Throughput Screening (HTS)

capacities were also commissioned. Proud of these successes Dr. Rajender

Kamboj, President of Drug division has declared. "Our goal is to be world class in

any of the therapy and target areas that we work in”.7

Therapy Segments:

As a result lupin's growth rate has been remarkable shown below.

Therapeutic Segments Market Growth Lupin Growth

Rate (%) Rate (%)

CVS 20 20

Anti Tb -2 7

Anti Asthma 21 34

Anti Infective 15 15

GI 17 20

CNS 20 36

Anti Diabetic 24 44 (ORG

IMS Mar 10)

Industry: During FY, 2010 Lupin continued to witness growth across all key

business divisions and therapy segments. Some of these segments are:

Lupin Respira:

The Company's entry into Anti-Asthma, Allergy and Respiratory Tract

Infections and COPD Medicine is spearheaded by the Lupin Respira division. With

eight new brands launched in FY 2010, it continues to garner market share in the

Indian Anti-Asthma Market, registering a growth of 34% in FY 2010 as against the

Market growth of 21%.

7 Lupin Annual Report 2010, P.39

Pinnacle CVS:

Lupin's specialised division that focuses on the Cardiac market continued to

post strong results growing at 20% in FY 2010 commanding a 5.2% share of the

overall Indian Cardiac market. The division also launched a neutraceutical in the

year, Harty (Resveratrol). Five new brand were launched during FY 2010,

Lupin Diabetes Care:

The Diabetes Care division posted yet another year of exemplary growth

garnering 3.3% market share of the overall Indian diabetes market. In FY 2010, the

Company's Diabetes business grew at 44% as against the Industry growth rate of

around 24 %. Lupin is ranked 8th overall in the (Oral+Insulin) diabetic market

growing at twice the market rate. The division launched two new brands during FY

2010.

Lupin Femina:

The Lupin Femina division was launched in FY 2009 to spearhead the

Company's entry into the women's health care segment. Lupin Femina registered a

dynamic growth of 134% and launched seven new brands during FY 2010. Lupin

Femina also launched two in-licensed products in the Gynaecology segment during

the year, namely Faa-20 and luprolide

Endeavour:

This multi-specialty division is responsible for the Anti-infective and

Cephalosporin business for Lupin. It focuses on acute therapy areas with a product

portfolio comprising Antibiotics, pain management, Gastrointestinal and Anti-

osteoporosis products. Lupin grew at an outstanding rate of 20% in the GI space in

Fy 2010. Lupin's Anti-infective business in India grew by 15 % in the same

timeframe. Endeavour made a strategic entry into the anti-arthritic segment with

the launch of its first in-licensed brand Hyalgan for Osteoarthritis. Hyalgan is a

research product of Fidia, Italy.

Maxter:

One of the youngest division within Lupin's India formulations business. It

focuses on the Critical Care segment as well as making inroads into the field of

Wound Management. Some of Maxter's products like Tazar and Merotrol are

market leaders in their categories. Maxter is the fastest growing player in the

critical-care segment with special focus on high-end injectables as well as other

life-saving medicines and products. The division recorded a growth rate of 11% in

FY 2010.

Lupin CVN:

2010, witnessed the launch of Lupin CVN, Lupin's Super Speciality Division

catering to the nenphrology segment. Already 7 of 11 Lupin CVN brands feature in

the market.

Endeavor:

A multi-specialty division-this division is responsible for driving the Anti-

infectives and Cephalosporin Business for Lupin within the IPM. It focuses on

acute therapy areas with a product portfolio comprising Antibiotics, pain

management, Gastrointestinal; Anti Osteoporosis products Lupin grew at an

outstanding rate of 30.4% in the GI space, whereas the market grew by just 8.2%

in FY 2008-09. Lupin's Anti-infective business in India grew by 22.1% as against a

market growth rate of just 9.8% (ORG IMS Mar 09).

Lupin:

Responsible for the Company's focus on the semi-acute therapy, Lupin

continues to maintain market leadership status in the Anti TB segment, with an

overall market share of 48.3% (ORG IMS Mar 09),

Maxter:

One of the youngest divisions within Lupin's India Formulations business, this

division focuses on the Critical Care segment of the IPM and has also made a foray

into the field of Wound management. Some of Maxter's products like Tazar

(piperacilin Tazobactam) and merotrol (Meropenem) are market leaders in their

categories already. (ORG IMS Mar 09).

INCREASED PRODUCT OFFERINGS:

The Company brought as many as 54 new products into the market in FY

2008-09. These have the potential to be accountable for significant growth and

market share gain in the years to come.

Segments in Which Lupin Outperformed the Market

Therapeutic Market Growth

Rate (%)

Lupin Growth

rate (%)

CVS 13.2 25.5

Anti-TB -5.9 5.6

Anti-Asthma 13.1 48.8

Anti Infective 9.8 22.1

GI 8.2 30.4

CNS 10.4 48.7

Anti-Diabetic 16.7 53.0

AN EXPANDING PASSIONATE FIELD FORCE:

As part of its sales strategy to enhance market reach and penetration, the

Company has augmented its field staff to over 3,000 medical representatives. The

Company conducts extensive training programs at the induction as well as

refresher levels. As a result, Lupin's India sales and marketing personnel have

adopted a more consultative approach towards the medical fraternity. Replete with

up-to date medical and technical knowledge, the Company's competent, credible

field force has emerged as a qualitative differentiator in the marketplace. A well-

trained field force has succeeded in adding depth as well as reach to Lupin's

Formulations business.

IN-LICENSING-THE WAY AHEAD:

Partnership and in-licensing arrangements are integral to the Company's

growth strategy. Successful in-licensing deals have enabled Lupin to emerge as the

first-to-market' company when introducing several new drugs from different

corners of the world, ensuring that the Indian marketplace has access to some of

the latest and best healthcare options. Recognising the importance of in-licensing

to its growth objectives, the Company has set up a dedicated team to identify and

pursue novel and potential in-licensing opportunities. In the last three years, the

Company has introduced 12in-licensed products of these , 5 products were the first

to be introduced to the Indian markets. The Company successfully launched

Lupisulin (Recombinant DNA Human Insulin), Ismigen (Polyvalent Mechanical

Bacterial Lysate), and Faximab (Abciximab) in Fy 2008-09.

FY 2010 saw the addition of development in new therapeutic areas such as

Ophthalmics, not to mention the Company expanding the number of filings for oral

contraceptives to 23 ANDAs to date. Furthermore, the cumulative first-to-file and

exclusive opportunities now stand at 12.

ADVANCED DRUG DELIVERY SYSTEMS:

The Advanced Drug delivery Systems (ADDS) initiative has emerged as a key

growth driver within the Company's R&D program. Over the last 5 years, Lupin

has made strategic investments towards strengthening its ADDS research

capabilities. FY 2010 was a landmark year primarily because Lupin successfully

out-licensed its proprietary drug delivery technology based Rifaximin product to

Salix Pharmaceuticals for the US Market. Lupin and Salix entered into an

agreement under which the two companies will collaborate in the development and

commercialisation of an extended release product incorporating Rifaximin and

utilizing Lupin's proprietary bioadhesive technology. Lupin and salix have also

entered into an exclusive agreement for supply of Rifaximin Active

Pharmaceutical Ingredient (API). Salix made a USD 5 million up-front payment to

Lupin and will make additional regulatory milestone payments. Furthermore, Salix

will pay royalties on net sales of the bioadhesive Rifaximin product to Lupin.

This alliance further validates Lupin's growing capabilities in the drug delivery

space. The Company now has a host of drug delivery platforms that have already

been developed. These include.

* Bio-adhesive Extended Release

* Laser-drilled Extended Release

* Matrix/Coated Extended Release

* Taste Masking Technologies

* Improved Bioavailability through Solubilisation and Nano- particle

technology.

As part of its current strategy, the Company aims to license its ADDS products

to innovator companies whilst also developing niche brands for itself.

ANALYTICAL RESEARCH:

The Analytical Research Group ensures that all processes and products

transferred to Lupin's plants meet regulatory requirements and expectations

through the development and validation of the right testing methods. LRP houses a

sophisticated analytical facility supporting both process Research and

pharmaceutical Research. The facility is also equipped to study physical properties

such as polymorphism in both, API and drug products, using powder X-ray

Diffraction, Solid State NMR and Differential Scanning Calorimetry. Additionally,

isolation/synthesis and characterisation of impurities in APIs and drug products is

conducted with the latest LC/MS-MS systems and automated preparative HPLC

techniques and instrumentation.

LUPIN BIO RESEARCH CENTER:

Lupin Bioresearch Center (LBC) was started early in 2009 and has both

Clinical and Bioanalytical capabilities. LBC successfully completed 31 full studies

in FY 2010. This independent center in Pashan, Pune, houses 2 clinics with a total

of 56 beds, a bioanalytical lab with 7 state-of-the-art LC/MS-MS systems and its

own clinical chemistry lab amongst several other capabilities. 2010 was a record

year for the Company's generics process research program. During the Year, the

Company filed 19US DMF filings taking the cumulative total to 104 DMF filings

and 118 EDMFs/ CoSs, featuring several unique and complex APls. The last three

years have been landmark years for Lupin in the generic Pharmaceutical Research.

In Fy 2010, Lupin Pharmaceutical research Group filed 37 Abbreviated New Drug

Applications (ANDAs) with the United States Food and Drug Administration.

Lupin not only registered one of the highest number of ANDA filings amongst its

Indian peers but also emerged as one of the Top 10 ANDA filers globally. The

cumulative number of ANDA filings now stands at 127 with 40 approvals,

including 6 tentative approvals granted by the US FDA to date. The Total

cumulative filings within the EU stands at 65, with 31 total approvals. The NDDD

Research group is committed to creating innovative new drug molecules that will

change the way dozens of diseases have been treated so far. Working with a

targeted drug design approach with proven biological mechanisms that alter

disease process will be a sure-fire recipe for success in this otherwise high-risk,

capital intensive field.

BIO TECHNOLOGY RESEARCH:

The vision of the Biotechnology Research group based out of Pune is to

develop and commercialise Bio-Similar and New Biological Entities for the

Company. Lupin's state-of-the-art Biotech research & Manufacturing facility has

already been approved by the Institutional Bio Safety Committee (IBSC) for

research on recombinant DNA. Furthermore, This facility has also been accredited

as a Biotech Centre by the Bioinformatic Centre of the University of Pune. Today,

Lupin has 7 proteins in different stages of development.

In FY 2010, the Company commissioned cGMP facilities for microbial as well

as mammalian cultures. The Company has also filed 5 patents for the technologies

developed in-house and published 6 research articles last year. Lupin is now

looking to launch its first Biological in the Indian market in 2011. It is also

exploring collaborative opportunities in the field of new biological formulations

and New Biological Entities.

TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT

(R&D):

Specific areas in which R&D was carried out by Company:

The state-of -the-art Research park at Pune was at the epicentre of the

Company's R&D initiatives which focussed broadly on Generics Research

comprising Process and Formulations Research, Advanced Drug Delivery Systems

(ADDS), Novel Drug Discovery and Development (NDDD) and Biotechnology

Research. It was a prolific year for generics process research programmes wherein

focus was on process and formulations research. The ADDS program emerged as a

key growth driver and area of strategic focus within the overall R&D program.

With significant investments being channelised towards strengthening its ADDS

research capabilities, different drug delivery platforms were developed. Bio-

adhesive and gastro retentive technologies were deployed in building unique

products, based on which, differentiated extended release products are currently in

advanced stages of development. There was a strong accent on controlled release

and exclusive, unique first-to-file niche fillings. The Company's state-of-the-art

Biotech research & manufacturing facility has been approved by the Institutional

Bio Safety Committee for research on recombinant DNA and also accredited as a

Biotech Centre by the Bioinformatics Centre of the University of Pune. Lupin Bio

Research Center's (LBC) state-of-the-art CGCP and CGLP facilities for Bio-

Availability and Bio-Equivalence (BA/BE) Clinical studies spread over 23500

square feet with a capacity of 56 beds, become fully operational. The said facility

carries out pilot and pivotal BE and Clinical end-point studies, including

inspections. DCGI DSIR and NABL pre-assessments. Necessary infrastructure was

built and pre-requisite technologies and skill-sets acquired. Targets were identified

research programs initiated and back-up programs evaluated for prospective

research areas. The medicinal chemistry facility was activated which would

ascertain the rationale, feasibility, IP Commercial potentials for clearly defining

milestones and decisions. Validation process for the new biology facility was

initiated where, highly sophisticated robotic Functional Assaying machines and

high Throughput Screening Capacities were commissioned.

Benefits derived as a result of the above R&D:

The company emerged as one of the top 10 ANDA filers in the US market.

During the year, the Company filed 19 US DMFs taking the cumulative total to

104 and 4 EDMFs/ AU DMFs, featuring several unique and complex APIs such as

Prostaglandins for Oral Contraceptives. The formulations research group filed 37

Abbreviated New Drug Applications (ANDAs) with the USFDA and received 7

approvals, out of which 3 were tentative approval. The cumulative number of

ANDA filings stands at 127, with 40 approvals, including 6 tentative approvals till

date. The total cumulative filing within the EU stands at 65, with 31 approvals till

date. Filings were made in new therapeutic areas such as Opthalmics and

Dermatology in addition to expanding the number of filings for Oral

Contraceptives to 22 ANDAs till date. The Cumulative first-to-file and exclusive

opportunities now stand at 12. The company successfully out licensed its Bio-

adhesive Technology platform to Salix Pharmaceutical, a US major for use with

Rifaximin. This validates the investment that the Company made in the ADDS

program over the years as also it's growing capabilities in the drug delivery space.

The Company filed 26 Fromulations patents, 84 API/ Process patents and 14 NCE

patents. Approvals were received for 4 Formulations patents and 31 NCE patents.

The Company has filed 5 Patents for the technologies developed by bio-technology

research and published 6 research articles. The Company has a pipeline on 4

Investigational New Drugs for addressing migraine, Psoriasis and Tuberculosis and

the same remain in various phases of clinical development.

Future Plan of action:

Efforts are being directed towards developing, discovering and

commercializing novel drugs to address disease areas with significant unmet

medical need. The Company plans to launch its first Biological in the Indian

market and is exploring collaborative opportunities in the field of new biological

formulations and biological entities. The Company aims to license its ADDS

products to innovator companies whilst also developing niche brands for itself.

Plans are afoot to commission CGMP facilities for microbial as well as

mammalian suites.

Research and development:

2010, was a landmark year for Research and Development at Lupin’s Research

program not only witnessed heightened activity but also gathered momentum

across the entire R&D value chain, be it intellectual Property Management,

Generics Research, Advanced Drug Delivery Systems Research, the newly recast

Novel Drug Discovery and Development Program or the Company’s

Biotechnology Research. The state-of-the-art Lupin Research Park at Pune,

Lupin’s global R&D hub, was the epicenter of all these rapid changes as the Group

went about creating new infrastructure and launching new development initiatives

and programs. Lupin Research Park today houses a pool of over 800 scientists,

compared to 550 research scientists last year. During FY 2010, the Company

invested 8.7% of its net sales for R&D and related spends, amounting to INR 4,119

million. Lupin Research and Development covers the following broad areas:

* Generics Research

Process Research

Pharmaceutical Research

* Advanced Drug Delivery Systems (ADDS) Research

* Intellectual Property Management

* Novel Drug Discovery and Development (NDDD)

* Biotechnology Research

In 2010, the Company's Research Program was firing on all cylinders. The

Group filed an unprecedented 37 ANDAs, 19 DMFs and 11 European applications.

The Company also licensed out its drug delivery technology based Rifaximin

product to Salix pharmaceuticals for the US. The Company also completed the

restructuring and staffing of its Novel Drug Discovery and Development Program.

GENERICS RESEARCH:

Lupin's Generic Research program develops APIs and Pharmaceutical Products

for US, Europe, Japan and other Advanced Markets. The Program comprises

process Research, Pharmaceutical Research, Analytical support and Bio-Clinical

Research.

INTELLECTUAL PROPERTY MANAGEMENT:

Lupin's Intellectual Property Group identifies new therapy areas and products

for the Company's research to develop. Working in conjunction with the research

teams, marketing as well-as external agencies it puts in place a well differentiated,

high-value product pipeline, with a strong accent on controlled release, exclusive

and unique first-to-file filings.

During FY 2010, the Company filed a record 37 New drug Applications

(ANDAs), with as many as 4 first-to- file opportunities with the US. The Company

had 4 first to-files for the generic versions of Glumetza®, LO Seasonique®,

Ciprofloxacin® and Ranexa® Lupin has 55 Para IV Filings with the US FDA so

far, out of which 24 were filed during FY 2010. Furthermore, the cumulative first-

to-file and exclusive opportunities now stand at 12. In FY 2010, Lupin also sold its

first-to-file ANDA for the generic version of Antara® (Fenofibrate tablets) to Dr.

Reddy's before acquiring the brand Antara® from Oscient Pharmaceutical in the

US. The Company's Ip group is also responsible for protecting the intellectual

wealth generated by the Company's research in addition to leading patent

challenges across the globe.

In 2010 the Company demonstrated its capabilities on the Intellectual Property

front by successfully settling all ongoing litigation with Novartis on Lotrel®

(Benazepril/Amlodipine) capsules and then launching the product in the American

Market. The Company successfully litigated and settled all ongoing litigation

relating to Memantine tablets, Lupin's generic version of Forest Laboratories Inc's

Alzheimer disease treatment "Namenda® Tablets. Namenda® tablets have US

sales of USD 949 million on 2009 (IMS Data). Lupin and Natco limited

established an alliance to jointly commercialise generic equivalents of Shire Plc's

FOSRENOL® (Lanthanum Carbonate) tablets. Natco is one of the first-to-files on

the product. Fosrenol® tablets achieved sales of USD 131 million (IMS Data).

During the course of the year, Lupin filed 26 Formulation patents, 84 API/Process

patents and 14 NCE patents. It also received approval for 4 Formulation patents

and more importantly 31 NCE Patents.

LUPIN AND THE MEDICAL COMMUNITY PARTNERS IN PROGRESS:

Lupin has always focused on building its relationship with the medical

fraternity by creating knowledge sharing Platforms to keep them abreast with

advantages and breakthroughs in the medical world. FY 2008-09 marks the fourth

year of the acclaimed International Symposium on Diabetes (ISD), a Platform

created by Lupin in association with visiting faculties from the renowned JOSLIN

Diabetes Centre, USA. Year after year, ISD continues to achieve its objective of

providing a platfrom for doctors to exchange their thoughts and listen to some of

the world-renowned Diabetologists from the Joslin Diabetes Centre. The event is

attended by as many as 5,000 doctors from across the country. The Symposium

clearly accentuates the quality and inputs Lupin has imparted into the marketplace

in terms of keeping doctors abreast with the latest developments and practices in

medical science. Additionally, Lupin has been the first company to enable Indian

doctors to tap into the vast knowledge resource of institutions such as the European

Neurological Society (ENS) and the American college of Cardiology (ACC).

Lupin's Joint Airway Initiative (JAI) is aimed at disseminating Knowledge

about Asthma and Chronic Obstructive Pulmonary Disease (COPD). Under this

initiative, the Company conducts free diagnostic campus to detect asthma and

COPD and also spreads awareness through mass media.

Human Resources:

At the very heart of Lupin and our phenomenal growth story is our biggest-our

people.

We are proud of their passion and commitment to the company and the

alignment of their aspirations and dreams to our shared vision. Our growth and

successes are met equally by even greater steps to ensure that we not only comply

but lead in areas of processes and human relations to unleash and harness

innovation at every level within the organisation. It is the behavior of our

leadership team and our people, their shared wisdom, which has gone into creating

the business democracy that is Lupin-a Company where entrepreneurship and

innovation thrive.

As a closely knit team of over 10,500 employees globally, we have

outperformed the Industry over the last 6 years. It is against this backdrop that the

Human resources founction assumes a strategic and critical role. HR has gone

beyond traditional employee engagement talent and leadership internally, but also

develops platforms that help identify potential talent by creating opportunities to

learn, perform and succeed.8

NURTURING LEADERSHIP:

Through customised training programs, Lupin has today ensured the creation

of a reservoir of leaders. During the last financial year, Learning and Development

was focused on creating world-Class development opportunities and provided

inputs for the largest ever number of employees across location levels, functions

and geographies. Team capabilities were also strengthened through collective

experience based training programs. Lupins strategic tie-ups with leading

management institutes such as IIM Ahmedabad, NMIMS Mumbai and leading

technology institutions such as the Birla institute of Technology and Science (BITS

Pilani), University of Pune and Manipal University helped our employees pursue

their academic interests concurrently while working at Lupin.

Managing Multiculturalism:

Managing a diverse workforce is no longer a choice but an imperative. In an

age of cultural Pluralism, Multiculturalism is needed to manage diversity

effectively. Lupin realises that managing diversity means acknowledging people's

differences and recognising differences as valuable. This enhances good

management practices by preventing discrimination and promoting inclusiveness.

8 Lupin Annual Report 2010, P.43

It stems from an understanding that we all operate on a single stage. The goal has

been to create a workplace that truly values diversity. a workplace built around the

core values of meritocracy and innovation. There has been a visible rise in the

number of women professionals in core of the Company such as R&D, Regulatory

and Quality Compliance. The Company has also set up management and

leadership programs to help promote talent within the women workforce of the

organisation. Today, around 18% of Lupin's worldwide workforce are women, one

of the highest in the generic pharmaceutical industry up from 6% in 2004.

The agenda now is to enhance mindsets that enable our people to consistently

think global and act local structured well designed induction program aimed at

mentoring new employees for their effective settling-in and assimilation of our

corporate values are in place. These programs ensure that every employee is not

only clear about their role and expected contribution but also aligned to the overall

corporate growth objectives. Today, HR has become a critical catalyst for

continuous transformation during a phase of rapid growth and transition shaping

not only processes, people and mindsets, but creating a culture that typifies Lupin

and unleashes innovation at every level within the organisation

INFORMATION TECHNOLOGY:

During FY 2010, Lupin invested in upgrading its SAP and Business

Intelligence platforms. With the new upgraded Enterprise Resource Planning

system in place, the Company is well equipped to leverage its existing technology

investments to ensure operational and transactional control and compliance across

the organization. . The new systems are expected to create a global standardised,

scalable and flexible platform for Lupin's global supply chain program and would

help achieve operational efficiencies to support the Company's growth objectives

globally.

RISKS CONCERNS & THREATS:

Over the Years, the Company has consciously adopted prudent risk

management measures and practices to mitigate environmental, Operational and

business risks. The Company believes that it has the requisite competencies to

handle varied risks and is continually evolving proactive strategies to counter

them.

Price erosion within the global generic markets is one of the key threats faced

by all generic players. Due to its vertically integrated model, in which the

Company's strengths in API and Intermediates play a crucial role in maintaining

the competitive position of its Formulation products, and our focus on value added

products. Lupin is well positioned to thrive in a highly competitive environment,

consistently gaining market share and enjoying quality earnings. Lupin's

acquisition philosophy is predicated on the need to enter into certain markets

which are of strategic interest. The acquisitions have been carried through in such a

way that there were no disruptions to extant managements. All our acquisitions

were well evaluated and deliberated internally and were prudent in terms of

outlays. The Drug Price Control Order (DPCO) continues to challenge the entire

Indian Pharmaceutical Industry. However over the years, Lupin's basket of

products and the chosen markets and segments it operates in, have meant that

DPCO directives are becoming increasingly less material to the overall business of

the Company. The Volatility in Pen G prices, a Key raw material input to APIs, is

a recurring phenomenon stemming from the vagaries in the supply and demand

positions with primarily Chinese manufacturers. These situations tend to be short

term in nature, nevertheless contribute to the volatility in the price movement of

this key input. Over the years, the Company has gained experience and expertise in

dealing with such volatility and mitigating its impact on the business.

It has been seen recently that regulatory authorities globally are becoming

more vigilant on pharmaceutical players with respect to compliance to standards

and regulations. Lupin believes in being compliant in all respects at all times. The

Company takes all its compliance requirements extremely seriously and maintains

rigorous systems to withstand scrutiny at all times. Lupin is committed to doing

whatever is necessary to meet and exceed norms laid by global regulatory

authorities.

Quality & regulatory Compliance:

Lupin has always identified Quality and Regulatory Compliance as a true

enabler and the critical differentiator between market leader and the rest-the

mainstay of long-term competitiveness over the years; we have built and nurtured

an environment around deep respect for quality and compliance, in line with global

best practices. We believe that quality not only has to be embedded in the product

but into the very way an employee thinks and works. This instills and engineers

quality and compliance into the culture of the organisation. Today, this culture is

ingrained in the Lupin Brand DNA and embraced by all Lupin personnel. FY 2010

was a landmark year for Lupin in terms of Quality and Compliance. Lupin

received official communication from the US FDA on the satisfactory resolution of

the Warning Letter issued earlier to its Mandideep site. The facility was re-

inspected in November 2009 and the Company was able to satisfactorily address

all of the concerns related to the Warning Letter and the site compliance status

was found to be acceptable. Earlier in the year, the UK MHRA and the Australian

TGA conducted a joint inspection of the Mandideep facility and found it

acceptable as well. The US FDA also inspected two new sites of the Company at

Aurangabad (Liquids) & Indore (Oral Solids and Oral Contraceptives). Both

inspections were found acceptable and these inspections bring the Company a step

closer to launching Liquids and Oral Contraceptives in the US. In addition, the

Company's Tarapur and Goa facilities were inspected by the US FDA in 2009 and

found acceptable. Goa was re-inspected in early 2010 by the US FDA and again

found to be compliant. Lupin's API Plant at Tarapur was also audited by the UK

MHRA and found to be compliant with c GMP.

2010 also saw the introduction of Lupin's Global pharmacovigilance Cell.

Pharmacovigilance involves the monitoring of the safety profile of medicinal

products form clinical trials to the pre-marketing period, when the drug is

introduced to the general population and thereafter-it continues throughout the life

cycle of the product. The aim of Pharmacovigilance is to protect and safeguard

public health by identifying, evaluating and minimising safety issues to ensure that

the overall benefits of medicines for outweigh the risks.

A dedicated global QC team spread across all manufacturing locations,

globally, is engaged in driving the quality philosophy of the organization. The

team also develops and implements the Quality policy and Guidelines for Key

systems and processes within the Company. Corporate Quality Assurance is

enforced and supported by a team of over 700 personnel comprising the quality

and regulatory functions at all Lupin sites

Financial Performance:

Come a long way from being a manufacturer and supplier of APIs, to

becoming a fully integrated global pharmaceutical company recent year have been

momentous landmark in Lupin journey. Impressive growth, noteworthy profits and

meaningful acquisitions- 2007-08 witnessed it all to aptly qualify as an action

packed year.

Lupin closed the year 2007-08 with Consolidated Revenues at (Rs. 27,730 Mn

717 Mn-FY 2006-07) recording a growth of 34% its consolidated Net profit for the

year increased by 32% to Rs. 4,083 Mn (Rs. 3,086 Mn-FY 2006-07). This year's

performance was driven by all round robust growth recorded by each of the

Company's business segments. The US as well as India business in particular were

significant growth drivers in last five years.

Financial situation 2010:

Lupin has shown a sound financial situation in last several years.9

It scaled newer heights and benchmarks in terms of sales and profits of the

Year ended march 31, 2010. Consolidated sales at Rs. 47678.4 mn., grew by 25%

over Rs. 38237.8 mn. of the previous year. International markets accounted for

67% of the revenues. Net Profit at Rs. 6816.3 mn., as against Rs. 5015.4 mn,

registered a growth of 36%. Earning per share was higher at Rs. 79.18 as compared

with Rs. 60.84 for the previous year.

Share Capital:

In 2010, the paid-up equity share capital of the Company rose by Rs. 61.2 mn,

Consequent to:-

(a) Allotment of 5816742 equity shares of Rs. 10/- each upon conversion

of foreign currency convertible bonds aggregating Us $ 17.3 mn and

9 Lupin Annual Report 2010, P.55

(b) Allotment of 307541 equity shares of Rs. 10/- each to eligible

employees under the 'Lupin Employees Stock option plan 2003, Lupin Employees

stock option plan 2005 and Lupin subsidiary employees stock option plan 2005.

Share Holders:

Over 4600 of Lupin’s shareholders come from nearly all states of India. In 2010 they received Rs.

13.5 per equity share absolving Rs. 1400 mn. The following tables give a detailed of their profile.10

Shareholding Profile

10

Lupin Report 2010, P.76

Geographical presence of shareholders as on March 31, 2010

Dividend Profile

Net Profit:

In 2010 Lupin recorded on operating profit before working capital changes of Rs. 8023 mn, up 26%

from previous year. The net cash generated was Rs. 5325 mn, up 25% Cash flow statement11

from the

previous year.

11

Lupin Report 2010, P.86

Consolidated Profit and Loss Account:

A five year statement of consolidated profit and loss is given below to show Lupin’s steady growth

in recent years.12

12

Lupin Report 2010, P.53

ADDITIONAL FINANCIAL STATES:

Sub-division of Shares:

In 2010 The Board of Directors recommended the sub-division of one share of

the face value of Rs. 10/- each into five shares of the value of Rs.2/- each.

Foreign Currency Covertible bonds (FCCBs):

Of the FCCBs of US $ 100 mn., issued by the Company in january 2006,

Bonds aggregating US $ 98.6 mn., were converted (including Bonds of US $ 71.3

mn. during the year) at a pre-determined price of Rs. 567.04 per share in

accordance with the terms of the issue. The balance FCCBs for US $ 1.4mn., were

redeemed during the year. There are no Bonds outstanding as on March 31, 2010.

Credit Rating:

ICRA Limited reaffirmed its "A1+" (pronounced A one plus) rating for your

company's short-term debt (including Commercial paper) Programme of Rs. 2500

mn. This rating is the highest-credit-quality rating assigned by ICRA for such

borrowings.

ICRA Limited assigned "LAA+" (pronounced" L Double A Plus") rating for

your Company's Non Convertible Debenture programme of Rs. 5000 mn. This

rating is the high-credit-quality rating assigned by ICRA for long-term debt

instruments.

Subsidiary Companies:

As on March 31, 2010 the company had 14 subsidiaries. During the year,

Lupin (Europe) Ltd. U.K. and Lupin Pharma Canada Ltd. Canada were

incorporated on June 5, 2009 and june 18, 2009 respectively. Lupin Holdings,

B.V., the Netherlands transferred its holdings in Max Pharma Pty. Ltd. Australia, a

wholly-owned subsidiary of the Company to Generic Health Pty. Ltd. Australia, an

associate of the Company upon which Max Pharma Pty. Ltd. ceased to be a

subsidiary of the company w.e.f. May 31, 2009.

Amalgamation:

With a view to achieving synergies of operations, optimum utilisation of

resources and control costs, the Board of Directors decided to amalgamate

Novodigm Ltd., Lupin Pharma care Ltd. and Lupin Herbal Ltd. (wholly-owned

subsidiaries of the Company) with Lupin Limited w.e.f. April 1, 2009 i.e. 'the

Appointed Date'.

The Hon' ble high Court of judicature at Bombay, by its Order dated January 8,

2010, sanctioned the scheme of amalgamation between Lupin Pharmacare Ltd. and

Lupin Herbal Ltd. with the Company subject to the order to be passed by the High

Court of Gujarat sanctioning the scheme of amalgamation between Novodigm Ltd.

HEALTHY CASH FLOWS & EFFECTIVE RESOURCE PLANNING:

Despite spending on brand acquisitions in the US and capacity expansions in

most of its facilities in addition to creating several new plants during the year, the

cash flow position of the Company remains healthy. Thanks to judicious financial

planning, the ability of the Company to raise credit remains unparalleled. Lupin's

short-term debt program continues to receive the highest rating from ICRA. In fact,

Subsequent to the global financial meltdown, Lupin's FCCB bonds were amongst

the few that continued to be quoted well above par, and all the residual bonds have

been already redeemed or converted into shares. In 2010 the Net Working Capital

increased by only 4% whilst the sales of the Company increased by 25%. The

working capital optimisation exercise that we have currently undertaken will yield

even greater results in the days to come. Overall interest payments were INR 385

million for FY 2010, reflecting an average cost of borrowing of 4% for the year.

The total debt at the year-end stood at INR 11,399 million and the Debt Equity

Ratio improved to 0.44 as on 31 st March 2010 from 0.62 as on 31st March 2009.

CAPITAL EXPENDITURE:

During 2010, the Company invested INR 4,433 million on capital expenditure.

The Company has set up multiple new API plants and a new ophtal formulation

facility.

DIVIDENDS AND TAXATION:

The Company recorded Earnings per Share of INR 79.18 during 2010, up 30%

from the previous year. The Board recommended a dividend of 135%, an

aggregate amount of INR 1,400 million, inclusive of tax on Dividend. This record

step-up in the dividend rate is strong indicator of the confidence that the Board of

Directors have in the financial strength of the Company. The Company has

implemented several tax saving initiatives to optimise its taxation in various parts

of the world. In the Indian context, the aggregate tax obligations of the Company

were lower as compared to the previous year due to higher turnovers from Tax

exempt production zones. The effective tax rate for the consolidated financials for

FY 2010 was 16%.

The Company has increased its reserves and surplus by INR 11,369 million to

INR 24,789 million during FY 2010.

INTERNAL CONTROL SYSTEMS:

The Company has in place sound internal control systems commensurate to its

size, scale of business and complexity of operations. Clearly defined policies,

procedures and inbuilt checks and controls, supplement the internal control

procedures. A well established and empowered system of internal audits and

control procedures independently reviews the financial and operational controls

and reports deviations, if any.

Corporate Social Obligation:

Over the years, The Lupin Human Welfare & Research Foundation (LHWRF)

has been successful in creating and undertaking well-planned sustainable and

integrated rural development programs-social and economic initiative that continue

to touch and transform the lives of over two millions rural folk in over 2,200

villages spread across 4 states in India-Rajasthan, Madhya pradesh, Maharashtra

and Uttarakhand. The Foundation through its work has emerged as a social and

economic catalyst empowering rural communities.

The Foundation continues to work on enriching the lives of the poorest of the

poor. Our focus is on uplifting people and families below the poverty line as well

as women empowerment. Today, as many as 56,000 families are covered under the

aegis of the Foundation through agriculture, animal husbandry and the rural

industry activities of LHWRF.

ECONOMIC DEVELOPMENT:

LHWRF's principal focus is on creating employment and employability by

imparting skills and creating programs that would create job opportunities -

specifically for the youth and women. During FY 2010, the Foundation worked on

strengthening areas like agriculture and animal husbandry by working on programs

that would yield higher output and offer value addition to help improve the overall

economic retaliation of the rural communities. The Foundation also emphasised on

promoting secondary occupations such as the local cottage industry, handicrafts

and services sector by creating fairs and promoting them. It also worked on

introducing better technologies and best practices with a view to improve quality

and market acceptability for these products in new markets.

SOCIAL DEVELOPMENT:

LHWRF has always aimed at the development of proper social, cultural,

scientific and spiritual attitudes amidst the rural community. The endeavor is to

instill an urge to not only work but be responsible for their own development in

villagers, especially women, children, the youth and older people. Significant

social development initiatives undertaken during 2010 were in the areas of Health,

Women Empowerment, Infrastructure Development and Renewable Energy. The

Foundation aims to continue bringing qualitative and quantitative improvement in

the Health services across areas that are bereft of medical facilities. LHWRF has

been working on establishing health centers and mobile health units to provide

medical care to the poor populace, targeting women and children residing in slum

and rural areas. The Foundation is planning 100% coverage to ensure that all

children are fully immunized and vaccinated in these areas.

The foundation has always believed that creating the right infrastructure is the

key to progress and prosperity. LHWRF Programs were focused on building

internal roads and basic sanitation facilities in various districts in Rajasthan. It also

focused on strengthening and revamping formal education and community centers

and training and production centers in various States.

THE NEXT STEPS:

LHWRF has always believed that any business has a direct social obligation to

the community and society it exists and works with, and its role cannot remain

restricted to returns to stockholders or its customers. After 22 years of having

served rural communities, LHWRF today is not only focused on bringing the

benefits of a knowledge- based economy to the poor and the needy but it stands for

ensuring better public health services and for creating scalable and replicable

programs that would ensure Education and Employability for rural India.

“Amark of recent achiever it is Lupin's branded business which contributed

37% of the overall US revenues with a turnover of USD 127 million, growing by

72% during Fy 2010"

Fy 2010 was marked with several examples where the Company was able to

leverage its intellectual property capabilities into driving organisation growth.

During the year, the company settled all ongoing litigation with Novartis on Lotrel

(Benazepril/Amlodipine) capsules and then launched the product in the US Market.

The Company also settled all litigation relating to Memantine tablets, Lupin's

generic version of Forest Laboratories Inc.'s Alzheimer disease treatment

"Namenda"® Tablets. In addition, the Company sold its first-to-file ANDA on

Antrara® (Fenofibrate) Tablets to Dr. Reddy's before buying the brand for the US.

Lupin and Natco Limited have an alliance to jointly commercialise generic

equivalents of shire's FOSRENOL (lanthanum carbonate) Tablets. natco is one of

the first-to-file on the product.

During FY 2010, the company filed 37 Abbreviated New Drug Applications

(ANDAs) with the United States Food and Drug Administration. Lupin not only

clocked in one of the highest number of ANDA filings amongst its Indian peers but

also emerged as one of the Top 10 ANDA filers globally. The cumulative number

of ANDA filings now stands at 127, with 40 approvals to date. Lupin has 55 para

IV filings with the US FDA, out of which 24 were filed during Fy 2010. The

cumulative first-to-file and exclusive opportunities now stand at 12. On the Drug

delivery front, in FY 2010 Lupin and Salix entered into an agreement under which

the two companies will collaborate in the development and commercialisation of

Lupin's extended release Rifaximin product for the US Market. Lupin will also

supply Rifaximin API to Salix. Salix made a USD 5 million up-front payment to

Lupin and the alliance also envisages typical milestone and royalty payments.

By insuring quality and global regulatory requirements, Lupin's has assured the

global standards of good manufacturing.

LUPIN'S GROWING STATUS:

Lupin is one of India's top 10 pharmaceutical companies and one the most

prolific introducer of new products in the Indian market place. As a leading global

player in the Anti-TB, Cephalosporin and Cardiovascular segments, the Company

operates in vital segments with global footprints in over 70 countries, through its

onshore presence and business alliances. Today, Lupin globally ranks No.1 in

Anti-TB and is a dominant Player in Cephalosporins and Prils. It is also developing

strong competencies in the Anti-Diabetic and Anti-Asthma segments. Through a

prolific R&D centre, the Company routinely develops novel, non-infringing, cost

effective and eco-friendly technologles for its products. The foundation of the

Company's success originates from its rock solid manufacturing infrastructure.

With 11 of its sites approved by the US FDA and two by the UK MHRA, Lupin

operates one of the largest capacities in india, meeting stringent international NCE

research, with four promising molecules under various stages of development. As a

highly integrated company, with an amply competent workforce it ahead in

multiple markets, Lupin is certainly a force to reckon with in the global

pharmaceutical marketplace.

Branding in Indian Pharmaceuticals Industry: With Special Reference to

LUPIN

Up until the 1970s India's Pharmaceutical market was mainly supplied by large

international corporations. Only cheap bulk drugs were produced domestically by

state owned companies founded in 1950s and 60s with the help of World Health

Organisation (WHO). These state run firms provided the foundation for the sector's

growth since the 1970s. Back then, Indian Government aimed to reduce the

country's strong dependence on pharmaceuticals imports by flexible patent

legislation and to create a self reliant sector. In addition, it introduced high tariffs

and limits on imported medicines and demanded that foreign pharmaceutical

companies reduce their shares in their Indian subsidiaries to two fifths. This made

India a less attractive location for international companies many of which left the

country as a consequence.

Especially India Drugs and Pharmaceuticals Limited (IDPL) is credited with

speeding up the development of a national pharmaceutical industry. Several IDPL

staff have successfully founded their own firms, which now belong to the top

group among India's Pharmaceutical companies. In the 1980s, however, the decline

of the state-run companies began-among other things because of increasing Central

Government bureaucracy and insufficient corporate governance. Today, there are

no (entirely) state owned pharmaceutical companies left. By contrast, the

weakening of the patent system and numerous protectionist measures speed up the

development of a major national pharmaceutical industry on a private-sector basis,

which made it possible to provide a large number of drugs.

India's Pharmaceutical industry has been in transition for several years. As a

consequence of major changes to India's drug patent legislation, the country's

Pharmaceutical industry is undergoing a process of reorientation. Its new focus is

increasingly on self developed drugs contract research and /or production for

western drug companies. Between 1996 and 2006, nominal sales of

pharmaceuticals in the Indian subcontinent were up 9% per annum and thus

expanded much faster than the global pharmaceutical market as a whole (+7% p.a.)

Indian companies strongly expanded their capacities, making the country by and

large self sufficient. Nevertheless, with total sector's sales of roughly EUR 10 bn,

India commands a less than 2% share in the world's pharmaceuticals market. This

puts the country in twelth place internationally, even behind Korea, Spain and

Ireland and before Brazil, Belgium and Maxico. Among the Asian countries,

India's Pharmaceuticals Industry ranks fourth at 8% but has lost market share to

China, as sales growth there was nearly twice as high and sales volumes nearly

four times higher than India.

India's Pharmaceutical industry currently comprises about 20000 licensed

companies employing approx 500000 staff. Besides many very small firms, these

also include internationally well-known companies such as Ranbaxy, Cipla,

LUPIN and Dr. Reedy. All in all, the Indian Pharma industry produces about

70000 different drugs which are higher than the number produced in many

Western countries. In 2006, India's Pharma industry exported products worth EUR

3bn, up from only EUR 650 m in 1996, which was due to the fact that demand for

low cost generic drugs is strongly on the rise, above all in the US, Europe and

Japan.

LUPIN: A Profile

Lupin Limited, established in 1968 with headquarter in Mumbai, has

successfully positioned itself as a transnational pharmaceutical company, with a

wide global footprint. The Company develops and markets a wide range of quality,

affordable generic and branded formulations and APIs in multiple markets across

the world. The Company has gained recognition as the world's largest

manufacturer of Tuberculosis drugs. Over the years, the Company has moved up

the value chain and has not only mastered the business of certain intermediates and

APIs, but has also leveraged its strengths to build a formidable formulations

business. It has a significant presence in Cephalosporins. Cardiovasculars (Prills

and statins), Diagetology, Asthama and NSAIDs therapy segments. Over the last

four years, the Company's business mix has improved with close to 70% of its

revenues coming from formulations and 30% from APIs.

Global Footprint:

The Company has a wide onshore and offshore presence with its products

available in close to 70 countries. In terms of overall revenues, the overseas

business constitutes close to 55% while the balance comes from the domestic

market. Lupin has retained a stronghold in India growing ahead of the industry and

has achieved a formidable position in many segments leveraging its sound

marketing prowess and a wide product basket. The US is Lupin's largest market

overseas where it has developed a robust branded and generic business. Over a

period of four years, Lupin has developed a business of US $ 200 mn in the US

and has been recognized as one of the fastest growing Companies in this market.

The Company aspires to replicate this success in other Advanced Markets such as

Europe, Japan and Australia. During 2007, Lupin fast tracked its growth trajectory

through two acquisitions. While the acquisition of Kyowa positioned the Company

amongst the top ten generic pharma Companies in Japan; another acquisition in

India provided it a springboard to leap ahead in the CRAMS space.

Manufacturing & Research:

Lupin's manufacturing facilities, spread across India, play a critical role in

enabling the Company realize its global aspirations and benchmark to international

standards. These facilities are approved by international regulatory agencies like

US FDA, UK MHRA, TGA Australia. WHO and MCC South Africa. The

Company has leveraged its strong vertical integration in building a global

pharmaceutical powerhouse. The Company's intellectual pool of over 400

scientists is constantly engaged in path breaking research.

l