Generic Pharmaceutical Industry Yearbook - Torreya€¦ · Generic Pharmaceutical Industry Yearbook...

Generic Pharmaceutical Industry YearbookGPhA Conference Edition, February 2016

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Table of Contents

1. Key Trends in the Generic Industry 2015-2016 4

2. M&A Activity in the Generic Industry 22

3. Approach to Ranking Generic Companies by Value 27

4. Ranking of the Top 75 Generic Companies with a U.S. Presence by Value 32

5. Ranking Global Top 100 Generic Companies by Value 35

6. Profiles of the Top Twenty Global Generic Companies by Value 41

Appendix: About Torreya Partners 67

This document was prepared by Torreya Partners for attendees of the GPhA conference. Underlying datasets and information are

available for Torreya Insights customers (contact Suzanne Schultz at [email protected]) or reach out to Torreya Insights at

555 Madison Avenue, Suite 1202, New York, NY 10022. (212) 257-5801.

www.torreyainsights.com

© Torreya Partners, 2016

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Preface

We at Torreya Partners are engaged in providing strategic advice to many companies in the global generic industry and have found

ourselves again and again hampered by the lack of information on the players in the industry and a sense of overall trends shaping the

sector. Thus, with our sister research company, Torreya Insights, we set out to compile a comprehensive global database of companies

in the pharmaceutical industry which includes over 2,000 players involved in the generics sector. This database is fundamentally

different than the widely used IMS prescription data because it approaches the industry at the company level rather than at the drug

level. Our approach has inherent limitations because we are not able to parse aggregated company level data into country level

information or information by therapeutic class. However, there are a number of advantages to our approach. First, prescription audit

data misses substantial swaths of economic activity in the generics sector due to direct shipments to clinics and physicians and the

way products enter the hospital distribution channel. Second, because companies report net revenues in their financials we are able to

determine the economic value of shipments rather than just gross revenue amounts as are reported in IMS.

This compendium of commentary, information, and data on the global generic pharmaceutical industry was compiled by Torreya

Partners and its sister company Torreya Insights in the Fall of 2015 and builds on a global pharma database that Torreya has maintained

since 2012.

We are grateful to many individuals who helped us with the insights in this report and the underlying database used herein including:

Bernard Berk, President, Nostrum Pharmaceuticals; Jonathan Berlent, Managing Director, Torreya Insights; Alexander Deardorff,Analyst,

Torreya Insights; Benjamin Garrett, Executive Director, Torreya Partners; Kylor Hua, Associate, Torreya Partners; Nitin Lath, Managing

Director, IDFC; Ketan Mehta, Chief Executive Officer, Tris Pharma; George Stephenson, Chief Executive Officer, Kremers-Urban

Pharmaceuticals and Carl Whatley, Chief Executive Officer, Vitruvias Pharmaceuticals.

All errors and omissions are our own and the information in this report, particularly that on private companies, may be inaccurate,

dated or, at best, directional.

Allen Lefkowitz

Managing Director, Generics

[email protected]

+1 (917) 558-1477

Tim Opler

Partner, Pharma

[email protected]

+1 (212) 257-5802

Vimal Vaderah

Analyst, Generics

[email protected]

+1 (212) 257-5822

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1. Key Generic Industry Trends

5

1. Teva’s Acquisition of Allergan’s

Generic Business for $40 billion

2. Pfizer’s Acquisition of Hospira

for $16 billion

3. ENDO’s Acquisition of Par

Pharmaceuticals for $8 billion

4. Concordia’s Acquisition of

Amdipharm for $3.5 billion

5. Hikma’s Acquisition of Roxane

Labs for $2.6 billion

6. Teva’s Acquisition of RIMSA for

$2.3 billion

7. Lannett’s Acquisition of

Kremers-Urban for $1.2 billion

8. Lupin’s Acquisition of Gavis for

$880 million

9. Bidvest’s Acquisition of Adcock

Ingram for $823 million

10. CVC’s Acquisition of Alvogen

he U.S. generic industry continued to experience dramatic growth in

2015 as the share of generic prescriptions approaches 90%, driven by

an unprecedented set of recent patent expirations.

This growth was accompanied by the rapid expansion of emerging players

such as Alvogen, Amneal, ANI Pharmaceuticals and ENDO. Foreign market

entrants such as Aurobindo, Dr. Reddy’s Laboratories, Huahai and Lupin also

saw their share of the U.S. generic sector grow healthily in the last year. More

than half of all pills sold in the United States now originate from a non-U.S.

based generic pharmaceutical company.

2015:AYear of Consolidation

The U.S. generic industry continued to experience dramatic change and

consolidation in 2015 as the largest incumbent firms expanded. Most notably,

Teva acquired the Allergan generic platform to position itself as an even

larger player in the sector. Pfizer, which has the world’s largest branded

generic platform, termed Pfizer Established Products, alongside its substantial

Greenstone business, also took a significant step to bulk up with its $16

billion acquisition of Hospira. Other consolidators of non-branded generics

and branded off-patent products continued to grow by acquisition. Most

notably, ENDO International acquired Par Pharmaceuticals for $8 billion,

adding substantial heft to an already large and growing business. In total, the

top ten generic industry M&A deals of 2015 exceeded $75 billion in value,

making the year the most important for M&A in the short history of the

generic pharmaceutical industry.

Overview

Top Generic Pharmaceutical

Industry Acquisitions in 2015T

6

Close to a Trillion Dollar Industry

Torreya Insights has analyzed over 2,000 generic pharmaceutical

companies on a global basis, including both publicly-traded and

privately-held companies. We define a generic company as one

whose primary revenues are either from INN generics or brands

that no longer have patent protection or market exclusivity.

Torreya then imputed valuations based on revenue multiples or

EBITDA multiples for private companies. The implicit assumption is

that the underlying factors driving valuations for private companies

are similar to the determinants for public companies.

With this valuation approach it then becomes possible to value all

known companies in the generic sector.

Interestingly, in January 2016, we saw the aggregate value of the

generic sector on a global basis exceed $900 billion for the first

time. In particular, our real time estimate indicates that as of

February 16, 2016 the aggregate industry value was $929 billion.

Just a decade ago, the aggregate value of the sector was under $150

billion, indicating that there has been massive sector growth in a

short period of time. We would not be surprised to the sector run

to over $1 trillion in value this year.

We believe the generic pharma sector will experience

extraordinary growth in the years ahead. While the share of

generics in the U.S. is high, there is substantial room for growth

elsewhere. And, there will be many opportunities to genericize

more complicated products, including biologics, in the years ahead.

Rank Company Value

1 Pfizer Established Pharma $84,621

2 Teva Generics (including Allergan Gx) 70,301

3 Sandoz / Novartis 36,495

4 Sun Pharma 30,035

5 CR Pharmaceutical 29,047

6 Yangtze River Pharma 28,185

7 Mylan 28,170

8 EMS 16,464

9 Abbott Established Pharma 14,582

10 Hengrui 13,235

Rest of industry 578,056

Total Industry Value $929,129

Top Ten Generic Companies Worldwide

By Value ($ millions), Feb 16, 2016

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Figure 1. Value Share of Top Ten Companies

This chart shows the enterprise value (or imputed value for private players) of each company as opposed to the total value of companies in the generic sector as of Feb 15, 2016.

Pfizer Established Pharma

9%

Teva

8%

Sandoz

4%

Sun Pharma

3%

CR Pharmaceutical

3%

Yangtze River Pharma

3%

Mylan

3%

EMS

2%

Abbott

2%Hengrui

1%

Rest of industry

62%

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Industry Remains Fragmented

* Pfizer has not provided guidance on GEP revenue and cash flow for 2016 so it is not possible to make an apples to apples comparison of the two businesses for this year.

Figure 1 on the previous page shows the share of the

value pie held by the top ten companies. Several facts

about the generic sector are readily apparent.

Generic Sector is Not Concentrated

It is readily apparent that the generic pharmaceutical

segment is not highly concentrated. The value share of

the top ten firms is less than 40% and the largest

company, Pfizer occupies only 9% of the value pie.

A widely used measure of industry concentration and

competitiveness is the Herfindahl Index (HHI). We

compute that the global HHI Index as of February

2016 was 0.021, well below the U.S. DOJ threshold of

0.25 that demarcates a highly concentrated industry –

where caution would be exercised by antitrust

authorities on horizontal mergers.

Few Players Have a Global Footprint

What is also noteworthy in Figure 1 is that only a few

of the top players in the generic sector are truly

global. Two companies (CR Pharma and Yangtze River)

are giants in their home country of China but have no

meaningful presence elsewhere. Only Pfizer, Teva,

Sandoz and Sun have a truly global presence.

Perhaps with the exception of Teva and Pfizer, none of

these firms are truly operating at global scale.

Pfizer is theWorld’s #1 Player

Some observers might be surprised to see that Pfizer

is the #1 global player in generics. In fact, Pfizer has

the world’s largest portfolio of off-patent brands

(branded generics) in their GEP (Global Established

Pharma) group. Pfizer’s U.S. non-branded generic

businesses (Greenstone and Hospira) are considerably

smaller. Notably, Pfizer’s GEP segment generates $12.5

billion in cash flow before taxes whereas we project

that Teva will generate approximately $9 billion in

total operating cash flows in 2016. We attribute

roughly $2.5 billion in cash flows to Teva’s on patent

brands implying that post-Allergan their generic

business generates roughly half of the cash flow of

Pfizer’s business.*

Following the close of the Allergan merger, we expect

Pfizer will continue to aggressively build its portfolio

of branded and non-branded generic products on a

substantial scale. Pfizer has a very real chance to

increase its lead as the world’s top player in both

branded pharma and generics.The pattern of the last

9

Living in a Big Two World

five years where four companies have been bunched

together in the overall global pharma rankings (Pfizer,

J&J, Roche, Novartis) will change with Pfizer as the

lone leader in 2016. We doubt that other players will

stand by idly; thus we believe that substantial

incremental consolidation in the pharmaceutical

industry will take place in 2016 and beyond.

The last year has obviously completely reshaped the

generic pharmaceutical industry.

In particular, the Teva / Allergan transaction has been

transformational and has created a global player with

both horizontal and vertical economies of scale. Teva

has full API, formulation and marketing infrastructure

on a global basis. Teva’s remaining areas of relative

weakness are few. For example, the only major

markets where Teva is absent are China and a few

countries in Latin America.

Teva’s communication in its press release regarding

the acquisition did not overstate the importance of

the development: “The [Allergan generics] transaction

will create a leader in the INN and branded generics

industry with an overall product portfolio that leads

the industry in terms of differentiation and durability

and offers promising growth opportunities.The new

Teva will further transform the global generics space

through its best-in-class generics pipeline, R&D

capabilities, operational network, supply chain, global

commercial deployment and infrastructure to achieve

greater efficiencies across the healthcare system…”

And, starting in 2012, Pfizer began to report segment

data on its Global Established Pharmaceutical

franchise. Pfizer writes in its 10K: “The GEP segment

deals with products that have or are expected to lose

market exclusivity through 2015 in most major

markets. These also include the generic

pharmaceuticals, sterile injectable products, and

biosimilar development portfolio.” The description is

unmistakable. The GEP portfolio is generic by our

definition: off patent branded or INN generics.

…the generic

industry will live

in a “Big Two”

world for some

time to come.

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Recent Developments in the U.S. Market

The GEP segment has been shrinking since it was first

broken out in 2012, as Pfizer’s key legacy brands have

been experiencing generic incursion (e.g., Celebrex® /

Lipitor®).

We do not see how a #3 or #4 player can, in the near

term, aggregate enough revenue to match either Pfizer

or Teva in scale.

Sandoz would need to merge with one of the larger

Chinese domestic players, Sun Pharma and either a

Mylan or Perrigo to become the #2 player. Given how

unlikely this is, the generic industry will live in a “Big

Two” world for some time to come. Interestingly, Sun

is also close to Sandoz in value ($30bn value for Sun

vs $36bn for Sandoz). Perhaps Sun will be the next

company to design a strategy to challenge the Big Two.

While we count more than 70 companies with a U.S.

presence as of February 2016, the count is down as

numerous mid-sized and smaller companies were

acquired in the 2013-2015 period. We expect this

consolidation to continue apace in 2016. While new

companies are coming online all the time, they are not

building up revenue fast enough to replace the groups

that have ceased to be independent.

Pricing to Remain an ImportantValue Driver

There are a number of notable trends. While we

expect U.S. price increases to moderate in this

election year, we do not foresee any substantial scale

back of pricing on differentiated generic products.

There are, of course, areas in topicals and injectables

where prices of generics are historically high. And we

expect to see price increases take place selectively

over time. And while approvals of complex generics

are speeding up, we do not expect substantial price

reductions to take place in the near term for such

products. This is because there are many individual

drugs where the competitive dynamics are not strong.

The story for commoditized generics in the U.S. is

somewhat different. The arrival of sourcing groups in

2015 has had a major impact on pricing and results for

companies like Lannett and Qualitest. Red Oak

Sourcing, a JV of CVS and Cardinal Health, has driven

costs down for commoditized products by creating

competition among generic players. One Stop,

McKesson’s sourcing team, has also been an aggressive

player in driving price competition among generic

manufacturers in 2015. Sourcing groups will create

additional downward price pressure in 2016 in

competitive situations.

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Regulatory Developments in the U.S. Market

Fig 2. Source: Janet Woodcock, Feb 4, 2016, “ Implementation of the Generic Drug User Fee Amendments of 2012 (GDUFA),” Testimony Before the House Comm on Oversight and Govt Reform.

Regulatory Factors

The driving factor in ongoing drug shortages and

pricing actions remains the FDA crackdown on

manufacturers in the U.S. and abroad (e.g., Bedford,

Hospira, Dr. Reddy’s, Wockhardt and many others). As

more facilities have received warning letters and 483’s

in the past several years, the availability of FDA-

certified CGMP manufacturing facilities operating at

scale has shrunk, particularly in injectables, liquids and

topicals. This is true both in the manufacture of

formulations and in the manufacture of API. We have

increasingly seen shortages emerge of API, especially

in selected areas of steroids, opioids and cytotoxics.

GDUFA has the potential to significantly improve

industry prospects and raise prices but the ANDA

backlog at the FDA remains unusually long and we

hear repeated discussion of files that have been under

review for three years or more with no initial actions

yet to be taken. Some companies have refiled

applications more recently in order to take advantage

of the Agency’s pledge to deliver 18 month review

times on recently filed ANDAs.

With a persistent 42 month backlog, the FDA’s Janet

Woodcock recently testified before Congress (Feb 4,

2016) that the Agency would continue to staff up to

work down the backlog.

Dr. Woodcock presented the chart that follows

(Figure 2) indicating that while the FDA has

substantially ramped up its FTE count on ANDA

reviews, the volume of ANDA filings has also risen

dramatically, somewhat offsetting the benefits of

additional staff.

Under GDUFA, FDA has now pledged to improve

ANDA review times and has recently been meeting or

exceeding the goals laid out in Figure 3.

Dr. Woodcock testified before Congress on Feb 4 that

“To date, the FDA has met or exceeded all

performance goals outlined in the GDUFA

Commitment Letter”.

The reality is more complex. Our industry contacts

indicate that the FDA has made some progress in

catching up on the pre-2015 backlog but we have

spoken to filers who have yet to even hear a first

meaningful communication from the FDA.

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352

300339

308332

404378

462

551

326 335307

361

449

563

766793

880830

859813

893

1103

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Number of Applications

Figure 2. FDA Generic Program FTE’s and ANDA Filings, 1990-2012

Generic Program Staff (FTE) Ceiling

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Figure 3. FDA ANDA Review Time Goals under GDUFA I

Source: Janet Woodcock, Feb 4, 2016, “ Implementation of the Generic Drug User Fee Amendments of 2012 (GDUFA),” Testimony Before the House Committee on Oversight and Govt Reform.

Goal FY2015 FY2016 FY2017

Original ANDA 60% in 15 months 75% in 15 months 90% in 10 months

Tier 1 first major amendment 60% in 10 months 75% in 10 months 90% in 10 months

Tier 1 minor amendments (1st –

3rd)

60% in 3 months 75% in 3 months 90% in 3 months

Tier 1 minor amendments (4th-5th) 60% in 6 months 75% in 6 months 90% in 6 months

Tier 2 amendments 60% in 12 months 75% in 12 months 90% in 12 months

Prior approval supplements 60% in 6 months 75% in 6 months 90% in 6 months

ANDA teleconference requests Close-out 200 Close-out 250 Close-out 300

Controlled correspondences 60% in 4 months 70% in 2 months 90% in 2 months

ANDA, amendment and PAS in

backlog on Oct 1, 2012 Act on 90% by end of FY 2017

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Figure 4. FDA ANDA Approvals, January 2014 to December 2015

Source: Janet Woodcock, Feb 4, 2016, “ Implementation of the Generic Drug User Fee Amendments of 2012 (GDUFA),” Testimony Before the House Committee on Oversight and Govt Reform.

15

Strategic Trends for 2016 – Continued Consolidation

Recent Channel Consolidation

Further, we have heard persistent complaints that the

FDA has substantially increased the frequency of

Refuse to File (RTF) Letters – rejecting ANDA

applications that do not follow CFR filing rules, such

as formatting of ANDA’s and completed Tables of

Contents.

But, despite the complaints, there is no doubt that

substantial progress has been made. As illustrated in

Figure 4, the pace of ANDA approvals is up

dramatically in the last six months.

We are optimistic that FDA approvals will continue to

accelerate with added resources and recent

reductions in filing volumes.

This changing regulatory picture will obviously impact

pricing for many products, ultimately benefitting

consumers while making life more difficult for some

companies.

We see a number of key strategic trends playing out

in 2016 in the global generic sector.These are:

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Strategic Trends for 2016 – Technology Emphasis and Globalization

Trend 1. Continued Consolidation

The economic case for consolidation in the U.S. generic

sector is strong. As noted by Teva in their investor

presentation following the Allergan Generics acquisition

(see chart on previous page), there has been dramatic

consolidation on the distribution and retail side of the

business.

The effect of this consolidation is to advantage larger

players who have more leverage in discussions of

pricing and supply with wholesalers, retailers and PBMs.

Teva, for example, saw the market share of its top 3

customers grow from 52% in 2009 to 83% in 2013.

We expect to see continued consolidation among

generic players, particularly among companies that are

in the more commoditized product categories. We

further expect to see added vertical integration.

Trend 2. Continued Focus onTechnologies

An important, if not widely heralded trend in recent

years, has been the emergence of more technological

sophistication in formulation among generic companies.

This is seen, for example in the microsphere area.

Companies needing to introduce generics against the

Alkermes / J&J depot products will need to be able to

produce sophisticated PLGA microspheres. This is

true for blockbusters like Risperdal Consta® and for

other less widely used products.

We have seen Amneal, Dr. Reddy’s and Lupin, for

example, make major investments in this area. Lupin

acquired Nanomi B.V., a technology company

specializing in monosphere’s and complex

At Least Three Companies Have Made a Major Investment

in PLGA Microsophere Technology for Complex Injectibles

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Strategic Trends for 2016 – Generics Benefitting from Global Growth

injectable technologies in January 2014. A year earlier,

Dr. Reddy’s Laboratories made a similar acquisition of

OctoPlus N.V.

In the complex liquids area, we have seen an arms race

emerging among a number of players with Tris Pharma

in a leadership position. Its extended release liquids

technology has allowed it to be one of two companies

to successfully genericize Tussionex® and introduced

superior formulations of branded products in the

cough/cold and ADHD areas.

We expect to see increased competition and

investment in technologies for more sophisticated

products rise ahead. Key areas of focus now include

respiratory products, injectable products and

controlled release solid oral dose products.

Trend 3. Continued Globalization

As noted earlier, few companies have truly taken

advantage of the economies of scale afforded by

globalization. Pfizer and Teva, for example, have a fully

integrated supply chain in generic cytotoxic drugs

allowing them to produce API inexpensively, formulate

a full line of cytotoxics and then supply these products

around the globe. The economies of volume in this

product line are considerable and allow both

companies to experience substantial profit. China and

India have a number of high quality, low cost

producers in API and formulations that have the

potential to globalize operations substantially,

including in the United States. This is true for

companies in other geographies such as Europe and

Japan. To date, we have not seen Chinese, European or

Japanese generic pharmaceutical players make

substantial inroads into the U.S. market but we expect

this to change in 2016 and the years ahead.

There are two key types of globalization activities to

Heather BreschChief Executive Officer

Mylan, N.V.

“The fevered pitch

of globalization has

gone to a whole

other level.”

February 2016

Speech, GPhA

18

Strategic Trends for 2016 – Continued Benefit to Consumers

note. The first, of course, is seen when companies like

Cipla or Sun Pharma build up a presence in the U.S.

market. The progress made by Indian-domiciled

companies has been spectacular in the last decade.

Lupin now sells over $900 million of generic product

each year in the United States. The U.S. is the key profit

center for them.

The second is to build up global capabilities across

markets. There are numerous large, growing and

lucrative markets around the globe including territories

like Russia, India, China, Korea, Mexico, Brazil and South

Africa. Selected consolidators such as Abbott, Acino,

Alvogen, Amneal, Glenmark, Lupin, Mylan, Stada, Teva

and Torrent understand the economics of globalization

very well and are likely to continue the pursuit of

organic and inorganic growth strategies globally to

leverage their product platforms. Key players in 2015 in

globalization were Alvogen, Lupin, and Teva. We expect

many others such as Abbott, Mylan and Sun to continue

to globalize their operations in 2016 given the growth

of emerging markets and the benefits from supplying

products to these markets.

Emerging market economies are of increasing interest.

The OECD forecasts that the fraction of the world’s

GDP from the world’s 29 most developed economies

will shift from 60% in 2000 to 43% in 2030.

Rapid growth in emerging markets will continue to

lead to shifting of budgets into generic pharmaceutical.

Generic drugs benefit disproportionately from this

economic growth as they have a lower cost entry

point for emerging middle class consumers than

branded products. Figure 5 shows the experience of

the U.S. itself, where spending on medical products

rose disproportionately with GDP.

Trend 4. Continued Benefit to Consumers

The GPhA and IMS Health have done very nice work

documenting the gains for consumers generated by

“Rapid growth in emerging markets will

continue to lead to dramatic shifting of

budgets into pharmaceutical products.”

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Strategic Trends for 2016 – Consumer Surplus Delivered by Pricing Pressure

The widespread availability of generic drugs has

undoubtedly had a massive positive effect on

humankind. We are struck by Cipla who state the

following mission: “Cipla is a global pharmaceutical

company whose goal is to ensure that no patient shall

be denied access to high quality & affordable medicine

and support.”

Cipla supplies inexpensive generic medicines on a

global basis from plants that have a consistent high

quality of production. Plants that make products for

unregulated markets in Africa are the same that are

used for product destined for Europe or the U.S.

Thanks to Cipla and hundreds of other global generic

companies like Lupin, Mylan, Sandoz,, Teva, Torrent and

Zydus Cadila, the availability of life saving medicines at

a reasonable price has spread massively over the last

several decades.

We do not doubt that widely observed improvements

in human life spans can be attributed at least in part to

the spread of generic pharmaceuticals.

Our prediction is that the benefit to consumers

(consumer surplus) in the next two decades will

exceed that of the last two decades.

Source: U.S. Bureau of Economic Analysis, National Income and Product Accounts

0

500

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1,500

2,000

2,500

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4,000

6,000

8,000

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Figure 5. Medical Spending in the U.S. and GDP

1929 to 2010

Once consumers have

covered the basics of food

and shelter they direct

marginal dollars to

superior goods such as

investments in life

extension (medical care).

generic in the United States. Of course, this analysis applies

equally well on a global basis.

20


Companies like HuaHai, Hisun and Humanwell are

now on the ground in the U.S. market and are building

up their organizations in the same way as the Indian

generic players did ten to twenty years ago. As these

companies begin to achieve critical mass in the U.S.

we expect to see much more downward pressure in

the U.S. on pricing of both high volume oral solid dose

products and other categories such as injectables and

liquids in the years ahead.

Pricing pressures in the API market are becoming ever

more intense and competition from large players in

both China and India has impacted the market. We

have been impressed by the emergence of specialty

players in the API market such as Ipca, Laurus, and

Symbiotec who are pursuing “last man standing”

strategies to achieve dominance an API category.

Ultimately, these strategies should have a profound

benefit on human life spans and the quality of life.

If the first cause of improving consumer surplus

relates to improving scale economies and greater

supply at a given price then the second relates to

human population growth and just as importantly

growth in wealth.According to the IMF GrossWorld

There are several reasons for this. One is that scale

economies in both API manufacture and production

have not yet been fully achieved. There are some low

cost producers in the U.S. for commoditized products

such as ENDO, but the real low cost producers in

China and India have far to go in realizing the

potential of their cost advantage. The push by the FDA

on manufacturing quality has impacted supply in the

short and medium term, leading global suppliers to

deliver quality products in the pattern followed by

Cipla. Ultimately, there should be substantial gains in

share by low cost producers as more and more

product categories are commoditized. We expect to

see prices for generic products in the U.S. ultimately

decline as these economies are achieved.

A particularly important trend for U.S. consumers has

been the entry of Chinese generic pharmaceutical

players into the market. To date, Chinese participation

in any market outside of China has been modest, but a

number of companies are going beyond their cost

advantage in API to develop low cost formulations in

order to market them on a global basis. While modest

today, we expect this trend to pick up substantially

over the next decade.

21


payor pressures for less expensive products are

supplemented by consumer demand for the same. With

advances in big data analytics and product traceability,

generic players should be better positioned globally to

be able to correlate the availability and usage of their

medicines with population health statistics. The ability

to document direct health benefits in both developed

and developing markets should be an important tool in

driving greater utilization of these products and

associated reimbursement.

Product (GWP) has grown by between three and five

percent per annum after inflation since 2010 to more

than $90 trillion today. The IMF does not see this

growth rate slowing down in the foreseeable future.

The implication is obvious: rising wealth, rising

populations and longer life spans all spell

disproportionately high growth in generic

pharmaceutical volumes in the years ahead benefiting

the world’s people.

These benefits coincide with the advent of big data

methods which have been increasingly used to

determine health outcomes.

In particular with the advent of Accountable Care

Organizations (ACOs) in the United States we are

seeing an increased interest on the part of health

systems and employers to contract around health

outcomes for employees while capitating costs.

Former HHS Secretary Michael Leavitt noted in his

keynote address at the GPhA 2016 Annual Meeting

that this interest could profoundly impact the generic

pharma sector.

In the future, we believe that the favorable cost profile

of generic drugs will become even more important as

Michael LeavittFormer Secretary of HHS

ACO’s and

performance-based

reimbursement

could profoundly

impact the U.S.

generic sector.

22

2. Generic Pharma M&A Activity Update

23

Key Developments in M&A: 2015 Versus 2014

Record Volume

2015 set an all time record for M&A volume in the

generic pharmaceutical industry with a total of $78

billion in reported volume

Two giant transactions did not close and are not

counted here (Teva / Mylan & Mylan / Perrigo)

Unreported transactions sizes (e.g., CVC / Alvogen)

would have grown 2015 volume number even more

Reported M&A volume in global generics, by contrast,

in 2014 was $12 billion

Average revenue multiple of 5.3 times in 2015 versus

3.8 times in 2014

Average multiple of Enterprise value to EBITDA of

15.1 times in 2015 versus 14.2 times in 2014

Despite toughening credit conditions and a volatile

market for generic companies equities, thus far in

2016 we do not see multiples coming down

Mylan’s recent 14x EBITDA bid for Meda in 2016

shows the appetite for paying healthy valuations is

unchanged

Higher Valuations

$12

$78

2014 2015

3.8x

5.3x

2014 2015

Dollar Volume of Generic M&A ($ Billions),

2014 vs. 2015

Average Revenue Multiple in M&A

2014 vs. 2015

24

Generic Pharma M&A Volumes, 2007 to 2015

The explosion in generic M&A deal volume in 2015 was historically unprecedented

78

5

8

5 56

27

32

$12.1

$17.1

$3.3

$15.5

$2.1

$7.2$3.2 $12.0

$78.0

-20

-10

0

10

20

30

40

50

60

70

80

0

5

10

15

20

25

30

35

40

45

2007 2008 2009 2010 2011 2012 2013 2014 2015

Global Generic Deal Count and Volume, 2007-2015

Deal Count Dollar Volume ($ billions)

25

Generic Pharma M&A – 2015

Consolidation in the generics industry continues at sky-high valuations for quality assets

Source: Capital IQ, Press Release and Torreya estimates

Ann. LTM EV/LTM

Date Target Acquirer EV ($mm) Revenue ($mm) EBITDA ($mm) Revenue ($mm) EBITDA ($mm)

12/10/15 Laboratories Vannier Stada $13.0 NA NA NA NA

12/04/15 Osmotica Avista NA NA NA NA NA

11/17/15 VistaPharm Warburg Pincus NA NA NA NA NA

11/16/15 Intrapharm Laboratories RIEMSER Pharma NA NA NA NA NA

10/13/15 Alveda Teligent 34.0 12.0 4.1 2.8x 8.3x

10/01/15 Rimsa Teva Pharmaceuticals 2,300.0 227.0 NA 10.1x NA

09/20/15 Solus & Solus Care Div. (Sun) Strides Arcolab 25.1 NA NA NA NA

09/08/15 Amdipharm Concordia 3,523.4 446.0 NA 7.9x NA

09/08/15 EIMA United Pharmaceuticals Hikma Pharmaceuticals NA 1,489.0 NA NA NA

09/03/15 InvaGen Cipla 550.0 225.0 50.0 2.4x 11.0x

09/02/15 Kremers Urban Lannett 1,230.0 413.0 133.0 3.0x 9.2x

08/26/15 4 Products (Pfizer) Alvogen NA NA NA NA NA

07/28/15 Roxane Hikma Pharmaceuticals 2,650.0 765.0 132.5 3.5x 20.0x

07/27/15 Allergan Generics Teva Pharmaceuticals 40,500.0 6,600.0 2,382.4 6.1x 17.0x

07/24/15 Temmler's Specialty Product Portfolio Lupin NA NA NA NA NA

07/23/15 GAVIS and Novel Laboratories Lupin 880.0 96.0 36.7 9.2x 24.0x

07/23/15 22 ANDAs (Teva) ANI 25.0 NA NA NA NA

06/30/15 Time-Cap Laboratories Marksans NA NA NA NA NA

06/02/15 Nostrum Mylan 75.0 27.0 9.0 2.8x 8.3x

06/02/15 Primegen Amdipharm NA NA NA NA NA

05/21/15 Aspen Australia Gx Assets Strides Arcoab 299.9 NA NA NA NA

05/20/15 Silarx Lannett 42.0 27.5 NA 1.5x NA

05/18/15 Par Pharma Endo 8,050.0 1,310.0 487.9 6.1x 16.5x

05/13/15 Medquimica Lupin NA 31.0 NA NA NA

05/11/15 Pharmacare Litha Pharma 132.5 30.1 NA 4.4x NA

04/10/15 Aurobindo Australian Business Eris Pharma NA NA NA NA NA

03/31/15 Actavis Australian Gx Business Amneal NA NA NA NA NA

03/05/15 Flecainide ANDA (Teva) ANI NA NA NA NA NA

02/23/15 Adcock Ingram (65% Stake) Bidvest 823.2 411.6 4.0 2.0x NM

02/05/15 Hospira Pfizer 16,323.0 4,463.7 746.8 3.7x 21.9x

02/02/15 Famy Care Mylan 800.0 58.3 NA 13.7x NA

01/26/15 Auden Mckenzie Actavis 461.1 NA NA NA NA

1st Quartile: 1.5x 8.3x

Median: 3.7x 16.5x

Mean: 5.3x 15.1x

3rd Quartile: 7.0x 20.0x

26

Generic Pharma M&A – 2014

2014 was an active year for generic M&A but did not come close to 2015 in the level of activity

Source: Capital IQ, Press Release and Torreya estimates

Ann. LTM EV/LTM

Date Target Acquirer EV ($mm) Revenue ($mm) EBITDA ($mm) Revenue ($mm) EBITDA ($mm)

12/09/14 Valeant Asset IGI Labs $0.5 NA NA NA NA

11/14/14 Uman Pharmascience 29.2 NA NA NA NA

11/03/14 Sandoz ANDAs IDT 18.0 NA NA NA NA

10/09/14 Tower Holdings (CorePharma) Impax Labs 700.0 220.0 82.5 2.6x 11.6x

10/01/04 Omega Labs Sagent Pharma 85.3 32.8 7.4 1.8x NA

09/30/14 Focus Pharma AMCo 113.6 64.9 NA 1.4x 10.9x

09/29/14 Shasun Pharma Strides Arcolab 295.1 218.2 27.0 2.6x NA

09/08/14 Soft Gel ANDAs (Par) Aceto (Rising) 8.2 NA NA NA NA

08/20/14 2 ANDAs Lannett NA NA NA NA NA

07/16/14 InnoPharma Pfizer 360.0 NA NA NA NA

07/07/14 Dream Pharma Alvogen 187.0 87.5 NA 2.1x NA

06/30/14 2 Gx Assets (Actavis) Impax Labs NA NA NA NA NA

06/26/14 Globalpharma Pfizer 158.8 NA NA NA NA

06/24/14 DAVA Pharma Endo 600.0 131.0 99.0 4.6x 6.1x

06/23/14 Veropharm Abbott 631.0 150.0 NA 4.2x NA

06/11/14 Medreich Meijia Seika 290.0 157.0 24.0 1.8x 12.1x

05/28/14 Bedford Labs Hikma Pharma 300.0 19.0 (22.0) 15.8x NM

05/16/14 CFR Pharma Abbott 3,351.4 782.3 121.6 4.3x 27.6x

05/09/14 VersaPharm Akorn 440.0 95.0 NA 4.6x NA

04/29/14 Somar Endo 268.8 100.0 NA 2.7x NA

04/06/14 Ranbaxy Labs Sun Pharma 4,084.0 1,796.1 183.9 2.3x 22.2x

04/02/14 Alvogen Pamplona NA NA NA NA NA

04/01/14 Silommedical Actavis 100.0 NA NA NA NA

03/27/14 PACK Pharma Aceto (Rising) 100.0 46.0 11.4 2.2x 8.8x

03/24/14 Upsher-Smith Assets Vertical Pharma NA NA NA NA NA

02/06/14 25 Gx Assets (Cypress) Breckenridge NA NA NA NA NA

01/17/14 Certain Gx Assets (Actavis) Aurobindo 40.7 NA NA NA NA .


Median: 2.6x 11.6x

Mean: 3.8x 14.2x


27

Revenue Multiples at Historically High Levels

The median M&A value to revenue multiple of 5.1x was almost double the median multiple seen in 2011

2.6x2.8x

4.0x3.8x

5.1x

2011 2012 2013 2014 2015

Median Reported Revenue Multiple

28

3. Generic Industry Company Valuation Approach

29

Ranking Approach

This section provides rankings based on valuation of publicly traded and private companies in the U.S. generic

pharma sector.

Inclusion / Exclusion Criteria

We have chosen to include not just companies headquartered in the United States, but have instead focused on

the value of those who have a significant presence in the United States market, including companies from many

countries such as China, India, Israel and Switzerland

We excluded companies such as Prestige Brands whose businesses are almost entirely in the OTC space

We excluded companies such as AMRI or Cambrex whose businesses involve manufacture of API but not in

marketing formulations in the United States

For large public companies that have a generic pharma division (Abbott Labs, Teva or Fresenius) we broke out

the division. But, for other companies where we were not able to fully separate the business based on segment

data, our estimates of value may included some activity from on-patent generics

Estimating Value

For public companies, valuations were determined by computation of enterprise value (market value of equity +

debt – cash). Enterprise value gives a view of the market’s valuation of a business independent of its balance

sheet

We then calculated global average ratios of enterprise value to revenue and enterprise value to EBITDA

(earnings flow before cash, depreciation and amortization) for publicly traded companies as of February 16,

2016

We checked to see if these valuation ratios followed country specific patterns

30

Ranking Approach

Interestingly, while we had seen higher ratios systematically in China six months ago, this valuation differential

has disappeared due to a fairly sharp downdraft in Chinese equities in 2016

– There were no other major areas in the developed world with statistically significant differences in valuation ratios from global

averages

Valuing Private Companies

For private companies, we typically have available a revenue estimate obtained from news stories, the company’s

own web site, industry participants etc. Data on a number of private companies such as Alvogen or Amneal that

access debt markets, were available from Moody’s Investor Service:

– In a few cases, such estimates were not available and we looked at prescription data in order to obtain our best estimate of a

company’s revenue in 2015 or 2014

– We know that some of these estimates will be incorrect and certain companies are missing due to the lack of financial data

Based on these data we then imputed valuations for private companies as a function of their estimated revenue.

If EBITDA data were available and implied a different value estimate, we then used an EBITDA value imputation

approach instead, based on the view that the market is ultimately valuing companies for the cash flows that they

produce. Obviously, our imputation approach provides a crude view of valuation given that we do not have

visibility into a private company’s growth prospects, pipeline etc. and thus are simply assuming that any given

private company can be valued as the average public company

We employed a revenue multiple of 3.9 times to impute valuations of private companies based on median

multiples observed in the valuation table of public-traded generic pharmaceutical companies with a U.S.

presence as of Feb 16, 2016. that follows

In a few cases, we have been made aware of private valuations for pre-revenue companies and have included

such companies in the value ranking where we had the data

31

Valuation of Publicly-Traded Generic Companies with a U.S. Presence, Feb 2016

Valuations as of Feb 15, 2016.

Company LTM EV/LTM

Name Exchange:Ticker Headquarters EV ($mm) Revenue ($mm) EBITDA ($mm) Revenue ($mm) EBITDA ($mm)

Sun Pharma NSEI:SUNPHARMA India $29,530 $3,888 $1,111 7.6x 26.6x

Mylan NasdaqGS:MYL Ireland 27,818 9,429 2,718 3.0x 10.2x

Perrigo NYSE:PRGO Ireland 26,105 5,350 1,443 4.9x 18.1x

Endo NasdaqGS:ENDP Ireland 19,862 3,354 782 5.9x 25.4x

Lupin BSE:500257 India 11,390 1,874 506 6.1x 22.5x

Dr. Reddy's BSE:500124 India 7,314 2,263 598 3.2x 12.2x

Cipla NSEI:CIPLA India 6,254 1,987 416 3.1x 15.0x

Aurobindo BSE:524804 India 6,110 1,941 446 3.1x 13.7x

Hikma LSE:HIK United Kingdom 5,739 1,460 433 3.9x 13.3x

Zydus Cadila BSE:532321 India 4,837 1,370 332 3.5x 14.6x

Akorn NasdaqGS:AKRX United States 3,994 593 208 6.7x 19.2x

Torrent Pharma BSE:500420 India 3,311 846 249 3.9x 13.3x

Glenmark BSE:532296 India 3,289 1,055 171 3.1x 19.2x

Huahai Pharma SHSE:600521 China 3,116 416.8 77 7.5x 40.4x

Hisun Pharma SHSE:600267 China 2,765 1,628 197 1.7x 14.1x

Impax NasdaqGS:IPXL United States 2,279 596 133 3.8x 17.1x

Lannett NYSE:LCI United States 1,802 407 236 4.4x 7.6x

Wockhardt BRSE:WBIO India 1,337 590 95 2.3x 14.1x

Mayne Pharma ASX:MYX Australia 691 109 23 6.4x 30.7x

Amphastar Pharma NasdaqGS:AMPH United States 477 211 (3) 2.3x NA

Sagent Pharma NasdaqGS:SGNT United States 392 289 28 1.4x 14.2x

Coherus NasdaqGM:CHRS United States 375 31 (64) 12.1x NA

Momenta NasdaqGS:MNTA United States 335 52 (91) 6.4x NA

ANI Pharmaceuticals NasdaqGM:ANIP United States 298 56 24 5.3x 12.5x

Teligent AMEX:IG United States 283 34 4 8.4x 64.0x

Claris Lifesciences Limited BSE:533288 India 125 112 23.8 1.1x 5.2x


Median: 3.9x 14.6x


32

4. U.S. Generic Company Value Ranking

33

Top 25 Generic Companies with a U.S. Operating PresenceGeneric Sector Value Ranking – Torreya Insights

Value

Rank Name Exchange:Ticker HQ - Country Company Type

Enterprise Value /

Imputed Value ($mm)

Revenue

($mm)

EBITDA

($mm)

1 Pfizer Established Pharma NYSE:PFE United States Public Company 84,621 21,587 12,885

2 Teva Generics (including Allergan Gx) NYSE:TEVA Israel Public Co Segment 70,301 9,546 2682

3 Sandoz / Novartis SWX:NOVN Switzerland Public Co Segment 36,495 9,310 3985

4 Sun Pharma NSEI:SUNPHARMA India Public Company 30,035 4,021 1149

5 Mylan NasdaqGS:MYL United Kingdom Public Company 28,170 9,429 3010

6 Lupin BSE:500257 India Public Company 11,019 1,831 603.1

7 Fresenius - Kabi Generic Drugs Public Segment Germany Public Co Segment 10,463 2669 561

8 Endo Generics NasdaqGS:ENDP Ireland Public Co Segment 9,549 2,436 NA

9 Perrigo - Prescription Pharma NYSE:PRGO Ireland Public Co Segment 7,868 1,073 540

10 Sanofi Generics Public Segment France Public Co Segment 7,775 1,984 495.9

11 Dr. Reddy's BSE:500124 India Public Company 7,317 2,368 562.4

12 Hikma LSE:HIK United Kingdom Public Company 6,503 2,058 327.0

13 Apotex Private Company Canada Private Company 6,388 1,630 NA

14 GSK Mature Brands Public Segment United Kingdom Public Co Segment 6,272 1,600 1440

15 Cipla NSEI:CIPLA India Public Company 6,164 2,018 442

16 Zydus Cadila BSE:532321 India Public Company 6,164 1,384 282.5

17 Aurobindo BSE:524804 India Public Company 5,942 1,930 466

18 Akorn NasdaqGS:AKRX United States Public Company 5,600 593 208.3

19 Glenmark BSE:532296 India Public Company 5,345 1,055 171.4

20 Torrent Pharma BSE:500420 India Public Company 4,418 846 249.0

21 Chemo Private Company Spain Private Company 4,312 1,100 NA

22 Humanwell SHSE:600079 China Public Company 3,728 1,137 326.6

23 Intas Pharma Private Company India Private Company 3,042 776 NA

24 Alvogen Private Company Luxembourg Private Company 2,940 750 187.5

25 Huahai Pharma SHSE:600521 China Public Company 2,899 417 77.1

34

Generic Companies with a U.S. Operating Presence Ranked #26-50Generic Sector Value Ranking – Torreya Insights

Value


Enterprise Value /

Imputed Value ($mm)

Revenue

($mm)

EBITDA

($mm)

26 Amneal Private Company United States Private Company 2,881 735 NA

27 Prasco Private Company United States Private Company 2,588 660 NA

28 Impax NasdaqGS:IPXL United States Public Company 2,499 596 133.1

29 Wockhardt BRSE:WBIO India Public Company 2,361 590 94.9

30 Alembic BSE:533573 India Public Company 2,062 329 63.9

31 Alkem / Heritage Pharma Private Company India Private Company 1,993 498 89.46

32 Ajanta Pharma BSE:532331 India Public Company 1,972 237 80.7

33 Breckenridge Pharma Private Company United States Private Company 1,568 400 NA

34 Lannett NYSE:LCI United States Public Company 1,537 407 236.1

35 Momenta NasdaqGS:MNTA United States Public Company 965 52 (90.7)

36 Coherus NasdaqGM:CHRS United States Public Company 851 31 (63.9)

37 Osmotica / Vertical Private Company United States Private Company 840 210 NA

38 Hetero Private Company India Private Company 751 188 NA

39 G & W Laboratories Private Company United States Private Company 624 156 NA

40 Mayne Pharma ASX:MYX Australia Public Company 624 109 22.5

41 Sagent Pharma NasdaqGS:SGNT United States Public Company 584 289 28

42 Amphastar Pharma NasdaqGS:AMPH United States Public Company 557 211 (3.1)

43 ANI Pharmaceuticals NasdaqGM:ANIP United States Public Company 505 56 23.9

44 Nephron Pharmaceuticals Private Company United States Private Company 500 125 NA

45 Epic Pharma, LLC Private Company United States Private Company 475 60 24.0

46 KVK-TECH Private Company United States Private Company 380 95 NA

47 Teligent AMEX:IG United States Public Company 371 34 4.42

48 County Line Pharma Private Company United States Private Company 356 45 18

49 Ingenus Pharma Private Company United States Private Company 324 81 NA

50 X-Gen Pharma Private Company United States Private Company 248 62 NA

35

Generic Companies with a U.S. Operating Presence Ranked #51-73Generic Sector Value Ranking – Torreya Insights

Value


Enterprise Value /

Imputed Value ($mm)

Revenue

($mm)

EBITDA

($mm)

51 Vertice Pharma Private Company United States Private Company 240 60 NA

52 Blu Pharmaceuticals LLC Private Company United States Private Company 224 56 NA

53 Sterimax Private Company Canada Private Company 200 50 NA

54 PII Private Company United States Private Company 160 NA NA

55 Citron Pharma LLC Private Company United States Private Company 157 40 NA

56 Claris Lifesciences Limited Private Company India Public Company 102 103 NA

57 Amerigen Pharmaceuticals Limited Private Company China Private Company 100 NA NA

58 Banner Life Sciences Private Company United States Private Company 96 24 NA

59 Virtus Pharma Private Company United States Private Company 92 23 NA

60 Granard Private Company United States Private Company 90 NA NA

61 Vista Pharma Private Company United States Private Company 84 21 NA

62 Lehigh Valley Technologies Private Company United States Private Company 80 20 NA

63 Stratus Pharma Private Company United States Private Company 80 20 NA

64 EPIRUS Biopharmaceuticals NasdaqCM:EPRS United States Public Company 76 0 (31.5)

65 Ritedose Pharma Private Company United States Private Company 64 16 NA

66 Vensun Pharmaceuticals, Inc. Private Company United States Private Company 60 0 NA

67 Bayshore Pharma Private Company United States Private Company 50 0 NA

68 CANDA Pharma Private Company United States Private Company 50 0 NA

69 Vitruvias Therapeutics, LLC Private Company United States Private Company 40 0 NA

70 Stason Pharmaceuticals, Inc. Private Company United States Private Company 33 8 NA

71 Amring Pharma Private Company United States Private Company 30 0 NA

72 Slayback Pharma Private Company United States Private Company 30 0 NA

73 Oakwood Laboratories LLC Private Company United States Private Company 26 6 NA

36

5. Global Generic Company Value Ranking

37

Top 25 Generic Companies WorldwideGeneric Sector Value Ranking – Torreya Insights

Value


Enterprise Value /

Imputed Value ($mm)

Revenue

(2015, $mm)

EBITDA

(2015, $mm)

1 Pfizer Established Pharma NYSE:PFE United States Public Company 84,621 21,587 12,885

2 Teva Generics (including Allergan Gx) NYSE:TEVA Israel Public Co Segment 70,301 9,546 2682

3 Sandoz / Novartis SWX:NOVN Switzerland Public Co Segment 36,495 9,310 3985

4 Sun Pharma NSEI:SUNPHARMA India Public Company 30,035 4,021 1149

5 CR Pharmaceutical Private Company China Private Company 29,047 7,410 345

6 Yangtze River Pharma Private Company China Private Company 28,185 7,190 NA

7 Mylan NasdaqGS:MYL United Kingdom Public Company 28,170 9,429 3010

8 EMS Private Company Brazil Private Company 16,464 4,200 NA

9 Abbott Established Pharma Segment: NYSE:ABT United States Public Co Segment 14,582 3,720 711

10 Hengrui SHSE:600276 China Public Company 13,235 1,401 376

11 Lupin BSE:500257 India Public Company 11,019 1,831 603.1

12 Fresenius - Kabi Generic Drugs Public Segment Germany Public Co Segment 10,463 2669 561

13 Aspen Pharmacare JSE:APN South Africa Public Company 9,864 2,236 553

14 Endo Generics NasdaqGS:ENDP Ireland Public Co Segment 9,549 2,436 NA

15 Celltrion KOSDAQ:A068270 South Korea Public Company 9,534 452 192.0

16 Perrigo - Prescription Pharma NYSE:PRGO Ireland Public Co Segment 7,868 1,073 540

17 Sanofi Generics Public Segment France Public Co Segment 7,775 1,984 495.9

18 Dr. Reddy's BSE:500124 India Public Company 7,317 2,368 562.4

19 Sinopharm - Rx Segment Private Company China Private Company 7,208 2,044 NA

20 Hikma LSE:HIK United Kingdom Public Company 6,503 2,058 327.0

21 Apotex Private Company Canada Private Company 6,388 1,630 NA

22 GSK Mature Brands Public Segment United Kingdom Public Co Segment 6,272 1,600 1440

23 Cipla NSEI:CIPLA India Public Company 6,164 2,018 442

24 Zydus Cadila BSE:532321 India Public Company 6,164 1,384 282.5

25 Aurobindo BSE:524804 India Public Company 5,942 1,930 466

38

Top Generic Companies Worldwide, Ranked 26-50 by ValueGeneric Sector Value Ranking – Torreya Insights

Value


Enterprise Value /

Imputed Value ($mm)

Revenue

($mm)

EBITDA

($mm)

26 R-Pharm Private Company Russia Private Company 5,880 1,500 NA

27 Akorn NasdaqGS:AKRX United States Public Company 5,600 593 208.3

28 Huadong Medicine SZSE:000963 China Private Company 5,558 3,295 268

29 CSPC Pharma SEHK:1093 Hong Kong Public Company 5,473 1,413 290.9

30 Glenmark BSE:532296 India Public Company 5,345 1,055 171.4

31 PT Kalbe JKSE:KLBF Indonesia Public Company 4,929 1,209 213.0

32 Fosun Pharma Generics Business SHSE:600196 China Public Co Segment 4,781 1,220 229.4

33 Eurofarma Laboratórios Private Company Brazil Private Company 4,761 823 326.8

34 GPC SEHK:874 China Public Company 4,553 3,031 226.0

35 Torrent Pharma BSE:500420 India Public Company 4,418 846 249.0

36 Chemo Private Company Spain Private Company 4,312 1,100 NA

37 Laboratorios Bagó Private Company Argentina Private Company 4,312 1,100 NA

38 Salubris Pharmaceuticals SZSE:002294 China Public Company 4,122 507 220.09

39 Roemmers Private Company Argentina Private Company 4,116 1,050 NA

40 Polpharma Private Company Poland Private Company 3,920 1,000 NA

41 Qilu Pharma Private Company China Private Company 3,834 978 NA

42 Dongbao Pharma SHSE:600867 China Public Company 3,829 234 74.3

43 Neptunus Group Private Company China Private Company 3,747 956 NA

44 Humanwell SHSE:600079 China Public Company 3,728 1,137 326.6

45 Stada DB:SAZ Germany Public Company 3,693 2,496 555.8

46 Kanghong Pharma SZSE:002773 China Public Company 3,561 270 61.0

47 Livzon Pharmaceutical Group Inc. SZSE:000513 China Public Company 3,504 894 134.8

48 Conba Pharma SHSE:600572 China Public Company 3,463 578 126.4

49 Piramal Enterprises BSE:500302 India Public Company 3,412 843 171.1

50 Hualan Biological Engineering SZSE:002007 China Public Company 3,397 201 100.2

39


Value


Enterprise Value /

Imputed Value ($mm)

Revenue

($mm)

EBITDA

($mm)

51 Haisco Pharma SZSE:002653 China Public Company 3,378 195 69.3

52 Kelun Pharma SZSE:002422 China Public Company 3,371 1,241 288

53 Hypermarcas BOVESPA:HYPE3 Brazil Public Company 3,287 1,196 296.0

54 Aodong Medicine SZSE:000623 China Public Company 3,280 361 70.7

55 Unilab Private Company Philippines Private Company 3,273 835 NA

56 Joincare Pharma SHSE:600380 China Public Company 3,243 1,196 195.5

57 Genomma BMV:LAB B Mexico Public Company 3,155 932 172.3

58 Gloria Pharmaceuticals SZSE:002437 China Public Company 3,084 307 96.7

59 Harbin Pharma SHSE:600664 China Public Company 3,056 2,662 118.3

60 Intas Pharma Private Company India Private Company 3,042 776 NA

61 Wuzhou Pharm SHSE:600252 China Public Company 3,026 518 179.7

63 Alvogen Private Company Luxembourg Private Company 2,940 750 187.5

62 Pharmascience Private Company Canada Private Company 2,940 750 NA

64 Huahai Pharma SHSE:600521 China Public Company 2,899 417 77.1

65 Amneal Private Company United States Private Company 2,881 735 NA

66 Dahuanong Animal Health SZSE:300186 China Public Company 2,875 164 24.7

67 Hisun Pharma SHSE:600267 China Public Company 2,807 1,628 196.5

68 SL Pharmaceutical SZSE:002038 China Public Company 2,753 200 119.4

69 China Medical System SEHK:867 China Public Company 2,729 475 147.4

70 Gedeon Richter BUSE:RICHTER Hungary Public Company 2,601 1,352 264.3

71 Prasco Private Company United States Private Company 2,588 660 NA

72 Aché Laboratórios Private Company Brazil Private Company 2,524 533 173.2

73 Yiling Pharma SZSE:002603 China Public Company 2,524 471 75.9

74 Xinbang Pharma SZSE:002390 China Public Company 2,523 399 45.9

75 Hybio Pharma SZSE:300199 China Public Company 2,519 68 34.6

40


Value


Enterprise Value /

Imputed Value ($mm)

Revenue

($mm)

EBITDA

($mm)

76 Impax NasdaqGS:IPXL United States Public Company 2,499 596 133.1

77 Pharmstandard Private Company Russia Private Company 2,449 625 188.0

78 Dingli Tech SHSE:900907 China Public Company 2,443 205 22.7

79 Chase Sun Pharma SZSE:300026 China Public Company 2,434 462 85.2

80 Tecnoquimicas Private Company Colombia Private Company 2,411 603 NA

81 Luye Pharma SEHK:2186 China Public Company 2,409 509 130.3

82 Mega Labs S.A. Private Company Uruguay Private Company 2,400 600 NA

83 Wockhardt BRSE:WBIO India Public Company 2,361 590 94.9

84 ZBD Pharma SHSE:603567 China Public Company 2,356 257 104.9

85 Jiangzhong Pharma SHSE:600750 China Public Company 2,356 457 72.2

86 Chongqing Zhifei Bio SZSE:300122 China Public Company 2,340 129 29.0

87 North China Pharma SHSE:600812 China Public Company 2,330 1,516 104.6

88 Hisoar Pharma SZSE:002099 China Public Company 2,320 213 38.8

89 Sawai TSE:4555 Japan Public Company 2,238 879 221.3

90 Zhongxin Pharma SHSE:600329 China Public Company 2,236 1,143 74.8

91 KrKa LJSE:KRKG Slovenia Public Company 2,170 1,442 404.6

92 China Traditional Chinese Medicine SEHK:570 Hong Kong Public Company 2,135 434 107.3

93 Yibai Pharmaceutical SHSE:600594 China Public Company 2,101 509 99.4

94 Mankind Pharma Private Company India Private Company 2,100 525 NA

95 Alembic BSE:533573 India Public Company 2,062 329 63.9

96 Changchun High & New Tech SZSE:000661 China Public Company 2,059 365 97.4

97 Jiangsu Wuzhong Group Private Company China Private Company 2,016 514 NA

98 Alkem / Heritage Pharma Private Company India Private Company 1,993 498 89.5

99 Sihuan Pharma SEHK:460 China Public Company 1,989 497 340

100 Ajanta Pharma BSE:532331 India Public Company 1,972 237 80.7

41

6. Profiles of Top Twenty Global Generic

Pharmaceutical Companies

42

#1: Pfizer Global Established Pharma (GEP)

Pfizer Inc. manufactures, and sells ethical and OTC pharmaceutical products across

the world. The company operates three divisions: Global Innovative Pharmaceutical

(GIP); Global Vaccines, Oncology and Consumer Healthcare (VOC); and Global

Established Pharmaceutical (GEP) segments.

The GEP segment offers patent-protected products that have lost marketing

exclusivity in various markets; and generic pharmaceuticals, and sterile injectable and

biosimilar development products. Key products in the Pfizer GEP business are off

patent brands such as Lipitor®, Celebrex® and Lyrica®. In total, Pfizer GEP markets

over 200 so-called branded generics across the globe. GEP also includes Hospira

and has a world class portfolio of generic injectable pharmaceutical products.

The top products in the GEP segment are branded generics, including Lipitor, Lyrica,

Zyvox, Pristiq, Premarin, Norvasc, Xalatan, Zoloft, Relpax, EpiPen, Effexor, Zithromax,

Medrol, Superazon. Also included are a portfolio of biosimilar products, Pfizer’s

Greenstone generic business and Hospira’s biosimilar business.

Pfizer has indicated a willingness to separate GEP into a new spun off company

sometime around 2018, although the final decision to go forward with this decision

has not been made.

Pfizer serves wholesalers, retailers, hospitals, clinics, government agencies,

pharmacies, and individual provider offices, as well as centers for disease control and

prevention. Pfizer Inc. was founded in 1849 and is headquartered in New York, New

York.

Address:

Pfizer Inc.

235 East 42nd Street

New York, New York 10017

United States

Main Phone: 212-733-2323

Website: www.pfizer.com

Type of Company: Public Company Segment

Exchange and Ticker: NYSE:PFE

Business Head: John Young

Summary Financials ($ millions)

Revenue (2015) $21,587mm

EBITDA (2015) $12,885mm

Imputed Value $84,621mm

Company Overview

Company Details

Ranking (as of Feb 27, 2016)

Generic Value Rank #1

Generic Revenue Rank #1

Notes: Data for Revenue and EBITDA for FY ending Dec 2015.

These data were extracted from Pfizer's segment data for 2015

which were reported by press release on Feb 2, 2016. Imputed

market value is computed as 2015 revenue times the median

multiple for comparable publicly traded generic companies. The

median multiple was computed as of Feb 15, 2016.

43

#2: Teva Generics

Teva Pharmaceutical manufactures and markets pharmaceutical products around the

world. Teva’s Generic Medicines segment offers generic or branded generic

medicines; specialized products, such as sterile products, hormones, narcotics, high-

potency drugs, and cytotoxic substances; and active pharmaceutical ingredients.

Teva’s generic products include a wide variety of therapeutics, ranging from

cardiovascular, anti-infective, central nervous system, anti-inflammatory, oncolytic,

anti-diabetic, analgesic, dermatologic, respiratory, and women's health, with dosage

forms including tablets, capsules, injectables, creams, ointments, liquids and inhalables.

In 2015 Teva acquired Allergan’s generic business for $40.5 billion. Teva wrote in its

press release announcing the transaction (July 27, 2015): “When combined with

Teva’s strong generics portfolio, Allergan Generics’ world-class generics pipeline,

which holds a leading position in first-to-file opportunities in the U.S., will further

enhance Teva’s goals of delivering the highest quality generic medicines at the most

competitive prices and cultivating the best development pipeline in the industry. The

resulting world-class product portfolio will be complemented by a significantly

expanded and more efficient global footprint, including leadership positions and

strengthened operations, sales and R&D platforms in attractive markets around the

world.” Teva has a large API business with a leading position in a number of specialty

API categories such as cytotoxics.

Teva Pharmaceutical Industries Limited is based in Petah Tikva, Israel and was

founded in 1901.

Address:

Teva Pharmaceutical Industries Limited

5 Basel Street, Box 3190

Petach Tikva, - 49131

Israel

Main Phone: 972 3 926 7267

Website: www.tevapharm.com

Type of Company: Public Co Segment

Exchange and Ticker: NYSE:TEVA

Business Head: Siggi Olafsson


Revenue (2016) $17,934

EBITDA (2016) $7,000

Imputed Value $70,301

Company Overview

Company Details

Notes: Market value estimate tied to 2016 numbers for Teva’s

generic segment after the Allergan Generics acquisition using

estimates in press release announcing the Allergan deal.

Because this transaction has not yet closed, the numbers are

pro forma. Imputed market value is computed as 2016 revenue

times the median multiple for comparable publicly traded

generic companies.




44

#3: Sandoz

The Sandoz division of Novartis offers generic pharmaceuticals comprising active

ingredients and finished dosage forms.

Sandoz has more than ten major global development centers and a worldwide

network of more than 30 manufacturing sites, and its products are available in more

than 160 countries.

Sandoz’s portfolio of approximately 1,100 generic molecules is already available to

more than 90% of the world’s population.

Sandoz’s portfolio ranges from standard generics to complex value-added products.

These generic products range in complexity from oral solids, gels and patch

technologies, to complex injectables, inhalers and biosimilars. Sandoz is a leading

global provider and producer of essential anti-infective medicines

Other key product groups include cardiovascular medicines, treatments for central

nervous system disorders, gastrointestinal medicines, oncology and respiratory

therapies, as well as medications for blood and blood forming organ disorders.

Sandoz was the first company to develop and market follow-on versions of

biopharmaceuticals.

Novartis is shifting $900mm in revenue of mature products to Sandoz in 2016. This

will raise the value of the segment considerably.

Novartis AG was founded in 1895 and is headquartered in Basel, Switzerland.

Sandoz employs 26,500 people.

Address:

Novartis AG

Lichtstrasse 35

Basel, Basel-Stadt 4056

Switzerland

Main Phone: 41 61 324 11 11

Website: www.sandoz.com


Exchange and Ticker: NYSE:NVS

Business Head: Richard Francis


Revenue (2015) $9,310

EBITDA (2015) $3,985


Company Overview

Company Details

Notes: Market value estimate tied to 2015 Sandoz segment

numbers taken from Novartis’ financials which were reported

on January 27, 2016. Imputed market value is computed as 2015

Sandoz revenue times the median multiple for comparable

publicly traded generic companies.




45

#4: Sun Pharma

Sun Pharmaceutical Industries Limited, a specialty pharmaceutical company,

manufactures and markets pharmaceutical formulations and active pharmaceutical

ingredients (APIs) in India and internationally.

Sun provide high-quality, affordable medicines trusted by healthcare professionals

and patients in over 150 countries of the world.

Sun’s presence in 65 key markets around the world is supported by 45

manufacturing facilities, across five continents.

Sun has a multi-cultural workforce, comprising more than 30,000 employees of over

50 nationalities.

Sun’s portfolio includes generics, branded generics, complex or difficult to make

technology intensive products, over-the-counter (OTC) products, anti-retrovirals

(ARVs), Active Pharmaceutical Ingredients (APIs) and intermediates.

It’s portfolio of over 2000 high quality molecules covers multiple dosage forms,

including tablets, capsules, injectables, inhalers, ointments, creams and liquids. Our

presence extends across a vast range of therapeutic segments covering psychiatry,

anti-infectives, neurology, cardiology, orthopaedic, diabetology, gastroenterology,

ophthalmology, nephrology, urology, dermatology, gynaecology, respiratory, oncology,

dental and nutritionals.

Sun Pharmaceutical Industries Limited was founded in 1983 and is based in Mumbai,

India. Sun’s Ranbaxy subsidiary was founded in 1961.

Address:

Sun Pharmaceutical Industries Limited

Acme Plaza, Andheri Kurla Road

Mumbai, Maharashtra 400059

India

Main Phone: 91 22 6696 9696

Website: www.sunpharma.com

Type of Company: Public Company

Exchange and Ticker: NSEI:SUNPHARMA

Business Head: Dilip Shangvi


Revenue (2015) $4,021

EBITDA (2015) $1,149

Enterprise Value $30,395

Company Overview

Company Details

Notes: Data for Revenue and EBITDA for LTM ended Dec 31,

2015. Sun Pharma has March 31 fiscal year end. Enterprise value

as of Feb 24, 2016. Computed as market cap plus debt minus

cash.




46

#5: CR Pharmaceutical

CR Pharma is the largest pharmaceutical company in China, registered in Beijing,

and engaged in the whole drug industrial chain including marketing of

formulations, manufacturing of API and formulations and distribution.

CR Pharma is structured as a holding company for many subsidiary companies

which market generic pharmaceutical products across China. CR Pharma does not

have a presence in markets outside of China. One of its subsidiaries, Beijing

Pharma, is one of the largest distributors of drugs in the world.

CR Pharma does business across more than 30 provinces in China, providing

generics across therapeutic areas such as cardiovascular, diabetes, women health

and pediatrics. CR Pharma also manufactures and markets API, biosimilars,

Traditional Chinese Medicines (TCM), OTC products and medical devices.

CR Pharma owns many pharmaceutical marketing companies including including

China Resources Pharmaceutical Commercial Group Company, China Resources

Sanjiu Medical & Pharmaceutical Co., Ltd., China Resources double-Crane

Pharmaceutical co., Ltd., Shandong Dong-E-E-Jiao Pharmaceutical Co., Ltd., China

Resources Saike Pharmaceutical Co., Ltd., China Resources Zizhu Pharmaceutical

Co., Ltd., China Anhui World-best Pharmaceutical Co., Ltd., China Resources

PienTze Huang Pharmaceutical Co., Ltd.

CR Pharma is one of the seven core strategic business units of China Resources

(Holdings) Company Limited, which was founded in 1938.

This company is a state-owned enterprise.

Address:

China Resources Pharmaceutical Group Ltd.

27/F,Block A,Phoenix Plaza,No.A-5,Shu

Guang Xi Li, Chaoyang District

Beijing, 100028

China

Main Phone: 86-10-57985000

Website: www.crpharm.com

Type of Company: Privately held

Business Head: Wang Chuncheng


Revenue (2015) $7,410

EBITDA (2015) NA


Company Overview

Company Details

Notes: CR Pharma reports its 2013 revenues and financials on its

website. However, because Beijing Pharma is a big source of this

revenue and is primarily in distribution, we have reduced the company’s

revenue estimate by 50% and have converted hem from HKD to USD.

We do not have access to financial numbers since 2013 and thus have

assumed zero growth since then. In reality, CR Pharma may well be a

substantially larger company than portrayed here. Imputed value is

computed as 2015 revenue times the median revenue multiple for

publicly traded generic companies in Feb 2016.




47

#6: Yangtze River Pharma

Yangtze River Pharmaceutical Group (YRPG) is a fully-integrated generic

pharmaceutical company in China with marketing, R&D and manufacturing

capabilities.

YRPG does not market generics outside of China.

This state-owned group achieved $7.19 billion in revenue in 2014 with CAGR of

19% for the past 10 years.

YRPG has 24 branch companies with over 10,000 employees across China.

YRPG’s facilities cover 2 million square meters and its sales network spans all

over China.

Yangtze River Pharma may have the largest campus of any pharmaceutical

company in the world. It’s campus is over a mile wide and is best crossed by car.

More than 130 products have been registered and marketed in China, covering 10

major therapeutic areas with great emphasis in the fields of Infection, CNS, GI,

Respiratory, CNS and Oncology.

YRPG invests 3% of its annual sales revenue into technological innovation, and it

has built the Jiangsu New Medicine Institute through industry-university-

institution cooperation. Its 400-person R&D platform includes a world class

technological center, a key state-level laboratory of pharmaceutical preparation,

and an engineering R&D center for traditional Chinese medicine.

YRPG was founded in 1971.

Address:

Yangtze River Pharmaceutical Group

Bld 8, Lane 67, Libing Road, Zhangjiang High

Tech Park

Shanghai, 201203

China

Main Phone: 86-10-57985000

Website: www.yangzijiang.com

Type of Company: Privately held

Business Head: Xu Jingren


Revenue (2015) $7,190

EBITDA (2015) NA


Company Overview

Company Details

Notes: Revenue estimate provided by the company in its profile

at BioPharm America in September 2014. The estimate is

assumed to be for 2013. We have carried this number forward

assuming zero growth through 2015. It is likely, in fact, that

revenues have grown substantially for Yangtze River. Imputed

value is computed as 2015 revenue times the median revenue

multiple for publicly traded generic companies in Feb 2016.




48

#7: Mylan

Mylan offers a portfolio of more than 1,400 generic and branded pharmaceuticals

which are marketed in approximately 165 countries and territories.

Its global R&D and manufacturing platform includes more than 50 facilities. Mylan

is also one of the world’s largest producers of active pharmaceutical ingredients.

Through its global manufacturing facilities Mylan has manufacturing capacity

capable of producing approximately 65 billion oral solid doses, 3,600 kiloliters of

APIs, 500 million injectable units, 260 million patches and 15 million semisolid units

per year. Mylan reaches many channels including retail, hospital and direct.

Mylan holds the number two ranking in the U.S. generics prescription market both

in terms of sales and prescriptions dispensed.

Approximately one in every 13 prescriptions dispensed in the U.S. is a Mylan

product. Mylan’s sales are derived primarily from the sale of oral solid dosages,

injectables, transdermal patches, gels, creams, ointments and unit dose offerings.

Mylan has built up through acquisitions over time starting with Matrix for HIV

drugs and Merck KGAA’s generic business which created a more global platform

in 2007. Other key acquisitions include Famycare and Agila Specialties. The recent

large acquisition of Abbott’s European branded generics business has helped to

create critical mass for its business in Europe. Mylan will be further transformed

via its acquisition of MEDA, announced in February 2016.

Mylan was founded in 1961 and has 30,000 employees.

Address:

Mylan N.V.

Albany Gate, Darkes Lane

Potters Bar, Hertfordshire EN6 1AG

United Kingdom

Website: www.mylan.com


Exchange and Ticker: NYSE:MYL

Business Head: Heather Bresch (CEO)


Revenue (2015) $9,421

EBITDA (2015) $3,010


Company Overview

Company Details

Notes: Data for Revenue and EBITDA for FY ending Dec 2015.

Market value estimate as of Feb 27, 2016.




49

#8: EMS

EMS S.A sells generic pharmaceutical products in Brazil. It’s products include both

branded generics and INN generics.

EMS is the top-ranked domestic producer of generic pharmaceutical products in

Latin America. EMS has achieved this position through very rapid growth over years.

EMS’ portfolio of 2600 products includes analgesics, antibiotics, anti-inflammatories,

antihypertensive, anti-anemics, immunosuppressants, contraceptives, and others.

It serves hospitals, clinics, and health agencies. Many of EMS’ Rx products are

distributed through pharmacies.

EMS has also started Brace Pharma which invests in innovative biopharmaceutical

companies worldwide in partnership with Ray Schinazzi, one of the world’s leading

innovators in drug development.

EMS has over 1500 sales reps in Brazil who make over 5mm medical visits a year.

EMS exports its products to Latin America, Africa, Asia, MidEast, Canada and Europe.

Founded 52 years ago, EMS began its history with the São Bernardo plant do

Campo (SP) in 1964, expanded to Hortolandia (SP) in 1999 and implemented the

Research and Development Center in 2002. More recently, EMS expanded to

Manaus where it built a high volume formulation facility called the Novamed with

capacity to produce more than 18 billion tables a year.

EMS has more than 7,000 employees.

EMS S.A. was founded in 1964 and is based in Hortolândia, Brazil.

Address:

EMS S/A

Rodovia SP 101, Km 08

Hortolândia, São Paulo 13186-901

Brazil

Main Phone: 55 19 3887 9800

Website: www.ems.com.br

Type of Company: Private Company

Business Head: Carlos Sanchez (Owner)


Revenue (2015) $4,200

EBITDA (2015) NA


Company Overview

Company Details

Notes: A $4bn revenue estimate is from the Brace Pharma

website as of September 2015. This number is assumed to be

for FY 2014. Confirmed by EMS. Based on historical growth but

also adjusting for recent weakness in the Brazil market, Torreya

has estimated $4,200 in revenue for 2015 (5% growth only).

Brace also reported $3500mm in revenue for 2013. Wikipedia

indicates that 2012 revenue was 2700mm. Imputed market

value is computed as 2015 EMS revenue times the median

multiple for comparable publicly traded generic companies.




50

#9: Abbott Established Pharmaceuticals Division (EPD)

Abbott’s Established Pharmaceuticals Division (EPD), headquartered in Basel,

Switzerland, is a leader in the sale of branded generics in emerging markets.

Operational sales in the company’s 14 key emerging markets, which include Brazil,

China, Russia and India, have grown rapidly over the last five years.

EPD brings value to its patients and customers through a growing portfolio of high-

quality established pharmaceutical products and by building country-specific

portfolios of trusted products to suit local needs.

EPD has a broad portfolio of established pharmaceuticals – high-quality, affordable

branded generic medicines that have been successfully treating patients for many

years. This portfolio covers several therapeutic areas, including gastroenterology,

women’s health, cardiology, metabolic disorders and primary care: • Cardiology and

metabolic: Lipanthyl® (fenofibrate), Omacor®, Teveten®, Tarka®, Synthroid®,

Isoptin® • Primary care: Klaricid®, Influvac®, Serc®, Luvox®, Brufen® • Women’s

health: Duphaston®, Femoston® • Gastroenterology: Creon®, Adomet®,

Duphalac®, Dicetel® patient needs.

Abbott made two substantial strategic acquisitions in 2014 to expand its presence in

the generic pharmaceuticals market in emerging economies. The company bought

Chile-based CFR Pharmaceuticals for $2.9 billion in May 2014, followed by Russian

pharmaceutical company Veropharm for $631 million in June 2014.

Abbott was founded in 1888 and employs approximately 69,000 employees in 150

countries.

Address:

Abbott Product Operations AG

Hegenheimermattweg 127

4123 Allschwil

Switzerland

Main Phone: +41 61 487 02 00

Website: www.abbott.com


Business Head: Michael Warmuth


Revenue (2015) $3,720

EBITDA (2015) $711


Company Overview

Company Details

Notes: The revenue and EBITDA number for 2015 was

obtained from Abbott's 2015 financials in the segment data

section of its press release for Q4 2015 results (Jan 28, 2015).

Imputed market value is computed as 2015 revenue times the

median multiple for comparable publicly traded generic

companies.




51

#10: Hengrui

Jiangsu Hengrui Medicine Co., Ltd. (“Hengrui”) researches, manufactures, and sells

pharmaceutical products in China.

Hengrui is the largest Chinese pharmaceutical company that is not state owned.

Hengrui is the top marketer of generic cancer drugs and injectables in China.

It offers antineoplastic, angiomyocardiac, antibiotic, and other drugs in the form of

tablets, injectables, injections, oral solutions, capsules, and ointments.

Hengrui has revenue of $1.2 billion and is highly profitable.

The company stock was officially listed on the Shanghai Stock Exchange in 2000.

Its API and finished drugs manufacturing facilities have passed Chinese GMP

authentication. In addition, its plants which manufacture API of Etoposide,

Ifosfamide and Irinotecan HCl, and finished drugs of Irinotecan HCl Injection,

Letrozole Tablet and Cabapentin Capsule have passed the USFDA inspection.

Hengrui was the first Chinese manufacturer of injectables to export its products

to the U.S., Europe and Japan.

Hengrui has over 2900 sales reps that cover 80 major cities across China.

Hengrui invests 10% of its annual revenue in research and development, and has

constituted a thorough innovation system with R&D centers and clinical division

in New Jersey, Shanghai, Chengdu, and Lianyungang. Its R&D is focused on cancer

drugs and endocrinology.

Hengrui was founded in 1970 and is headquartered in Lianyungang, China.

Address:

Jiangsu Hengrui Medicine Co., Ltd.

Lianyungang Eco & Tech Development Zone

Lianyungang, Jiangsu Province 222047

China

Website: www.hrs.com.cn


Exchange and Ticker: SHSE:600276

Business Head: Piaoyang Sun


Revenue (2015) $1,401

EBITDA (2015) $376


Company Overview

Company Details

Notes: Data for Revenue and EBITDA for 2015 were based on

the company’s first nine months reported through Sep 30, 2015

and then annualized. Market value estimate as of Feb 27, 2016.




52

#11: Lupin

Lupin’s generic drug business encompasses the entire pharmaceutical value chain,

ranging from branded and generic formulations, APIs, advanced drug

delivery systems to biotechnology.

Lupin’s drugs reach 70 countries with a footprint that covers advanced markets

such as USA, Europe, Japan,Australia as well as emerging markets including

India, the Philippines and South Africa.

Lupin has been an outstanding financial performer, exhibiting consistent 20%+

annual growth driven by its record of developing new generic drugs and in

commercial globalization.

Lupin markets generic drug formulations in the areas of cardiovascular,

diabetology, asthma, pediatric, central nervous system (CNS), gastro-intestinal,

anti-diabetic, anti-infective, pain, anti- tuberculosis, cephalosporin, gynecology, and

other therapeutic areas.

Lupin has a growing branded business in the U.S. and is investing in NCEs.

The company was formerly known as Lupin Chemicals Limited and changed its

name to Lupin Limited in 2001.

Lupin was founded in 1968 by Dr. Desh Bandhu Gupta, then an Associate

Professor at BITS-Pilani, Rajasthan. Named after the Lupin flower because of its

inherent qualities and what it personifies and stands for, the company was

created with a vision to fight life-threatening infectious diseases and to

manufacture drugs of the highest social priority.

Address:

Lupin Limited

Laxmi Towers, B Wing


India

Website: www.lupin.com


Exchange and Ticker: BSE:500257

Business Head: Vinita Gupta (CEO)


Revenue (2015) $1,831

EBITDA (2015) $603


Company Overview

Company Details

Notes: Data for Revenue and EBITDA for FY ending March 31,

2015. Financials converted to USD from INR at exchange rate

on Feb 27, 2016. Market value estimate as of Feb 27, 2016.




53

#12: Fresenius Kabi IV Generic Drugs

The Kabi division of Fresenius specializes in intravenously administered generic

drugs, infusion therapies, clinical nutrition, and related medical devices, achieved in

2015 total sales of €5.95 billion.

Kabi’s generic IV drug revenues in 2015 were $2.7 billion making it a giant in

hospital generics on a global basis. It’s revenues are diversified, roughly a third each

in North America, Europe and the emerging markets.

Fresenius Kabi markets more than 100 product families for critically and chronically

ill patients.

Fresenius Kabi has a global footprint with 61 sales and marketing organizations, 72

production sites and 16 R&D centers around the world.

Fresenius Kabi has more than 33,000 employees.

Fresenius Kabi Oncology Plc. It produces generics of intravenous oncology products

such as Paclitaxel, Irinotecan, Oxaliplatin, Gemcitabine, Cytarabine, Carboplatin,

Topotecan, Docetaxel and Epirubicin. Kabi is also a world leader in cytotoxic API

manufacture.

Fresenius Kabi also does contract manufacturings for companies all around the

globe. With over 40 years of experience in contract manufacturing, we have

developed active partnerships with an impressive number of top-tier pharmaceutical

multinationals as well as start-ups and biotech companies.

Kabi’s roots go back more than 100 years to the founding of Fresenius SE in Bad

Homburg, Germany, where the company is headquartered today.

Address:

Fresenius Kabi Rx Segment

Else-Kröner-Straße 1

Bad Homburg, Hessen 61352

Germany

Phone: 49 61 72 686 0

Website: www.fresenius-kabi.com


Business Head: Mats Henriksson


Revenue (2015) $2,669

EBITDA (2015) $561


Company Overview

Company Details

Notes: The Fresenius Kabi IV segment includes generic IV drugs

revenue as reported in Fresenius financials which were

reported on February 24, 2016. Imputed market value is

computed as 2015 Kabi IV drugs revenue times the median

multiple for comparable publicly traded generic companies.

Revenue in Euros was converted to USD at the Feb 27, 2016

exchange rate. EBITDA is computed using the EBITDA margin

of 21% reported for the Kabi segment times IV drug revenue.




54

#13: Aspen Pharmacare

Aspen Pharmacare Holdings Limited, through its subsidiaries, manufactures, markets,

and distributes branded and generic pharmaceutical products.

Aspen is publicly-traded and headquartered in South Africa. The company is

increasingly focused on globalization and has expressed interest in entering the U.S.

generic market.

The company offers branded, generic, over-the-counter, consumer, and infant

nutritional products. It provides various product types, including tablets, capsules,

eye drops, injectable products, oral contraceptives, form-filled seals, suppositories,

liquids, creams, ointments, infant nutritional products, and specialist active

pharmaceutical ingredients.

Aspen is represented in 47 countries including South Africa, Australia, Hong Kong,

Malaysia, Philippines, Taiwan, Japan, Kenya, Nigeria, Tanzania, Uganda, Ireland, United

Arab Emirates, Germany, France, the Netherlands, Mauritius, Brazil, Mexico,

Venezuela and the United States.

Acquisitions announced in recent years further extended the Group’s emerging

market presence to the Commonwealth of Independent States (“CIS”), comprising

Russia and the former Soviet Republics as well as to Central and Eastern Europe.

Aspen has 26 manufacturing facilities at 18 sites on 6 continents and more than 10

000 employees.

Aspen Pharmacare Holdings Limited was founded in 1997.

Address:

Aspen Pharmacare Holdings Limited

Aspen Park

Durban, KwaZulu-Natal 4019

South Africa

Main Phone: 27 31 580 8600

Website: www.aspenpharma.com


Exchange and Ticker: JSE:APN

Business Head: Stephen Saad


Revenue (2015) $2,236

EBITDA (2015) $553


Company Overview

Company Details

Notes: The revenue and EBITDA for 2015 are for the FY

ending on June 30, 2015. Converted from South African Rand

to USD on Feb 26, 2016 exchange rate.




55

#14: ENDO Generics / Par Pharma

Endo International plc is a global specialty pharmaceutical company focused on

improving the lives of patients while creating value. Endo develops, manufactures,

markets and distributes quality branded pharmaceutical and generic

pharmaceutical products as well as over-the-counter medications through its

operating companies.

ENDO’s Par Pharmaceuticals (generic) segment offers products in the pain

management, urology, CNS disorders, immunosuppression, oncology, women’s

health, hypertension, generic lidocaine patch, and other markets.

Par has a strong manufacturing base in both Alabama and New York.

Par has an excellent pipeline of U.S. generic products including numerous first to

file products and Paragraph IV’s.

The combination in 2015 of ENDO’s Qualitest and newly acquired Par

businesses (known collectively as Par Pharmaceutical) expands Endo’s generics

business to be an industry leader. ENDO had previously acquired Boca and Dava

Pharma.

Par Pharmaceuticals sells its generics directly to large pharmacy chains; and

through wholesale drug distributors to pharmacies, hospitals, governmental

agencies, and physicians.

Endo International plc was founded in 1920 and is headquartered in Dublin,

Ireland.

Address:

Endo International plc

Minerva House

Dublin, Co. Dublin 4

Ireland

Website: www.endo.com


Exchange and Ticker: NASDAQ:ENDP

Business Head: Paul Campanelli


Revenue (2015) $2,436

EBITDA (2015) NA


Company Overview

Company Details

Notes: Data for Revenue for FY ending Dec 2015. These data

were obtained from ENDO’s YE press release dated Feb 29,

2016. We annualized Q4 revenue to obtain full year revenue

given the integration of Par Pharma in financials took place in

Q3 2015. Imputed value is computed as 2015 revenue times the

median revenue multiple for publicly traded generic companies

in Feb 2016.




56

#15: Celltrion

Celltrion, Inc. develops and produces various therapeutic proteins including

oncology treatment drugs by bioengineering mammalian cell-culture technology.

Celltrion is a world leader in biosimilar monoclonal antibodies and was the first

company to get a biosimilar antibody approved in 2013.

Celltrion markets Remsima, the first approved biosimilar mAb and tumor necrosis

factor antagonist that is used to treat rheumatoid arthritis, ankylosing spondylitis,

ulcerative colitis, adult Crohn’s disease, plaque psoriasis, and psoriatic arthritis.

Celltrion’s product pipeline includes CT-P6 for the treatment of breast cancer; CT-

P10 for the treatment of non- Hodgkin’s lymphoma and rheumatoid arthritis; and

CT-P27, a therapeutic antibody for treatment against universal influenza, which has

completed Phase IIA clinical trials.

Celltrion is also jointly developing mAbs for rabies with the Center for Disease

Control and Prevention in the United States; antibodies against various virus

subtypes and drug resistant hepatitis B viruses; Anti–GP88, mAbs for treatment of

breast and lung cancer diseases; antibody-drug conjugate. In addition, it offers

contract manufacturing services to biopharmaceutical companies.

Celltrion boasts one of the world's lagest state-of-the-art mammalian cell culture

plants with a total production capacity of 140,000L. These plants were designed and

constructed to comply with US FDA cGMP and EMA GMP regulations.

The Company’s head office is located in the Incheon Free Economic Zone.

Celltrion, Inc. was founded in 2002.

Address:

Celltrion, Inc.

23, Academy-ro

Incheon, - 406-840

South Korea

Main Phone: 82 3 2850 5000

Website: www.celltrion.com


Exchange and Ticker: A068270 (KOSDAQ)

Business Head: Jung-Jin Seo


Revenue (2015) $452

EBITDA (2015) $192


Company Overview

Company Details

Notes: Data for Revenue and EBITDA for FY ending December

31, 2015. Market value estimate as of Feb 27, 2016.




57

#16: Perrigo Prescription Pharmaceuticals Segment

Perrigo Company plc markets generic drugs and OTC products worldwide.

Perrigo operates through Consumer Healthcare (CHC), Branded Consumer

Healthcare (BCH), Prescription Pharmaceuticals (Rx Pharmaceuticals), Specialty

Sciences, and Other segments.

Perrigo’s business is mainly focused on OTC products. We have valued its

prescription pharmaceutical segment which is almost entirely comprised of generic

products.

Perrigo’s Prescription Pharmaceuticals segment offers generic and specialty

pharmaceutical prescription drugs in various dosage forms, such as creams,

ointments, lotions, gels, shampoos, foams, suppositories, sprays, liquids, suspensions,

solutions, powders, controlled substances, injectables, hormones, women's health

products, oral solid dosage forms, and oral liquid formulations; and ORx products.

Perrigo serves wholesalers; retail drug, supermarket, and mass merchandise chains;

hospitals; and pharmacies.

Perrigo’s Rx segment is particularly strong in the topicals and opthalmics area.

Perrigo offers the largest line of generic dermatologicals in the United States.

Perrigo was the subject of a hostile takeover in 2015 from Mylan who was

interested in its large global OTC business and its generic exposure. Perrigo’s

shareholders voted down the Mylan offer.

Perrigo was founded in 1887 and is headquartered in Dublin, Ireland.

Address:

Perrigo Company Public Limited Company

Treasury Building, lower Grand Canal Street

Dublin, Co. Dublin 2

Ireland

Main Phone: 353 1 709 4000

Website: www.perrigo.com


Exchange and Ticker: NYSE: PRGO

Business Head: Joe Papa


Revenue (2015) $1,073

EBITDA (2015) $540


Company Overview

Company Details

Notes: Calendar year data for 2015 and 2014 prescription

pharmaceuticals are included. These data were reported in a Feb

18, 2016 press release and a bridge 10KT on Feb 25, 2016. This

segment is valued using an EBITDA multiple given its abnormally

high margin. EBITDA for the segment is computed as operating

income plus an adjustment for noncash items as reported in the

10KT of 39% of depreciation and amortization less a non-cash tax

adjustment. We used 39% because 39% of 2015 CY operating

income of Perrigo was from the Rx segment.




58

#17: Sanofi Generics

Sanofi S.A. is a global pharmaceutical company headquartered in Gentilly, France.

The company was formed as Sanofi-Aventis in 2004 by the merger of Aventis and

Sanofi-Synthélabo, which were each the product of several previous mergers. It

changed its name to Sanofi in May 2011.

Sanofi has a substantial generics business which comprises Zentiva in Europe

(recently renamed Sanofi Generics); Winthrop in the United States; Medley in Brazil;

Genfar with a presence across South America; and Global Pharma based in Dubai.

Medley, based in Brazil, has approximately $1 billion in revenue while Zentiva does

does approximately $1 billion Euros in annual sales. Revenues of Winthrop in the

U.S. are also substantial while revenues of Genfar and Global Pharma are less

important.

Key transactions historically have been:

– Sanofi acquired Genfar S.A. in 2012. At the time of the acquisition Genfar was

the second largest generic company in sales and leader in units in Colombia and

has a commercial presence in Venezuela, Peru, Ecuador and ten other countries

in Latin America

– In 2009 Sanofi acquired Medley of Brazil for it’s generics business

– In 2014 Sanofi Acquired Globalpharma of Dubai for it’s generics business

– In 2008 Sanofi Acquired the Czech Generic drug maker Zentiva NV for $2.6B

Sanofi has indicated that it is open to divesting its European generic operations.

Address:

54, rue La Boétie

75008 Paris

France

Main Phone: +33 (0)1 53 77 40 00

Website: www.sanofi.com


Exchange and Ticker: NYSE: SNY

Business Head: Olivier Brandicourt


Revenue (2015) $1,984

EBITDA (2015) $496


Company Overview

Company Details

Notes: Sanofi disclosed revenues of its generics business as being

1805mm Euros in 2014. Given that Sanofi has indicated that this

business is under some pressure we have estimated flat revenues

for 2015. This was on p. 210 of its document entitled "Meet

Sanofi Management". Sanofi has indicated that its EBIT margins are

approximately 20%. We have thus estimated EBITDA margins to

be approximately 25%. Imputed value is computed as 2015

revenue times the median revenue multiple for publicly traded

generic companies in Feb 2016.




59

#18: Dr. Reddys

Dr. Reddy’s Laboratories Limited operates as a vertically integrated generic

pharmaceutical company across the world.

Dr. Reddy’s has three segments: Global Generics, Pharmaceutical Services and

Active Ingredients (PSAI), and Proprietary Products. The Global Generics segment

produces and markets finished pharmaceutical products as branded formulations or

generic finished dosages. This segment also has a biosimilars business.

The PSAI segment develops active pharmaceutical ingredients (APIs) and

intermediaries, which are used as ingredients for finished pharmaceutical products.

Dr. Reddy’s has 10 manufacturing facilities of which 5 are FDA inspected. These

facilities have capacity to generate over 25 billion generic units a year.

Dr. Reddy’s generics business offers over 200 high-quality generic versions of

expensive innovator medicines—at a fraction of the cost—in over 20 countries

around the world. Key therapeutic areas include anti-infective, metabolic disorders,

and pain and inflammation.

Dr. Reddy’s recently received an FDA warning letter that impacted 3 manufacturing

facilities in India. The company is aggressively moving to remedy the situation.

Dr. Reddy’s generic business is 54% North America; 15% India and 12% Russia.

Dr. Reddy’s has achieved 18% annualized top line growth over the last decade.

Dr. Reddy’s has approximately 20,000 employees.

Dr. Reddy’s was founded in 1984 and is headquartered in Hyderabad, India.

Address:

Dr. Reddy's Laboratories Ltd.

8-2-337, Road No. 3

Hyderabad, Andhra Pradesh 500034

India

Main Phone: 91 40 4900 2900

Website: www.drreddys.com



Business Head: Satish Reddy


Revenue (2015) $2,368

EBITDA (2015) $562


Company Overview

Company Details


2015. Market value estimate as of Feb 27, 2016.




60

#19: Sinopharm Rx Segment

Sinopharm is the largest integrated pharmaceutical company in China with more

than $40 billion in revenue in 2015; more than $2bn in EBITDA and approximately

$5 billion in cash.

Sinopharm is a state-owned enterprise that is supervised by the State-Owned

Assets Supervision & Administration Commission Of The State Council.

Sinopharm’s activities are principally in pharmaceutical distribution. However, among

its many subsidiaries are three companies which are publicly listed that sell non-

patented RX medicines in the fields of biosimilars, vaccines and Traditional Chinese

Medicine.

Sinopharm owns 11 wholly-owned or holding subsidiaries, and 6 listed companies:

Sinopharm Group Co., Ltd., China National Medicines Co., Ltd., Sinopharm Accord

Medicines Co., Ltd., Beijing Tiantan Biological Products Co., Ltd., Shanghai Shyndec

Pharmaceutical Co., Ltd. and China Traditional Chinese Medicine Co. Ltd.

The Sinopharm Rx Segment includes Beijing Tiantan; Shanghai Shyndec and China

TCM.

In Chinese pharmaceutical industry, Sinopharm is the first, the largest and the most

successful enterprise to cooperate with foreign companies. Sinopharm has

established dozens of successful Sino-foreign pharmaceutical joint ventures since

1980’s, e.g. China Otsuka Pharmaceutical Co., Ltd. , Sino-Swed Pharmaceutical Co.,

Ltd. (SSPC), Xian Janssen Pharmaceutical Co., Ltd., Sino-American Squibb

Pharmaceutical Co., Ltd. and Suzhou Capsugel Ltd.

Address:

China National Pharmaceutical Group Corp.

No.20 Zhichun Road Haidian District

Beijing, China 100088

Main Phone: 86 10 6203 3332

Website: www.sinopharm.com



Business Head: Zheng Hong


Revenue (2015) $2,043

EBITDA (2015) NA


Company Overview

Company Details

Notes: Data for Revenue is based on 2014 financials. Market

value estimate as of Feb 27, 2016 and is computed as the sum of

the market caps of Beijing Tiantan Biological Products Co., Ltd.,

Shanghai Shyndec Pharmaceutical Co., Ltd. and China Traditional

Chinese Medicine Co. Ltd. Imputed value is computed as 2015

revenue times the median revenue multiple for publicly traded

generic companies in Feb 2016.




61

#20: Hikma

Hikma Pharmaceuticals PLC develops, manufactures, and markets a range of generic

and in-licensed pharmaceutical products in solid, semi-solid, liquid, and injectable

final dosage forms in the Middle East and North Africa, the United States, Europe,

the United Kingdom, and internationally.

Hikma Pharmaceuticals is a multinational pharmaceutical company based in London,

that manufactures branded and non-branded generic and in-licensed pharmaceutical

products.

Hikma was first listed on the London Stock Exchange in 2005 is now a constituent

of the FTSE 100 Index. Hikma is the largest regional pharmaceutical company in the

MENA region and has a major presence in the U.S. generics marketplace.

Hikma was founded in Amman, Jordan in 1978 by Samih Darwazah.

Hikma operates through three segments: Branded, Injectables, and Generic. The

Branded segment offers over 450 products across a range of therapeutic areas.

These products are largely branded generics. The Injectables segment markets over

200 branded and non-branded products in many dosage strengths. This segment

also offers sterile liquid, lyophilized, and cytotoxic products. The Generics segment

provides 11 products in 44 dosage strengths and forms for various therapeutic

areas including analgesic, anti-infective, anti-inflammatory, cardiovascular, CNS,

respiratory, hormonal, and others.

Hikma Pharmaceuticals PLC was founded in 1978 and is based in London, United

Kingdom.

Address:

Hikma Pharmaceuticals PLC

13 Hanover Square

London, Greater London W1S 1HW

United Kingdom

Main Phone: 44 20 7399 2760

Website: www.hikma.com


Exchange and Ticker: LSE: HIK

Business Head: Said Dawarzah


Revenue (2015) $2,058

EBITDA (2015) $327


Company Overview

Company Details

Notes: The 2015 revenue estimate is pro forma for the Roxane

acquisition. In particular we annualized first half reported revenue

for Hikma and then added $650mm in Roxane 2015 revenue

(based on a news story issued in 2015).




62

#21: Apotex

Apotex is the largest Canadian owned pharmaceutical company with over 10,000

employees globally and with estimated sales of approximately $2 billion.

With its manufacturing sites, Apotex can produce up to 24 billion dosages per year.

It produces 300 medicines in 4,000 dosage forms and formats that are exported to

115 countries.

Extensive investments in Canadian facilities include over 3 million square feet in

manufacturing and R&D facilities in Richmond Hill, Toronto, Etobicoke, Brantford,

Windsor and Winnipeg.

The success of Apotex has been built not only on developing a broad product

portfolio but also in launching the difficult to do generics — taking on challenges of

developing difficult APIs and formulations, products with difficult clinical and

regulatory pathways, and patent challenges.

Apotex operates along 3 core Lines of Business: (1) Global Generics: Responsible

for the delivery of the generics portfolio to all global markets; (2) Global Specialty

Pharma: Responsible for the development, manufacturing and global

commercialization of Biosimilars and other specialty products and (3) Global Active

Pharmaceutical Ingredients (API).

Apotex has 500 products under development and will spend $2 billion in R&D

between 2015 and 2025.

Apotex Inc. was founded in 1974, and is the largest Canadian-owned pharmaceutical

company.

Address:

Apotex, Inc.

150 Signet Drive

Toronto, Ontario

M9L 1T9

Main Phone: 1-800-268-4623

Website: www.apotex.com


Business Head: Barry Sherman (Chairman)


Revenue (2015) $1,630

EBITDA (2015) NA


Company Overview

Company Details




Company disclosed revenues of approximately $2bn CAD in

March 2015 press release. Press release:

http://www.apotex.com/global/about/press/20150316.asp. The

company reports revenue of more than $2bn on its website in

Feb 2016. Because IMS MIDAS shows $3bn in gross revenue we

suspect that Apotex’s revenue is considerably higher than

reported. We converted CAD to USD using exchange rates as

of Feb 27, 2016 and imputed the value by multiplying 2015

revenue by the median multiple for public traded comparables.

63

#22: GSK Mature Brands

GlaxoSmithKline plc is a global pharmaceutical company with expertise in

therapeutic areas, including respiratory, anti-virals, central nervous system,

cardiovascular and urogenital, metabolic, anti-bacterials, and emesis, dermatology,

rare diseases, immuno-inflammation, vaccines, and HIV.

GSK also has a large separately managed portfolio of mature brands.

These brands are off-patent and are generic for all intents and purposes.

GSK went through a sale process for its established products brands in 2014 that

was eventually pulled. During the sale process the dimensions of the established

products portfolio became public.

The drugs that were in the sale process had a revenue base of approximately $1.6

billion.

GSK established brands include antidepressant Paxil, migraine treatment Imitrex,

Zantac for stomach acid and Zofran for nausea.

Our revenue estimate understates the size of the portfolio because there are

additional revenues from these products that have not been publicly disclosed for

emerging markets.

GlaxoSmithKline plc was founded in 1935 and is headquartered in Brentford, the

United Kingdom.

Address:

GlaxoSmithKline Pharmaceuticals PLC

980 Great West Road

Brentford Middlesex TW8 9GS

United Kingdom

Main Phone: 44 20 8047 5000

Website: www.gsk.com


Exchange and Ticker: LSE: GSK

Business Head: Andrew Witty


Revenue (2014) $1,600

EBITDA (2014) NA


Company Overview

Company Details

Notes: The 2014 revenue estimate was disclosed in a Reuters

story in 2014 describing a potential sale of the GSK products.

Imputed value is computed as 2015 revenue times the median

revenue multiple for publicly traded generic companies in Feb

2016. One could argue that this process overstates the value of

these products since they are declining. However, these products

are considerably more profitable than traditional generics.




64

#23: Cipla

Cipla is a global generic pharmaceutical company which uses cutting edge

technology and innovation to meet the everyday needs of all patients.

Its portfolio includes more than 1,500 generic pharmaceutical products provided to

150 countries across therapeutic categories with one quality standard globally.

Cipla has an 80 year history and a well-respected brand for delivering generics.

Cipla’s emphasis on access for patients was recognized globally for the pioneering

role played in HIV/AIDS treatment as the first pharmaceutical company to provide a

triple combination anti-retroviral (ARV) in Africa at less than one dollar a day and

thereby treating many millions of patients since 2001.

Cipla acquired Invagen, a U.S. generic company, from Hetero in February 2016

which adds $230mm in revenue. Cipla’s press release announcing the Invagen

acquisition noted: “The acquisition of InvaGen pharmaceuticals also provides Cipla

with about 40 approved ANDAs, 32 marketed products, and 30 pipeline products

which are expected to be approved over the next 4 years. In addition, InvaGen has

filed 5 first-to-file products. Dosage forms include immediate release, modified

release and extended release tablets and capsules. With a manufacturing footprint of

~350,000 sq.ft of GMP area, InvaGen has 3 units located in Long Island, NY, with a

total production capacity of 12 billion tablets and capsules per annum and about

500 employees. “

Cipla was founded in 1935 Dr. K A Hamied, with a vision to make India self-

sufficient in healthcare.

Address:

Cipla Limited

Cipla House


India

Main Phone: 91 22 2482 6000

Website: www.cipla.com


Exchange and Ticker: NSEI:CIPLA

Business Head: Yusuf Hamied (Chairman)


Revenue (2015) $2,018

EBITDA (2015) $442


Company Overview

Company Details

The revenue and EBITDA for 2015 are annualized based on

quarterly results. These numbers are converted from INR to

USD based on exchange rates as of Feb 27, 2016.




65

#24: Zydus Cadila

Cadila Healthcare Limited engages in the research, development, production,

marketing, and distribution of pharmaceutical products.

This company is sometimes confused with Cadila Pharma which is a separate player

with a common lineage, also based in Ahmedabad. To avoid confusion, we refer to

Cadila Healthcare as Zydus Cadila.

Zydus’ portfolio includes active pharmaceutical ingredients, veterinary, and human

generic drug formulations.

Zydus has over 20 manufacturing sites which produce more than 15 bn pills / year.

Zydus markets its products in the U.S. through its Accord Health subsidiary.

Zydus has seen 43 fold in revenue over the last 20 years.

Zydus is developing a pipeline of 24 biologics comprising 20 biosimilars and 4 novel

biological products; and new drugs in cardio-metabolic, inflammation, pain, and

oncology therapeutic areas. Recently, Zydus launched Exemptia, the first biosimilar

for Adalimumab, the largest selling therapy worldwide for inflammatory arthritis.

Zydus also has a vaccine portfolio, an animal health portfolio and a formidable NCE

portfolio. Zydus is also the only Indian pharma company to launch its own patented

NCE – Lipaglyn, which has been approved for the diabetic dyslipidemia.

Zydus has over 16,000 employees and is headquartered in Ahmedabad, India.

The group’s origin can be traced to 1952 when it was founded by Late Mr.

Ramanbhai B. Patel.

Address:

Cadila Healthcare Limited

Satellite Cross Roads, Sarkhej-Gandhinagar Hwy

Ahmedabad Gujarat 380015

India

Main Phone: 91 79 2686 8100

Website: www.zyduscadila.com



Business Head: Pankaj Patel


Revenue (2015) $1,384

EBITDA (2015) $283


Company Overview

Company Details

Notes: The 2014 revenue estimate was disclosed in a Reuters

story in 2014 describing a potential sale of the GSK products.

Imputed value is computed as 2015 revenue times the median

revenue multiple for publicly traded generic companies in Feb

2016. One could argue that this process overstates the value of

these products since they are declining. However, these products

are considerably more profitable than traditional generics.




66

#25: Aurobindo

Aurobindo, headquartered in Hyderabad, India, is a generics and API manufacturing

powerhouse:

– High-growth company with a large ANDA pipeline in multiple therapeutic areas

and formulations

– Major presence in the US with a rapidly growing injectable business

Increased revenues from nearly $950M in FY2013 to over $2 Billion in 2015.

– Generic sales account for 65% of revenue, with API manufacturing accounting

for the rest

Aurobindo’s manufacturing facilities are approved by several leading regulatory

agencies like US FDA, UK MHRA, Japan PMDA, WHO, Health Canada, MCC South

Africa and ANVISA Brazil. The company’s robust product portfolio is spread over 6

major therapeutic/product areas encompassing Antibiotics, Anti-Retroviral, CVS,

CNS, Gastroenterological,

US generic sales comprised over 60% of total generic sales in FY2014, with sales

over $550M

AuroMedics, arm that markets injectable products in the US, is expected to grow by

over 120% and account for 27% of total Aurobindo sales in FY2015

Unlike other Indian domiciled generic players, Aurobindo does not have a significant

domestic presence

Aurobindo began operations in 1988-89 with a single manufacturing unit

Address:

Aurobindo Pharma Limited

Water Mark Building

Hyderabad, Andhra Pradesh 500 084

India

Main Phone: 91 40 6672 5000

Website: www.aurobindo.com



Business Head: N.Govindarajan


Revenue (2015) $1,930

EBITDA (2015) $466


Company Overview

Company Details


2015. Market value estimate as of Feb 27, 2016. INR financials are

converted to USD using exchanges rates as of Feb 27, 2016.




67

Appendix A-1. About Torreya Partners

68

Top Rank#1 Ranking by Number of

Strategic Advisory

Transactions Closed in the

Pharmaceutical Sector

Worldwide in 2015.

25 Dealsclosed in 2015 across the

pharma sector.

$7.6 Billionin transactions closed in 2015

across the pharma sector. Over

$100bn in transactions across

180+ deals closed since 2007.

Top ranked across numerous

subsectors in this time.

An Investment Bank Focused on Pharmaceuticalswith 34 Employees Across 2 Offices + Strong Global Coverage

and deep sector expertise focused on long-term interest of our clients

19 Senior

AdvisorsMost with industry experience.

Examples of Transaction Work in 2015

69

Selected Torreya Advisory Roles in Branded Generics, Formulations and API

Acquired assets of

January 2016

$10 mm

Sale of ANDA

Portfolio to

November 2015

Sale of ANDA

Portfolio to

July 2015

$25 mm + Profit Share

Sale of Zonalon®

to

February 2015

$9.5 mm

Sale to

December 2015

Terms Undisclosed

(Vertice Pharma)

Acquisition of

November 2015

CAD$47 mm

Divestiture of

injectable assets of

Bedford

LLaboratories

February 2016

Terms Undisclosed

Advisor to owner in sale

to

January 2015

$2.1 bn

Acquisition of US Rights

to Zonegran® from

September 2014

$90 mm

Sale of Pessac Liquids /

Intermediates Plant to

October 2014

$26 mm

Sale of ANDA

Portfolio to Unnamed

Buyer

October 2014

Sale of ANDA

portfolio to

October 2014

$18 mm

Sale of ANDA

portfolio to

December 2013

$12.5 mm +

profit share

Sale to

October 2010

Sale to

December 2007

$7 mm

Sale of US Rights of

Naprelan to

November 2013

Terms Undisclosed

Acquisition of Six Off

Patent Drugs to form

Actient Pharma from

July 2010

$87 mm

Acquisition of Donnatal

from

May 2014

$325 mm$275 mm

http://www.midlothianlabs.com/index.cfm

http://www.midlothianlabs.com/index.cfm

70

Details on Selected Recent Advisory Roles

Torreya is one of the most active advisors in the generic space

ANI acquired 22 previously

marketed ANDAs from Teva for

$25 million in cash at closing a %

of future gross profit from

product sales upon re-launch

This acquisition expands ANI’s

pipeline to 68 products with a

total market value of ~$4 billion

Torreya acted as financial advisor

to Teva following our work on its

last ANDA divestiture to ANI in

December 2013

Crown raised $20 million in senior

secured term loan from Hayfin

Advisors

This allows Crown to double its

sales force and focus on growing

its branded and generic

prescription businesses

Hayfin has also agreed to partner

with the management on further

acquisitions


to Crown Labs

IGI acquired Alevda Pharma, a

Canadian injectable generic

company for CAD$ 47 million in

cash

This acquisition expands IGI’s

geographic footprint and brings it

a complementary portfolio

The company sees the opportunity

to register and sell each other’s

products cross-border


to IGI

A public generic pharma acquired

a portfolio of injectable ANDAs

from Hikma

Hikma was required by the FTC to

divest the portfolio to satisfy as

one of the closing conditions for

the pending acquisition of Bedford

The goal was to sign the deal

quickly while maximizing the value


to Hikma and identified a highly

motivated buyer

July 2015

$25 mm + Profit

Share

Sale of ANDA

Portfolio to

September 2015

$20 mm

Debt Financing from

October 2015

CAD$47 mm

Acquisition of

October 2015

Sale of ANDA

Portfolio to

Public Generic

Pharma

71

Excellence in Both M&A and Licensing Transactions

Torreya has advised on more than 50 M&A transactions… … and is the advisor of choice on business development deals.

Sale to

July 2014

$557 mm

($75 mm upfront)

Sale to

September 2013

$250 mm

($35 mm upfront)

License WW Rights

of pidilizumab to

October 2014

$335 mm

August 2013

$550 mm

Oncology

Partnership with

Sale to

July 2014

$688 mm

($538mm upfront)

July 2015

$605 mm

($95 mm upfront)

Sale to

January 2015

$470 mm

Sale of FXR

Programs toLicense of TGFβ

October 2015

$517 mm

($37mm upfront)

72

This presentation has been prepared by Torreya Partners LLC or Torreya Partners (Europe) LLP together with their respective affiliates and the members, directors, officers, employees, advisors, or agents of each of them

(together “Torreya Partners”) for the exclusive use of the party to whom Torreya Partners delivers this presentation (the “Company”) in connection with an actual or potential mandate or engagement, and may not be used

or relied upon for any purpose other than as specifically contemplated by a written agreement with Torreya Partners. The information used in preparing these materials was obtained from or through public sources or the

Company. Torreya Partners assumes no responsibility for independent verification of such information and has relied on such information being complete and accurate in all material respects. No representation, warranty or

undertaking, express or implied, is made and no responsibility is accepted by Torreya Partners as to or in relation to the accuracy or completeness or otherwise of these materials or as to the reasonableness of any other

information made available in connection with these materials (whether in writing or orally) to any interested party (or its advisors). Torreya Partners will not be liable for any direct, indirect, or consequential loss or damage

suffered by any person as a result of relying on any statement contained in these materials or any such other information. None of these materials, the information contained in them or any other information supplied in

connection with these materials, will form the basis of any contract. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies)

prepared by or reviewed and discussed with the managements of the Company and/or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been

reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecast obtained from public sources, represent reasonable estimates).

There is no guarantee that any of these estimates and projections will be achieved. Actual results will vary from the projections and such variations may be material. Nothing contained herein is, or shall be relied upon as, a

promise or representation as to the past or future. Torreya expressly disclaims any and all liability relating or resulting from the use of this presentation. Torreya Partners assumes no obligation to update or otherwise review

these materials. These materials have been prepared by Torreya Partners and its affiliates and accordingly information reflected or incorporated into these materials may be shared with employees of Torreya Partners and its

affiliates and agents regardless of location. This presentation speaks only as of the date it is given, and the views expressed are subject to change based upon a number of factors, including market conditions and the Company’s

business and prospects.

This presentation has been prepared on a confidential basis solely for the use and benefit of the Company; provided that the Company and any of its employees, representatives, or other agents may disclose to any and all

persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax

treatments and tax structures. Distribution of this presentation to any person other than the Company and those persons retained to advise the Company, who agree to maintain the confidentiality of this material and be

bound by the limitations outlined herein, is unauthorized. This material must not be copied, reproduced, distributed or passed to others at any time without the prior written consent of Torreya.

This presentation has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instrument. The Company should not construe the

contents of this presentation as legal, tax, accounting or investment advice or a recommendation. The Company should consult its own counsel, tax and financial advisors as to legal and related matters concerning any

transaction described herein. Torreya Partners does not provide any tax advice. Any tax statement herein regarding any U.S. federal or other tax is not intended or written to be used, and cannot be used, by any taxpayer for

the purpose of avoiding any penalties. Any such statement herein was written to support the marketing or promotion of the transaction(s) or matter(s) to which the statement related. Each taxpayer should seek advice based

on the taxpayer's particular circumstances from an independent tax advisor. This presentation does not purport to be all-inclusive or to contain all of the information that the Company may require. No investment, divestment

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Insofar as these materials originate in the United Kingdom or are capable of having an effect in the United Kingdom (within the meaning of section 21 of the Financial Services and Markets Act 2000) they are directed only at

classes of recipient at whom they may lawfully be directed without contravening that section or any applicable provisions of the Conduct of Business Sourcebook of the Financial Conduct Authority, including persons of a kind

described in Article 19 (Investment professionals) or Article 49 (High net worth companies, unincorporated associations etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended)

and are not intended to be distributed or passed on, directly or indirectly, to or relied or acted on, by any other class of persons.

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