GROWTH THROUGH EFFICIENCY - Webowizard · Shasun Pharmaceuticals Ltd. with Strides Shasun Limited....
Transcript of GROWTH THROUGH EFFICIENCY - Webowizard · Shasun Pharmaceuticals Ltd. with Strides Shasun Limited....
GROWTH THROUGH
EFFICIENCY
Investor presentationSeptember 2019
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CORPORATE OVERVIEW
OUR CAPABILITIES
EXPANSION PLANS
FINANCIAL HIGHLIGHTS
What’sInside
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Evolution on an experienced foundation
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•Strategic recourse to focus on mature APIs offering
supply chain security for the regulated markets
•Organic growth with over 80% regulated market
business along with profit sharing partnerships
•Demerged Human API business from SeQuent to
operate as Pure Play animal healthcare company
•Leadership position in key API’s with scale of
manufacturing from Low Volume to Mid to High
Volume
• Investments across the facilities to focus on quality
and EHS
•Expansion across the regulated markets with key
approvals and compliance record
•Demerged the select API business of Strides Shasun
to integrate with human API business of SeQuent
Demonstrated operational excellence over 2 decades
Why a shift towards standalone API setup?
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While the opportunity is growing, it needs a focused play
Supply chain
discontinuance
• Regulatory requirements are
tightening and will likely continue to
do so with a push for more
transparency in the supply chain.
This could result in requiring
certification for good manufacturing
practices for key intermediates and
raw materials*
USFDA’s increasing
oversight on APIs
• FDA’s increased oversight on
resulting in 483s, warning
letters and import alerts
Increasing Pollution and
Environmental Concerns IP conflicts and
competing interests
• Forward integration interest
of majority API players has
led to concerns around
potential competition with
international customers along
with issues around IP
security and conflict
• Governments’ increasing focus on pollution
controls and zero liquid discharge
• Environmental regulations, especially in China,
are putting pressure on corporations to remedy
pollution problems. Some plants are being shut
down or moved, causing capacity issues and
supply chain interruptions from raw materials to
intermediates and APIs.
Highlights
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Pipeline of 20+
products under
different stages of
development
Research
Presence in 75+
countries,75%+ regulated
market sales and 100+
Filings
Market Presence
5 Globally compliant API and
diversified facilities with
capacity over 1600kl
Infrastructure
Commitment to highest
levels of compliance,
consistency and quality
with zero 483s in last 2
USFDA audits
Compliance
Consciously favoring value
over volumes thereby
limiting pricing pressure in
the long term and creating
capacities after assuring
demand
Orientation
Complex chemistry capabilities including
handling of catalytic hydrogenation,
hydride reductions, organometallic
reactions, hazardous reactions amongst
others
Capabilities
API business model with large scale infrastructure, wide products and established customer relationships
Solara Business at a glance
YEARS OF EXPERIENCE
CAPABILITIES
MANUFACTURING
EMPLOYEES
R&D CENTRES
SCIENTISTS
30+ years of experience in research based API and intermediate development
Offers Contract Research and Manufacturing and Development Services across the entire value chain of a new chemical entity which covers from Discovery to Commercial Phase.
5 globally compliant manufacturing facilities with 1,600KL capacity and capabilities in high vacuum distillation, hydrogenation, halogenation, Grignard reaction, polymer chemistry amongst others
2,500+ people across multiple locations embracing our culture of integrity, and transparency
Two state of the R&D centres with new and better technologies at competitive cost
200+ scientists with strong technical leadership to develop high-quality services that create strategic value for our partners and customers
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Doing what is “RITE” for the customers
RESPECTWe at Solara respect our Employees, Customers and Partners. Here we ensure that our client’s expectations are consistently met
TRANSPARENCYRegularly engage with investors, suppliers, customers, and stakeholders by providing regular financial and business updates.
INTEGRITYOur business stands on the pillar of integrity, honesty and fairness. Everything we do here stands the test of public scrutiny
EFFICIENCYWorking towards achieving a high level of efficiency in all process and systems and fulfilling the promises made to stakeholders.
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Brief Profile of the Board of Directors
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Deepak Vaidya
Dr. Kausalya Santhanam
Non-Exec. Director & Chairman
Independent Director
Nirmal BhogilalIndependent Director
Independent Director
Fellow member of the ICA in
England and Wales. He has
previously worked as the Country
Head of Schroder Capital Partners
(Asia) Pte. Ltd. for over 12 years.
He is experienced in the corporate
financial services industry in India
and abroad.
Founder of SciVista, she is a
Patent attorney registered with
IPO as well as the US PTO.
She has a Ph.D in Cell biology
and Immunology and her Post
Doctoral training was in Cancer
Biology at Center for Cellular
and Molecular Biology
He is a practicing Chartered Accountant
and a Management Consultant at
Bangalore having an experience of 36
years in Direct tax matters, Audit and
Assurances. He was nominated by
KSIIDC for few listed Companies and
currently holds directorships in reputed
companies
Chairman of the Batliboi Group.
He was Past President and
Committee Member of the Indian
Machine Tool Manufacturers
Association. He has been
Chairman of various committees
in CII and its Western Region
Ronald Tjeerd de Vries (Ron)Independent Director
Ankur Thadani is a Principal at TPG
Growth, based in Mumbai. He joined
TPG in 2013 and has worked on
multiple investments in Healthcare,
Energy and Consumer sectors across
India and the broader South-Asia
region. Ankur also serves on the board
of CTSI, Rhea Healthcare.
Ankur Thadani
Independent Director
Mr. Ronald Tjeerd de Vries (Ron) is
a MsC in Chemical Engineering and
IMD executive Leadership Alumni.
He has 25 years’ experience in the
MNC Corporate Sector in Pharma
and Food Presently he is Owner
and MD of RDV Consulting based
at Auckland (NZ).
R. Ramakrishnan
Solara’s leadership team
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Leadership with several years of experience in the pharmaceutical industry
Jitesh has more than 20 years’ experience and has led the North America API business as well as managed the Formulations P&L business of erstwhile Shasun Pharmaceuticals Limited, whichgot merged with Strides Shasun Limited. Jitesh has been responsible for P&L business for North America and Europe Finished Dosage Form (Regulated Markets-Region 1) and overallresponsible for API business P&L.
Sreeni has over 24 years of experience in Pharmaceutical Manufacturing, Technology Transfer, Project Management in setting up facilities, Quality Assurance, Plant operations and Sales & Marketing.
Sreenivasa Reddy B. (Sreeni)COO
Jitesh Devendra (Jitesh)CEO
Hariharan S. (Hari)CFO
Hariharan is a Cost Accountant with rich and varied experience of more than 30 years in field of Corporate Finance, Accounts and Strategic planning. He played a vital role in the merger process ofShasun Pharmaceuticals Ltd. with Strides Shasun Limited.
Sundara Moorthy V. (Sundar)SVP- Quality Management & Regulatory Affairs
Venkateshan Rangachari (Venky)CBOVenky has over 28 years of experience in Executive Management and leadership roles in pharmaceutical and project management across varied geographies in Healthcare space. He has rich experiencein API and CRAMS business across the world, has held senior positions in business development and managing overseas subsidiaries/ manufacturing units .
Sundara Moorthy has done his Post Graduation in Organic Chemistry. He has rich and diversified experience of 23 years in the Quality Management, Regulatory Affairs and Compliance functions.
Swaminathan Srinivasan(Swami)Head – Research & Development
25+ years of experience in generic pharmaceutical industry with vast exposure in active pharmaceutical ingredient as well the Dosage forms with deep understanding of the industry dynamics. He wasassociated with Jubilant Life Sciences, Alembic, Dr. Reddy Laboratories, Orchid & Ranbaxy.
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Robust manufacturing capabilities5 facilities with all major regulated market approvals
CuddaloreMysore
INTERMEDIATES
Puducherry
Mangalore
Ambernath
EU GMP
Vizag(Greenfield Site)
Core focus• Mirrored facilities for developing products • Deploy systems that are highly automated and stringent, specifically in
the labor intensive areas.• Focus on technology and production processes that represent a clear
advantage against the industry standard
Capabilities1600 KL capacity with capabilities in high vacuum distillation, hydrogenation, halogenation, Grignard reaction, polymer chemistry amongst others
Key Approvals Globally compliant API facilities with all regulatory approvals and adherence to the highest quality standards
Manufacturing StrategyCapacity creation after assurance of demand and location based diversification for minimizing concentration risk
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Facilities
Pondicherry Facility Multipurpose Cuddalore Facility
▪ The buildings for the manufacturing of Intermediates and isolationof final drug substance are separate.
▪ Packing sections are controlled and meets ISO Class - 8requirements.
▪ Reactors are in the range of 1200 L to 12,500 L of size with MOC of SS, MSGL, GL
▪ Highly flexible pilot plant with a broad range of equipment
▪ FDA inspected cGMP multi purpose API and intermediate facility
▪ Broad range of reactor sizes with flexible containment and LEV facilities. The facility has reactors varying in size from 250 L to 12500 L
▪ Different material of construction SS, GL, SS-GL, MS-GL, Hastealloy
▪ Temperature ranges from –90°C to +200°C
▪ Segregated hydrogenation facility with multiple gas scrubbing systems
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Facilities
Multipurpose Mangalore Facility
▪ Multi purpose cGMP API and intermediate facility inspected by DCD, USFDA,
WHO, EDQM, MFDS, TGA, AEMPS, ISO-14001
▪ 6 Full fledged cleanrooms meeting ISO class-8 slandered can hand six
products simultaneously
▪ Broad range of stainless steal and Mild steal glass lined reactors of size from
250 L to 6300L
▪ Self contained “Pilot facility” having SS, GL and all glass reactors of size 20 Lit
to 250Lt
▪ Pressure reaction facility, Operating temperature ranges from –20°C to +130°C
Multipurpose Ambernath Facility
▪ FDA inspected cGMP multi purpose API and intermediate facility
▪ The facility has reactors varying in size from 250 L to 8000 L
▪ Different material of construction SS, GL, SS-GL, MS-GL
▪ Temperature ranges from –20°C to +130°C
▪ Segregated hydrogenation facility with multiple gas scrubbing systems
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Dedicated research and development capabilities
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Strong technical leadership to develop
high-quality pharma products that
create strategic value for our partners
and customers
Technical Expertise
R&D capability to develop over an
entire cycle with new and better
technologies at competitive cost
Development
Focus on differentiated products
characterized by complex formulations
across diverse therapeutic categories
Product Selection
Strong IP assessment capabilities and
strong global regulatory expertise
Regulatory Filings
Our R&D Centre in Chennai Our R&D Centre in Bangalore
Two India based R&D Centre for best in class product development
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Foothold in key markets
37%
US6%
Japan
18%
SE Asia
25%
EU
Establishing relationship with customers ensuring business enhancement
3%
LatAm
3%
MENA
8%
WHO
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Regulatory Approvals – Inspection Track Record
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Regulatory AgencyLatest Inspections at
Puducherry Cuddalore Mangalore Ambernath
United States May-2017 Jul-2019 Jul-2018 Jan-2019
Europe Nov-2014 Jan-2017 Sept-2017 Oct-2017
Geneva - Oct-2016 Feb-2018 -
India Jul-2018 Jan-2018 Aug-2018 Dec-2017
TG TGA, Australia - May-1998 Feb-2013 -
Uni United Kingdom Jan-2017 Jan-2017 - -
Japan Nov-2007 Mar-2017 Jul-2019 -
Regulatory Approvals – Inspection Track Record
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*As Mysore is an intermediate site, no regulatory inspection has been conducted so far. Site has a valid GMP certificate issued by the Drug Control Department, Government of Karnataka
Wide product offerings and pipeline
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Rich basket of niche high value products for the global markets
DMF FILING RUN RATE GEOGRAPHY WISE FILINGS
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08
05
8
6 6
910
FY16 FY17 FY18 FY19 FY20(P)
• 50+ Commercial APIs predominantly in Anthelmintic, Anti-malarias, Anti-infective, Neuromuscular Insomnia, Anti Psychotic Hyperkalemia, amongst others
• 20+ APIs under development across across Anthelmintic, Anti-malarias, Beta blockers, Muscle relaxants, Novel Oral Anti-Coagulants, Anti-infective and other niche segments
• 140+ DMFs filed
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Promising Approach for CRAMS
Customer confidentiality guaranteed
ConfidentialityHighly responsive, customer focused teams from inquiry to delivery
ResponsivenessDelivery performance a KPI, even at the proposal stage
Performance
Dedicated Project Management, driving project execution and responding to customer need
TeamHigh level of communication, visibility and customer involvement
TransparencyPost-project customer survey to continuously monitor our performance and drive improvement
Feedback
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Wide gamut services across the development chain
Chemistry Pre-clinical Phase 1 to Phase 3 Commercial
• Hit to Lead• Lead Optimization
• Synthesis & Purification• Ref. Std. & Impurities
• Process Optimization• cGMP Production
• Process Validation • Capacities• Cost Advantage
Contract ManufacturingAPIs and Advanced Intermediates
Custom SynthesisPilot campaigns, Clinical supply
Contract Development (FTEs)Lead Analogues, Building Blocks, Ref Stds
CONTRACT DEVELOPMENT
CONTRACT MANUFACTURING
ANALYTICAL & REGULATORY SUPPORT
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Business development structure with customer centricity
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Business Development Team
Go to market team
Emptor (Customer centricity)
Aligned to execute business seamlessly while focusing on customer
service, complaints, supply assurances and receivables
Post the handover from BD team, GTM team focusses on business execution,
driving growth strategies and retaining customer business
Core focus around portfolio strategy, selection, new opportunities and business
analytics
How do we differentiate over traditional API approach
• Focus on end to end process
• Customer centricity at the core
• Closed cohesive working with analytics
and R&D
High focus on customer advocacy
EHS and Safety
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Zero Liquid Discharge System
▪ Low TDS treatment followed by
Biological treatment system cum RO
Plant.
▪ High TDS treatment followed by Pre
Chemical treatment cum MEE & RO
Plant.
▪ Agitator Thin Film Drier followed by
MEE Plant to separate solids.
▪ Recovered water used in gardening
and utility for plant
▪ Solids disposed to government
authorized landfills
Biological Treatment Plant
▪ Biological Treatment Plant –
LTDS & HTDS
MEE
▪ Multiple Effect Evaporation
System (MEE Plant)
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Up Coming Greenfield Site - Vizag
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Project Roadmap – Multi Purpose Facility - Vizag
Project approval Construction Installation Facility Validation
• Project Approval – June’19
• Statutory Approvals & Ordering of Long Lead Items July’19 – Sept’19
• July’19 –Jan’20 • Dec’19 – Apr’20• Validation between
May’20- June’20
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Other planned initiatives
Vizag green field multi purpose facility will be up and running in Q2 of 2020
Solara is looking forward to acquire kilo lab facilities in USA and Europe
Willing to provide dedicated facilities for our esteemed customers based on their future requirement
Solara is always stay ahead of providing advance and state of the art infrastructure and instrumentation for our existing
customers in collaborative manner.
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Significant growth and profitability over 5 quarters
REVENUE(₹ in million)
NET PROFITS(₹ in million)
EBITDA(₹ in million)
EARNINGS PER SHARE(₹ / share)
3,0333,437 3,601
3,919
3,345
Q1'19 Q2'19 Q3'19 Q4'19 Q1'20
92 96
221262 265
Q1'19 Q2'19 Q3'19 Q4'19 Q1'20
465 494
656701
663
Q1'19 Q2'19 Q3'19 Q4'19 Q1'20
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910 10
Q1'19 Q2'19 Q3'19 Q4'19 Q1'20
Well capitalized to fund future growth initiatives.
Including for cash reserves and committed equity infusion from the promoters and our lead investor – TPG Growth, Solara has a surplus of ₹5 billion ($68 million)
Growth in Reported EBITDA margins over last 5 quarters
Steady progress through the proactive cost improvement programs
Fast expanding portfolio of new products and new customers to access new markets for existing products
Strong leverage situation supporting better EBITDA to EPS conversion
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FY19 Recap
Figures in ₹mn, unless a % or stated otherwise. All financial numbers are for the continuing business
NET DEBT/EQUITY (X) NET DEBT/EBITDA (X)
ROCE % ASSET TURNS (X)
1.5
0.8
FY18 FY19
4.0
2.0
FY18 FY19
8.4%
14.0%
FY18 FY19
1.5
1.6
FY18 FY19
FY19 VS FY18 PERFORMANCE
Particulars FY19 FY18 YoY%
Revenue 13,991 10,367 35%
Operating EBITDA 2,862 1,559 84%
Operating EBITDA
Margins20% 15% 550 bps
R&D Cost -448 -103
Forex gain/(loss) -98 2
EBITDA 2,316 1,458 59%
EBITDA Margins 17% 14% 250 bps
HIGHLIGHTS
• Growth in Revenue by 35% due to continued growth in base
business & new product launches.
• Operating EBITDA up by 84% due to price increase; better
capacity utilization and cost improvement program
• 4x growth in R&D investments to develop new products and
process improvements.
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Right sized balance sheet with improvements in key ratios
Improvements in financial ratios led by a right sized balance sheetposition
Net Debt to EBITDA comfortable at <2x range
Net Debt to Equity at ~0.8x
Particulars Mar’18 Mar’19 Jun’19
Shareholders' funds 7,640 9,559 9,837
Less: Goodwill -3,634 -3,587 -3,587
Net worth 4,006 5,972 6,250
Term Loan 3,026 3,236 3,144
Working Capital 3,302 3,625 3,479
Gross Debt 6,328 6.861 6,623
Less: Cash -470 -2,245 -1,639
Net Debt 5,858 4,616 4,984
Total 9,864 10,588 11,234
Particulars Mar’18 Mar’19 Jun’19
Net Tangible Fixed Assets 6,703 8,034 8,359
Net Non-current Assets 1,068 190 238
Net Current Assets 2,093 2,364 2,637
Total 9,864 10,588 11,234
SOURCES OF FUND
APPLICATION OF FUND
KEY UPDATES
All values are in ₹ Mn. 33
Our Key focus areas on execution
GROWTH IN EXISTING BUSINESS
• Market extension of existing APIs
• Continuous cost improvement programs
FUTURE GROWTH
• Planned new greenfield site for capacity expansion
• Market specific new product launches
• Focussed efforts to build CRAMS business
QUALITY AND COMPLIANCE
• Continued investments to drive quality and
compliance to the next level
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Thank You