INVESTOR PRESENTATION

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Cadila Healthcare Ltd
INVESTOR PRESENTATION September 2005
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Zydus Cadila- One of Indias leading integrated
pharma company

• Ranked 5th in the domestic formulation market
  with 4 market share
• Foraying into the developed generics markets
• Leveraging strengths through contract
  manufacturing
• Consolidated revenues of US 300mn, PAT US28mn
  and market capitalization of U0.7b

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Core business areas
Emerging markets
High end APIs intermediates
Domestic dosage forms
Research Development
Contract manufacturing
Developed generics markets
Revenue break up by segment
Revenue break up by region
Based on 1Q 2005-6- Altana JVs contribution was
low
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Facilities and infrastructure
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Distinctive capabilities in manufacturing,
distribution
Manufacturing
Distribution

• Moraiya- largest facility in Asia - capable of
  producing 3 bn tablets/pa (single shift)
• Amongst the few in India to make
• Lyophilised products
• Vaccines
• Aerosols
• Hormones
• Cytotoxic products
• Only producer in India
• Trans dermal patches
• Suppositories

• Country wide distribution
• One of the largest sales force in the country
• Servicing 0.15m doctors or about 60 doctors in
  the country
• Capability for cold chain products
• Distributing high-end in-licensed products

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Overall strategy

• Continued focus on domestic market
• Grow rapidly in key global generics markets- US
  and Europe
• Leverage strengths through contract manufacturing
  opportunities
• Focus on innovation- RD

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Domestic market strategy

• Maintain overall position and market share
  through
• Focus on faster growing chronic/ lifestyle
  segments
• Continued new product introductions
• In-licensing arrangements- Schering AG,
  Boehringer Ingelheim
• Marketing excellence

2000-01
2004-05
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New products- a key driver of growth

• New products introduced in last 3 years
  contribute 15 of sales
• Plan to introduce 40 new products 2005-6
  including 3 in- licensed products

• Towards marketing excellence -Project Phoenix
• Strengthening pillar brands
• Rejuvenating mature brands
• Enhancing product management skills
• Improving business health

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Achievements in domestic market

• Zydus Cadila ranks 5th with Rs 8bn sales
• Market share of 4 in a highly fragmented market
• Market growth slowed to 1.8 ( ORG-IMS MAT June
  05)

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Source ORG-IMS MAT June-05
Rs. mn

• 15 Zydus brands feature amongst the top 300
  brands
• Half of top 20 brands still growing and 90 have
  gt10 MS
• Feature in top launches every year -Best launch
  of 2004- Nucoxia

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Top rankings in key therapeutic areas
Segment/ Total market
Segment growth
Zydus Rank
Zydus MS
Cardiovascular
10.6
9
8.1
1
Gastrointestinal
7.1
1
8.7
1
Female Healthcare
1.5
5.7
22

1
Respiratory
3
4.4
10
2
Pain Management
3
5.2
2
5.3
Segment ranking and Market Share refer to
participated market SourceORG-IMS
Jun 05 (MAT)
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International business- two fold focus

• Developed generics markets
• US- the largest generic market in the world
• Zydus Pharmaceuticals (USA)
• Zydus Healthcare LLC
• Europe- Zydus France SAS
• Spain, Italy ( planning to enter)

• Emerging markets
• CIS- Russia , Ukraine
• Asia Pacific- Sri Lanka, Vietnam, Myanmar
• Africa, Middle East
• Brazil, South America

Formulations-emerging markets
Formulations- developed markets
APIs/intermediates- exports
2005
2010E
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US - the key market

• Cost excellence through backward integration
• Significant proportion of own APIs
• API and FDF facilities in India with US cGMP
  quality control

• Product selection
• 60 products prioritized
• Products include
• existing generics,
• would-be generics including block busters
• NDDS based

• Transactional excellence
• Strong team- experienced in US generics market
• Customised solutions
• Focus on high service levels

• Unique distribution
• Tie up with Mallinkrodt for distribution in US
• Sell under joint label
• Share revenues and profits
• Select customers- service directly

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US - robust filings

• 27 ANDAs represent U 20b in current market
  size
• ANDAs filed- half for mature products. Include 6
  blockbusters and 2 NDDS
• Half the products envisage own API

Product Approvals by FDA
Current status of filings

• Atenolol
• Clindamycin
• Metformin HCI
• Metformin ER-750 mg
• Metformin ER-500 mg

• Filed 27 ANDAs and 30 DMFs so far
• Received 5 product approvals
• Plan to file 12-15 ANDAs and DMFs annually

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US - marketing plan

• Plan to launch 4-5 products in 2005
• Atenolol, Metformin- first shipments sent, more
  orders on hand
• Launch another 12-15 products in 2006
• Aggregate market size of these 20 products US
  15b in current brand size
• Expect to multiply sales in 2006 even as pricing
  pressure continues

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France- first step in Europe
Major patent expiries in France

• US 2bn generics market,grew by 29 in 2004
  (Source IMS)
• 40 major drugs going off patent in France
  during 2004-7.Aggregate current size 3bn Euro
• Expected to drive 20 per annum growth in the
  generics market

Generics to drive our French business
French business segments

• Branded generics business
• Launched pure generics
• Export business

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Key initiatives for France

• Relationship with
• pharmacists
• Building special relationship with pharmacists
• Supporting a health awareness program for the
  Zydus club of pharmacists

• Leveraging Indias low cost
• New product filings- first dossier submitted in
  2004-5, more in pipeline
• Site variation- current 3 filings, 2 approvals

• Launch of generics
• Launched 67 generic presentations
• Plan to boost the basket to 80 presentations
  by end 2005

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International business- new markets

• Spain/ Italy
• Low generics penetration, high growth
• Looking for suitable entry opportunity

• South Africa
• Branded generics- commenced operations
• Marketing and distribution partner finalized
• Plan to launch 4-5 products in 2005-6, 8 in 2006-7

• Brazil
• Generics market size of US0.5b
• Launched 5 generics products in Q105-06
• Plan to increase basket to 11 products in 2005-6
• Plan to file for and launch 10-12 products every
  year

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Altana JV- the benchmark in contract
manufacturing

• Successful JV, high profitability
• Contributed 47 of consolidated PAT in 2004-5 (
  annualized basis)
• Contribution volatile in last few quarters due to
  change in dispatch, expansion related closure in
  1Q 2005-6
• Post-expansion in 1Q 2005-6- expect operations to
  be smoother, subject to Euro
• Expect JV contribution to account for lower
  proportion of consolidated profits in future, as
  other segments grow

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Contract manufacturing - exciting prospects

• Mayne Pharma (Australia) - JV model for oncology
  injectibles (Generics)
• Breaking ground for an integrated cyto toxic
  facility near Ahmedabad
• Commercial production expected in FY08
• 4 contacts signed in 1Q 2005-6 with peak revenue
  potential of US13 m.
• Discussing with various pharma companies
  currently

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Research - investing for the future

• R D pipeline
• 3 in pre-clinical stage
• First IND filed and phase I clinical trials
  started in house
• Start phase II in 2006-7
• Expect to file one more IND in 2006
• NDDS- novel release, inhaled, trans-dermal

• State of art RD center
• Rich talent pool -technical strength gt230
• Developed infrastructure for pre-clinical
  research and development
• RD expense- projected at 6-7 of sales

R D to Sales
NCE
Pre Clinical
Phase 1
Phase 2
Phase 3
ZYH1
Dyslipidemia
ZYH2
Diabetes
ZY01
Obesity
ZYI1
Inflammation
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Summary of Growth drivers
Long-term gt5 years
Medium-term 2-5 years
Short-term lt 2 years

• Innovation- research driven (NCE and NDDS) global
  pharma company

• Expand business in regulated generic markets-
  organically /inorganically
• In-licensing and out-licensing
• Contract manufacturing, in-sourcing and
  leveraging on alliances

• Capitalise on existing strengths to drive growth
  in domestic market
• Regulated generics markets APIs and
  formulations in Europe and USA

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Leveraging the India advantage
US - regulatory filings formulation
manufacturing base in India high level
backward integration
France- Shift manufacture to India gradually
through site variation/new filings
Contract manufacturing-lower cost manufacturing
RD- phase I /IIa clinical trials in India
Bio-equivalence studies- potential to carry out
in India
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Consolidated Financial Highlights
2004-5 was affected by de-stocking by the
channel in the run up to VAT implementation from
April 1, 2005, leading to 24 lower domestic
formulation sales in Q4, affecting FY 2004-5
sales, profits and growth
Note Consolidated numbers of 2004-5 include
15 months of operations for foreign subsidiaries
and Altana JV and as such, not strictly
comparable.
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Highlights Q1 2005-6 consolidated result
Altana JVs contribution was lower due to
expansion related closure, lower lifting by
Altana and weaker Euro.
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Our vision
One of Indias leading healthcare players, we aim
to be a global research driven company by 2020.
We shall achieve sales of 400mn by 2006 and We
shall be a top ten global generics company with a
strong RD pipeline and sales in excess of 1b
by 2010
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Thank You
No part of this presentation may be reproduced,
quoted or circulated without prior written
approval from Cadila Healthcare Ltd.. This
presentation may include certain forward looking
statements , based on current expectations,
within the meaning of applicable laws and
regulations. Actual results may differ and the
company does not guarantee realization of these
statements.The Company also disclaims any
obligation to revise any forward-looking
statements . The viewers may use their own
judgement and are advised to make their own
calculations before deciding on any matter based
on the information given herein
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