pharma sector v6

8/2/2019 Pharma Sector v6

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Dev Gandhi 209

Gaurav Shah 212

Jitendra Jain 213

Gaurav Khedekar 220

Vineet Khatri 251

Vishal Thakkar 253

Nishant Jain 255

Group Members



Pharma Sector Outlook



Domestic Healthcare Industry

Domestic Pharma market has grown at a CAGR of 13.5% over last five years driven

primarily by volumes

Volumes are being driven by deeper penetration (non-urban markets), higher

affordability and acceptability

Industry sources expect domestic pharma market to grow to USD 55 bn by 2020

Significant part of the additional growth would come from chronic/lifestyle

segment that is growing at a much faster rateExample Companies such as Sun Pharma, Lupin & Cadila – with higher exposure to

chronic segment - would benefit more



Company Domestic sales - % of total sales Key Therapies

Cipla 46 Respiratory, Anti-infectives

Sun Pharma 44 Psychiatry, Neurology, CVS

Cadila HC 39 Gastro, Cardiac

Lupin 33 CVS, Anti-TB, Asthma

Glenmark 32 Derma, CVS

Ranbaxy 18 Anti-infectives, CVS

Dr. Reddys 16 Gastro, CVS

Companies with higher exposure to domestic market



India: $55 bn market by 2020



USD 80 bn patent cliff offers huge opportunity



The Evolving Marketplace



Big Pharma facing challenges....

Generics to emerge as the preferred play

Substantial

Patentexpiries in

near future

Weakproductpipelines

Subdued

growthfrom IPRprotectedproducts

Low R&Dproductivity

Rising costsof

Healthcareputting theFed budgets

underpressure



Big Pharma facing challenges....



….Focusing on EMs/Generics for revenue growth



….and exploring alliances with Domestic Pharma



Regulatory environment getting stringent



Rising competition in domestic market as well as…



Rank Country No. Of Transactions Total Transaction value in USD mn

1 United States 114 25,665.502 Germany 18 5373.2

3 India 48 4943.8

4 China 105 3445.7

5 Brazil 13 1978.8

6 France 15 1745.5

7 Australia 16 1713.7

8 South Korea 14 1283.7

9 Switzerland 10 1146.6

10 Netherlands 9 716.3

11 Japan 27 562.1

12 Ireland 4 550

13 Belgium 3 538

14 Italy 8 409.9

15 Argentina 4 294

16 United Kingdom 16 287.2

Source: Thomson M&A Database

Transactions in the Pharma sector in 2010



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2

3

4

5

Five Strategies

Invest in the Marketing and Sales Infrastructure of

2015 and Beyond

Re-assess Product / Pricing Strategy

Acquire more Talent and Experience from other

Industries

Use Internal ROR to Prioritise and Rationalise the

R&D Portfolio

Review and Revise Governance Standards



Strategy 1

The driver of industry growth is Emerging Markets

Because in the longer term, the key Emerging Market consumers andgovernments will want access to the very best medicines

Products must take into account the needs of consumers in Emerging Markets

Modern medicines to Emerging Markets at much lower prices than have been

accepted in Western Markets

The established branded generic Emerging Markets growth route could run outof steam as generics become commoditised

Re-assess Product / Pricing Strategy



Strategy 2

Accelerate the modernisation of selling and marketing in mature marketsExample: QR barcodes as a means for doctors to communicate with theindustry using smart phones to make a sales force more efficient

Focus on the longer term in Emerging MarketsExample: Chinese government push to increase use of OTC drugs sold atretail pharmacies

Accelerate development and integration of social media and mobile-healthpolicy

Example: From a survey of the websites of the 13 companies which aredefined as the large capitalisation pharmaceutical industry, 15% have a blog,54% are on Facebook and 77% are now on Twitter

Invest in the Marketing and Sales Infrastructure of 2015 and Beyond



Strategy 2 ....cont

Industry Percentage with ablog Percentage onFacebook Percentage onTwitter

Telecommunications 75% 100% 100%

Computer, office

equipment

67% 100% 67%

Specialty retailer 50% 50% 100%

Food and drug

stores

17% 33% 50%

Pharmaceuticals 33% 0% 33%

Source: Burson-Marseller: Social Media Use by Fortune 100 Companies 29th July 2009



Strategy 3

More diversity of talent throughout any given organisation should enhanceand strengthen the business

Senior management in the industry should actively seek talent andexperience from outside the traditional group of pharmaceutical competitors

Acquire more Talent and Experience from other Industries



Strategy 4

Set up an R&D team with the express role of working out how to beat thecompany’s key innovative compounds - an internal fast follower team

Assess whether the compounds with the highest potential return are optimally

funded to bring them to market as rapidly as possible with the best possible label

Consider introducing an external perspective to this process

Clearly articulate policy on collaborations, both with academia, withbiotechnology companies and smaller pharmaceutical companies as well as with

peers

Look for ways to maintain a return on the intellectual capital built up during aperiods of success in any given therapeutic area. Too often companies discard thisintellectual capital once patents have expired

Use Internal ROR to Prioritise and Rationalise the R&D Portfolio



Strategy 5

Companies need to conduct a root and branch review of governance andenterprise risk management across the entire value chain

Internal independent checks and balances where people review each stage

and have a reporting line outside of that area’s particular vertical with directaccess to c-suite executives

Give power and credence to internal audit groups and focus on their outputs

Use completely independent and external experts who are allied with ethics,

risk and governance as a final check and balance for each element of the valuechain

Review and Revise Governance Standards



Company Review



Well integrated Pharma player with global footprint

Operational

Experience

Across the

globe,>1050

in R&D

Registered

for global

markets

Global

Revenues

Market

Capital

Spent on

R&D

Among top

300 brands

in India

Pharma

companies

in India

Filed

globally

≈ 60 yrs

$1 bn +

Among top 5 20 brands

300+ products ≈ 6% of sales

14,000+ employees 650+ patents $ 3 bn +



Vision - To march beyond the Billion



Corporate Strategy,Business portfolio mix

Business Specificstrategies

Implementingstrategies

Opportunity

evaluation of all

potential markets

Final selection of

markets & therapies /technologies

Vision & detailed

strategies for all the

businesses till 2015

Key risks and

mitigation plansidentified for each

business

Synthesis of

business strategies

with corporate

strategies

Strengthened review

and monitoringmechanism

Journey Beyond the Billion (BtB)....

Conducted a comprehensive strategy exercise to achieve the vision



Business clusters for BtB journey

India Formulations

US oral solids

• Brazil

• Mexico

EU

Japan

Emerging

APIs

JVs

Biosimilars

Transdermals

Vaccines

Injectables

Inhables

Creams, ointments

Established home

markets

Future home

markets

Steady growth

business

New Technology

business

• Sustainable &

profitable growth

• Significant

revenue

contribution

• High growth

potential

• Large revenue

contribution

• Steady growth

• Low variability

in business

performance

• High upfront

investments

• Large potential

upside

BtB



Pillars of Organisational Health

Key initiatives identified to improve overall org. Health in four key areas

VICA for Growth

Zydus 2015

V a l u e C r e a t i o n

I

n n o v a t i o n

C o l l a b o r a t i o n

A c c o u n t a b i l i t y



Thank You

pharma sector v6

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