analyst presentation 100212

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Shasun Pharmaceuticals Limited

Analyst meeting Presentation

10th February 12



3

S. Abhaya Kumar

Managing Director

Business Outlook

SHASUN



Mission

To be the Preferred Partner and Provider of Services to the pharmaceutical Industry

• Shasun is a leading supplier of active ingredients, intermediates, formulation, chemistry and

analytical services to the pharmaceutical industry;

• Shasun people, facilities and capabilities are among the best in the industry.

• Shasun cover the entire life cycle of a product at all scales, from pre-clinical and clinical

phases to validation and commercial supply, while fully complying with HSE and cGMP

regulations and standards within FDA and MHRA approved facilities.



Global Footprint

V i z a g - I n d i a

• Shasun has developed it’s presence in some of the major countries in the world.

• We continue to expand our base and globalize further.



Business overviewShasun – Business Segments

Active Pharmaceutical Ingredients:

– Shasun is the largest manufacturer of Ibuprofen in the world. Its current API portfolio includes

Ibuprofen, Nizatidine, Ranitidine , Gabapentin , Olanzapine and Cycloserine amongst others

– Active New API product development pipeline

API Contract Research & Manufacturing (CRAMS):

– Shasun’s CRAMS business spans India and UK

– SPSL Dudley, UK facility has over 40 years of expertise in working with top pharma companies for

custom services and manufacturing. It has a very healthy mix of emerging and big pharma clients

Finished Dosages – Formulation CRAMS

– Provides oral solid dosage development and manufacturing services at its Formulations facility in

Pondicherry

– This facility has undergone successful inspections by US FDA, MHRA (UK) and TPD Health Canada

– Recently expanded the formulations capacity from 1.4 billion tablets per annum to 5 billion tabletsper annum

Biotech:

– This unit launched Streptokinase, a fibrinolytic drug used for the treatment of heart attacks



Shasun – India facilities

Cuddalore

Shasun Research Centre

Pondicherry

API facility in Cuddalore

–Multi-product API facility

–4 Production Blocks, cGMP operation

–US FDA / MHRA approved

Formulations - Pondicherry

–Commissioned in Dec 2005 ,cGMP operation –Formulation development capabilities

–Current capacity to manufacture 5 billion units of OSD

–US FDA / MHRA approved

–Contract Formulations to US / EU

Shasun Research Centre (SRC) Chennai

– Contract research and custom synthesis services

– 12 synthetic labs, 6 kilo Labs and 1 scale up facility

– Key customers in Japan, USA and EU which include

large MNC Pharma

Biotech Facility – Pondicherry

– Production of recombinant streptokinase

– Facility approved for COPP /WHO

Ibuprofen API facility in Pondicherry

– World largest producer of Ibuprofen

– USFDA /MHRA approved facility

– cGMP operation

– Effluent treatment plant with marine discharge facility

– Pilot Plant for Contract /Custom Manufacturing



Shasun – UK facility

42 Acre Site

Process Research &Development Laboratories

Scale Up Laboratory Facilities

Highly flexible Pilot Plant

3 Large Scale Production Facilities –

D1, D1.5 & D2

450 m³ cGMP reactor capacity

Commercial Biological Waste Water Treatment

Facility

Top Tier COMAH site

Successful MHRA audit November 2010

Successful FDA PAI May 2011

Successful PMDA PAI in July 2011



Shasun – Review of 11-12



Shasun India –Business growth

SPL India achieved highest sales of Rs 212 crs for any Qtr in Qtr 3 FY 12

Current year 9 months sales Rs 528 crs 24% growth over last year

Substantial growth in Gabapentin and Ibu derivatives 45% over last year

Nizatidine revival in Japan market

CRAMS API sales increase 53% over last year

Formulation business growth 34%

Thrust in new generic product growth

Current 9 months EBITDA Rs 57.03 crs vs Rs 48.51 crs last full year



Shasun India –Business Update

Formulation

1. Commercial production capacity expansion completed2. New QC Lab integrated software installed

3. FDA has inspected 4 customer ANDA and one NCE in Nov 11 and No 483

report

Pondy Ibu Plant

1. New alternative Fuel Boiler installed, resulting in reduced steam cost2. Signed long term contracts with big pharma for supply of Ibuprofen

3. Completed capacity expansion

Cuddalore

1. Process optimization for a major API

2. Capacity expansion for API

3. Plant commissioned within 5 days of cyclone



Shasun India – Business Update Bio Tech

1. Plant shifted from Velacherry Chennai to Pondicherry with in API facility

2. Gold Nano particle project preclinical study underway

CRAMS –API

1. Integration of UK and Indian CRAMS to create a global CRAMS organization

2. Emerging Pharma customer acquisitions-current year 11 new customers

3. Break through with one Big pharma involving 10 FTE contract

Vizag new facility

1. Phase I construction started and expected to be completed by Dec 12

Corporate

1. Opened China sourcing office

2. Capex committed spend for 9 months Rs 50 Cr to support growth



Shasun – Growth Strategy



Shasun Growth Strategy

Shasun has unveiled a robust and scalable growth strategy

F o r m u l a t i o n s

C R A M S

B i o t e c h

N

e w M a r k e t s

A P I s

APIs growth

Grow Ibuprofen derivates

Increase in API capacity

Focusing on new products

development

New market growth

Formulations growth

Capacity expansion and new

contracts

Own ANDA filings

Shasun branded formulations,investment for future

CRAMS growth

New customers/ new products

acquisition in US, EU and Japan

New facility in Vizag

Exploit technology differentiation

Biotech/Nanotech growth

Exploring biosimilars

R&D in cutting edge technologies

with collaborative efforts

Nano technology development

Technology tie-ups New productsCapacity expansion Cost optimization

Growth Drivers



API -Portfolio

Product Growth drivers

Ibuprofen and

Derivates

Shasun is one of the largest manufacturers of Ibuprofen in the world.

Ibuprofen and its derivatives offer new growth opportunities with improved margins

Gabapentin The product went generic in US in 2005 and has since then been a significant growth

driver for Shasun

Capacity expansion will help the growth

Nizatidine Nizatidine is an anti-ulcerant drug.

Cycloserine It is used for the treatment of multi – drug resistant TB.

Olanzapine-C The Company commercialized the product in EU and North American market in FY 11.

Sevelamer HCl Shasun filed DMF in 2009. The drug is going generic in 2013.

Sevelamer

Carbonate

Shasun filed DMF in 2009, The drug is going generic in 2013.

Colesevelam Shasun filed DMF in 2009, The drug is going generic in 2014.



Shasun - reliable supply chain facilitator

Dedicated Global Manufacturing

capacities for Key products

Approved as suppliers in most licences

in US / EU & SEA incl India

Proven track record of supplies ( Ibu &

Gaba )

Global suppliers to Big Pharma and

Generic majors ( Ibu, Rani , Niza )

Spot business less than 10 % of capacity

Security of Supplies assurance

Security of

supplies

LocalAdvantage

Competitive

Supply Prices



SPL India –Generic API Product Pipeline

APIs under dev Therapeutic Area Innovator Peak Sales US Patent Expiry

Product - 1 Lipid lowering agent $3 Bn Jan '21

Product - 2 Anti-viral $4 Bn Jul '17

Product - 3 Anti-depressant $300 M Nov'21, (Jun '15 with PIV)

Product - 4 Anti-emetic $500 M Jul '18, (Oct'15 with PIV)

Product - 5 Lipid lowering agent $6 Bn Dec '16

Product - 6 Anti-coagulant $3 Bn Feb '21

Product - 7 Metabolic disorder $600 M Nov '25, (Jun '17 with PIV)

Product - 8 Respiratory Disease $1 Bn Jan '20

Product - 9 Schizophrenia $750 M Jul '18

Product - 10 Metabolic disorder $750 M Sep '18

Product-11 Anti-coagulant $4 Bn Feb '22 with PIV

Product-12 Cough suppressant $1.5 Bn Open

Product-13 Metabolic disorder $2 Bn Open

Pl f DMF fili



Plan for new DMF filing

FY 11-12 FY 12-13 E FY 13-14 E

US DMF Filings 1 6 7Eu DMF Filings 0 4 5

TOTAL No OF PDTS 1 6 7

0

1

2

3

4

5

6

7

8

N o . o f D M F s

US DMF Filings

Eu DMF Filings

TOTAL No OF PDTS



SHASUN-NBI has developed a radioactive gold nano construct

based therapeutic agent, NBI-29 (GA-198AuNP) for treating

solid tumor

NBI-29 is designed and co-developed with Nanoparticle

Biochem, Inc, USA and SHASUN, India

NBI-29 agent has demonstrated unprecedented therapeutic

efficacy and is considered to be a significant oncological

breakthrough as it will realistically alleviate pain and suffering

of cancer patients

Preclinical studies underway with successful completion of

toxicity study in swine. Efficacy study in dogs being carried

out and additional tox study planned in rodents & rabbits

SHASUN-NBI’S THERAPY AGENT

Nano technology

ControlGroup

Treated

Group

Tumor

Tumor

ControlGroup

Treated

Group

Tumor

Tumor

l b



CRAMS- Formulations business

Finished Dosage Business remains a major opportunity for Shasun to increase and

diversify its revenue base…..

• Capacity expansion

• Site transfer business

• Product developmentservices

Scale upOSD

revenue

Own ANDAportfolio

Further scale-up of OSD revenues

through contractual agreements

While the service oriented model

remains the key pillar of the business,

Shasun is also investing in building its

own ANDA.

Near term focus on site transfer business

and build client relationships

Product development services to

emerging pharma customers on NCE

Plans to tie-up with Pharma Companiesfor launch of Patented Products in India

CRAMS F l i d i li



CRAMS- Formulations product pipeline

Strong growth product pipeline

CRAMS - Formulation Pipeline - Jan 12 USA Europe Canada Total

Shasun Customer Shasun Customer Customer

ANDA commercialized 4 4 7 0 0 15

ANDA awaiting regulatory approval 1 1 0 2 0 4

ANDA Pipe line 21 2 0 5 0 28

Site transfer commercialised 0 6 0 7 7 20

Site transfer awaiting regulatory approval 1 11 0 0 3 15

Total 27 24 7 14 10 82



CRAMS –API

Partnering with innovators in the early phase

Seeking Timely opportunities and building success Stories= Able Management.

Sustaining Growth through in house talent- experienced motivated team, IP

assets, State of Art regulatory compliant facilities.

World Leaders in supplying some of the API’s.

Global foot Print offerings

Pipeline of Mega blockbusters

CRAMS API



CRAMS –API

API CRAMS – UK Pipeline

API CRAMS – India Pipeline

911

8

28

0

5

10

15

20

25

30

Phase I Phase II Phase III Launch

67

45

9

0

2

4

6

8

10

Pre clinical Phase I Phase II Phase III Launch

Shasun portfolio has grown to 37

launched products. The pre launch

pipeline remains strong with 28

projects in the clinical phase 2 & 3

Shasun’s focus is on its core

strengths of safety & quality

compliance, continuous

improvement and innovation,

which has continued to attract

new clients.

The Shasun CRAMS business unit

has focused on several markets forgrowth and built many key

relationship with innovator

companies

CRAMS API India Ke Gro th Dri ers



CRAMS API – India Key Growth Drivers

Product Phase & Application StatusAnnual potential

(USD mn)

Product A, API Launch, Antidepressant Product performing well in the market 7.91

Product B, interm.Launch,Antidepressant Product launched last year and second source 3.78

Product C, interm Launch, Anti gout Product launch 2013 0.75

Product D, API Prelaunch, ED

Supplying to the innovator (NA emerging pharma) and first

su l in 2012 15.0

Product E, APIPrelaunch, Diabetic

Validation work to begin this year for a Japense customer10.5

Product F, intermPhase 3, Asthma

Phase 3 campaign concluded in 2011 and approval expected

in 2014 9.0

Product G, API Phase 2, API for Japanese customer-starting work in 2012 9.0

Product H, Interm Phase 2, Analgesic Supplier as second source. EU company 2.0

Shasun Pharma Solutions Limited UK



26

John Wiper

President

Business Review

Shasun Pharma Solutions Limited, UK

How SPSL UK fit into the Shasun global network



Dudley

UK

SRC Chennai

India

Pondicherry

India

Cuddalore

India

R&D & Chemistry Services

Analytical Services

Hazard Evaluation

Kilo Laboratories

Pilot Plant

Commercial

Manufacturing

Regulatory Services

Formulation Services

How SPSL UK fit into the Shasun global network…

Dudley Facility Overview



42 Acre Site

Process Research &Development Laboratories

Scale Up Laboratory Facilities

Highly flexible Pilot Plant

3 Large Scale Production Facilities –

D1, D1.5 & D2

450 m³ cGMP reactor capacity

Commercial Biological Waste WaterTreatment Facility

Top Tier COMAH site

Successful MHRA audit November 2010

Successful FDA PAI May 2011

Successful PMDA PAI in July 2011

Proof of concept to commercial supply - a full range of services across all phases of the product

lifecycle on one site

Dudley Facility Overview

Dudley UK - One Site Integrated Scale Up and Supply



Dudley, UK One Site Integrated Scale Up and Supply

All operations to cGMP

Pilot Plant

Development

Centre

QC & Quality

Production

Facilities

Warehouse &

Distribution

API Finishing &Milling Suites

Commercial Bio

Treatment Plant

11-12 – A Great Year for SPSL



11 12 A Great Year for SPSL

People

New management structure established

Dudley head count increased from 292 to 314 in 2011

due to increased production activity

Staff transfer program up and running with Shasun,

India to share best practice and enhance level of

integration

Profitability

Sales growth 17% over last year

Current year EBITDA margin -17.3% vs 12.1% last year

Current year 9 months PAT GBP 3.22 well ahead of last

year

11-12 – A Great Year for SPSL



11 12 A Great Year for SPSL

Safety

Successful completion of several major hazard regulatory

inspections on key risk control systems

Selected as partner by Environment Agency for pilot

implementation of new approach to regulation

UK Chemical Industry Association diamond award for 10 years of

continued safety performance in 2011Quality

Several successful audits by key regulatory bodies:

Successful FDA PAI inspection in May 2011

Successful audit by Japanese authorities in July 2011

Over 60 customer visits & 15 successful customer audits during

2011

Investment Update



p

Over the last 12 months we have invested around £2.8M at

Dudley…

Investment in general infrastructure upgrades of around£1M

New capability investment of around £1M

Upgrades to enhance pilot plant capabilities, replacing last

remaining older technology isolation units

Investment to enhance drying capacity on Dudley 2 in order

to increase utilisation

New expansion to Purified Water System

Capacity enhancements on D1 and D2 for key product

production expansions

….. With customer support of £1.4M

New High Pressure Lab Suite

Pilot Plant Upgrades

Strategy for growth



Strategy for growth

Maintaining and nurturing our key growth driver products

Prospecting for new business

Technology promotion and targeted offers

CRAMS -Pipeline



p

16 new products introduced in last 12 months

1012

8

28

Phase I Phase II Phase III Launch

Key Growth Drivers – Existing product prospects



Key Growth Drivers Existing product prospects

Phase &

ApplicationStatus Annual Potential

UK Biotech, APIPhase III;

Alzheimer's

Very positive Phase II date; supply

agreement in progress100-300MT; £25-50M

European Biotech,

API

Phase II; Psoriasis

& MSProgressing through Phase II;

Potential for 20MT per

annum ; £3-4M

US Biotech, APIPhase III

Thrombosis

Shasun is sole supplier; working withclient to develop and industrialise

the process

Future : 1MT for £2M

European Big

Pharma,

Intermediate

Launched; anti

coagulant

Launched; SPSL is the favoured of

two suppliers10-20MT; £1.5-2.5M

New customer biotech and emerging pharma



g g p

40%

40%

6%

14%

Big Pharma

Biotech

Mid Size / Emerging

Non Pharma

11%

59%

23%

7%

Big Pharma

Biotech

Mid Size / Emerging

Non Pharma

2009-10 2011-12

Increased sales from Biotech and Mid Sized / Emerging Pharma companies from UK as Big Pharma focus

remains on developing emerging market supplies

Key New Business Opportunities



Phase Status

Technology Intermediate,

Big Pharma, UK Launched

Customer seeking new source for launched API

intermediate; shortlisted to final 2 suppliers;10MT, £2M

Technology Intermediate,

Big Pharma, EuropePhase II

New application of existing building block; 5-

10MT; £3-5M – decision in H2 2012

API – New Client

Biotech, USAPhase III

MS application of one of our existing APIs; 5-

15MT; $1-3M

Technology Intermediate

Emerging Pharma, USALaunched

Intermediate for recently launched API;progressed to 2nd selection stage;

10MT; $4-5M

NCE Validation Program

Emerging Pharma, USAPhase III

API requiring pilot trials, registration and

validation; up to 5MT $4-5M

Technology Intermediate

Biotech, USA Phase III Tonnage quantities for 2012; 1-2MT; $2-3M

Database of Open Proposals – Value at £17M

R&D Capabilities



Part of Shasun Global R&D Organisation

CTO – Michel Spagnol

UK Head of Technical Services – Paul Quigley

Strong IP portfolio of more than 40 patents

41 Scientists based in UK (60% PhDs)

cGMP Kilo Lab facilities from 10 to 50L

High Potency Capability at 10 and 20L

World Class Hazard Evaluation Lab

Special capabilities: Chiral Synthesis, Azides, Thiophosgene,

Diphosgene, HF, TMS Cyanide, diazomethane

North East Process Industry Cluster (NEPIC) Innovation

Award Winner

Winner in 2011 for 4th Generation HKR Catalyst

Winner in 2012 for Novel Synthesis to Huperazine A

Shasun



39

S.Hariharan

Chief Financial Officer

Financial Review

Shasun –Sales



40

Sales Product (Rs laks) Q3 FY12 Q3 FY11 Growth 9M FY12 9M FY11 Growth

API 16,625 11,846 40% 41,907 35,095 19%

Ibuprofen & derivatives 7,156 6,112 17% 18,360 17,339 6%

Other APIs 9,469 5,734 65% 23,547 17,756 33%

CRAMS 4,465 2,652 68% 10,785 7,563 43%

CRAMS - API 2,637 1,174 125% 5,205 3,405 53%

CRAMS - Formulation 1,828 1,478 24% 5,580 4,158 34%

Bio Tech 66 59 12% 122 105 16%

SPL - TOTAL 21,156 14,557 45% 52,814 42,763 24%

SPSL UK -CRAMS 9,724 5,279 84% 23,024 18,375 25%TOTAL 30,880 19,836 56% 75,838 61,138 24%

SPL India Standalone Financial Qtr 3 FY 12



SPL Standalone (Rs. Lakh) Q3 FY12 Q3 FY11 Growth 9M FY12 9M FY11 Growth FY11

Sales & operating revenue 21,284 15,224 40% 53,325 43,744 22% 57,673

Rawmaterial cost 12,438 9,207 33,547 26,514 35,198

Contribution 8,846 6,017 19,778 17,230 22,475

Contribution/Sales % 42% 40% 37% 39% 39%

Operations cost 5,389 4,552 14,075 14,041 17,624

EBITDA 3,457 1,465 136% 5,703 3,189 79% 4,851

EBITDA % 16% 10% 11% 7% 8%

PBT - before forex loss 2,159 489 342% 2,451 350 600% 764

Forex loss 757 452 2,683 1,442 (73)

Tax 134 - (1875) - 348

Profit After Tax 1,268 36 3422% 1,642 (1092) 488

SPSL UK Financial Qtr 3 FY 12



SPSL UK Standalone (GBP 000) Q3 FY12 Q3 FY11 Growth 9M FY12 9M FY11 Growth FY11



Contribution 7,966 5,064 20,837 18,608 26,259


Operations cost 5,437 5,327 15,625 15,478 20,602

EBITDA 2,529 (263) 5,212 3,130 67% 5,657

EBITDA % 21% -4% 17% 12% 15%

PBT - before forex loss 1,607 (1147) 2,401 521 361% 1,831

Forex loss 14 48 (155) 74 (65)

Tax - - (667) - (915)

Profit After Tax 1,593 (1195) 3,223 447 621% 2,811

Consolidated Financial Qtr 3 FY 12



Consolidated (Rs. Lakh) Q3 FY12 Q3 FY11 Growth 9M FY12 9M FY11 Growth FY 11



Contribution 15,426 9,677 36,230 30,471 42,095


Operations cost 9,824 8,512 26,375 25,384 33,128

EBITDA 5,602 1,165 381% 9,855 5,087 94% 8,967

EBITDA % 18% 6% 13% 8% 11%

PBT - before forex loss 3,604 (479) 4,612 318 1350% 2,228

Forex loss 1,012 486 2,826 1,497 (131)

Tax 131 - (2373) (303)

Profit After Tax 2,460 (965) 4,159 (1179) 2,662

Consolidated Funding Qtr 3 FY 12



Shasun Pharmaceuticals - Stand alone Rs Lakhs

Funding Details Closing(31.12.2011)

Closing(30.09.2011)

Closing(30.06.2011)

Closing(31.03.2011)

Total Borrowings 25,831 24,292 22,395 21,894

Net Worth 18,479 17,523 17,274 17,149

Debt /Equity 1.40 1.39 1.30 1.28

Shasun Pharmaceuticals Limited - Consolidated

Funding Details Closing

(31.12.2011)

Closing

(30.09.2011)

Closing

(30.06.2011)

Closing

(31.03.2011)

Total Borrowings 38,739 36,579 33,037 32,954

Net Worth 11,998 9,971 9,025 8,392Debt /Equity 3.23 3.67 3.66 3.93

Financial Update



Sales growth of 22%

EBITDA 93% growth and current year 9 months FY 12 EBITDA exceeded full year FY 11

EBITDA

EBITDA /Sales current year 13% vs 8% last year

PAT –Current year 9 months FY 12 PAT Rs 41.59 exceeded full year FY11 PAT Rs 26.62

crs

Re-structuring of portfolio – more added value business

Good growth in newer products

Continued success in new product capture providing a healthy pipeline of new business

Shasun at the cross roads of strategic positive change…..



Expansion of formulation

capacity/

capacitydebottlenecking

in API plants

Newcontracts

/ pipeline

Renewedmanagement

focus

Achieving sustainable growth and enhancing shareholder wealth remains our key objective….

Diversify sales mix

Create differentiated product / serviceofferings

Improving operating margins

Expansion of API /Formulation capacity

Enhanced focus on New Business

Development

Expansion into new products/ geographies

Focus on achieving sustainable growth

Enhance shareholder returns

analyst presentation 100212

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