Investor Presentation June 2011 - Macquarie Group...Hamburg Health Authority, Australian-TGA, ISO 9001:2000, ISO 14001, Danish Medicines Agency, PMDA, Japan Sterile Carbapenem API

1www.orchidpharma.com

Investor Presentation June 2011

BSE: 524372 NSE: ORCHIDCHEM Bloomberg: OCP@IN Reuters: ORCD.BO


Disclaimer

This presentation is strictly confidential and may not be copied, published, distributed or transmitted. The information in this presentation is being provided by the company.

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This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of Orchid Chemicals & Pharmaceuticals Limited, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of Orchid Chemicals & Pharmaceuticals Limited or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to:

the ability to successfully implement our strategies, our research and development efforts, growth and expansion plans and technological changes;

changes in the value of Rupees and other currencies;

changes in laws and regulations that apply to our customers, suppliers and the pharmaceutical industry;

increasing competition in and the conditions of our customers, suppliers and the pharmaceutical industry; and

general economic conditions affecting our industries.

Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements.

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Orchid Chemicals & Pharmaceuticals Limited disclaims any obligation to update these forward-looking statements to reflect future events or developments. By viewing this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of Orchid Chemicals & Pharmaceuticals Limited and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of Orchid Chemicals & Pharmaceuticals Limited.

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Table of Contents

1. Situation Overview

2. Key Highlights

3. Key Growth Strategy

Appendix


Situation Overview


Company Overview

Overview

Key Business Segments

DM – Developed Markets; EM – Emerging Markets

Revenue Break-up (FY11) Shareholding Pattern (March ’11)

Overview

Key Offering

Facilities

Key Clients

Vertically integrated global pharmaceutical company - capabilities spanning discovery to deliveryEstablished research, manufacturing and marketing capabilitiesPresent across 70+ countries through alliances, joint ventures and partnerships

Active pharmaceutical ingredients (API), finished dosage forms (FDF), new drug discovery (NDD), novel drug delivery systems (NDDS) and custom research and manufacturing services (CRAMS)Oral AntibioticsDiverse (oral) multi-category non-antibiotic product range (Non-Penicillin/Non-Cephalosporin)Focus areas include anti-infective, anti-inflammatory, anti-oxidants, anti-ulcerants, CNS, CVS, nutraceuticals and other oral and sterile products

2 API manufacturing sites in India and 1 API manufacturing site in China3 formulations manufacturing sites in India, and 3 research campuses in IndiaManufacturing facilities approved by US FDA, UK MHRA, EDQM, DMA, MCC and TGAR&D facility accredited by National GLP Authority of India (aligned to OECD principles of GLP)

Hospira, Pfizer, Biovitrum, Merck

Orchid Chemicals & Pharmaceuticals Limited

API for orals

Cephalosporin Penicillin injectables Carbapenems

NPNC (non-penicillin

and non- cephalosporin)

Orals (FDFs) API for injectables

API for injectables Orals (FDFs)

API for injectables API for orals

5


Corporate Structure

Wholly owned subsidiary for drug discovery and development

Wholly owned subsidiary for business development (generics and CRAMS) in Japan

50:50 joint venture for manufacture of sterile cephalosporin APIs in China

Wholly owned subsidiary for rendering select services in US

Wholly owned subsidiary for undertaking South African generics foray

Wholly owned subsidiary for drug discovery and development in US

Affiliate (planned to be a subsidiary) for discovery and development of new cardiovascular drugs

Wholly owned subsidiary for generics foray in Europe

Wholly owned subsidiary

Chennai, India

China

Tokyo, Japan

London, UK

Delaware, USA

Princeton, NJ, USA

South Africa

Union City, CA, USA

San Diego, USA

Orchid Research Laboratories Ltd.

NCPC Orchid Pharmaceuticals Company Ltd.

Orchid Pharma Japan K K

Orchid Europe Ltd.

Orchid Pharmaceuticals, Inc.

Orgenus Pharma Inc.

Orchid Pharmaceuticals SA (Pty) Ltd.

Bexel Pharmaceuticals Inc.

Diakron Pharmaceuticals Inc.

6

100%

50%

100%

100%

100%

100%

100%

100%

Orchid Chemicals & Pharmaceuticals Ltd.

Wholly owned subsidiary for marketing of products in US & Canada

New Jersey, USA

Karalex Pharma LLC 100%


Global Presence

Global Headquarters Manufacturing Facilities R&D Subsidiaries Joint Ventures Marketing Offices Affiliates

7

Orchid has a global presence with offices spread across both the emerging & developed markets


Key Highlights


Key Highlights

9

State of the Art

Infrastructure

Fully Integrated

Pharma Company

Strong R&D Focus & Pipeline

Experienced Management

Consistent Financial

Performance

2

3

4

5

1


Fully Integrated Pharma Company

Segments:APIs to multiple dosage

forms

Markets: Regulated and semi-regulated

Value chain: Drug

discovery to drug delivery

Products: Multi-

therapeutic versatility

Integrated Pharma Player

Orchid is one of the leading vertically integrated player in the pharma segment with presence across pharma sub segments

Factors Description

Segments

Presence across pharma value chain

Products / Therapeutic Focus

Markets

Global presence across 70+ countries through alliances, joint ventures and partnerships

Entered into several marking / licensing agreements to introduce products in multiple markets

Diversified business model with focus across Emerging as well asdeveloped markets

Value chain

Strong vertically integrated capabilities

Accredited bulk manufacturing facilities – long term supply contracts for global pharma companies

Strong R&D team - Focus on NCEs and NDDS

ANDA pipeline

Acquisition of Karalex Pharma to strengthen front end presence in US

Integrated Pharma Play

Anti-infectivesAnti-inflammatoryAnti-oxidantsAnti-ulcerantsCNSCVS

NutraceuticalsOral and sterile productsAnti-allergicsOsteoporosisAnti – allergicsAnti – depression

Anti – parinsonAlzheimer’sDiabetesOncologyClotting disordersObesity

1

Time, cost, risk and value

Global API

Domestic formulation Global

generics CRAMS NDDS NCEs

10


State of the Art Infrastructure

Formulation facilities – advanced marketsoral dosage form complex with multi-therapeutic facilities; oral cephalosporin formulations; NPNC (non-antibiotic) dosage formsStrong regulatory pipeline including FTFsUS FDA and UK MHRA approved

Largest cephalosporin API manufacturing complexVariety of non-sterile and sterile (crystalline and lyophilised) APIsUS FDA, UK MHRA, WHO – GMP, EDQM, MHRA , Hamburg Health Authority, Australian-TGA, ISO 9001:2000, ISO 14001, Danish Medicines Agency, PMDA, Japan

Sterile Carbapenem API facilityMulti-site API complex with dedicated facilities for penicillins, sterile carbapenems, non-penicillin, noncephalosporins (NPNC)UK MHRA; US FDA; OHSAS 18001: 1999; Danish Medicines Agency EU-GMP; WHO GMP Audit

Drug Discovery Centre, Biology Centre, Animal House cum Pre-clinical Facility, CMC Facility, Analytical Centre, Formulation Facility in Chennai, IndiaGLP accredited by National GLP Authority of India, aligned with OECD PrinciplesScientific base of 130 plus with several doctoral and post-doctoral scientistsAccess to 200 plus scientists in other R&D and technical domains

2

Irungattukottai (Chennai), Tamil Nadu

Alatur (Chennai), Tamil Nadu

Aurangabad, Maharashtra

ORLL (Chennai), Tamil Nadu

11

ORLL - Orchid Research Laboratories Limited

Sterile cephalosporin API manufacturingStrong market share in the local market50:50 Joint Venture

Shijiazhuang, Hebei Province (China)

City, State

TypeProductApprovals


Strong R&D Focus & Pipeline

Orchid undertakes its drug discovery and development through its wholly owned subsidiary -Orchid Research Laboratories Limited (“Orchid Research” or “ORLL”)

Orchid Research, based in Chennai, is an integrated research company with end-to-end capabilities in drug discovery and development with focus on

−

Discovery and development of New Chemical Entities (NCEs)

−

Custom Research and Manufacturing Services (CRAMS)

Follows one of the following business models

−

Out-licensing of NCEs (early phase or proof-of-concept phase)

−

Co-development of NCEs

−

‘FTE’ based or ‘Fee for Service’ based Projects

Strong R&D team of 130 plus with several doctoral and post-doctoral scientists and leverage additional 200+ scientists in other R&D and technical domains of the Company

Strong NCE Pipeline and a strong IPM system

Overview Intellectual Property Management

Regulatory Pipeline

Strong IPM systems to protect inventions, secure intellectual property and assureclient confidentiality

644 patent applications filed in various national and international patent offices; 226 patents published

3

Patent Applications Filed: Total – 644 Patents Published: 226

Orchid's – FTF pipelline

Products TAPossible launch Brand name

Peak sales (US$m)

Desloratadine ODT Tabs Anti-allergics Jan-12 Clarinex 20

Ibandronate Sodium Tabs Osteoporosis Mar-12 Boniva 1,200

Desloratadine Tabs Anti-allergics Apr-12 Clarinex 275

Eszopiclone Tabs CNS Jun-12 Lunesta 250

Duloxetine DR Cap-Pellets Anti Depression Jun-13 Cymbalta 3,000

Rasagiline Mesylate Tabs Antiparkinsonian Nov-13 Azilect 200

Memantine Tabs Alzheimer's Jan-16 Namenda 1,200

Gemifloxacin Tabs Disease Jun-16 Factive 30

Regulatory status - FDFs (1)

Product segmentMarket NPNC Cephs TotalUS 29 (10) 13 (11) 42 (21)EU 12 (8) 13 (9) 25 (17)Grand total 41 (18) 26 (20) 67 (38)

Products under development - FDFsProduct segment

Market NPNC Cephs TotalUS 41 2 43EU 15 3 18RoW 42 8 50Grand total 98 13 111

12

1 – figures in brackets indicate total FDFs already approved; as of Match 2011


Discovery Early Pre-clinical Late Pre-Clinical Regulatory Toxicology

Phase 1 Clinical

Phase II Clinical

Tyrosine-TZD, Non-PPAR molecule

DPP IV Inhibitor

Novel

Th1 / Th2 Cytokine Synthase Inhibitor

Diabetes

Therapeutic Segment

Inflammation

Oncology (Non-Cytotoxic)

PDE IV Inhibitor

TNF ∝

Inhibitor

STAT 3 / IL-6 Inhibitor

HDAC Inhibitor

Anti-InfectivesOxazolidinone

Cephalosporin

Betalactamase Inhibitor

CNS

Obesity Novel

Novel

Oral Direct Thrombin InhibitorClotting Disorders

13

Strong R&D Focus & Pipeline (cont’d)3

NCE Pipeline


Consistent Financial Performance (Consolidated)

Revenues (1) (4)

PAT (2) (3) (4)

1 – excludes other income and other non recurring income; 2 – Reported net profit and margins based on total income; 3 – Includes profit of US$225mn on account of sale of assets ; 4 - USD / INR - 45

4

PAT (US$mn)

14

EBITDA (1) (4)

EBITDA (US$mn)

33%

2009 2010 2011Post Hospira Transaction

Orchid reported growth in FY11 financials on account of higher volumes, new product launches and cost management strategies


Consistent Financial Performance (Consolidated)

1 – USD / INR - 452 – Debt includes only principal amount of FCCB (excludes any redemption premium)

4

15

Debt Break up (1) (2)

438

581

365408

Net Debt / Equity (2)

Significant reduced leverage post Hospira transaction, disciplined financial and working capital management has improved the financial profile of the Company

Post-Hospira DealPre-Hospira DealPost-Hospira DealPre-Hospira Deal

Improvements in Working CapitalDebtor Days Inventory Days


Growth Strategy


Growth strategy

17

New niche Initiatives

Existing Business

Inorganic Strategies

Growth Strategy / Focus Areas

Focus on long term supply contracts, new product approvals and development of new product segments to be the key growth drivers in the short – medium term


Appendix


Process & Pharma Research

Focused on developing patentable processesCovers antibiotic and non-antibiotic segments for domestic, emerging and regulated markets

New Drug Discovery

Channeled through – ORLL and Bexel Pharmaceuticals IncORLL: multi-therapeutic, multi-lead portfolio and selective partnerships Bexel is working in the areas of diabetes, inflammation, obesity, multiple sclerosis, cardiovascular and auto-immune diseases

Pre-clinical Research

Undertakes a wide range of studies, including regulatory toxicity Other tests / researches undertaken include - animal toxicology, microbiology andpharmacology studies

Novel Drug Delivery Systems

Undertakes development of new dosage forms and strengths to enhance the efficacy and safety of existing drugsDevelops novel combinations of existing drugs for better compliance and / or synergistic effectStrategy focuses on developing NDDS on bench scale and establishing limited proof-of-concept Business strategy envisages collaborative approaches with MNCs and specialist delivery companies for further studies andeventual commercialization

Biotech Research

Focused on replacing existing chemical methods of manufacturing various intermediates, with fermentation and enzymatic based transformations PCR and Directed evolution of proteinsGene cloningProtein expression and purificationHigh-throughput screeningDevelopment of assays for proteins in the cephalosporin pathway

CRAMS

Custom Research and Manufacturing Services (CRAMS) as a discrete initiative and advanced, especially in the areas related to new drug products, NDDS and NCEs.With CRAMS, we also reinforce our position as a preferred global partner with the potential to undertake a wide range of projects on a 'FTE' or 'fee for service' basisOffering dedicated teams and manufacturing lines for full-scale commercial manufacture

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R&D Capability

Orchid has R&D capabilities across multiple segments


THANK YOU

© 2011 Orchid Chemicals & Pharmaceuticals Ltd., All Rights Reserved.

This material was used during an oral presentation; it is not a complete record of the discussion. This work may not be used, sold, transferred, adapted, abridged, copied or reproduced in whole on or in part in any manner or form or in any media without the prior written consent. All product names and company

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For any information or clarifications, please visit www.orchidpharma.com

or call

Ch Ram, Head - Communications & Investor Relations

on +91 98400 11626 / [email protected]

20

Documents

Investor Presentation June 2011 - Macquarie Group...Hamburg Health Authority, Australian-TGA, ISO 9001:2000, ISO 14001, Danish Medicines Agency, PMDA, Japan Sterile Carbapenem API