Piramal Healthcare Limited - Investor Presentation April 2012

Piramal Healthcare Limited

Investor Presentation

April 2012

• Overview of Piramal Healthcare

• Pharma Solutions

• Critical Care

Agenda

2

• Consumer Products Business

• Life Sciences

• Financial Services

• Special investments

Piramal Healthcare – an overview:

� Market Cap: Rs. 8,100 crs

� Debt: Rs. 1,200 crs

� EV: Rs. 9,300 crs

� 9MFY12 Sales: Rs. 1,664 crs

� Cash receivable from Abbott: Rs. 4,000 crs

� Book Value of investment in Vodafone:

Rs. 5,863 crs

� 9MFY12 PAT: Rs. 153 crs

� Select Financials:

� High Standards of Corporate Governance: Board of Directors:Independent Member Particulars

1 Keki Dadiseth Ex-Director, Unilever Plc. & former Chairman, Hindustan Lever Ltd.

International advisor to Goldman Sachs

2 N Vaghul Former Chairman, ICICI Bank Limited,

Director of Mahindra & Mahindra, Wipro Limited

3 Deepak Satwalekar Former CEO & Managing Director – HDFC Standard Life Insurance Co. Ltd Director of Infosys and Franklin Templeton Asset Management (India).

4 S Ramadorai Former CEO, Tata Consultancy Services Limited (TCS)

5 Dr. R. A. Mashelkar An eminent scientist, Former Director General of CSIR, Former Member of

Scientific Advisory Council to the Prime Minister

6 Prof. Govardhan Mehta Internationally acclaimed researcher in organic chemistry, Ex-Director of Indian Institute of Sciences

� High Standards of Corporate Governance: Board of Directors:

Piramal Healthcare – an overview:

Piramal Healthcare

Pharma Business Financial Services Business

4

PharmaSolutions

CriticalCare

OTC

• Partners with MNC pharma cos to service their mfg & development needs

• Sales – Rs. 10.2 bn

• Sells anesthetic products to hospitals globally

• Sales –Rs. 3.9 bn

• Sells OTCProducts in India

• Sales – Rs. 1.9bn

Life Sciences

• Works in 4 TA: Oncology, Diabetes, Inflammation Infectious Diseases

• Has a pipeline of 16 compounds with 8 in clinical trials

• Received approval for cartilage repair gel – BST-Cargel®

NBFC IndiaReit

• NBFC focused on lending to Real estate sector• Current book of Rs. 1.3 billion

• A Real Estate Investment Trust with domestic and offshore fund

• Total AUM –Rs. 38 billion

Pharma Solutions

5

Pharma Solutions

Market Characteristics

• Global Outsourcing market estimated to be USD 32 billion, growing at 12%

• Market share of India extremely low

• Lower costs and high quality manufacturing skill presents compelling

rationale to shift manufacturing to India

• Cost pressures on big pharma due to patent expiries leading to

opportunities for Indian CMOs

India CMOs SizeGlobal Outsourcing Market Size

Market CharacteristicsMarket Characteristics

6Source: Business Insights 2012

India CMOs SizeGlobal Outsourcing Market Size

31.9

64.0

0

10

20

30

40

50

60

70

Year 2011 Year 2017

USD Bn

1.8

5.3

0

1

2

3

4

5

6

Year 2011 Year 2017

USD Bn

A full-service CMO across the drug life-cycle

Early Phase Custom Synthesis and Formulations Development Full scale supplies

Discovery Research

Pre-clinical Dev.API

Phase IAPI

Phase IIaAPI

Phase IIb Phase III Launch

CLINICAL DEVELOPMENT

Medicinal Chemistry

Pre-clinical Dev.Forms

Clinical Trials Formulations

Formulations development

APIAPI API

Medicinal


Discovery Research


Phase IAPI

Phase IIaAPI



Medicinal Chemistry




APIAPI API

Medicinal


Discovery Research


Phase IAPI

Phase IIaAPI



Medicinal Chemistry




APIAPI API

Medicinal

7

API

• Canada – Torcan

• UK – Morpeth,

• India – Ennore

Formulations

• UK – Morpeth

• India - Ahmedabad

API

•Canada - Torcan

•UK – Morpeth,

• India – Ennore,

Formulations

•UK – Morpeth

• India – Ahmedabad

API

• Torcan (niche APIs only)

• Morpeth,

• Digwal, Ennore

Formulations

• Morpeth

• Pithampur

Medicinal & Synthetic Chemistry Services –India -Ahmedabad

API


• UK – Morpeth,


Formulations

• UK – Morpeth


API

•Canada - Torcan

•UK – Morpeth,


Formulations

•UK – Morpeth


API


• Morpeth,

• Digwal, Ennore

Formulations

• Morpeth

• Pithampur


API


• UK – Morpeth


Formulations

• UK – Morpeth


API

•Canada - Torcan

•UK – Morpeth,


Formulations

•UK – Morpeth


API


• Morpeth,

• Digwal, Ennore

Formulations

• Morpeth

• Pithampur


Sales break-up (Rs. In crores) 9M FY2012 Growth

Pharma Solutions 963 43.4%

From assets in India 585 74.8%

From assets outside India 378 12.3%

UNITED KINGDOMMorpeth•API development & manufacturing•Formulation development•Commercial formulation manufacturing•Clinical Trial supplies & distributionGrangemouth•Antibody Drug Conjugates development & manufacturing

CANADAToronto•API development & manufacturing

RM supplies

Pharma Solutions – Global Footprint

8

INDIAMumbai R&D•API development•Formulation development

Chennai•API development & manufacturingHyderabad•API manufacturing

•Ahmedabad•Drug Discovery Services•Formulations Development•Clinical Trial manufacturing

•Pithampur•Commercial formulation manufacturing

CHINAShanghai•Sourcing Office

RM supplies

Critical Care

9

Critical Care

Critical Care - expanding product portfolio and enhancing geographic reach

Geographies

/Products

Halothane

Isoflurane

Enflurane

Sevoflurane

US EU RoW

� � �

� � �

US EU RoW

� � �

� � �

� � �

�

US EU RoW

� � �

� � �

� � �

� � �

10

Addressable Market Opportunity $ Million

100 550 1,800

Desflurane

Propofol �

� � �

� � �

2006 2011 2016

Critical Care – Infrastructure in place for sustained rapid growth

38 Managers

32 Sales Field Force

84 Distributors

11

Products Products

Manufactured

Approvals/Certific

ation

Bethlehem USFDA, AFSSAPS

Digwal US FDA, WHO,

UKMHRA, MCC

Ambernath (BSV) WHO

Baddi (Abbott) USFDA

Sevoflurane PropofolEnflurane Isoflurane HalothaneDesflurane Haemaccel

(Rs. In crores) 9M FY2012 Growth

Critical Care Sales 281 3.3%

OTC Business

12

OTC Business

OTC – Strong Track Record

•Moved from no. 40 in 2008 to top-10 in 2011

•Sales have grown by 29% CAGR in last 3 years (9M FY12 sales: Rs.

109 crores)

• Field force expansion to improve distribution to 4 lakh chemists and

cover all 485 1 lakh+ towns in India

• Lacto Calamine

won coveted

13

won coveted

2010 REBRAND

100 Winner

•Successful Rx to

OTC

transformation

for Polycrol,

Tetmosol and

Supractiv

Life Sciences

14

R&D: To launch a molecule globally

16 products under development in various stages

� Our lead molecule for P276 is currently undergoing Phase I/II clinical trials for

multiple indication of cancer: Head & Neck, Mantle Cell Lymphoma, Malignant

Melanoma, Pancreatic and Triple Negative Breast Cancer;

� Potential Market size: $ 10 billion;

� Earliest expected launch: FY2014

15

� Received the European CE mark approval for the innovative bioorthopaedic

product for cartilage repair - BSTCarGel ®.

� Acquired molecular imaging development portfolio of Bayer pharma which

includes rights to Florbetaben – a final stage Phase III clinical trial molecule.

� Explore out-licensing opportunity for P1736, a Diabetes molecule which is

currently in Phase II after the completion of this trial

Annual spend : Rs. 230 – Rs. 250 crores

BST-CarGel®: An overview

� A novel bioscaffold for advanced cartilage regeneration that has clinically demonstrated consistently higher quality cartilage repair

� An EU class III medical device, it is a liquid scaffold which, combined with the patient’s whole blood, is then implanted into a debrided cartilage lesion prepared with bone marrow access

� Received European CE mark regulatory approval in April 2012

� Plans to commercially launch in the fourth quarter of the 2012 calendar year

� Filed for regulatory approval to sell in Canada and will soon file in India

Damaged CartilageBefore Treatment

CartilageAfter Treatment

Current European Market Potential

The CE mark enables us to access a potential $ 200 mn market in Europe.

While we can sell in all EU countries, the largest markets in Europe for BST-CarGel® are: UK, Germany, France, Spain, and Italy

MRI of patient treated with CarGel

� PHL has signed agreement to acquire leading portfolio of molecular imaging

tracers from Bayer AG – forming subsidiary Piramal Imaging

� Lead compound Florbetaben - final stage Phase III molecule

� Reliably detects Beta-Amyloid in the brain, which is the pathological

hallmark of disease in probable Alzheimer's disease patients

� Potential tool to aid in diagnosis and assessment of Alzheimer’s disease

� Positive Phase III results to be presented April 25 at American Academy of

Piramal Imaging – An overview

� Positive Phase III results to be presented April 25 at American Academy of

Neurology Annual Meeting

� Early diagnosis can both improve patients’ quality of life and reduce

healthcare costs

� Potential Market size: $ 1.5 billion

� Earliest regulatory filing: 2012

� Other assets include strong pipeline of PET imaging tracers in CNS, Oncology,

and Cardiovascular diseases

� Core members of Bayer’s R&D team will join Piramal Imaging leadership team

Financial Services

18

Vision to be specialized financial services company

PHL Capital

IndiaReit PHL Finance Infra NBFC

�NBFC lending to Real Estate,

Promoter Financing, Hospitals,

Educational Institutes etc.

� Advisor to

Offshore and

Domestic

� Regulatory

approvals

awaited

19

Educational Institutes etc.

� Team in place for Real Estate

Funding, being set up for other

segments

�Operations commenced; current

loan book of Rs. 131 crores

Domestic

Real estate

funds

� AUM: Rs.

3,800 crores

awaited

Indiareit - Executive Summary

• Best positioned to benefit from emerging Indian real estate

‒ Consistent fund raising

‒ Proven & consistent investment strategy

‒ Strong team with comprehensive investment experience;

• … supplemented with key differentiators

‒ Realized exits across funds

‒ Exits commenced since October 2008

‒ Valuations in sync with guidance and exit delivery

‒ Estimate 2.22x pre-tax money multiple on valued portfolio (March ‘11)

‒ Ability to profitably deploy large pools of capital;

‒ Over USD 650Mn in 4 years

Proven fund

management

expertise,

successful exits

across vehicles

2020

‒ Over USD 650Mn in 4 years

– First to declare independent valuations

– First to commence exits in investee projects

– First to round trip investments across all fund offerings

– First to manage third party portfolio

On track execution

and delivery

• Work commenced on majority projects

• No partners litigations

• No land issues

• No credit default

• Visible cash flows

• Work linked to off-take

Comprehensive Experience

•5 Top Tier 1 cities

•8 Local partners

•23 Projects

•53.7m sq ft of Saleable area currently under development

History of firsts in

the Indian market

IndiaReit: Build on strong Brand Equity

� Current fund raising plans:

� PHL’s commitment to these new funds will be 8 – 10 percent

I – Offshore funds Size

Offshore development fund $ 500 million

Rental yield fund $ 125 million

II – Domestic fund

Slum redevelopment fund Rs. 500 crores

21

� PHL’s commitment to these new funds will be 8 – 10 percent

� IndiaReit to look for special mandates like the investment

management mandate that it has from Trinity Capital PLC under

which it manages US $ 200 mn of assets

� Investment in IndiaReit to generate ROE of 18-20% from 2014

onwards

PHL Finance: Way Forward

� Led by Mr. A. K. Purwar, ex-Chairman of State Bank of India

� Strong systems and process in place aimed at building a book of

quality asset with Gross NPAs less has 2% and Net NPAs less than

1%

22

� To have loan book of Rs. 5,000 crores by FY2016

� PHL’s commitment to be Rs. 750 crores (One time Cash infusion)

� Investment in this NBFC to generate ROE of 15-16% by FY2016

Special Investments

23

Special Investments

PHL to invest surplus funds in investments that give:

o minority equity stake

o global companies in India

o high growth sectors

o short to medium term

o Minimal risk

24

o Minimal risk

o ROE: 17-20% p.a.

PHL has increased it’s stake in Vodafone Essar to 11% with the total investment of $ 1.2 billion

The partnership underscores trust placed by global companies in Piramal values, ethics, corporate governance and good reputation

Thank you

25

For further details contact:Sagar Gokani [email protected] Mhatre [email protected]

Back-up slides

26

Back-up slides

Rs. Crores

Profit & Loss Account – Consolidated Continuing Businesses – Q3 FY2012

31-Dec-11 31-Dec-10 % Gr 31-Dec-11 31-Dec-10 % Gr

Total operating income 617.6 534.9 15.5% 1,664.3 1,319.6 26.1%

NCE R&D Expenses 94.0 - - 94.0 - -

Other Operating Expenses 486.9 420.7 15.7% 1,249.3 1,902.7 -34.3%

OPBIDTA 36.6 114.1 -67.9% 320.9 115.4 178.0%

Period ended - ConsolidatedQ3 Ended 9 Months Ended

27

Note: Foreign exchange gain (mainly on Abbott receivables) included in OPBIDTA of Q3 FY2012 and 9MFY2012 of Rs. 28.0 crores and 206.9 crores

OPBIDTA 36.6 114.1 -67.9% 320.9 115.4 178.0%

OPM % 5.9% 21.3% - 19.3% 8.7% -

Interest 22.1 12.9 71.3% 52.4 71.7 -26.9%

Depreciation 40.1 24.0 66.9% 95.6 69.9 36.9%

Profit before tax (25.6) 77.2 - 172.9 (26.1) -

Income tax (37.8) 16.9 - 16.7 3,662.5 -

Profit after tax 9.7 60.3 - 152.6 12,535.2 -

EPS (Rs.) 0.5 2.9 - 9.0 599.8 -

Balance Sheet – Consolidated Q3 FY2012

Rs. Crores

As at As at

31-Dec-11 30-Sep-11

Equity capital 34.5 33.4

Reserves & Surplus 11,541.8 11,879.2

Networth 11,576.4 11,912.7

Minority Interest 8.9 7.7

Deferred tax liability (Net) 60.1 46.1

Loan funds 1,172.9 1,088.9

Period ended- Consolidated

28

Loan funds 1,172.9 1,088.9

Total 12,818.2 13,055.4

Net fixed assets 1,971.9 1,717.9

Investments 3,877.0 3,917.5

Net current assets 6,969.4 7,420.0

Inventories 495.9 455.6

Sundry debtors 396.8 351.9

Other current assets 7,404.1 7,546.2

Current liabilities 1,327.3 933.7

Total 12,818.2 13,055.4

1. Other current assets include amount of Rs. 6,373 crores as receivable from Abbott towards sale of Healthcare Solutions business

Documents

Piramal Healthcare Limited - Investor Presentation April 2012