#1461.35 675. 45.02 2356 79 12.69 684.3 235 125.25 456.22 458.0 23.36 235 3496 3612.19 752.36 32.35 65723 32.5 421.22 0,05 16.9 9512 558,46 1.25 452.1 763.2 684,2 125.08 0.09 215 14,22 489.36 2,75 34,4 33.2 363,2 789 65.02 763.33 546.2 45692.33 123.25 333.44 33126 1698 314.46 Dr. Reddy's Laboratories Limited Hyderabad, India NYSE: RDY | NSE: DRREDDY | BSE: 500124 NOTA-2 NALE NO CI FUNDUSZ 1.Ztytutu hybych se 2.2 tytutu in Dr. Reddy's Investor Presentation June 2016#2Safe harbor statement • This presentation contains forward-looking statements and information that involve risks, uncertainties and assumptions. Forward- looking statements are all statements that concern plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical fact, including, but not limited to, those that are identified by the use of words such as “anticipates”, “believes”, “estimates”, “expects", "intends”, “plans”, “predicts”, “projects” and similar expressions. Risks and uncertainties that could affect us include, without limitation: General economic and business conditions in India and other key global markets in which we operate; The ability to successfully implement our strategy, our research and development efforts, growth & expansion plans and technological changes; Changes in the value of the Rupee and other currency changes; Changes in the Indian and international interest rates; Allocations of funds by the Governments in our key global markets; 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 Changes in political conditions in India and in our key global markets. Should one or more of such risks and uncertainties materialize, or should any underlying assumption prove incorrect, actual outcomes may vary materially from those indicated in the applicable forward-looking statements. For more detailed information on the risks and uncertainties associated with the Company's business activities, please see the Company's Form 20-F for the fiscal year ended March 31, 2015, and Form 6-K for the quarters ended June 30, 2015, September 30, 2015, December 31, 2015 and its other filings with the Securities and Exchange Commission. Any forward-looking statement or information contained in this presentation speaks only as of the date of the statement. We are not required to update any such statement or information to either reflect events or circumstances that occur after the date the statement or information is made or to account for unanticipated events Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 2#3Our Purpose We accelerate access to affordable and innovative medicines Because Good Health Can't Wait.#4Contents • • • Update on US FDA matter Executive Summary Company Overview Sustainable performance over the past 5 years Optimistic future • FY17 Priorities Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 4#5Update on ongoing US FDA matters November 2015 Warning Letter For Three Sites Activity Document Control December 2015 January 2016 March 2016 May 2016 Response Submitted First status update Second status update Third status update Electronic data reliability Infrastructure upgrades QC systems corrections and simplification Sterility assurance Manufacturing procedures Investigation rigor Status Done Of the Nearly done Nearly done Warning Letter Commitments, WIP Nearly done 94% will be completed by June. WIP WIP WARNING FDA Observation categories included: documentation practices and control, laboratory testing procedures, incident investigation practices, and standard operating procedures. Independent product quality assessments performed by Lachman Consulting Services. No questions or comments by FDA to date Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 5#6Executive Summary Top Line Growth with Healthy Profitability 1 2 3 4 Differentiated APIs for key customers and internal commercialization Growth in unbranded markets via complex & limited competition assets Growth in branded markets via differentiated products and services Investment and approvals in biologics (EMS) and Proprietary Products (US) to drive mid to long-term growth Well-positioned for sustained profitable growth given our proven capability in complex generics with strategic investments in R&D for Proprietary Products and Biologics Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 6#7Recent Highlights: Proprietary Products Our first set of NDAs Zembrace & Sernivo launched in the US 3 mg NDC 67857-809-37 Rx Only Zembrace SYMTOUCH (sumatriptan injection) For subcutaneous use only. Each autoiniector contains a profilled eurinna ac Closed three deals to In-license assets Xeglyze, XP23829 E 7777 Xeglyze (abarretapir) Xeglyze (abametapir) Lution, 0.74% www. NDC WIZ K Ax Only Sernivo (betamethasone dipropionate) Spray, 0.05% Potency expressed as be For Topical Use Only PROMIUS PHARMA GERMAN XenoPort Eisai#8Recent Highlights: North America Generics Entered definitive agreement with Teva / Allergan ⚫ Acquired eight ANDAS (One approved and seven under review with FDA) Majority of the molecules being acquired are complex products and/or expected to have limited competition • Across multiple dosage forms i.e. sublingual film, Vaginal ring, inhalation respule, topical cream and oral solids combined sale of the branded versions of the products in the U.S. is approximately $3.5 billion MAT April 2016 (IMS) Expect to launch half of them in fiscal 2018 Acquisition of 6 OTC brands with strong brand equity NDC 55741-524-24 COMTREX DAY COLD & COUGH Acetaminophen ✔Pain Reliever ✓ Fever Reducer Dextromethorphan HBr Cough Suppressant Phenylephrine HCI Nasal Decongestant NIGHT Acetaminophen Pain Reliever Fever Reducer Chlorpheniramine maleate Antihistamine. Dextromethorphan HBr Cough Suppressant Phenylephrine HCI Nasal Decongestant 12 COATED CAPLETS 12 COATED CAPLETS EXTRA STRENGTH DOAN'S MAGNESIUM SALICYLATE PAIN RELIEVER RELIEVES BACKACHE PAIN 24 CAPLETS NEW LOOK! MAX STRENGTH Arthritis Pain Relief MYOFLEX TROLAMINE SALICYLATE 10% NET WT. 4 oz (113g) PAIN RELIEVING CREAM NDC 55741-304-04 TARGETED RELIEF FROM: Arthritis Muscle & Joint Pain Minor Backache ODORLESS & DEEP PENETRATING LONGEST LASTING INGREDIENT NOC 55741-402-02 UP TO HOURS NUPERCAINAL HEMORRHOIDAL OINTMENT Fast Temporary Relief of Pain, Itching, and Burning Due to Hemorrhoids. DIBUCAINE 1% NETW FRIN Pain Reliever Fear Petcer Tough on pain. Gentler to your stomach. Man plain aspe BUFFERIN REGULAR STRENGTH BUFFERED ASPIRIN 130 COATED TABLETS-325 mg EACH Apply Obr Free NEW! IMPROVEMENT IN ONE WEEK Ives No "na 2014 survey 80% OF USERS reported improvement in 1 WEEK! Cruex Nail Cruex Nail FUNGAL NAIL REVITALIZING GEL 5% Bonicel Probiotic Filtrate FUNGAL NAIL FREVITALIZING GEL Smooths Thick Rough Nails Restores Nail Health Improves Appearance & Odor BRUSH-TIP APPLICATON NET WIT ADVANCED FORMULA 0.27 AL 07 (BmL)#9Recent Highlights: Emerging Markets 500rg Dr. Resors ton R Rituximab Injection 500 mg Reditux Approved in Russia and adision ECHOF OILDREN CREPALLY 4-4-2 and Redi tux 500 1 vial Venezuela!#10Company Overview#11Integrated business model Pharmaceutical Services & Active Ingredients Global Generics Proprietary Products ghings li Partner of Choice Access to affordable medicines Fulfilling unmet and under-met needs FY16 Revenue mix 14% FY16 Revenue mix 83% FY16 Revenue mix 3% Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 11#12Key strengths and capabilities Collaboration across business units Industry leading product Deep market presence development skills Early mover advantage in Biosimilars Vertically integrated organization with modern infrastructure • Several niche product opportunities (decitabine, azacitidine, fondaparinux) first to market in USA • Branded generic markets - India, Russia), CIS countries and Venezuela Generic markets - USA, UK and Germany . First to launch Biosimilar rituximab in 2007 • 4 Biosimilar products being marketed • Investor Presentation - 2016 R&D centers in India, UK, Netherlands and US 20 USFDA inspected formulation & API manufacturing facilities Dr. Reddy's Laboratories Ltd. 12#13Formulation manufacturing infrastructure and capabilities DOSAGE FORM CAPABILITIES DETAILS 10 Facilities out of which Tablets, Capsules, Oral Solids (22 bn pills annual) Pellets, bi-layers, Modified/Extended release, ODTs Injectable (110 mn units annual) • • . • Vial PFS including complex products 4 USFDA approved of which 2 are located in USA 3 MHRA approved 1 state of art facility is ready for USFDA approval 3 Facilities out of which • • 1 oncology facility, USFDA/MHRA/ANVISA approved 1 State of the art facility commissioned 1 facility approved by ANVISA/Romania focused on emerging markets 2 Facilities out of which 1 facility for emerging and domestic market and Ointments (10mn units annual) Tubes/creams/ Gel • • 1 facility for US market coming on-stream Multiple strategic alliances for manufacturing variety of dosage forms Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 13#14Globalized R&D to access the right talent to solve complex scientific challenges 107 Investor Presentation - 2016 Y DE.REDDYT Complex Chemistry Centre of Excellence Cambridge, UK Complex Injectable Centre of Excellence Leiden, Netherlands Canada UK US Complex generics & Proprietary products Princeton, NJ, USA External partners Germany Italy Octo 12 12 DR. REDDY'S 900 on a Product Development Centres, Hyderabad & Bangalore Aurigene Discovery Technologies Ltd, Bangalore Dr. Reddy's Laboratories Ltd. 14#15Sustainable performance over five years#16Sustainable revenue growth over last 5 years REVENUES (Rs Cr) Well placed to harness profitable growth opportunities in the future Sustained focus on - 。 Portfolio management 。 Operations excellence 。 Science & Technology capabilities 。 Superior Commercial choices across markets Poised for growth in emerging businesses of Proprietary Products, Biologics and Aurigene +10% 15,471 14,819 13,217 11,627 9,674 FY12 FY13 FY14 FY15 FY16 FY16 global revenues of $2.4Bn Steady improvement in capital efficiency & productivity over the last five years Value in USD is calculated based on the average US dollar exchange rate#17Profitable growth trends All values in Rs Cr. GROSS MARGIN EBITDA 26% 9,228 25% 8,540 24% 24% 26.6% ** 23% 7,580 60% 4,134 6,058 3,617 3,625 5,331 58% 57% 2,541 2,782 3,318 55% 52% FY12 FY13 FY14 Gross Margin FREE CASH FLOWS FY15 -% to Sales FY16 FY12 FY13 FY14 FY15 FY16 EBITDA Adj. EBITDA % to Sales 876 930 695 589 ROCE 26.8%** 1,875 29.6% 28.3% 28.2% 26.1% 22.4% FY12 FY13 FY14 FY15 FY16 ■Free Cash Flow Investor Presentation - 2016 FY12 FY13 FY14 FY15 FY16 ROCE ...... Adj. ROCE ** **Adjusting for the Venezuela related accrual taken in FY 16 Dr. Reddy's Laboratories Ltd. 17#18Our North America Generics base business grew at 15% CAGR (FY16 Gr:12%) REVENUES (US $ Mn) +15% STRATEGIC FOCUS 1,168 1,044 921 738 671 Investments in capacity and facilities • Build capabilities for complex dosage forms Augment capacities for Oral Solids and Injectables Deepening go-to-market model Demand generation for non-substitutable products in clinics & hospitals Moving towards branded OTC franchise FY12 FY13 FY14 FY15 FY16 Now ranked #10th among the US generics companies Leading private label OTC player; strong #2 after Perrigo#19Russia business sustaining uncertain macro economic conditions REVENUES (Rouble mn) +9% 10,005 10,115 8,891 8,041 STRATEGIC FOCUS 6,817 • Focus on portfolio augmentation and productivity improvement • Continue to Scale-up the OTC business • Establish Biosimilar business with launch of Reditux FY12 FY13 FY14 FY15 FY16 • Established strong presence in Pain Management, G.I. & Anti-Infectives therapies Top 5 brands rank #1 in their respective segments & 12 brands in the top 3#20Our India business grew at 12% CAGR (FY16 Gr:19%) REVENUES (Rs Cr) STRATEGIC FOCUS Deep focus on Chronic and Super-specialty therapies Strategic business development and M&A efforts ⚫ Differentiated assets in relevant therapies +12% 2,129 1,787 1,571 1,456 1,293 FY12 FY13 FY14 FY15 FY16 Successful integration of the brands acquired from UCB Improvement on the back of - • Focused sales & marketing efforts on mega brands • Improving new launch productivity • Scale-up in institutions sales#21Despite modest performance, PSAI continues to be strategic differentiator REVENUES (US $ mn) 500 590 . • STRATEGIC FOCUS Accelerate first-to-market access for our partners through non-infringing IP positions Invest in technology platforms to develop complex APIs Supply reliability to meet customer demands 417 400 345 FY12 FY13 FY14 FY15 FY16 Partnerships with top Generics players: ~40% of sales from global top 5 >60% of Global Generics segment's sales from vertically integrated APIs#22Optimistic future#23Our purpose guides our customer value proposition leading to specific strategic choices Purpose We accelerate access to affordable medicines because Our promises * Bringing expensive medicine within reach + Addressing unmet patient needs Helping patients manage disease better Our strategic choices First-to-market, tough-to-make products Differentiated formulations for unmet medical needs Good Health Can't Wait. Investor Presentation - 2016 + Enabling and helping our partners ensure that our medicines are available where needed Value-added services for patients and customers + Reliable & flexible supply chain Dr. Reddy's Laboratories Ltd. 23#24Healthy pipeline of high entry barrier products Bringing expensive medicine within reach Number of pending Gx filings by dosage form Complex Softgel, 5 Inj/ Sterile, 17 Topical/ Transdermal, 6 Inj, 10 Complex OSD, 17 - OSD, 27 Market shares of limited competition products have been stable 79 pending ANDAS & 3 pending NDAs (505b2s) of ~$45 billion of innovator brand sales value - incl. 52 para-IV and 18 first to file products Portfolio of products based on - - Complex Characterization / Analytical chemistry - Novel regulatory pathway - Large & complex clinical / Bio-studies High technology barrier in development & manufacturing Fast-following on potential OTC switches Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 24#25Biologics: Maximizing value of current assets in near to mid-term while pursuing global development Biologics revenue has grown at approx. 40% CAGR over the last 10 years 4 Peg-grafeelⓇ 1 Grafeel® Dr. Reddy's filgrastim launched; The 1st biosimilar filgrastim (G- CSF) in India 2 Reditux TM Dr. Reddy's rituximab launched in India; 1st biosimilar MAb in the I world. 3 CrespⓇ Dr. Reddy's darbepoetin alfa was launched in India; The first biosimilar darbepoetin alfa in the world Dr. Reddy's peg filgrastim launched; End-to-end development in-house (single source pegfilgrastim) 2011 Pre-2006 Investor Presentation - 2016 2010 2007 2 US INDs filed- Rituximab and Peg-GCSF 2014 2012 MERCK SERONO DR.REDDY'S Dr. Reddy's Laboratories Ltd. 25#26Biologics: Creating substantial value in long term from new portfolio choices while driving R&D productivity Investor Presentation - 2016 Product Portfolio • 6 existing products; > 50 filings across 14 major countries. 5 new products in clinical development 5 new products in early development FY20 Business Emerging Markets Revenue: $150Mn - $200Mn • Profile • Developed Markets Profits/Royalties expected to Kick-in EBITDA margin post R&D: > 25 % FY25 • Emerging Markets Revenue: $300Mn - $400Mn Business • Developed Markets Profits: ~ $150 - 200Mn Profile • EBITDA margin post R&D: > 35 % Dr. Reddy's Laboratories Ltd. 26#27Proprietary Products: Building $500 million business by FY22 business through lower-risk innovation model Reverse Translation-based Product Development Engine Promius Pharma: A unique, unmet-need driven Specialty Dermatology and Neurology company Commercialization Model focused on solving patient challenges [focusing directly on both physician and patient] Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 27#28Services aimed at improving patient outcomes or customer needs • Provide innovative services around our products PROPRIETARY PRODUCTS Enable doctors and pharmacists to create better outcomes BRANDED GENERICS Value-added service offerings API AND GENERICS Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 28#29FY17 Priorities#30FY17 Priorities mm Growth Track progress on Strategic growth plan Accelerate Biologics and Proprietary Products commercialization to get to scale Improve R&D productivity and hit rate of filings Organization Continue to build on Supply chain excellence initiatives Organization Simplicity and Design organization for success Operations Strengthen quality management systems and processes Enhance the infrastructure for training & development of our staff on the current cGMP practices Investor Presentation - 2016 Dr. Reddy's Laboratories Ltd. 30#31阿 GOOD HEALTH CAN'T WAIT. COP 道 H 26#32Contacts Investor relations Kedar Upadhye [email protected] (Ph: +91-40-66834297) Media relations Calvin Printer [email protected] (Ph: +91-40-49002121) Dr. Reddy's About Dr. Reddy's: Dr. Reddy's Laboratories Ltd. (NYSE: RDY) is an integrated pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services & Active Ingredients, Global Generics and Proprietary Products - Dr. Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations. Our major therapeutic areas of focus are gastro-intestinal, cardiovascular, diabetology, oncology, pain management and anti-infectives. Dr. Reddy's operates in markets across the globe. Our major markets include - USA, Russia & CIS, Venezuela and India. For more information, log on to: www.drreddys.com Disclaimer: This press release may include statements of future expectations and other forward-looking statements that are based on the management's current views and assumptions and involve known or unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to without limitation, (i) general economic conditions such as performance of financial markets, credit defaults, currency exchange rates, interest rates, persistency levels and frequency / severity of insured loss events (ii) mortality and morbidity levels and trends, (iii) changing levels of competition and general competitive factors, (iv) changes in laws and regulations and in the policies of central banks and/or governments, (v) the impact of acquisitions or reorganisation, including related integration issues. The company assumes no obligation to update any information contained herein. Registered Office: Dr. Reddy's Laboratories Ltd. 8-2-337 | Road No. 3, Banjara Hills, Hyderabad - 500034, Telangana, India. Tel: 91 40 4900 2900 | Fax: 91 40 4900 2999 | Web: www.drreddys.com