#1BSE: 532321 NSE: CADILAHC Cadila Healthcare Ltd. Investor Presentation June 2011 Zydus dedicated life#2Our Vision Zydus shall be a leading global healthcare provider with a robust product pipeline; Stepping beyond the billion, we shall achieve sales of over $3 bn by 2015 and be a research-based pharmaceutical company by 2020... Zydus icated life dedicated to 2#3A Snapshot ■ One of the largest company in the Indian formulations market worth over Rs. 480 bn (Source: ORG IMS MAT Mar-11) Operations in US, Europe, Japan, Latin America, Asia Pacific, Africa and Middle East regions International sales in generic markets contribute to >42% of revenues, with > 55% growth in formulation exports in last 5 years Market leader in niche Indian consumer wellness market with strong brands ■ Innovation driven - investing -6% of revenues p.a. on NME, Biological and NDDS research and Generics development ■ Dedicated team of > 13,000 Zydans across 20 countries Market Cap Cadila Healthcare Ltd. > Rs. 180 bn (~ $ 4 bn) (24-Jun-11) Zydus Wellness Ltd. > Rs. 22 bn (~ $ 500 mn) (72% ownership) ■ Declared the Emerging Company of the year by 'ET Award for Corporate Excellence 2010'#4Well integrated company and expanding Globally Revenue break up (%) by segment (FY 10-11) Indian finished dosage formulations International finished dosage formulations High end APIs + intermediates Consumer Wellness APIs, 9% ▲8% India Formulations 38% " ▲ 19% Exports Formulations 43% ▲37% \India Others, 3% 16% India Consumer, 7% ▲ 25% Revenue break up (%) by region (FY 10-11) Regulated Mkts (US, EU, Japan), 40% ▲ 34% Manufacturing Research and Development India, 49% ▲ 19% Emerging Mkts, 11% ▲ 24% 4#5State of the art facilities and infrastructure (1/2) Formulations Finished Dosage Form, Moraiya (USFDA Approved) Finished Dosage Form, Sikkim Finished Dosage Form, Baddi German Pet Finished Dosage Form, Goa Finished Dosage Form, Brazil Agiolax (for Madaus), Goa Cytotoxic Injectables for Hospira JV (MHRA, USFDA) Cytotoxic Injectable For BSV JV Transdermals Mfg., Moraiya LO 5#6State of the art facilities and infrastructure (2/2) APIs and Fine Chemicals R&D API, Ankleshwar (USFDA Approved) API, Dabhasa (USFDA approved) Fine Chemicals, Moraiya (USFDA Approved) Zydus Biologics ZYDUS RESEARCH CENTRE Zydus Research Center, Moraiya Biologics Active Substances, Changodar Pharmaceutical Technology Center, Moraiya Vaccine Technology Centre Zydus vic Pantoprazole Intermediates for Nycomed JV Vaccine Technology Center, Moraiya API Process Researh Center, Dabhasa CO 6#7Financial highlights Income from Operations (Rs. Mio.) EBIDTA (Rs. Mio.) 46302 36868 ▲26% 29275 ▲26% ▲27% 8086 6058 ▲ 33% 10262 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 Net Profit # (Rs. Mio.) 3234 ▲ 57% 2008-09 5092 ▲ 40% 2009-10 7110 15.79 ▲ 57% EPS # (Rs.) 24.87 ▲ 40% 34.73 2010-11 2008-09 2009-10 2010-11 # Net Profit and EPS exclude Exceptional Items. 7#8One of the largest in Indian Pharma market with 2 ~ Rs 18 bn sales Leading positions in key segments - CVS, GI, Female Healthcare and Respiratory (participated market segments) ■ 17 brands amongst country's top 300 brands ■ New product launches - a key growth driver ■ Launched >60 new products and line. extensions in 2010-11 Therapeutic Area-wise Sales Break-up of Branded Formulations (FY 10-11) Respiratory, Antiinfective, Nutraceuticals, 2.4% 10.7% .10.2% Dermatology.. 3.1% Biological, 2.9% Pain Mgmt... ▪ 24 were first in India 7.3% ■ Dedicated task force of > 4500 people with therapeutic focus Others. 10.8% ■ In-licensing arrangements with Bayer Schering Pharma, Boehringer Ingelheim, Nycomed, Baxter, Genzyme Inc. ■ Recently entered into JV with Bayer Healthcare for sales and marketing pharma products in different therapeutic areas Note: All market related information sourced from ORG IMS MAT Mar-11 Cardiovascular, 20.0% Neurological, 3.0% Diagnostics, 2.0% Gastro Intestinal, 17.4% Female Healthcare, 10.2% 8#9International formulations: two-fold focus Focusing on developed generic markets (~32% of global sales) ✓ US - Zydus Pharmaceuticals USA Inc. ✓ Europe • France Zydus France SAS • Spain Laboratorios Combix - Japan - Zydus Pharmaceuticals Japan Co. Ltd. Formulations Exports (Rs. Mio.) 3,770 6,465 9,676 14,018 19,215 FY 06-07 FY 07-08 FY 08-09 FY 09-10 FY 10-11 Driving growth in emerging markets (~11% of global sales) Brazil - • Branded Quimica e Pharmaceutica Nikkho Do Brazil Ltda. Generics - Zydus Healthcare Brazil Ltda. Mexico - Zydus Pharmaceuticals México S.A. Emerging Markets • Asia Pacific- Sri Lanka, Myanmar, Taiwan, Philippines South Africa - Simayla Pharma. Pty. Ltd. Africa, Mid East - Sudan, Uganda, Algeria Product Portfolio Robust pipeline of new products across markets ✓ Initiatives to add specialty and niche dosage forms in the portfolio#10☐ Among the top 20 and one of the fastest growing generic companies in US Started operations in 2005 and adopted a "Customer Centric Model" Ranked 12th amongst the top US generic companies based on scripts (Source: IMS) Among the top three players in the market for nine out of the top ten products marketed "Preferred Supplier" for many customers. Focusing on delivery based, difficult to make products, the next growth driver 3.984 Sales in US (Rs. Mio.) 9,655 ▲ 44% 6,715 ▲ 69% FY 08-09 FY 09-10 FY 10-11 DMF Filings ANDA Filings ANDA Approvals Products Launched 40 10 99 65 97 130 KEY REGULATORY STRENGTHS A robust regulatory pipeline Over half of the products use own API Started filing ANDAs for Nasal (5 so far) and Parenterals (18 so far) Plan to file 12 -15 ANDAS p.a. 10 10#119th largest generic company in France; among top 20 generic companies in Spain Among top 10 in Euro 3 bn French generics market with over 2.5% market share ■ Launched >200 presentations (>90 molecules) in France so far Focusing on expanding market coverage thru new product launches incl. Day 1 opportunities Recognized as one of the most reliable partner to deal with by the pharmacists - a result of continuous focus on enrichment of customer relations Among top 20 in Euro 0.8 bn Spanish market ■ Launched >35 molecules in Spain so far ■ Plan to increase product portfolio to tap less penetrated market Overall, registered sales of Rs. 2,755 Mio. in FY 10-11 in Europe, up by 13% in Euro terms 116 Regulatory pipeline from India 67 21 64 49 46 KEY STRENGTHS Leveraging India's low cost base - started supplying over 35% of France sales from India New product filings include 39 products for Spanish market New Products Site Transfers Filed Approved Launched 11#12☐ Strategies for Japan: World's 2nd largest pharma market Generic market valued at $ 3.5 bn, growing at over 10%, with low generic penetration of ~7% in value terms, 22% in volume terms (Source: IGPA) Acquired Nippon Universal Pharma. Ltd. (now Zydus Pharma Japan - ZPJ), with a marketing set-up and a small manufacturing facility Plans to establish ZPJ as a generic player in Japan by introducing new products through in-licensing route as well product registrations from India Launched >25 new in-licensed products in last two years Recently launched Amlodipine in Japan to become first Indian company to get a marketing approval and launch a product manufactured in India Dedicated field force of >30 people to address the requirements of the customers Sales in Japan (Rs. Mio.) 422 219 ▲ 44% 316 ▲ 34% FY 08-09 FY 09-10 FY 10-11 12#13Strategies for $ 13bn Brazilian pharma market Set up Zydus Healthcare Brazil Ltda. (100% subsidiary) to enter generics market in 2005-06 Filed 64 dossiers so far for generic and branded products from India, of which 23 have been approved. Launched 14 generic products so far Acquired Nikkho in 2007-08 to foray into the fast growing, profitable and sustainable branded generics segment Sales in Brazil (Rs. Mio.) 1,628 ▲ 12% 1,818 ▲ 24% 2,250 FY 08-09 FY 09-10 FY 10-11 A profit-making co., Nikkho has a mfg. facility and strong marketing and distribution network in Brazil Expanded the branded basket to over 25 products with launch of several new brands from India and a few acquired brands Planning to increase product portfolio in both branded and generics market with 8-10 launches every year 13#14Achievements in the fast growing emerging markets Operations in ~20 semi / non regulated emerging markets of Asia Pacific, Africa and Middle East regions Focusing on rapidly growing markets of South Africa, Taiwan and Philippines No.1 Indian company in Uganda and Sudan and amongst top 3 Indian pharma cos. in Sri Lanka and Myanmar Acquired Simayla Pharma of South Africa, Africa's largest and only regulated. market Plan to launch several new products in South Africa from the group's strong pipeline built from India and leverage Simayla's marketing capabilities Only Indian company to start operations in Taiwan successfully Registered CAGR of >25% over last 3 years with sales of Rs. 1980 Mio. in FY 10-11 14#15Strong brand equity in highly potential consumer wellness segment in India Zydus Wellness Ltd. - spearheading operations in consumer wellness segment Strong presence in niche categories Sugar ■ India's largest selling sugar substitute with Free >85% market share (Source: AC Nielsen) Everyuth Nutralite Healthier than Butter ■ Skincare product range with leadership in peel-offs, scrubs and face wash categories ■ India's largest selling margarine ■ Continuous thrust on category expansion through launch of newer variants, also exploring possibilities of launching new categories in wellness domain ☐ Recently forayed into nutraceuticals space with launch of Actilife a nutritional milk additive for adults. - ■ Aim to cross sales of Rs. 500 cr. by 2013 Sales Zydus Wellness (Rs. Mio.) 3,355 ▲25% 2,675 1,947 ▲ 37% FY 08-09 FY 09-10 FY 10-11 Net Profit # Zydus Wellness (Rs. Mio.) ▲ 89% 249 467 ▲ 27% 595 FY 08-09 FY 09-10 FY 10-11 # Excludes Exceptional Items 15#16☐ ☐ ☐ Unlocking value through win-win alliances Zydus Nycomed JV - most successful contract manufacturing JV in Indial State-of-the-art mfg. facility for Pantoprazole key intermediates Commissioned the expanded facility to manufacture complex high-end APIs for Nycomed Zydus Hospira - JV for oncology injectables State-of-the-art cytotoxic facility in SEZ - approved by MHRA, USFDA, TGA and Health Canada Plan to manufacture 6 oncology products Commercial supplies for EU market commenced Zydus BSV JV for oncology NDDS - State-of-the-art mfg. plant in SEZ near Ahmedabad Launched NDDS product in India as Nudoxa Strategic out-licensing deal with Abbott Labs To license 24 products for 15 key emerging markets Option to include 40 additional products Sales Contribution from JVs (Rs. Mio.) 2708 2152 ▲ 70% 1597 839 60% 999 758 556 FY 08-09 FY 09-10 FY 10-11 Zydus Nycomed Zydus Hospira 16#17Ongoing Investment in Newer Portfolios Worth over $ 180 bn Current Business One of the leading players in Indian pharma industry and a strong player in global generics market Mid term Biogenerics : 40 bn Transdermal : 10 bn : 22 bn : 16 bn Long term Novel discovery products from Zydus NME pipeline Near term Pulmonary : 20 bn Vaccine Topical Transdermal : 10 bn Injectables Oncology : 17 bn : 55 bn Note: Value indicated is estimated brand sale ($) 17#18A scientific talent pool of >1050 and investing over 6% of the turnover on research Zydus Research Centre (ZRC) - Ahmedabad ■ Focus on NME Research, Biologicals & NDDS Pharmaceutical Technology Centre Ahmedabad and Mumbai ■ Focus on Finished Dosage Form Development & NDDS API Process Research - Dabhasa - ■ Focus on API Process Development Vaccine Technology Center - Ahmedabad ■ Focus on Vaccine Research & Development Talent Pool of >1050 Scientists Generics/ Developmental > 425 scientists NME & Drug Discovery 425 scientists API & Others 200 scientists R&D Investment: Rs. 2976 Mio. in FY 10-11 Generics / Developmental Rs. 2024 Mio. (68%) NME & Drug Discovery Rs. 659 Mio. (22%) API & Others Rs. 293 Mio. (10%) 18#19Dedicated facility for NME research: Zydus Research Centre Areas of focus: Dyslipidemia, Diabetes, Obesity, Inflammation Project Target Indication Drug Lead Pre- discover optimiza | clinical IND Phase Phase | Phase I NDA y tion develop ment Facility for target identification to pre- clinical research/early ZYH1 PPAR alpha Dyslipidemia : gamma ZYH2 |PPAR alpha: Diabetes gamma ZYH7 PPAR alpha Dyslipidemia clinical development ZYM Multi-modal Pain Signed a new drug discovery and ZYO1 CB-1 Obesity aatagonist development pact with Eli Lilly and Co., focused on cardiovascular research Joint research with Karo Bio, Sweden for non- steroidal glucocorticoids Initiated NDDS product development based on Nanotechnology ZYT1 TR-beta Dyslipidemia agonist ZYOG1 Oral GLP-1 Diabetes agonist Obesity ZYD1 GLP-1 Diabetes agonist Obesity ZYGL241 Oral GLP-1 Diabetes agonist Obesity ZYGK1 Glucokinase Diabetes activator ZYG19 GPR-119 Diabetes agonist ZYPH0907 PTH agonist Osteoporosis 19#20Biosimilars: ☐ ☐ ☐ Biosimilars and Vaccines - The Next Big Opportunity Strong pipeline: 17 biosimilars and 2 novel products Strong IP position either through own patent or non-infringing processes. 120 experienced scientists dedicated to Biosimilars programme End to end product development and mfg. to be done in-house at the dedicated facility Product G-CSF Multiple Sclerosis Oncology/Nephrology Nephrology Osteoporosis Mktg. Process Indication Cloning Devp. Pre-Clinical Regulatory Clinical Devp. Permission Devp. Authori- sation Oncology Peg G-CSF Oncology IFN a-2b Infectious diseases Peg IFN a-2b Infectious diseases IFN B 1b ΙΕΡΟ Prod 1 Teriparatide Prod 2 Prod 3 MAB 1 Oncology/RA MAB 2 Inflammation MAB 3 Oncology MAB 4 Oncology Prod 4 AMI Prod 5 Fertility Prod 6 Fertility MAB 5 Rabies PEG-EPO Nephrology Diabetes Rheumatoid Arthritis Vaccines: Acquired Etna Biotech, Italy, engaged in vaccine research and development State-of-the-art Vaccine Technology Center under construction Developed high quality vaccine for H1N1 in-house 1st Indian co. to launch H1N1 vaccine Several other vaccines under different stages of development 20 20#21Key Financial Numbers - FY 2010-11 Rs. Mio. Growth Consolidated Profitability 2010-11 2009-10 y-y% Domestic Sales 22,324 18,724 19.2% Exports Sales 22,887 17,418 31.4% Total Gross Sales 45,211 36,142 25.1% Total Income from Operations 46,302 36,868 25.6% EBIDT 10,262 8,086 26.9% EBIDT % to Total Income 22.2% 21.9% Net Profit # 7,110 5,092 39.6% Net Profit % to Total Income 15.4% 13.8% EPS not annualised (Rs.) # 34.73 24.87 39.6% # Excl. Exceptional Items Rs. Mio. Consolidated Financial Position Mar-11 Mar-10 Change Net Worth 21,715 16,183 34.2% Net Debt (Ex Cash) 8,021 8,398 -4.5% Net Fixed Assets 22,636 19,326 17.1% Net Current Assets (Ex Cash) 8,689 6,581 32.0% Fixed Assets Turnover 2.15 1.98 0.17 Net Debt to Equity 0.37 0.52 -0.15 Return on Net Worth 37.5% 35.9% 1.6% Return on Cap. Employed 24.5% 21.1% 3.4% 21#22Safe Harbour Statement This presentation may include certain "forward looking statements", based on current expectations, within the meaning of applicable laws and regulations. Actual results may differ and the company does not guarantee realization of these statements. The Company also disclaims any obligation to revise any forward- looking statements. The viewers may use their own judgement and are advised to make their own calculations before deciding on any matter based on the information given herein No part of this presentation may be reproduced, quoted or circulated without prior written approval from Cadila Healthcare Ltd. Zydus dedicated alife to www.zyduscadila.com 22