#145.02 675.45 684.8 421,22 9512 363.2 452.3 763.2 799 215 14.22 489.54 65.02 45692.35 123.25 333.44 Duelonic FL 3 NOTA-2 NALE NO CI FUNDUSZ Dr. Reddy's Laboratories Limited Hyderabad, India BSE: 500124 | NSE: DRREDDY | NYSE: RDY 1.Zyuu yych se 2.2 tylulu instrumentowy Investor Presentation June 2018 Dr. Reddy's#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, 2017, and Form 6-K for the quarters ended June 30, 2017, September 30, 2017 and December 31, 2017 and other filings with the US SEC. 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 2#3Contents Our Purpose Company Overview Recent Business Highlights Growth Roadmap Optimistic Future 3#4Our Purpose We accelerate access to affordable and innovative medicines Because Good Health Can't Wait.#5Our Purpose Guides Our Customer Value Proposition Leading to Specific Strategic Choices PURPOSE OUR PROMISES We accelerate access to affordable medicines because Good Health Can't Wait. Bringing expensive medicine within reach Addressing unmet patient needs Helping patients manage disease better Enabling and helping our partners ensure our medicines are available where needed Working with partners to help them succeed 5#6COMPANY OVERVIEW 6#7Future Current Multidimensional business model to sustain long-term growth • UNBRANDED (US + EU) Monetize the complex/limited competition assets across channels and classes of trade BRANDED (EM + INDIA) Continued growth for mega brands through patient centric initiatives Selective business integration on NCE assets PROPRIETARY PRODUCTS Maximize the base business revenues through volume growth initiatives and managed care strategy Accelerate Biosimilars filings in US and EU Outreach model for novel dosage forms in Non- traditional channels Accelerate the journey to monetize Biosimilars assets across existing and new markets Focus on development and filing of late-stage, high-value differentiated assets PSAI Leverage Industry leading chemistry skills to synthesize complex APIs enabling robust portfolio across the businesses 7#8Recent Business Highlights 8#9FY18 Financial Performance FY18 Revenues USD 2,181 M (YoY growth: 1%) FY18 EBIDTA USD 370 M (% of Sales: 17%) FY18 FCF USD 93 M FY18 PBT USD 220 M (YoY decline: 2%) FY 18 R & D Expenses USD 281M (% of Sales: 12.9%) Net Debt/Equity 0.24 9#10Highlights of FY18 Filings Good filings performance 19 ANDAS & 1 NDA filed in the USA Markets India Business performance post-GST picked up pace for the rest of FY18 Observations No critical observations in multiple regulatory inspections in CTOs. FTO2 and FTO3 cleared regulatory hurdles New markets in EM showed positive early performance trends PSAI service levels to customers started showing improvement towards end of the year Product launches Exciting new product launches in NAG like Sevelamer, Lipo Dox, Palonosetron Inj, OTC Levocetirizine Cost Control in the organization helped partially offset revenue challenges 10#11Delivering affordable generic alternatives in Unbranded Markets 15 NEW PRODUCTS LAUNCHED IN NORTH AMERICA IN FISCAL 2018 First-To-Market launches of Palonosetron for Injection and OTC Levocetirizine Tablets • Affordable alternative for complex, limited-competition products Multiple limited-competition launches this fiscal year (Incl. Sevelamer, Doxorubicin Hydrochloride Liposome Injection, Bivalirudin for Injection, and Ezetimibe & Simvastatin Tablets) Other Product Launches in the U.S. . Melphalan Hydrochloride 50mg Powder for Injection Clofarabine Injection for Intravenous Use . Metaxalone Tablets • Cefixime for Oral Suspension Pipeline Updates . Positive DC outcome on Suboxone litigation 11 Launch preparations on track for on near-term big-ticket launches#12Biosimilars and small molecule Oncology assets fueling global expansion Successful launches of Oncology products in EM and EU • Colombia, Brazil, Algeria, Spain, Italy Reditux™ paving the way for the entry of upcoming Biosimilar assets in new markets • Currently approved in 17 countries and available in 14 Launched five products in India through strategic collaboration with Amgen Vectibix XGEVA Kyprolis (panitumumab) (denosumab) injection Injection for IV Infusion (carfilzomib) f for Injec prolia (denosumab injection Repatha (evolocumab) 140 mg/ml injection Entry into more new markets in LatAm, Africa and Asia slated for H2 FY 18 12#13• • Making a difference through Patient-centric Initiatives in Emerging Markets Our first wave of patient-centric packaging has been received well • Four India Star awards for patient-centric packaging (selected from 622 entries); now qualify for Asia star and World star awards Positive feedback from patients, doctors and pharmacists Prototyping packaging innovations for patients in Russia Working with Geriatric Society to enhance therapy experience of geriatric patients Revamping packaging of OTC brands Adherence programs • After success in specialty care, we now have achieved scale in primary care with the CVAD adherence program in India Anti-Allergic CETRINE 20 capsules Ceticaine 10mg Push Tab feature in carton to serve as a reminder of when to have the medicine Cetirizine 10mg Anti-Allergic CETRINE 20 capsules Cetirizine 10mg Anti-Allergic CETRINE 20 capsules 米 Integrated flap that provides key information to the patient Ristamine and other allergies, such allergies to molds and dust mites 13#14Addressing unmet needs in Derma and Neurology Commercial Updates ⚫ First set of launches Zembrace TM and Sernivo™ ramping up well, continue to focus on accelerating the commercial business' path to profitability • Promius Pharma recognized as an emerging R&D driven commercial organization in the neurology and dermatology communities R&D Updates ⚫ Filed the NDA for migraine candidate DFN-02 • Developing robust R&D Pipeline - Three assets in Phase Ill and Three assets in Phase II respectively BD Updates • Out-licensing of DFD-06, a topical high potency steroid, to Encore Dermatology • Global License & Commercialization Agreement for Phase III Clinical Trial Candidate (DFA 02) for Mitigation of Surgical Site Infections with CHD Biosciences 14#15Our Quality Journey WE ARE COMMITTED TO EXCELLENCE IN QUALITY AND TO BEING THE BEST IN THE INDUSTRY U.S. FDA Audit Updates Sites Previously on Warning Letter CTO 5: Three observations in audit - Received EIR CTO 6: Received EIR: compliance pending FTO 7 Sterile Plant: Received EIR: compliance pending, anticipating re-audit in H2 2018 Other Sites CTO SEZ: Concluded with zero observations CTO 3: Concluded with five observations CTO 1: Concluded with four observations FTO 3 Bachupally: Received EIR Mirfield: Concluded with three observations Mexico: Concluded with zero observations CPS Technology Development Center: Received EIR FTO SEZ PU-01 & 02: Received EIR pam-pac EKSON 2000 000 690 000 20 220#16Growth Roadmap 16#17North America Generics: Growth driven by limited competition products Portfolio Channel • 2018 • . Oral solid dosages account for almost 80% of the current revenues Injectables accounting for 20% of the revenues Retail is the predominant class of trade for the business contributing more than 60% of current revenues Current OTC presence broadly in private Label segment . 2021 More than 50% of revenues to come from Injectables, Topicals and other complex dosage forms Initiate monetization of Biosimilars assets Specialized channels like Oncology Clinics, Hospitals, OTC are expected to form 60% of the mix OTC Brands to become relevant part of business Customer Plant • Exclusive focus on trade partners across retailers, Distributors and GPOs Increased relevance of other stakeholders like Patients, Physicians and Payors · More than 70% revenues reliant on internal manufacturing sites • Diversified manufacturing network with almost 50% of revenues coming from partner manufacturing sites 17#18Healthy Pipeline of First-to-market, Tough-to-make Products Bringing Expensive Medicine within Reach NUMBER OF PENDING FILINGS* BY DOSAGE FORM Topical/ Transdermal/ Vaginal, 9 Inhalation, 2 Softgel, 2 Complex Inj/ Sterile, 20 Inj, 16 Filings as of March 31, 2018; Internal estimates Complex OSD, 22 OSD, 39 PIPELINE HIGHLIGHTS 107 pending ANDAS & 3 pending NDAs (505b2s) • No incl. 63 para-IV and 30 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 18#19India & Emerging Markets: Growth driven by patient centric initiatives 2018 2021 • India • Focus on mega brands expansion Improvement in new launch productivity Step-up in Chronic and Super-specialty therapies • Portfolio augmentation and productivity improvement • • Strategic business development and M&A efforts • Differentiated assets in relevant therapies Focus on new growth avenues [a] Institution / Corporate hospitals; [b] OTC and Nutritionals EM • . Focus on mega brands expansion / improvement in field force productivity Launch of Biosimilar products in existing markets Leveraging the Complex generics / Biosimilar portfolio, across markets Increase depth in lead geographies of Russia, Brazil & China Expanding presence in new markets Selective business integration for OTC / differentiated assets Augment the capacities by establishing local manufacturing capabilities 19#20Biologics: Maximizing value of current assets in near to mid-term while pursuing global development BIOLOGICS REVENUE HAS GROWN AT APPROX. 30% CAGR OVER THE LAST 10 YEARS EU/US approval enabling studies initiated for pegfilgrastim Rituximab and bevacizumab approval enabling studies for EU/US expected to be initiated in next 4 - 6 quarters 2 new molecules entering clinical development in next 12 months 1 Grafeel® Dr. Reddy's filgrastim launched; The 1st biosimilar filgrastim (G-CSF) in India 2 RedituxⓇ Dr. Reddy's rituximab launched in India; 1st biosimilar MAb in the world 3 CrespⓇ Dr. Reddy's darbepoetin alfa was launched in India; The first biosimilar darbepoetin alfa in the world 4 Peg-grafeel® Dr. Reddy's peg filgrastim launched; End-to-end development in- house (single source pegfilgrastim) EU/US Clinical programs initiated for rituximab and pegfilgrastim 2014 Pre-2006 2007 Above diagram depicts calendar years 2012 2016 2017 EM clinical Studies for trastuzumab and bevacizumab EU/US Clinical Program initiated for bevacizumab MERCK SERONO Fresenius Kabi bought Merck KGaA's Biosimilar business in Sept 17 " 2011 2010 Dr. Reddy's 20 20#21Biologics: Creating substantial value in long term from new portfolio choices while driving R&D productivity 6 commercial products; > 50 filings across 14 major countries FY20 Product Portfolio FY20 Business Profile 5 new products in clinical development Strong and relevant play in Emerging Markets Developed Markets Royalties expected to Kick-in FY25 Business Profile Emerging Markets Revenue: $300 Mn - $400Mn Developed Markets Profits: > $100Mn EBITDA margin post R&D: > 35 % 21#22Proprietary Products: Aspiring to build a $400 million business by FY22 through a low-risk innovation model • Established with the goal to address unmet needs of specific patient segments in Dermatology & Neurology Diverse portfolio of R&D assets with a track record of regulatory success Licensed three clinical stage assets to augment overall long term value of the portfolio Strong track record of commercial success 33% CAGR top-line growth [FY11-FY17] Specialty Dermatology Franchise 3 Products approved; 1 asset commercialized and 2 licensed Supported by 60 Sales Reps in 6 Regions Specialty Neurology Franchise Introduced the Neurology franchise through the launch of Zembrace in 2016 Supported by 45 Sales Reps in 6 Regions • FDA Approval for Five NDAs (organic pipeline assets) Two Launched April/May 2016 ZEMBRACE ™ Sym Touch TM (sumatriptan injection) 3 mg/ 0.5 mL Sernivo™ (betamethasone dipropionate) Spray, 0.05% 22#23Aurigene: Specialized Biotech division focused on addressing critical needs in Oncology and Auto-immune therapeutic areas BUSINESS MODEL Focused on Oncology & inflammation disorders Complementing infrastructure for small molecule & peptide drug discovery Client value proposition characterized by collaboration & licensing Multi-year collaborations with 6 of top-10 pharmaceutical companies OUTCOMES 70+ integrated discovery programs resulting in over 135 patents in the last 10 years Out-licensed multiple early-stage and late stage programs 11 INDs filed under collaboration programs; multiple assets in Phase I/II Pipeline of programs in Immuno-oncology, Epigenetics & Th17 pathway 23#24OPTIMISTIC FUTURE 24#25Key Strategic Priorities Strengthening Manufacturing & Quality Create culture encouraging Transparency and Compliance Creating Leaner and Flexible cost structures Focus on Manufacturing and R & D Network Rationalization, Improving Plant Operating Efficiency, R&D Productivity and Portfolio Optimization Assuring Long-Term Growth across all our businesses Focus on delivering Top 30 products accounting for 50% of incremental growth 25 25#26MP 20 OME 20 P20 P 20 20 20 Good Health Can't Wait. MP MP 20 MP 2 20 P20 20 NO ONZ O OM OMP OMP OM 20 PMP 20 20 OM Dr. Reddy's#27Investor relations Saunak Savla [email protected] (Ph: +91-40-49002135) Contacts Media relations Calvin Printer [email protected] (Ph: +91-40-49002121) Dr. Reddy's About Dr. Reddy's: Dr. Reddy's Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, 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 gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr. Reddy's operates in markets across the globe. Our major markets include - USA, India, Russia & CIS countries, and Europe. 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