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Shasun Pharmaceuticals Limited

Analyst meeting Presentation 10th February 12

Disclaimer
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 readers may use their own judgment 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 Shasun Pharmaceuticals Limited.

SHASUN

Business Outlook

S. Abhaya Kumar Managing Director

Mission

To be the Preferred Partner and Provider of Services to the pharmaceutical Industry

Shasun is a leading supplier of active ingredients, intermediates, formulation, chemistry and


analytical services to the pharmaceutical industry;

Shasun people, facilities and capabilities are among the best in the industry. Shasun cover the entire life cycle of a product at all scales, from pre-clinical and clinical phases to validation and commercial supply, while fully complying with HSE and cGMP regulations and standards within FDA and MHRA approved facilities.

Global Footprint

V iza g-India

Shasun has developed its presence in some of the major countries in the world. We continue to expand our base and globalize further.

BUSINESS MODEL
Pre-Launch
FTE Low Cost Intermediates Tactical Kg (Big Pharma) Total Service Offering Hazard / Complexity / API Strategic Supply Options Project Management Geographic Preferences Post-Launch Cost Effective API & Formulation Total / High Service Hazard / Complexity / API Assurance of Supply Flexible Asset Base

Scale Manufacturing Assets

PI

PII

PIII

Technology (F, HKR) Application of NOPPs Highly Experienced and Customer Focused People

Business overview
Shasun Business Segments Active Pharmaceutical Ingredients: Shasun is the largest manufacturer of Ibuprofen in the world. Its current API portfolio includes Ibuprofen, Nizatidine, Ranitidine , Gabapentin , Olanzapine and Cycloserine amongst others Active New API product development pipeline API Contract Research & Manufacturing (CRAMS): Shasuns CRAMS business spans India and UK SPSL Dudley, UK facility has over 40 years of expertise in working with top pharma companies for custom services and manufacturing. It has a very healthy mix of emerging and big pharma clients Finished Dosages Formulation CRAMS Provides oral solid dosage development and manufacturing services at its Formulations facility in Pondicherry This facility has undergone successful inspections by US FDA, MHRA (UK) and TPD Health Canada Recently expanded the formulations capacity from 1.4 billion tablets per annum to 5 billion tablets per annum Biotech: This unit launched Streptokinase, a fibrinolytic drug used for the treatment of heart attacks

Shasun India facilities


Ibuprofen API facility in Pondicherry World largest producer of Ibuprofen USFDA /MHRA approved facility cGMP operation Effluent treatment plant with marine discharge facility Pilot Plant for Contract /Custom Manufacturing

Shasun Research Centre

API facility in Cuddalore Multi-product API facility 4 Production Blocks, cGMP operation US FDA / MHRA approved Formulations - Pondicherry Commissioned in Dec 2005 ,cGMP operation Formulation development capabilities Current capacity to manufacture 5 billion units of OSD US FDA / MHRA approved Contract Formulations to US / EU

Cuddalore

Pondicherry

Shasun Research Centre (SRC) Chennai Contract research and custom synthesis services 12 synthetic labs, 6 kilo Labs and 1 scale up facility Key customers in Japan, USA and EU which include large MNC Pharma Biotech Facility Pondicherry Production of recombinant streptokinase Facility approved for COPP /WHO

Shasun UK facility
42 Acre Site Process Research &Development Laboratories Scale Up Laboratory Facilities Highly flexible Pilot Plant 3 Large Scale Production Facilities D1, D1.5 & D2 450 m cGMP reactor capacity Commercial Biological Waste Water Treatment Facility Top Tier COMAH site Successful MHRA audit November 2010 Successful FDA PAI May 2011 Successful PMDA PAI in July 2011

Shasun Review of 11-12

Shasun India Business growth


SPL India achieved highest sales of Rs 212 crs for any Qtr in Qtr 3 FY 12 Current year 9 months sales Rs 528 crs 24% growth over last year Substantial growth in Gabapentin and Ibu derivatives 45% over last year Nizatidine revival in Japan market CRAMS API sales increase 53% over last year Formulation business growth 34% Thrust in new generic product growth Current 9 months EBITDA Rs 57.03 crs vs Rs 48.51 crs last full year

Shasun India Business Update


Formulation 1. 2. 3. Commercial production capacity expansion completed New QC Lab integrated software installed FDA has inspected 4 customer ANDA and one NCE in Nov 11 and No 483 report

Pondy Ibu Plant 1. New alternative Fuel Boiler installed, resulting in reduced steam cost 2. Signed long term contracts with big pharma for supply of Ibuprofen 3. Completed capacity expansion Cuddalore 1. 2. 3. Process optimization for a major API Capacity expansion for API Plant commissioned within 5 days of cyclone

Shasun India Business Update


Bio Tech 1. 2. Plant shifted from Velacherry Chennai to Pondicherry with in API facility Gold Nano particle project preclinical study underway

CRAMS API 1. 2. 3. Integration of UK and Indian CRAMS to create a global CRAMS organization Emerging Pharma customer acquisitions-current year 11 new customers Break through with one Big pharma involving 10 FTE contract

Vizag new facility 1. Phase I construction started and expected to be completed by Dec 12 Corporate 1. 2. Opened China sourcing office Capex committed spend for 9 months Rs 50 Cr to support growth

Shasun Growth Strategy

Shasun Growth Strategy


Shasun has unveiled a robust and scalable growth strategy Growth Drivers
New Markets New products
Biotech/Nanotech growth Exploring biosimilars R&D in cutting edge technologies with collaborative efforts

Formulations

Technology tie-ups
APIs growth Grow Ibuprofen derivates Increase in API capacity Focusing on new products development New market growth

Capacity expansion
Formulations growth Capacity expansion and new contracts Own ANDA filings Shasun branded formulations, investment for future

Cost optimization
CRAMS growth New customers/ new products acquisition in US, EU and Japan New facility in Vizag

Exploit technology differentiation Nano technology development

Biotech

CRAMS

APIs

API -Portfolio
Product Ibuprofen and Derivates Gabapentin Growth drivers Shasun is one of the largest manufacturers of Ibuprofen in the world. Ibuprofen and its derivatives offer new growth opportunities with improved margins The product went generic in US in 2005 and has since then been a significant growth driver for Shasun Capacity expansion will help the growth Nizatidine is an anti-ulcerant drug. It is used for the treatment of multi drug resistant TB. The Company commercialized the product in EU and North American market in FY 11. Shasun filed DMF in 2009. The drug is going generic in 2013. Shasun filed DMF in 2009, The drug is going generic in 2013. Shasun filed DMF in 2009, The drug is going generic in 2014.

Nizatidine Cycloserine Olanzapine-C Sevelamer HCl Sevelamer Carbonate Colesevelam

Shasun - reliable supply chain facilitator


Dedicated Global
Competitive Supply Prices

Manufacturing capacities for Key products in most licences in US / EU & SEA incl India

Approved as suppliers

Proven track record of supplies ( Ibu &


Local Advantage

Gaba )

Global suppliers to Big Pharma and


Security of supplies Generic majors ( Ibu, Rani , Niza )

Spot business less than 10 % of capacity Security of Supplies assurance

SPL India Generic API Product Pipeline


APIs under dev Therapeutic Area Product - 1 Product - 2 Product - 3 Product - 4 Product - 5 Product - 6 Product - 7 Product - 8 Product - 9 Product - 10 Product-11 Product-12 Product-13 Lipid lowering agent Anti-viral Anti-depressant Anti-emetic Lipid lowering agent Anti-coagulant Metabolic disorder Respiratory Disease Schizophrenia Metabolic disorder Anti-coagulant Cough suppressant Metabolic disorder Innovator Peak Sales $3 Bn $4 Bn $300 M $500 M $6 Bn $3 Bn $600 M $1 Bn $750 M $750 M $4 Bn $1.5 Bn $2 Bn US Patent Expiry Jan '21 Jul '17 Nov'21, (Jun '15 with PIV) Jul '18, (Oct'15 with PIV) Dec '16 Feb '21 Nov '25, (Jun '17 with PIV) Jan '20 Jul '18 Sep '18 Feb '22 with PIV Open Open

Plan for new DMF filing


8 7 6 5 4

No. of DMFs

US DMF Filings
3 2 1 0

Eu DMF Filings TOTAL No OF PDTS

US DMF Filings Eu DMF Filings TOTAL No OF PDTS

FY 11-12 1 0 1

FY 12-13 E 6 4 6

FY 13-14 E 7 5 7

Nano technology
SHASUN-NBI has developed a radioactive gold nano construct
based therapeutic agent, NBI-29 (GA-198AuNP) for treating solid tumor

NBI-29

is designed and co-developed with Nanoparticle

SHASUN-NBIS THERAPY AGENT

Biochem, Inc, USA and SHASUN, India


Tumor

NBI-29

agent has demonstrated unprecedented therapeutic


Control Group

efficacy and is considered to be a significant oncological breakthrough as it will realistically alleviate pain and suffering of cancer patients

Tumor

Preclinical

studies underway with successful completion of

Treated Group

toxicity study in swine. Efficacy study in dogs being carried out and additional tox study planned in rodents & rabbits

CRAMS- Formulations business


Finished Dosage Business remains a major opportunity for Shasun to increase and diversify its revenue base..

Own ANDA portfolio

Further scale-up of OSD revenues through contractual agreements While the service oriented model remains the key pillar of the business, Shasun is also investing in building its own ANDA. Near term focus on site transfer business and build client relationships Product development services emerging pharma customers on NCE to

Scale up OSD revenue Capacity expansion Site transfer business Product development services

Plans to tie-up with Pharma Companies for launch of Patented Products in India

CRAMS- Formulations product pipeline


CRAMS - Formulation Pipeline - Jan 12 Shasun ANDA commercialized ANDA awaiting regulatory approval ANDA Pipe line Site transfer commercialised Site transfer awaiting regulatory approval Total 4 1 21 0 1 27 USA Customer 4 1 2 6 11 24 Europe Canada Total

Shasun Customer Customer 7 0 0 0 0 7 0 2 5 7 0 14 0 0 0 7 3 10 15 4 28 20 15 82

Strong growth product pipeline

CRAMS API
Partnering with innovators in the early phase Seeking Timely opportunities and building success Stories= Able Management. Sustaining Growth through in house talent- experienced motivated team, IP assets, State of Art regulatory compliant facilities. World Leaders in supplying some of the APIs. Global foot Print offerings Pipeline of Mega blockbusters

CRAMS API
Shasun portfolio has grown to 37 launched products. The pre launch pipeline remains strong with 28 projects in the clinical phase 2 & 3 API CRAMS UK Pipeline
30 25 20 15 10 5 0 Phase I Phase II Phase III Launch 9 11 8 28

Shasuns focus is on its core strengths of safety & quality compliance, continuous improvement and innovation, which has continued to attract new clients.

API CRAMS India Pipeline


10 8 6 6 7 4 5 9

The Shasun CRAMS business unit has focused on several markets for growth and built many key relationship with innovator companies

4 2 0 Pre clinical Phase I

Phase II

Phase III

Launch

CRAMS API India Key Growth Drivers


Product Phase & Application Status Product performing well in the market Product launched last year and second source Product launch 2013 Supplying to the innovator (NA emerging pharma) and first supply in 2012 Validation work to begin this year for a Japense customer Phase 3 campaign concluded in 2011 and approval expected in 2014 API for Japanese customer-starting work in 2012 Supplier as second source. EU company Annual potential (USD mn) 7.91 3.78 0.75 15.0 10.5 9.0 9.0 2.0

Product A, API Launch, Antidepressant Product B, interm.Launch,Antidepressant Product C, interm Launch, Anti gout Product D, API Product E, API Product F, interm Product G, API Prelaunch, ED Prelaunch, Diabetic Phase 3, Asthma Phase 2,

Product H, Interm Phase 2, Analgesic

Shasun Pharma Solutions Limited, UK

Business Review

John Wiper President

26

How SPSL UK fit into the Shasun global network


Dudley UK R&D & Chemistry Services Analytical Services Hazard Evaluation Kilo Laboratories Pilot Plant Commercial Manufacturing Regulatory Services Formulation Services SRC Chennai India Pondicherry India Cuddalore India

Dudley Facility Overview


42 Acre Site Process Research &Development Laboratories Scale Up Laboratory Facilities Highly flexible Pilot Plant 3 Large Scale Production Facilities D1, D1.5 & D2 450 m cGMP reactor capacity Commercial Biological Waste Water Treatment Facility Top Tier COMAH site Successful MHRA audit November 2010 Successful FDA PAI May 2011 Successful PMDA PAI in July 2011

Proof of concept to commercial supply - a full range of services across all phases of the product lifecycle on one site

Dudley, UK - One Site Integrated Scale Up and Supply


Pilot Plant QC & Quality API Finishing & Milling Suites

Development Centre Production Facilities Warehouse & Distribution

Commercial Bio Treatment Plant

All operations to cGMP

11-12 A Great Year for SPSL


People New management structure established Dudley head count increased from 292 to 314 in 2011 due to increased production activity Staff transfer program up and running with Shasun, India to share best practice and enhance level of integration Profitability Sales growth 17% over last year Current year EBITDA margin -17.3% vs 12.1% last year Current year 9 months PAT GBP 3.22 well ahead of last year

11-12 A Great Year for SPSL


Safety Successful completion of several major hazard regulatory inspections on key risk control systems Selected as partner by Environment Agency for pilot implementation of new approach to regulation UK Chemical Industry Association diamond award for 10 years of continued safety performance in 2011 Quality Several successful audits by key regulatory bodies: Successful FDA PAI inspection in May 2011 Successful audit by Japanese authorities in July 2011 Over 60 customer visits & 15 successful customer audits during 2011

Investment Update
Over the last 12 months we have invested around 2.8M at Dudley Investment in general infrastructure upgrades of around 1M New capability investment of around 1M Upgrades to enhance pilot plant capabilities, replacing last remaining older technology isolation units Investment to enhance drying capacity on Dudley 2 in order to increase utilisation New expansion to Purified Water System Capacity enhancements on D1 and D2 for key product production expansions .. With customer support of 1.4M
Pilot Plant Upgrades New High Pressure Lab Suite

Strategy for growth


Maintaining and nurturing our key growth driver products Prospecting for new business Technology promotion and targeted offers

CRAMS -Pipeline

28

10

12 8

Phase I

Phase II

Phase III

Launch

16 new products introduced in last 12 months

Key Growth Drivers Existing product prospects


Phase & Application UK Biotech, API European Biotech, API US Biotech, API European Big Pharma, Intermediate Phase III; Alzheimer's Phase II; Psoriasis & MS Phase III Thrombosis Launched; anti coagulant Status Very positive Phase II date; supply agreement in progress Progressing through Phase II; Shasun is sole supplier; working with client to develop and industrialise the process Launched; SPSL is the favoured of two suppliers Annual Potential

100-300MT; 25-50M Potential for 20MT per annum ; 3-4M Future : 1MT for 2M

10-20MT; 1.5-2.5M

New customer biotech and emerging pharma


Increased sales from Biotech and Mid Sized / Emerging Pharma companies from UK as Big Pharma focus remains on developing emerging market supplies

14% 6% 40%

7% 23%

11%

40%

59%
Big Pharma Biotech Mid Size / Emerging Non Pharma

Big Pharma Biotech Mid Size / Emerging Non Pharma

2009-10

2011-12

Key New Business Opportunities


Phase Technology Intermediate, Big Pharma, UK Technology Intermediate, Big Pharma, Europe API New Client Biotech, USA Technology Intermediate Emerging Pharma, USA NCE Validation Program Emerging Pharma, USA Technology Intermediate Biotech, USA Launched Phase II Phase III Launched Phase III Phase III Status Customer seeking new source for launched API intermediate; shortlisted to final 2 suppliers; 10MT, 2M New application of existing building block; 510MT; 3-5M decision in H2 2012 MS application of one of our existing APIs; 515MT; $1-3M Intermediate for recently launched API; progressed to 2nd selection stage; 10MT; $4-5M API requiring pilot trials, registration and validation; up to 5MT $4-5M Tonnage quantities for 2012; 1-2MT; $2-3M

Database of Open Proposals Value at 17M

R&D Capabilities
Part of Shasun Global R&D Organisation CTO Michel Spagnol UK Head of Technical Services Paul Quigley Strong IP portfolio of more than 40 patents 41 Scientists based in UK (60% PhDs) cGMP Kilo Lab facilities from 10 to 50L High Potency Capability at 10 and 20L World Class Hazard Evaluation Lab Special capabilities: Chiral Synthesis, Azides, Thiophosgene, Diphosgene, HF, TMS Cyanide, diazomethane North East Process Industry Cluster (NEPIC) Innovation Award Winner Winner in 2011 for 4th Generation HKR Catalyst Winner in 2012 for Novel Synthesis to Huperazine A

Shasun

Financial Review

S.Hariharan Chief Financial Officer

39

Shasun Sales
Sales Product (Rs laks) Q3 FY12 Q3 FY11 Growth 9M FY12 API 16,625 11,846 40% 41,907 Ibuprofen & derivatives 7,156 6,112 17% 18,360 Other APIs 9,469 5,734 65% 23,547 CRAMS CRAMS - API CRAMS - Formulation Bio Tech SPL - TOTAL SPSL UK -CRAMS TOTAL 4,465 2,637 1,828 66 21,156 9,724 30,880 2,652 68% 1,174 125% 1,478 24% 59 14,557 5,279 19,836 12% 45% 84% 56% 10,785 5,205 5,580 122 52,814 23,024 75,838 9M FY11 Growth 35,095 19% 17,339 6% 17,756 33% 7,563 3,405 4,158 105 42,763 18,375 61,138 43% 53% 34% 16% 24% 25% 24%

40

SPL India Standalone Financial Qtr 3 FY 12


SPL Standalone (Rs. Lakh) Sales & operating revenue Rawmaterial cost Contribution Contribution/Sales % Operations cost EBITDA EBITDA % PBT - before forex loss Forex loss Tax Profit After Tax Q3 FY12 21,284 12,438 8,846 42% 5,389 3,457 16% 2,159 757 134 1,268 Q3 FY11 15,224 9,207 6,017 40% 4,552 1,465 10% 489 452 36 3422% 342% 136% Growth 40% 9M FY12 53,325 33,547 19,778 37% 14,075 5,703 11% 2,451 2,683 (1875) 1,642 9M FY11 43,744 26,514 17,230 39% 14,041 3,189 7% 350 1,442 (1092) 600% 79% Growth 22% FY11 57,673 35,198 22,475 39% 17,624 4,851 8% 764 (73) 348 488

SPSL UK Financial Qtr 3 FY 12


SPSL UK Standalone (GBP 000) Q3 FY12 Q3 FY11 Growth 9M FY12 9M FY11 Growth Sales & operating revenue Rawmaterial cost Contribution Contribution/Sales % Operations cost EBITDA EBITDA % PBT - before forex loss Forex loss Tax Profit After Tax 1,593 12,023 4,057 7,966 66% 5,437 2,529 21% 1,607 14 (1195) 6,955 1,891 5,064 73% 5,327 (263) -4% (1147) 48 73% 30,113 9,276 20,837 69% 15,625 5,212 17% 2,401 (155) (667) 3,223 447 621% 25,820 7,212 18,608 72% 15,478 3,130 12% 521 74 361% 67% 17% FY11 37,761 11,502 26,259 70% 20,602 5,657 15% 1,831 (65) (915) 2,811

Consolidated Financial Qtr 3 FY 12


Consolidated (Rs. Lakh) Sales & operating revenue Rawmaterial cost Contribution Contribution/Sales % Operations cost EBITDA EBITDA % PBT - before forex loss Forex loss Tax Profit After Tax Q3 FY12 Q3 FY11 Growth 31,108 15,682 15,426 50% 9,824 5,602 18% 3,604 1,012 131 2,460 20,581 10,904 9,677 47% 8,512 1,165 6% (479) 486 (965) 381% 51% 9M FY12 76,699 40,469 36,230 47% 26,375 9,855 13% 4,612 2,826 (2373) 4,159 (1179) 9M FY11 62,608 32,137 30,471 49% 25,384 5,087 8% 318 1,497 1350% 94% Growth 23% FY 11 85,252 43,157 42,095 49% 33,128 8,967 11% 2,228 (131) (303) 2,662

Consolidated Funding Qtr 3 FY 12


Shasun Pharmaceuticals - Stand alone Funding Details Rs Lakhs Closing (31.03.2011) 21,894 17,149 1.28

Closing Closing Closing (31.12.2011) (30.09.2011) (30.06.2011) Total Borrowings 25,831 24,292 22,395 Net Worth 18,479 17,523 17,274 Debt /Equity 1.40 1.39 1.30 Shasun Pharmaceuticals Limited - Consolidated Closing Closing Closing Closing Funding Details (31.12.2011) (30.09.2011) (30.06.2011) (31.03.2011) Total Borrowings 38,739 36,579 33,037 32,954 Net Worth 11,998 9,971 9,025 8,392 Debt /Equity 3.23 3.67 3.66 3.93

Financial Update
Sales growth of 22% EBITDA 93% growth and current year 9 months FY 12 EBITDA exceeded full year FY 11 EBITDA EBITDA /Sales current year 13% vs 8% last year PAT Current year 9 months FY 12 PAT Rs 41.59 exceeded full year FY11 PAT Rs 26.62 crs Re-structuring of portfolio more added value business Good growth in newer products Continued success in new product capture providing a healthy pipeline of new business

Shasun at the cross roads of strategic positive change..


Diversify sales mix
Renewed management focus

Create differentiated product / service offerings Improving operating margins Expansion of API /Formulation capacity Enhanced focus on New Business Development Expansion into new products/ geographies Focus on achieving sustainable growth Enhance shareholder returns

New contracts / pipeline

Expansion of formulation capacity/ capacity debottlenecking in API plants

Achieving sustainable growth and enhancing shareholder wealth remains our key objective.

Thank You