Pakistan IPO Summit - 2016

OBS Group

AGP Limited

Pharmaceutical Industry of Pakistan

 OBS Group
Companies under OBS Group
 Established in 1963, OBS is one of Pakistan’s leading 1. OBS Healthcare (formerly Organon
corporations in the healthcare segment Pakistan);
2. OBS Pakistan (formerly Merck Sharp
& Dohme of Pakistan);
 OBS specializes in international partnerships and 3. Schering Plough Pakistan;
fostering strategic alliances with reputed international 4. Aklima Clinical Research;
5. AGP Limited;
firms whose products touch the lives and well being of 6. Aspin Pharma (J&J Pharma)
people around the world
OBS Group Financial Highlights
 OBS provides full range of high quality professional
services including clinical research, manufacturing, (PKR mn) 2012 2013 2014 2015 2016E
Turnover 2,143 2,629 6,433 7,997 8,697
marketing, sales and distribution of pharmaceutical &
PBT 347 218 965 942 2,096
consumer healthcare products Total
2,535 3,071 13,001 16,922 17,230
Assets
 It is currently ranked 11th pharmaceutical company out Equity 541 664 4,388 4,978 6,338

of 700+ multinational and local companies in Pakistan

Areas of Expertise
 Strong presence in Pakistan, Afghanistan and Sri Lanka
and in process of expansion to CIS Countries, Myanmar,
1. Anti-infectives 7. Ophthalmology
Cambodia and Africa 2. Cardiology 8. Respiratory
3. CNS 9. Women Health
4. Diabetes & Metabolic (Infertility, HRT &
 Annual Group Sales Turnover of ~ US$ 85million 5. Disorders Contraception)
6. Gastroenterology 10. Vaccines
 OBS Journey
2006 Sales Revenue 2016 E
PKR 350mn ~ PKR 8.7 bn

58th Market Ranking 11th

OBS HEALTHCARE OBS PAKISTAN OBS SRI LANKA AGP ASPIN PHARMA SANTEN PHARMA,
•Acquired in July 2014 JAPAN
•Dedicated for •Dedicated for •A strategic •Acquisition of
Organon legacy MSD legacy alliance with •International alliances Janssen Brands and •A strategic alliance with
products products Merck & Co. Inc. include Eli Lilly, GSK, Johnson & Johnson Santen (a global
USA to acquire UCB and Alcon Pakistan Facility. ophthalmic company) to
•Formerly a subsidiary •Formerly a represent them in
part of their
of NV Organon, the subsidiary of •Acquired in July Pakistan
portfolio for Sri
Netherlands Merck & Co. Inc, 2015
Lanka Operations •Launch in May 2016
USA

2006 2007 2008 2009 2010 2014 2015 2016

OBS PHARMA AKLIMA CLINICAL SCHERING PLOUGH MYLAN (USA)

•Incorporation of OBS
Pharma (Pvt.) Ltd, a
sister concern focusing
on branded generic and
consumer health
products
RESEARCH PAKISTAN •A strategic alliance
•A joint venture with •Dedicated for Schering with MYLAN USA to
Norton Audits Inc. USA Plough legacy products promote their
for clinical research •Formerly a subsidiary complete portfolio in
services and trial of Schering Plough USA Pakistan
management in •Launched in March
Pakistan 2016
Top International Brands in OBS Group

44 44
Brands Brands

11 11
Brands Brands
OBS Group

AGP Limited

Pharmaceutical Industry of Pakistan

 AGP Limited
International Affiliations
The company began operations in
1989 and has performed by leaps &
bounds ever since

AGP’s business comes from both the

manufacturing, sale and marketing
of products of international repute
whilst marketing & manufacturing
under its own brand Historic Overview – Company Financials
(PKR Millions) 2012 2013 2014 2015 2016E
Turnover 2,699 3,110 3,338 3,748 4,250
Gross Profit 1,573 1,811 1,906 2,162 2,444
Profit after Tax 686 809 873 643 1,003
OBS acquired AGP in July 2014 1,380 1,887 2,192 8,351
Total Assets 8,436
Equity 1,068 1,555 1,248 3,190 4,193

58% 24% PKR

AGP’s product portfolio comprises 3.58
of over 110 variants of 44 products,
which contributed to a top line of
PKR 3.7 billion in 2015 Gross Profit Net Profit *Expected EPS
Margin Margin 2016
 AGP Product Portfolio
AGP’s Portfolio consists of 44 brands products including 8 star products

 AGP pursues an aggressive product development AGP’s Product Portfolio is divided into 5 Main Business Units
strategy and has a robust product pipeline
 3 new products were launched in 2015 GYNAE A Gynae / Orthopedic / Antibiotic
 6 new products have been launched in 2016 - 1 to Products
be launched by end of Nov 2016
 Agreement signed with Mylan in 2015 - 2 products
launched in 2016 GYNAE B Gynae, Pain management / Anti-
 Product registration in Sri Lanka, Myanmar and Spasmodic
Tajikistan in process
 At least six new launches planned in 2017
PAEDS Antibiotics/ Anti Asthmatic drugs
Total Sales Volume for children
(PKR Millions)
3,744
3,110 3,338
4,000
3,500
INTERNAL General physician products, Gastro
3,000 MEDICINE A Enterology Products, Antiallergens
2,500
2,000
1,500
INTERNAL General physician products, Broad-
1,000
500
MEDICINE B Spectrum Antibiotics &
- Antiallergens
2013 2014 2015
OBS Group

AGP Limited

Pharmaceutical Industry of Pakistan

 Pharmaceutical Industry of Pakistan
Industry Analysis
Sales Exports 2014 2015 2016 2017f 2018f
Pharmaceutical sales, USD bn 2.35 2.63 3.0 3.42 3.90
USD 3bn USD 200mn+ Sales, % of GDP 0.99% 1.02% 1.12% 1.19% 1.25%
Sales, % of health expenditure 35.3% 34.8% 34.0% 33.0% 31.9%
Health spending, USD bn 6.48 7.06 7.59 8.17 8.83

The domestic Pakistan market demonstrates more than

Local Companies 14.2% compound annual growth over the last five years
Market 3,500
(63%) MNCs (37%) comparing favorably to international growth rates
Share 3,000
2,500 3,002

2,000 2,633
2,355
2,177
1,500 2,026
700+ registered companies, including 400 1,000
Market Size pharmaceutical manufacturing units; 25
500
multinationals
0
GSK, Abbott Laboratories, Getz , Sami, Searl,
Top Market 2012 2013 2014 2015 2016
Sanofi Aventis ,Pfizer Laboratories, Novartis,
players
Hilton, Ferozsons, OBS Regional Analysis
Domestically Pain killers, anti-stress and anti-depressants, anti-
Regional Analysis (in USD) Pakistan India Bangladesh
produced drugs infective, homeopathic
Total Pharmaceutical Market 3.0bn 21bn 1.5bn
Antibiotics, vaccines, analgesics, tranquillizers,
Imported products drugs for treating cardiovascular diseases and Growth Rate 14% 20% 12%
cancer International Ranking Value Wise 45 13 58
Pharmaceutical Companies 700 25,000 210
US, UK, Germany, Switzerland, Japan,
Import markets USFDA / MHRA Approved Plants 0 523 4
Netherlands, France, China and Indonesia
Pharmaceutical Exports >160mn >15,500mn 50mn
Regulator Drug Regulatory Authority of Pakistan Raw Material (API) Supply to own
30% 70% 15%
country
Source: IMS, Pakistan Pharmaceutical Manufacturers’ Association, Pakistan Economic Survey & BMI Research
 Local Sector Performance
 The pharma sector performed very well in the past 5 years and this growth is expected to continue
going forward due to:
 Increasing foreign investor interest in pharma stocks
 Diversion of focus to Consumer Healthcare Business
 Focus on exports/New product launches
 Population growth/increased per capita spending on health
 Valuations have improved significantly with the sector currently trading at a P/E multiple of 23.7
 Stability of PKR vs. USD would help keep costs of raw materials low as most raw materials are imported
 Players are looking to diversify into Nutrition and Diagnostics products segment & adding them into the
product portfolio mix for better margins

Price Earnings Multiple Price to Sales Multiple Price to Book Multiple

Avg. 22.8 Avg. 3.44 Avg. 6.75
32.0 10.0 8.7 8.5
35.0 9.0
30.0 25.5 7.0 5.8 6.9
23.1 22.9 6.0 8.0
25.0 7.0 5.5
20.0 5.0 3.9 6.0
4.0 5.0 4.1
15.0 10.7 2.6 2.8 4.0
10.0 3.0 2.1
3.0
5.0 2.0 2.0
0.0 1.0 1.0
0.0 -
Muhammad Kamran Mirza
Head - Investment Banking Group
JS Bank Limited
1st Floor - Shaheen Commercial Complex
Dr. Ziauddin Ahmed Road
Karachi-74200, Pakistan
URL: www.jsbl.com
UAN: (+92 21) 111-JS BANK (572-265)
Tel: (+92 21) 3227 2534
Muhammad Kamran Nasir
CEO
JS Global Capital Limited
6th Floor - Faysal House
Main Shahra-e-Faisal
Karachi, Pakistan
URL: www.jsgcl.com
UAN: (+92 21) 111-574-111
Tel: (+92 21) 3279 9558