BOBCAPS ELIXIR Pharmaceuticals and Healthcare Investment Banking Newsletter Inaugural Edition April – September 2018

BOB CAPITAL MARKETS LTD. A wholly owned subsidiary of President’s Note

Inside this Edition

Dear Reader, 3 Company News It gives me immense pleasure to share the inaugural edition of BOBCAPS ELIXIR, Investment Banking Newsletter covering Pharmaceuticals and Healthcare sectors. Our endeavour is to 6 Industry News publish ELIXIR as a quarterly newsletter covering the industry deal dynamics, trends and events that has shaped the industry in recent times.

7 Key Transactions We have covered the following key subsectors – Pharmaceuticals, Biotechnology & Life Sciences, Healthcare & Diagnostics and Medical Devices & Consumables.

8 Select Deals – Case Study We hope you find this newsletter interesting and we look forward to receiving your feedback to help us improvise on our future editions. Public Market Data 10 Please get in touch with us: [email protected]

Warm Regards, 13 Team Avdhoot Deshpande President, Investment Banking – Equity Company News Product & Regulatory (1/2)

Product Launch Glenmark launches Akynzeo in under licensing pact with Helsinn Glenmark receives US FDA approval for generic Vagifem 10 mcg launched Akynzeo, a drug used for prevention of Glenmark Pharmaceuticals Inc, USA (Glenmark) has announced that USFDA has chemotherapy-induced nausea and vomiting, in India and Nepal under an granted final approval for Estradiol Vaginal Inserts USP, 10 mcg, the generic version exclusive licensing pact with Swiss pharma group Helsinn. Akynzeo is an oral fixed of Vagifem, 10 mcg, of Novo Nordisk which is used for providing relief from combination of netupitant (300 mg) and palonosetron (0.5 mg). menopause symptoms. Pasteur launches quadrivalent influenza vaccine, FluQuadri in India Glenmark receives marketing approval for generic Seretide Accuhaler Sanofi Pasteur announced the launch of its 4-strain influenza vaccine FluQuadri in Glenmark’s subsidiary Glenmark Arzneimittel GmbH has secured marketing India – this will be India’s first quadrivalent vaccine to provide broader protection authorization in Germany for fluticasone/salmeterol dry powder inhaler (DPI), a against influenza to population above 3 years of age. generic version of GlaxoSmithKline’s Seretide Accuhaler. It is use for the treatment of asthma and chronic obstructive pulmonary disease (COPD). Glenmark will sell the Sanofi launches multiple sclerosis drug, Aubagio in India product in Germany under the name “Salflutin”. Sanofi Genzyme, the specialty care global business unit of Sanofi, has launched US FDA nod to ’s glaucoma drug Aubagio from its international Multiple Sclerosis (MS) portfolio. A chronic and debilitating disease of the nervous system, Multiple Sclerosis has varied symptoms Sun Pharma has received the USFDA approval for its new drug application of like weakness in the limbs, poor vision, fatigue or slurred speech XELPROS, which is used to reduce open-angle glaucoma or ocular hypertension. Dr Reddy's Labs launches generic Bloxiverz injection in US market Expansion and Diversification Dr Reddy’s Laboratories has launched the US FDA approved neostigmine methylsulfate injection, USP, a therapeutic equivalent generic version of Bloxiverz China’s medical devices company Lepu Medical to foray into Indian market injection. Dr Reddy’s neostigmine methylsulfate injection, USP is available in 5 Lepu Medical Technology, the leading manufacturer and innovator is all set to make mg/10 mL and 10 mg/10 mL multi-dose vials. its foray into Indian medical devices and equipment market through an overseas Regulatory Approvals subsidiary company. Lepu will set up a fully functional operation organization with 95% Indian employees and will be soon launching the whole range of PCI products. Zydus gets US FDA marketing approval for Nystatin ointment, omeprazole and sodium bicarbonate capsules Wockhardt sets up its first manufacturing facility in the Middle East Zydus Cadila has received the final approval from the US FDA to market Nystatin Drug firm Wockhardt has set up its first facility in the Middle East in Dubai to ointment USP, 100,000 units per gram. It will be manufactured at its topical manufacture new chemical entities (NCEs) for catering to global markets. The manufacturing facility at . The Company has also received the final facility is spread over 10,000 sq. meters. approval to market omeprazole and sodium bicarbonate capsules, 20 mg/1100 mg Glenmark to market generic tiotropium bromide powder inhaler in West Europe and 40 mg/1100 mg. Glenmark Pharmaceuticals Europe has entered into a strategic, exclusive licensing receives US FDA approval for generic Albenza agreement for marketing generic tiotropium bromide dry powder inhaler (DPI) in Cipla has received final approval for its ANDA for albendazole tablets (200 mg) Western Europe. The product is used in the treatment of chronic obstructive from the US FDA. Cipla’s albendazole tablets (200 mg) is AB-rated generic pulmonary disease (COPD). therapeutic equivalent version of Impax Laboratories Inc.’s, Albenza. Albendazole is AstraZeneca open GMD Centre in India an anthelmintic drug indicated for use in treatment of parenchymal neurocysticercosis. AstraZeneca opened its new Global Medicines Development (GMD) Centre in Bengaluru – the unit is one of its 9 GMD centers globally that transforms Zydus receives US FDA approval for generic Atelvia delayed-release tablets breakthrough molecules into medicines and monitor its use and safety. Zydus Cadila has received the final approval from the US FDA to market Risedronate sodium delayed-release tablets (US RLD – Atelvia delayed-release tablets), 35 mg. This medicine is used to treat osteoporosis in women, caused by menopause. 3 Source: Industry websites, Deal Databases Company News Product & Regulatory (2/2)

...Expansion and Diversification Manipal-backed iGenetic to branch out into B2C mass diagnostics vertical Hetero Labs recalls over 1.59 mn bottles of hypertension drug from US iGenetic Diagnostics, a healthcare diagnostics firm with a focus on specialized and Indian drug firm Hetero Labs is recalling over 1.59 mn bottles of Valsartan Tablets differentiated tests will soon offer routine assessments for consumers under a used for treatment of hypertension from the US market due to deviations from the different brand. good manufacturing norms. The Company is recalling Valsartan Tablets USP in the Novartis to pay as much as USD 1 bn for skin drug rights strengths of 40 mg, 80 mg, 160 mg and 320 mg, manufactured by the company for Camber Pharmaceuticals. Novartis AG agreed to buy the rights to a skin-disease drug from developers Galapagos NV and MorphoSys AG for ~USD 1 bn. Novartis will pay EUR 95 mn Sun Pharma again faces FDA heat on Halol plant (USD 111 mn) upfront and deferred payments of up to EUR 850 mn based on the drug reaching certain regulatory, commercial and sales goals. Drug major Sun Pharmaceutical Industries has come under the US Food and Drug Mitra Biotech, Glenmark partner for advancing immuno-oncology drug pipeline Administration (FDA) scanner with the regulator issuing six observations related to utilizing CANscript platform deficient procedures at its Halol manufacturing facility. The facility in received its first approval in four years from the FDA for a product used to treat Mitra Biotech, a Massachusetts-based global leader in advancing personalized cancer only in June. The Halol plant had been under FDA scanner since September oncology treatment has entered into a partnership with Glenmark Pharmaceuticals 2014. focused on advancing Glenmark's proprietary immuno-oncology drug pipeline utilizing Mitra’s CANscript platform. CANscript is a human, immune-relevant ex vivo platform that allows drug developers to understand drug performance in human Fundraise/ IPO tissue, which in turn allows for an informed approach to clinical development and patient response. Carlyle-backed pathology firm Metropolis Healthcare files for IPO Lupin, Japan’s Nichi-Iko tie up to distribute biosimilar drug Metropolis Healthcare one of the leading diagnostics companies in India, has filed a Lupin, India’s third-largest drug maker has tied up with Japan’s Nichi-Iko for the DRHP for an IPO comprising 15.16 mn shares consisting of an offer for sale of up to distribution, promotion and sale of Lupin’s recently filed biosimilar Etanercept in 5.01 mn shares by the Promoter Dr. Sushil Shah and upto 10.25 mn shares by Japan. Etanercept is used for the treatment of several auto immune diseases. Carlyle. The company reported consolidated revenue of ~INR 6.5 bn and PAT of ~INR 1.1 bn for the year ended 31 March 2018. Recalls / Exits / Regulatory Radar Abbott discontinues Xience Alpine stents in India PE fund Jacob Ballas to exit Inventia Healthcare through INR 4,500 mn IPO National Pharmaceutical Pricing Authority (NPPA) has permitted Abbott Healthcare Inventia Healthcare backed by private equity fund Jacob Ballas, filed DRHP for an to discontinue selling its premium metallic stent Xience Alpine Premium from the IPO. Inventia focuses on developing oral solid dosage formations (OSDFs), The share Indian market. Due to the regulatory intervention on stent prices, Abbott had sale will see Jacob Ballas exit Inventia by selling its entire 23.4% stake. The firm applied for withdrawal of its high-end stents last year. plans to raise fresh capital of INR 1250 mn which will be used to retire outstanding Sun Pharma recalls testosterone cypionate injections from US loans and for general corporate purposes, as per the draft documents. Sun Pharmaceutical has recalled more than 5,200 units of testosterone cypionate injections from the US – the company is recalling 5,215 units of 10 ml vials of testosterone cypionate injections on account of “presence of particulate matter: organic and inorganic compounds detected in vials of product”.

4 Source: Industry websites, Deal Databases Company News Strategic M&As and Private Equity Investments

Strategic Mergers and Acquisitions Private Equity Investments

Cipla's subsidiary to buy South Africa's Mirren for ZAR 450 mn Epygen looking to raise INR 3,000 mn to propel biosimilar in India

Drug major Cipla's subsidiary has signed an agreement to acquire South Africa's Mirren Epygen Biotech, one of the leading privately held biotechnology companies in India for a cash consideration of ZAR 450 mn (approx. INR 2,280 mn). The acquisition of plans to raise INR 3000 mn in the next three years to fuel launch of its biosimilar Mirren, which specializes in over the counter (OTC) pharmaceutical products will pipeline. The funding will provide Epygen to propel clinical trial programmes of its strengthen its market position and will help it to accelerate growth within OTC space. pipeline molecules in the field of oncology and cardiology, which are showing substantial promise in protein expression and purification. Cadila Healthcare to buy 51% stake in Windlass for ~INR 1,555 mn Advanced Enzyme raises INR 1,080 mn structured debt Cadila Healthcare has entered into an agreement to acquire 51% in Windlass Healthcare for ~INR 1,555 mn. The acquisition will help Cadila to ramp up operations Advanced Enzyme Technologies has raised INR 1,080 mn as structured debt from and increase product offerings. Avendus Finance, the non-banking finance company (NBFC) business of KKR backed Avendus Capital. Advanced Enzyme provides enzyme-based solutions for a Aurobindo acquires Apotex Inc's biz in 5 European countries for EUR 74 mn variety of industries, including pharmaceuticals, nutraceuticals, animal nutrition and food processing. Its clientele includes Indian pharmaceutical companies in the has signed a definitive agreement to acquire Canadian nutraceutical and nutrition segment across the globe. pharmaceuticals company Apotex International’s commercial operations and certain supporting infrastructure in five European countries for EUR 74 mn (INR 5.93 bn) in an Cytecare Hospitals gets fund infusion of USD 31 mn from Goldman Sachs all-cash deal. The acquisition will extend and diversify Aurobindo’s European product portfolio by adding over 200 generics and more than 80 over-the-counter products that had total sales of EUR 133 mn. Bengaluru Cytecare Hospitals has received a Series-A round infusion to the tune of USD 31 million from Goldman Sachs. The investment will be used towards a long term growth strategy focused on establishing an oncology franchisee across 4 to 5 Aurobindo to acquire dermatology and oral solids businesses from Sandoz for USD cities across India. These will be centre of excellence providing the best of care 900 mn which will pursue research on the disease. Aurobindo Pharma's US based subsidiary Aurobindo Pharma USA has entered into a definitive agreement with Sandoz Inc., USA, a Novartis division, to acquire its Online pharmacy NetMeds secures USD 35 mn dermatology and oral solids businesses for a consideration of US$ 900 mn. Online pharmacy NetMeds Marketplace has raised USD 35 million in a Series C enters Lucknow with acquisition of Medics for INR 910 mn funding round from Southeast Asian business conglomerate Daun Penh Cambodia Group based in Singapore. Netmeds will use the funds to expand its reach through Apollo Hospital Enterprise a multi-speciality chain of hospitals has acquired a 50% marketing efforts and enhance customer experience by expediting delivery and for stake in Medics International Lifesciences (Medics), a 330 bedded super-speciality working capital purposes. hospital in Lucknow. The Apollo Medics Super Speciality Hospital would strengthen Apollo Hospitals’ leadership position in the hospital space as well as enhance its presence in the state of Uttar Pradesh where it already has a strong brand equity.

Olon buys API manufacturing facility in Mahad, India

Olon, an active pharmaceutical ingredients (API) contract development and manufacturing organization (CDMO) and generics supplier, announced the acquisition of a local generics chemical operations API manufacturing facility in Mahad, India, as part of a continuing expansion of its global footprint. 5 Source: Industry websites, Deal Databases Industry News Government Regulations & Notifications

Drug firms corner export incentives More Medical devices may come under drug law Pharmaceutical companies have emerged as big beneficiaries of the commerce The Central Drugs Standard Control Organization (CDSCO), the drug quality ministry’s export incentive scheme MEIS, having received the major portion of the regulator under the ministry, has suggested to add 8 new categories of medical disbursals. Under the Merchandise Exports from India Scheme (MEIS), the devices under the definition of drug, which will be directly regulated under the government provides duty benefits at different rates depending on product and Drugs and Cosmetics Act. At present, only 23 medical devices qualify as drugs and country. Rewards are payable as percentage of realized free-on-board value and the are monitored for quality by the Drugs Controller General of India (DCGI). The list MEIS duty credit scrip can be transferred or used for payment of a number of duties proposed by CDSCO includes implantable medical devices, MRI equipment, CT including the basic customs duty based on the drug reaching certain regulatory, scan equipment, defibrillators, dialysis machines, PET equipment, X-ray machines commercial and sales goals. and bone marrow cell separator. Health ministry set to frame guidelines for standards of point of care test and MTaI backs govt plan to regulate critical care medical devices collection centers The Medical Technology Association of India (MTaI), which represents leading Alarmed by rising cases of misdiagnosis and wrong diagnosis in the country which in research-based medical technology companies with significant manufacturing turn leads to long-term complications, the Union health ministry is set to frame investments in India, has welcomed the central government’s plan to regulate guidelines for standards of point of care test and collection centers. The guidelines will manufacture, import and sale of critical medical devices such as pacemakers, CT prescribe minimum standards for point of care testing, collection centers, standards of scanners and X-ray machines in the country. quality of testing kits, quality of above point of care testing and collection centers including training of personal performing these tests. It will be incorporated in Clinical Govt plans cap on trade margins of medical devices Establishments (Central Government) Rules. Government plans to bring down prices of commonly used medical devices by Maharashtra FDA cancels 47 drug manufacturing licenses, 636 sale licenses capping the trade margin at 30% on the first point of sale, a move likely to across state for non-compliance to norms trim irrational profits made by distributors, wholesalers, retailers and even hospitals by selling such products to patients. Having served 155 notices to drug manufacturers in the state for non-compliance in the past six months, the Maharashtra Food and Drug Administration (FDA) has Exporters face hiccups in Vietnam market due to tightening of regulatory recently canceled 47 manufacturing licenses, 636 sale licenses and lodged 4 FIRs in requirements certain cases for non-compliance to norms. The state regulator also suspended 2,490 Indian pharmaceutical exporters are facing hiccups in Vietnam market due to sale licenses and 79 manufacturing licenses. This comes close on the heels of Central tightening of regulatory requirements for drugs imported into the country and the Drugs Standard Control Organization (CDSCO)'s proactive approach to conduct risk Vietnam government's push to promote domestic drug industry. Another challenge based inspections of Schedule M units in collaboration with the state drug regulator for Indian exporters is change in Vietnam's bidding criteria for imported drugs last for effective oversight on compliance to good manufacturing practices (GMP). year, giving top priority on EU’s GMP certified drugs or Pharmaceutical Inspection Pharma industry associations seek hike in ceiling prices of NLEM drugs as API Co-operation Scheme Good Manufacturing Practice (PIC/S GMP) certified drugs prices rise significantly 1,000 medical devices to have BIS quality seal soon; standardization to Worried by extraordinary rise in prices of raw materials pushing up formulation prices complete in 2 months significantly, associations have urged the Central government A range of medical devices will soon have an 'Indian standard' and nearly 1,000 to increase ceiling prices of drugs under National List of Essential Medicines (NLEM). products are currently being benchmarked. The standardization is expected to be A delegation of Indian Drugs Manufacturers Association (IDMA) is set to meet the completed in the next 2 months. Most of the important devices will carry Indian Central government in this regard. standardization from the Bureau of Indian Standards (BIS) as per NITI Aayog. Health ministry bans 328 controversial FDC drugs with immediate effect The ministry of health and family welfare has prohibited the manufacture for sale, sale or distribution for human use of 328 fixed dose combinations (FDCs) with immediate effect. It has also restricted the manufacture, sale or distribution of six FDCs subject to certain conditions.

6 Source: Industry websites, Deal Databases Key Transactions M&A and Private Equity

Deal Value Date Target Company Name Investor (s) / Buyer (s) Deal Type % Sought ($ mn) Pharmaceuticals, Biotechnology and Lifesciences 2018-08-13 Windlas Healthcare Cadila Healthcare M & A – Domestic 22.5 51.0 2018-08-10 Glenmark Pharmaceuticals True North Managers Private Equity 92.6 100.0 2018-07-23 Koye Pharmaceuticals PI Opportunities Fund Venture Capital - - 2018-07-19 Alniche Lifesciences India Life Sciences Fund Private Equity 10.0 - 2018-06-21 Fullife Healthcare Sixth Sense Venture Fund Venture Capital 1.5 10.0 2018-06-16 Sai Life Sciences TPG Asia VII SF Private Equity 105.4 35.0 2018-06-09 Ind-Swift Laboratories Edelweiss Alternative Asset Advisors, EC Special Situations Fund PIPE 11.2 19.7 2018-05-18 Neuland Laboratories Malabar India Fund LP, Steadview Capital Master Fund QIP 18.5 - 2018-04-02 Mankind Pharma ChrysCapital, GIC, CPP Investments Private Equity 350.0 10.0 2018-04-19 Merck Procter and Gamble M & A – Inbound 295.1 77.8 2018-04-17 Bremer Pharma Alivira Animal Health M & A – Outbound 2.80 100.0 2018-04-02 Abbott (2 Diabetes and Hyperthyroidism Brands) Corona Remedies M & A – Domestic - - Healthcare and Diagnostics 2018-08-02 Medall Healthcare Constellation Alpha Capital Corp M&A - Inbound 211.5 100.0 2018-07-13 Fortis Malar Hospitals IHH Healthcare Berhad M&A - Inbound 4.1 26.0 2018-07-13 IHH Healthcare Berhad M&A -Domestic 1,068.2 57.2 2018-07-05 Medics International Lifesciences Apollo Hospitals Enterprise M&A -Domestic 13.2 50.0 2018-07-03 DCDC Health Services Asian Development Bank Others 10.0 - 2018-06-16 Krishna Institute of Medical Sciences General Atlantic Private Equity - 30.0 2018-05-16 Cytecare Hospitals Goldman Sachs (Principal Investments) Venture Capital 31.0 - 2018-05-04 Surya Children's Medicare SeaLink Capital Partners Private Equity 29.5 100.0 2018-04-16 GNRC Avendus Finance Structured Funding 10.2 - 2018-04-22 OSL Healthcare Nayati Healthcare and Research M&A - Domestic 20.0 51.0 Medical Devices and Consumables 2018-07-05 Tarsons Products ADV Partners Private Equity 23.1 49.0 2018-06-15 Ascent Meditech LeapFrog Emerging Consumer Fund III Private Equity - - 2018-05-14 Tynor Orthotics Lighthouse Advisors India Private Equity 21.2 -

Source: Deal Databases 7 Constellation Alpha Corp acquires Medall Healthcare

Constellation Alpha Corp. Medall Healthcare

• Integrated Indian Radiology & Pathology company • Constellation Alpha Capital Corp. is a special offering 900+ pathology & 750+ radiology tests purpose acquisition firm listed on NASDAQ • 5th pathology company in India with top apex lab network • Biggest India focused IPO ($143.75 mn) in June • Leader in South India with ~25 mn tests conducted 2017 on ~9 mn customers per annum • Only US-listed Indian healthcare services company • Network of 48000+ doctors, 570 corporate tie- ups and 7850+ touchpoints • The SPAC is engaged in acquiring businesses and • Exceptional growth metrics 17% Revenue CAGR assets, via a merger, capital stock exchange, asset (FY13-18) and 27% EBITDA CAGR (FY13-18) acquisition, stock purchase • Presence across multiple states with FY18 Revenue • Focuses on healthcare services and manufacturing of INR 3,544 mn businesses and conceived as an India-focused, • Pathology (62%), Radiology (38%) healthcare roll-up platform • Private payors – 63%, Government contracts – 37%

Deal Contours Strategic Rationale Future Plans • Large, high growth market in the • Geographical Expansion – • Fully diluted pro forma fastest growing major economy Enter New Markets Enterprise Value1 - USD 267 mn • Differentiated business model (hub • Penetrate regions with • To acquire 93% at Closing, and spoke) positioned to extend limited coverage by other remaining shares in June 2019 • India’s leading apex lab network National Diagnostics 2 • EV/EBITDA (Current Year): provides strong foundation for Chains 15.4x geographic expansion • Acquire Regional Leaders EV/EBITDA3 (Forward Year): • • Acquisition strategy to consolidate • Public-Private 12.8x fragmented industry Partnerships at the State • Attractive entry valuation with level significant upside • 3x Deeper Coverage Of • Margin expansion driven by growing Existing Markets in 5 Years scale (FY22)

1Fully diluted enterprise value including 1.5 mn rights, 0.6 mn pre-IPO units and 3.6 mn founder shares and excludes unexercised warrants at strike price of $11.50 2Assumes current year EBITDA of $17.4M 3Assumes forward year EBITDA of $20.9M Source: Company Presentation, Deal Databases 8 Aurobindo acquires Sandoz’s Dermatology, Oral Solid Business

Aurobindo Pharma Sandoz • Aurobindo Pharma USA is engaged in the manufacturing of pharmaceutical products in • Sandoz is a global leader in generic the form of tablets, capsules, oral contraceptive pharmaceuticals and biosimilars and a division pills of the Novartis Group • Sandoz US includes the inline portfolio of • The company was founded in 1994 and is based dermatology and oral solids, authorized generics in New Jersey, United States of America and in-licensing products, branded dermatology • Operates as a subsidiary of Aurobindo Pharma products and 3 manufacturing facilities at Ltd (India) Hicksville, Melville and Wilson • Aurobindo exports to over 125 countries across • The business also includes the 100% the globe with more than 70% of its revenues shareholding in Eon Labs, a wholly owned derived out of international operations subsidiary of Sandoz

Strategic Rationale Deal Contours Future Plans Portfolio diversification • Deal Value – USD 0.9 bn • • Post acquisition Aurobindo will Sandoz being 2nd largest • Upfront purchase price of USD • become 2nd largest generic player 0.9 bn in cash including dermatology player in the US in the US with 8.6% combined potential upside in near term • Presence across Generics, Branded market share2 and OTC earn-out and additional Plans to grow its global business • Approx. 300 products under • potential earn-out on pipeline and to expand and enhance its product development Vertically integrated Infrastructure product portfolio offerings in key • EV/Revenue1 – 1.0x • Well established and dermatology therapeutic areas • Acquired portfolio with 70% • Also to further strengthen its revenue contribution by oral focused commercial and • relationship with “Big 3” buying solids and 30% by dermatology manufacturing infrastructure and R&D facilities of Sandoz groups along with significant • Significant synergies & value creation portfolio enhancement in the medium term

1The portfolio is expected to generate over $0.9 bn in sales for the first 12 months after completion of the transaction for Aurobindo 2Market Share in the US by Number of Prescriptions Source: Company Presentation, Deal Databases 9 Public Market Data Pharmaceuticals and Lifesciences (1/2)

Ent. Market Stock EBITDA PAT Company Revenue EV/Sales(x) EV/EBITDA(x) P/E(x) ROE ROCE Value Cap Price margin margin

(INR bn) (INR bn) (INR) (INR bn) (%) (%) TTM FY19E FY20E TTM FY19E FY20E TTM FY19E FY20E (%) (%) Sun Pharmaceuticals 1,442 1,439 600 260 21.6% 8.3% 4.6x 4.8x 4.2x 21.4x 20.9x 16.7x 66.7x 33.6x 25.1x 5.8% 12.3% Piramal Enterprises 728 415 2,247 59 8.1% 86.9% 12.8x 5.4x 4.3x 157.5x 19.7x 15.7x 8.0x 19.0x 13.6x 24.8% 0.0% Cipla 546 522 648 147 19.2% 9.6% 3.2x 3.2x 2.8x 16.4x 16.0x 13.3x 37.0x 28.6x 22.7x 10.5% 12.6% Aurobindo Pharma 476 441 753 162 23.2% 14.9% 2.2x 2.6x 2.2x 9.6x 11.9x 9.7x 18.2x 17.3x 14.5x 23.0% 28.1% Lupin 456 401 887 156 20.2% 1.6% 2.5x 2.8x 2.4x 12.3x 15.8x 12.2x 159.5x 31.4x 22.5x 1.9% 2.7% Dr. Reddy's Laboratories 456 426 2,567 142 16.7% 6.9% 2.6x 2.9x 2.6x 15.8x 15.2x 11.9x 43.4x 28.1x 20.7x 7.8% 12.2% Cadila Healthcare 429 392 383 116 24.6% 15.3% 3.7x 3.4x 3.1x 14.9x 14.8x 13.1x 21.8x 20.7x 18.2x 22.6% 29.0% 381 376 626 43 20.3% 10.7% 8.7x 7.3x 5.8x 43.0x 30.4x 20.4x 90.4x 62.0x 36.2x 8.0% 8.3% Divi's Laboratories 326 345 1,300 38 33.9% 23.0% 7.1x 7.4x 6.5x 20.8x 20.8x 17.5x 39.3x 30.9x 26.1x 15.5% 15.5% 324 273 1,611 59 23.0% 11.5% 4.5x 4.2x 3.7x 19.5x 16.5x 14.0x 40.2x 33.9x 24.3x 15.1% 24.0% 237 235 1,961 63 16.3% 10.0% 3.8x 3.2x 2.8x 23.4x 18.4x 14.7x 37.2x 25.4x 19.9x 13.5% 20.1% GSK Pharmaceuticals 230 243 1,434 29 17.7% 12.3% 5.7x 7.0x 6.2x 32.3x 34.5x 28.8x 69.2x 52.9x 44.2x 17.3% 19.8% Glenmark Pharmaceuticals 207 173 612 89 18.1% 8.7% 2.0x 2.1x 1.9x 11.3x 12.3x 10.3x 22.3x 19.7x 16.4x 14.7% 14.2% Abbott India 148 158 7,430 33 16.0% 12.2% 3.2x NA NA 20.1x NA NA 39.3x NA NA 26.1% 26.4% Jubilant Life Sciences 140 110 692 75 20.2% 8.6% 2.2x 1.6x 1.4x 10.8x 7.7x 6.6x 16.8x 11.8x 9.6x 17.1% 17.9% 132 132 717 22 43.2% 32.4% 6.4x 5.3x 4.9x 14.9x 12.2x 12.5x 18.3x 16.0x 17.0x 29.5% 30.3% Sanofi India 131 138 5,993 25 21.8% 13.2% 4.1x NA NA 18.9x NA NA 42.3x NA NA 16.7% 21.3% 119 113 597 31 20.5% 13.2% 3.5x 3.3x 2.9x 17.0x 16.8x 14.1x 27.3x 25.1x 21.1x 20.0% 18.9% Limited 115 133 2,899 20 25.4% 18.3% 4.2x NA NA 16.4x NA NA 36.8x NA NA 14.1% 24.8% Eris Lifesciences 98 96 696 9 37.6% 34.4% 13.1x 8.7x 7.5x 34.8x 22.7x 19.0x 32.6x 26.9x 21.7x 41.2% 189.2% 90 86 678 32 14.1% 7.4% 2.7x 2.5x 2.1x 19.1x 14.6x 11.5x 35.8x 24.4x 17.7x 9.3% 9.2% 88 91 1,030 21 31.9% 22.7% 5.8x 4.1x 3.6x 18.2x 14.5x 12.1x 19.3x 21.6x 17.5x 26.0% 26.7% Wockhardt 86 58 522 39 NM NM 2.8x NA NA 32.9x NA NA NA NA NA NM NM Strides Pharma Science 59 39 436 28 15.4% 23.3% 2.8x 2.0x 1.7x 18.4x 12.9x 10.0x 58.9x 25.5x 14.8x 25.4% 44.7% Laurus Labs 53 43 410 20 20.7% 8.4% 3.2x 2.2x 1.9x 15.2x 11.3x 8.2x 25.9x 22.7x 13.8x 11.9% 14.7% Merck 46 50 3,014 11 12.8% 8.8% 1.8x NA NA 12.7x NA NA 53.2x NA NA 13.4% 15.1% Astrazeneca Pharma India 41 42 1,691 6 8.6% 4.0% NA NA NA NA NA NA 158.6x NA NA NA NA

Source: Bloomberg as on 16th October, 2018

NA: Not Available NM: Not Meaningful

10 Public Market Data Pharmaceuticals and Lifesciences (2/2)

Ent. Market Stock EBITDA PAT Company Revenue EV/Sales(x) EV/EBITDA(x) P/E(x) ROE ROCE Value Cap Price margin margin

(INR (INR bn) (INR) (INR bn) (%) (%) TTM FY19E FY20E TTM FY19E FY20E TTM FY19E FY20E (%) (%) bn) Granules India 33.7 25.0 98 16.8 16.5% 7.9% 2.1x 1.7x 1.5x 12.5x 10.1x 7.9x 18.0x 13.9x 10.7x 12.0% 14.7% Shilpa Medicare 32.6 32.7 401 7.5 20.2% 14.0% 5.0x 3.7x 3.0x 24.9x 15.4x 12.2x 30.7x 20.6x 15.6x 10.2% 10.3% FDC 32.4 36.7 210 10.6 21.3% 16.3% 3.7x 2.7x 2.4x 16.8x 11.0x 8.8x 21.5x 15.0x 11.9x 13.6% 14.6% Caplin Point Laboratories 31.2 32.0 423 5.3 37.1% 27.5% 8.0x 5.0x 4.1x 21.7x 13.5x 10.8x 22.1x 19.4x 15.3x 49.2% 52.0% Suven Life Sciences 30.6 33.3 261 6.1 32.9% 20.2% 3.0x 4.6x 4.1x 9.2x 15.5x 12.7x 27.0x 25.4x 20.6x 17.2% 17.2% Hikal 26.3 20.3 164 12.8 18.9% 6.0% 1.8x NA NA 9.5x NA NA 26.2x NA NA 12.1% 12.5% Advanced Enzymes 22.8 22.6 202 3.9 42.3% 23.2% 6.2x 5.2x 4.5x 14.7x 11.9x 10.0x 25.0x 19.2x 15.3x 17.6% 36.2% J.B. Chemicals & Pharma 21.2 24.9 298 13.9 15.7% 10.0% 1.6x 1.3x 1.2x 10.1x 7.9x 6.5x 18.1x 14.6x 11.8x 9.9% 11.4% Indoco Remedies 20.0 17.8 192 10.2 13.3% 4.0% 2.1x 1.8x 1.5x 16.1x 12.0x 9.7x 43.1x 25.5x 18.5x 6.2% 9.6% Aarti Drugs 18.7 13.6 578 12.4 16.0% 6.6% 1.4x 1.3x 1.1x 8.6x 8.2x 7.0x 16.8x 13.4x 11.2x 19.0% 15.0% Bliss GVS Pharma 18.1 17.4 168 3.7 29.2% 15.8% 5.6x NA NA 19.3x NA NA 943.2x NA NA 11.5% 20.5% Panacea Biotec 17.5 10.4 170 5.9 14.3% NM 4.0x NA NA 27.7x NA NA NA NA NA NM NM Sequent Scientific 15.5 12.6 51 8.5 11.7% 49.7% 2.6x 1.5x 1.3x 22.0x 13.6x 10.0x NA 43.1x 25.9x 51.9% 111.0% Marksans Pharma 13.5 12.6 30 9.0 8.7% 4.0% 1.5x 1.2x NA 17.6x 11.8x NA 35.2x NA NA 7.9% 10.7% Nectar Lifesciences 13.4 5.0 22 18.8 12.6% 2.8% 0.8x NA NA 6.1x NA NA 9.6x NA NA 5.1% 10.5% Neuland Laboratories 13.2 10.4 598 5.3 9.6% 2.3% 1.7x 2.1x 1.7x 18.2x 16.6x 10.5x 55.4x 23.9x 11.7x 2.2% 8.2% TTK Healthcare 12.3 12.9 912 5.8 8.2% 3.1% 2.5x NA NA 30.3x NA NA 71.0x NA NA 9.3% 12.2% Novartis India 10.9 18.7 755 5.2 NM 15.2% 1.4x NA NA NA NA NA 26.6x NA NA 9.5% 11.4% Ind-Swift Laboratories 10.8 2.6 58 7.7 17.5% 2.9% 1.4x NA NA 8.1x NA NA 11.3x NA NA 4.2% 5.1% Morepen Laboratories 10.6 10.7 23 6.1 11.3% 4.9% 2.3x NA NA 20.2x NA NA 36.0x NA NA 13.8% 25.5% Hester Biosciences 10.6 10.0 1,180 1.4 37.6% 17.0% 10.6x NA NA 28.3x NA NA 43.5x NA NA 17.6% 14.6% Vivimed Labs 9.5 3.3 39 11.9 18.7% 6.6% 1.0x NA NA 5.5x NA NA 4.3x NA NA 8.0% 14.2% Gufic Biosciences 9.0 8.3 107 3.0 15.1% 5.3% 3.0x NA NA 20.0x NA NA 52.0x NA NA 35.3% 43.9% SMS Pharmaceuticals 6.7 5.5 65 4.6 20.6% 6.8% 1.6x NA NA 7.7x NA NA 17.4x NA NA 10.3% 10.8% Lincoln Pharmaceuticals 5.3 5.0 250 3.6 14.5% 9.6% 1.3x NA NA 8.7x NA NA 14.5x NA NA 16.7% 19.0% Medicamen Biotech 4.9 5.0 428 1.1 14.8% 9.1% 6.2x NA NA 41.8x NA NA 47.4x NA NA N.M. N.M. RPG Life Sciences 4.5 4.0 242 3.4 10.9% 3.9% 2.0x NA NA 18.1x NA NA 29.8x NA NA 8.7% 11.7% Themis Medicare 3.7 3.0 329 2.1 12.0% 5.4% 2.8x NA NA 23.3x NA NA 26.7x NA NA 7.0% 15.7% Anuh Pharma 3.4 3.8 151 2.4 9.1% 6.9% 1.5x NA NA 19.6x NA NA 23.1x NA NA 11.4% 14.7% NGL Fine-Chem 3.2 3.1 497 1.1 21.0% 11.1% 2.3x NA NA 11.2x NA NA 24.4x NA NA 19.3% 19.5% Albert David 2.8 3.3 573 2.9 7.6% 3.4% 0.6x NA NA 7.4x NA NA 24.3x NA NA 5.3% 6.0% Jenburkt Pharmaceuticals 2.6 3.0 641 1.1 20.7% 15.0% 2.1x NA NA 10.3x NA NA 17.1x NA NA 29.8% 29.5% Kopran 2.4 1.7 38 3.1 12.7% 6.5% 1.0x NA NA 7.9x NA NA 8.1x NA NA 15.2% 17.1% Source: Bloomberg as on 16th October, 2018

NA: Not Available NM: Not Meaningful 11 Public Market Data Healthcare, Diagnostics and Medical Devices

Ent. Market Stock EBITDA PAT Company Revenue EV/Sales(x) EV/EBITDA(x) ROE ROCE Value Cap Price margin margin

(INR bn) (INR bn) (INR) (INR bn) (%) (%) TTM FY19E FY20E TTM FY19E FY20E (%) (%)

Healthcare

Apollo Hospitals Enterprise 188.5 157.6 1,133.0 82.4 9.6% 1.4% 2.2x 2.0x 1.8x 22.3x 19.0x 15.7x 3.6% 2.6%

Aster DM Healthcare 105.2 82.7 163.7 66.2 9.3% 4.1% 1.6x 1.3x 1.1x 17.7x 12.6x 10.1x 11.4% 12.3%

Fortis Healthcare 93.0 72.0 138.8 45.6 6.0% N.M. 1.9x 1.9x 1.7x 31.1x 18.4x 12.8x N.M. N.M.

Narayana Hrudayalaya 52.3 45.4 222.0 22.8 9.3% 2.3% 2.8x 1.9x 1.7x 29.7x 20.3x 15.1x 5.1% 5.9%

Max India 27.2 19.6 73.0 15.9 5.4% N.M. 1.9x 1.0x 0.9x 35.0x 10.7x 8.6x N.M. N.M.

Healthcare Global Enterprise 23.4 19.3 219.2 8.3 14.3% 2.5% 3.5x 2.4x 2.0x 24.6x 16.7x 13.1x 4.3% 5.2%

Shalby 16.5 16.5 153.1 3.8 21.8% 11.2% 5.8x NA NA 26.5x NA NA 8.5% 8.0%

Kovai Medical Center And Hospitals 10.8 9.4 860.0 5.9 22.1% 9.9% 2.6x NA NA 11.7x NA NA 22.2% 15.9%

Indraprastha Medical Corp 4.2 3.7 40.6 7.2 10.0% 2.9% 0.7x NA NA 6.8x NA NA 15.1% 8.9%

KMC Speciality Hospitals 2.8 2.8 17.2 0.7 18.6% 9.4% 2.4x NA NA 12.9x NA NA N.M. 9.1%

Fortis Malar Hospitals 0.8 1.0 52.1 1.5 1.2% 2.2% 0.6x NA NA 53.7x NA NA 78.5% 77.4%

Lotus Eye Hospital And Institute 0.6 0.6 28.1 0.4 11.3% 4.5% 0.7x NA NA 11.2x NA NA 0.8% 0.9% Diagnostics

Dr Lal Pathlabs 77.9 80.0 959.5 10.6 24.9% 16.2% 6.7x 6.3x 5.4x 27.0x 25.0x 21.1x 24.6% 29.1%

Thyrocare Technologies 31.9 33.0 613.8 3.5 41.3% 26.6% 8.8x 7.5x 6.2x 21.4x 19.6x 16.2x 21.9% 30.5%

Medical Devices and Consumables

Poly Medicure 20.5 19.7 222.9 5.2 23.1% 13.6% 4.4x NA NA 19.1x NA NA 23.4% 22.9%

Opto Circuits India 11.5 2.9 10.2 2.3 22.8% 15.2% 4.7x NA NA 20.8x NA NA 3.9% NA

Source: Bloomberg as on 16th October, 2018

NA: Not Available NM: Not Meaningful 12 BOBCAPS Pharmaceuticals & Healthcare Coverage Team

Avdhoot Deshpande  With over 25 years of work experience in Equity Capital Markets, he has worked with marquee names in the Investment Banking space like IL&FS, Avendus Capital, HSBC InvestDirect, President, and Centrum Capital Investment Banking -  Strong network of relationships with investors and the corporate community over the years has led Equity to several marquee and successful capital market mandates

 Over 12 years of investment banking experience in cross border/domestic M&As, PE syndication and capital markets Saurabh Drolia  Successfully originated & advised several mid and large corporates across Pharmaceuticals, Healthcare, Consumer, Industrials and Chemicals sectors Vice President  He has worked with KPMG, Elara Capital and JP Morgan Services. He was heading the Pharma and Consumer sectors at Elara Capital and was also a member of the Board

 Over 2 years of experience in M&A, Private Equity, Debt Syndication transactions across India and Chirag Vora South Asia region  Transaction experience in diverse sectors: Chemicals, Financial Services, Consumer, Plastics and Manager Renewables  B.Tech (Information Technology) and MBA (Finance) from NMIMS Mumbai

 Over a year’s technical experience in the Specialty Chemicals segment Shradhda Somkuwar  Chemical Technology graduate from the Institute of Chemical Technology (UDCT), Mumbai and MBA (Finance) from Jamnalal Bajaj Institute of Management Studies (JBIMS), Mumbai Analyst

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