WOCKHARDT LIMITED

Wochardt ranks amongst 's leading pharma The acquisition strategy continued in 2004 in companies with a strong focus on biotech products. Europe when Wockhardt acquired the brands, businesses and marketing infrastructure of Background Esparma GmbH of Germany.

Wockhardt, is India's leading research based The manufacturing facilities of Wockhardt are , pharmaceuticals and health care spread across India and UK, with nine enterprise. It traces its roots back to 1960s when manufacturing plants in India and one in UK.These the -based Khorakiwala family bought a facilities have the approval of major regulatory small pharmaceutical company that manufactured bodies, including US FDA and UK's MHRA with medicines for common cold and cough.Till 1992, capabilities for both finished dosage formulations the company focused its operations towards and API.The state-of-the-art biotech park in becoming a major player in the Indian Aurangabad is designed according to US FDA and pharmaceutical industry.Thereafter it concentrated EMEA (European Medicines Agency) standards.The its energies to become a global player. company has subsidiaries in US, UK and Brazil, majority-owned companies in South Africa and In 1998 it acquired Merind, a former affiliate of Mexico and marketing offices in Africa, Russia, Merck Sharp and Dohme of the US.This enabled it Central and South East Asia. to enter new therapeutic areas like corticosteroids, psychiatry and . In the The promoters hold the majority stake in the same year Wockhardt also acquired Wallis company (74.9 per cent of the equity stake).The laboratory of the UK.Wockhardt acquired CP next largest shareholders are the Indian public Pharmaceuticals in the United Kingdom in the year (11.2 per cent equity stake), followed by foreign 2003, thereby gaining access to a large customer institutional investors and overseas corporate base of hospitals and the National Health Service bodies (5.1 per cent stake). Insurance companies, (NHS). Largely due to these highly successful mutual funds, domestic financial institutions, acquisitions, today it is the largest Indian banks, corporate bodies, non-resident Indians and pharmaceutical company in the UK and one of the shares representing GDRs constitute the top ten generic pharmaceutical companies in UK. remaining stake.

Company Products Established Founder Distribution Production plants

Wockhardt Pharmaceuticals 1960 Khorakiwala India,Americas, India, UK Family Europe, Middle East, Asia Pacific, Africa 195 presence in topicals (Nadifloxacin) and is among Product segment Power Brands the worlds leading producers of API (Vitamin B12 Diabetology Wosulin and Dextromethorphan).Wockhardt has a Mopaday significant presence in pain management, cough Glimaday therapy, psychotic drugs, diabetology, vaccines, Nephrology Wepox nutrition and animal health. It has embarked on a

Pain Management Proxyvon “Power Brands” strategy with a marketing Spasmo-Proxyvon emphasis on its brands that have contributed to significant market leadership. Nutrition Methycobal Dexolac Decdan Wockhardt UK's oral healthcare products are sold both as own brand (ConfiDent) as well as private Neuro-Psychiatry Libotryp Tryptomer label to a large number of European retailers like Boots, Superdrug, Sainsbury,ASDA, Morrisons (UK), Cough Therapy Zedex Kruidvat, Delhaize,VIP,Aldi, and Redwin (Global). Bro-Zedex Viscodyne Financial Analysis Source: Company website

Products and Brands Wockhardt's sales crossed the US$ 200 million mark in 2005, having witnessed a CAGR of 13.8 per cent Wockhardt's market presence covers formulations, between 2001 and 2005. Exports, which constitute , nutrition products, vaccines and more than 35 per cent of total sales grew at an API.The company has around 720 products in impressive CAGR of 31 per cent during the same research driven fields such as diabetes, oncology, period.The company posted a CAGR of 32.5 per neurology, nephrology, infection, psychiatry, cent in its net profits in this period driven mainly by respiratory, cardiology, nutrition steriles, biotech, the increased scale in European markets due to oral, topical and API. integration of businesses and increased transactions in biotech business.The profitability margins have Wockhardt product portfolio constitutes two shown phenomenal increase in the year 2005 mainly broad categories - generics and biotechnology. Its on account of high savings in material cost, with generic products include as Ranitidine, Enalapril, operating margin at 31.2 per cent and net margin at Famotidine and Bethanechol, which are marketed in 23.6 per cent.Wockhardt is also in the midst of the US.The company's biotechnology focus has shifting a major portion of manufacturing of CP resulted in the successful development and Pharma and Esparma to India, which shall yield marketing of important recombinant products, further savings in manufacturing cost. namely Biovac (Hepatitis-B vaccine),Wepox (recombinant Erythropoietin used in dialysis and Wockhardt's contribution in making for cancer patients) and Wosulin (recombinant ‘Made in India’ global insulin).The company has made a breakthrough with Interferon alpha 2b (an antiviral used in International business constitutes as much as 60 multiple sclerosis and cancer) and Glargine (a novel per cent of Wockhardt's revenue.The world's most long-acting insulin). Growth stimulating factors sophisticated pharmaceutical markets, the US and (GSF) are in the development pipeline. It also has a Europe, today account for about half of the 196 company's turnover. For the last one decade, the In Europe the company has identified exports, new company has been pursuing global business product launches and strategic acquisitions as opportunities and growing by pitching itself against growth drivers. Its European presence consists of the world's most competitive players in generic Wockhardt UK in the United Kingdom, formed pharmaceuticals.This has been made possible by after the integration of the two companies pioneering research and successful acquisitions in acquired by it,Wallis Laboratory and CP potential markets. Pharmaceuticals, and Esparma GmbH in Germany, acquired in 2004. In the US market Wockhardt has set up a sales and marketing subsidiary,Wockhardt USA Inc., Wockhardt UK Limited is amongst the 10 largest headquartered at New York, to enable it to capture generics companies in UK and the second largest greater value from its US operations.Today, hospital generics supplier. It has a US FDA Wockhardt has six Abbreviated New Drug approved manufacturing facility for injectables.This Application (ANDA) approvals in its pool - facility plays a strategic role in driving growth Famotidine, Ranitidine, Captopril, Enalapril, through partnerships in contract manufacturing. Bethanechol Chloride, and Cefuroxime Axetil. Wockhardt UK has entered into a product Another 50 ANDAs are in various stages of the development and contract manufacturing developmental pipeline.The highlight of its US relationship with Amylin Inc. for Exenatide. It has operations is its ascent to a leadership position in also built up a critical mass in private label over- Bethanechol Chloride in the US market, garnering a the-counter drugs and dental care (denture 40 per cent market share. cleaning tablets, powders and fixative creams). 197 Its German subsidiary Esparma GmbH has been of insulin manufactured by Wockhardt.This joint identified as the vehicle for future acquisitions in venture is planning to undertake marketing of the European market.The Esparma business was other diabetology products and acquired with the brands, sales and marketing products at a later stage.The joint venture with infrastructure sans the manufacturing facility and is Pharma Dynamics in South Africa has been formed expected to focus on neurology and urology, two for marketing Wockhardt's products in the country. high growth segments in Germany. Factors fuelling Wockhardt's global In the emerging markets, the company has a initiatives presence through its subsidiary in Brazil, joint ventures in Mexico and South Africa as well as a Aiding Wockhardt's globalisation plans are its ten market presence in Russia, Ukraine, Kazakhstan, world-class manufacturing plants and their state-of- Vietnam, Myanmar, Sri Lanka, Kenya, Ghana, Nigeria the-art research laboratories.Wockhardt's global and Tanzania. Its subsidiary in Brazil,Wockhardt success has been made possible due to the Farmaceutica Do Brazil Limited, was established in technological advances brought about in the 2004 for marketing its generics and biotech manufacturing set-up, to keep pace with products. Brazil is one of the world's top 10 requirements of global regulators like US FDA, generic markets, and is expected to emerge as a MHRA and EMEA.The company has also key market for Wockhardt after India, Europe and established its own local offices in the US and the US. Its joint venture in Mexico is with the Europe to coordinate its business with regulators. country's leading national company to sell all forms The insights gleaned from this experience are helping Wockhardt to interact with regulators in other potential markets.

In the area of clinical trials Wockhardt has developed capabilities in undertaking successful trials.The trials on Wosulin,Asia's first recombinant insulin, marked a significant upward shift in Wockhardt's learning curve. For the first time, the trials were conducted as per ICH (The International Conference on Harmonisation of technical requirements for Registration of Pharmaceuticals for Human Use).These trials were unprecedented in Wockhardt's history and the learnings and insights gathered have been a competitive advantage for the company.

The company's young and talented human resource pool, drawn from various countries, has been a great facilitator in transforming Wockhardt to the position it is today.The constant upgradation of their skill sets and globalisation of its work culture have helped Wockhardt in its globalisation plans. 198 Future plans plans in the biotech domain. It has targeted to launch one biotech product from its portfolio The company has received 26 approvals for its every year and expects its biotech sales to grow biopharmaceutical products from 18 countries faster. It also intends to continue with its research These would drive the growth of the biopharma orientation towards developing newer products for division in the future.Wockhardt does contract the market. manufacturing for leading multinational companies in Europe and the US.

Wockhardt is also in the process of expanding its dermatology business. It has made a sound Globalisation at a glance beginning by gaining exclusive marketing rights for • Revenues from international markets constitute their Nadifloxacin brand (Nadoxin).This drug is not nearly 60 per cent of total sales, with most only an effective treatment for a wide range of of them coming from US and Europe tropical bacterial infections but has also proven • Six ANDA approvals for drugs in its portfolio ability against Mupirocin and Fusidic acid-resistant in the US strains. • Acquisitions of 3 international pharma companies - 2 in UK and 1 in Germany The company has recently received approval from • Subsidiaries in US, UK, Germany and Brazil US FDA for marketing Zonisamide capsules in the • Market presence in Russia, Ukraine, Kazakhstan, US market. Zonisamide is the generic version of Vietnam, Myanmar, Sri Lanka, Kenya, Ghana, Dainippon's Zonegran capsules with a market size Nigeria and Tanzania of US$ 174 million. • Subsidiary in UK amongst the top 10 generic companies in the country Given that Wockhardt has developed competence in the biotech segment, it has laid down aggressive www.wockhardtin.com 199