Advancing Affordable Biopharma Stelis Leadership Team today
Milan Doshi Dr. Roger Lias SVP & Global Biosimilars CEO Business Development
Joe Thomas Biju Mathew Outgoing CEO SVP & Head of Quality
Minh Tran Molly McGlaughlin SVP & Head of Manufacturing SVP & Global Lead CDMO
Anand Khedkar Sachin Jaiswal SVP & Head of R&D Finance Head
page Strictly Private and Confidential 02 EVOLUTION.
Compelling opportunity Differentiated Model $160m+ investments Strong progress
What started as a sub-set of our speciality business has now been built into a fully integrated biopharmaceutical business with world-class capabilities.
Biologics is a long gestation business and Stelis is at the end of the investment phase with products de- risked & close to filing and commercial-scale GMP facilities coming on stream to deliver revenues
Strictly Private and Confidential Invested over $160m to position Stelis as a differentiated business having diverse income streams
UNIQUE SCIENTIFIC DOMAIN NICHE DIVERSIFIED PLATFORM EXPERIENCE EXPERTISE PORTFOLIO INCOME STREAMS
01 02 03 04 05
State-of-the art R&D and small Talented scientific & Clone development Focusing on Bone health Near term revenues from scale manufacturing facility technical team with Cell culture and and Diabetes CDMO/CMO income to service focusing on biosimilars, bio- experience in high-end fermentation operating costs at Stelis betters and novel biologic biopharma development Process engineering and 2 assets ready to enter applications & manufacturing to analytics phase-3 clinical study Phased commercialization in EU regulated market process development and / RoW followed by US with Large scale fully integrated standards scale up Disruptive platform to incremental investments in US / manufacturing facility to cater to Bioassay, Structural drive a global insulin Japan clinical studies funded internal product pipeline as well characterization opportunity with co-development / licensing as CMO and Partnering activities Quality, Regulatory & income both for drug product(DP) and Clinical functions fully drug substance(DS) integrated into a cohesive Fast track sterile injectable development plan up to strategy of group Platform aligned for tailored cell filing and marketing line production, R&D authorization optimization, scale-up & commercial-scale manufacturing.
page Strictly Private and Confidential 04 Strategic oversight by an Independent Board with cross functional and wide experience
Ghiath Sukhtian Deepak Vaidya Founder & Chairman, GMS Chairman and Independent Director 50+ years experience and founder of MS pharma, Tabuk Pharmaceuticals, He is a fellow member of the Institute of Chartered Accountants in England and Alvogen amongst others pharma companies. He has been instrumental in Wales. He has previously worked as the country head of Schroder Capital building many businesses across pharma, consumer goods and telecom Partners (Asia) Pte. Ltd., and is currently the chairman of Arc Advisory Services companies Pvt. Ltd.
Faisal Sukhtian PM Thampi Director, GMS Independent Director 11+ years experience in the pharma industry with prior experience in He holds a bachelor's degree in Science from the University of Madras and a investment banking. he holds degree in economics and management diploma in Chemical Engineering from the Battersea Polytechnic, London. He has been CMD of BASF India Limited and has also been a member of the Committee of the Indo German Chamber of Commerce in the past.
Claudio Albrecht Joe Thomas Nominee from GMS Whole Time Director (CEO, Stelis) Ex- CEO of STADA AG. Claudio has worked in and with the Generic industry for 20+ years in leadership roles in pharma, consumer health and more than 30 years. He started his pharmaceutical career at Sandoz and has biopharma. Prior to Stelis, he has worked at Strides, Bioserve and P&G held leadership positions in Ratio pharm Group
Venkat Iyer Nominee from Tenshi 35+ years experience in formulations, nutraceuticals, herbal extracts and natural drugs. He has been working with the Strides group since 1999 and he was the CEO of Agila Specialties. Venkat was transitioned from Agila to Mylan when the business was divested and has since then moved back to Strides in Advisory role
page Strictly Private and Confidential 05 Led by an experienced team with global experience across leading biotech companies
Name Work Experience
Dr. Roger Lias 30+ years
Joe Thomas 30+ years
Minh Tran 25+ years
Anand Khedkar 25+ years
Milan Doshi 25+ years
Biju Mathew 25+ years
Molly McGlaughlin 25+ years
page Strictly Private and Confidential 06 A two-pronged strategy to drive profitable growth…
Stelis Growth Globally Compliant Biosimilars Strategy High-End CDMO services • Niche but commercially attractive biologics • Fully integrated, multi-capable facilities and skill sets representing important disease categories for end-to-end biopharmaceutical development and • Biosimilar PTH (Teriparatide) targeting Osteoporosis manufacturing needs: with < 4 global competitors • Comprehensive services to support all phases of • Drug-device Sodium Hyaluronate Single Injection – pre-clinical and clinical development including only 3 other mkt leading single inj. brands, of which supply of clinical materials, etc. for proteins and only 1 is close to our product claims mAbs • Disrupting high volume insulin and analogs space with • cGMP manufacturing of DS and DP for commercial our low-cost technology supply, including fill and finish, packing and • High yields & purity at best cost produced in testing for both microbial & mammalian compact facilities biologicals • Technology validated in Insulin Glargine; Lispro and rh-Insulin to follow • To offer Sterile Fill finish services • Strong partnering activities for out-licensing of • 3 injectable filling lines can be used for both products biologics as well as non-potent general steriles • ~$25m to ~$30m investment for EU-ready • High viscosity product PFS filling line biosimilars development which is good for EM/RoW • Pen Device assembly line • Late-stage licensing to realise best value with regulatory milestones, transfer price and • Other value-added services Royalty/Profit share • Formulation Dev./ Analytical / Stability • US/Japan clinicals funded by license partner
page Strictly Private and Confidential 07 …in the industry where biotech is set to become $500b opportunity in next 5 years
Key Points
◼ Global biologics market is expected to grow much faster than the chemical drugs market ─ Share of biologics in the global pharma market expected to increase from c.19% in 2015 to c.30% in 2025
◼ Strong growth in biologics market driven by: Superior clinical efficacy Active development of antibodies for new therapeutic areas and strong growth of new drug classes Increasing biotech R&D investments
Growth outlook of global pharmaceutical industry (US$bn)
2015 2025 Market size $1,105bn Market size $1,649bn
Large Molecules (Biologics) 205, 19% 489, 30%
Small Molecules 1160, 70% (Chemical) 900, 81%
Source: Broker Research, Frost & Sullivan page Strictly Private and Confidential 08 Affordable bio-therapeutics underpins our strategy
INDUSTRY CHALLENGES OUR APPROACH AT STELIS
• Low penetration of biologics in EM/RoW ▪ Strategic selection & partnering on biosimilar development • Cost of biologics un-affordable to patients opportunities across regulated & emerging markets. spending “out of pocket” ▪ Cost effective, global quality development with focus on process • High cost of Innovator product burdening efficiency, increased yield output and R&D costs spread over healthcare systems in Reg. Mkts multiple markets. • Lack of global quality biosimilars in all ▪ Extensive analytical characterization vs. reference drug reduce need regions for large & expensive clinical studies in regulated markets
page Strictly Private and Confidential 09 Complexity remains significantly higher than generics, hence continued barriers to entry
Biosimilars Generics
Time 7-8 years 2-3 years
Product Cost $30 - $100 million $1 - $10 million Development
Probability of 50-75% ~90% Success
Technical Barriers to entry High Low Requirement
Requirement for PK/PD BE drug approval Legal Requirement Clinical trial Phase I, III -
Competitors Few (partially differentiated) Very high Competition Market Capture major share of an existing drug Difficult to capture large share Competition
page Strictly Private and Confidential 010 PORTFOLIO
Differentiated products Complements affordability De-risked development. Well designed GTM.
The strategic investments in our biosimilar program have put us in a sweet spot with our advanced assets ready to enter phase-3 trials & a disruptive technology for insulins.
Strictly Private and Confidential An attractive initial pipeline for Stelis to validate full spectrum of capabilities
Commercial Market Clone Lab scale Process Molecule Innovator Indication Phase 1 Phase 3 Market Current Stage Rights Opportunity Selection similarity Char.
▪ Dossier preparation for submission with EMA as biosimilar. – Q1 FY21 Rh- Eli Lilly Worldwide Osteoporosis ~$1.9bn 2022-23 ▪ US dossier submission under 505(b)(2) in FY22 Teriparatide ▪ EM and EU launch in FY22 followed by US launch year expected in FY23
▪ Change in MDD to MDR. Clarification on MDR requirements awaited. Stelis Sodium Anika Worldwide Osteoarthritis ~$2.5bn 2022-23 ▪ In US, the FDA has re-designated HA as a drug-device vs as class-3 device Hyaluronate Therapeutics previously. FDA response to Pre-Ind package expected in Dec 2019.
Glargine Sanofi Worldwide Insulin ~$12.4bn 2023-24 ▪ Ready for scale up in production
Lispro Eli Lilly Worldwide Insulin ~$6.6bn 2023-24 ▪ Pre-clinical stage
Rh-Insulin Eli Lilly Worldwide Insulin ~$2.7bn 2024-25 ▪ Pre-clinical stage
Aspart Novo Nordisk Worldwide Insulin ~$8.1bn 2024-25 ▪ Pre-clinical stage
page Strictly Private and Confidential 012 Rh-Teriparatide: Biosimilar to Forteo®/ Forsteo® Biosimilar to Forteo®/Forsteo® - a niche treatment for osteoporosis
01 02 03 04
PRODUCT FORM& MARKET OUR CURRENT INDICATION OPPORTUNITY DIFFERENTIATORS STATUS
• Indication : Treatment of • Forteo/Forsteo® leads the • Same recombinant • Completed EU approval women with post market amongst treatment escherichia coli platform determining PK menopausal osteoporosis options of bisphosphonates, as the innovator comparability study in with high risk of fracture Selective Estrogen Receptor (Forteo/Forsteo®) Australia with Stelis Modulators (SERMs) and teriparatide compared to • Form: Subcutaneous • Only known developer to newer biologics like Forsteo® and Forteo® injection filled in multi-dose provide both reusable and abaloparatide and pre-filled cartridge in re- disposable pen device • EU filing in Q2CY20, US denosumab. usable/disposable pen options to cater to global dossier submission under device • Continues as gold standard market demand 505(b)(2) in FY21 for treatment of • Competitive cost ex-Stelis • EM and EU launch in FY22 osteoporosis with over 10 India compared with other followed by US launch year years of sales without any biosimilars and synthetic expected in FY23 complaints teriparatide with ability to • In advanced stage • Market Size estimated over achieve further economies discussion for a significant $1.9 billion globally of scale with scalable API licensing opportunity for production EU, US and Japan page Strictly Private and Confidential 014 Reusable & disposable device for addressing global market needs
innovator reusable device disposable device CE marked reusable device developed
• Developed on proven autopen® platform by owen mumford UK • CE certificate received from SGS, UK based notified body • Developed for 24 month in-use period
Disposable pen development
• Developed by innovative EU org. specialized in drug delivery systems • Ergonomic pen device, well differentiated vs. innovator
Development aligned with regulators
• Reusable device development approach aligned with CHMP (EMA) • Disposable device development approach aligned with USFDA
page Strictly Private and Confidential 015 Stelis Sodium Hyaluronate: First non-avian, non-cross-linked, high molecular weight low-volume single injection for knee osteoarthritis Completed global development for a compelling product in the management of osteoarthritic pain
01 02 03 04
PRODUCT FORM& MARKET OUR CURRENT INDICATION OPPORTUNITY DIFFERENTIATORS STATUS
• Form: Intra-articular • Growing prevalence of • First non-avian, non-cross- • Completed global development of the injection (EU: Class 3 Device; osteoarthritis with increasing linked, high molecular product as a device with filing US: Drug Device Combo) preference for single injection weight low-volume single completed for EU market. viscosupplement injection for osteoarthritis • Indication: Treatment of • Our device dossier compliant with EU- pain in osteoarthritis of the • The market is estimated at • In-house API, process and MDDR regulations was filed in early knee ~$2.5B. formulation development 2018. Meanwhile, EU issued new device with complete control of the guidelines effective May’20 and we are • Top 4 companies account for production process from updating our dossier to comply with 65% of the market- Sanofi bio-material through to the the same Synvisc(23%),Kaken Seiyaku finished device ensuring Artz(16%), Ferring’s • In US, the FDA has re-designated HA as consistency, quality and an Euflexxa(16%), J&J’s a drug-device vs as class-3 device integrated supply chain Monovisc(9%) previously. Recently filed pre-IND assurance. package to confirm the clinical pathway. • Expected commercialization in FY22 with a hybrid development strategy
page Strictly Private and Confidential 017 HA market largely driven by 3 injections with a structural shift towards single injection
OPPORTUNITY FOR HA BASED TREATMENT SHIFT IN DEMAND TOWARDS SINGLE INJECTIONS
Inj. Regime% CY2015 CY2018 CY2023 18-23 CAGR 5 injections ~300 ~349 ~300 ~-3% 3 Injections ~850 ~1,123 ~1,350 ~5% ~$2.5b 1 injection ~600 ~850 ~1,250 ~10% Global revenues for HA Three injections segment led the market in 2018, closely followed by the single injection segment. This growth can be accredited to the prolonged presence and holding a significant market share
Single injection segment is anticipated to be one of the fastest growing segments owing to the benefits of the product such as increased convenience and reduced hospital visits and adverse effects such as pain US APAC ROW
Due to the presence of high unmet medical needs, growing awareness about applications of minimally invasive techniques, and increasing disposable income; HA sales are expected to 53% 35% 12% grow at a lucrative CAGR in the forthcoming years
% Extrapolation of estimates from the market sources, partners and certain assumptions.
page Strictly Private and Confidential 018 Stelis Hyalostel OneTM is superior to the current market leading products
stelis biopharma Sanofi Aventis Ferring Pharma Anika Therapeutics Zimmer Biomet
(market leader)
avian derived avian derived source non-avian non-avian non-avian (chicken comb) (chicken comb) visco chemical cross-linking elasticity non-cross linked chemical cross-linking non-cross linked chemical cross-linking
Concentration mg /ml 30 mg per ml per inj 20mg /ml 80mg 8 mg /ml 48 mg 10 mg /ml 20 mg 22 mg /ml 88 mg 10
high molecular weight volume and high molecular weight with high molecular weight with medium molecular weight with high molecular weight with molecular with 4ml volume per 6ml volume per injection 2ml(3x) volume per injection 4ml volume per injection 3ml volume per injection weight injection
page Strictly Private and Confidential 019 Exceeds the market leaders in physico-chemical properties
N O N C R O S S - LINKED & HIGH MOLECULAR WEIGHT Only commercially developed non-cross linked single-injection product with no toxic cross linkers
Superior to market leader synvisc-one®, with significantly higher concentration and lower volume
LOW VOLUME PER INJECTION Hyalostel OneTM versus Monovisc®
• Non cross-linked & high molecular weight • Low polydispersity • Higher viscoelastic properties • Zero shear viscosity • In-vitro study, demonstrates higher rheological properties vs. Monovisc®
Similar 6-month duration of effect as synvisc-one® and monovisc® as a single-injection. cost effective vs 3 inj. euflexxa® and single inj. 3-month gel-one
DURATION OF EFFECT
NON AVIAN SOURCE
Superior to monovisc® which is the only non avian single injection
page Strictly Private and Confidential 020 Disrupting the industry paradigm in insulins with low cost technology platform Disrupting the industry paradigm in insulins with low cost technology platform
#1 #2 #3 #4
LOWEST PRODUCT GLOBAL PRODUCT OPTIMISED FASTER TIME TO COST QUALITY DEVELOPMENT COST MARKET
• Highest Yield with optimised • Industry leading product • Controlled cost of program • In market for market insulin Manufacturing cycles quality development launch strategy
• Significant Process • Meet all Bio similarity • Clinical design and hybrid • Faster time to market for improvements guidelines Regulatory filing strategy select regions
page Strictly Private and Confidential 022 Global Insulin Opportunity continues to expand with ~500 million diabetic patients
GLOBAL SCENARIO
KEY OPPORTUNITIES FOR NEW PLAYERS LIKE STELIS
• Making Insulin and its analogs accessible to patients at affordable cost is our goal.
• High Protein expression platforms & efficient purification process to deliver products of highest INDIAN MARKET Purity and Yield .
• India ranked 2nd People with diabetics (73 million) and projected • Minimal Facility occupancy resulting in reducing to reach 134 million by 2045 - Diabetes not only causes mortality the overheads and final cost of the product to the but morbidity. market. • With current spending on diabetic care was 31 bn $ in 2017 -Huge requirement of Biosimilar products anticipated. • Supply Chain Management: Adopting the global practices. • Most of the healthcare cost is borne out of pockets in India – Urban poor spends 34% (10,000 INR/Yr) rural poor spends 27% (6,262 INR/Yr) of their income on diabetic treatment – The need of • Pen Device working with suppliers to develop at low cost effective drugs is very crucial cost. page Strictly Private and Confidential 023 Recombinant Insulins will continue to be ‘standard of care’ for foreseeable future
01 02 03 04
PRODUCT FORM& MARKET OUR CURRENT INDICATION OPPORTUNITY DIFFERENTIATORS STATUS
• Developing insulin and • Rapid market growth in • Foray into the highly • Planned region-wise clinical insulin analogs with EM/RoW where rising attractive generic insulin studies to meet requirement in all platform capabilities to incomes, change in food habits market through an acquisition markets develop analogs for and obesity have resulted in a of proprietary technology • Phased manufacturing scale-up indications such as long diabetes epidemic developed by ex-Eli Lilly starting at 1 KL scale and moving acting basal insulin , fast scientists • Insulins is a large opportunity up to 5/10KL with growing acting insulin and human globally & Insulin analogs are • Stelis' technology is cost demand insulin recombinant a mainstay of diabetes competitive with fewer • Simultaneous development in re- treatment for T1 and T2DM purification steps, higher usable and disposable pen devices yield, greater recovery with • Few insulin biosimilar players as also in vials high purity vs. competition meeting regulated market quality (we will be 4th globally) • Internal capability to develop and supply insulin DS and DP, supporting cost leadership at all stages of product life-cycle
page Strictly Private and Confidential 024 BIRAC Grant-in-Aid for Stelis Insulin-Glargine validates technology proposition
Received formal confirmation of $ 3Mn Grant-In-Aid from BIRAC under funding line between Government of India and World Bank for Accelerating Discovery to Development of Biopharma.
Stelis amongst few companies to have received this grant-in-aid after a long and thorough vetting procedure of our technology, development and manufacturing capabilities
Project duration is 36 months.
Funding is for partially supporting development up to completion of Phase-3 (First tranche received).
National Biopharma mission grant has given visibility to Stelis within the Biopharma ecosystem.
Successful completion of the project might open up more future funding opportunities.
page Strictly Private and Confidential 025 EMA & FDA regulations and recent initiatives favouring our insulin strategy
Changing Regulatory landscape
Europe United States
• Europe has actively adopted biosimilar products • Recent notification from US-FDA suggests that a due to their impact on cost of healthcare. comparative immunogenicity study may not be required. • EU published insulin specific guidelines, which came into effect in late 2015 and as per guidelines, EU • This is a big change towards allowing biosimilar authorities waived off the need to perform a Phase- insulins in the US market. The overall tone points 3 efficacy study for marketing authorisation. towards adoption of approach inline with EMA.
• Guidelines also indicate that if bio similarity between • The change in regulatory landscape is positive biosimilar insulin and the reference insulin can be and will likely shorten the development timelines concluded with high confidence, waiving of pre- and the cost of development significantly. licensing safety study may be considered with appropriate justification. • Glargine expression system E.coli is same as the one used for Lantus®. The impurity profile is same which reduces the risk and residual uncertainty considerably.
page Strictly Private and Confidential 026 Global GTM strategy mapped for all assets with a flexible business model Flexible business models for faster Go To Market access
B2C WITH OWN FRONT END Where the asset is fully owned and unencumbered, giving Stelis the unrestricted ability to roll-out via own front-ends in key markets (APAC, SEA)
B2C WITH JV Joint venture with partners for the development, registration and marketing of assets in the key markets such as US, EU, Japan. Products will be registered with partner with joint economic and business control
B2B IP LED Stelis develops the asset which are out-licensed to marketing partners. Up-front licensing fee will be used to fund investment in R&D while profit share and supply contracts to provide stable long-term cash flows
Business B2B IP Sold Model B2B IP Sold IP Sold to the partner for specific markets. Focus on fill and finish to generate revenues under CMO model
page Strictly Private and Confidential 028 Significant advanced stage discussions ongoing for licensing, our funnel is well aligned with the current development stage of product
RH- TERIPARATIDE HYALOSTEL ONE TM INSULIN ANALOGS
Market Ongoing Market Ongoing Market Ongoing Region Region Region Opportunity($m) discussions Opportunity($m) discussions Opportunity($m) discussions
N. America 956 4 N. America 1,000 1 N. America 9,706 1
Europe 287 10 Europe 80 8 Europe 1,435 4
ROW 485 23 ROW 556 15 ROW 1,454 9
• Discussion in progress with 37 companies • Growing demand driven by increasing • Discussion progressing with 14 companies for commercialization rights in 93 geriatric population. for commercialization rights in 46 countries. countries. • Discussion in progress with 24 companies • Advanced stage licensing discussions for a for commercialization rights in 75 • Development in both disposable pens as preferred contractual arrangement in the countries. well as re-usable pens EU , US and Japan • Good traction from the market given the • Cost assurance coupled with high quality • Continue to explore opportunities being unique attributes of the products offer a and integrated supplies is an significant the only developer to provide both significant new perspective to the partners aspect in the business development funnel. reusable and disposable pen device options to cater to global market demand at competitive cost
page Strictly Private and Confidential 029 CAPABILITIES.
Best-in-class R&D platform. Cost-efficient development. Globally compliant practices. Dual purpose capabilities.
22,000 sq. ft. R&D centre at Jigani, Bangalore dedicated to the development of recombinant biologics and formulations. Facility is designed to support both microbial and mammalian biopharma development
Product development as per ICH, FDA and EMA guidelines following QBD principles
Strictly Private and Confidential PRODUCT AND PROCESS DEVELOPMENT AS PER GLOBAL STANDARDS
Scientists Houses 100+ scientists
Key Capabilities R&D area Occupies 22,000+ Square feet • Clone development of Analytical, PD and FD labs • Upstream process development • Downstream process development Merck Partnership • Formulation development Partnered with Merck for • Device development technologies and training • Early clinical supplies • Clinical development • Optimized development cycles
page 031 Advanced DS Process Scale-Up lab to bridge R&D and Commercial scale
DESIGNED WITH BEST-IN-CLASS TECHNOLOGIES FOR SMOOTH SCALE- UP AND TECHNOLOGY TRANSFER
Key Capabilities
• Partnership with Merck Life Sciences on Process Technologies and Training
• Equipment with same geometric aspects as in commercial manufacturing facility
• 50 L microbial DS GMP facility can generate material for pre-clinical and clinical studies
• Single-use and conventional technology options in DS purification operations
page Strictly Private and Confidential 032 cGMP Process Scale Up and Quality Control Labs to support clinical development
cGMP manufacturing of Microbial and Mammalian products up to 50L scale
Analytical Methods and Bioassay Development
Clinical product filling for all injectable formats
Execution of stability studies of DS and DP as per ICH guidelines
Characterization of reference standards
Product comparability studies
Tech transfer package
page Strictly Private and Confidential 033 ESTABLISHING LONG TERM SUCCESS WITH HIGH END MANUFACTURING CAPABILITIES
• Fully integrated and flexible microbial and mammalian manufacturing platforms for drug substances and fill finish of drug products
• Designed to offer comprehensive CDMO services and own IP biopharma products with regulatory compliance & greater operational flexibility
• Extending our strong track record of regulatory compliance for into our new CDMO business
• Leverage our strong base of talent and lower operating costs Fast and flexible large-scale manufacturing facilities for commercial production
Key Capabilities
• Faster, more flexible and cost-effective way of producing biologics drug substances and drug products • Hybrid Microbial platform with conventional SS fermenter for fermentation and single-use and conventional systems for downstream • Disposable single use mammalian platform for better regulatory compliance, no product carry over, less turn around time between batches and operational efficiency • Formulation and fill finish of all injectable formats using isolator based filling lines for enhanced bioburden control • Fully automatic packaging line with labeler, syringe assembling systems, blistering and cartoning machines • On-site analytical and microbiology labs for in-process and release testing
page Strictly Private and Confidential 035 Quality fabric integrated across the entire chain from development to commercial manufacturing
GLOBAL ORG WIDE INTERNAL MANAGEMENT STANDARDS IMPLEMENTATION CONTROLS OVERSIGHT
• Adopting global regulatory • Leveraging 20 + years of • Internal & External audits • Quality Forum (QSR) at the site requirements experience in aseptic and corporate level manufacturing • Process controls and Shop floor • Designed to meet standards set Governance • Quality Metrics reporting and by the US, EU, WHO, PICS • Procedures, Specifications, review & escalation. amongst others instructions establishment • Quality Management Systems. • Continuous improvement • Constantly enhancing / • Training – On the Job, Classroom, • Weekly QMS meeting programs upgrading systems / procedures GMP training. department wise. through learning from 483s, Warning Letters, industry best practices
page Strictly Private and Confidential 036 CDMO SERVICES
Stelis BioSource :
A one stop solution for customers in a business environment constrained by high quality biotech capacities
Operated as Stelis BioSource, we are a one-stop shop with comprehensive capabilities from Cell line and Process Development through to scale up, cGMP manufacturing and fill/finish of proteins and peptides.
Strictly Private and Confidential Offering end to end biological services from early stage to late stage development to commercial manufacturing
R&D CAPABILITIES PROCESS SCALE UP MANUFACTURING
• Upstream development • Microbial upstream • DS manufacturing
• Downstream development • Mammalian upstream • Formulations, aseptic fill and finish • Formulation Development • Down stream process scale up • Sterile injectables fill – finish • Analytical development • Formulation- fill and finish
page Strictly Private and Confidential 038 Biopharma contract manufacturing is a $26b Opportunity constrained by significant capacity shortages
Key Drivers for growth
Hedge Risk 01. Biopharmaceutical companies often outsource to balance risk and buy time until key milestones $26b Capacity constraints Opportunity by 2023 given the growing biopharmaceutical 02. Many market entrants and start-ups developing biopharmaceuticals lack pipeline (CAGR of 16.77% ) and existing manufacturing capabilities. lack of adequate manufacturing capabilities Investment hurdles A new biopharma plant with large vessels designed to produce high-volume 03. biopharmaceuticals would require more than $250 million
Capabilities CMOs are very well-suited to production process development, able to increase 04. yields while reducing COGS
Technology Not all existing plants are ready for disruptive productivity increase or use of 05. disposables.
page Strictly Private and Confidential 039 Trends continue to favour dollar inflows into growth for new players with significant capabilities
EVOLVING VOLUME FLEXIBLE SIMPLIFIED CAPACITY TECHNOLOGY TRENDS PLATFORMS SUPPLY CHAINS CONSTRAINTS
1 2 3 4 5
• The “world” of • Production volumes are • Reducing economy of • Market need for • 2019 finds capacity biomanufacturing is decreasing due to both scale (higher $/batch) simplified supply chain constrained in both changing in response technology (higher • Need for flexible, (less vendors) and Mammalian and to evolving technology, yields/titers per batch) multi-product platform associated cost Microbial. markets and and smaller markets. facilities with best in reduction throughout • There is also a need for regulations class science and lower product lifecycle, in global manufacture • These factors are cost propositions. particular at later (US/ex-US) for leading towards the clinical and commercial Biosimilars being need for lower costs phase. produced for not only and more flexible the North American manufacturing market but for commercialization in global markets.
page Strictly Private and Confidential 040 The CMC Biologics market landscape- India Accounts for 12% of the global outsourced projects assigned
*Average Commercial Contract is $20M-$30MUSD/Year for 5 years $100-150M Total MARKET BY REGION BIG PHARMA/BIOTECH
US, Canada & Western Europe 45% BLA • 10/125 IND’s Success Rate India 15% China and other emerging markets 40% 6% *Average Process Performance 7% Qualification Project is $12-15M 30% 7% MID SIZE PHARMA/BIOTECH • 25% Success Rate 7% PHASE 3 • Failure to meet Clinical Endpoints US, Canada & Western Europe 46% • 3-5 Years 8% India 11% *Average Phase III Project is $5.6M China and other emerging markets 43% 14% 9% 12% SMALL PHARMA/BIOTECH
ANNUALLY • 70-75% Success Rate PHASE 2 • Failures more due to financing and M&A North America • 2-4 Years US, Canada & Western Europe 39% Western Europe India 11% *Average Phase II Project is $3.2M India China and other emerging markets 50% China Singapore & SEA • 125 Biologic IND’s Annually Globally Japan & Korea EMERGING PHARMA/BIOTECH PHASE 1 • 85-95 Mammalian Based/30-40 Microbial Based Latin America • 2-3 Years
Eastern Europe & Turkey US, Canada & Western Europe 42% CMC BIOLOGICS MARKET PLACE BY CLINICAL PHASE *Average Phase I Project is $2.4M Middle East India 9% China and other emerging markets 49%
https://www.grandviewresearch.com/industry-analysis/biologics-market page Strictly Private and Confidential 041 Significant growth visible in the large molecule and biotech space for outsourcing
ANNUAL REVENUE GROWTH BY SEGMENT OUTSOURCED MARKET SEGMENTS
*Stelis BioSource™ Pipeline has 30+ potential Clinical research 9% opportunities with mix of global players
Large Pharma/Biotech
Drug Product 4%
Medium Biotech (Small Pipeline)
API Large molecule 22%
VALUE CHAIN Small Biotech (Single Product)
API Small molecule 19%
Research Institutes (NIH/BARDA/DOD)
Discovery & Development 18%
www.BioPharma.com/service sector performance
page Strictly Private and Confidential 042 Stelis BioSource is uniquely positioned in otherwise a competitive market place
CLONAL CELL LINES Clonal cell line development (CHO, SP2/0, NS0, e. Coli, Pichia)
MANUFACTURING PROCESSES Development of manufacturing processes Biologic Drug Substance and Sterile Drug Product Leaders Market Large
MANUFACTURING Non-GMP Manufacture Scale up
through Commercial Manufacture COMPETITIVE LANDSCAPE
ALL TIME REGULATORY COMPLIANCE ANALYTICAL METHODS Analytical method development and
characterization of Biologics
STELIS CENTER OF EXCELLENCE CDMO OFFERING Emerging Global Players Global Emerging
page Strictly Private and Confidential 043 Stelis is a one-stop solution with capabilities for single cycle development
Project Management
Project initiation Clone Selection and process Lab Scale Consistency Mfg Process Lock Cell Lines development
CELL LINE PROCESS PROCESS GMP DEVELOPMENT DEVELOPMENT SCALE-UP MANUFACTURING
DOE and QbD high Single cell sorting and Process demonstration 10L- 2x2,000L Mammalian throughput process high throughput imaging 20L-50L Up steam and Akta 1,000L Microbial development to meet Pilot Down Stream scale Down Stream Processing TPPs PFS, Vial, Cartridge
Analytical Method Development Method Transfer to QC Full QC Release of DS/DP Employ Multiple Orthogonal Techniques Utilize In-house Efficiencies QA Regulatory understanding
Gated activities for all programs with iterative analytical methods for Client programs
page Strictly Private and Confidential 044 OUTCOME
Key investments completed. Near term revenue visibility. Diverse income streams. Significant Value Creation.
With major investments already made into development platform, laying a decisive go-to- market strategy, we are now poised to build a sustainable business with high margins & promising returns in five years
Strictly Private and Confidential Multiple pillars for growth and profitability with risk mitigated cashflow streams
• Cost-effective process technology developed in the US with higher Insulin platform technology yield, greater recovery, and high purity vs. competition • FY21- Break even at operating level with marginal Opex under- • PTH- Only known developer to provide both reusable and disposable recoveries pen device options to cater to global market demand at competitive Follow on Biologics cost. • Hyalostel OneTM - Differentiated device for knee osteoarthritis • FY22- Expected to have a positive EPS • Pipeline of 30+ opportunities for the integrated Drug Substance and Stelis Value Chain Value Stelis CDMO Services for Drug Substance and high Drug Product manufacturing in mammalian and microbial end biological services opportunities • FY23- Generate positive return ratios on our
• Significant interest from pharmaceutical and biopharmaceutical investments Drug Product CDMO Services companies for fill-finish in drug products – vials, PFS and cartridges • FY25- potential for significant value creation
page Strictly Private and Confidential 046 With ~$40m additional infusion from Strides, Stelis is designed for significant value
Current Ownership Ownership after infusion of investments
Partners #shares $Value %holding #shares $Value %holding
Strides 4,06,434 34.7 42.8% 7,26,409 74.6 54.1%
Minority investors 5,44,091 56.4 57.2% 6,15,910 70.5 45.9%
Total 9,50,525 91.1 100.0% 13,42,319 145.1 100.0%
(Ownership structure on a fully diluted basis)
page Strictly Private and Confidential 047 Thank You
Strictly Private and Confidential Ster les v2.0 Recreating Value in Speciality Injectables | December 2019
Strictly Private and Confidential December 05, 2019:
An exciting day for Strides as we complete our six year non-compete period on Agila transaction today
Strictly Private and Confidential Extensive experience. Proven outcomes.
We are known to have created disruptive value with Agila-our speciality injectable business that was sold to Mylan as an undisputed “market leading” speciality injectable platform. Significant experience in building Agila as a global specialty injectable platform…
ROBUST R&D PLATFORM COMPLIANCE RECORD Built domain expertise in product Unblemished 15 year track record of development: Liposomal, nanoparticle , 65 inspections until closure of emulsions, peptides, colloidal transaction formulations Organization wide culture of ~85% success rate in development compliance
HIGH PACE APPROVALS KNOW HOW Filing run-rate of 100+ products / years Standalone management team comprising 200+ filings in USA long-tenured and highly experienced 180+ filings in Other developed markets employees with 103 approvals Engagement of leadership team through focused business score card review
DE-RISKED MANUFACTURING B2B/B2C REVENUE STREAMS Nine global manufacturing plants and eight B2C- majority of the pipeline was approved by USFDA / MHRA spread across three unencumbered, giving unrestricted roll-out in clusters and five complexes US. Front-ends in India, Nordics; strong focus Established capabilities for penems, betalactams in Brazil and oncology across formats including pre-filled B2B- Highly diversified CMO services with no syringes, vials, ampoules, lyophilised injections, single customer accounting for more than 15% suspension injections and mini-bags revenue. Developed products out-licensed to marketing partners
STRONG PARTNERSHIPS, UNENCUMBERED PIPELINE UNDERPINNED BY RICH CAPABILITIES
page Strictly Private and Confidential 04 …which resulted in $1.6b value for all stakeholders
TOWARDS THE END OF 2012 , AGILA 1.0 HAD Leading player in a niche and ACHIEVED ALL ITS difficult-to-operate injectables segment STRATEGIC OUTCOMES Best-in-class manufacturing and operations infrastructure
VALUE Market-leading track record of filings and approvals $300m licensing deals with global generics/ innovators (Pfizer, GSK) which resulted in lower investments for Agila Strong partnerships and deep, unencumbered pipeline In 2012, over 82% of the shortage products were injectables with oncology and anti-infectives covering the majority. Agila manufactured most of the underpinned by strong R&D injectable oncology products in the shortage list (addressing market capabilities shortages of $200m) Significant global shortages in injectable capacities emerged and this Standalone management team resulted into a strategic opportunity with Mylan comprising long-tenured and Exit Agila at 8x of revenue, creating $1.6b value , one of the largest highly experienced employees transactions in Pharma from India Distributed Special dividend of $600M+ to shareholders, a corporate record in India
page Strictly Private and Confidential 05 Generics Injectables. Continued growth opportunity.
High barriers to entry led by complex capabilities, high operational & capital cost and compliance requirements make injectables a compelling play The opportunity in generic injectables remains exciting, and the market continues to grow @ 13% CAGR
CONTINUED REMAINS A SUPPLY OPPORTUNITIES TO MARKET GROWTH SPECIALISED PLAY SHORTAGES CREATE A NEW NICHE
• Global Opportunity of • No major player has • 60% of the drug • Opportunity to develop products that are >$400b of which emerged since the exit shortages in the FDA on continued shortages generics is $70b of Agila list are of injectables • Leverage group’s capabilities in freeze • Market growing at a • Amneal, Aurobindo and • Various incumbents dried technology to fast-track CAGR of 13% versus DRL- only players to have issues with the development of a niche generics 10% growth rate in have built a portfolio capacities or portfolio 2012-13 of 20+ products in last regulatory concerns • Significant opportunity to in-license six years around the • Market operated by 8- products with proprietary technologies manufacturing sites 10 players which • 70% of the market by useful in removing adverse excipients for account of 70% of the value has 4-5 players • Owing to issues around safer injections, cold chain revenues compared to 6-7 API sourcing, several management, better presentations, generics in the oral products have higher bioavailability and increased solids inconsistent/disrupted efficiencies in hospital workflow supplies
page Strictly Private and Confidential 07 Steriles v2.0 is designed to be lighter, faster, better and yet more valuable
Leveraging our strengths, rich experience and the high points of our version 1.0, we plan to rekindle our steriles business and develop a robust B2C led global injectable franchisee that bodes well with the growing industry opportunity Key elements of our B2C led Strategy in Steriles 2.0
HIGH FOCUS ON DIFFERENTIATED VIRTUAL & COMPELLING PRODUCT PRODUCT DEVELOPMENT PORTFOLIO
01 02 03 04 05
LEVERAGING RICH ASSET LIGHT REGULATED MARKET DOMAIN GLOBAL FOCUS WITH EXPERIENCE IN MANUFACTURING REVENUES THROUGH INJECTABLES STRATEGY OWN FRONT END
page Strictly Private and Confidential 09 An experienced team with 100+ years of domain experience and proven track record in Agila/Mylan
Project Management and Technical Leadership Quality & Compliance Regulatory & IP Portfolio Strategy Manufacturing
• Strategic oversight by • Driven by Sundhar CK, ex- • Oversight by Biju Mathew, • Group centralised team for • Experienced portfolio Venkat Iyer, the ex-CEO global Head of Head of Quality assurance at regulatory affairs and IP team with track record of Agila Specialities. Manufacturing and SCM at Agila with over 20+ years management of disciplined product Agila/Mylan experience in quality selection to optimize • Technical team has function • Experience to design resource utilization combined experience of • Team has 50+ years strategies based on best in several years in the experience in • Group quality , risk class pathways to reduce • Focus to identify products injectable domain and pharmaceutical and management and approval times with limited competition speciality products biotechnology space with compliance governance & high entry barriers – experience in framework with a team of • Continuous mining of technical complexity/ API pharmaceutical 400+ people regulatory & IP scarcity amongst others engineering & projects intelligence by monitoring events, and guidelines
page Strictly Private and Confidential 010 Virtual model for development with lesser products , lighter infrastructure and focused outcomes
Use of platform technologies through strategic partnerships to develop differentiated products to solve for Readiness of the hybrid fill-finish aseptic increased drug stability, high bioavailability and cold manufacturing facility at Stelis to kick start operations chain management
Setup in-house capabilities to build a comprehensive Scale we as up grow portfolio with 15 – 20 filings per year Partnering high quality manufacturing assets across the globe for a quicker market access
In-licensed pipeline of niche injectables and peptides for access to market in reasonable time Research & Manufacturing Readiness to execute submission batches starting Jan’20 Value Chain Value development Partnerships for in-licensed products and August‘20 of in-house Fast-track development of products in consistent R&D projects shortages listed by the USFDA
Major products backward integrated with Group API Strategic partnerships with high quality R&D manufacturing network ensuring compliance and organizations to in-license late-stage developments on a supply security for raw materials fee for service model
page Strictly Private and Confidential 011 Developing a phased portfolio with $10b+ market opportunity that mirrors our strategic progression
DIFFERENTIATED PRODUCTS
• Use of platform technologies through strategic partnerships to develop differentiated products to solve for Clinical, R&D, Manufacturing and Supply chain challenges • Partnerships with R&D company to utilize proprietary technology as a route to achieve above objectives • 5-10 products in 3 years with significant market opportunity
SPECIALISED PRODUCTS
• 7 products identified with $2.3 bn addressable opportunity • Challenges with respect to manufacturing or sourcing API leading to limited competition • Develop or in-license niche injectables in the lyophilised, liposomal and long acting domains • 10-15 products in 3 years
BASE PRODUCTS
• •High20+ volume, products API intensive identified products with $2.5 bn addressable opportunity - most products on shortage list or have high price/unit – • Costacross leadership vials, PFS etc
• •AchieveBase significantbusiness market to be share built on the existing technical know how of the leadership and technical team • Planned 30-40 products in 3 years with quick to scale up potential
page Strictly Private and Confidential 012 Purely a B2C led regulated market model with better economics potential over Agila 1.0
Strategy designed around own front- end for B2C led growth
Focus on unrestricted ability to roll- out products via own front-end in the US and other regulated markets
Front end focus to have better economics and operational control
Developing sales and marketing presence in key other regulated markets through own network
Strides will have access to ~54% of the total economic value
page Strictly Private and Confidential 013 Steriles Version 2.0 in a nutshell:
Leveraging our rich domain experience. Virtual development of the portfolio. Lesser products with global orientation. Lighter infrastructure. Phased investments B2C led regulated market strategy. Mirrored equity ownership structure to Stelis. (Strides will have ~54% in Steriles 2.0)
Strictly Private and Confidential Reset. Resurgent.
Strides Growth Strategy | December 05, 2019 The global generic industry is witnessing the most dramatic times leading to structural changes and creating a new normal for the market players Dramatic shift in the business environment for the global generics play
STRUCTURAL CHANGES TRANSITION TO GX-GX COMPLIANCE EMERGING TRENDS IN THE US GENERICS MODEL IN EX-US MARKETS OVERHANG IN THE MARKET
• Generics industry witnessing a • Structural shift of generics model in • Companies have witnessed increased • From 2010-15, many large players reversal in gains of many decades other regulated markets and regulatory scrutiny by USFDA on scaled their revenues largely on emerging markets towards Gx-Gx drug product manufacturing and opportunistic pricing, and lack of new • Consolidation amongst the global API sites competition. Consequently, these generic companies has not played to • Increase in interchangeability by players overleveraged to consolidate plan as a result of ANDA approval channels, decreasing power to • Rise in the number of warning letters growth. pick up for new players post command premiums and increasing to Companies by USFDA (23+ GDUFA ( 781 ANDA approvals per rebates/ conditions warning letters in 11 months to (Net Debt to EBITDA) year in 2018 vs 450 approvals in Indian companies in 2019) 6.0 5.8 5.3 5.2 2013) • Several market pushed in low 4.0 growth cycles • Number of plants classified as • This has resulted in the market share OAI/VAI has also been high in drop for top 5 players significantly • Industry continues to experience 2019(~10 OAIs and ~50 VAIs) Teva Amneal Endo Mallinck. Mylan cyclical effects resulting in (Top 5 cos. Market share) opportunities • 120+ drug shortages in US, most 48% 47% 42% 39% 36% since 2012 • Emerging new players have • Incumbents are focused on disrupted the market with faster • 37% attributable to maximizing the value from existing product approvals and better service manufacturing issues operations- better operations, efficiencies • 27% each due to capacity 2014 2015 2016 2017 2018 leaner organizations shortage & API issues • Large players are • Buying groups’ scale and • With ANDA backlog being completed, exiting/restructuring/withdrawing independent pharmacy consolidation FDA has increased scrutiny related to products resulting in new resulting in pricing pressure API impurities and excipients on opportunities for the emerging players new filings
Source: Industry reports 3 The consolidation strategy of large players has not played out to plan, giving new opportunities for emerging players with supply efficiencies and customer centricity
# ANDA withdrawals in the US #drugs discontinued in the US in 2018 ANDA launches as a % of approvals(est)
64 606 50% 45% 40%
30% 28 248 252 27 214 170 13
2015 2016 2017 2018 2019 Mylan Teva Sandoz Other 2015 2016 2017 2018
# Reported drug shortages in the US Reasons for drug shortages in the US(est.) Import alerts issued by the US FDA(est.)
37% 120 50 45 27% 27%
30 30 25 44 35 9% 26 23
Manufacturing API issues Capacities Others 2014 2015 2016 2017 Current 2015 2016 2017 2018 2019 issues
4 Source: Industry reports, USFDA Data Over the last 18 months, the Strides strategy has been reset to adapt to the changing environment and yet leading into resurgent growth with right sized balance sheet Focusing on a “less for more” approach with better financial outcomes
CONTRARIAN STRATEGIES CONCENTRATED OPERATIONS BETTER FINANCIAL OUTCOMES
Blitz-scaling in the US markets • Achieved operational excellence with • Adjusting for the exit of our operations in • Invested $100m+ from 2015-2019 to build a robust manufacturing operations , supply Arrow, the business has already grown from carefully selected portfolio magnified by chain optimization and competitiveness in $309m revenues with $37m EBITDA(~12% lack of Indian competition technology margins) in FY19 to $200m in H1FY20 with • US now becomes the front runner for Strides, $39m EBITDA(~20% margins) • Superior customer advocacy achieved with achieves 3x growth from Q4’18 to reach no Failure to Supply or Out of Stock • As of H1FY20, 73% of our business has been $57 run-rate in Q2’20. situation for any of our products reset to meet >22% EBITDA margins criteria • US front end, which was a ~$10m P&L in versus 25% of such business in FY18. Q4FY18 now tracks ~$40m quarterly sales • Continued focus on quality, and • The business is well on its course to achieve compliance albeit an unfavorable • The Arrow transaction has resulted in ~60% our FY20 estimates of ~$220-$240m inspection outcome at Puducherry reduction in the debt, the Net Debt to Fastest growth in other reg markets EBITDA now stands at <2x versus >4x in • As a consequence to our strategic exit in • R&D filings for over 25 products in last 18 FY19 Australia, the other regulated market has a months with over 30 filings for other significant portfolio arbitrage for global regulated markets in spite of over 50% • Overall focus on improving the quality of markets reduction in opex cost financials for the company has resulted into • This segment is now the fastest growing ROCE improvement from ~7% in FY19 to • 100% success rate with 36 bioequivalence segment with significant improvement in ~15% in H1FY20 with targeted FY20 exit (BE) studies initiated in 2019 margins ROCE at 18%-20% In Africa for Africa strategy • Pilot studies minimized based on technical • Operating in difficult frontier markets with assessment leading to cost “in market for market” strategy (course savings/reduced time correction in progress)
6 Contrarian strategy in US, unlike competition. Achieving 6x growth in <4 years.
Benefiting from the proactive strategy to blitz scale when most incumbents are down sizing or exiting. Resurgent business growth through own front end and carefully selected products
FOCUS APPROVALS PORTFOLIO PIPELINE TEAM
~$20M ~$57M IN Q4FY18 IN Q2FY20
Focus on mature products 100+ ANDAs filed with Strong Commercial Pipeline of 40 products Strong go to market that are high technology 67+ approvals portfolio with most of under development capability through own barrier products the products in top 3 with filing rate of 20 frontend in US ANDA/year managed by a team of 20+ people
A two pronged sales structure with bias towards own front end
Direct Channel / Own Front End Marketing partnerships
• B2C model with direct sales to consumers from our US firm- Strides Pharma • B2B2C model with sales to consumers through partners Inc(SPI) • IP of products owned by Strides and partnered on exclusive/non-exclusive • IP of products owned by Strides basis for marketing. Strides has an option to revert these products to its own • 20+ products with significant demand secured through contracts front end (6 products already reverted to SPI in FY19) • Front end tracked ~$40m revenues in Q2FY20 , growing over 4x scale from • Partnered business by design to slow down as we continue to focus on building own front end and exit all contracts by FY22 ~$10m revenues in Q1FY19
8 Well designed value oriented portfolio strategy for our business progression
MARGIN SURPLUS ALLOWING STEPPING UP THE VALUE CHAIN • Strategy designed around in-licensing programs with 505(b)(2) orientation • Product development, licensing & supply agreement entered with SUDA, an AU R&D Co. for its novel drug SUD-001H, an oral spray of sumatriptan to treat migraine headache for the Specialized US market which is pegged at USD 1.2 bn Dosages
PROFIT MAXIMIZATION AND SUSTAINABLE CASH FLOW FOR R&D
Niche Dosage forms/Others • Scarcity model - niche domains (SGC, Liquids), API availability, complex R&D & manufacturing and Small market size and <3 active players • Products with entry-barriers, resulting in a lucrative market opportunity Financial Year FY19 H1FY20 Ann. • Opportunity to build a significant VA opportunity from our facilities in Florida No. of products 32 35-36 and Singapore Revenues($m) ~$82 ~$130-$145 • 60% of the portfolio for Strides is amongst top 3 in the market Average Rev/Product(m) ~$2.4 ~$3-$4
STRONG BASE PRODUCTS WITH MARKET LEADERSHIP Base products • High volume products with integrated APIs • Cost leadership to achieve significant market share Financial Year FY19 H1FY20 Ann. • Sustainability within the segment through 1 – 2 introductions No. of products 4 6 annually Revenues($m) ~$68 ~$90-$96 • Key molecules include – Ibuprofen, Ranitidine, Gabapentin, Average Rev/Product(m) ~$17 ~$15-$16 Mycophenolate, PEG, Oseltamivir ,
9 A growing front end P&L with key commercialized products having no price erosion or consistent market share
PRODUCTS WITH RANK #1 (% MS) PRODUCTS WITH RANK 2 & 3 (% MS)
Ketoconazole Tablets 77% Ergocalciferol Capsules 41%
Calcitriol Capsules 31% Methoxsalen Soft Gels 66%
PEG 3350/Electrolytes - 26% Nulytely Buspirone Tablets 7.5 mg 55%
Potassium Citrate ER Tablets 23% Vancomycin Capsules 51% Mycophenolate Mofetil 22% Tablets Acarbose Tablets 48% Benzonatate Capsules 18%
Ranitidine Tablets 42% Acetazolamide Tablets 17%
Ibuprofen Tablets (Rx) 40% Tacrolimus 11%
Potassium Chloride ER Omega-3 Capsules 28% 11% Tablets (Klor Con)
10 Omega and Calcitriol includes share of our partners Invested in building blocks to double our current business visibility to a potential ~$800m US business
• Biosimilar PTH (Teriparatide) targeting Osteoporosis with < 4 competitors $150m-$250m • Drug-device Sod. Hyaluronate Single Injection – only 3 other mkt leading single inj. Brands, opportunity in 36- of which only 1 is close to our specifications 48 months • Niche but commercially attractive biologics including industry leading proprietary insulin FOLLOW ON BIOLOGICS platform
$50m-$100m • Focus on creating a speciality generics strategy led by in-licensed opportunities opportunity in 36- • Strategic partnerships with two R&D organizations with a keen focus on developing specialty 48 months generics to solve for unmet patient needs SPECIALITY
• Re-entry into Steriles with lesser products , lighter infrastructure and yet more valuable $200m-$400m business opportunity in 24- • Kick-start programs with in-licensed products aligned for global regulated market submission 48 months • Positioned to utilize high quality manufacturing at Stelis STERILE INJECTABLES
• We are focusing on building an “in market for market” private label business leveraging our Our US Business Value chain Value Business US Our $50m-$100m portfolio of products across tablets, capsules, soft gels and proprietary formats opportunity in 18- • To leverage our product development and local manufacturing capabilities at WPB, Florida 24 months • CHC business is sub-scale, but expected to breakeven in 12 mths PRIVATE LABEL & CHC
• Our Base business is operating to plan and has the ability to reach $400m revenues ~$400m • With new launches and continued growth in the base business, the front end business will Opportunity in continue to ramp up where as the partnered business will down size by design 12-18 months • The VA opportunity from Singapore(Already commenced) and WPB, Florida (next year) will EXISTING BUSINESS add a new lever to the growth trajectory
11 Fast growth in often neglected other regulated markets. Tapping $20b opportunity with portfolio fungibility across the key markets-Europe, Australia, Canada and South Africa. Low-key pharmaceutical growth markets are the fastest growing segment for Strides
01 03 Foray into new markets Low investment high return with a small base and opportunity through limited front end presence portfolio maximization in UK approach
$20m $32m Q119 Revenues In Q2’20
02 04 A complex mix of P&Ls at Judicious organic and different stages of inorganic combination with evolution wherein some focus on leveraging markets are at mature portfolio developed for the stage and others at growth US and Australia or incubation.
13 Matured markets drives 80% revenue delivering more than Company EBITDA. Focus on turning around businesses acquired at a low investment value
Core Strategy 3x growth in UK with EBITDAs higher than company average • Organic growth with 95+ registrations and strategic focus to sell products through own front-end • Tap market scarcity while maintaining significant market share in key molecules
1.5x growth in Partnerships in EU led by own IP delivers >30% margins • 140+ in-house R&D filings to build a strong partner led business • Focus on better customer alignment for long-term partnership • Low investment high return opportunity • Matured business, growth from new product launches and adding new territories through portfolio maximization approach Matured businesses deliver higher than • Wide footprint across major markets in CMO led model in Italy, turnaround after 14 quarters of loss company EBITDA and • State-of-the-art manufacturing capabilities with >35 years of experience in semisolids the European continent free cash for funding • Supplies products to UK, Territorial EU, Middle East as well as African markets new growth markets • Inorganic foray in Canada, South Africa and Germany/DACH Region with low entry investments for a significant turnaround Re-entry in South Africa through Trinity in 2017 • Controlling stake in Trinity, South Africa for market access • Future growth driven by Portfolio maximization and site transfers to India • Accelerate hybrid R&D model with future • Acquisition of business was at $4.6m for a 52% ownership R&D aimed to be responsive to global regulatory needs Kick-started Canadian operations in 2019 with organic/inorganic strategy • Continued high focus on quality • Recent foray into Canada through acquisition of Pharmapar and a strategic joint venture with a leading OTC company compliance and manufacturing • Organic growth strategy with minimum cost due to portfolio advantage flexibility • Acquisition of business was at CAD 3.8m for a 80% ownership Newer markets are still • Strategic partnerships to carry own IP Acquisition of 70% stake in Fairmed to bolster presence in DACH region generics to newer markets in incubation, will need • Fairmed’s market access in the DACH region is a highly complementary combination investments to attain • Acquisition of business was at Euro2.3 m for a 70% ownership profitability • Fairmed has an annualised revenue base of Euro 6 million
14 While regulated markets have been course corrected, our reset strategy for emerging markets and global access markets continues to be work in progress Challenges in the emerging markets and institutional business continue, FY21 could see traction from the new launches in institutional business
RESET STRATEGY GOALS
• Initiated our course correction strategy for emerging market & institutional business in FY19 to focus on achieving strategic and financial outcomes • Focus to bring out channel hygiene in our branded generics business in Africa with a redesigned portfolio and market selection. • Develop a steady portfolio to be on the forefront of new regimen products in the Anti-retroviral(ARV). • Shift our key products in institutional business from India to our manufacturing site in Nairobi, Kenya for an “In Africa for Africa” market play
AFRICA AND EMERGING MARKETS GLOBAL ACCESS MARKETS/DONOR BUSINESS
What is achieved? What is achieved? • While Institutional business has now shrunk to a <$50m from the peak $100m, it delivers profitable outcomes • Brands Africa achieves course-correction with a revamped business leadership, field force & agency channel in key markets Work in progress • Our R&D pipeline for the new regimen on track with the first key Work in progress product approval due in Q4FY20/Q1FY21 which will accelerate the reset • While Brands Africa has been reset, it continues to be sub-scale with of the institutional business respect to achieving strategic & financial outcomes • Continued site transfer of products to Kenya to execute on “in Africa for Africa” strategy for the donor programs Planned Outcomes Planned Outcomes • Focus on driving growth around new product launches, new territories • Business remain strategically important and will continue to get and increased productivity to achieve 3x revenues in 18-20 months leadership attention , focus to ramp up institutional business to its • Disciplined sales gap between primary , secondary and tertiary sales and historical potential in 12-18 months higher productivity from the field force • High Focus on turning Kenyan operations profitable and improve cashflows
16 Strengthening CXO suite and strategic advisory with new arrivals and robust governance framework Leveraging rich global expertise of the industry stalwarts
Venkat Iyer, Global Tech Operations Dr. Aqeel Fatmi, R&D Strategy GP Singh , US Business Prabir Jha , Leadership transformation
• 35+ years experience in formulations, • 37+ years of experience in • Senior Pharmaceutical Executive / Advisor • 30+ years experience as an HR leader with nutraceuticals, herbal extracts and natural executive/general management, Global / Mentor diverse industry experience, from the civil drugs. R&D, Drug Discovery and Development, • 20+ years experiences both in India as service to engineering, Information Strategic Planning and Implementation, well as the US in various leadership roles Technology, pharmaceuticals, automotive • Working with the group since 1999, was and Novel Drug Delivery Platforms pertaining to strategy, M&A, commercial and telecom. the CEO of Agila Specialities • Advisor and Mentor to Senior Leadership and operations. • Been the CHRO of two NYSE listed & two across several pharmaceutical companies • Held leadership position with leading Fortune 500 companies. • Transitioned Agila to Mylan when the • Held leadership positions in companies pharmaceutical companies like Sun • Helped all companies to make it to Top business was divested and has since then like Banner Life Sciences, Solvay Pharma and Jubilant Pharma for their US Ten “Best Companies to Work For” in moved back to Strides in Advisory role Pharmaceuticals and Reid Rowell operations India. Laboratories • Currently member of the Board of Director • Significant global exposure to all facets of • Founding Member, Combination of Shinkei Therapeutics , a leading CNS HR and organizational effectiveness, Chemistry centre at Georgia State products company especially large scale transformation. university
18 A Strong Corporate leadership team with rich global pharmaceutical experience
Arun Kumar Badree Komandur Raju Subramanyam Managing Director & Executive Director & CFO Head-Global Manufacturing Group CEO
Shashank Sinha Umesh Kale VK Singh CEO - International Business Chief of Quality Services Chief Business Officer & CHC
Ramaraju PVS Sanjay Singh Sormistha Ghosh Chief Quality Officer CHRO Chief Risk Officer
Anjani Kumar Manjula Ramamurthy Debarati Tripathi Chief IT Officer Company Secretary Intellectual Property
19 Highest focus to reclassify Puducherry facility & recalibrate the quality fabric of Strides
Role changes determined to regain our industry leading standards with compliance
• Significant changes made to quality and compliance framework given the changing regulatory paradigm and the unfavourable Puducherry inspection • Our erstwhile quality unit now split into two independent functions- Quality Services and Quality Operations • Changes focussed to drive definite outcomes concerning our products, processes and people • Role changes will ensure that we regain our industry leading standard with compliance
Umesh Kale, Chief of Quality Services Ramaraju PVS, Chief Quality Officer
• Ex-CQO with Strides for 10+ years • Ex-COO/Head of Manufacturing (over 10+ years with Strides) • Primary focus on recalibrating the quality fabric and bringing out our level of compliance ahead of the industry. • Lead the quality operations, including internal audits, master data management, risk office, technical training, • Head Puducherry remediation committee to focus on and vendor management. accelerating the site reclassification process with FDA. • Support the Puducherry remediation plan. • Provide leadership to global quality services, global harmonization of the corporate decisions & initiatives • Continue to lead the supply chain and procurement forthcoming on preventive measures. function.
• Closely work with IT in digitalization and automation • Support the MD’s office in strategic initiatives that need efforts and to deliver to design our investments made into technical interventions. quality systems.
20 New CXO leadership to drive stronger strategic & business outcomes
Raju Subramanyam, Head Global Mfg Sanjay Singh, CHRO VK Singh, Chief Business Officer Anjani Kumar, Chief IT Officer
• Providing overall leadership to the • Leading the people centre and own all its • An accomplished industry leader for 25+ • 20 years of experience with exposure to manufacturing operations across all facets, including talent management, years with a successful record of leading numerous industries including, locations and will oversee external culture transformation, leadership and significant growth in several mid-size and Pharmaceutical, Services, Telecom, supplies both at our existing and future organizational development large pharmaceutical companies. Automobile and Logistics. CMOs. • Leading Strides’ transition into a high- • Varied experiences of owning P&L • He has been employed with several • A Chemical Engineer from IIT Kanpur performance organization that offers a responsibilities spanning across Fortune 500 organizations like IBM, and an MBA from IIT Bombay, brings delighting and congenial work culture for formulations, drug delivery, active Nissan, Cognizant and has worked as along with him 28 years of rich and all. pharmaceutical ingredients, corporate consultant with Pharmaceutical companies diverse experience in manufacturing, strategy and M&As. like Pfizer and Ranbaxy. supply chain and EHS in India, China, • An engineer by education and has since South East Asia & North America. specialized in Human Resource with an • He was the President-Operations at • His expertise includes IT strategy, MBA from XLRI, Jamshedpur. Emcure Pharmaceuticals Limited, and he Corporate IT, Consulting and Digital • Previously, he was Joint President & has previously been the CEO of RPG Life Transformation. Global Head – Operations at Cipla. He • His 24+ years of industry experience Sciences and Ethypharm, India. has also held leadership positions with includes his leadership stints at Hi-Tech • Post Graduate in Marketing & other leading multinational companies like Gears, PI Industries, Cairn India, • Chemical Engineer from IIT, Kanpur and Management from Kelly Business School, Dr Reddy’s, Dupont and GE Plastics. Jubilant Organosys, Whirlpool, P&G an MBA in International Business from Indiana University (USA) & B.E., in and Coca-Cola. Indian Institute of Foreign Trade, New Mechanical Engineering, NIT, Rourkela. Delhi.
21 With strategic growth engines in place, our efficient execution could result in Strides achieving significant revenue size with industry leading profitability and return ratios. Well designed to create significant value through differentiated platforms
CONTINUED VALUE CREATION
BIOTECH , CHC & PRIVATE LABEL
BIOTECH • Niche but commercially attractive biologics representing important disease categories STERILE INJECTABLES • Multiple pillars for growth and profitability with • Re-entry of steriles business in the US with a risk mitigated cashflows focused approach to minimize go-to-market • Break even at operating level in FY21 with B2C GLOBAL GENERICS timelines marginal Opex under-recoveries • Virtual strategy with lesser products , lighter • Expected to have a positive EPS in FY22 • Continued growth in the US business driven by infrastructure and yet more valuable business volume growth in existing products and launch CHC & PRIVATE LABEL of new products through own front-end • Kick-start programs in December with 10+ in- licensed products aligned for submission batch • CHC business operated by the private equity • Front-end growth in other regulated markets execution partner, business outcomes on track and we driven by increased presence across all sales expect break even in 12 months channels • Operational break even in 15 months of first filing • Significant headway in private label • Right sized balance sheet with significant focus opportunity from our manufacturing site in • Planned ₹200 crore phase 1 capital infusion on operating cashflows, and profitability Florida, to break even in first year of operations from all equity partners 100% ownership for all major P&Ls ~54% ownership ~54% ownership
23 Thank You