Abbott Acquisition of Piramal

A brief snapshot of implications for the company & market

The New Pecking Order

3500 2967 3000 2533 2500 2000 1500 1000 500 0 Abbott + Piramal + Solvay Cipla Ranbaxy GSK Sun Zydus Cadila Alkem + Cachet + Indchemie 2237 2208 1966 1828 1499

Rank

PharmaTrac (Rs. Cr)

Pharma Market 1 Abbott + Piramal + Solvay 2 Cipla 3 Ranbaxy 4 GSK 5 Sun 6 Zydus Cadila 7 Alkem + Cachet + Indchemie 8 Lupin 9 Mankind 10 Aristo

MAT Apr-10 Val (Cr) MS% GR% 45385 100 13.8 2967 6.54 17.5 2533 5.58 14.8 2237 4.93 3.4 2208 4.86 3.8 1966 4.33 14.3 1828 4.03 14.3 1499 3.30 12.5 1462 3.22 16.4 1367 3.01 16.7 1163 2.56 11.4

Not only Number 1 but distinct with a wide margin will maintain the No. 1 Rank atleast for the near future Key is to sustain the growth (17.5% - highest in top 10) that the distinct entities achieved independently.

Therapy Synergies
Value at Price to Retailer (10% higher) Therapeutic Class (EphMRA) Indian Pharma Market A - Alimentary Tract and Metabolism J - General Anti-Infectives Systemic C - Cardiovascular System R - Respiratory System N - Central Nervous System M - Musculo-skeletal System D - Dermatologicals B - Blood and Blood Forming Organs G - Genitourinary System & Sex Hormones V - Various P - Parasitology S - Sensory Organs H - Systemic Hormonal Preparations L - Antineoplastic & Immunomodulating Ag U - Others K - Hospital Solutions T - Diagnostic Agents Market Val (Cr) $ Bn (@47) 45,447 9.67 11,340 2.41 9,043 1.92 4,812 1.02 3,705 0.79 3,399 0.72 2,821 0.60 2,360 0.50 2,046 0.44 1,931 0.41 1,313 0.28 707 0.15 615 0.13 476 0.10 375 0.08 201 0.04 192 0.04 110 0.02 MS% 100 25.0 19.9 10.6 8.2 7.5 6.2 5.2 4.5 4.2 2.9 1.6 1.4 1.0 0.8 0.4 0.4 0.2 GR% 13.9 13.5 12.5 13.2 14.6 14.0 15.5 12.6 13.3 16.2 13.3 8.7 15.8 14.0 41.6 49.0 19.7 50.8 MAT Apr-10 Abbott Piramal Solvay Merged Entity Val (Cr) % Presence Val (Cr) % Presence Val (Cr) % Presence Val (Cr) % Presence 560 1.23 2,113 4.65 294 0.65 2,967 6.5 216 1.9 456 4.0 142 1.3 814 7.2 3 0.0 421 4.7 424 4.7 7 0.1 228 4.7 18 0.4 252 5.2 4 0.1 281 7.6 3 0.1 289 7.8 149 4.4 215 6.3 53 1.5 417 12.3 36 1.3 144 5.1 2 0.1 183 6.5 140 5.9 140 5.9 4 0.2 89 4.3 93 4.5 8 0.4 77 4.0 85 4.4 85 6.5 15 1.1 100 7.6 27 3.8 27 3.8 6 1.1 6 1.1 46 9.6 31 6.5 77 16.1 10 2.6 10 2.6 0 0.0 41 21.5 41 21.5 9 8.5 9 8.5

> 5% share for 7 of the top 10 Therapy Areas

Top Brands Merged Entity

Rank 2 37 42 56 74 103 114 122 134 143 170 173 177 213 219 230 233 235 236 242 249 273 276 278 287 Brand PHENSEDYL COUGH LINCTUS DIGENE EPTOIN DUPHASTON UDILIV VERTIN DUPHALAC THYRONORM STEMETIL HAEMACCEL LMWX GARDENAL CREMAFFIN PARAXIN KENACORT NERVUP TOSSEX BRUFEN TRIBET GENTICYN LOBATE GM PHENERGAN FINECEF SUPRADYN ACITROM Company Piramal Abbott Abbott Solvay Solvay Solvay Solvay Abbott Piramal Piramal Piramal Piramal Abbott Piramal Piramal Piramal Piramal Abbott Piramal Piramal Piramal Piramal Piramal Piramal Piramal MAT Apr-10 188 79 74 64 56 48 45 43 40 39 35 35 35 31 31 30 30 30 29 29 29 27 27 27 26 GR 15 9 7 45 35 33 27 37 -5 36 45 6 7 7 17 9 4 7 30 2 45 3 43 13 6

5 brands in the top 100 25 Brands in the top 300

Highest Growth > 5 Cr Brands

Industry Rank 912 1034 1631 1033 1095 1517 1745 1108 961 1839 823 1250 497 1303 363 1339 1639 639 597 1484 Brand CEFI O CEFI XL D OPTIUM ROCKBON PPG ISOMIL MEGAMOX CEFI (NPIL) CLINAXON DURAJOINT GM CAAT NUPOD CEFCHAMP CEROM ZIMNIC ERTYCIN IMI CILA LIMCEE FIGHTOX DOBUTREX Company Piramal Piramal Abbott Piramal Piramal Abbott Piramal Piramal Piramal Piramal Piramal Piramal Piramal Piramal Piramal Piramal Piramal Piramal Piramal Piramal MAT Apr-10 Val (Cr) GR 11 $ 10 1365 6 929 10 721 9 612 7 401 6 316 9 274 10 204 5 192 12 152 8 115 17 100 8 98 22 94 8 73 6 68 14 59 15 52 7 52

Top 20 growing brands (above > 5 Cr turnover) Total 137 brands > 5 Cr turnover

Mega Reach
Company Piramal Healthcare Piramal Trucare Abbott Solvay Merged Entity Medical Reps 3000 2000 1600 500 7100

Twice the size of next highest field-force of Mankind (3500)

Challenges Ahead
Pay Structure Parity: MNC payouts 20-25% higher than Indian companies for equivalent functional posts Designation Parity: Indian companies have tendency to keep higher role titles to retain people Portfolio Management: Inter-divisional movement of Brands to maximize gain in long term. Rationalizing brands to optimize in-clinic time to focus on brand building Cost Rationalization: Certain common functions would have to be rationalized leading to some minor layoffs in the 12-18 month horizon. Current Pharma Industry growth can absorb so no big concerns on this front.

Opportunities
Largest promotional Budget & Reach can outwit competition with sheer power Reach the remotest interiors with the massive field numbers Cross synergies can push OTC products E.g. Digene periodic promotion to 5000 Gastroenterologists E.g. Pediasure periodic promotion to 10000 Pediatricians Low cost generic manufacturing for Indian and International Markets. In Africa, SE Asia, CIS a dual approach of generic & patented player Adding Rural Reach to current Mega Brands historic opportunity to create 200 Cr plus brands in Indian Pharma Industry in the next 2-3 years