Changing Dynamics

 The US generics market was the main driver of growth and profitability
for Indian pharmaceutical companies between 2005-15.
 But for Sun pharma FY18 revenues degrew by 14% to 261 Billion
mainly due to decline of US sales.
 Now with the changed dynamics, the importance of other markets has
increased.
 Strategies-Identify new engines of growth and invest more in
innovation

New Strategies and Scenario

 Sun pharma investing in building its global specialty business since

the last few years.
 This initiative will help in moving up the pharmaceutical value chain.
 R&D-Investment -$22 Billion targeting developing complex generics
and specialty products.
 The other focus area is cost control and product rationalisation with
the support of R&D projects, manufacturing footprint and other
areas for earning back on investments.
 FY18 revenues degrew by 14% to 261 Billion because of decline in
US sales.
 Sun pharma recorded growth in all markets except US.
 Ranbaxy synergies- Ranbaxy acquisition. The targeted synergy
benefits for FY18 was US$ 300 Million.
 Ability to successfully adhere to these cGMP standards to be one of
the focus area with stringent standards.
 Restructuring and rationalisation-Tough pricing conditions in US
markets has resulted in focus on cost control in US markets.
 Specialty initiatives- two main objectives –
(I) to build an additional engine of future growth (II) to move up the
pharmaceutical value chain through development and
commercialisation of branded patented products.
 Specialty portfolio targets Dermatology, Ophthalmic, Oncology and
CNS segments
 US Markets-Key specialty products are likely to be commercialised
in the US in FY19.There is significant pre-launch and branding costs
along with increasing sales force costs.
 New medications have witnessed a gradual and continuous shift
towards specialty medicine.
 Developed Markets-Pharmaceutical spending in developed markets
is estimated to grow at 2-5% CAGR from US$ 753.2 Billion in 2017
to US$ 915-945 Billion in 2022.
 Focus Area- Continuing to invest in the accelerating OTC business
across key markets through brand building and brand extensions. •
Expanding presence across OTC sub-categories in various markets.
• Maintaining leadership in existing markets by offering innovative
solutions to consumers.
Value Creation framework- Growing and sustaining our prominence across markets,
therapeutic segments and products.
Future growth drivers • Launch of specialty products • Patent expiries and the US
government’s focus on reducing healthcare costs will continue to favour growth of low-cost
generics.
Focus areas • Enhancing the share of specialty business. • Focussing on complex generics
and high-entry barrier segments. • Ensuring a broad offering to customers across multiple
dosage forms. • Improving service levels for customers through round-the-clock cGMP
compliance, product robustness and supply chain
 US Business Market

Progress in FY18
• Revenues for RoW markets increased by 15% to `29,740 Million in FY18.
• Growth was primarily driven by the full-year inclusion of sales of acquired brands in
Japan.

 As per Euro monitor 2017 report, Sun Pharma’s consumer healthcare business in
India recorded over 10% growth during the year and has grown at 12.6% CAGR over
the preceding six years. Sun Pharma commands a 2.8% market share in India’s
consumer healthcare market.
Future growth drivers
• Enhanced drug demand in geriatric care and lifestyle diseases such as obesity,
hypertension, depression and diabetes will drive pharmaceutical consumption in these
markets.
• Adoption of newer medical technologies as well as government policies of promoting
low-cost generics will propel growth in these markets. Outlook and future focus
 • Ramping up presence in Japan post transfer of Novartis brands to Sun Pharma.
• Improving profitability for overall portfolio.

 Indian consumer healthcare market will be driven by emerging middle-class and

rising healthcare consumption.
• Globally, emerging markets like Russia, Romania, Nigeria, South Africa and
Myanmar are projected to see sustained growth, driven by enhanced healthcare awareness.

R& D-Strategy through Innovation

(B) Technology Absorption, Adaptation and Innovation

 The company continues to invest on R&D, both as revenue expenses as well as

capital investments. Part of this spending is for complex products, specialty
products, generic filings for the US, and API technologies that are complex and
may require dedicated manufacturing blocks.
 Investments in creating research sites, employing scientifically skilled and
experienced manpower, adding equipment, sponsored research and in accessing
world class consultants to continuously upgrade the research understanding of
the scientific team in the technologies and therapy areas.
 Thrust on the development of novel technologies like use of green reagents for
chemical transformations in API synthesis and ultrasonic crystallisation for
achieving required particle size, capillary flow reactors for continuous process
and safety related studies using reaction calorimetry.
 Product Life Cycle management for key products.
 Backward integration is a key strategic objective and many of our products enjoy
the benefit of this backward integration.
 Process robustness implemented for wide range of products to reduce cost and
increase in process capability.
 Novel compact dosage forms having differentiation with regards to improved
stability and/or reduced pharmacokinetic variability have been developed for the
Indian market. Stable liquid oral formulations of labile products are also being
developed.
 Benefits -derived as a result of the above efforts e.g. product improvement, cost
reduction, product development, import substitution
(a) Offers complete baskets of products under chronic therapeutic classes. Many
products are in the pipeline for future introduction in India, emerging markets, as
well as US and European generic market. The company has developed an ability
to challenge patents in the US market, and earn exclusivity.
(b) Not dependent on imported technology, can make high-end products available
at competitive prices by using indigenously developed manufacturing processes
and formulation technologies.
(c) Offers technologically advanced differentiated products which are convenient
and safe for administration to patients.
(d) We are among the few selected companies that have set up completely
integrated manufacturing capability for the production of anticancer, hormones,
peptide, immunosuppressant and steroidal drugs.
(e) The Company has benefited from reduction in cost due to import substitution
and increased revenue through higher exports.
(f) Clinical studies of some products (complex and difficult to formulate) have
been carried out at our in-house clinical pharmacology units. This has helped to
maintain R&D quality and regulatory compliance with significantly reduced cost.