SUN PHARMACEUTICALS

INDUSTRIES LTD.

Maanhvi Ralhan
06.07.2019
 ESTABLISHMENT & GROWTH
1983
Sun Pharma established by Mr. Dilip Shanghvi with five
psychiatry products and a two person marketing team

1994
Sun Pharma launches IPO

1996
Sun Pharma expands sales network across 24 countries

2007
Sun Pharma demerges Sun Pharma Advanced Research
Company (SPARC), into a separate entity becoming the first
pure research company to be listed on Indian stock exchanges

2013
Ranbaxy acquisition catapults Sun Pharma to world’s 5th
largest specialty generic pharmaceutical company
 ACQUISITIONS & ALLIANCES

1996
Sun Pharma acquires API plant from Knoll Pharma at Ahmednagar, Maharashtra, India

1997
Sun Pharma purchases equity stakes in TDPL and MJ Pharma
Sun Pharma’s first international acquisition of Caraco Pharmaceutical Laboratories, USA

1999
Sun Pharma acquires Milmet Labs and Gujarat Lyka Organics, India

2000
Sun Pharma acquires Pradeep Drug Company, India

2004
Sun Pharma acquires Phlox Pharma (India) and niche brands from Women’s First Healthcare (US)
 2005
Sun Pharma completes buyout of manufacturing unit in Bryan,
Ohio, US
Sun Pharma acquires ICN’s business in Hungary from Valeant
Pharma
Sun Pharma acquires intellectual property and assets of Able
Labs from US District Bankruptcy court in New Jersey

2008
Sun Pharma acquires Chattem Chemicals Inc, US

2010
Sun Pharma acquires controlling stake in Israel-based Taro
Pharmaceuticals, USA to effectively double company's US
business

2012
Sun Pharma completes two more acquisitions in USA; Dusa
Pharmaceuticals and the generic business of URL
Pharmaceuticals
 2014
Sun Pharma acquires Ranbaxy in a US$ 4 billion landmark
transaction to create world’s fifth largest specialty generic
pharma company
Sun Pharma acquires Pharmalucence in USA

2015
Sun Pharma acquires GSK’s Opiates business in Australia
Sun Pharma acquires InSite Vision Inc. to strengthen branded
ophthalmic portfolio in USA

2016
Sun Pharma acquires 14 brands from Novartis in Japan
Sun Pharma acquires Ocular Technologies, Sarl to strengthen
branded ophthalmic portfolio
Sun Pharma acquires branded oncology product Odomzo®
(sonidegib) from Novartis for global markets
Sun Pharma acquires Biosintez to enhance presence in Russian
market
Over the years Sun Pharma has had numerous Acquisitions and Joint Ventures with the companies given below:
 SUNOLOGY
Sunology - a combination of two words, Sun & Ideology is at the core of Sun.
Humility, Integrity, Passion & Innovation together form Sunology.
It is a way of life at Sun.

Humility Passion
•Under promise and over deliver •Infuse energy in everything that you do
•Let your work speak for you •Walk that extra mile
•Always put ‘we’ before ‘me’ •Inspire others
•Learn from mistakes •Do your best in every situation

Integrity
•Do the right thing with conviction & without
fear
•Practice honesty, impartiality & fairness at all
times
•Adhere to strong ethical and moral standards
•Courage to call-out what is not right
Innovation
•Strive to implement new ideas & technologies
to meet unmet needs
•Encourage others to think out-of-the-box
•Do not limit yourself
•Believe in raising the bar every time
 VISION
Reaching People and Touching Lives Globally as a Leading Provider of Valued Medicines.

VALUES
Quality
•Get it right the first time
Reliability
•Maintain efficiency & discipline in all processes &
systems and fulfil the promises made to stakeholders
Consistency
•Endeavour to bring new products to the market &
consistently deliver value to stakeholders
Trust
•Be transparent in dealings
Innovation
•Implement new ideas & technologies to meet unmet
needs and think ahead of times
BOARD OF DIRECTORS
ISRAEL MAKOV DILIP SHANGHVI
Chairman Managing Director

SUDHIR V. VALIA SAILESH T. DESAI

Non- Executive and Executive Director
Non-Independent Director

KALYANASUNDARAM VIVEK CHAAND SEHGAL

SUBRAMANIAM Non- Executive Independent
Executive Non- Director
Independent Director

REKHA SETHI GAUTAM DOSHI

Non-Executive Non-Executive Independent
Independent Director Director
 PRODUCT PORTFOLIO
COMPREHENSIVE, DIVERSE AND HIGHLY COMPLEMENTARY PORTFOLIO OF SPECIALITY AND GENERIC PRODUCTS

SPAN GENERICS BRANDED GENERICS

OVER-THE-COUNTER(OTC) ANTI-RETROVIRALS(ATVs) DOSAGE FORMS

E.g. Any medicine without Prescription
E.g. Antibiotics
▪ Tablets
▪ Capsules
Active Pharmaceuticals Intermediates
Ingredients (API’s) ▪ Injectable
▪ Inhalers
▪ Ointments
▪ Creams
▪ Liquids
MARKET SHARE

as on 5th July’19
 COMPETITOR ANALYSIS
RANK COMPANY LEADERSHIP CEO SCORE EMPLOYEES TOTAL REVENUE
FUNDING
Dilip S. Shanghvi 73/100 30,0000 $0 $4B
Managing Director

1 Govindarajan 79/100 20,000 -- $2.8B

Narayanan
Managing Director

2 Sharvil P. Patel 60/100 12,227 -- $1.8B

Managing Director

3 Habil Khorakiwala 89/100 6,768 -- $559.6B

Founder & CEO

4 Samir Mehta 75/100 14,700 $155.6M $1.1B

CEO

5 Nimish Chudgar 65/100 500 -- $120M

CEO
RANK COMPANY LEADERSHIP CEO EMPLOYEES TOTAL REVENUE
SCORE FUNDING

6 Umang Vohra 69/100 12,235 -- $1.9B

CEO

7 Heather Bresch 76/100 35,000 -- 22.3B

CEO

8 F. Michael Ball 83/100 19,000 -- $4.6B

CEO

9 Glenn Saldanha 82/100 13,500 -- $1.2B

Managing
Director
 INDUSTRY ANALYSIS
INDUSTRY SIZE(in terms of volume and value)
The pharmaceutical sector was valued at US$ 33 billion in 2017.
The country’s pharmaceutical industry is expected to expand at a CAGR of 22.4 per cent over
2015–20 to reach US$ 55 billion.
India’s pharmaceutical exports stood at US$ 17.27 billion in FY18 and have reached US$ 15.52
billion in FY19 (up to January 2019).
Pharmaceutical exports include bulk drugs, intermediates, drug formulations, biologicals, Ayush &
herbal products and surgicals.
India’s domestic pharmaceutical market turnover reached Rs 129,015 crore (US$ 18.12 billion) in
2018, growing 9.4 per cent year-on-year (in Rs) from Rs 116,389 crore (US$ 17.87 billion) in 2017.

Indian companies received 304 Abbreviated New Drug Application (ANDA) approvals from the US
Food and Drug Administration (USFDA) in 2017. The country accounts for around 30 per cent (by
volume) and about 10 per cent (value) in the US$ 70-80 billion US generics market.

India's biotechnology industry comprising bio-pharmaceuticals, bio-services, bio-agriculture, bio-

industry and bioinformatics is expected grow at an average growth rate of around 30 per cent a
year and reach US$ 100 billion by 2025.
 INDUSTRY GROWTH
REVENUE AND NET INCOME, EPS GROWTH RATE

Revenue or turnover or top line is income that a

company receives from its normal business
activities. Revenue Growth is used to measure how
fast a company's business is expanding. The figure
shows the annual rate of increase/decrease in a
company's revenue or sales growth in terms of
percentage change from the previous year.
Compound Annual Growth Rate of Sun Pharmaceuticals Industries Ltd.
An ideal company should have an steady upward
trend. Year-over-year performance is frequently 1 YEAR
used by investors seeking to gauge whether a
company's financial performance is improving or REVENUE -16.12%
worsening.
NET INCOME -69%
EPS BASIC -69%
 FINANCIAL ANALYSIS
SUN PHARMA Income Statement Analysis

•Operating income during the year fell 16.1% on a

year-on-year (YoY) basis.

•The company's operating profit decreased by 44.4%

YoY during the fiscal. Operating profit margins
witnessed a fall and stood at 21.2% in FY18 as against
31.9% in FY17.

•Depreciation charges and finance costs increased by

18.6% YoY and 29.5% YoY, respectively.

•Other income grew by 34.6% YoY.

•Net profit for the year declined by 66.4% YoY.

•Net profit margins during the year declined

from 24.3% in FY17 to 9.6% in FY18.
SUN PHARMA Balance Sheet Analysis

•The company's current liabilities during

FY18 stood at Rs 199 billion as compared to
Rs 179 billion in FY17, thereby witnessing
an increase of 11.1%.

•Long-term debt stood at Rs 18 billion as

compared to Rs 14 billion during FY17, a
growth of 23.4%.

•Current assets fell 4% and stood at

Rs 316 billion, while fixed assets rose 4%
and stood at Rs 213 billion in FY18.

•Overall, the total assets and liabilities for

FY18 stood at Rs 643 billion as against Rs
614 billion during FY17, thereby witnessing
a growth of 5%.
Current Valuations for SUN PHARMA
•The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.0, an decline from the EPS of
Rs 32.7 recorded last year.
•The price to earnings (P/E) ratio, at the current price of Rs 646.5, stands at 38.3 times its trailing twelve months
earnings.
•The price to book value (P/BV) ratio at current price levels stands at 3.6 times, while the price to sales ratio
stands at 5.1 times.
•The company's price to cash flow (P/CF) ratio stood at 37.6 times its end-of-year operating cash flow earnings.

SUN PHARMA Share Price Performance

Over the last one year, SUN PHARMA share
price has moved up from Rs 516.6 to Rs
646.5, registering a gain of Rs 129.9 or
around 25.1%.
Meanwhile, the S&P BSE HEALTHCARE
Index is trading at Rs 15,959.5 (up 0.1%).
Over the last one year it has moved up from
13,744.7 to 15,959.5, a gain of 2,215 points
(up 16.1%).
Overall, the S&P BSE SENSEX is up 15.2%
over the year.
 CHALLENGES IN THE INDUSTRY
1. Patents and Intellectual
Property Rights
India's new product patent regime is
the
result of the WTO's Doha Round of
negotiations in 2001. Final
agreement was reached on TRIPs
ground rules for patent protection
among WTO member countries,
stating that both processes and
products should be protected.
Subsequently, on March 22, 2005, In
dia's parliament approved the
Patents(Amendment) Act
2005, bringing in a system
of product patents backdated to
January1, 2005. The new
regime protects only products
arriving on the market
after January1, 1995, abolishing the
previous process patent system
established by the 1970 Patent Act.
2. Pricing Issues
The prices of 74 bulk drugs and
their formulations, which
account for around 40 percent
of the retail pharmaceutical
market, are controlled by
the Drug Price Control Order
(DPCO) of 1995. The
government's 2002
Pharmaceutical Policy would
have
reduced the numbers of price-
controlled drugs still further, b
ut this proposal is currently
under judicial review in the
Supreme Court. If it is approved,
the number of price-controlled
drugs is expected to drop to 25.
3. Regulatory Reforms
The government is now starting to develop an
infrastructure for clinical trials in India, with
amendments made recently to Schedule Y of the
Drugs and Cosmetics Rules
of 1945
to allow for multicenter concurrent clinical trials in Indi
a and address the protection of trial participants, and
the integration and quality of data. Among
other developments, Good Clinical Practice
guidelines have been published and made mandatory.
The government is now starting to develop an
infrastructure for clinical trials in India, with
amendments made recently to Schedule Y of the Drugs
and Cosmetics Rules
of 1945 to allow for multicenter concurrent clinical
trials in India and address the protection of trial
participants, and the integration and quality of data.
Among other developments, Good Clinical Practice
guidelines have been published and made mandatory.
 FUTURE OPPORTUNITIES IN THE INDUSTRY

Indian pharmaceutical
market by 2020
(US $ billion)

FACTORS INFLUENCING GROWTH OF THE INDUSTRY

 CONCLUDING REMARKS
Medicine spending in India is projected to grow 9-12 per cent over the next five years, leading India to
become one of the top 10 countries in terms of medicine spending.

Going forward, better growth in domestic sales would also depend on the ability of companies to align
their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-
diabetes, anti-depressants and anti-cancers that are on the rise.

The Indian government has taken many steps to reduce costs and bring down healthcare expenses.
Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit
the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving
drugs and preventive vaccines also augurs well for the pharmaceutical companies.
Exchange Rate Used: INR 1 = US$ 0.0139 as of FY19
THANK YOU