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Lupin Ltd
BSE: 500257 | NSE: LUPIN | ISIN: INE326A01037 Market Cap: [Rs.Cr.] 21,102 | Face Value: [Rs.] 2 Industry: Pharmaceuticals - Indian - Bulk Drugs
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Mn, during the previous fiscal to US$ 187 Mn in FY 2008-09. Today, Lupin is the fastest growing Generics company in the US by prescriptions, clocking over 90% year on year growth and is the 9th largest Generic player in the US by prescriptions (IMS Health). The Company now has a total of 22 products in the market, out of which 8 are market leaders. Lupin holds top 3 positions in terms of market share for 18 of these products (IMS MAT Mar 09). Our ability to increase market share can be attributed to various strategic moves such as leveraging our differentiated product portfolio and pipeline, creating new relationships with trade partners, in addition to further building existing relationships. Flawless execution and an efficient and responsive supply chain and distribution network have led to greater strengths and position year on year in the biggest Generic market of the world. So much so that during FY 2008-09, the Company recorded the highest per product revenues amongst its Indian peers. During FY 2008-09, the Company expanded its Generics product portfolio through the launch of Ramipril capsules, Divalproex DR tablets, Cefadroxil suspension as well as capsules and Levetiracetam tablets. Lupin's upward spiral into the leadership orbit in the US Generics space is deep rooted in our business strategy which encompasses the following: An IP-based niche product portfolio Over the years, Lupin has focused on developing a differentiated product portfolio for the US Generics market. By building a pipeline of mainstay important complex products, coupled with the right IP-backed product opportunities, the Company has created a formidable position and is therefore able to ensure higher margins and hence profitability. Backed by an efficient and intuitive Intellectual Property Management Group, sound process and formulations research capabilities, Lupin has a well-differentiated, value-based product pipeline for the future, with a clear focus on controlled release, exclusive and unique first-to-file Para IV filings and other

niche filings. In FY 2008-09, the Company filed a record number of 28 ANDAs, with as many as 5 first-to-files of which 2 are potential exclusive first-to-file opportunities. Lupin's cumulative filings stand at 90, addressing an estimated market size of US$ 90 Bn. The Company also filed 11 US DMFs in the year. As part of its strategy, the Company aims at adding a new therapy area every year. During FY 2008-09, Lupin entered into the Oral Contraceptives (OC) space through the filing of 7 OC ANDAs and associated DMFs. The Company also filed its first liquid products in the year. Over the years, Lupin has developed its IP capabilities to identify and challenge unique opportunities. Lupin's demonstrated IP successes include the Cefdinir, Perindopril and Ramipril litigations. In 2009, the Company received a landmark judgment from the Federal Circuit Court of Appeals in its favor that resulted in winning the Cefdinir litigation against Abbott Laboratories and Astellas Pharma Inc. The Company also settled the litigation relating to Desloratadine tablets, the Generic version of Schering-Plough's ClarinexR tablets. As per the terms of the settlement, Lupin received license to the relevant Desloratadine patents and is free to commercially launch its Generic Desloratadine product on July 1, 2012, or earlier, in certain circumstances. Schering-Plough's ClarinexR tablets recorded US sales of US$ 329 Mn for the year 2007(IMS Jun 2008). Customer service and quality commitment Lupin's success in the highly regulated US market stems from its strict adherence to the highest quality and customer service standards. As an acknowledgment of its impressive delivery record, the Company was recognised by Wal-Mart and awarded its prestigious "Supplier Award of Excellence" for the 2nd Quarter 2008 for overall commitment, performance, on-time shipping, innovative programs and quality of overall partnership. This is an acknowledgment of the inroads that the Company has made into the US markets and the recognition of its strengths. The Company was also named a 'Strategic Vendor' by Wal-Mart, during FY 2008-09. At the heart of meeting and exceeding customer's expectations is an efficient and responsive supply chain. In the course of the year, the Company significantly enhanced its API and finished product capacities to meet current and future demands. The Company has also created new facilities in Indore to significantly supplement its existing oral solid capacities. In line with its goal of entering into one new area each year, the Company invested in Oral Contraceptive API and FP facilities in the course of the year. Seamless interaction between the US and the Indian teams across the supply chain ensures that the Company is able to responsively meet changing customer demands. Marketing strategy and alliances Lupin's ability to flawlessly execute and deliver on expectations is a result of its strong supply chain and carefully crafted marketing strategies. Lupin's strong and growing presence across all classes of trade such as the chain drug stores, distributors, wholesalers and mail order houses

has helped the Company build larger market shares. In a bid to further enhance its market penetration and build a strong long-term position, the Company has consistently engaged in the development of strategic alliances with trade partners. A key growth driver for the year was Lupin's ability to build sales on its existing base business and garner market share for its top 7 accounts. The top 7 Lupin customers comprising chains, wholesalers and mail order grew by 46% over the previous year. This growth was from the existing products as well as several product introductions. Recognised in the marketplace for its superior IP and marketing capabilities, Lupin continues to set the pace as well as new trends in the market by exploring strategic synergistic opportunities. The Company has entered into an alliance with Natco for the joint commercialisation of the Generic equivalent of FosrenolR tablets. Lupin and Natco believe that they are amongst the first-to-file for the product. US BRANDED With sales of US$ 74 Mn, Lupin's branded business contributed 27% to the overall US business. The Company's experience, sound market understanding and effective marketing strategies are reflected in the success of its flagship brand, SupraxR. During FY 2008-09, SupraxR continued to be on a growth trajectory, with the SupraxR Double Dose recording an overall prescription growth of 48% over the previous year. In April 2008, Lupin launched SupraxR 400 mg Tablets (Cefixime USP) in the US. This line extension further extends the SupraxR franchise. SupraxR 400 mg tablets will help the Company increase its share of the US$ 450 Mn antibiotic market for the treatment of Urinary Tract Infections. It also extends the use of SupraxR to the adolescent and teenage patient population. SupraxR 400 mg tablets are being promoted by the Company's 60 member strong specialty pediatric sales force. Lupin is also evaluating additional options reaching out to other specialty doctors. The Company's efforts are expected to be further supplemented by innovative promotional campaigns. The Suprax basket now encompasses SupraxR (Cefixime) for oral suspension 100 mg/5ml, 200 mg/5ml and SupraxR 400 mg tablets (Cefixime Tablets). The Company has strengthened its portfolio of offerings by value-added line extensions and will continue to invest in developing new products and product line extensions using its proprietary controlled release and taste making platforms. Aerochamber PlusR FY 2008-09 was an exciting year for Lupin as the Company added yet another valuable brand to its portfolio. Lupin's strategic alliance for AeroChamber PlusR, with Forest Laboratories Inc. was the highlight for the Branded business in the US market. As per the terms of this multi-year alliance, Lupin has deployed its force to promote AeroChamber PlusR to pediatricians. AeroChamber PlusR is a Valved Holding Chamber (VHC) device that is used with metered dose inhalers to enhance the delivery of medication to the lungs in the treatment of Asthma and

COPD. AeroChamber PlusR is the most widely prescribed holding chamber across the US and an estimated two thirds of its prescriptions are written by pediatricians (IMS 2007). This arrangement is expected to further bolster Lupin's franchise with pediatricians, whilst extending its presence in the respiratory segment. Lupin is also aggressively seeking in-licensing opportunities and alliances to add new products to further build the Company's branded business. In particular of interest, are new products that have a clear synergy with Pediatrics, specifically, in the areas of Allergy, Asthma and ENT. Furthermore, the Company is opportunistically looking at new specialty areas to further grow its branded business. EUROPE Lupin has now built a solid foundation to grow its Formulations business in the European markets with a product pipeline encompassing Anti-infective, Cardiovascular and CNS therapy products. Having established its presence across select EU markets through unique localised direct-to-market initiatives, judicious acquisitions and strategic partnerships, the Company is today well placed to address the unique demands of the fragmented and diverse EU market. The Company's research and strong intellectual property management competencies, a sophisticated product identification strategy and solid manufacturing capabilities have enabled it to grow in both, size and scale and has helped create a strong differentiator for its products in the EU market. During FY 2008-09, the Company's Formulations business in Europe recorded a growth of 99%. Additionally, during the year, Lupin filed as many as 6 EDMFs/COSs across Europe. The total filings across various EU markets stand at 54, with 22 approvals. Going forward, the Company intends to make close to 15 filings per year in the EU. It is already in the process of developing the right commercial infrastructure in select markets to effectively market its rapidly expanding product pipeline. GERMANY Lupin made strategic inroads into the German Market by acquiring Hormosan Pharma GmbH (Hormosan), a German Generics company, specialised in the supply of pharmaceutical products. Hormosan enjoys a strong brand identity in Germany, especially in the CNS area. With the change in market to a substitution-driven market, the Company has completely changed its focus and is now geared towards capitalising on the right Generic opportunities. The Company's first win in the German market through Hormosan came within just two quarters of acquiring the company. Hormosan won the Allgemeine Ortskrankenkassen (AOK) tender to supply Sertraline in all 5 regions of Germany covering all AOK-insured persons. UK Lupin's direct-to-market initiative has worked well in the UK, which is evident from the success of the Company's flagship brand, Lisinopril that commands a market share of 15%. Lupin is now looking at introducing several new value-added products. The Company has a strong

pipeline of 22 MAAs and received approvals for Trandolapril capsules and Perindopril tablets, during FY 2008-09. FRANCE Having built successful partnerships over the past one year, Lupin continues to make inroads into the French market with its Cefpodoxime Proxetil tablets, accounting for over 60% market share. The Company further consolidated its presence in the market by launching the Cefpodoxime Proxetil suspension in FY 2008-09. Lupin is already paving the way to grow its direct-to-market business at a faster pace than its partnered business. In addition to UK, Germany and France, the Company is also focused on building relationships in the markets of Italy, Spain, Portugal, Poland, Czech Republic, Hungary and Turkey. The Company would continue to focus on alliances and acquisitions and increased direct presence in these key markets. THE ROAD AHEAD Lupin is well aware of the challenges that lie ahead in maintaining and sustaining its current pace of growth and trajectory in the advanced markets. The Company will continue to focus on identifying and developing a differentiated product portfolio for the markets it chooses to operate in, with a focus on creating profitable and distinctive niches and also at the same time, rely on its ability to garner greater market share. Further, growth in the number of quality filings ANDAs/MAAs and DMFs/COSs would be key to maintaining Lupin's continued success in the advanced markets. Through creating timely manufacturing capacities and facilities and adhering to stringent quality standards, the Company will continue to meet and exceed expectations. Lupins goal is to be amongst the best in the Generic markets of US and Europe and the passage of each year takes the Company closer to this much cherished goal.

India Infoline Research

Company | Sectors

Dr Kamal K Sharma, MD, Lupin Ltd

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| Sector | Latest

15-Sep-11 14-Sep-11 14-Sep-11 14-Sep-11 07-Sep-11 02-Sep-11

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Lupin receives approval from USFDA for Eszopiclone Sleep Medicine Lupin announces launch of Generic KEPPRA XR Tablets Lupin announces launch of generic KEPPRA XR tablets Lupin received final approval for the Levetiracetam extended release tablets Lupin allots equity shares Lupin receives final approval to market Generic Ultram ER

Peer Comparison
Company Lupin Divi's Lab. Jubilant Life Orchid Chemicals Elder Pharma Dishman Pharma. Shilpa Medicare Nectar Lifesci. Hikal Vinati Organics Shasun Pharma. Piraml.LifeSci. Suven Life Scie. Parabolic Drugs SMS Pharma. Prev Next Market Cap (Rs. in Cr.) 21,101.59 9,622.08 3,448.85 1,393.30 771.59 525.76 524.16 459.82 452.35 344.46 335.97 228.58 198.39 197.43 166.33 P/E P/BV EV/EBIDTA (TTM) (TTM) (x) (x) (x) 29.10 6.69 19.97 21.30 5.26 16.78 12.77 1.59 9.61 9.28 1.23 8.97 9.63 1.26 7.41 13.46 0.82 11.84 10.93 2.27 7.90 4.72 0.64 6.46 9.83 1.45 7.91 6.70 2.40 5.78 28.24 1.96 8.53 0.00 -0.79 0.00 19.32 1.57 17.35 3.46 0.52 0.00 21.99 0.76 8.90 ROE (%) 28.5 25.9 13.0 15.1 13.0 6.4 51.2 19.9 14.7 42.8 2.6 0.0 8.5 22.8 3.9 ROCE (%) 23.0 28.1 8.2 10.4 12.4 7.9 42.1 15.7 11.1 35.1 7.3 0.0 5.2 17.0 7.4 D/E (x) 0.33 0.02 1.16 1.64 1.20 0.80 0.92 1.41 1.61 0.58 1.14 0.00 0.47 2.41 0.81

Futures & Options Quote

Future

| Option

Expiry Date 473.95 6.05 [1.3]% Instrument: Expiry Date: Open Price: Average Price: No. of Contracts Traded: Open Interest: FUTSTK Underlying: 29 Sep 2011 Market Lot: 479.70 474.89 528,000 1,176,000 LUPIN 1000

473.95 Previous Close: 482.15 | 470.55 Days High | Low: 25.07 Turnover (Cr.): Open Int. Change: -10,000.00 ( [0.8]% )

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Key Information
Key Executives:

Desh Bandhu Gupta , Chairman Kamal K Sharma , Managing Director M D Gupta , Executive Director Nilesh Gupta , Executive Director
Company Head Office / Quarters:

159 C S T Road, Kalina Santacruz (East), Mumbai, Maharashtra-400098 Phone : 91-22-66402323 Fax : 91-22-26528806 E-mail : info@lupinworld.com Web : http://www.lupinworld.com
Registrars:

Lupin Ltd Investors Serv Dept 159 C S T Road Kalina Santa Cruz(E) Mumbai - 400 098

Fund Holding

Mutual Funds | Fll

Scheme Name DSP BR Top 100 Equity Fund (G) DSP BR Equity Fund (D) DSP BR Focus 25 Fund (G)
Detailed List

No. of Shares 1,882,420 1,175,541 499,073

Calendar
Sep-2011 M T W 19 20 21 IPO Issue Open : Prakash Constro. New Listing : Vaswani Inds.
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