Newsletter on Indian Healthcare Industry

Transcription

1 24 th Jan 5 th Feb 11 PharmaHealth TRACK Newsletter on Indian Healthcare Industry Top Story Content Results Declared: Sector sees positive results except few dips Pharma and healthcare sector has so far come out with positive results for the quarter ended Dec 10. Out of 12 major players who have announced results, most of them have posted double digit growth barring a few negatives. The sector saw on average 26% rise in revenue in quarter ending 31 Dec 10 compared to quarter ended in 31 Dec 09. There was 16% increase in EBITDA with almost 14% rise in net profit seen for this quarter compared to same quarter last year. Most of the companies have seen rise in their revenues and profits, with only few like Cipla and Divi s Lab seeing dip in their net profit. Dr Reddy and Orchid Chemical posted high growth in net profit yoy basis. In general, sector has seen EBITDA margin of 26% whereas 17% margin is seen for net profit which is marginally lower as compared to last year EBITDA margin of 28% and profit margin of 18% on an average. Private Equity 2 Mergers & Acquisitions 3 News Update 4 Regulatory Developments 6 Upcoming Events 6 Stock Market Update 7 Peer Benchmarking 7 About Four-S Services 8 About Four-S Services Four-S Services is India's leading provider of Research, Financial Consulting and Investment Banking services with offices in Gurgaon, Mumbai and Bangalore. We have a proven track record of consistently delivering high quality solutions, enabling our clients to improve the effectiveness of decision making and acting as a catalyst in achieving business success. We have executed more than 120 mandates across diverse range of industries including Education, Financial Services, Infrastructure, M&E, IT-ITeS, Auto and Auto ancillaries, Retail, Real Estate and Textile etc Our Services: Strategy Consulting Business Planning Investment Banking Research Support Valuation Services Investor Relations & IPO Consulting For further information, please contact Seema Shukla at seema@four-s.com or reach us as

2 Investment Activity last year.. FOUR-S PharmaHealth Track Date Investor(s) Target Stake (%) Equity Check Business Stage 13-Jan New Silk Route Nectar Lifesciences 14.6 NA Biotech Growth 19-Jan Mumbai Angels AIOCD Pharmasofttech NA 0.4 Pharma Retail Early 24-Feb Milestone Religare Healthcare Global NA 10.0 Hospitals Growth 9-Apr Orbimed Bharat Serums and Vaccines NA NA Biotech Early 20-Apr AIF Capital Famy Care NA 40.0 Wellness Products Late 27-Apr KITVEN, Accel Partners Mitra Biotech NA NA Biotech Early 28-Apr Aavishkaar Goodwell GV Meditech NA NA Hospitals Early 11-May GIC Singapore Fortis Healthcare Hospitals PIPE 26-May NEA, GTI Group Nova Medical Centre NA 21.4 Hospitals Early 28-May Basil Global Corporation Karmic Lifescience NA NA Clinical Research Early 23-Jun Warburg Pincus Metropolis Healthcare NA 85.0 Hospitals Late 3-Aug Song Advisors Eye Que Vision NA NA Eye-care hospital Early chain 9-Aug IndoUS Venture Visionary RCM NA 3.2 Healthcare Growth Partners Services 16-Aug Baring Private Equity Shilpa Medicare 8-9 NA Pharma NA 19-Aug Kalpathi Investments Primex Healthcare 45 NA Diagnostic early 19-Aug Elephant Capital plc ClinTec International 28.8 NA CRO early 25-Aug TA Associates Dr Lal PathLabs 16 NA Diagnostic mid 19-Oct Matrix Partners India Centre for Sight NA NA Hospital mid 1-Nov Navam Capital Vyome Biosciences NA NA Skin care early 23-Nov India Innovation Fund Mitra Biotech NA NA Biotech NA 10-Dec 15-Dec Evolvence India Life Sciences Fund Aureos Capital Fermenta Biotech NA Biotech NA BSR Super Specialty Hospital NA 10.0 Healthcare - Hospitals 27-Dec CX Partners Thyrocare Technologies Healthcare NA 17-Jan 18-Jan 28-Jan Zephyr Peacock India Halcyon Capital Advisor Sequoia Capital, Elevar Equity Aizant Drug Research Solutions Ltd Integrated Health & Healthcare Services Glocal Healthcare Systems NA NA NA NA 5.0 CRO Early 44.2 Hospitals Buyout 3.3 Hospitals Early Source: Four-S Database

3 Mergers & Acquisition Date Investor(s) Target Stake (%) FOUR-S PharmaHealth Track Amount Business Stage 1-Jan Zydus Cadila Simayla Pharmaceuticals 30 NA Formulations Growth 17-Mar Religare Technova SRIT's Healthcare Solutions NA NA Healthcare IT Growth 23-Mar Piramal Healthcare Cipla s i-pill Brand NA ` 950 mn Contraceptive Growth 5-Apr Opto Circuits N S Remedies NA $1.5 mn Medical Equipment Growth 22-Apr Piramal Healthcare Bharat Serums and Vaccines NA NA Injectible Anesthetic Growth 21-May Abbott Labs Piramal Healthcare(Formulation) 100 $3.72 bn Formulations Late 26-May Kaya Limited Derma Rx Asia Pacific Pte NA NA Skin care Growth Super Religare Lab 14-Jul SRL Piramal Healthcare (Diagnostic) 100 `6 bn Diagnostics Late 27-Aug Cipla Ltd Meditab Specialties NA `1.33 bn Pharma Late Elder 17-Sep Pharmaceuticals NeutraHealth NA `700mn Pharma Growth 23-Sep Mitsui & Co Ltd Arch Pharmalabs Limited 5 `650mn Pharma Late 11-Oct Fortis Global Quality Healthcare Asia Limited 100 $196mn Healthcare Growth 8-Nov Cambrex Zenara Pharma 51 $20mn Pharma Late GlaxoSmithKline oral penicillin 23-Nov Dr Reddy business 100 NA Pharma Late 6-Dec Opto Circuits Cardiac Science Corporation 76 $55mn Diagnostics Growth 9-Dec Strides Arcolab Inbiopro Solutions 70 `650mn Biotechnology Growth 23-Dec Fortis Dental Corporation Holdings 30% `11.4bn Dental healthcare Growth 19-Jan 2011 Transasia Bio- Medicals Diasis Diagnostic Systems NA NA Diagnostics Late 20-Jan 2011 Surya Pharmaceuticals ActivOn NA `990mn Pharma Late Source: Four-S Database Four-S Indian PE Directory 2010 A Guide to choosing private equity partners Detailed listing of ~330 Active PE/VC Investors in India - PE/VC players that have invested in the past 3 years. A first-of-its-kind, the directory offers Deal History in India for individual investor. Management, investment profile and Contact details. User-friendly Spreadsheet Format. It comes from Four-S Services, the most trusted deal information bank in India.

4 News Update Healthcare & Pharmaceutical Sector 1.) Pharmaceutical Sector Results Continued Cipla Q3 net profit dips 19%: Cipla Ltd has posted a net profit of ` mn for the quarter ended December 31, 2010 as compared to ` mn for the quarter ended December 31, Total Income has increased 11% from ` mn for the quarter ended December 31, 2009 to ` mn for the quarter ended December 31, Dr Reddys Lab Q3 net profit at ` mn: Dr Reddys Laboratories Ltd has posted a net profit of ` mn for the quarter ended December 31, 2010 as compared to net loss of ` ( ) mn for the quarter ended December 31, Total Income has increased 9% from ` mn for the quarter ended December 31, 2009 to ` mn for this quarter. Lupin Q3 net profit up 39 %: Lupin Ltd. reported a top-line growth of 17% and net profit growth of 39% for the third quarter, FY Net sales grew by 17% to ` 14,672 million during Q3, FY , up from ` 12,554 million (Q3, FY 09-10). Net profits grew by 39% to ` 2,240 million during Q3, FY , as compared to ` 1,606 Mn. (Q3 FY 09-10). Glenmark Pharma Q3 cons net profit up 16%: For the third Quarter of FY 2011, Glenmark s consolidated revenue was at ` 7,508.15mn [US$ mn] as against ` 6, mn an increase of 17%. Revenue from the generics business was at ` 2, mn, as against ` 2, mn (USD mn), a growth of 7%. Sun Pharma Q3 net profit up 8%: Company has posted a net profit from ordinary activities after tax of ` mn for the quarter ended December 31, 2010 as compared to ` mn for the quarter ended December 31, Total Income has increased from ` mn for the quarter ended December 31, 2009 to ` mn for this quarter ended December 31, Divi s Lab Q3 net profit up 45%: Divi s Laboratories Ltd has posted a net profit of ` mn for the quarter ended December 31, 2010 as compared to ` mn for the quarter ended December 31, Total Income has increased 13% from ` mn for the quarter ended December 31, 2009 to ` mn for the quarter ended December 31, Wockhardt Q3 net profit at `1.41bn: Consolidated Sales evenues stood at `9.5bn, showing a 7% growth over the corresponding quarter of Net Profits stood at `1.41bn and operating profit (EBIDTA) was `2.43bn, a growth of 82.0%. Ayurvedic medicines face EU ban from May 1 A ban on the sale of Ayurvedic and other herbal medicines will take effect across Europe from May 1 following a European Union directive introduced as a response to growing concern over adverse effects of such alternative medicines. Users and promoters of such medicines have called the EU directive called the Traditional Herbal Medicinal Products Directive, 2004/24/EC, "discriminatory and disproportionate". Ayurvedic and traditional herbal medicines will need to licensed to comply with the EU directive passed in 2004, which takes effect from May 1.Those ayurvedic products marketed before the legislation came into force in 2004 can continue to market their product until April 30, 2011, under the transitional measures. Once this time limit has expired, all herbal medicinal products must have prior authorisation before they can be marketed in the EU. Ayurvedic medicines such as "ashwagandha" will not be available for sale across Europe from May 1. Cadila and Bayer to set up new JV in India Bayer HealthCare and Zydus Cadila have signed an agreement to set up the Joint Venture Company Bayer Zydus Pharma for the sales and marketing of pharmaceutical products in India. Each party will hold 50% of the shares of Bayer Zydus Pharma, and be equally represented on its management board. Bayer Zydus Pharma will start operations with Bayer HealthCare s Pharmaceutical Division contributing its existing sales and marketing business in India to the new company, and Zydus contributing its women s healthcare products, diagnostic imaging business and other products. Through this transaction Bayer HealthCare will significantly enhance its marketing capabilities in India as part of its emerging market growth strategy. Zydus will maintain its strong position in India and will strengthen its network with global healthcare players, including in relation to its manufacturing capabilities. Natco may seek compulsory licence for Bayer's cancer drug Natco Pharma plans to seek a compulsory licence from the government to make Bayer AG's Nexavar in India, invoking a provision in local laws that allows generic drugmakers to make and sell patented drugs cheaply if the medicine is unaffordable. The development, a test case for such licensing in India, is being watched by local and global innovator companies as it could be the first instance where a foreign drugmaker would be forced to grant a licence. A generic drugmaker can invoke the compulsory licensing provision once the patent completes three years and

5 FOUR-S PharmaHealth Track the patent holder is given a six-month notice to consider a voluntary licence offer. Ranbaxy inks cooperation MoU with Russia's Yaroslavl region Drug firm Ranbaxy Laboratories has signed a memorandum of understanding (MoU) with the government of Yaroslavl region in Russia for cooperation in the field of healthcare and medical science. As per the MoU, both the parties will cooperate in development of healthcare system and new medical technologies in the Yaroslavl region. This will include expansion of educational programmes for medical and pharmaceutical community, collaboration in the field of clinical trials as well as improvement of drug safety monitoring in medical practice. As a first step, Ranbaxy will evaluate collaborations with local academic and research centers in Yaroslavl region to broaden the scope of medical educational programmes for professional medical and pharmaceutical community. Venus Remedies gets UK nod for anti-cancer drug Venus Remedies Ltd has announced their Anti-Cancer drug GEMCITABINE got UK MHRA approval. Venus is all set to capture substantial market share by entering the highly lucrative market of Europe as it stands amongst the first few to receive the Market Authorisation for Gemcitabine. The other countries in the list are Poland, Germany, Slovenia and Portugal for which the same feat has been achieved. Gemcitabine is a US$1.5bn drug world wide with more than 30% market share from Europe. Hilleman Lab to invest about ` 6500 mn to develop vaccines Hilleman Laboratories will invest 90 million pounds (nearly ` 6500 mn) in seven years to develop vaccines, including one to treat diarrhoea, for which it will conduct research in India. Hilleman Laboratories, a 50:50 joint venture between MSD Pharmaceuticals and UK-based Wellcome Trust, will collaborate with Boston-based Medicine in Need to develop a rotavirus diarrhoea vaccine in India. It will be the company's first project in the country. As per the company, rotavirus diarrhoea leads to annual deaths of five to seven lakh children all over the globe, out of which one lakh are in India alone. As per the development plan, Medicine in Need will provide the company its formulation technology, while MSD would provide components of its existing rotavirus vaccine. Wockhardt nutrition biz back on Abbott radar Wockhardt Ltd s troubles with its foreign currency convertible bond (FCCB) holders are turning out to be a blessing in disguise for the drug major. Last year, Wockhardt had to abort a deal to sell the business to US drug major Abbott for $130 million (`6.2bn), after its FCCB holders opposed the deal at the high court here. Now, the business has again attracted suitors, one being Abbott again. Wockhardt s nutrition business portfolio has popular infant food brands such as Farex, Dexolac and Nusobee and adult food supplement Protinex. According to two independent sources, Wockhardt has been approached separately by Abbott and two other companies to buy the business. And, the offers value it at more than double the amount of last time. 2.) Healthcare Fortis adds 150-bed hospital in Uttar Pradesh & 100 bed Lifeline Hospitals in Rajasthan Fortis Healthcare Ltd, India s fastest growing hospital network, has taken over Operations and Management of the 150 bed Vivekanand Hospital and Research Centre in Moradabad, Uttar Pradesh (UP), in line with its strategy to strengthen its presence in India s tier II cities. The hospital will be re-christened Fortis Vivekanand Hospital and will continue to operate in a manner consistent with the principles it was founded upon. The newly added 100 bed Lifeline Hospital in Alwar, Rajasthan will strengthen Fortis presence in the state and extend the benefit of high quality medical care to increasing number of people in and around the district of Alwar. The move is in line with Fortis strategy to strengthen its presence in India s tier II cities. The hospital will be re-christened as Fortis-Lifeline Hospital. The addition of Lifeline Hospital takes the Fortis network to a total of 53 hospitals with over 8,000 beds spread across 13 States in the Country. Apollo ties up with Eisai, HelpAge India In a public-private partnership, Apollo Hospitals has signed an agreement with Eisai Pharmaceuticals, Japan, and HelpAge India to provide better access to medicines to the underprivileged elderly patients suffering from dementia and depression. The scope of the agreement is to explore collaboration followed by research between the companies for improving the rate of prevention, screening, diagnosis, treatment and support of dementia and depression among the elderly in India. Novalis Tx is one of the most advanced, effective methods of radiotherapy and radio surgery. In sensitive and crucial areas like the brain, pinpoint accuracy is paramount; a conventional radiation treatment can potentially cause severe complications.

6 FOUR-S PharmaHealth Track To overcome this shortcoming, Indraprastha Apollo Hospitals has installed the Novalis Tx Radiosurgery and Radiotherapy platform. This shapes the radiation beam precisely to the tumor or lesion, ensuring that the best possible treatment dose is delivered while damage to the healthy tissue is minimized. Opto Circuits arm bags contract for Powerheart AEDs Cardiac Science Corporation, wholly owned subsidiary of Opto Circuits India has been awarded a contract to deploy Powerheart AEDs in all Tyco Flow Control facilities globally. The first phase of the rollout, planned for the first quarter of 2011, will equip Tyco's Australian, Pacific and North and South American facilities. 3.) Investments/Fund Raise Jyothy Lab arm plans to raise ` 1.5bn via debt Jyothy Laboratories Ltd announced that the Board of Directors of the Company at its meeting held on January 25, 2011, took note of expansion plan of its subsidiary company, namely, Jyothy Fabricare Services Limited (JFSL) and granted "in Principle" approval to JFSL for raising up to ` 1.5bn through Equity / Debt on private placement basis. Jupiter Biosciences in talks to acquire SynphaBase AG Jupiter Biosciences is reportedly in talks to buy privately held Swiss pharma company SynphaBase AG for about US$10mn as it looks to boost research capabilities and front-end sale of its products internationally. If successful, this will be Jupiter s second acquisition in Switzerland after it bought Merck Biosciences manufacturing facilities in 2008 to service customers in the heavily regulated markets abroad, especially Europe. SynphaBase has annual revenues of $7 million and employs 25 people. Global News Update Endo Pharma inks pact with Orion Corp Endo Pharmaceuticals reportedly reached a collaboration agreement with Orion Corp. for the discovery, development and commercialization of assets in Oncology. The formation of the R&D collaboration partnership allows the companies to bring forward a total of eight "discovery phase" candidates by combining an equal number of programs. Novartis to acquire Genoptix Novartis AG is reportedly strengthening its personalized medicine and cancer portfolio with the US$470mn buy of U.S. cancer diagnostics company Genoptix. The deal, which comes after Novartis's US$52 bn purchase of U.S. eyecare group Alcon Inc, shows Novartis still has the financial clout to clinch smaller deals as it seeks to drive growth in its five main units pharmaceuticals, consumer health, eyecare, generic drugs and vaccines and diagnostics. Events Calendar Pharma Sales Force Effectiveness Date: Mar 08 09, 2011 Venue: Amara Hotel, Singapore Organizer: Pharma Sales Asia enquiry@iqpc.com.sg Phone: Emerging Trends in Healthcare Date: 17 Feb 11 Venue: Le Meridien, New Delhi Organizer : ASSOCHAM sandeep.kochhar@assocham.com Pharma World Expo Date: Feb 23 26, 2011 Venue: Bombay Exhibition Centre, Mumbai Organizer: Chemtech Foundation Website: conferences@jasubhai.com Vaccine World Summit India 2011 Date: Mar 1-3, 2011 Venue: New Delhi Organizer: Lisa Tan lisa.tan@imapac.com

7 FOUR-S PharmaHealth Track Stock Market Update As on 04 Feb 2011 Market Cap Price Percentage Change (%) Company In ` Mn In ` 1W 1M 3M 6M 1 Year SUN PHARMACE 43, DR.REDDY'S L 26, CIPLA LTD. 26, RANBAXY LABO 22, GLAXOSMITH 18, LUPIN LTD 18, CADILA HEALT 16, PIRAMA HEALT 9, Divi's Lab 8, GLENMARK PHA 7, AUROBINDO PH 6, BIOCON LTD 6, APOLLO HOS E 5, OPTO CIRCUIT 4, IPCA LAB LTD 3, JUBILANT ORG 3, ORCHID CHEM 2, BSE Sensex NSE Nifty BSE Healthcare Quarterly Results ` in million Companies Revenue EBITDA PAT Margins Q4 FY 10 Q3 FY10 Q3 FY11 YoY Q3 FY10 Q3 FY11 YoY Q3 FY10 Q3 FY11 YoY EBITDA NPM DR.REDDY'S L % % % 21% 14% RANBAXY LABO % % % 25% 17% SUN PHARMACE % % % 29% 23% CIPLA LTD % % % 23% 15% LUPIN LTD % % % 20% 16% AUROBINDO PH % % % 27% 16% CADILA HEALT % % % 22% 14% JUBILANT ORG % % % 17% 8% GLENMARK PHA % % % 27% 15% PIRAMA HEALT % % % 2217% 1715% BIOCON LTD % % % 24% 14% APOLLO HOS E % % % 18% 8% GLAXOSMITH % % % 37% 27% IPCA LAB LTD % % % 22% 14% ORCHID CHEM % % % 29% 12% OPTO CIRCUIT % % % 32% 23% Divi's Lab % % % 41% 32%

8 FOUR-S PharmaHealth Track TTM Results ` in million Companies Revenue EBITDA PAT Margins TTM TM Dec 10 TTM Dec11 YoY TTM Dec 10 TTM Dec11 YoY TTM Dec 10 TTM Dec11 YoY EBITDA NPM RANBAXY LABO % % % 34% 21% DR.REDDY'S L % % % 21% 12% CIPLA LTD % % % 26% 18% SUN PHARMACE % % % 37% 34% LUPIN LTD % % % 22% 16% AUROBINDO PH % % % 25% 13% CADILA HEALT % % % 24% 16% JUBILANT ORG % % % 19% 10% PIRAMA HEALT % % % 489% 377% GLENMARK PHA % % % 29% 17% BIOCON LTD % % % 22% 13% GLAXOSMITH % % % 36% 26% APOLLO HOS E % % % 17% 8% IPCA LAB LTD % % % 21% 13% ORCHID CHEM % % % 26% 3% OPTO CIRCUIT % % % 32% 23% Divi's Lab % % % 47% 38% Standalone results for Cipla, Glaxosmith, Aurobindo Pharma and Ipca Lab Sept 10 Results used for companies Glaxosmith, Ranbaxy, Piramal Healthcare. Jubilant Org, Apollo Hospital. BSE Healthcare Index movement in last 2 weeks

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