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Information Memorandum. Strictly Private & Confidential. Company Overview. Background. Marksans Pharma Ltd. (“the Company” or “MPL”) is a Mumbai based player with strong presence across the Global Markets.
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Information Memorandum Strictly Private & Confidential
Background • Marksans Pharma Ltd. (“the Company” or “MPL”) is a Mumbai based player with strong presence across the Global Markets. • The Company straddles across key therapy areas and markets its products in both evolving and developed markets. • It is also actively engaged in R&D and offers CRAMS to global pharmaceutical companies • It was incorporated in 2001 as a wholly owned subsidiary of Glenmark Pharmaceuticals Ltd. and later spun-off into a separate entity - Glenmark Laboratories Ltd. (“GLL”) in March 2003 & changed its name to “Marksans Pharma Ltd” in 2005 • It has a world class manufacturing facilities for API and Formulations, approved by US FDA, UK MHRA, Australia TGA and Brazilian ANVISA health authorities • The R&D capabilities of the Company include Dossier Development Services,chemical synthesis and process optimization, formulation development and specialised drug delivery systems • For FY 2008 and FY 2009, the Company has reported a consolidated turnover of USD 60 mio and USD 72 mio respectively
The Promoters • The Company was set up by Mr. Mark Saldanha, a first generation entrepreneur and is rapidly expanding its business operations Mr. Mark Saldanha, was associated with Glenmark Pharmaceuticals Ltd. as a whole time director and was instrumental in the growth of the company in mid and late nineties, before promoting this venture. He is well versed in the overall management of the company and has vast experience in managing the marketing, production and finance function of the company Mark SaldanhaManaging Director & CEO The Promoter is currently engaged in the Pharmaceutical business only
Manufacturing Facilities State-of-the art Manufacturing Facilities Compliant Accredited by Accredited by BRAZIL Accredited by Accredited by
Manufacturing Facilities - Formulations • Marksans state of the art manufacturing facilities in Goa are of international standards adhering to stringent quality norms and are approved by US FDA. Its world class manufacturing capabilities cater to APIs as well as formulations. Key Features: • Built-up area of 18,000 square feet with scalable capacity. The facility is 100% EOU • Approvals from USFDA , UK MHRA, Australian TGA and Brazilian ANVISA health authorities • One of the biggest manufacturing facility for soft gelatin capsules and tablets in Asia (Capacity of 2.50 bn tablets/line/annum for tablets, 4.8 bn capsules / line / annum) respectively • Fully automated in terms of packing operations • Containing an R&D centre which comprises of three divisions for: • formulation development, • devising analytical methods and • conducting stability studies
Strenghts • Global presence. • Low cost manufacturing base. • World class manufacturing capacities / plant, huge capacities. • The company has approvals from Global Health Authorities like US FDA, UK MHRA, Australia TGA. • Own front ends into UK/Europe, Australia. • Tie up with big Pharma companies. • Strong R & D, Dossier development capabilities. • Preferred outsourcing partner. • The company has more than 125 plus product IP – for regulated markets. • More than 500 plus product IP’s – in semi-regulated markets. • Wider product basket – from OTC to prescription. • Only company in India having USFDA approval for softgel products. • Very few companies in India offering CRAMS for US/global markets into formulation development and manufacturing.
API operations were focused on Ciprofloxacin and Ranitidine which have suffered substantial price erosion Regulated markets, API and formulations CRAMS for Global markets Lifestyle therapeutic segment in domestic market Increasing rural penetration in domestic markets SWOT Analysis Strengths Opportunities • World class fully integrated manufacturing facilities • Strong research & regulatory capabilities • Continuous identification and launch of new markets to expand geographies • Market leader position in certain key bulk drugs with strong presence in exports • Highly competent, experienced and professional management team • Strong R&D skills so as to enable in-house product development • Strong marketing platform for pan-India presence • Strong development pipeline to cater to company’s future growth Threats • Attrition. • Competition • R&D speed and managing launch • Changing regulatory requirements Weaknesses
Growth Strategy MARKSANS PHARMA GROWTH STRATEGIES IN-ORGANICGROWTH STRATEGY ORGANICGROWTH STRATEGY
Organic Growth ORGANIC GROWTH STRATEGY Customer Leveraged Growth Market LeveragedGrowth Market Share Growth • Strengthen and expand current core businesses ( Formulations) • Product expansion, channel expansion and sales effectiveness • Increasing the ANDAs pipeline by increasing R&D Capabilities • Expand offshore market penetration • In-licensing and out-licensing opportunities • New geographies, new customers, new channels • New opportunity evaluation and development • Creating options for future businesses • New Products, new services • R&D focussed and customer centric initiatives LOW HIGH BUSINESS RISKS AND TIME INVOLVED
Inorganic Growth INORGANIC GROWTH STRATEGIES StrategicAlliance Acquisitions • Already taken initiatives in this direction (Relonchem, UK; Bell Healthcare, UK & Nova Pharmaceuticals, Australia) • Instantly added new brands and products and state of the art manufacturing facilities • Fresh customer base, addition of new geographical locations • Economies of scale and integration to operations • A fresh breath of management skills and talent acquired • time-to-market has substantially reduced which has given us a significant competitive edge. • In-licensing for critical divisions (biopharma based oncology and cardio products) • Out-licensing ANDAs to increase market penetration • combined competitive energies into building competitive advantage & defeating mutual rivals • Leveraging manufacturing and R&DCompetencies in India • using global front-ends for Marketing • Leveraging the India Advantage (Low-cost for manufacturing and R&D)
Key Growth Drivers • Rapid filing of ANDAs / MAs, DMFs/COSs into US, Europe & Emerging Markets • Expand Custom Research and Manufacturing Support (CRAMS) Services in the Regulated Markets • Acquisitions of growing, profitable pharmaceutical companies and/or products. The company has recently entered into a share purchase agreement with UK's Hale Group to acquire its entire share capital, along with its subsidiary company Bell Sons & Co, Relonchem Ltd & Nova Pharmaceuticals. The details of the same are given in the Annexure • Enter into out licensing arrangements with big pharma company in US, Europe to manufacture & market post patent & off patent drugs
US Market – Post Patent Product Launch Strategy Technology Driven Niche Liquid Gel Market • This market is tapped by select players, thus providing differentiation in crowded generic market • Innovator Product • First to file the product in USA • Aiming for Day 1 launch after patent expiry in USA • Tie up with one of the largest pharma company in USA • Exclusive supply & marketing arrangement • Backed by upfront licensing fees and milestone payments
Export Business plan Targeting the Big Apple • Strategies : • Target products coming off patent between 2010 to 2015 • Tie ups with big multinationals , generic companies and distributors for supply of our products in the USA . • Remain focused on development of high end Rx products for launch in the US. • Commercialize through our own front end and also distribution arrangements with our partners. • Aiming at outlicensing ANDA’s to big pharma companies expecting milestone payments of USD 20 mio plus by 2013. Already signed milestone contracts worth USD 6.7 mio.
Export Business plan List of ANDA’s filed
Export Business plan List of ANDA’s filed/Under Filing
Export Business plan US Market –Targeting the Big Apple Other Soft gelatin products Day and Night Combination products • Paracetamol +PE day capsules - Paracetamol +PE + Doxylamine Succinate capsules
Emerging Markets –Current Status and Strategies Continue registration of products across geographies with a focus on markets of countries with high potential Offering CRAMS services for existing and emerging markets, one of the major driver and revenue earner for the company Initiated launch of its own Brand registration in emerging markets of Africa, Russia, CIS, Srilanka, South East Asia Offering product basket covering wide therapeutic changes –CRAMS-Liquids, Solid Orals.
Introduction • Marksans Pharma UK Limited (“MPL UK” or “the Company”) is the UK based 100% subsidiary of Marksans Pharma Limited • The company has its registered office at Widnes, London • In January, 2008 the Company had acquired UK based pharma company, Hale Group, the parent company of Bell, Sons and Co (Druggists) • In August, 2008 the Company had acquired UK’s leading generic drug marketing and distribution company Relonchem. The company was owned via the holding company Barnacle
Introduction • Bell is a well-established manufacturer of a broad range of OTC pharmaceuticals having full approval approval of the UK MHRA and currently holds 38 product licences. Licensed products contribute over 45% of Bell’s total turnover • Bell manufactures licensed products both as own branded products and, for certain customers, in own label form together with a range of unlicensed products. Customers include retailers, pharmacies, chemist wholesalers and cash and carry outlets • The company employs 106 people at its freehold licensed manufacturing site in Southport, Merseyside and has further 12 employees providing sales administration, buying and technical support • The company has a comprehensive UK customer base with excellent distribution between retail and wholesale sectors. It also has a significant and well-established portfolio of export distributors
Products • The Company’s products baskets consists of: • Cough and cold remedies • Galenicals • Vitamins • Palliative and healthcare items • Oils • Antiseptics and disinfectants • The Company currently holds 38 product licences registered with MHRA. Licensed products contribute over 45% of the Company’s turnover • Under the OTC pharmaceuticals, the Company supplies its “own label” pharma products to all of the UK’s leading supermarket chains. The own label market now accounts for more than 45% of the Company’s total turnover
Financial summary… P&L Summary Million pounds * 15 months ** EBITDA was low because of one time costs associated with acqusition
Balance Sheet Summary Million pounds
Export trade • The company has traded in the export markets for 80 years. The Company uses a network of established distributors as the route to overseas markets. Distributors generally benefit from exclusive distribution rights for their country of operation, thus providing stability in terms of marketing and price maintenance for both distributor and the company. • Because of their longevity, the Company’s branded products are well recognised and greatly respected in many overseas markets. The Company’s products are sold in more than 40 countries with principal markets being in West Africa and the Middle East. • Export customers number around 50, providing one-third of the Company’s total sales revenue. The top 10 customers account for 60% of total export turnover and 20% of total Company turnover.
Business operations • Supplier and manufacturing process • Raw materials and packaging components are purchased only from approved suppliers, with key suppliers required to pass an audit covering quality and control procedures prior to approval. • All raw materials and packaging components undergo inspection by quality control before being released for use in production, with certain key elements being subjected to chemical analysis. • Distribution • Order picking is carried out by company employees with distribution to customers being outsourced to select transport companies. Outsourcing the delivery of orders provides the Company with a high degree of flexibility with regard to the size of order that can be handled. • Outsourcing deliveries greatly improves the company’s service level to its customers.
Business operations • Product development • Product development is undertaken by dedicated laboratory technicians in Widnes, Cheshire • The company has 16 products at various stages of development and estimate that together they could add GBP 2 million to annual turnover. The Company does not undertake “novel” research into new products. It looks to develop products that complement its product range, developing formulations for similar goods that are already in the market, on other occasions varying formulations that are already held • Although the products developed by the Company are not “leading edge”, they still take a considerable time to get to market. It is currently estimated that a new product takes 3 years from commencement of development to approval by the MHRA. • With the exception of designs for own-label products, the Company does not carry out any product development for third parties.
Key attractions • Well established with an excellent reputation in UK and export markets • Strong presence in the supermarket own label pharmaceutical product market (40%of turnover) with potential to introduce new product lines • Over 30% of sales to export markets • Consistently profitable with good prospects for growth • 38 product licences • Good product development team • Full MHRA approval • Highly qualified and experienced second tier management and loyal staff • Freehold premises with room for exp
Upsides envisaged • The acquisition will provide Marksans an entry into the branded product category in Europe. The company has a vast distribution network throughout the UK and overseas • Exports of liquid formulations from India is poor. The manufacturing facilities of Bell can be used for the production of liquid dosages for supply to Marksans current markets • Synergies and cost savings in manufacturing and R&D. The manufacturing of solid dosages of Bell can be outsourced to Marksans formulation facilities the same being MHRA approved • Assistance from Marksans in sourcing raw materials from India • Product sales across geographies • Sale of Bell products through Nova (Australia) and vice versa
Introduction… • The company was set up by the promoters in 2002 for licensing, marketing and supply of generic pharmaceutical products in UK market • Product manufacturing is done under contract by third parties in India, Germany, France etc. ensuring a low cost of goods and a competitive position in the market • The Company has major national distributors like AAH, Unichem and Phoenix and regional wholesalers as their distribution partners • The company specialises in the licensing, marketing and supply of generic pharmaceutical products to wholesalers, retailers and hospitals in UK • The company is also engaged in the development of its own proprietary information and has plans for providing licensing out and distribution agreements to generic companies worldwide. The Company products encompass most of the therapeutic classes
Introduction… • The Company already has 47 granted product licences of which around 36 products are commercialized as of now and 36 licences pending in the UK, Denmark, Finland and Ireland • The company has reported sales of £ 12.12 million and £ 13.78 million respectively for the year ended FY’07 and FY’08 (10 months ended 31st March, 2008)
Business operations… • Sales and distribution • The sales and distribution is managed from Dartford. The sales department targets customers on a monthly basis. The price structure is continually reviewed based on market intelligence • The Company has a very good relationship with national distributors like AHH and Unichem. Majority of the products are sold in bulk to these distributors and the balance is then sold through regional wholesalers like Sigma, Colarand which have an excellent distribution into the retail sector of the industry. The company also supplies products to global generic players like Actavis • Pricing Strategy • The sale price of generic products is predominantly dictated by the market, the sales force are in constant communication with customers to determine market trends • The company has entered into three way agreements with the API vendor and contract manufacturers to ensure it can maintain a constant presence in the market and react quickly to upturns in product pricing • The Company is also adopting a policy for Own Label Supply (OLS), whereby the company provide finished product in a customers own livery and they take the risk in the market on the price they are able to achieve
…Business operations • Manufacturing • Manufacturing is outsourced to contract manufacturers from countries like India, Germany, Iceland, Malta, Spain and France. • An annual forecast is provided to the contract manufacturer. Confirmed orders are provided three months prior to delivery, these orders become binding on the confirmation of acceptance from the contract manufacturer. • Indian contract manufactures include Indoco Remedies, Intas pharmaceuticals,Marksans Pharma etc. among others
Financial Summary Profit & Loss Summary Million pounds * 10 months
Financial Summary Balance SheetSummary Million pounds
Key attractions… • Pharmaceutical marketing and distribution provider • Strong sales and marketing expertise • Supplier to major national distributors, regional distributors and global generic players in UK • Technical and Regulatory Expertise: • Highly reputable track record for attaining MHRA approval for the manufacturing facilities, complex technical transfers and registration of new developments in Europe • Commercial Experience • Management of lifecycle of molecule • Ability to replicate market share successes and expansion into Europe • People Resources • Excellent team fully integrated with the Indian pharmaceutical market, optimising its management skills to source competitive services for the regulated markets of Europe
