GlaxoSmithKline Pharmaceuticals Limited · NSE:GLAXO
GlaxoSmithKline Pharmaceuticals — India Investor Conference 2008
43 slides from GlaxoSmithKline Pharmaceuticals's conference presentation, February 2008
Slide 1: GSK Pharmaceuticals Limited India Investor Conference
GSK Pharmaceuticals Limited India Investor Conference February 2008
Slide 2: Leading the Industry in R&D
Leading the Industry in R&D Mid-to-late-stage pipeline products NDA’s Filed 15 15 3 10 6 9 5 3 6 3 6 2 Cowen Dec 07
Slide 3: Pipeline is delivering
Pipeline is delivering Upto 25 Potential launches 2007- 32 Phase III / 2009* Filed # 12 NCEs 5 Vaccines 8 PLEs Phase II 149 projects in clinical development Phase I 89 NCEs 37 PLEs 23 Vaccines # Key projects in Phase III/Filed (STA-4783 (Synta) and Lunivia entered Phase III/Filed in Q3) * Includes l
Slide 4: Late stage activity of key assets in 2007
Late stage activity of key assets in 2007 Approvals Submissions Phase 3 Starts Tykerb (US) Volibris* (EU) } |elesclomol’ (melanoma) Altabax (US,EU) Promacta‘(US)* |{ 18382627 (RLS) Veramyst (US) Luniviat (EU) belimumab’ (SLE) Arixtra (ACS) (EU) Gepirone ER* (US) |{ ofatumumabt (RA**) | ReQuip XL‘ (P
Slide 5: Strengthening Biopharmaceuticals: 20% by 2015
Strengthening Biopharmaceuticals : 20% by 2015 Transforming Acquired Domantis Technology dAb FTIH demonstrated Ofatumumab† Syncria† Building Bosatria ToleRx anti-CD3 Late Phase Belimumab† Continued mAb for MAG in Phase 1 Investment 26 mAbs & dAbs in CEDDs † In-license or other alliance relationship
Slide 6: Vaccines, a key GSK growth engine
‘ Vaccines, a key GSK growth engine Phase | Phase Il Phase Ill Submitted HIV Mosquirix Simplirix Cervarix (BLA) (1) (Malaria) (Herpes Simplex Virus) (Cervical cancer) A Flu Pre-pandemic S. pneumo adult |/TB New generation flu (MAA) Cc iovi Epstein-B pet|| MAGE-AS ASCI Flu Pandemic ytomegalovirus pst
Slide 7: Business Environment
Business Environment
Slide 8: Market Dynamics
Market Dynamics Post new patent law, generic players reluctant to take the risk of launching “new” molecules. Accelerated activity to launch on market pre ‘95 molecules. Significant increase in competitive activity around GSK brands. Erosion of MNC shares. Market conditions to remain similar for the
Slide 9: Pharma Market – Key Drivers in '07
Pharma Market – Key Drivers in ‘07 Vol.Gwth Price Gwth N.I Gwth % to Growth KEY GROWTH DRIVERS Mkt Total % (18%) Systemic Antibacterials 17.5 11 A-Acid, A-Flat A-Ulcerant 5.2 16 (13%) 8 Drugs Used In Diabetes 5.0 26 Agents: Renin-Angiotensin 2.8 25 (9%) Antianaemics 2.5 15 1 8 Anti-Asthma & Copd Pro
Slide 10: Rx Market forecast to grow ~11% in medium term
Rx Market forecast to grow ~ 11% in medium term Pharma Industry India GDP 18 13 Growth % 11 11 11 10 8.6 8 8 6 8 8 8 8 75 8 6 5 6 2000 2001 2002 2003 2004 2005 2006 2007 2008E 2009E Source : ORG IMS Retail Audit
Slide 11: GSK India Business
() cs GSK India Business
Slide 12: GSK - leadership for decades in a challenging market
GSK - leadership for 2 decades in a challenging market Household name +$730 M sales (’06 published results) – Rx $425 M ; Cx $305 M Rx Leadership for over 25 years, 6.4 % M.S (IMS IIPA Audit Dec07) About 3900 people,>2200 in sales force Largest prescription generator Board well represented by indepe
Slide 13: GlaxoSmithKline India - Holding Pattern
GlaxoSmithKline India - Holding Pattern GlaxoSmithKline plc UK Horlicks Limited Glaxo Group Limited Smith Kline Beecham (Luxembourg) s.a.r.l. (UK) (Luxembourg) Benelux Smith Kline Beecham Investment BV (Netherlands) Smith Kline Beecham Mauritius Port Louis Limited 50.7% (Mauritius) 43% GSK GlaxoSmit
Slide 14: Ranked No 1 on corporate image by Doctors
Ranked No 1 on corporate image by Doctors Company Rank Glax o SmithKline 1 Ranbaxy 2 Cipla 3 Dr. Reddy’s 4 Pfizer 5 Source : AC Nielsen ORG Marg Corporate Image Study 2003-2004
Slide 15: Leadership in major doctor segments
Leadership in major doctor segments Key Specialities GSK Rank General Practioner 1 Consulting Physician 1 Paediatricians 1 Gynaecologists 1 General Surgeons 1 Dermatologists 1 ENT 1 Oncologists 1 Cardiologists 2 Gastroenterologists 3 Diabetologists 3 Chest Physicians 4 Source : Cmarc Database. Rank
Slide 16: GSK Leads MNCs in Market Standing
GSK Leads MNCs in Market Standing Corporations Val in crs Val MS MNC Total 6161 100.0% GLAXOSMITHKLINE 1504 24.4% PFIZER 781 12.7% ABBOTT 708 11.5% SANOFI AVENTIS 694 11.3% NOVARTIS 517 8.4% MERCK LIMITED 260 4.2% WYETH LIMITED 241 3.9% ASTRAZENECA 201 3.3% JANSSEN-CILAG 147 2.4% SOLVAY PHARMA 137 2
Slide 17: Hospital Business: GSK is the leader
Hospital Business : GSK is the leader Corporations Val in crs Val MS Total Hosp Market 2435 100.0% GLAXOSMITHKLINE* 160 7 CIPLA 116 5 SANOFI AVENTIS* 107 4 SUN* 101 4 ALKEM* 100 4 Source: ORG ims H.S.A Dec MAT 2007
Slide 18: Strong Commercialisation capability: New launches continue to do well
Strong Commercialisation capability : New launches continue to do well despite several generics # of Brands Rank in Rep Mkt L.Date Val in crs Val MS competitors Cobadex CZS 1 Oct’03 13 5.4% 230 PARIT 5 Sep’05 8 6.0% 82 WINIDAMET 1 May’05 4 25% 12 WINDIA 4 May’05 4 18% 12 Source: ORG ims SSA Dec MAT
Slide 19: New Launches in '07
New Launches in ‘07 — —=- Zemetril 250mg AriXtra’ 25 0:05: SS ® (ARZEC 9 Tablets ° ® QVINFLAPEN Tablets
Slide 20: GSK Pipeline (contd.)
GSK Pipeline (contd.) New Pharma Products NCE India launch Key Differentiation 1st in Class. Dual mechanism Tykerb 2008 to cut of blood supply to the tumor Inlicensed - Cardio H1-2008 Cardiovascular Vascular Inlicensed - Critical 2009 Critical Care Care New corticosteoid in a novel 2009 device - wor
Slide 21: GSK Pipeline
GSK Pipeline Vx Portfolio Growth NCE India launch Key Differentiation Rotavirus - biggest Rotarix Q2-2008 cause of diarrhoea Cervical cancer vaccine Cervarix 2009 Infanrix Hexa 2009 DTPa + Hib + HB + IPV Strep-Pneumonia - Synflorix 2010 vaccine
Slide 22: A partner of choice for In-licensing
A partner of choice for In-licensing •Maximize opportunities through strong Sales, marketing & Distribution - Access to about 100,000 doctors - Pharmacies across the country •Track record of successful India specific licensing deals
Slide 23: GSK India - Reasons for success
GSK India - Reasons for success Country specific business model Offerings across all segments and price points Deep distribution penetration Sourcing and manufacturing to support low price business model Sales & Marketing capabilities built to optimise opportunities in all segments Consequently larg
Slide 24: Overview 2007
Overview 2007
Slide 25: Growth YTD 9M 2007
Growth YTD 9M 2007 Excluding QFC/AFC In INR Mn Sales 12,681 6.1% Gross Margin 7,126 7.4% Opex 3,327 9.5% Other Income 42438.5% Treasury Income 495 41.2% PBT 4,718 11.0%
Slide 26: Segmental Performance
Segmental Performance Sales (Rs. Mn) 11,902 484 769 294 13,450 5.3 17.9 8.3 24.9 6.3 PBT margins 39% 38% 38% 36% 35% 29% 9M 2007 24% 24% 9M 2006 19% 17% Pharma Iodex QFC Exports Overall Profit (Rs. Mn) 3,964 142 133 59 4,851 9.8 (8.5) (12.5) 2.2 10.2
Slide 27: Focus Products drive growth
Focus Products drive growth In INR Mn Category 9M '06 9M '07 Gr% Priority Focus 3,551 3,908 10% Vaccines 656 638 -3% Priority Others 3,472 3,741 8% Price Controlled 3,554 3,563 0% Iodex 411 484 18% Total Sales 11,712 12,386 6%
Slide 28: Financial performance
Financial performance EPS and Book Value per share 42.7 35.7 30.5 24.4 17.3 Book value ` 142 EPS 106 112 90 78 2002 2003 2004 2005 2006 PAT % to Sales Return on Net Worth % 23% 21% 32% 19% 29% 30% 18% 27% 13% 22% 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006
Slide 29: Future Outlook
Future Outlook
Slide 30: Critical Issues & Challenges
Critical Issues & Challenges Growing a mature and ageing portfolio under threat from significantly increased competitive pressures. Growth in private hospitals resulting in margin pressure. Maximising impact of Vaccine new product launches. Exclusivity for older vaccines under threat as local player
Slide 31: Strategies Actions & Opportunities
Strategies Actions & Opportunities Continued emphasis on improving product mix. Focus (high margin) products to drive growth Growth in 2008 driven by new Vx, new products (Carzec, Tykerb, Arixtra). Augment vaccines portfolio: – launching Rotarix in Q2 ‘08 to drive Vx portfolio performance. Prepare f
Slide 32: New Initiatives: Restructuring for Growth
New Initiatives : Restructuring for Growth
Slide 33: New Initiatives: Restructuring for growth
New Initiatives : Restructuring for growth Institutional Develop channels for hospitals to leverage GSK scale, Opportunity optimise marketing spends and develop expertise.
Slide 34: Institutional Opportunity in India
Institutional Opportunity in India Growing Hospital Sales contribution expected – Over next 10 yr, addition of 780,000 beds & Capex of $34Bn anticipated (Source: ORG IMS) – In India hospital Sales currently 9.2% of Total Mkt (compared to ~25% in dev mkts)
Slide 35: Institutional Opportunity in India …(contd.)
Institutional Opportunity in India …(contd.) Hospital sales, a major contributor to the industry worldwide contributions ~ 25 – 30% In India currently accounts for 10% to IPM and increasing steadily; this is a key growth driver of the IPM GSK is the leader in the hospital segment M.S. 7.4% Has domin
Slide 36: New Initiatives: Restructuring for Growth
New Initiatives: Restructuring for Growth Institutional Develop channels for hospitals to leverage GSK scale, Opportunity optimise marketing spends and develop expertise. Rural Develop channels & reach for tapping rural opportunity. Opportunity Expand resourcing non promoted products through contrac
Slide 37: Rural Market Insights / Opportunity
Rural Market Insights / Opportunity 64% of India’s Health Care spend from rural markets Only 28% of ethical Rx Sales from rural India – indicating low penetration, inadequate infrastructure Situation changing with use of innovative technology, NGO efforts 21 (37%) 26 (15%) 23 Metro cities account fo
Slide 38: Rural Market Growths
Rural Market Growths Metros Class 1 Class 2 - 6 + Rural 100% 17% CAGR 17% CAGR 41% 43% 75% 50% 33% 12% CAGR 32% 13% CAGR 25% 26% 9% CAGR 25% 9% CAGR 0% IPM Rep mkt Source – ORG SSA Dec06 (3yr CAGR)
Slide 39: New Initiatives: Restructuring for Growth
New Initiatives: Restructuring for Growth Institutional Develop channels for hospitals to leverage GSK scale, Opportunity optimise marketing spends and develop expertise. Rural Develop channels & reach for tapping rural opportunity. Opportunity Expand resourcing non promoted products through contrac
Slide 40: 6 Business units
Sales & Marketing organization today 6 Business units ENT,GP ENTEROPLUS P R I DERMAT DERMA M A GYANEC ASCLEPIUS R Y DIABETO/CP UNICORN C PACC A R BIOLOGICALS E Fragmented market Large no. of products Large Geographical area Ageing portfolio
Slide 41: New Sales & Marketing Structure
New Sales & Marketing Structure CVS & Diab NEW ENT,GP Specialty EnteroPlus Teams Oncology Derma Derma Biologicals Asclepius Gynae, Ortho Derma +CSF Unicorn Diab / Cons Phy Asclepius +HSF Pul. & CriticalCare Surgeons, Chest P&CC +HSF Biologicals Vaccinators EnteroPlus +CSF Fragmented market Unicorn L
Slide 42: What will this structure achieve
What will this structure achieve Consolidate GSK strength in Primary care Enhance presence in growing therapy areas/specialties Improve penetration in Rural /extra urban markets Consolidate Presence in Hospitals Maximize resources for growth
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