Annual Report
`
`2015
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`lPR2015-01030
`
`(Page 1 of 212)
`
`

`
`CONTENTS
`
`CHAIRMAN'S LETTER
`
`I\J
`
`CORPORATE IN FORMATION
`
`AWARDS 2014-15
`
`VICE CHAIRMAN ’S LETTER
`
`CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR'S LETTER
`
`FINANCIAL HIGHLIGHTS 2015
`
`U N ITED STATES
`
`INDIA
`
`REST OF THE WORLD MARKETS & EUROPE
`
`GLOBAL ACTIVE PHARMACEUTICAL INGREDIENTS BUSINESS
`
`RESEARCH & DEVELOPMENT
`
`GLOBAL MANUFACTURING & SUPPLY CHAIN
`
`HUMAN RESOURCES
`
`CORPORATE SOCIAL OBLIGATION
`
`CHIEF FINANCIAL OFFICER’S LETTER — FINANCIAL REVIEW
`
`-I>
`
`U'|
`
`OW
`
`O0
`
`C)
`
`I\J
`
`-I>
`
`ON
`
`O0
`
`N) C)
`
`JJJJEJJJJJJJJJJJJ
`
`N) O‘)
`
`NJ 00
`
`U.) C)
`
`REPORTS AN D FI NAN CIALS
`
`U.) U.)
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 2 of 212)
`
`

`
`CHAI RI\/\AN’S LETTER
`
`
`
`2 | Lupin Limited
`
`-.
`
`(Page 3 of 212)
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`Janssen Ex. 2002
`
`

`
`We ore committed to core, to grow,
`to nurture ond to shore.
`
`Dear Shareholders,
`
`I have always believed that great companies that are founded with a strong vision and built on solid values are
`the ones that thrive and live on.
`
`These are the companies that overcome challenges and excel beyond the competition, beyond economic cycles
`
`and eventually beyond lifetimes and generations. These are businesses that make their customers and society the
`
`reason why they exist, serving social needs while still delivering performance, growth and numbers.
`
`At Lupin, we have created a culture of growth, of creative optimism, of caring for people and our communities.
`
`That is the Lupin spirit. This is what has helped us innovate and deliver strong performance year after year
`
`consistently. We are committed to care, to grow, to nurture and to share.
`
`This for me is Lupin; Growth and beyond.
`
`Warm regards,
`
`Dr. Desh Bandhu Gupta
`Founder & Chairman
`
`Lupin Limited
`
`Annual Report 2015 | 3
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 4 of 212)
`
`

`
`CORPORATE
`
`INFORMATION
`
`Dr. Sofia Mumtaz, Head — Pipeline
`Management and Legal
`Mr. Sunil Makharia, President — Finance
`
`Mr. Debabrata Chakravorty, President
`— Global Sourcing
`Mr. Ray Tsunoda, President — Japan
`
`Registered Office
`159, C.S.T. Road, Kalina,
`Santacruz (East), Mumbai — 400 098.
`Tel:+ 91 22 6640 2323
`FaX:+ 91 22 2652 8806
`
`Corporate Office
`Laxmi Towers, ‘B’ Wing,
`Bandra Kurla Complex,
`Bandra (East),
`Mumbai — 400 051.
`Tel: + 91 22 6640 2222
`Fax: + 91 22 6640 2130
`
`Website
`
`www.lupin.com
`
`E—mai|
`
`info@lupin.com
`
`Corporate Identity Number
`L241 OOMH1 983PLCO29442
`
`Key Contacts
`Mr. Pradeep Bhagwat,
`General Manager, Investors’ Services
`Email: pradeepbhagwat@lupin.com
`
`Mr. Alpesh Dalal,
`Head — Investor Relations
`
`Email: alpeshdalal@lupin.com
`
`Mr. Shamsher Gorawara,
`Head — Corporate Communications
`Email: shamshergorawara@lupin.com
`
`Directors
`
`Dr. Desh Bandhu Gupta, Chairman
`Dr. Kamal K. Sharma, Vice Chairman
`
`Ms. Vinita Gupta, ChiefExecutive Officer
`
`Mr. Nilesh Gupta, Managing Director
`
`Mrs. M. D. Gupta, Executive Director
`
`Dr. Vijay Kelkar, Independent Director
`Mr. R. A. Shah, Independent Director
`
`Mr. Richard Zahn, Independent Director
`
`Risk Management Committee
`Dr. Kamal K. Sharma, Vice Chairman
`
`Ms. Vinita Gupta, Chief Executive Officer
`
`Mr. Nilesh Gupta, Managing Director
`Mr. Ramesh Swaminathan, Chief
`Financial Officer
`
`Mr. Sunil Makharia, President — Finance
`
`Bankers
`Central Bank of India
`
`Dr. K. U. Mada, Independent Director
`
`Bank of Baroda
`
`Mr. Dileep C. Choksi, Independent
`Director
`
`State Bank of India
`
`Citibank N.A.
`
`Company Secretary & Compliance
`Officer
`Mr. R. V. Satam
`
`The Hongkong and Shanghai Banking
`Corporation Limited
`Standard Chartered Bank
`
`Auditors
`Deloitte Haskins & Sells LLP
`Chartered Accountants
`
`Internal Auditors
`
`Ernst & Young LLP
`KPMG
`
`Audit Committee
`
`Dr. K. U. Mada, Chairman
`Dr. Kamal K. Sharma
`
`Mr. Dileep C. Choksi
`
`Stakeholders Relationship
`Committee
`
`Dr. Vijay Kelkar, Chairman
`Dr. K. U. Mada
`
`Nomination and Remuneration
`Committee
`
`Dr. K. U. Mada, Chairman
`Mr. R. A. Shah
`Mr. Richard Zahn
`
`Corporate Social Responsibility
`Committee
`
`Dr. Desh Bandhu Gupta, Chairman
`Dr. Kamal K. Sharma, Vice Chairman
`
`Mr. Nilesh Gupta, Managing Director
`
`Dr. Vijay Kelkar
`
`4 | Lupin Limited
`
`ICICI Bank Limited
`
`Kotak Mahindra Bank Limited
`
`JP Morgan Chase Bank, N.A.
`
`Senior Management Team
`Dr. Desh Bandhu Gupta, Chairman
`Dr. Kamal K. Sharma, Vice Chairman
`
`Ms. Vinita Gupta, Chief Executive Officer
`Mr. Nilesh Gupta, Managing Director
`Mr. Shakti Chakraborty, Group
`President — /ndia Region Formulations
`Mr. Vinod Dhawan, Group President —
`AAMLA & Business Development
`Mr. Ramesh Swaminathan, Chief
`Financial Officer
`
`Dr. Rajender Kamboj, President — Novel
`Drug Discovery & Development
`Mr. Naresh Gupta, President — API &
`Global TB
`
`Mr. Divakar Kaza, President — Human
`Resources
`
`Mr. Alok Ghosh, President — Technical
`Operations
`Dr. Cyrus Karkaria, President —
`Biotechnology
`Mr. Paul McGarty, President — Lupin
`Pharmaceuticals /nc., USA
`
`Dr. Maurice Chagnaud, President —
`Europe and Head of /nhalation Strategy
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 5 of 212)
`
`

`
`AWARDS 2014-15
`
` |NC|_UDED |[\] BSE 30
`Exchange Sensitive Index - BSE’s flagship index
`
`Included in the Standard & Poor’s Bombay Stock
`
`OR SENSEX
`
`
`
`'I
`
`
`Outstanding Company of
`the Year
`
`#1 ,580 Global 2000
`#’l ,495 in Profit
`#819 in Market value
`
`
`DUN &
`Top Indian Companyin 1
`
`
`
`BRADSTREET
`CORPORATE
`AWARDS 2015
`
`the Pharmaceuticals sector
`
`FORBES AS|A
`FAB 50
`
`Asia — Pacific's 50 biggest
`listed companies 2014
`
`‘I
`
`of the Year (Pharma)
`
`Best Companies to Work
`for, 2015, India
`
`
`
` Risk Management Firm
`WOMEN
`
`ICAI
`AWARDS EOR
`EXCELLENCE
`IN FINANCIAL
`REPORTING
`
`Winner of Gold Shield
`d M
`1‘
`t
`'
`un er
`anu ac urIng
`Sect”
`
`§glA
`BUSWESS
`
`Ms. Vinita Gupta
`
`Annual Report 2015 | 5
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`lPR201I5-01 030
`
`(Page 6 of 212)
`
`

`
`VICE CHAIRMAN'S LETTER
`
`6 | Lupin Limited
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 7 of 212)
`
`

`
`Our ability fo change, odopf and improvise
`sholl remoin the key to our growth.
`
`Dear Shareowners,
`
`At Lupin, we are engaged in continuously sharpening our
`competitive advantage. In the rapidly changing landscape
`of technology and commerce in business, it is essential to
`continuously fine tune our growth engine. We are laying
`renewed emphasis on bringing superior products, designing
`innovative processes and building people's capabilities.
`Our people remain at the center stage of our growth story.
`The Company crossed USD 2 billion in revenues this fiscal
`and I am happy to note that the growth has largely been
`organic rather that inorganic. Everyone at Lupin looks at this
`milestone more as a platform to build and work towards the
`Lupin of tomorrow.
`
`Over the last decade, Lupin has emerged as the benchmark
`for sustained performance and value creation across sectors,
`which explains our inclusion in the S&P BSE SENSEX
`
`(S&P Bombay Stock Exchange Sensitive Index).
`
`We realize that with growth comes responsibility and
`accountability. We must manage expectations of all
`stakeholders and commit to deliver superior performance
`
`each time. There is a need to continuously raise the bar and
`reinvent ourselves. We must focus beyond performance
`and intended outcomes. We are continuously evaluating
`various aspects of our business and how they impact our
`preparedness to achieve our objectives. Our ability to
`change, adapt and improvise shall remain the key to our
`growth initiative. Lupin is relentless in its effort to improve,
`to transform and determined to strive for the better every
`day,‘ we are committed to outperform. Lupin is poised for
`growth, naturally.
`
`Best regards,
`
`Dr. Kamal K. Sharma
`V/ce Cha/rman
`
`Lupin Limited
`
`Annual Report 2015 | 7
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 8 of 212)
`
`

`
`CHIEF EXECUTIVE OFFICER AND
`MANAGING DIRECTOR'S LETTER
`
`
`
`9
`91'»
`
`,
`
`I M
`
`’
`,-
`
`‘,i*'’-f.
`d"’é’J—-3f:."l’:I
`fa JET:
`i _
`
`8 | Lupin Limited
`
`(Page 9 of 212)
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`Janssen Ex. 2002
`
`

`
`We ore commifled fo building o world—closs
`reseorch driven, quolify speciolfy ond generics
`powerhouse second fo none.
`
`Dear Shareholders,
`
`We have had another strong year of growth be it revenues,
`margins and enhanced profitability. The Company continues
`0 strengthen its position as an innovation—|ed transnational
`oharmaceutical company, which reinforces our belief that a
`strong business model, the right business practices, |ike—minded
`oeople, a lucrative pipeline and investments in strategic growth
`oays rich dividends even in the face of increased consolidation,
`competition and a volatile economic environment.
`
`n FY 2015, all our key markets delivered and we continued
`0 improve on operational performance, which resulted
`
`'n robust revenues and profits. Lupin’s Net sales grew by
`13.6% to $125,997 million (USD 2.06 billion), EBITDA grew
`oy 23.7% to 338,593 million and our Net Profits grew by
`30.9% to $24,032 million during FY 201 5. Over the last 5
`years, the Company has delivered a Compounded Annual
`Growth Rate (CAGR) of 21 .4% in Sales, 31.1% in EBITDA
`and 28.7% in Net Profits.
`
`Today, we are the 7th largest generic pharmaceutical
`company globally by market capitalization and the 10th
`largest generic pharmaceutical company globally by
`sales (Bloomberg, June 2015). Lupin is the 6th largest
`pharmaceutical player in the US, the 3rd largest Indian
`pharmaceutical company by revenues and the 8th largest
`generic pharmaceutical company in Japan.
`
`FY 2015 saw us intensify our research efforts to address
`opportunities in difficu|t—to—do generics, dermatology,
`inhalation, complex injectables and the biosimilars space,
`thus opening up new avenues of growth in key markets such
`as US, Europe, Japan, Canada and in the Emerging Markets.
`Our investments in Novel Drug Discovery and Development
`
`and Biosimilars are starting to pay off with targets
`orogressing through various stages of clinical trials in Europe
`and Japan. In the next two years, we will make meaningful
`orogress and have multiple filings in each ofthese areas.
`We have also been very active in forging new alliances.
`We entered into a distribution agreement with Salix
`Dharmaceuticals |nc., USA to exclusively market, distribute
`and sell Zaxine®, Re|istor® and other gastroenterology
`oroducts for Canada, heralding our entry into the Canadian
`3rands market. The Company completed its acquisition of
`Dharma Dynamics, South Africa and further consolidated its
`oresence in the fast growing African market.
`
`Going forward, meaningful acquisitions are going to be vital
`0 our growth strategy and we are targeting geographies,
`complementary product portfolios and therapies that we feel
`are missing from our current portfolio. We are investing in
`people, processes, technology and systems. Over the coming
`years, we envision a new Lupin, replete with differentiated
`products and strong market presence; a complex generics
`and specialty pharmaceutical major, nimble and agile;
`innovating and evolving every step ofthe way.
`
`We are committed to building a world—class research driven,
`quality specialty and generics powerhouse second to none.
`That for us is the Lupin of tomorrow. We have always
`stood for Growth. That is the foundation we are built on.
`
`We are now looking beyond.
`
`Best Regards,
`
`Vinita Gupta
`Chief Executive Officer
`
`Lupin Limited
`
`Nilesh Gu pta
`Managing Director
`Lupin Limited
`
`Annual Report 2015 | 9
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 10 of 212)
`
`

`
`HIGHLIGHTS 2015
`
`Business analysis — revenue and profitability
`
`CAGR
`21.9%
`
`125,997
`
`31
`
`30
`
`27
`
`25
`
`26
`
`110,866
`
`94,616
`
`69597
`
`57068
`
`“"
`E
`
`‘’
`E
`
`'-”
`E
`
`“‘
`*
`E
`:
`Net sales
`(E million)
`
` %
`
`I API I Domestic formulations
`
`-
`I Emerging markets
`formulations
`
`I Advanced markets
`formulations
`
`_
`E
`
`(\l
`E
`
`m
`E
`
`-<r
`E
`
`Ln
`E
`
`I Domestic
`
`I Exports — Advanced markets
`
`Revenue composition
`
`I Exports — Emerging markets
`Geographic break down
`(% contribution)
`
`CAG R
`33.9%
`
`§
`m
`co‘
`
`m
`03
`
`_"3
`
`CAG R
`36.1%
`
`3
`m
`<r‘
`
`C
`mg
`2
`
`CAG R
`29.2%
`
`%
`N
`E’;
`
`$(Y!
`
`00.
`
`KO
`03
`3.
`F
`
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`
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`
`EB|DTA
`(E mi||ion)
`
`10 | Lupin Limited
`
`Profit before tax
`(E million)
`
`Net profit
`(E million)
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`lPR2015-01030
`
`(Page 11 of 212)
`
`

`
`Business critical investments
`
`Financial leverage
`
`0
`m
`0
`
`Lo
`Lfi
`co
`ow
`f\l
`
`o‘
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`=,-
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`
`I Current year
`
`I Past years
`
`Cumulative R&D
`(? million)
`
`I Current year
`
`I Past years
`
`Cumulative ca pex
`(? million)
`
`Debt equity ratio
`
`Shareholder value growth
`
`CAGR
`29.0%
`
`Ln
`§
`Ln
`
`C)
`8*».
`<1’
`
`03
`
`3
`N
`
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`2
`
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`
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`U.
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`00.
`
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`
`<1’
`U.
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`
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`U.
`;
`
`CAGR
`48.4%
`
`~
`3?
`pg‘
`f\l
`
`N
`U.
`F
`
`g
`~.
`$
`"‘
`
`on
`U.
`;
`
`8
`01
`Lfi00
`
`r
`U.
`F
`
`Earning per share
`(§)
`
`Dividend
`(0/0)
`
`Market Capitalization
`(? million)
`
`Annual Report 2015 | 11
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`lPR2015-01030
`
`(Page 12 of 212)
`
`

`
`LARGEST GENERIC
`PHARMACEUTICAL COMPANY
`IN THE US BY PRESCRIPTION
`
`THE UNITED STATES IS LUP|N'S LARGEST MARKET AND CONTRIBUTED
`45% OF THE COMPANY'S REVENUES DURING FY 2015.
`
`"he US continues to be the principal growth engine for the
`Company and our performance in the US over the last 10
`years has been one ofthe most exciting growth stories in
`he pharmaceutical industry; that of the creation of a top
`10 global generic powerhouse and an emerging specialty
`oharmaceutical player.
`
`The Company's US subsidiary, Lupin Pharmaceuticals,
`nc. (LPI), is dedicated to delivering high—quaIity, branded
`anc generic medicines trusted by healthcare professionals
`anc patients across the US. LPI today is recognized as a
`ore erred supplier of quality generics into he United States
`servicing large US wholesale and retail channel partners.
`n addition, the Company has over the Ias decade built a
`wigwly differentiated and profitable Branded Business which
`enjoys strong brand equity amongst Pediatric specialists
`anc primary care physicians in the US. Tocay, our strong
`marketing and sales capabilities, an enviable product
`pipeline ably delivered by a world—class research and
`manufacturing operation, serviced bya 21x7 global supply
`chain all ensure that Lupin is delivering quality formulations
`be 't brands or generics to the American I-ealthcare system.
`
`Lupin today is the 6th largest and the fastest growing
`top 10 pharmaceutical corporations in the US,‘ 4.3%
`market share growing at 9% (market share by prescriptions-
`IMS Health Table 1).
`
`Our US revenues grew by 12% to $54,532 million
`(USD 891 million) during FY 2015, up from $48,532 million
`(USD 803 million) in FY 2014. The US Brands business
`contributed 34,908 million (USD 80 million) or 9% of
`tota US sales during FY 2015 while the Generics business
`contributed €49,624 million (USD 811 million) or 91% of
`tota US sales.
`
`V1
`II.
`
`Lupi1’s US generic sales grew by 12% as compared to the
`4.5% overall growth ofthe US generic industry (IMS Health)
`during FY 2015. This growth was in the backdrop of industry
`chal enges like heightened pricing pressures resulting from
`rapid customer consolidation,‘ increased generic competition
`on previously launched exclusive and semi—excIusive
`procucts as well as a visible slowdown of product approvals
`in the US. The Company clocked in generic revenues of
`
`12 | Lupin Limited
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`lPR2015-01030
`
`(Page 13 of 212)
`
`

`
`891
`
`803
`
`693
`
`507
`
`441
`
`548
`
`361
`
`308
`
`811
`
`723
`
`(V
`03
`
`210
`
`2
`
`E
`
`00
`<r
`
`FY14 FY15
`FY13
`FY12
`FY11
`US formulations revenues
`(USD million)
`
`FY11
`
`FY12
`
`FY13
`
`FY14
`
`FY15
`
`FY11
`
`FY12
`
`FY13
`
`FY14
`
`FY15
`
`US generics revenues
`(USD million)
`
`ANDA pipeline
`
`USD 811 million during FY2015, up from USD 723 million
`the previous fiscal. We launched 11 new products, including
`the successful commercialization of generic versions of
`Monodox® 75mg and Celebrex® to name two high profile
`exclus've and semi—exclusive launches.
`
`It wasn't just new launches that helped us maintain our
`growtw trajectory but also our ability to increase market
`shares for existing products and grow our base business.
`30 of he 77 generic products marketed by LPI in the US are
`ranked No.1 by market share and 55 of these 77 are in the
`top 3
`oy Market share (IMS -lealth). Lupin is the 6th largest
`generics company in the US
`with 5.5% market share by
`prescr'
`ptions (unbranded generics Table 2).
`
`The Company filed 18 ANDAs for the US market during
`FY 20 5 and now has 99 AN
`DAs pending for approval and
`launch addressing a total market size of over USD 62 billion.
`Of these, 34 AN DAs are first— o—file addressing a market size
`of over USD 8 billion. We have 15 exclusive first—to—file ANDAs
`
`addressing a market size of L
`
`SD 2.5 billion approximately.
`
`US Brands
`
`FY 2015 was a year of buildi
`1g and consolidation for one
`of our key differentiators — our US Brands business. Not only
`did we expand our Brands product portfolio but we were
`also able to stem declining sales during FY 2014 arising out
`of generic competition for Antara® (Fenofibrate Capsules
`43mg and 130mg). Despite the entry of a 3rd generic into
`the market, LPI not only maintained a 62% market share for
`Antara® (Fenofibrate Capsules 43mg and 130mg) but we
`
`were also able to grow branded Antara® revenues on the
`back ofthe launch of Antara® 90mg, which is an exclusive
`strength. Our Suprax® branded franchise held steady during
`FY 2015 as we completed the transition of the tablet
`business to the capsule dosage form which we launched
`during FY2014.
`
`The Company's 160 strong soecialty sales force made new
`inroads into the pediatric dia rrhea market with Alinia®
`(Nitazoxanide) for oral suspension for which we acqu'red
`Alinia®
`FY 2014. Prescriptions for
`exclusive rights in the US in
`grew by more
`han 40% dur'ng FY 2015.
`LPI also launched the all new
`
`atic
`
`InspiraCha mber® Anti—S
`C) under a strategic licensing
`Valved Holding Chamber (V
`agreement witw InspiRX Inc.
`(InspiRX). The agreemen
`0 promote, distribute and
`grants Lupin exclusive rights
`C in the United States. LP
`market InspiraChamber® Vl-
`began
`promotion of I
`1spiraChambe
`r® VHC through marketing
`programs and
`ohysician deta'
`ling in February 2015. We are
`ial.
`very excited wi
`h the product given the market poten
`The InspiraChamber® VHC is designed to enhance del
`of aerosol mecication from most pressurized meterec
`inhalers. Several clinical and laboratory studies have swown
`that InspiraChamber® VHC is superior to the leading VHCs in
`the market.
`
`"very
`dose
`
`As we move into FY 2016, the Company remains committed
`to continue to strengthen its branded portfolio with the
`launch of additional products by not only creating alliances
`but also developing its own pipeline and making strategic
`brand acquisitions.
`
`Dispensed TRx US Pharmaceutical Industry
`Table 7 .' Dispensed TRX Total US /nclustry, l\/lA7f April 2075
`Table 2 .' Dispensed TRX US unbranded Generics, l\/lA7,' April 2075
`Lupin is ranked 6th in the US Industry standings of all pharmaceuticals
`Lupin is ranked 6th in the US industry standings of unbranded generics
`Leading
`MAT, April 2015
`
` Leading
`
`corporations
`US Industry
`1 Teva
`
`2 Mylan Labs Inc.
`3 Sandoz (Novartis)
`4 Actavis US
`5 Endo Pharm Inc.
`6 Lupin Pharma
`
`4,608
`527
`
`335
`322
`306
`254
`200
`
`% Market Share
`100.0
`11.4
`
`% Growth
`3
`-2.4
`
`corporations
`US Industry
`1 Teva
`
`3,592
`458
`
`100
`12.8
`
`4.5
`-3.2
`
`7.3
`7.0
`6.6
`5.5
`4.3
`
`-6.2
`6.4
`-4.6
`2.0
`9.0
`
`2 Mylan Labs Inc.
`3 Sandoz (Novartis)
`4 Actavis US
`5 Endo Pharm Inc.
`6 Lupin Pharma
`
`327
`257
`233
`208
`198
`
`9.1
`7.2
`6.5
`5.8
`5.5
`
`-6.9
`14.8
`-5.2
`1.9
`8.7
`
`Annual Report 20
`
`15|13
`
`Ja
`
`nssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`IPR2015-01030
`
`(Page 14 of 212)
`
`

`
`24%
`CONTRIBUTION TO
`LUPIN’S GLOBAL SALES
`
`3.25%
`
`OVERALL MARKET SHARE
`
`OF THE IPM (IMS TSA
`MAT, MAY 2015)
`
`5,500+
`
`SPECIALTY FIELD FORCE
`
`
`
`FOR INDIA, THE COMPANY'S 2ND LARGEST MARKET IN TERMS OF
`
`REVENUES, FY 2015 WAS UNDERLINED BY ITS CONCENTRATED PUSH
`
`TOWARDS EMERGING AS A MARKET LEADER.
`
`India is a critical part of Lupin’s ambitious growth plans
`and contributed 24% to the Company's global revenues.
`Emerging from the shadows of a tumultuous FY 2014
`where the entire industry and the Indian Pharmaceutical
`Market (IPM) were adversely affected by changes in the Drug
`Price Control Order (DPCO), Lupin’s domestic formulations
`business emerged stronger in FY 2015, clocking in revenues
`of $30,295 million, a growth of 20.5% over the previous
`year, outpacing and outperforming the IPM which grew by
`12.1% (IMS MAT, March 2015).
`
`This translates into a CAGR of 1 8% for the last 4 years.
`Chronic therapies contributed 66% of India revenues in
`FY 2015 (44% in FY 2008). Our performance is also a
`
`reflection of our ability to combat and respond to an
`intensely competitive, fragmented and dynamic business
`environment,‘ testimony to the commitment and passion of
`our 5500+ medical sales & marketing team. Our flawless
`
`execution that has made us a key player in fast growing
`therapies such as Cardiology, Central Nervous System (CNS),
`Diabetes, Anti—Asthma, COPD, Gastro—intestinal (GI)
`
`and Gynaecology.
`
`Proportion of revenues derived from key segments
`
`- A;4::J,.its; T'hE§f6PIES
`2014-1 5
`34%
`
`Chronic;Therza pies;
`66%
`
`2 007-08
`
`56%
`
`44%
`
`We continue to be the market leader in the Anti—TB market
`
`and are the 3rd largest player in Cardiology and Anti—Asthma
`segments. We grew our market share in therapies such
`as Diabetology on the back of new product launches.
`A marked improvement from being the 7th largest player in
`FY 2014. The Company has been constantly fine tuning its
`product portfolio by adding innovative new products, which
`
`14 | Lupin Limited
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`lPR2015-01030
`
`(Page 15 of 212)
`
`

`
`30,295
`
`23,840
`
`25,141
`
`19,374
`
`15,734
`
`— Cardiovascular
`— Anti—Diabetic
`— Anti—lnfecti\/es
`— Anti—Asthma
`Gastro—lntestinal (GI)
`Anti—TB
`
`Central Nervous System (CNS)
`— Gynaecology
`Others
`
`FY1 1
`
`FY12
`
`FY13
`
`FY14
`
`FY15
`
`Domestic formulations (sales)
`
`(? million)
`
`Therapeutic contribution
`
`explains why Lupin has one ofthe fastest growing and
`
`largest portfolios of young high growth brands. We now
`have 26 brands with sales upwards of €300 million, 4 out
`
`of which have sales exceeding $1,000 million (C-iluconorm,
`Huminsulin, Tonact and Rablet).
`
`Our existing associations with global thinktanks and
`
`institutions like American College of Cardiology (ACC),
`
`American College of Chest Physicians (ACCP); the lan Donald
`
`School; the European Society of Cardiology (ESC); the
`
`European Society of Cardiology— Heart Failure Association
`
`and hypertension & lipid profile campaigns that we have
`conducted.
`
`The Company is focused on nurturing and developing its
`5,500+ specialty product marketing and sales force by
`providing structured training and technology inputs to
`ensure that we are in tune with new innovations,‘ that we
`
`are not only leveraging our size to launch new products and
`grow but also the fact that we are garnering market shares
`by expanding coverage and reach meaningfully with speed
`and agility.
`
`(ESC HFA) and European Association for Neurological
`
`Societies (EANS) to name a few have gone a long way in
`
`ln—licensing products through strategic alliances to widen
`our product portfolio and to enter new therapies has also
`
`bringing the latest technical know—how and advances to the
`
`medical community within the IPM. Spreading awareness,
`
`patient education and meaningful care has always been
`
`a key focus for the Company and we continue to educate
`
`patients and society at large on diagnosis and preventive
`
`care across the country, be it our Spirometry and CO
`
`monitoring camps which have helped diagnose Asthma
`/COPD; BMD Camps for detection of osteoporosis and
`
`related disorders,‘ or the special Diabetes (HB1AC) camps
`
`been a key contributor to Lupin’s strong growth in the IPM.
`The Company has in—licensed 27 products over the last 5
`years, out of which 4 were a first for the IPM. We have
`emerged as a preferred partner for multinational companies
`looking to enter the IPM and also grow existing market
`shares in India.
`
`We are at the cusp of an interesting growth journey where
`Lupin’s lndia formulations business is all set to emerge as a
`billion dollar enterprise within the next 5 years.
`
`Therapy growth matrix - Lupin vs IPM
`L
`i
`
`Grlcpnxth
`
`Rate*
`2.5%
`
`Grklnsvltlh
`
`Rate
`16.1%
`
`10.2%
`12.3%
`
`16.6%
`11.1%
`
`17.6%
`27.6%
`
`25.0%
`20.2%
`
`Therapy Area
`
`Anti—TB
`
`Cardiology
`Anti—Asthma
`
`Diabetology
`Central Nervous
`
`System
`Anti—lnfectives
`
`l:l:;l::t
`
`53.2%
`
`5.9%
`10.6%
`
`5.9%
`2.3%
`
`Our top brands
`
`The”WArea
`
`C-iluconorm Anti—Diabetic
`Tonact
`Cardiovascular
`Ra blet
`C-}astro—lntestinal
`Budamate
`Anti—Asthma
`Telekast
`Anti—Asthma
`Rcinex
`Anti—TB
`
`Clopitab
`Telista
`Ra mistar
`Akt
`
`Cardiovascular
`Cardiovascular
`Cardiovascular
`Anti—TB
`
`Glarlcfvlf/Etlh
`
`27.2%
`12.5%
`25.0%
`28.5%
`35.5%
`17.5%
`
`14.2%
`17.1%
`5.8%
`11.3%
`
`l\::l::l
`
`1
`
`1
`
`3
`3
`
`5
`10
`
`13
`
`Gl\r/lcili/lx/l<fff*
`
`21.8%
`14.5%
`15.2%
`15.4%
`17.8%
`11.6%
`
`10.4%
`15.2%
`4.8%
`3.8%
`
`9.1%
`
`13.4%
`
`2.9%
`
`*/MS MAI March 2075
`
`*/MS MAI March 2075
`
`Annual Report 2015 | 15
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 16 of 212)
`
`

`
`4th
`
`LARGEST GENERIC PLAYER
`
`IN SOUTH AFRICA
`
`Scientists at Kyowa Research Center, Japan '
`
`
`
`
`
`LUP|N'S REST OF THE WORLD (ROW) AND
`EUROPEAN MARKETS ARE THE 3RD LARGEST
`CONTRIBUTOR TO THE COMPANY'S REVENUES
`GLOBALLY AND OUR YOU NGEST AND FASTEST
`GROWING BUSINESS.
`
`Lupin’s ROW business caters to markets in Asia—Pacific
`including Japan, the MiddIe—East, Philippines, Australia,
`South Africa, Mexico and Latin America. Europe covers our
`businesses in the UK, Germany, France and Russia.
`
`.
`
`if C,
`
`J13.
`
`Lupin’s ROW markets including South Africa and Japan,
`clocked in revenues of $24,522 million during FY 2015,
`a growth of 6% and contributed 19% to the Company's
`global consolidated revenues.
`
`These markets are the fastest growing growth opportunity in
`the global pharmaceutical market and are expected to grow
`to USD 400 billion by FY 2020. Our growing presence and
`leadership credentials in markets like Japan, South Africa and
`Mexico coupled with our efforts to enter new markets with
`meaningful acquisitions are going to help us address these
`growth opportunities.
`
`tr,
`
`‘,.
`
`Japan is the 2nd largest pharmaceuticals market in the world
`with sales of over USD 115 billion. Generics accounts for
`
`49% of total pharmaceutical volumes in Japan. The Japanese
`Government has a target of 80% generic penetration by
`2020 which translates into an additional 35-40% of overall
`
`pharmaceutical volumes going generic. Add to this, patent
`expiries valued at over USD 14-16 billion by 2018 and all
`ofthis amounts to one of the largest growth opportunities
`for Lupin globally. The Company has been streamlining its
`business operations and integration and renaming of |’rom
`Pharmaceuticals to Kyowa CritiCare Co. Ltd., (KCC) with
`Kyowa Pharmaceuticals (Kyowa) our Japanese flagship was
`one such measure. We also plan to set up a new dedicated
`manufacturing site for oral solids in Japan and a new
`injectable line in KCC. Lupin’s dedicated Japan block at Goa
`will be operational in the next fiscal and will increase our
`ability to supply from India significantly.
`
`16 | Lupin Limited
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 17 of 212)
`
`

`
`8
`E
`N
`
`8
`O‘
`N
`
`8
`l\
`on‘
`N
`
`<r
`$
`
`8
`k0
`
`0
`_
`go
`
`O
`,9
`
`‘C’:
`'\
`
`8
`
`N
`
`8
`0'1
`r
`N
`
`i.n
`00
`'\~
`0‘
`
`'-D
`if
`E
`
`on
`<]'
`Q
`
`<r
`9
`3‘
`
`$
`“O.
`r
`T
`
`
`FY11
`FY12
`FY13
`FY14
`FY15
`
`ROW and Europe sales
`(3 million)
`
`FY11
`
`FY12
`
`FY13
`
`FY14
`
`FY15
`
`Finished dosages filings
`(Rest of world)
`
`
`FY11
`FY12
`FY13
`FY14
`FY15
`
`Japan sales
`(¥ million)
`
`Japan remains the 3rd largest market for the Company
`globally and contributed 11% to our global revenues.
`It is also the largest market within Lupin’s ROW business
`contributing about 54% of ROW revenues. During FY 2015,
`our Japanese businesses Kyowa including KCC generated
`revenues ofJPY 23,709 million (313,239 million), a growth
`of 1 1% over the previous year. Lupin remains the 8th largest
`generic pharmaceutical player in the Japanese market
`with a strong presence in the Neurology, Cardiovascular,
`Gastroenterology and lnjectables segments.
`
`South Africa
`
`The South African pharmaceutical market is valued at about
`USD 3.5 billion with generics growing at 9% by value and
`4% by volumes during FY 2015. Lupin’s South African
`subsidiary Pharma Dynamics (PD) recorded revenues of ZAR
`760 million (34,218 million), clocking in growth of 19% over
`the previous year. PD remains the 4th largest generics player
`& ranks amongst the top 20 pharmaceutical companies in
`South Africa with leadership in the Cardiovascular segment.
`
`Mexico
`
`Mexico is one ofthe fastest growing pharmaceutical
`markets valued at over USD 13.5 billion, growing at 9-1 0%
`annually (IMS Health). Lupin completed the integration of
`Laboratories Grin S.A. de C.\/. (Grin) which we had acquired
`last fiscal. Grin is a specialty pharmaceutical company and
`the 4th largest ophthalmic player in Mexico. It is also the
`
`fastest growing player in the Mexican ophthalmic market
`and grew 7% by volumes and 16% by value during FY 2015.
`For 6 months consolidated, Grin registered revenues of MXP
`227 million (3 984 million) this fiscal.
`
`Australia
`FY 2015 witnessed Lupin acquire the balance stake of 9%
`in Generic Health Pty Limited (GH) which is now a wholly
`
`owned subsidiary of the Company. GH recorded revenues of
`AUD 26 million (31,372 million) during FY 2015.
`
`Philippines
`The Philippines pharmaceutical market is valued at USD
`3.3 billion and grew by over 6% during FY 2015. Lupin’s
`Philippines subsidiary Multicare Pharmaceuticals (Multicare)
`grew 26% as against the industry growth of 2.5%,
`generating revenues of PHP 1,148 million (31,584 million).
`
`Europe
`FY 2015 has been a year for new beginnings for Lupin
`"n Europe (EU) with the Company establishing its new
`weadquarters in Zug, Switzerland which would provide
`a strong centra platform to develop and grow our EU
`ousiness. FY 2015 saw us ramp up hiring and strengthen
`our EU leadership team across key functions like supply
`chain and regu atory affairs which are critical to our
`ong—term growth strategy The Company filed 5 marketing
`authorization aoplications and received 4 approvals during
`FY 2015,‘ cumu
`ative filings with EU authorities now stand
`at 62 with 52 aoprovals to date. Lupin’s EU business clocked
`"n sales of 33,279 million during FY 2015 as compared to
`33,054 million he previous year.
`
`ROW key markets
`
`Geography
`
`Currency
`
`FY 2015
`
`FY 2014 Growth
`
`Japan
`
`JPY minion
`
`23,709
`
`21,399
`
`11%
`
`South Alllca
`Australia
`
`ZAR mllllon
`AUD million
`
`760
`26
`
`638
`30
`
`Philippines
`_
`Mexico
`
`PHP million
`_
`_
`MXP million
`
`1,288
`
`1,336
`
`227
`
`NA
`
`l9%
`_1 4%
`
`—4%
`
`NA
`
`Annual Report 2015 | 17
`
`Lupin Ltd. v.
`
`Janssen Sciences Ireland UC
`
`Janssen Ex. 2002
`
`IPR2015-01030
`
`(Page 18 of 212)
`
`

`
`No.1
`IN ANTI—TB SEGMENT
`GLOBALLY
`
`0/9 0
`CONTRIBUTION TO
`OVERALL COM PANY
`REVEN U ES
`
`90%
`CAPTIVE
`CONSUMPTION OF APIs
`
`3.
`
`Lupinytt at work at our /n c/ore manufacturing facility, In c/ia
`
`GLOBAL ACTIVE
`
`PHARMACEUTICAL
`
`INGREDIENTS BUSINESS
`
`THE GLOBAL API INDUSTRY IS ON THE
`
`UPSWING WITH FACTORS SUCH AS
`
`INCREASED GENERIC PENETRATION,
`PATENT EXPIRIES AND RISE IN OVERALL
`
`PHARMACEUTICAL CONSUMPTION.
`
`The Indian pharmaceutical industry ranI<s amongst the
`
`in key API segments globally and also grow our business
`
`top 5 API producers globally and accounts for over 30%
`
`meaningfully. Lupin’s global API business generated
`
`of global production. India is one of the most preferred
`
`revenues of 3 I I ,94I million during FY 2015 contributing
`
`supplier of quality AP|s globally given our rich research
`
`heritage, focus on cost optimization and strong quality
`track record.
`
`9% to global revenues. Exports constitute more than 65%
`
`of the total API sales by the Company.
`
`Lupin’s API legacy spans over four decades of having
`
`serviced the world's largest pharmaceutical companies.
`
`Deep vertical integration, scale and more importantly our
`
`investments in research, manufacturing and quality have
`helped us build a quality product pipeline. Coupled with
`