The document discusses investment strategies for the life science industry in India. It provides an overview of India's economic growth, pharmaceutical industry, and drivers in the industry such as population growth and increasing chronic diseases. It outlines strengths and weaknesses of India's pharmaceutical sector. It also discusses internal R&D programs by Indian pharmaceutical companies, discovery and commercialization deals between Indian and global companies, and recent acquisitions in the Indian life science industry. The presentation aims to translate India's potential in the life science sector into reality through strategic investments.

1. Life Science Investment Strategies for India:
Translating Potential into Reality
Harshawardhan Bal, PhD
Stem Cell Capital
www.stemcellcapital.com
1

2. Unveiling India and Its Potential
Agenda
• About Stem Cell Capital
• Introduction to the Panel
• The India story so far…
• Investment strategies for India
• Q&A
2

3. Moderator
Harshawardhan Bal – Stem Cell Capital (US/India)
• Lead the Life Sciences practice at Stem Cell Capital, a mid-market advisory firm
founded in 2008 with a focus on cross-border transactions covering M&A, capital raise
(VC/PE syndication), licensing, asset valuation, global BD and strategic sourcing.
• Over a decade of global and diversified experience in life sciences from Dana-
Farber/Harvard Cancer Center, OSI Pharmaceuticals and Millennium Pharmaceuticals
/ Takeda with a focus on early stage drug discovery, disease biology of HIV/AIDS and
HTLV-induced Adult T-Cell Leukemia.
• Consultant at Booz, Allen & Hamilton with leadership roles in NCI’s cancer Biomedical
Informatics Grid Program and global regulatory submission harmonization strategy for
pharma clients. Previously as VP and Head of Life Sciences for MAPE Advisory
Group, Mumbai, was responsible for M&A and PE transactions.
• M.S. in Pharmaceutical Sc. from Nagpur University and PhD in Molecular Biology from
the National Institute of Immunology, New Delhi. Postdoctoral training at Univ of
Rochester and Cold Spring Harbor Laboratory.
3

4. Introduction to the Panel
Pooja Pathak - Oxford Bioscience Partners (Boston)
• Pooja is a Principal at Oxford and focuses on investments across life science
sectors including therapeutics, medical devices, diagnostics and bioenergy.
She has been involved in the investment and monitoring of portfolio
companies such as Claros Diagnostics (point-of-care diagnostic), SmartPill (GI
capsule technology) and Luca Technologies (natural gas production
technology).
• She is currently a Board Observer with Molecular Biometrics (in vitro
fertilization diagnostic) and follows Oxford’s public positions in Acadia
Pharmaceuticals and Antisoma.
• Prior to Oxford, Pooja was a Senior Associate Consultant at Bain & Company,
a global strategy consulting firm. Pooja has a BS in Chemical Engineering
from the University of Illinois at Chicago and a MS in Chemical Engineering
from the MIT.
4

5. Introduction to the Panel
Srini Akkaraju - New Leaf Venture Partners (Menlo Park)
• Srini is a Managing Director at NLVP and focuses on biopharmaceuticals
investments. Prior to joining New Leaf, Srini was a co-founder and Managing
Director at Panorama Capital. Before forming Panorama, Srini served as
Partner of J.P. Morgan Partners, where he was responsible for leading venture
investing in biotech companies. Earlier, Srini held business and corporate
development positions at Genentech where he was responsible for worldwide
partnering activities, in-licensing of therapeutics and out-licensing of
development projects.
• Srini is the author of a number of peer-reviewed articles, including ones
published in Science and Nature. Board Seats: Presidio Pharmaceuticals,
Synageva BioPharma.
• He received B.A. degrees in both Biochemistry and Computer Science from
Rice University and M.D. and Ph.D. degrees in Immunology from Stanford
University School of Medicine.
5

6. Introduction to the Panel
Yatin Mundkur – Artiman Ventures (Palo Alto)
• Yatin is a Partner at Artiman where he focuses on early-stage Technology and
Medtech investments. Yatin has over 17 years of experience working with
technology companies in venture capital.
• Previously, Yatin was Managing Director at TeleSoft Partners, where he led
investments in over twenty companies in the early stage semiconductor and
software sectors. He founded and served as President of Equator
Technologies, a developer of Programmable MediaProcessors. His prior
experience also includes senior positions at Conexant, Sun Microsystems,
and others. He holds ten patents in areas of computer architectures, digital
consumer electronics, semiconductor design, and software.
• Yatin is currently on the boards of BioImagene, Cellworks Group, Infinite Z,
Pricelock, Virident Systems and Prysm.
• Yatin holds a B.S.E.E. from MSU of Baroda, India, and a M.S.E.E. from the
UTexas at Austin.
6

7. Introduction to the Panel
Viren Mahurkar – Wockhardt (Mumbai)
• Viren is Senior VP of Global BD at Wockhardt and has global responsibility for
acquisitions, licensing and partnerships with a focus pharma, biotech &
medical technologies including biosimilars and raising funding for the
company’s infectious diseases preclinical/post-IND research assets.
• Earlier he worked at Pfizer, as Director, International BD at NY, with focus on
new growth opportunities for the Europe Region. He was responsible for
forging European co-promotion partnerships with Novartis for cardiovascular
combination product. He also served as Country Director of Strategy and BD
coordinating Pfizer's efforts to define a new India growth strategy.
• Viren specializes in M&A/investment banking and global markets and has held
leadership positions in banking and has led some prestigious Indian deals,
such as the acquisition and tender offer for Abbott India by Pharmacia.
• Viren holds an MBA from the University of Delhi, MSc from the London School
of Economics.
7

8. Unveiling India
The story so far…
All data taken from company, industry, trade organization and analyst reports.
8

9. India
Economic Outlook
• 4th largest economy by purchasing power parity (PPP) with a GDP of
US$1.23 trillion
• Ave. GDP growth of ~9% between 2005-2008
• World’s 2nd fastest growing economy with current GDP growth at ~ 6-7%
(2008-09) post global slowdown
• Economic indicators project 8% growth in 2010-11 and beyond
9

10. India
Pharmaceutical Industry Overview
• 4th largest in volume and 13th in value
• >134 FDA-approved plants, one of the highest in the world
• ~ 10,000 pharmaceutical units that produce around 400 bulk drugs and >
60,000 formulations (covering 60 therapeutic categories)*
• With growth ~ 8.4% YOY, India will be a top 10 global pharma market in by
sales by 2020 with the total value reaching USD 50 Bn
• The Dept of Pharmaceuticals, GOI founded in 2008 under the Ministry of
Chemicals & Fertilizers aims to make India a global pharma innovation hub
by 2020
10

11. Indian Pharma Industry
Strengths…
• Large pool of highly trained manpower
• Well developed chemical industry and process engineering skills
• 2nd largest number of US FDA approved facilities
• TRIPS compliance
• Drug cost a fraction of the cost in the West
• FDI up to 100 percent
• Strong IT skills for research data management
• Strong marketing and distribution network
• Well established network of laboratories
• Cost competitive (R&D, manufacturing, clinical trials, and labor)
11

12. Indian Pharma Industry
and weaknesses…
• Low level of investment in R&D
• Highly fragmented industry
• Low level of industry-academia partnerships
• Low margins
• Government price controls
• Most Indian companies are small by world standards
• Industry concentrated at lower end of value chain
• Lack of experience in drug discovery
• Low levels of per capita medical expenditure
12

13. Industry Drivers
Economic growth, population, urbanization, demographic changes and
the emergence of lifestyle diseases
• Economic growth: The Indian economy’s recent growth expanded the middle-class
and grew the healthcare market, a trend that is expected to continue. Increasingly
health aware middle class with disposable income.
• Consumer healthcare spending is expected to increase to 13% of GDP by 2015.
• Population growth: The population is expected to grow to 1.24 Bn by 2015, while the
aging population is expected to increase to 112 Mn, opening up a new healthcare
dimension.
• Middle-class growth: Households with over US$5,000 annual income are expected to
increase to 63.8 Mn by 2015.
• Working age and urban population prone to lifestyle diseases, as a proportion of
overall population, is expected to increase from 28% in 2001 to around 31% by 2015.
Mindset shift of urban Indian consumers from treating illness to managing wellness 13

14. Generics & Services Sector Overview
API, formulations and contract services (CRAMS)
• India’s active pharmaceutical ingredients (API) industry with estimated sales US$4.1 Bn is the
world’s 3rd largest after China and Italy
• India manufactures over 400 APIs and supplies to about 50 countries; exports account for
around 70% of sales.
• India’s domestic formulations market is projected to grow at a CAGR of 13% to an estimated
US$15 Bn by 2015.
• At 30% growth YOY, CRAMS is the fast growing segment in the Indian pharma – with contract
research contributing 29% and contract manufacturing contributing 66%.
• Globally, the outsourcing trends are expected to grow further with the contract manufacturing
market size at US$ 45 Bn (US$ 29 billion from formulations and US$ 16 Bn from APIs)
• Contract research market size is estimated to be at ~ US$ 38 Bn (US$ 11 Bn from Drug
Discovery and US$ 27 Bn from Clinical Research).
14

15. Indian Pharma R&D
The beginning of innovation
15

16. Internal R&D Programs
NCE Pipelines of Indian Pharma
Company Pre-Clinical Phase I Phase II Phase III Total
Lupin 4 1 2 3 10
Dr. Reddy’s 4 2 3 1 10
Biocon 4 - 1 2 7
Glenmark 4 - 2 - 6
Ranbaxy 8 1 1 - 10
Piramal Healthcare 2 - 3 - 5
Cadila - 3 1 - 4
Torrent 5 1 - - 6
Wockhardt 4 1 1 - 6
Sun Pharma 3 1 - - 4
Total 38 10 14 6 69
16

17. Discovery & commercialization deals
Date Company Indian Partner Description
2010 Endo Pharma Biocon’s subsidiary Syngene First deal on discovery of a biological
International therapeutic entity for oncology
2009 BMS Biocon’s subsidiary Syngene Agreement to develop integrated drug
International discovery and development capabilities
2009 Pfizer Aurobindo Pharma Commercialize generic products in US and EU
2009 Pfizer Claris Lifesciences Commercialize off-patent drugs in the US,
Canada, Australia, New Zealand and Europe
2009 GSK DRL Market DRL’s 100 branded pharmaceuticals in
emerging markets such as Africa, West Asia,
Latin America and Asia-Pacific, excluding India
2009 Novavax Cadila Pharmaceuticals Joint venture to develop, manufacture and
commercialize vaccines, drugs and diagnostics
2009 UCB Pharma Alembic Apply Alembic's NDDS for UCB’s epilepsy drug
2008 Eli Lilly Piramal Healthcare, Jubilant Development of molecules from pre-clin to Ph II
Organosys and Suven
2007 Merck Piramal, Orchid and Advinus R&D collaboration for developing new drugs
Therapeutics
Evolution from (pure) Cost basis Shared risk/reward R&D innovation expertise
17

18. Acquisitions… a snapshot of recent deals
Date Acquirer Target Description
2010 Hospira Orchid Chemicals and Acquisition of beta-lactam
Pharmaceuticals generics injectibles business
2009 Perrigo 85 % stake in Vedants Move API production from
Company, OTC Drugs and Fine Germany and Israel to India
producer Chemicals
2008 Japan-based Ranbaxy Acquisition of global generics
Daiichi business
2008 Singapore's Dabur pharma Acquisition of oncology API
Fresenius Kabi manufacturing capabilities
2009 Sanofi Aventis (Merieux Alliance's 80 % Strengthen vaccine portfolio
stake in) Shantha Biotech and accelerate growth in
strategic emerging markets
2009 Pfizer Vetnex Acquisition of the animal
healthcare business
18

19. Thank You!
Harshawardhan Bal, PhD
Stem Cell Capital
www.stemcellcapital.com
Tel: +1 717 557 8247 (cell)
harsh.bal@stemcellcapital.com
19