Abbott Acquisition of Piramal

A brief snapshot of implications for

the company & market
 The New Pecking Order
3500 Rank PharmaTrac (Rs. Cr) MAT Apr-10
2967
3000 Val (Cr) MS% GR%
2533 Pharma Market 45385 100 13.8
2500 2237 2208 1 Abbott + Piramal + Solvay 2967 6.54 17.5
1966
2000 1828 2 Cipla 2533 5.58 14.8
1499
1500
3 Ranbaxy 2237 4.93 3.4
4 GSK 2208 4.86 3.8
1000
5 Sun 1966 4.33 14.3
500 6 Zydus Cadila 1828 4.03 14.3
7 Alkem + Cachet + Indchemie 1499 3.30 12.5
0
8 Lupin 1462 3.22 16.4
Abbott + Cipla Ranbaxy GSK Sun Zydus Alkem +
Piramal + Cadila Cachet + 9 Mankind 1367 3.01 16.7
Solvay Indchemie 10 Aristo 1163 2.56 11.4

Not only Number 1 but distinct with a wide margin – will

maintain the No. 1 Rank atleast for the near future

Key is to sustain the growth (17.5% - highest in top 10)

that the distinct entities achieved independently.
 Therapy Synergies
Value at Price to Retailer (10% higher) MAT Apr-10
Market Abbott Piramal Solvay Merged Entity
Therapeutic Class (EphMRA) Val (Cr) $ Bn (@47) MS% GR% Val (Cr) % Presence Val (Cr) % Presence Val (Cr) % Presence Val (Cr) % Presence
Indian Pharma Market 45,447 9.67 100 13.9 560 1.23 2,113 4.65 294 0.65 2,967 6.5
A - Alimentary Tract and Metabolism 11,340 2.41 25.0 13.5 216 1.9 456 4.0 142 1.3 814 7.2
J - General Anti-Infectives Systemic 9,043 1.92 19.9 12.5 3 0.0 421 4.7 424 4.7
C - Cardiovascular System 4,812 1.02 10.6 13.2 7 0.1 228 4.7 18 0.4 252 5.2
R - Respiratory System 3,705 0.79 8.2 14.6 4 0.1 281 7.6 3 0.1 289 7.8
N - Central Nervous System 3,399 0.72 7.5 14.0 149 4.4 215 6.3 53 1.5 417 12.3
M - Musculo-skeletal System 2,821 0.60 6.2 15.5 36 1.3 144 5.1 2 0.1 183 6.5
D - Dermatologicals 2,360 0.50 5.2 12.6 140 5.9 140 5.9
B - Blood and Blood Forming Organs 2,046 0.44 4.5 13.3 4 0.2 89 4.3 93 4.5
G - Genitourinary System & Sex Hormones 1,931 0.41 4.2 16.2 8 0.4 77 4.0 85 4.4
V - Various 1,313 0.28 2.9 13.3 85 6.5 15 1.1 100 7.6
P - Parasitology 707 0.15 1.6 8.7 27 3.8 27 3.8
S - Sensory Organs 615 0.13 1.4 15.8 6 1.1 6 1.1
H - Systemic Hormonal Preparations 476 0.10 1.0 14.0 46 9.6 31 6.5 77 16.1
L - Antineoplastic & Immunomodulating Ag 375 0.08 0.8 41.6 10 2.6 10 2.6
U - Others 201 0.04 0.4 49.0 0 0.0
K - Hospital Solutions 192 0.04 0.4 19.7 41 21.5 41 21.5
T - Diagnostic Agents 110 0.02 0.2 50.8 9 8.5 9 8.5

> 5% share for 7 of the top 10 Therapy Areas

 Top Brands – Merged Entity
Rank Brand Company MAT Apr-10 GR
2 PHENSEDYL COUGH LINCTUS Piramal 188 15
37 DIGENE Abbott 79 9
42 EPTOIN Abbott 74 7
56 DUPHASTON Solvay 64 45
74 UDILIV Solvay 56 35
103 VERTIN Solvay 48 33
114 DUPHALAC Solvay 45 27
122 THYRONORM Abbott 43 37
134 STEMETIL Piramal 40 -5
143 HAEMACCEL Piramal 39 36
170 LMWX Piramal 35 45
173 GARDENAL Piramal 35 6
177 CREMAFFIN Abbott 35 7
213 PARAXIN Piramal 31 7
219 KENACORT Piramal 31 17
230 NERVUP Piramal 30 9
233 TOSSEX Piramal 30 4
235 BRUFEN Abbott 30 7 5 brands in the top 100
236 TRIBET Piramal 29 30
242 GENTICYN Piramal 29 2
25 Brands in the top 300
249 LOBATE GM Piramal 29 45
273 PHENERGAN Piramal 27 3
276 FINECEF Piramal 27 43
278 SUPRADYN Piramal 27 13
287 ACITROM Piramal 26 6
 Highest Growth > 5 Cr Brands
Industry Rank Brand Company MAT Apr-10 Val (Cr) GR
912 CEFI O Piramal 11 $
1034 CEFI XL D Piramal 10 1365
1631 OPTIUM Abbott 6 929
1033 ROCKBON Piramal 10 721
1095 PPG Piramal 9 612
1517 ISOMIL Abbott 7 401
1745 MEGAMOX Piramal 6 316
1108 CEFI (NPIL) Piramal 9 274
961 CLINAXON Piramal 10 204
1839 DURAJOINT GM Piramal 5 192
823 CAAT Piramal 12 152
1250 NUPOD Piramal 8 115
497 CEFCHAMP Piramal 17 100
1303 CEROM Piramal 8 98
363 ZIMNIC Piramal 22 94
1339 ERTYCIN Piramal 8 73
1639 IMI CILA Piramal 6 68
639 LIMCEE Piramal 14 59
597 FIGHTOX Piramal 15 52
1484 DOBUTREX Piramal 7 52

Top 20 growing brands (above > 5 Cr turnover)

Total 137 brands > 5 Cr turnover
 Mega Reach
Company Medical Reps
Piramal Healthcare 3000
Piramal Trucare 2000
Abbott 1600
Solvay 500
Merged Entity 7100

Twice the size of next highest

field-force of Mankind (3500)
 Challenges Ahead
• Pay Structure Parity: MNC payouts 20-25% higher than Indian
companies for equivalent functional posts
• Designation Parity: Indian companies have tendency to keep
higher role titles to retain people
• Portfolio Management: Inter-divisional movement of Brands
to maximize gain in long term. Rationalizing brands to
optimize in-clinic time to focus on brand building
• Cost Rationalization: Certain common functions would have to
be rationalized leading to some minor layoffs in the 12-18
month horizon. Current Pharma Industry growth can absorb –
so no big concerns on this front.
 Opportunities
• Largest promotional Budget & Reach – can outwit competition
with sheer power
• Reach the remotest interiors with the massive field numbers
• Cross synergies can push OTC products
E.g. Digene periodic promotion to 5000 Gastroenterologists
E.g. Pediasure periodic promotion to 10000 Pediatricians
• Low cost generic manufacturing for Indian and International
Markets. In Africa, SE Asia, CIS – a dual approach of generic &
patented player
• Adding Rural Reach to current Mega Brands – historic
opportunity to create 200 Cr plus brands in Indian Pharma
Industry in the next 2-3 years