1

Cadila Healthcare Ltd

Investor PresentationOctober 2006

2

Zydus Cadila- One of India’s leading integrated pharma companies

Ranked 5th in the domestic formulation market. (as per ORG IMS MAT Sep-06).

Formulations exports grew by ~35% in last three years and by 114% in last year.

Rapid growth in the developed generic markets (US, France and Brazil), which will further accelerate formulations exports growth.

Leveraging strengths through contract manufacturing.

Consolidated revenues (FY 05-06) of US$335 mn, PAT of US$34 mn and market cap. of ~US$ 900 mn.

3

Core business areas

Research & Development

Contract manufacturing

Emergingmarkets

High end APIs +intermediates

Developed generic markets

Domestic dosage forms

Revenue break up by segment Revenue break up by region

For FY 05-06 Rs. 15 bn. ($ 335 mn)

4

Facilities and infrastructure

Formulations Dosage forms Certification

Moraiya (Ahmedabad)

Tablets, Soft & hard gel capsules, Metered dose inhalers, Dry powder inhalers, Injectibles, Lyophilised vials, Transdermal patches and Vaccines

US FDA (for tablets), MHRA, ANVISA, AFSSAPS, BFAD, MCC

Baddi ( Himachal Pradesh) Tablets and capsules GMP

Goa Orals, injectables and suppositories

GMP

Bulk Drugs & Fine Chemicals Type Certification

Ankleshwar (Gujarat) - API Multi-purpose US FDA

Vadodara (Gujarat) - API Partially dedicated US FDA

Patalganga ( Maharashtra) - API Multi-purpose GMP

Ahmedabad (Gujarat) - Fine Chem Fully dedicated

Contract manufacturing Type Certification

New Mumbai (Zydus Altana JV- pantoprazole intermediates)

Dedicated facility GMP

Goa (Madaus - for Agiolax) Dedicated facilityWHO, GMP, BaFD, ANVISA

One more formulations facility in a tax free zone and an integrated cytotoxic facility for Zydus Mayne JV in SEZ are under construction.

Initial formalities for new facility (in SEZ) for JV w ith BSV to manufacture anti cancer product (NDDS) have also been completed.

5

Distinctive capabilities in manufacturing and distribution

Moraiya- largest facility in Asia - capable of producing 3 bn tablets/pa (single shift)

Amongst the few in India to make Lypholised products Vaccines Aerosols Hormones Cytotoxic products

Only producer in India Transdermal patches Suppositories

Country wide distribution Large sales force and 7

specialty divisions Servicing ~0.15m doctors

or about 60% doctors in the country

Capability for cold chain products

Distributing high-end in-licensed products

Manufacturing Distribution

6

Overall strategy

Continued focus on domestic market

Grow rapidly in key global generics

markets- US, Europe & Latin America

Leverage strengths through contract

manufacturing opportunities

Focus on innovation- R&D

7

Domestic market strategy

• Maintain overall position and market share through:– Focus on faster growing chronic/ lifestyle segments– Continued new product introductions– In-licensing arrangements- Schering AG, Boehringer

Ingelheim, Bio Sidus, Meda Pharma etc.– Marketing excellence

2000-01 2005-06Portfolio shift to life style and chronic segments

8

Achievements in domestic market

• Zydus Cadila ranks 5th with Rs ~8bn sales. (Source : ORG IMS MAT Sep-06)

• 14 Zydus brands feature amongst the top 300 brands. (as per ORG IMS MAT Sep-06)

• Top 3 brands have > 25% MS, and out of the top 20 brands, 17 brands have > 10% MS. (Source : ORG IMS MAT Sep-06)

• Launched 34 new products in FY 05-06. New products introduced in last 3 years contribute ~10% of domestic formulations sales.

• Featured in top launches every year - Penegra, Pantodac, Mifegest, and now Nucoxia, adjudged best launch of 2004-05.

• Plan to launch over 35 products in FY 06-07 also. Recently launched ‘Novolizer’, a third-generation refillable, breath actuated multiple dose dry powder inhaler device for Asthma and COPD. The technology for the device has been provided by Meda Pharma of Sweden.

• Launched “Project Phoenix” for -

• Strengthening pillar brands• Rejuvenating mature brands• Enhancing product management skills• Improving business health

• Recently restructured marketing divisions to increase participated market share and enhance presence in specialty and high growth segments.

9

Top rankings in key therapeutic areas

CardiovascularCardiovascular

GastrointestinalGastrointestinal

Female HealthcareFemale Healthcare

RespiratoryRespiratory

11

11

11

22

* Segment ranking and Market Share refer to participated market Source:ORG-IMS Jun 06 (MAT)

Zydus Rank *

Zydus MS *

10.7%10.7%

Segment MS *

Segment growth *

9.1%9.1%

5.8%5.8%

4.4%4.4%

14.1%14.1%

18.9%18.9%

15.7%15.7%

11.7%11.7%

7.0%7.0%

6.0%6.0%

8.3%8.3%

7.7%7.7%

27,00727,007

Participated Segment Value

(Rs. Mio)

22,93922,939

14,72314,723

11,15111,151

10

International business- two fold focus

Developed generics markets• US- the largest generic market in the

world• Zydus Pharmaceuticals Inc. - for

formulations• Zydus Healthcare LLC - for APIs

• Europe- Zydus France SAS• Spain, Italy (planning to enter)

Emerging markets

• CIS - Russia , Ukraine

• Asia Pacific- Sri Lanka, Vietnam, Myanmar

• Africa, Middle East

• Brazil, South America

19

25

39

Formulations-emergingmarkets

Formulations- developedmarkets

APIs/intermediates- exports

2005-06 US$ 83 mn 2010E US$ 370 mn

International sales projection 60

200110

11

US - the key market

Product selection ~60 products prioritized Products include

existing generics, would-be generics including

block busters NDDS based

Transactional excellence Strong team- experienced in

US generics market Customised solutions Focus on high service levels

Unique distribution Tie up with Mallinkrodt for

distribution in US Sell under joint label Share revenues and profits Select customers- service

directly

Cost excellence through backward integration

Significant proportion of own APIs

API and FDF facilities in India with US cGMP quality control

12

US - robust filings

Filed 41 ANDAs and 45 DMFs so far.

41 ANDAs represent ~ US$ 21b in current market size.

Received 17 product approvals, of which 7 have been launched.

ANDAs filed- half for matured products. Include 6 blockbusters and 2 NDDS.

Half the products envisage own API.

Plan to file 10-12 more ANDAs by the end of FY 06-07, taking cumulative total to over 50 ANDAs.

24

17

41

45

0 5 10 15 20 25 30 35 40 45

ANDAs pendingapproval

ANDA approvals

ANDA filings

DMF filings

13

US - marketing plan

Marketing and distribution through Mallinckrodt, which is 7th largest generic player in US.

Also doing direct marketing through own US subsidiary.

Launched 7 products so far. Response has been excellent with initial market share > 10% in all products.

Sales in first year (FY 05-06) ~ US$ 11 mn., operations were profitable in the very first year.

Plan to launch another 6-8 products in FY 06-07.

Aggregate current market size of branded products of these ~ 15 products is ~ US$ 11b.

Expect to multiply sales in FY 06-07 even as pricing pressure continues

14

France- first step in Europe

4.95.7

10.5

Sales (mn Euro)

CY2003 CY2004 CY2005

Generics to drive our French business

804

592

809731

Patent expiries (mn Euro)

2004 2005 2006 2007

Major patent expiries in France ~US $ 2bn generics market, grew by

29% in 2004 (Source IMS)

~40 major drugs going off patent in France during 2004-7.Aggregate current size ~3bn Euro

Expected to drive ~ 20% per annum growth in the generics market

Pure generics

Business thru “Evolupharm”, a large buying group representing ~ 2250 pharmacies.

Exports business

Branded business, which has been sold off recently, to have total focus on generics

French business segments

15

Key initiatives for France

Launch of generics Launched over 85

generic presentations so far.

Plan to boost the basket to ~ 90 presentations by end 2006

Leveraging India’s low cost

New product filings- first approval received in 05-06, more in pipeline

Site variation- current 12 filings, 4 approvals

8

56

76

90

0

10

20

30

40

50

60

70

80

90

Generics products- cumulative

CY2003 CY2004 CY2005 CY2006E

15

1

12

4

0

2

4

6

8

10

12

14

16

New product filingsfrom India

Site variation filings

Filed Approved

Relationship with

pharmacists Building special

relationship with pharmacists

Supporting a health awareness program for the Zydus club of pharmacists

16

International business- new markets

Brazil Pharma market size of ~US$7 bn.,

growing at ~18% (Source : ESPICOM) Filed 26 pure & branded generics

dossiers Received 13 generic product

approvals, and all have been launched.

Plan to file for and launch 8-10 products every year

Spain/ Italy Low generics penetration, high

growth

Looking for suitable entry opportunity

South Africa Branded generics- commenced

operations

Marketing and distribution partner finalized

Filed 33 submissions, received 10 product approvals so far

Launched 3 products in 05-06, plan to launch 6-8 products in 06-07

17

Zydus is uniquely positioned on Contract Mfg. Front :

World class state of the art manufacturing facilities.

Dedicated dossier filing and IPR team, enabling rapidity in site transfer projects and competency in development projects.

Zydus’ experience with global partners -

Cost efficient and high quality products and services

Working with several US and European multinationals

Operational transparency with these partners

Dedicated project management teams

Contract manufacturing - exciting prospects

18

Altana JV - benchmark in contract manufacturing.

State of the art manufacturing facility set up as an EOU near Mumbai.

Supplying 2 key starting materials of Pantoprazole to its worldwide patent holder, Altana AG, Germany.

60% of global requirements are met from this plant.

Recently increased capacity by 20% from 48 tons to 60 tons.

Mayne Pharma (Australia) - JV for oncology injectibles (Generics).

Setting up an integrated cytotoxic facility located in an SEZ near Ahmedabad.

Construction of the plant in full swing now.

Commercial production expected in FY 07-08.

Full capacity utilisation in FY 08-09.

17 other contracts with big innovator and generic MNCs signed so far with peak revenue potential of US$ 25.5 Mio.

Few more contracts in pipeline.

Contract manufacturing - achievements so far

19

Research Focus

Zydus Research Centre (ZRC)

Located in Ahmedabad

Focused on NME Research

Pharmaceutical Technology Centre (PTC)

Located in Ahmedabad

Focused on Finished Dosage Form Development

API Process Research

Located in Ankleshwar/Ahmedabad

Focused on Process research

Revenue R&D Spends - FY ’06

Scientific Talent Pool ~ 600

250

100

250

NME & DrugDiscovery

Generics /Developmental

API & Others

23780

479

NME & DrugDiscovery

Generics /Developmental

API & Others

60%

10%30%

Rs. 797 Mio. (5.5% of net sales)

20

Zydus Research Center - investing for the future

• NME Research & Biologicals (Biogenerics).

• Therapeutic Area: Diabetes, Dyslipidemia, Obesity, Inflammation.

• Infrastructure for target identification to pre-clinical research / early clinical development.

• Lead lipid lowering drug candidate ZYH1 in Phase II clinical trials.

• ZYI1, the Anti-inflammatory & Pain Management compound, completed Phase I trials, while ZYH2, the novel agent for treating diabetes will start Phase I clinical trials soon.

• Multiple candidates under preclinical stage.

NME IND Filing Phase 1 Phase 2 Phase 3

ZYH1 Dyslipidemia

ZYH2

ZY01

Diabetes

Obesity

ZYI1 Inflammation

Pre Clinical

NME Pipeline

21

PTC – New Product Development Team

• Product Development team of 250 scientists

• Infrastructure:

– Development labs

– Pilot Plant

– Analytical Support

– Stability studies

– Pharmacokinetics

• In-house Regulatory, IPR & Packaging development Group

PTC : Scientific Team

80

10

115

25

155

Formulations DevelopmentAnalytical Development

Pharmacokinetics & Project Mgmt.Regulatory Affairs

IPRPackaging Development

22

Set up a JV with M/s Bharat Serum and Vaccines Ltd., one of the top 10 biotech companies in India, to develop, manufacture and market a non-infringing and proprietary Novel Drug Delivery System (NDDS) of an approved anti-cancer product for global markets.

Acquired ~ 62% stake in Carnation Nutra-Analogue Foods Ltd., the manufacturers of “Nutralite”, India’s largest selling margarine, currently enjoying a market share close to 60%, which is free from cholesterol and is healthier substitute for butter. This will complement our “Sugar Free”, which is brand leader in life style segment.

Opened up a new subsidiary in Japan - "Zydus Pharma Inc., Japan" to kick start Japanese operations. The subsidiary will market APIs and formulations in Japanese market, and start product registration process in 2007.

Recent Developments

23

Leveraging the India advantage

Contract manufacturing : lower cost manufacturing

R&D : phase I /IIa clinical trials in India

US : regulatory filings + formulation manufacturing base in India + high level backward integration

France : shift manufacturing to India gradually through site variation & new filings

Bio-equivalence studies : potential to carry out in India

24

Summary of Growth drivers

Short-term < 2 years

Short-term < 2 years

Medium-term 2-5 years

Medium-term 2-5 years

Long-term >5 years

Long-term >5 years

Capitalise on existing strengths to drive growth in domestic market

Regulated generics markets – APIs and formulations in Europe and USA

Expand business in regulated generic markets- organically /inorganically

In-licensing and out-licensing

Contract manufacturing, in-sourcing and leveraging on alliances

Innovation- research driven (NCE and NDDS) global pharma company

25

Financial Highlights

26

Our vision

One of India’s leading healthcare players, we

aim to be a global research driven company by

2020. We shall achieve sales of $400mn by

2006 and we shall be a top ten global generics

company with a strong R&D pipeline and sales

in excess of $ 1b by 2010

27

No part of this presentation may be reproduced, quoted or circulated without prior written approval from Cadila Healthcare Ltd..

This presentation may include certain “forward looking statements” , based on current expectations, within the meaning of applicable laws and regulations. Actual results may differ and the company does not guarantee realization of these statements.The Company also disclaims any obligation to revise any forward-looking statements . The viewers may use their own judgement and are advised to make their own calculations before deciding on any matter based on the information given herein

www.zyduscadila.com

Thank You.