Global leadership in APIshas helped Lupin leverage economies of scale into building a global generics powerhouse.

Factors such as an increased focus on generics adoption globally, the rising number of blockbuster drugs patent expirations, constant demand for reduction in manufacturing costs and strong growth in the overall pharmaceutical market are some of the driving forces that are reshaping the global API Industry. Recent studies indicate that the API Industry is set for significant growth with India, China and Italy positioned as the largest producers. India has emerged as the most favored API producing nation globally largely because of its credentials as the best quality manufacturer of generic formulations as well as its cost competitiveness as compared to its counterparts.

Lupin’s strengths and cost leadership in APIs has not only enabled forging of better synergies between diverse Formulation businesses across the globe but also helped create new opportunities for future growth. Today, Lupin is one of the most vertically integrated global generic majors; a market leader on both fronts of the pharmaceutical business, APIs and Formulations.

In FY 2011, the company’s API business generated revenues of `8,403 million, representing a growth of 12% on a YOY basis. This has been achieved due to a constant endeavor to improve operational efficiencies but also because of careful strategic planning. Today, Lupin runs one of the most profitable businesses in the Industry with return on capital employed (ROCE), comparable to the best.

The company has established global leadership positions in its chosen therapeutic domains in API and has a firm grip on the Cephalosporins, CVS and Anti-TB space.

Over the years, and particularly in FY 2011, the Company’s API output has grown significantly in both volume and value. This is a result of continuously and tirelessly focusing on creating operational efficiencies and building synergies with a view to both protect and improve margins. Coupled with prudent procurement strategies this has helped the Company sustain its profitability despite adverse input price volatility, witnessed specifically on the Pen G front. The added dimension of compounded growth in captive consumption to fuel the ever expanding formulations business provided an additional thrust to the volumes produced by the API division.

Lupin continues to enjoy global market leadership in Rifampicin, Pyrazinamide and Ethambutol, as well as in Cephalosporins such as Cephalexin, Cefaclor and their Intermediates. In FY 2011, Lupin continued to record significant growth in 7 ADCA & 7 ACCA products. Furthermore, Lupin continues to remain a strategic supplier of TB products to the Global Drug Facility (GDF), thus maintaining its premier position in the Anti-TB space.

In a strategic move during 2011, Lupin also merged Novodigm with its API business to further streamline operations, enhance productivity and increase capacities for the development of new APIs and intermediates. Lupin has also made significant investments into expanding the Novodigm production facilities in Vadodara.