Alkem Labs Chairman Speech

MESSAGE FROM THE FOUNDERS'' DESK

Dear Shareholders,

We are delighted to share our thoughts with you, on the completion of the 45th year of our business. It has been a long and fulfilling journey, replete with achievements.

During this journey, we have built a formidable global pharmaceutical company that has 800 brands, 21 manufacturing plants, a well-entrenched presence across India and the US, and sales and distribution network in over 50 countries worldwide. This year our revenues have crossed the US$ 1 billion mark, giving us a strong platform to further scale up growth in the coming years.

We have come this far thanks to our vision, work culture, the pursuit of quality, and our dedicated workforce. It has always been our endeavour to deliver highly efficacious and quality drugs at affordable prices. These traits will be our foundation to take our growth story forward.

The pharmaceutical market of today is radically different from what it was when we began our journey. Both our key markets of India and the US has undergone significant changes in terms of regulatory landscape, competitive pressures and therapeutic mix. We have done relatively well in these evolving markets, credit of which goes to our resilient brands, our processes and most importantly our people.

Briefly touching upon the year gone by, our India business faced multiple headwinds including the ban on certain Fixed Dose Combinations (FDCs),a relatively weak anti-infective season and a slow growth in our trade generic business due to tightening of credit terms set by us. However, on the positive side, our chronic business continued to grow significantly ahead of the market growth rate, leading to improvements in our market share and ranking in therapy segments of neuro and CNS, antidiabetics and even cardiac and dermatology. So, overall, while our India business has had a lot of challenges; there were opportunities of growth as well.

Our International Business mainly led by the US business delivered a robust performance on the back of new product launches and market share gains in our existing products. Medicine spending in the US is expected to grow at a steady clip and the region is also expected to witness a large number of products going off-patent over the next five years. Given this, we see a good headroom for growth in the US market. However, with the growing number of players entering into the generic business and the trend of raising grants of ANDA approvals, the prospect of increased price-based competition cannot be ruled out. Our Company is well placed in this growing market with more than 120 ANDAs filed with the USFDA, CGMP compliant manufacturing facilities and own front end to distribute and market our products. During the year, our R&D investment touched Rs 4.6 billion, a growth of about 27% over last year.

With great satisfaction, I would like to share that, Alkem has also contributed substantially to the growth of communities we are part of. Health and education continues as our CSR priorities. Building of amenities and facilities to deliver better access to education and healthcare remains a key lever for bringing about a positive impact in the society.

We would like to offer sincere thanks to all our shareholders, partners and employees for being part of our growth story and contributing towards the fulfilment of our vision. Our growth is a testimony to the fact that with teamwork, motivation and sustained efforts, everything is possible.