CEO & MD’s
Letter

Creating long-term value for our stakeholders

CEO MD letter

Dear Shareholders,
We are pleased to present our first Integrated Annual Report. This report aims to provide our stakeholders with a holistic view of our value-creation model, strategy, governance, and performance. The report also gives us the opportunity to share more about Lupin, our core strengths, what we stand for, and the value we bring to our patients, customers and stakeholders. We are Resilient, we are Responsible, and we stand for Results.

Shaped by the COVID-19 pandemic, the unexpected and overwhelming year that went by affected every aspect of our lives. Through this period, we worked hard to strengthen the long-term value of our business, to emerge stronger coming out of the pandemic. This would not have been possible without the hard work, perseverance, and commitment of our 20,000+ Lupinytts.

It gives us a lot of confidence to see the agility and resilience that our team demonstrated in this period, while continuing to manage the business through the lens of people, performance and purpose. In addition to ensuring business continuity, our priority was ensuring the health and safety of our people. We put in place extensive measures to protect them and their families; yet sadly we lost several of our valued colleagues across the world. We extend our deepest sympathies to their families and teammates.

In the face of this unprecedented volatility, we made proactive investments in our people, processes, operations and technologies so that we could deliver strong operational performance throughout the period and into the future. Through the quarters of FY21, we improved operational performance and our margins by maximizing revenues and delivering on our cost optimization efforts.

In the US, we continue to be the 3rd largest generic player (by prescriptions). We have a total of 168 generic products in the market, with market leading share on 53 products and feature in the Top 3 on 122 of our products. While the weak flu season and COVID-19 related disruptions resulted in lower revenues compared to the previous fiscal, the highlight of the year for our US business was the launch of Albuterol, validating our capability to emerge as a leading complex generic player.

CEO MD letter

We are the 6th largest company in the Indian Pharmaceutical Market. Our India business continues to be a robust driver of revenue and profitability backed by a strong pipeline of products, both from our external partners and increasingly from our internal development.

Our global API sales recorded growth of 6.3%. Our Growth Markets recorded slightly lower numbers compared to FY20 due to substantial pandemic exposure, and our EMEA region sales grew 3.4%. In Europe we were very pleased to get approval for launch of our first biosimilar, Etanercept, validating our capabilities on the biosimilars front.

After a challenging period, we have come a long way this past year, and are well set to drive growth going forward, both in revenues and profitability. As we progress into FY22, while some challenges persist, we expect to continue to build on the momentum gained, and aim to achieve robust growth. In the US, we see the ramp up of Albuterol, growth in our inline products as well as new inhalation product launches like Brovana® driving growth. We also expect to hit multiple milestones in our complex generic pipeline in all three of our lead platforms – inhalation, biosimilars and injectables. We see our inhalation portfolio starting to go global with the UK marketing authorization for Fostair®, for which we are the first generic to be approved. We also see our biosimilar portfolio starting to evolve with the ongoing review of our first BLA filing in the US for Peg-filgrastim.

As a company committed to innovation, we invested 9.6% of our revenues in R&D during FY21. We have a clear research strategy in place to maintain our core generic position, deliver on complex generics, and build out our innovation portfolio.

We accelerated EBITDA improvement throughout FY21 led by new launches, cost optimization and restructuring efforts. Net Profit before Exceptional items grew by 33.9% to INR 12,165 million in FY21.

The last fiscal was a year where we demonstrated that our people come first – when lives depended on ensuring taking all necessary precautions, we implemented numerous initiatives towards ensuring the health, well-being and safety of our people and our work environment; it was a year where we demonstrated agility – we took multiple steps to change our strategic direction, we reduced the number of people at our facilities, staggered shifts, made work from home possible for as many people as we could; it was a year where we showed that we can successfully navigate through uncertainty, while not just protecting, but strengthening our core. To us, the last fiscal was a year that showed us the true capability that Lupin has, and how much more we can do.

As responsible corporate citizens, we continue to extend all forms of support to COVID-19 relief efforts. In a year of turmoil, we are proud and humbled to have been able to serve our communities.

As COVID-19 treatment and vaccination gets to acceptable levels, we see the business and the economy picking up. Importantly, we see a stronger, brighter Lupin emerge through this – with a renewed sense of purpose of solving India’s health challenges and bringing DBG’s legacy to the world.

Kind regards,

Vinita Gupta Chief Executive Officer
Nilesh D. Gupta Managing Director