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India & China

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  1. India & China Dr. Brian W Tempest Chief Mentor & Executive Vice Chairman of the Board Ranbaxy Laboratories Limited, Delhi, India Berlin – 6th December 2006

  2. Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “likely”, “project”, “should”, “potential”, “will pursue” and similar expressions or variations of such expressions may constitute "forward-looking statements". These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, our growth and expansion plans, obtain regulatory approvals, our provisioning policies, technological changes, investment and business income, cash flow projections, our exposure to market risks as well as other risks. Ranbaxy does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date thereof. Disclaimer

  3. Asia’s Share of the World GDP (at PPP in %) Year18701913 195019732001 China 17% 9% 5% 5% 12% India 12% 8% 4% 3% 5% Japan 2% 3% 3% 8% 7% Rest of Asia7%5%7%9%13% Total Asia38%25%19%25%37% Source – WEF - was 59% in 1820 with India 16%, China 33%

  4. The R&D Investment Advantage Most attractive R&D Investment locations: Ranked 3rd - China, USA, India, Japan & UK Source – UNCTAD 2005 Reasons why India: • Qualified Scientists & Engineers • Global India players with Alliances • English speaking • TRIPs compliant – first patent March 2006 • IIT, IIM & other scientific institutions Source – UNCTAD 2005

  5. The Education Advantage • 4th largest reservoir of Scientific Manpower (2nd largest English speaking) • 3m graduates pa, 115k MSc Chemistry (3.5k UK), 215k Eng (222k USA) Physics the most popular subject • Knowledge super power in the making • Lead by a Nuclear Scientist as President – remote sensing satellite technology, 1/6 countries • PCT application ranked 3rd – K, Ch, Ind, Si, RSA • “US & Europe will not dominate Science, Maths, IT industries” • Diaspora network (25m across 120 countries)

  6. The Education Advantage Engineers/Science graduates p.a – India 0.7m, China 0.5m, EU 0.5m, USA 0.4m, Japan 0.3m

  7. The Clinical Advantage Cost Advantage China India Enrolment 50 33 Cost 40 16 Patients/site 250 500 Based on USA at 100 Index Source: BCG report ‘Looking Forward 2006’ Country USAIndia Sites 22 8 Subject 626 896 Source: Andy Lee Pfizer Global, head clinical study and data management.Business India, August 13, 2006 • Patients • Naïve untreated patients • HIV 50m • Diabetes 32m • HT 5m Medical Tourism Thailand India - Open heart $14250 $4400 - Hysterectomy $ 2012 $ 571 - Knee surgery $7000 $4500 “………..The Country’s World Class skills in Chemistry & IT and it’s large treatment naive patient population provides added allure”Boston Consultancy Group Harnessing the power of India 2006

  8. The Pharma Advantage Competitive Advantage - Cost of Innovation • Clinical data management • An Indian speciality • 300 staff GSK • -2.2m clinical data sheets • -450 trials • -Error rate <0.01/100k • -No data security issues • Source: BCG report ‘Looking Eastward Sep’2006’ R&D hotbeds “China & India have become R&D hotbeds……….. MNCs already operate some 180 R&D centres in China and More than 100 in India” Source: BCG report ‘Looking Eastward Sep’2006’ 2005 2004 2001 185 2000 1999 170 146 86 49 24 32 Ranbaxy’s Patent Filings R&D III 24

  9. The Pharma Advantage – API’s USA DMF filings by India % Share of USA DMF filings IndiaChina 2004 27% 9% 2005 37% 10% Q1’06 44% 15% Q2’06 41% 16% Source: US FDA / J P Morgan, 6th August 2006 1990 1 1995 4 2000 36 2004 187 2005 262 Source: Crisil / US FDA / J P Morgan Source: US FDA, Credit Suisse

  10. Global Market Trends – Vendor Availability IndiaChina Analog preparation 41 25 Combinatorial chemistry 37 7 Analytical chemistry 37 7 Structural chemistry 26 5 Assay development 26 2 Computer drug design 26 13 High throughput Screening 11 2 Bio informatics 13 7 Genetically modified animals 0 3 Basic molecular biology 13 25 *Out of 90 vendors in October 2005 Source – BCG, ‘Looking Eastwards, September 2006’

  11. India A Global Strategic Asset for developed World Market businesses

  12. Potential Challenge - Pollution USA – 4% population with 20% emissions China – Same level as USA in 2005. In 2025 will be double India, China, USA – Refuse any mandatory CO2 emission caps India is 6th greatest energy consumer Ganges River is the World’s most polluted river – source: World Commission on water

  13. Potential Challenge – InfrastructureA common view - Infrastructure will need $155b over the next five years Source – Manmohan Singh

  14. Thank You