Tag: API

Alembic Pharma targets 5-6 new product launches in US every quarter

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Vadodara-based generic drug maker Alembic Pharmaceuticals plans to launch 5-6 new products every quarter in the United States. The company launched 11 new products during the third quarter of the current financial year (Q3FY24), and 20 new products in the first nine months of the year (9MFY24).

The company’s CFO RK Baheti said if the newly launched products gain traction and prices remain stable, Alembic Pharma should witness good business in the US generic market.

Alembic’s US generics sale for Q3 picked up and were at $57 million versus $53 million in Q2FY24 helped by new launches and volume gains for existing products.

The pharmaceutical company has grappled with steep price erosion in the US generic market in recent years. However, prices have begun stabilising, and even though product specific pricing pressures remain, new launches are expected to start contributing to growth.

Alembic Pharma specialises in active pharmaceutical ingredients (APIs) used in drugs to manage conditions such as diabetes, osteoporosis, and depression. Baheti expects the API business to grow at 7-10% amid pricing pressures.

“With generic stabilising, hopefully, API business will also improve,” he said.

Revenue of the API business, which contributes 19% to the total, declined 11% to ₹289 crore in Q3.

Alembic Pharma reported a third-quarter profit of ₹180.5 crore, a 48% year-on-year (YoY) increase from ₹122 crore, driven by strong sales in both the US and domestic markets. The company revenue grew 7% YoY to ₹1,630.6 crore from ₹1,509 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) margin for Q3 was at 16.3% versus 16.5% in the same quarter last year.

For 9MFY24, revenue growth is 11% YoY at ₹4,712 crore, while profit has jumped to ₹438 crore from ₹189 crore. Margins have spiked to 14.3% from 12%.

Domestic business, Baheti noted, is outperforming the market in most categories, and the margins are good.

Brokerage firm HSBC has maintained its ‘Hold’ rating on the stock with a target price of ₹835 apiece. HSBC said a steady growth outlook for India formulations business should act as a cushion for the company while its US business continues to face challenging market conditions.

Antique Broking has also maintained ‘Hold’ recommendation on the stock with the same target price as HSBC citing potential margin improvement due to operating leverage.

Alembic Pharmaceuticals has market capitalisation of ₹18,971 crore. The company’s shares have surged more than 86% over the past year.

For more, watch the accompanying video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

PI Industries shares surge after twin acquisitions in Pharma API, CDMO space

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of agri-sciences company PI Industries Ltd surged over 9 percent on Friday noon after the company announced twin acquisitions to enter the pharma API (active pharmaceutical ingredients) and Contract Development and Manufacturing Organisation (CDMO) spaces.

PI Industries said that its wholly owned subsidiary PI Health Sciences Ltd has executed definitive documents with Therachem Research Medilab LLC for acquiring its wholly owned subsidiaries in India and its assets in the United States for $50 million. An additional payment of up to $25 million has been committed in performance-linked pay-outs over the next six years.

Also read: IPCA Labs shares fall to pandemic level lows as concerns over Unichem deal remain

Therachem Research Medilab is a chemistry-driven solution provider in medicinal chemistry research, process research and development, specialising in the rare disease area. It provides services and products to pharmaceutical and biopharmaceutical companies in the preclinical and clinical stages.

It had consolidated revenue of around $33 million with a normalised EBITDA of approximately $14 million for the year ended March 31, 2022. EBITDA refers to earnings before interest, tax, depreciation and amortisation.

PI Health Sciences has also signed a definitive agreement with Plahoma Twelve GmbH for acquiring 100 percent stake in Archimica SpA for 34.2 million euros.

Archimica is an Italy-based small molecule API manufacturer and CDMO servicing over 60 marquee customers in more than 30 countries. It had revenue of around $45 million with Ebitda of approximately $7 million for the year ended December 31, 2022.

The purchase consideration of both these acquisitions will be paid in cash and will be funded from the completed qualified institutional placement (QIP) proceeds and internal accruals.

PI Industries said that both the acquisitions are expected to be earnings-accretive with immediate effect and the consummation of the transactions and their integration into the corporate structure of PI is expected to be completed during Q1FY24.

The company added that PI Health Sciences will combine the acquired businesses’ R&D capabilities with the new integrated pharma research centre being developed in IKP Hyderabad for CRO (clinical research organization) and CDMO offerings.

CNBC-TV18 reported this on 3rd April about a corporate development in PI Industries related to a likely announcement of a possible acquisition that the company plans to make.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Pharma PLI Scheme: Industry worried about large capex & tough competition

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Pharmaceutical companies have been lukewarm to the government’s production linked incentive scheme announced for the sector. This scheme was announced back in April and till now not a lot of them have applied for it.

Speaking in an interview to CNBC-TV18, Vijay Garg, Joint MD of IOL Chemicals & Pharmaceuticals said, “We will not be applying for the pharma PLI scheme.”

The last date for application of pharma Production Linked Incentive (PLI) scheme for active pharmaceutical ingredients (APIs) and bulk drugs is November 30. However, players in the pharma sector have said that there is only a lukewarm response to the government’s production linked incentive scheme and some suggest more incentives and tweaks may be needed to ignite interest.

Garg said, “The major thrust under PLI is on fermentation based products, which isn’t IOL’s area of expertise.”

According to him, industry is worried about large capex and tough competition from China. “2-3 years is a short time to bring in robust technology to compete with Chinese products,” he said.

Meanwhile, Adhish Patil, CFO of Aarti Drugs said that the company will be applying for the pharma PLI scheme.

“However, the government will take 4 months to decide on who is eligible under PLI scheme,” he said.

According to Sujay Shetty, Partner & Pharma Head of PWC India, the capex required to set up capacities under PLI scheme is a concern.

Shetty also said, “Some API plants are subject to green clearance norms which could be a concern.”

For entire discussion, watch video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Macquarie raises TP on Solara Active Pharma by over 40%, says re-rating to continue

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The share price of Solara Active Pharma climbed up to 19 percent on Wednesday after Macquarie raised its target price to Rs 1,680 per piece and also initiated ‘OUTPERFORM’ on the stock. The stock rallied as much as 19 percent to Rs 1,248.70. It pared some gains to trade 12 percent higher to Rs 1,174 on the NSE, at 2:00 pm.

Solara is a top 3 pure-play Active Pharmaceutical Ingredient (API) manufacturer in India, stated Macquarie’s report. The company was formed after the demerger of Strides Pharma and Sequent Scientific, and thus benefits from a legacy of three decades in API space, the report added. This makes it one of the strongest API players in the market today.

Macquarie noted that Solara’s strategy of working with customers on a long-term basis (50-50 percent of contracts are long-term) rather than capitalising on short-term opportunities will lead to higher wallet share. Hence, it believes it’s growth is more sustainable than its API peers.

Moreover, the company’s major capex has already been done i.e. the commissioning of the Visakhapatnam facility. “We expect it to expand the share of launches done over the past few years. It intends to grow CRAMS (contract research and manufacturing) both organically and inorganically, which could garner 30 percent to sales in FY25E from 10 percent in FY20,” said the brokerage.

As mentioned earlier, with major capex behind, expect Solara to report a strong cumulative free cash flow of Rs 2.2 billion over FY21-23E. Furthermore, it is the cheapest API stocks globally.

According to the report, it has a strong regulatory track-record and has the scope of a re-rating further ( stock up 195 percent in past one-year v/s Nifty’s 4 percent). We believe the company is in it for a long haul.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow