By: IPP Bureau
Last updated : December 07, 2021 12:59 pm
CLSA, a capital market and investment group organised an Investors’ Forum where five Indian pharma companies participated. Excerpts from the report
The companies provided a broad roadmap on the transition to complex generic products while maintaining a calibrated R&D allocation strategy. They expect U.S. FDA inspections to resume sometime next year for Indian sites. The companies are keen to acquire in India, but target valuations are expensive.
Aurobindo - Multiple R&D initiatives underway
Aurobindo is undertaking multiple R&D efforts towards complex products. It is on track to file injectables, respiratory, transdermals and biosimilars over the next 1-2 years and expects its R&D spend to be at 5-6% of sales in the near term. It remains confident of generating US $ 650m-700m revenue from the global injectable business over the next three years from US $ 400m in FY21.
US price erosion was in the high single digits in Q1FY22 due to the build-up of inventory across suppliers mainly due to decreased demand. As inventory liquidation takes place in the coming months, price erosion should normalise.
Dr Reddy’s - Stepping up on investments
The key pillars of growth (USA, India, EMs and APIs) are progressing well for Dr Reddy’s and it remains confident of achieving the aspirational target of 25% Ebitda margin.
Pricing pressure in the US is likely to remain elevated in the near term, but Dr Reddy’s remains confident of new launches offsetting erosion in the base business. It expects gRevlimid to be approved before the launch date (which is sometime in CY2022).
The company is investing in manufacturing sites for injectables, biosimilars and digital platforms to support R&D, supply-chain and promotions for branded products.
Dr Reddy’s expects supply constraints for Sputnik V vaccines to be resolved shortly and will begin the trial of Sputnik Light vaccine trials in India soon.
Dr Reddy’s does not see any immediate impact from the ongoing investigation into an anonymous complaint related to improper payments to healthcare professionals by or on behalf of the company in Ukraine.
Lupin - Recovery in US and Ebitda margins expected from Q3FY22
Lupin expects its US sales to cross US $ 200 m in Q3FY22 and Ebitda margin of 17-18% in H2FY22. India business is expected to grow in the high teens in FY22.
Lupin expects to generate significant cost savings from the ongoing restructuring of its speciality business in the US where it is incurring a US $30 m loss currently.
The company remained confident of gSpiriva and bNeulasta launch in the US in FY23.
Piramal Enterprises - Reiterated FY22 pharma revenue growth guidance of 20% YoY
Piramal Enterprises reiterated FY22 revenue growth guidance of 20% YoY for its pharma business. It believes each of its businesses (CDMO, complex hospital generics and India consumer health) has large addressable markets with long revenue streams, which should enable it to target 15% revenue growth and Ebitda margins in the late-20s over the medium to long term.
Piramal will initiate the demerger of the pharma business from the parent after the integration of Dewan Housing Finance.
Sun Pharma - Specialty ramp-up progressing well
Sun Pharma remained confident of ramping up its global speciality portfolio led by key products like Ilumya and Cequa despite incremental competition in key product Absorica. It also touched upon the potential of four products in its speciality pipeline and recently in-licensed novel anti-acne product Winlevi which should complement its current derma portfolio and benefit from the existing field force.
Sun reiterated that the speciality business is expected to achieve Ebitda breakeven in FY23 and to see significant margin improvement in the longer run.
Sun’s capital allocation policy will be towards building a global speciality pipeline along with further investments in India and select emerging markets.