UNICHEM LABORATORIES :: IDFC Emerging Stars Conference

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UNICHEM LABORATORIES 
OUTPERFORMER (RS196, MCAP: RS7.1BN / US$156.8M)


• Unichem Labs is one of the India’s leading integrated pharma companies, with a strong presence in the domestic
formulations market. It is ranked 25th in the domestic formulations market (IMS data, December 2010). It derives 76%
of its revenues from the domestic market, 20% from regulated markets and the rest from emerging markets.
• Unichem's five brands – Ampoxin, Losar H, Losar, Trika and Unienzyme – feature among the top 300 (ORG IMS
data). Unichem's top 10 brands – Ampoxin, Losar, Losar H, Trika, Unienzyme, TG-Tor, Vizylac, Telsar, Telsar H and
Serta – contribute 51% of domestic sales. The largest brand/ brand extensions clock revenues in excess of Rs1.48bn,
while 13 brands contribute more than Rs100m/ year. Unichem enjoys the No. 1 position in 19 therapeutic sub-groups.
• The company clocked a revenue CAGR of 12% in FY05-10, with its focus portfolio clocking over 20% yoy growth in
9MFY10. Unichem achieved decent growth rates in the domestic market despite the impact of DPCO. About 20% of its
domestic portfolio (in value terms) is under price control. Its key products, Metronidazole (API), Ampoxin (antiinfective)
and Zator Plus (Spirolactum with Torsilomide), are also under price control.
• The management remains focused on the domestic market, and has taken several measures to enhance its footprint:
o Potential entry into uncovered market segments like hospitals and gynecology
o Product portfolio optimization and field resource allocation relating to chronic therapy
o Focus on field productivity and enhanced field force to support growth
o Optimal use of manufacturing assets.
• Unichem maintains a balanced mix of chronic and acute therapies in the domestic formulation market, with chronic
care accounting for 58% of sales and acute therapy contributing the rest.
• Sales have suffered over the past few quarters due to pricing pressure on Ampoxin, especially the injectable
formulation, which has led to value erosion. The company is now focused on reversing this and is hopeful of
stemming the decline by FY12. This should provide support to overall domestic business growth.
• Unichem has added nearly 400 people in the domestic business in Q4FY10. The full impact of these additions on
productivity would be visible from FY12. Unichem is also looking to hire 200 people, including 150 for the gynecology
segment. The company has also set up a team to cater to the hospital segment.
• The management also cautioned that the acute segment, which accounts for ~42% of the business, has not been
growing over the past few months and may impact overall growth.
• On the international front, Unichem has more than 565 product registrations across the world and more than 416
regulatory filings (DMFs, EDMFs. e-CTDs, ACTDs, etc). It has filed 15 ANDAs so far, of which nine have been
approved. The company is positive about the product pipeline and has guided for R&D spend of up to 4% of sales
going forward.
• Unichem is also hopeful of closing 2-3 contract manufacturing deals in antibiotics and non-antibiotics over the next 2-
3 quarters. These deals can add Rs1.2bn-1.5bn revenues at peak sales, with potential increases as the deals are
expanded.
• RoW currently contributes 4% of overall sales. The company is looking to expand this sharply over the next 4-5 years
as it seeks to leverage its 700-800 registrations (secured / under way) in this market segment.