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Focus on niche to drive growth…
�� Leading player in domestic dermatology segment
• The domestic formulations are growing at ~15-16% per year. It is
a leading player in the high margin domestic dermatology
segment and enjoys ~8% market share
• Beside dermatology, it is also improving its market share in
segments like respiratory (market share: ~2.9%) and cardiac
(market share ~2.4%).
• In the US, Glenmark follows specific strategy of identifying niche
products with limited competition despite lower market size. It
markets 67 products in the US and another 41 ANDA are pending
for USFDA approval. Of these 41 ANDAs, it filed 14 ANDAs with
Para IV certification
• Glenmark is the only Indian generic player to have received
approvals for high margin oral contraceptives in the US market
and has already launched four products
• Glenmark is one of the few domestic pharma companies with a
strong research pipeline. In a span of six to seven years, it has
spent around US$140 million and received ~ US$200 million from
the R&D pipeline
• Currently, the pipeline consists of eight molecules (four new
chemical entities or NCEs and four new biological entities or
NBEs), which are under in stages of development
• The company has entered into an agreement with Sanofi to outlicense
an NBE named GBR 500 for inflammatory diseases. Sanofi
will develop and commercialise this molecule
�� Going ahead
• Glenmark will re-focus on R&D and try to milk the pipeline of eight
products especially the NBEs as it is the only Indian company to
have struck a deal for an NBE
• It plans to launch two FTF products i.e. Malarone (anti-malarial)
and Cutivate (dermatology), which will kick-start the process of
launches and settlements of many high margin FTFs
• The debt equity ratio is expected to come down significantly on
account of rekindling of the R&D pipeline and monetisation of the
US portfolio including FTFs
Valuation
Glenmark is building a niche pipeline for the US market. We believe
recently launched products and FTFs (to start from FY12) will drive
growth in sales. It is also building a healthy pipeline for the domestic
market. The recent deal with Sanofi for out-licensing biological molecule
augurs well as it will generate steady cash flows for debt reduction
besides milking the R&D pipeline. We remain positive on the stock.
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