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Glenmark Pharma
Growth from all the corners
Mr. Percy Birdy – CFO, Glenmark Generics and Mr. Jason D’souza –
General Manager, Investor Relations shared their view on the industry
and the company
Key Highlights
§ Indian operations are cash cow for the company. Strong performance from key
specialties, new product launches coupled with recent addition to the filed force
would lead to 16-18%+ growth in the Indian business. Total MR strength is ~2400
§ In the US – ANDA basket consists of 69 generic products authorized for distribution
with 40 pending for approval with the USFDA including 13 Para IV filings till date
§ Malorene – launched in Q3FY12 and Cutivate – expected launch in Q4FY12 are
key upside triggers for the stock. In case of Malorene, exclusivity is expected to
extend well beyond 180 days as there has no other ANDA filer till date neither an
authorized generic. In case of Cutivate – management has guided for potential
sales of US$25-30mn during 6 months of exclusivity. Post the exclusivity there will
be 3 players in the market
§ Tarka – Glenmark has still not received any verdict from the appeals court
§ OCs – Management has guided for launch of 7 new products in the OCs, oral solids
and semi solids space, as well as exclusive launches. It has already launched 6 OC
products and 12 are pending for approval. The company is planning to file 6 more
ANDAs in this space in coming years
§ Ortho Tri-Cyclen – MS US$200mn. Glenmark launched the product in Q3FY12 and
has been able to take 10% market share as one its competitor had to voluntarily
recall the product from the market
§ Company has guided for US$240mn sales from the US market in FY12E
§ Glenmark currently has a pipe-line of 5 NCE & NBE molecules which are under
various stages of clinical development. This includes Crofelemer, which has been
in-licensed by Glenmark from Napo Pharma
§ In Russia – the company remains largely isolated from the reference drug pricing
policy as it operates in those regions which are not affected by the government
policy. It caters to niche therapies of Derma and Respiratory. Receivables in this
market are in-line with industry at 140 days.
§ Management has guided for top-line growth of 25% for FY12 with US business
clocking 20% growth. Capex guidance stands at Rs2bn for the next 2-3 years
Valuation
We expect Glenmark Pharma to report 24% revenue growth in FY12E and 8% growth in
FY13E. We expect EBIDTA margins to move from 20.1% in FY11 to 26.1% in FY12 and
23.8% in FY13. Earnings will grow by 19% CAGR over FY11-13E. We maintain Buy
rating on the stock with a target of Rs401 (18x FY12 base business earnings + adjusted
NPV of Rs45). At CMP, the stock is trading at 13.0x FY12E and 13.1x FY13E earnings.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Glenmark Pharma
Growth from all the corners
Mr. Percy Birdy – CFO, Glenmark Generics and Mr. Jason D’souza –
General Manager, Investor Relations shared their view on the industry
and the company
Key Highlights
§ Indian operations are cash cow for the company. Strong performance from key
specialties, new product launches coupled with recent addition to the filed force
would lead to 16-18%+ growth in the Indian business. Total MR strength is ~2400
§ In the US – ANDA basket consists of 69 generic products authorized for distribution
with 40 pending for approval with the USFDA including 13 Para IV filings till date
§ Malorene – launched in Q3FY12 and Cutivate – expected launch in Q4FY12 are
key upside triggers for the stock. In case of Malorene, exclusivity is expected to
extend well beyond 180 days as there has no other ANDA filer till date neither an
authorized generic. In case of Cutivate – management has guided for potential
sales of US$25-30mn during 6 months of exclusivity. Post the exclusivity there will
be 3 players in the market
§ Tarka – Glenmark has still not received any verdict from the appeals court
§ OCs – Management has guided for launch of 7 new products in the OCs, oral solids
and semi solids space, as well as exclusive launches. It has already launched 6 OC
products and 12 are pending for approval. The company is planning to file 6 more
ANDAs in this space in coming years
§ Ortho Tri-Cyclen – MS US$200mn. Glenmark launched the product in Q3FY12 and
has been able to take 10% market share as one its competitor had to voluntarily
recall the product from the market
§ Company has guided for US$240mn sales from the US market in FY12E
§ Glenmark currently has a pipe-line of 5 NCE & NBE molecules which are under
various stages of clinical development. This includes Crofelemer, which has been
in-licensed by Glenmark from Napo Pharma
§ In Russia – the company remains largely isolated from the reference drug pricing
policy as it operates in those regions which are not affected by the government
policy. It caters to niche therapies of Derma and Respiratory. Receivables in this
market are in-line with industry at 140 days.
§ Management has guided for top-line growth of 25% for FY12 with US business
clocking 20% growth. Capex guidance stands at Rs2bn for the next 2-3 years
Valuation
We expect Glenmark Pharma to report 24% revenue growth in FY12E and 8% growth in
FY13E. We expect EBIDTA margins to move from 20.1% in FY11 to 26.1% in FY12 and
23.8% in FY13. Earnings will grow by 19% CAGR over FY11-13E. We maintain Buy
rating on the stock with a target of Rs401 (18x FY12 base business earnings + adjusted
NPV of Rs45). At CMP, the stock is trading at 13.0x FY12E and 13.1x FY13E earnings.
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