Alembic & Alembic Pharma


(Nityanand) #352

@ankitgupta As per my understanding the originator can restrict other players from selling that drug even after the patent expiration. Please let me know if my understanding is correct.


(Hitesh Patel) #353

nityanand,

Yes the innovator will play all cards available to delay the launch of competitor products even after the expiry of patents. He will cite any available reason to justify his case.

Immediately after expiry of patents the USFDA grants final approvals for few players who have filed early and whose tentative approvals they find in order. These few players get to launch in limited competitive period (exclusivity is often the term used) and end up getting the big dollops before severe price erosion sets in and multiple players get into the fray. But many a times this early launch is “at risk” launch wherein the innovator might go for litigation and if the innovator wins then the other players suffer big damages. The other option for the other generic players is to enter into a sort of understanding with the innovator and decide some terms and conditions after which they are spared the risk of litigation.


(Ankit Gupta) #354

It can sell the drug only after getting final approval from USFDA and all the litigations are ruled in generic company’s favour. Other competitors will only be allowed to sell after getting approval from USFDA. The revenue from the product will only start after it gets final approval mostly after Nov. 2017 and by that time other competitors who have file Para IV/FTF might also get approval.
For detailed learning, you can google about it. Everything is available on internet.


(Debjit) #355

hi ,
any one having any update on result ?


(Abhishek Basumallick) #356


(Prashant Kulkarni) #357

Results link:
http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/9CD2E6A1_0DF6_4C94_9C4C_11F0FCAB2EEA_133349.pdf

Link has Investor presentation as well


(Ananth) #358

Some notes listening to conf call

US sales

  • all facilites compliant with FDA
  • cumulative approvals at 49
  • Pricing pressure in abilify
  • 23 products launched with alembic label got market share with own front end, 9 people on board to take care of own front end
  • not launched new products in q2 , re-launched old products with alembic label - hence growth in base business
  • direct marketing one of the reasons for gross margin improvement other than abilify
  • fy17 6-8 ,fy18 6-8 - total 12-16 new product launches in next two years with existing facilities and capabilities
  • H2 will be softer than H1 growth for abilify
  • some products persuing with CMO and some with own facilities
  • benefits of own front end - pick up opportunities faster and act faster when needed with supply chain nimbler - basically get better pulse of the market
  • 33 pending approvals with FDA - roughly 40% of P IV or FTF
  • Benicar - high competition -10-12 tentative approvals after Mylan FTF launch this week - launch by april next year
  • lacosomide - court ruled against generic companies - matter will go to appeal.
  • US sales q1 220cr , q2 270cr (some spill over of abilify)
  • api business grow 20%

Capex and New facilities

  • capex for 1hfy17 220cr, full year capex 600cr, 300-400cr capex fy18 - 1000cr capex next two years - growth is a continuous journey
  • dermatology - H2 fy18 facility will be ready, after that exhibit batches (may be 6 months)
  • oncology oral and oncology injectable facility will be ready by end of fy17 after that 6m+ exhibit batches and then filings for oncology
  • we are persuing some CMO possibilities
  • start one more new facility oral - fy18

R&D expenses

  • 400cr+ for full year r&d in fy17, not a big growth in over this in fy18 in r&d expenses

  • 20-25 new products every year in india

Disclosure: invested


(Rakesh ) #359

Nirmal Bang Sec Alembic Pharma Ltd Q2FY17 RU

Motilal Oswal Result Update

20161025_Alembic-Pharmaceuticals-Limited_204_QuarterUpdate.pdf (478.4 KB)

KR Choksey RU

KRChoksey_AlembicPharma_Q2FY17_RU_20161026_261016131519.pdf (845.3 KB)


(Sandeep Patel) #360

The DMF filing upto Sep 30, 2016 is out and Alembic has filed one DMF during the quarter (Q3CY16).

Gefitinib:

  • Innovator: Astrazeneca (Iressa) - www.iressa-usa.com
  • Medicine for the treatment of non-small cell lung cancer
  • The generic Gefitinib (for non-US market) is manufactured by ~12 cos., RPG Life Sciences, Neon Lab, Resonance Lab, Lyka Lab, Natco, Miracalus etc.
  • Iressa has been retailing in US at ~7400USD for 30 capsules; stable price since past 2 years.
  • Other DMF filers: Sichuan, Zhejiang, Yabao, Cipla, MSN Lab, Qilu, Synthon

Source: http://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/FormsSubmissionRequirements/DrugMasterFilesDMFs/UCM370722.xls


(ramanhp) #361

Alembic Pharmaceuticals Limited receives USFDA Approval for Telmisartan and Amlodipine Tablets

http://www.bseindia.com/corporates/ann.aspx?scrip=533573&dur=A&expandable=0


(Sandeep Patel) #362

Alembic gets USFDA nod for two small molecules (market size wise) in last fortnight.

Itraconazole capsules, 100mg.

Zolmitriptan ODT (Orally Disintegrating Tablets), 2.5 mg and 5 mg


82 : ANDA filings (per Q2FY17 investor presentation)
52 : ANDA approvals (46 Final and 6 Tentative)
30 : ANDA pending approval (pipeline)


(nil_71) #363

Any idea about the Best Practices being followed etc. All ANDAs news are great but one 483 can derail whole story. eg Alkem lab…


(Sandeep Patel) #364

Fair question. Form 483 is now commonplace. 483 basically contains inspectional observations. Data fudging, omission, false reporting and/or process failure related observations are high severity in nature; a serious US-facing pharma player would strictly avoid getting these. Other observations related to hygiene, awareness and/or documentation discipline are quite widespread, however not high severity in nature. Thus severity of observation can derail whole story (not Form 483 per se).

Alembic had received Form 483 in Mar 2016 for formulation facility. Subsequently received EIR (i.e. all clear) in Oct 2016. Alembic’s focus on regulatory compliance can be gauged from the following excerpt (taken from Alembic Management Q&A) -

What in your opinion are the major risks?
Regulatory Compliance. We are taking this very very seriously. When we were small it was easy to manage. But as we scale up we need to ensure systems and processes that take care of ensuring quality.

Kindly give us a sense of how seriously this is taken by Top Management?
The normal practice in the industry is to employ 1:2 Quality:Product personnel. At Alembic we are maintaining a 1:1 Quality: Product personnel ratio. We ensure everything is on the SAP ERP system. We have built a strong Quality Team.

When the Board meets, the first item on the Agenda is USFDA Compliance. And usually it takes 3-5 hours.

Source: http://www.valuepickr.com/q-and-a/alembic-pharma-management-qa-jan-2014/


(nil_71) #365

Thanks a lot @lustkills


(Adiga) #366

(Rohit Ojha) #367

Q3 FY17 results-

Revenue 776cr vs 930cr
PAT 86cr vs 269cr

R&D spend was 116cr vs 70cr, now stands at 15% of revenue
4 ANDA filed in Q3, 3 approvals received.
2DMFs filed in Q3

India branded formulations at 294cr vs 288cr


(Rupesh Tatiya) #368

These are very good set of numbers. The bottom line/EPS seems depressed due to higher R&D cost but it is really like investing in future at the expense of today.

This company scores high on Point number 3 - R & D Culture, Size of R & D w.r.t. Size in Phil Phisher’s book. The size of R&D w.r.t. revenue if significant, there is a successful R & D culture at the Alembic & there is really nothing to suggest otherwise. Also when they have reached the size of 0.5bn$ in sales, they really have to think big & transformational to grow from here.

Disc - Invested, Not a buy/sell recommendation, do your own diligence before investing


(Yogesh Sane) #369

Does anyone here thinks company is spending too much on R&D? Such investments may not always pay-off. Investors are also likely to demand higher discount rate to account for risks ahead. Have they hired any industry veteran to lead the R&D efforts?


(Nishant Kandoi) #370

Hi Yogesh,

Given the market cap size of alembic, it does seem that the R&D investment should be typically lower if we compare to industry averages.

However, I personally feel that R&D investment is the main driver for alembic if it wants to aggressively venture into the US market in the long run, especially when “winner take all effect” is dominant.

Small cap pharmas can’t afford to file many ANDAs as they are expensive. Even if one files a single ANDA, the chances of it paying off generously, is typically low (as you rightly mentioned).

Hence, it becomes kind of essential to file many, many ANDAs to increase the chances of catching a windfall (a single blockbuster ANDA can make a huge difference to Income statement). Its very unpredictable to know which one of them would take off. But nevertheless, filing more of them definitely increases chances of huge payoffs from few of them. I think Pareto 80/20 principle (or power law) comes into play here.

Going forward 5-10 years down the line, I speculate that there would greater rift between small cap and large cap pharma companies, simply because of the sheer ability of large cap pharmas to file many more ANDAs and ramp up the production facilities accordingly.

In the Valuepickr Alembic management Q&A, the management has mentioned that they have made a product roadmap till upto 2024!

My limited understanding tells me that the only “risk” involved in doing more R&D, is an impact on the operating margins. If the US companies decide to sue/challenge the ANDA filings which comes out of R&D, there are always other options to negotiate (again mentioned in the Alembic management Q&A).

I am sure I made a lot of assumptions above. I am open to learning from the community :slight_smile:

Disc: Not invested


(Ananth) #371

My noted points in Q3 FY17 conf call of alembic (mostly focused on US generics).

revenue degrew 17% ebidta 19% margins NP 86cr for the 3QFy17
India branded formulations 294cr was flat - impacted due to price reductions in azithral impacted 6-8cr and demonetisation had impact in trade

international Operations:
R&D continued investing heavily. 111cr R&D -15% of sales for q3
Full year expected 400cr R&D expenses, FY18 similar numbers for R&D costs
4 ANDA filed in this qtr, Totally 15-20 ANDA filings targeted in fy17

new capex:
Oncology orals and injectables - facility will be ready in first half of fy18 will file exibit batche after that
general injectable and derm - facility will be ready second half in fy18 and then will start filing exhibit batches
new oral facility construction will start in fy18

Received for EIR for formulation and API facilities - all facilities compliant with FDA - US FDA inspections happened in 2016 ( Management expects FDA to visit once in every two years - unless there are observations etc)

cumulative approvals 52, 3-4 new product launches in q4fy17, only one new launch in fy17 is so far

API business grew by 64% - surprising
aripiprazole downtrend continues

margins will be under pressure in fy18 due to pricing pressure in abilify
6-8 new launches in fy18 which should bring in some growth
gross margins will go down due to apriprazole sales tapering

janaushadi stores - impact not known currently, not accessed by the management

next year 20+ new ANDA filings

Out of 400cr R&D expenses - 15-20% is outsourced injectables and complex molecules
external r&d filings- some with Alembic facilities, some with CMO facilities - filed couple of products already with CMO (contract manufacturing)

Pristiq - Alembic will be in first wave of launches - there may be lot of companies will be launching in first wavethough

rizhen is mererly financial investment - rhizen R&D costs not included in alembic R&D expenses

Long term launches:
will file 6-8 filings from the current facility every year (which is oral solid)
New capacities built up for onco, injectables, derma - file exhbiti batches in fy18, then will start filing ANDAs, commercial launches happen 2-3 year later
fy19 filings will start from new facilities
40 products in derma being worked on
opthamalogy under consideration

26 new products with alembic label. Front end has been successful as per the management.
11 approved not yet launched - 3-4 launches this quarter in q4fy17, one of them may be day one

My summary: Company is investing heavy in R&D and building new facilities/capabilities. fruits for which will be available FY19 onwards (pains today, gains tomorrow).

Disclosure: invested