Shilpa Medicare -Racing away on the Oncology API highway!


(MONK88888) #503

Anyone who is attending the AGM for Shilpa Medicare should look to post the following query to CEO

  1. In the light of approvals Car-T ( chimeric antigen receptor cell therapy , using one’s own engineered WBC to fight cancerous growth) , what would be the future of anti cancer drugs / therapy. Target date for submissions is 2018 to FDA from Kite Pharma / Novartis & Juno. As you are aware the setback to Juno was because of deaths during toxic side effects. I am sure Mr. Vishnukant would be well informed & he could probably elucidate as to how they see the future for anti cancer drugs.
    There is an article on FT this morning about cell therapies-its a good read
    Discl: Invested

(naishadh) #504

When is the AGM? Hope some boarders are attending it


(MONK88888) #505

Dates have not been announced but we can safely assume around 3rd or 4th week of Sept


(naishadh) #507

(Ananth) #508

Jadcherla formulations plant inspected by USFDA gets 1 minor observation

http://www.bseindia.com/xml-data/corpfiling/AttachLive/6f11f18e-de63-4dfb-91c5-e9ef0dae1d6a.pdf

This is after API plant getting EIR in March.

Meanwhile, Motilal initiates coverage of shilpa.


(Vijayk) #510

Overvalued shilpa cracking finally! Had warned abt the valuations of 50 pe with flat growth!


(Vivek Gautam) #511

Tks. Whats your take on Shilpa results, competitive intensity in US & other countries,Shilpa relationship with distributors in US?

Seems Jadcherla formulation plant inspection has gone through with zero observations recently. What could be its impact?

Are there headwinds for specialized Onco players like Shilpa as well or they are comparatively better off?


(Sandeep Patel) #512
  • SLPA’s sales rose marginally by 0.8% YoY to INR1.7b due to the shift of part of the CRAMS business to the JV with ICE. This shift of operations started 3QFY17 onward. The company, however, has witnessed improved traction on the formulations front over the past year. EBITDA margin expanded 30bp YoY to 20.2%, which, along with higher other income and lower taxes, led to an increase in PAT to INR241m from INR147m in the year-ago period.

  • Sales much higher adjusting for business shift to JV: SLPA has begun shifting some of CRAMS’ business to its JV with ICE. We note that the transferred part of the business recorded sales of ~INR550m, adjusting for which, YoY sales growth would have been ~33% (led by US formulation, CRAMS and Oncology API segments).

  • Higher formulation sales drive gross margin: Gross margin improved 690bp YoY due to superior product mix. However, EBITDA margin expanded by just 30bp YoY due to higher other expenses (led by increased R&D spend)

  • Gradual build-up in formulation sales: Formulation sales came in at INR200m for the quarter, compared to INR140m in 4QFY17, driven by two ANDA approvals for the US market. In addition, it has a good pipeline of 26 ANDAs pending for approval, largely in Oncology. On this basis, we expect SLPA to garner USD24m in FY18.

Source: http://www.motilaloswal.com/site/rreports/636380418202898389.pdf


(naishadh) #513

25 time FY 19 earnings - why would I value a business which is facing so many headwinds at such a high multiple - its more like 15X in my opinion - I see no upside from these levels - It’s time to get out of this company. Much brighter spots in the Indian markets available - my 2 cents


(Vilin) #514
  • At current price of Rs. 570 it is 19x FY19 expected earnings and not 25 times which is not expensive considering growth potential.
  • Shilpa is not facing any regulatory (FDA and others) headwinds which many pharma co’s are facing and going by the track record (including the latest audit of formulation plant) think from medium term perspective it is better placed
  • Shilpa has just started exports of formulations so its base business is going to only grow from hereon as more and more ANDA gets approval.
  • Revenue from JV with Italian partner provides revenue visibility and limited downside to CRAMS business which is still 40 to 50% of total revenue and expected to grow at ~10%
  • Revenue from Tranexamic acid for JV with Japanese partner likely to get reflected from Q2"FY18
  • Also, revenue from launch of dental products and coating products by INM tech in FY18, oral thin products by Shilpa therapeutics will help in diversifying its revenue

([email protected]) #515

Hi Vilin - I am new to investing so my knowledge is limited.
Can you please let me know how did you arrive at 19x FY19 as the EPS for the last 4 qtr (including Q1FY18) is 14.89
Thanks


(Rajesh) #516

He quoted only Moti Lal Oswal valuation view.


(MONK88888) #517

I am invested only in this company & have most of my savings in that exposure. I am disappointed with this company’s general lack of communication wit h minority shareholders. One learns more about the company from research reports than from the company itself. They should at least hold conference calls on why the quarterly performances have been patchy . I have sent several mails asking some pertinent questions but most times never get a reply. I have been with this company for 3 years & plan to stay with them for at least 2 years more -even though they don’t bother to appreciate minority share holders.
I had mentioned quite sometime back about 622-628 levels break could take it down to 550. We have gone below that as well , barring a large trigger (like ANDA approval) , we may continue to languish here. The irony is that it has gone below the Private Placement done with TA fund.
If someone out here has better visibility with management , please explain to them the lack of clarity from our perspective-specially on the consolidated results (more like a black box)


(Vivek Gautam) #518

why dont you catch hold of promoters n attend the AGM where u can network with passionate investors as well?


(sta) #519

Could you explain this shift to ice


(MONK88888) #520

Just a quick technical update. From a Elliot perspective , there exists a potential for scrip to first head to 645 & if it breaks then onwards journey to around 718-720 ish. Other indicators like candles / MACD is supporting this theory.
Earlier I had written about a possible comatose of the scrip around 550-560 levels. I am now inclined to change that opinion & see some strength coming in. Again lets watch 640 to ensure that its not a dead cat bounce. Dear Vivek -yes hoping to attend the AGM :grinning:& meet this forum members
Thank you all for the brilliant insights / views about this company & many others
Discl : I have exposure


(MONK88888) #521

Shilpa Annual reports out on website & AGM on 29th Sep


(MONK88888) #522

I need a bit of handholding please
In the Annual report Page 12 , It is reported that FDF(Finish Dosed Formulation) site was inspected by FDA and the EIR received with zero 483 on Dec 2016
Now that it has minor observation , I believe that they cannot export till their CAPA is accepted and certificate re-issued -which means we might not yet see the US ANDA approvals positive impact for Q2
This means there exists a potential to under deliver on results front
Discl: All my savings invested :slight_smile: with VB
Otherwise the AR is a wealth of relevant information


(Sandeep Patel) #523

High level details can be found in “Ursodeoxycholic acid” section (page 8 & 9) of ICICISec research report @
http://forum.valuepickr.com/uploads/default/original/2X/7/799fa4b5ca5baf994fb546ac85da84d2a1aee352.pdf


(Sandeep Patel) #524

Shilpa Medicare successfully building strong franchise, says ICICI Securities

  • Building strong franchise in formulations business after achieving decent scale in APIs.
  • Exploring opportunities in NDDS through subsidiary companies and in biosimilars through recently acquired Navya Biologicals
  • Estimated earnings CAGR of 33.8% over FY17-20 coupled with substantial improvement in return ratios
  • Recently launched generic Gleevec in EU and two launches in the US, generic Xeloda and Vidaza, contribute ~6-8% to the total revenue currently.
  • Has ~21 pending ANDAs in the US and even higher number of filings in the EU with an estimate of 5-7 new launches in the next two years.
  • We expect formulations and APIs to register revenue CAGR of 65.4% and 31.2% over FY17-20 and contribute 16% and 53%, respectively to overall revenue by FY20E.
  • A JV with ICE would continue to account ~250-300cr under its head as it gradually shifts the whole business to the JV over the next 2-3 years.

Source: http://www.financialexpress.com/market/shilpa-medicare-successfully-building-strong-franchise-says-icici-securities-maintains-add-rating-on-stock/846052/