Suven Life Sciences - Embedded triggers


#143

The question is what happens if it ends in failure? will they raise another round of equity? will market trust their ability for subsequent clinical trials? IMO debt would still have been a better option. Equity is the most expensive capital and should have been used when phase 2 would have been declared a success.


(KK) #144

Here we have to consider one thing, It is correct in saying Equity is an expensive capital for a strong business like Suven. But we have to look at few points:

  1. Interest payment will be an extra burden for them, because going forward the earnings will be lumpy (as already said by Venkata Jatti). Hence for a lumpy earnings projection, it is wise to stay out of debt.

  2. The cost of future R&D are going to be huge and hence needs to be handled accordingly. Taking debt at Phase 2A, will only make financing difficult at later stages of the development where they actually needs lots of cash in hand.


(reacher) #145

So consolidated books will shown an eps of 3.14 ( 40 crs on 12.73 cr shares ) for next 2 years ! Say between 3 and 4 eps for coming 2 years


(Aravind Sankeerth) #146

the classy way you put it, I liked it. I think with Venkats hardwork and their team they will do something by 2017. Suven can be a multibagger


(JKS) #147

yet another patent news


PS - sold a minor qty tdy in the run up


(reacher) #148

What made you sell could you share whats fair value in your view where you will be comfortable buying back - i ask this since you have v good understaing of this co and have been holding it for a while i think


(JKS) #149

@reacher the later part of your statement (holding for a while) is true. I am not a great assessor of fair value. One observation of mine is that - on days, when the patent news is released, the stock jumps up a bit, only to give it up later. Also, Venkat Jasti had often clarified that there is no real monetary value to these patents, unless they find a buyer. I did not fully capitalize on the previous ride between 330 and 200 and my current behavior is to avoid the same the 2nd time; I am expecting a few flat quarters, I think, one more revisit of the lower levels is not ruled out, although often I have been proved wrong in the past, in my assessment !! so, take it with a pinch of salt. The real move up is when Suven is able to find a buyer and lock in some real royalty for one of those molecules in advanced stages of trial runs. I find that timeframe is some time away.
PS - Disclosure given above


(JKS) #150

yet another patent news…stock is up…
http://www.bseindia.com/corporates/ann.aspx?scrip=530239&dur=A&expandable=0


(Whipsaw) #151

Suven Q3 results: http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/AC6CA52B_3FAA_45E6_87A1_DD5030235F8E_145631.pdf


(nitin.verma) #157

Suven q4 results.


(nitin.verma) #158

Dear all,
Some notes from the concall ( from whatever I could gather)

  • this year they had a degrowth in crams of about 17% in topline. The specialty chemical space compensated for that
  • total rev from specialty chemical 220 cr for the year
  • as per Mr jasti 220cr is the peak they can do in that space
  • Fy17 they are expecting upwards of 15% growth in crams with specialty chemical remaining similar to last year.
  • margins for crams (Ebidta) 30% and specialty 20%
  • out of 3 molecules for which they got orders for preclinical phase they have got 1 order of 30cr to be executes in q1 17.
  • of rest two second is doing well ( on innovator side) and they expect order by year end
  • third one has been slow and he wasn’t sure when he will get repeat orders
  • these compounds shud give recurring rev for 5-6 years
  • malathion royalty wud remain same yoy
  • vizag facility at current 45% utilisation. Plan to take it to 75%. However volumes won’t go correspondingly up as other crams facility was uti lised for the same and now vizag one will the one only for specialty chemical
  • for suven 502 28cr was expensed last year and in Fy17 wud need another $10milion
  • the trial is behind schedule by 2 months but confident it wud be ramped up. They need 500 patients for a gud data size.
  • this drug is number 3 in sequence behind gsk and a Japanese one but has certain advantages when used synergistically with current t standard of care. Hence Mr jasti was very confident of making the cut. But earliest opportunity of monetisation wud be fag end of Fy18.
    Please remind me of any errors.
    Regards Nitin
    Disclosure : invested since 45 levels. Forms 8% of portfolio

(dr ravindra gupta) #159

great dear nitin
can u provide us link for concall . so we can here it


(nitin.verma) #160

Sorry, don’t have a link.
Company might post a transcript on its website


(kiran) #161

Suven gains 2 product patents.


#162

Suven has just published standalone results and tried to compare with same Q last year which is incorrect. Suven502 Phase 2 trial costs are supposed to part of US subsidiary now so we will need to look at consolidated results and comparison to same Q last year becomes irrelevant. Any one has any idea about consolidated results.


(Ravindra Mutyala) #163

Company clearly disclosed that free cash flows along with funds raised in QIP are used to fund clinical research. So standalone results give the actual picture of Suven’s business. Consolidated results may not show any different picture if Suven is capitalising the R&D. I am not sure whether Suven capitalizing R&D or not.

Disc: Invested


#164

But aren’t shareholders entitled to access consolidated results? I can not find it anywhere. Lat year AR has consolidated numbers but this Q’s numbers don’t have consolidated figures. It is not capitalizing R&D but standalone number does not have R&D cost as it is booked in US subsidiary. Comparison with last year is incorrect as last year number had R&D cost in stand alone number.


#165

Alzheimer’s drug-development pipeline: 2016
http://www.sciencedirect.com/science/article/pii/S2352873716300191

Disc: Invested


#167

Drug development in Alzheimer’s disease: the path to 2025

Longish but worth a read


#168

Lundbeck says Alzheimer’s drug fails in late-stage study