Torrent Pharma Ltd

Stock Opportunities Not-so-Hidden Gems
318

Thanks @ankitgupta

This FTF exclusivity expiry is a very important aspect for all pharma investors, that’s why wanted to be very sure on correctness of my conceptual understanding around this.

Went back to FDA site to read it in fine prints……here is what I found around the 180 days trigger events…

The statute provides that the first applicant to file a substantially complete ANDA containing a paragraph IV certification to a listed patent will be eligible for a 180-day period of exclusivity beginning either from the date it begins commercial marketing of the generic drug product, or from the date of a court decision finding the patent invalid, unenforceable or not infringed, whichever is first.

http://www.fda.gov/Drugs/DevelopmentApprovalProcess/SmallBusinessAssistance/ucm069964.htm

Coming back to how come Watson FTE exclusivity will end on Oct when Astra Zeneca patent expired only on first week of July and exclusivity time calculation does not start from the time of approval, I think the answer was hidden in my first post itself. The company named Allergen which I mentioned had a pre patent expiry marketing agreement with Astra is none else but new name for Watson.

http://www.allergan.com/NEWS/News/Watson-Pharmaceuticals-Inc-Is-Now-Actavis-Inc

So, to me its sorted now. AstraZenca allowed marketing rights to Watson/Actavis/Allergan (all there are same entity) starting May 2016 under an agreement and thus 180 exclusivity will stand seized in October.

Thanks,
Tarun

Dis: 1. Invested with ~10% of PF
2. Still learning…

1 Like
320

In December, the company wrapped up patent litigation with Teva Pharmaceutical Industries ($TEVA), Mylan, Aurobindo, Sun Pharma and Par Pharmaceutical.

http://www.fiercepharma.com/sales-and-marketing/astrazeneca-zaps-another-crestor-generic-threat-actavis-settlement

Something off context but came across while my recent study on Biocon, Biocon has EU regulatory approval to launch Rosuvastatin (gCrestor)Tablets in FY 17. Opportunity size USD 1.2b

http://www.biocon.com/biocon_press_releases_150216.asp

Thanks,
Tarun

321

Torrent gets approval for gCrestor (Rosuvastatin Calcium) for 5 mg drug. Link - http://www.accessdata.fda.gov/scripts/cder/drugsatfda/index.cfm?fuseaction=Reports.MonthlyApprovalsAll

The approval is much earlier than expectations (management was expecting the approval from October, 2016). It is the 10th generic approval for the drug. Although, it was a big opportunity prior to patent expiry with size of more than USD 5 billion, as per the last Torrent concall, it seems there is a lot of price erosion for the generic. It would be interesting to go through the concalls of Glenmark, Sun and Aurobindo which already have approval for the generic and what’s their view on the price erosion. Also, one would have to factor in the contribution of 5 mg drug in the overall size of the molecule.

17 Likes
323

Sorry but where does it says the funds are diverted from Torrent Pharma… As per the article its from the Torrent Group which owns multiple businesses including Torrent Pharma…

2 Likes
324

yes, its Torrent Group and not from Torrent Pharma

1 Like
327

I am late but here are my highlights from Annual report of FY16.

ANDAs filed=77, 62 approved including 6 tentative
US DMFs=27
Europe dossiers=59
Europe DMFs=28

  • Advanced clinical trials for 2 programs- cardio metabolic risk reduction and heart failure. far.
    The most advanced discovery program of the Company is Advanced Glycation End-Products (AGE) Breaker, of which the Phase II clinical trials for the indication of diabetes associated heart failure in India and Europe is completed. During the year, clinical development plans have been finalized and we expect to file for the continuing clinical development later in the current year.
    During the financial year 2012-13, the Company initiated Phase-II clinical trial in India with its second NCE for the reduction of cardio metabolic risk. The results have been encouraging and preparations have been initiated to start the next phase of development. The Company believes that this program is uniquely positioned to address the consequences of relative chronic over-nutrition which is assuming alarming proportions of health hazard in India, other emerging economies besides developed countries. Phase Ib study for its third NCE being developed for inflammatory bowel disease has also been initiated and is expected to be completed by Q1 of financial year 2016-17. Further characterization is progressing well for this indication.

  • Working on NDDS projects such as long acting injectable, nasal sprays, oral dispersible films and foams in order to improve efficacy and therapeutic outcome.

  • Initiated investment in the areas of Oncology, Dermatology, Opthalmic, Biosimilars and Respiratory. Planning to invest 6-8% of sales in R&D activities in order to develop diversified dosage forms with high level of complexity.

  • The company has initiated work on a green field integrated manufacturing facility for drug substances and drug products (API & formulations) in Oncology. The Phase I has installed capacity of 20 mn tablets, 7 mn capsules and 3 mn lyophilized vials. The facility shall conform to latest international regulatory requirements of USFDA, EU-Germany.

  • US market is experiencing a shift in balance of “innovation cycle”- fewer patent expiries and launches of more innovative medicines

  • Higher growth in pharmerging markets (10-13% till 2020) compared to US 5-8%

  • The key drivers of the growth for pharma market over the next five years will be: Access expansion in Pharmerging countries, greater use of more expensive branded medicines in developed markets, and greater use of cheaper alternatives when loss of patent exclusivity occurs.

    Pasted image857×445 34.4 KB

  • Specialty therapies continue to be more significant in developed markets than in Pharmerging. Oncology continues to be the largest category in developed countries. Leading classes in Pharmerging markets are dominated by pain, antibiotics and hypertension, while in developed markets specialty categories such as oncology and auto immune diseases are more prominent

  • The Indian pharmaceuticals market is valued at Rs 98,414 crores in March 16 MAT (Moving Annual Total) by AIOCD with growth of 13% over the same period in 2015.

Pasted image860×215 29.7 KB

  • India business- The Company is ranked 17th in the IPM with significant presence in Cardiac, CNS, GI and Antidiabetic therapies. Our 11 brands are in Top 500 brands of Indian Pharmaceuticals market. Brands like Shelcal, Chymoral, Nikoran, Dilzem, Nebicard, Nexpro etc have been contributing significantly to the India sales

  • Brazil- Economic pressure is also expected to keep a check on the government spending on healthcare impacting its public access for free medicines (select drugs), program “Farmacia Popular”. Federal and State government buying through tenders are also expected to take a hit, thus retail demand for more and cheaper drugs would continue at the forecasted levels, in the private market

  • During the year, S&P downgraded Brazil’s long term sovereign credit rating to BB (2 notches below the investment grade), citing concern about weakening of the country’s credit profile and expectation of a longer adjustment process, slower correction of fiscal policy and another year of recession. In the recent months, the Brazilian Real has appreciated and moved from a low level of 4.16 to a US$ to 3.59 levels presently. However, the macro economic backdrop warrants depreciation pressure in the currency not only on account of weaker economic outlook but also on account of volatile external environment.

  • Brazil- Among the Indian Companies, in terms of market share, Torrent ranks No. 1 with the second largest less than half of the size of Torrent (IMS dataset). The Company has 19 products under approval out of which 3 products are expected to be approved during the coming year. The Company has a development basket of 49 products with 16 products in the Cardio Vascular (CV) segment, 21 products in the Central Nervous System (CNS) segment, 10 products in the Oral Anti Diabetic / obesity (OAD) segment and 2 products in other segments.

  • In Brazil where the Company sells branded generics, the pure generic competition could adversely affect development of branded business. The Company has been building its product portfolio in the generic segment with parallel filings of the Company’s products in the CV, CNS, OAD & Other therapies. The Company has approvals of 18 products whereas 15 products are under approval.

  • USA- The Company received 7 ANDA approvals in financial year 2015-16. The Company has 62 ANDA approvals (including 6 tentative approvals) and its pipeline consists of 14 pending approvals and 119 products under development. The US business is expected to contribute to the growth of international business in a significant way.

  • In the US, there is a continuing trend towards consolidation of certain customers groups such as wholesale drug distribution and retail pharmacies, as well as emergence of large buying groups. The consolidation may result into these groups gaining additional purchasing leverage and consequently increasing the product pricing pressures. Additionally the emergence of large buying groups representing independent retail pharmacies and prevalence and influence of managed care organizations and similar institutions potentially enable those groups to attempt to extract price discounts on our products. The result of such developments could affect the sales volumes and price realizations of our products on an overall basis.

  • Europe- The Company’s European business mainly includes Germany, United Kingdom and Romania where the Company has its direct presence. Germany is the fourth-largest pharmaceutical market in the world and the largest in Western Europe. It is valued around Euro 28 Bn and is expected to grow at a CAGR of 3-4% till 2020. Majority of the market is tender driven and it is expected to continue for foreseeable future which is putting pressure on the margins of the industry. Among the Generic players, Torrent holds 6th position with a market share of around 4% and is ranked No. 1 among Indian players in the Market.

  • Price erosions continue in the German generic market leading to shrinking operating margins. The insurance companies have been empowered to enter into rebate contracts and float tenders. Aggressive bidding by competitors could lead to unsuccessful bids in tenders exposing the Company to loss of existing sales. Likewise in other European markets, regulatory changes could
    affect price realizations.

  • The Company has commenced commercial production of its formulation manufacturing facility at Dahej SEZ in Gujarat during April 2016.The Company has received regulatory approvals from various regulatory authorities viz. USFDA, EU-Germany etc. Phase I of the Dahej facility has an installed capacity of about 600 crore tablets / capsules. Construction of Phase II will commence soon and once commissioned, the total capacity will increase to about 1100 crore tablets / capsules and 80 MT API per year.

18 Likes
328

This article mentions severe price erosion for Crestor. From $760 for 90 day supply of 20mg to $58 for 90 day supply of 20mg. This kind of price erosion does not look real to me.

329

Good source to compare med price in US market. Certain marketing tact will be there but by and large good to find a broader range:

3 Likes
330

Anuj Saxena, CEO of Elder Pharmaceuticals is being investigated by CBI for bribery and defaults… Elder had sold 2 of its divisions to Torrent pharma in 2014.

As for as I understand there should be no impact on Torrent Pharma.

331

Q2 Results

http://www.moneycontrol.com/stocks/reports/torrent-pharma-announces-q2-results-standalone-consolidated-auditors-report-standalone-limited-review-report-consolidated-results-press-release-forquarter-ended-september-30-2016-5247621.html

333

Numbers missed the estimates by some margin, but is the 10-15% fall happening in last 2-3 sessions justified?

Disc: Invested

334

I feel it is justified considering the stock was overvalued to that extend. GAbilify effect is over now completely and little juice is extracted as per the notes from Alembic Pharma. Also, our estimates were different compared to the general public estimates. :stuck_out_tongue:

335

I believe this is as much a reflection of the people holding the stock as it is of the company’s fundamentals.

I probably expected investors in Torrent Pharma to keep the super impact of Abilify in mind over the past few quarters - alas, not to be. Or maybe this is just a blessing to be on VP - where I can get such insights? Not sure.

But just look at Wonderla’s Q2 numbers - don’t think there was any management guidance as well to expect a poor quarter and still hardly a dent on it today.

In Torrent’s case, expected negative surprise has been hammered but Wonderla’s unexpected negative surprise appears unpunished.

Markets getting more efficient at pricing businesses and one-off events or just a reflection of people (as some say - smart money) holding the stock?

336

Here are my notes from Q2FY17 concall. I have organized the info from different questions

India-
Rev grew 12% vs Q1 growth of 3%. Price growth in Q2 was 6%, volume growth 1%, new products 2%.
Launched a CNS product (Lurasidone) for strengthening position in anti psychotic market.
Focus continues on specialty and productivity. Per capita productivity increased to 6 lakhs. Focus only on prescriptions. Specialists take some time to start recco our products. De focusing on anti-infectives.
Going fwd the growth will be better than the market growth.

Brazil-
20% rev growth in INR,
Local currency growth was 31% in Q1 and 8% in Q2
Launched first branded generic of Olmisartan- 75mn Brazilian Real
Trazidone- 110mn. Launch before end Q2
Tender business declined heavily (20%) due cut in govt spend.
Had problem in QC lab which caused inventory pile up in trade business.

USA
On Abilify, 4 additional competitors impacted pricing. It has now become a normal product, on par with any other product in our portfolio.
Esomeprazole/Nexium also price pressure. Auro came in April only
There was one product where we saw irrational competition.
Dont expect any large impact on any products going fwd. Hangover phase is over and now business is usual. there will not be a repeat of drop from Q1 to Q2.
Impact of pricing pressure and volume is across the board, not just Nexium and Abilify. Lost some contracts. Exited where prices are not good. US revenue going fwd- environment is changing. Firstly, USFDA is close to its GDUFA commitment. Secondly, Walmart + McKesson joint purchases (merger) started from 1st April. Thought at beginning of the year that Pricing impact will be 5-10% on the base business vs 3-5% in normal year.
The changing environment also impacts the price they are willing to pay for acquisitions.

We have 56 approved products- Some we are out of market and in some we are increasing capacities, so there is a scope of growth even without additional approvals. eg. Detrol LA- we could not increase market share because of capacity constraints. going fwd we will increase capacity on that product. Another example-venlafaxine was not produced much because other products were prioritized. The market for this is growing 7-8% in unit terms. Such products will get revived.

Guided 10 launches but didnt launch anything this year. Out of 3 approvals this year, we will launch 2 in Nov and 1 in Jan. Hoping some more approvals by end of fiscal year…one additional approval by end Oct. Rest is in hands of USFDA.

4 sure shot launches for FY17. Rest 6 approvals were expected but havent come yet. At least 2-3 should come this year. We can end the year with 6-7 launches

One launch will be Floxetine hydrochloride (prozac??) November launch, already approved. Small pdt which sells through whole saler channel. 85% share of Mylan, 10-15% Teva. Dont expect more players.

Renevela/Sevelamer - responded to all questions. Waiting for USFDA to come back on that.
Quetiapine/Seroquel (it had 2013 annual sales of 1.3bn)- We have a pending query which we are wworking on. We can be on wave 1 or wave 2 of launch.

R&D
Currently 20 filings under review and 6 tentative approvals
Filed 6 ANDA in H1 including 1st derma ANDA, 1 FTF, 1 in-licensed pdt for which regulatory work was done at Torrent but development was done outside.
Target of 4-5 filing per Q. FY17 total will be 15+
15 launches a year from FY18-19 onwards
Areas- Derma, Onco, Opthal.
111cr spent in Q2 up from 57cr last year.

Dahej
8 pdts approved
Ramping up production from Dahej
Approval rate is slightly slower than expected, so the utilization is low. However full costs are getting charged to P&L.

Glochem was acquired for 120cr, small acquisition. It was already making APIs for Torrent. We will file more DMFs from here- targeting 8-10 per year. We have now 3 API plants- 60+60+50 tonnes. 40% API are made in-house currently.

Why are we carrying debt when we have current investments, cash? Large part is in overseas subsidiary. Want to have some liquidity to care of capex. Net-net basis we have very low debt. Looking for some refinancing to reduce interest cost.

Tax rate 17% in H1. Full year can be 18-20%

Capex guidance- 500cr per year for next 3 years

Acquisitions
First prio for inorganic growth is India but all available acquisitions are very expensive. 2nd Brazil and US. 3rd UK. Want to expand scope by therapeutic areas/dosage form rather than scale.
USD 400-500mn would be a comfortable size. More than that we will have to look for higher borrowing

20 Likes
337

Torrent stock hasnt performed well since this thread was started. I believe the reason to be that post abilify, the company missed on a couple of large launches (Celebrex, Crestor) and the ANDA filing rate has been disappointing. I think that things will pick up from here on.

Saw a report by edelweiss post management meet. Imp takeaways-

  • 100 US ANDA filings by FY20. 15 in FY17 and 20 thereafter
  • In-licensing 10 ANDA per year
  • In medium term, 5-6 launches including gTribenzor, gAzor, gSarafem, gLuvox CR, gEnablex and gLamictal XR, site transfers of approved ANDAs to Dahej and in‐licensed filings will drive growth in US.
  • Increase Brazil filings to 10 per year and triple portfolio size to 100 in next 5 years
  • Germany tender business to grow 2.5x in next 5 years
  • Focusing on specialists in India and increasing productivity. Plan to launch 2 more Biosimilars in India for Reliance Life-sciences
  • Capex- 500cr per year for next 3 years

http://www.moneycontrol.com/currency/reports/torrent-pharma-ltd-company-update-report-december-21-2016-edelweiss-securities-114475.html

8 Likes
338

Indian Mutual funds has increased its holding in Torrent in Dec’16. I feel, results will be as expected in Q3’17, but would be better in Q4.

1 Like
339

Testing time ahead for Indian Pharma

340

Clopidogrel Market is expected to prompt pharmaceutical companies to venture into clopidogrel drug manufacturing

The patent of clopidogrel manufacturing got expires on Market 31, 2012 and is expected to prompt pharmaceutical companies to venture into clopidogrel drug manufacturing. Moreover, companies such as Dr. Reddy’s have acquired the approval to manufacture clopidogrel 300mg. Furthermore, several other organizations such as Roxane Laboratories, Aurobindo Pharma, Sun Pharma, Torrent Pharmaceuticals, and Apotex Crop have gained approval for marketing clopidogrel 75mg. Clopidogrel is also used with aspirin to treat worsening chest pain and to keep blood vessels open and present blood clots after certain heart related operations.

341

Good results from torrent pharma.

http://www.torrentpharma.com/pdf/Revenue-Q3-YTD-Dec-FY17.pdf

Growth in India, Brazil and Germany are heartening.

342

hitesh sir whats your take on torrents reults specially growth in brazil,germany and india