Alembic Pharma (Oral Solids ==> Injectables, Onco, Derma, Opthalmic)

Stock Opportunities Not-so-Hidden Gems
795

Here are my notes from their AR24.

Manufacturing facilities:

  • All EIRs are in place

  • F1 (Panelav): Oral solids

  • F2 (Panelav): Oncology oral solids + oncology injectables

  • F3 (Karkhadi): General injectables+ Ophthalmic

  • F4 (Jarod): Oral solids + Oral suspensions. Transferred products from F1 to F4 to decongest F1

  • F5 (Karkhadi): Dermatology

  • Sikkim: Branded domestic business

  • Pithampur will come onstream in FY25 and complement Sikkim for domestic sales

  • 3 API plants (2 in Panelav, 1 in Karkhadi)

US (sales: 1’730 cr., growth @10%)

  • Launched 27 products (15 were from new facilities), filed 15 ANDAs (12 complex filings), got 15 final approvals, filed 1 DMF

  • 10 injectables launched so far

  • Reduced annual ANDA filings from 20-25 earlier to 15 now, product mix is changing to complex products

  • 7 oncology product filings awaiting approvals

  • Filings catering to new therapies (oncology, dermatology and ophthalmology) and new platforms (injectables and inhalation) it stood 12 filings (out of 15 filings) in FY24. In FY25, the filings for these products and platforms will be ~14

  • 54% of development pipeline for the US comprises non-OSD products

  • Made a meaningful entry into the peptide space with 2 ANDAs filed and setting up a kilo lab for peptide APIs

Non-US generic (sales: 1’052 cr., growth @23%)

  • 14 launches in FY24

  • Will launch 25+ products in Chile in FY25 expanding product basked to 30+. Expect to start operations in Mexico in 2026

  • Received orders for 2 injectables from Malaysia and Chile which will be launched in FY25

  • Setup subsidiary in UAE with a scientific office. Filed 20 products in UAE and hopeful of securing approvals in 12-18 months

  • Have presence in 41 countries

  • Their strategy of developing B2B model has worked well in Europe

  • Favorable regulatory tailwinds in Australia helped them grow volumes

Domestic business (sales: 2’200 cr., growth @7% vs 8% for industry)

  • 12 therapeutic areas, 20 marketing divisions, 5000+ MRs catering to 2.33 lakh doctors (vs 2.31 lakh in FY23)

  • Launched 15-20 new products

  • 1.5% market share, 4 brands generating 100 cr.+ revenues, 9 leading brands, 69 brands above 10 cr. sales

  • MRs 5000+, gave iPads to MRs and upgraded to SalesForce

API (sales: 1’246 cr., growth @7%)

  • 33% captive consumption

Animal healthcare

  • Created a new division for livestock products, 71 products launched in speciality and animal health spaces in FY23 and FY24.

  • Expanded team to 350 people

R&D 476 cr. (vs 731 cr. in FY23)

  • Investments in API, injectables and ophthalmic will increase

  • Largest investment in FY25 will be on peptide-based formulations and APIs for Para-IV filings

  • 6 new technologies such as powder drug layering, laser drilled osmotic drug delivery, spray drying, hot melt extrusion, wet milling using Dyno-mill and dry granulation using roller compactor were introduced

  • New technologies to manufacture various dosage forms are through the technology of sterile powder namely lipid-based liposomes and polymer based microspheres. Nanoparticle delivery system technology is also introduced that uses nanoparticles for targeted administration and controlled release of therapeutic agents. Device capabilities have been introduced for manufacturing pre-filled syringes, pre-filled cartridges, pens and auto-injectors both upstream and downstream

  • 800+ R&D team

Capex (345 cr.)

  • Capex cycle is over fulfilling demand over next 3-5 years, expect good free cashflow generation

  • Setup 12MW solar power plant for Panelav unit, setting up 11MW solar plant at Karakhadi in FY25

Miscellaneous

  • Employees : 14’858 (vs 14’593 in FY23)

  • KMP + close person remuneration: 75 cr. (vs 48 cr. in FY23)

  • Related party purchases from Shreno Publications: 50.95 cr. (vs 43.31 cr. in FY23)

  • CSR : Spent 13.19 cr. (transferred 2.94 cr. of obligations in April 2024)

  • 8% increase for non-managerial personnel and 65% increase for managerial personnel (there was no commission paid in FY23 which was reinstated resulting in higher payout to KMPs)

  • # shareholders : 78’191 (vs 101’761 in FY23)

  • Auditor remuneration : 1.39 cr. (vs 1.3 cr. in FY23)

  • Tax liability : 13.22 cr. (vs 1.77 cr. in FY23)

  • Contingent liability : No major liability except corporate guarantee of 40.69 cr. (vs 106.72 cr. in FY23)

Disclosure: Invested (position size here, no transactions in last-30 days)

4 Likes