54 Para IV filings and 30 expected to have FTF status (very exciting portfolio)
More than two-thirds of portfolio is ranked ‘TOP 3’ in market share in respective molecule markets
Launched 28 products in Fy20
New launch intensity is likely to remain at ~25 products in Fy21
Market share gain in key products: gSuboxone (20% MS; can fetch $100m in Fy21), gToprol XL (market leader; can fetch $35m in Fy21), gIsotretenoin (relaunched in Fy20; can fetch)
Key known US fillings (key growth contributors): gCopaxone, gNuvaring, gRevlimid, gCiprodex, gKuvan, gVascepa, etc
Europe:
Launched 40 products in Fy20 (24% of 168 total launches in Fy20)
Europe sales grew 49% YoY in Fy20
Strength in core markets like Germany
Ramp-up of new markets like France, Italy, Spain and new launches
With clear focus on leveraging the US injectable portfolio, co expects growth momentum in Europe to stay strong
Emerging Markets (Russia + CISR + RoW):
Launched 80 products in EM in Fy20 (48% of 168 total launches in Fy20)
Russia is the key market for DRL and accounts for ~51% of the DRL EM sales
Most of EM sales are based on hospital products; DRL is well positioned to be the solution for the unmet need because some of these markets are not being served well
China: DRL is the largest foreign generic company in China, been there for the last 20 years, selling about $100 million, about 10 products. DRL never left China even when it was hard. The benefit will come because on this infrastructure, given the new regulation and especially the introduction of the GA regulation. 70 products of U.S. portfolio can fit the GA requirement of China. Most of it are already in the stages of registrations, and some it even going to be launched soon
India:
DRL is India’s 2nd largest pharma co by global revenues, however not in top 10 by domestic revenues!!!
Domestic sales is a focus area now; change in priority under new leadership
Very decent domestic growth scope considering DRL size and offerings
Domestic MAT sales growing far ahead of IPM over the past ~24 months
India - Acquisition of select Wockhardt’s branded generics:
INR 1850 Cr deal
Fy20 (9m) sales of this portfolio are ~377 Cr; was 594 Cr in Fy19 sales
Implied valuation 3.8x EV/Sales
Portfolio includes 62 brands in multiple therapies such as respiratory, neurology, derma, gastro, pain and vaccines
Key brands are Practin, Zedex, Bro-zedex, Tryptomer and Biovac
Acquisition is in line with DRL’s renewed focus on branded generic businesses
Limited fixed assets, could have high goodwill with amortization of ~15 years
Pharmaceuticals Services and Active Ingredients (PSAI):
Filed 98 DMFs (drug master files) worldwide in Fy20, including 10 filings in the US
Has total 893 DMFs (US 204, Europe 168, Canada 74, RoW 447) as per Q2Fy19 presentation
Historically, the PSAI’s priority was to develop internal ANDAs; third-party sales lacked attention
Has invested in expanding capacities in the past 7 years, however the capacity utilization is low
Probability of the following three levers of growth likely to play out in PSAI over the next 2-3 years
Growth in pharmaceutical services: DRL has enhanced engagement with innovators to drive the services business. Recently, announced separating the services business into a separate subsidiary under Aurigene. Aurigene is involved in drug discovery, and hence, under Aurigine, the segment is likely to gain greater focus
Leadership in select APIs: Strives to achieve leadership position in 25% of its DMFs through consistent improvement in cost efficiencies
Patent expiry opportunities: Historically, DRL has been an early mover in patent expiry opportunities. Such high-value product-specific opportunities are likely to emerge in 2023-25
