These five API companies may benefit as drug makers seek to reduce dependence on Chinese Raw material.
Discl: Invested in API companies. Please apply due diligence before investment.
These five API companies may benefit as drug makers seek to reduce dependence on Chinese Raw material.
The Article lists the name of API makers likely to be affected in case of disruptions in imports of Key Starting Raw material from China !
Discl: Invested in a basket of API makers âŚ
It is not a buy sell recommendation. Please apply due diligence before investments
Well, I think it would be important to know few things -
Would be good to know thoughts of those who have in depth knowledge of the sector.
Disc: As do not understand anything on above points, not yet invested in any API players. Have some exposure to MNC Pharma and couple Indian formulation companies
Though I am not an expert on Pharma Sector, will try to answer your queries, as I am tracking this sector due to my investment interests and because of the ongoing Border conflicts between India & China.
(1) The way in which India is one of the leading exporter of Generic/ formulations to the world at competitive price, similarly China is a leading exporter of API & Its Starting key material to the World at competitive ratesâŚSo the entire world including India sources itâs API & Its key starting material from China at a competitive rates.
Chinaâs expertise lies in producing the Starting key material for API by fermentation process from rotten vegetables and fruits. It is highly technolgy driven fully supported by Chinese Govt. Thus the Chinese Industry is able to offer a cheaper and cost effective product to the world.
(2) To become Atma Nirbhar, we have identified most essential 53 molecules which we are currently importing from ChinaâŚthough there may be many more we must be importing due to cost competitivenessâŚPLI scheme has been declaredâŚthe list of 53 molecules attached in the link below. A lot of issues are still being debated including whether brown field projects would be included⌠technology supportâŚetcâŚ
(3) Alternate source for key starting Raw material from other countries are also being exploredâŚ
(4) I was looking for import content of different API makers from respective threads in Valuepickr forum⌠but there is no concrete data available. It seems to be a Grey Area and there seems to be a lack of transparency among the promoters of the API companies in disclosing and quantifying the exact volume of imports from China , risks involved in China imports and mitigation plan thereof.
(5) I am attaching an interesting article- what is a possible way out for India with regards to Key starting material for indian API industry? and though it is a long drawn process.
Good summary of what is happening in Pharma.
I was wondering why Vitamin C tablets are off the shelf nowadays- for example Limcee - a very popular Vit C tablet are not available during the pandemic due to supply disruption though
China was dumping this vitamin C Ascrobic Acid in Tonnes in India before pandemicâŚ
Now seeing that Govt is taking action on China imports , half a dozen companies led by Bajaj Health care have lodged complaint and DGTR has started investigation to levy Anti-dumping duties on Chinese vitamin C.
Interestingly, I never heard of Bajaj Health care - listed company with promoters 67% holding and very good return ratioâs and making a wide range APIâs consisting of several acute and chronic segments apart from nutraceuticalsâŚ
There is no thread in valuepickrâŚ
Please have a look at the company website âŚ
Any views from members welcomeâŚappears interesting from investment point of view unless there is some corporate governance issue with this company.
http://www.bajajhealth.com/api/
There were several questions about how pharma/API industry will be affected by supply issues with KSM from a country. I find the below research doc very illuminating about âtheirâ methods. For the impatient, go straight to âin-depth case studiesâ arround page 20. Starts with norway case. They are very averse to affecting their own to punish others.
The CCPs coercive diplomacy_0.pdf (7.6 MB)
I infer that, if an api is indirectly/directly connected to their domestic pharma needs, then its KSM supplies are very likely safe for now (based on the research report of historical measures). The condition in which this rule will break would be if they have already stocked enough for a possible disruptive event (Example: War). Another way to view would be that if the supplies are not yet disrupted, then it could mean the current stock is not enough to start a war.
Can someone point to the countryâs import data for medicines?
What about price escalation? Similar arguments can be made for the same. Waiting on commentary from others.
China seems to have increased price of Key Starting Raw material by 20% for our API makers⌠So if any of our API maker is dependent upon china only for the raw material , then the bottom line could be hit to the extent of its Chinese import content. The API maker may not be hit , if it has a second source either from india or some other country at a reasonable/ competitive price !
Similarly, China has hiked its API price by 20% and so our Generic pharma makers those who depend upon China only for its API could also be hit to the extent it imports from China!
I am ok with that if India takes it a challenge and goes the whole gamut of manufacturing the entire product range from start to finish. We might face immediate roadblocks but it could turn out to be a blessing in disguise for Indian Pharma companies.
I was watching this wonderful interview with Amit Ranjan (link), here are the key points that I could gather. If anyone is interested in learning about Indian pharma septic practices I will recommend watching his videos.
Disclosure: Invested in a number of Indian pharma companies (Lupin, Cadila, Biocon, Ajanta, Natco), detailed portfolio here
Hello @harsh.beria93
Saw one comment from you on Glenmark on hitesh jiâs thread. Just wanted to know your thoughts on probability of successful capital raise by Ichnos.
Thanks
USFDA warning letter to Shilpa could be a beginning of the bad news for the pharma industry itself. USFDA issues have been the biggest concern for Indian pharma industry for last 5 years. Covid pandemic changed that a lot as USFDA started going easy on many companies for past 6 months (more and quick approvals). This brought in wave of optimism in the pharma sector thereby raising almost all export oriented pharma companies to their lifetime highs. Now Shilpa medicare getting USFDA letter could be potentially turn of stance for USFDA. Maybe USFDA feels that they can go back to their original stringent implementation levels. If so, indian pharma dependent on US exports can quickly turn negative. So need to watch next few months, in terms of number of approvals vs no. of warning letters.
Company specific USFDA approvals and observations should anyways be closely watched. Indian Pharma is too diverse and companies have their own compliance records. A general or broad view is not very helpful. Another way look at this event is that market will value the companies that have a good track record with USFDA .
In this interview with Eli Lilly CEO, we can see that he is talking about CMO partnerships with Samsung and Amgen for its monoclonal antibodies.
Is there any Indian CMO with similar capabilities for monocolonal antibodies
Syngene is the preferred antibody production partner by our clients leveraging our scientific expertise and flexibility required for high quality antibody production. Syngeneâs tailored facility and experienced scientists offer small and large scale monoclonal and polyclonal antibody production and purification services. Syngene also offers services surrounding Hybridoma generation and screening.
https://www.syngeneintl.com/services/discovery-biology/antibody-generation