Hi Dhiren,
Cud u pls share the source of this info and more details as it will impact many pharma companies and not just IOL
IOL is into APIs i.e. sort of raw material for those big pharma companies. Hence its not exactly contract manufacturing of medicines.
As per my understanding , the details from link shared should not affect this company much. Please feel free to correct me of I missed smthing.
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@Ravish I fully agree to your point. Management remuneration is increasing disproportionately. Amt Receivables are also increasing. Indebtedness is increasing. With these negatives, the company is not worth investing. Though traders can play their game.
Even Mr. Mallyaâs Kingfisher saw doubling ;). That doesnât mean Investors should have stayed with Kingfisher.
Disc: Not Invested, so my views may be biased
Fantastic Q3 result and successfully completed unit IV to manufacture Metformin, an anti- diabetic drug.
Press Release-12 Feb
Segment results have been interesting, with the pharma giving growing at a fast pace:
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Do you think Chemical segment will also start contributing to bottom line going forward given the favorable scenario for the sector
Two issues:-1:
1.IOL is not in formulation of drugs.Will it get affected once drug prices correct?
2.BASF coming up with large capacity in few years,will affect its market seriously.
Some insights on Ibuprofen from BASF point of view -
Ibuprofen is one of the products that BASF held onto when it sold off the rest of its API business several years ago. The German company now intends to significantly expand capacity for the ingredient.
BASF said Wednesday it will invest âŹ200 million ($225.6 million) to build what it calls a âworld-scale plantâ at its headquarters site in Ludwigshafen, Germany, to produce ibuprofen. The plant is slated to come online in 2021.
âIt will be the first world-scale ibuprofen plant in Europe,â Markus Kamieth, a BASF executive director, said in a statement.
It will also expand production at its site in Bishop, Texas, about 35 miles southwest of Corpus Christi, where it has manufactured ibuprofen for more than two decades. It said it expects that project to be complete in 2018.
In 2015, BASF sold off most of its API business to Swiss contract manufacturer Siegfried Holding for âŹ270 million ($302.3 million). Siegfried bought BASFâs ephedrine, pseudoephedrine and caffeine API businesses, as well as its custom drug-manufacturing operation. With the deal, Siegfried picked up plants in Minden, Germany; Evionnaz, Switzerland; and Saint-Vulbas, France, that employed more than 800.
At the time, the industrial products company said that the deal would allow it to narrow its focus on the higher margin products, which included polyethylene glycol and omega-3 as well as ibuprofen.
Link - https://www.fiercepharma.com/manufacturing/basf-beefs-ibuprofen-api-capacity-projects-u-s-and-europe
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Will they be able to compete on cost with IOL. I dont have too many details but with IOL located in low cost location (India) , surely it would have cost advantage over BASF.
But I agree that over capacity ,once BASF plant is ready, would harm margins for sure.
The major capacity would come online only in 2021. What I wanted to highlight was BASF keeping high margin product i.e. Ibuprofen while they divested the rest of the low margin APIs.
Link - Codeine ban boosts sales of Nurofen, Panadol
After the recent codeine ban in US the sales of Nurofen have been up by 45% in US compared to Feb 2017. This ban is for OTC selling on Codeine, it has now been rated as prescription drug. The 45% rise is Nurofen (brand name for Ibuprofen) is huge this could in a way increase the demand for Ibuprofen.
In the mean time I will try to find the market share of OTC Codeine before the ban.
Regards
Krishna
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Management is quite bullish for the next 3 years
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Vanita Organics is one of the lowest cost producer and IOLCP cannot match it at all. We can hope that we the stabilised production the company may be able to reduy Raw material cost and if it succeeds it will be a different story .
The Ibuprofen imports and other bulk drug imports from China have come down quite considerably.
The import of Ibuprofen API that makes analgesics has come down considerably from Rs 116 core in 2015-16 to Rs 52.40 crore in 2016-17. The government has been trying to set up clusters for the manufacturing of bulk drugs. Late last year, the Department of Pharmaceutical issued an expression of interest for the fourth time as the first three times the industry did not show much enthusiasm.
Hi @inteliinv
The news of codeine ban in the OTC market from Feb 1st is w.r.t Australian market (not US). Codeine can still be availed in Aus but only through prescriptions, this step is usually taken by regulators to control/tackle the misuse of drug.
Coming to the US market now, codeine is already under the more restrictive schedule of Controlled Substances Act.
Prices of Ibuprofen had run-up in FY17 and in 9MFY18-no doubt. But, the driver behind it is still not clear (Australiaâs codeine ban issue can be one factor but, I feel there is more to this price rise) and we should work to figure it out.
Regards,
Yogansh Jeswani
Disclosure: Tracking
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Hi @yogansh, thanks for the information.
Codenine ban would not a be major driver. From managementâs interview I got to know that there are some issues going on with 2-3 players of China in terms of regulations. The management didnât elaborate on the same. I tried to search for it on internet but havenât been able to find anything on the same.
The search is still on, will get back whenever I find something relevant.
Regards
Sri Krishna Bhutra
@inteliinv - issue with Chinese players was emphasize d by Vinati organics CMD Mrs. Vinati during one of the recent interviews.- if I remember correctly.
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Hi @T11 , I will go through the interview of Vinati Organics and get back, was not aware as currently not tracking Vinati. Would be great if you could share the link if possible.
Regards
Krishna
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How the co is going to reduce/manage debt-I have not found reasonable explanation.May i request knowledgeable member to throw some light.Regret my deficiency in financial understanding.
Disclaimer-Invested small amount