Lupin - Is it the time to buy for long term

Novitium gets approval for famotidine (oral suspension). This is a big product for Lupin with FY21 sales of >$180mn (estimates from Jefferies).

Disclosure: Invested (position size here)

What is What is In-Licensing?

Under the license agreement, the two companies will take on the development and commercialization of ciraparantag in Europe, Australia and New Zealand. The drug candidate is targeted for the reversal of the anticoagulant effect of direct oral anticoagulants and low molecular weight heparin in patients who use these products and need emergency surgery or are experiencing life-threatening uncontrolled bleeding. Ciraparamtag restores the body’s ability to form blood clots.

The presentation made by vinita in jp morgan healthcare conference is available on lupin -investor -presentation section and on youtube.
Has some broad colour on companies focus areas, plans, audit etc.
Worth al ook. Not pasting the link here as not sure on copyrights.

1 Like

Here are my notes from the Q4FY21 concall.

  • Products on shelf: Reduced from 174 to 168. Portfolio rationalization is behind now, price erosion is much more controlled (at single digits) and hope that it persists
  • Very poor flu season in US impacted revenue (~$36mn). Despite that, Q4 US sales came at $195mn (compared to $212mn in Q4FY20 and $188mn in Q3FY21). Sequential uptick was due to albuterol and levothyroxine ramp up.
  • EBITDA margins have improved sequentially to 18.8% sales vs 18.6% in FY21Q3. Expect margins of 19-20% in FY22 and base margins should be 20-22% by FY23. Margins will spike up to 26-27% when a complex product is launched and then come back to base levels of 20-22%
  • Gross margins came at 65.1% (driven by albuterol) and higher write-offs due to weak flu season
  • For FY22, inhalation portfolio will kick in (brovana, perforomist). Experiencing additional challenge for famotidine.
  • Guidance: Expect 10% US sales growth in FY22. Goal is to get to $1bn+ US sales by FY23. India should grow in double digits
  • Extremely committed for the business and not willing to sell out
  • India: Acute product sales have grown this quarter. Growth was at 5.9% vs 8.5 IPM for Q4FY21 (IQVIA). For FY21, Lupin grew at 3.9% vs IPM of 4.3% (IQVIA).In chronic, Lupin grew at 10.2% vs 8.4% IPM growth. Now, 65% of sales are chronic in nature. Field force stands at 7700. Should see double digit growth in FY22.
  • In chronic therapy, focus is on diabetes, cardiovascular, and respiratory. Diabetes is growing the fastest among chronic therapies (20%+). Highly under indexed in women’s health, vitamins and supplements, dermatology and will launch products in these categories
  • Albuterol: Has ramped up further and made the supplies, IQVIA reported market share at only 8% levels as IQVIA numbers are lagging supplies. Haven’t seen shift to Sandoz. Pricing has been stable thus far. Hope to build-up market share to 20% levels (by end of FY22)
  • gSpiriva: In process of responding to FDA, have got priority review, expect approval and launch in FY23. Litigation should be settled in FY22, expect court proceedings to pick up pace in September 2021
  • gFostair: Made significant progress with UK agency and expect approval soon (to be launched in the next couple of months)
  • gBrovana: Material product for FY22
  • Levothyroxine: Currently at 18.7% of generic market share. Started FY21 at 15% of generic market share
  • Metformin: At 50%+ share in glumetza (with reduced pricing to gain back market share). Yet to launch fortamet
  • Biosimilars: Filed 1st product (pegfilgrastim) in USA but the facility has not been inspected. Should be launched in 15-18 month timeframe.
  • Etanercept: Launched in Germany + Austria + eastern Europe. Seen revenue growth QoQ. France is yet to happen.
  • Revlimid: Looking to launch in 2022
  • Specialty portfolio: Major product will be trick for women health division (H2FY22)
  • API: Lower sales due to lower antibiotic sales and a weak flu season. API generate lower gross margins but have similar to the corporate level EBITDA margin
  • Employee expenses: Came lower also due to a one-off, in which they had provided for higher expense for sales incentives which didn’t come through and thus Lupin wrote back that amount. Expect to be <18% of sales going forward
  • Effective tax rate came down in FY22 with Brazil and USA entities returning to profitability. Expect it to remain at 27-28% in FY22
  • Inspections: FDA has come up with remote inspection guidelines, hope to get remote inspection soon. Pithampur Unit II required a deeper fix which was done. Tarapur and Goa sites did not require deeper fix.
  • R&D: At 9% level in FY21 and this will decline going forward. Complex generics (inhalation + injectable) + biosimilars expenses were front-ended. Inhalation portfolio is paying off. Injectable portfolio (with iron + peptide + liposomal + depot) will start contributing in the next 2-3 years (from FY23). Biosimilars will start contributing in the next couple of years. 5-years ahead: complex generics will be the biggest revenue and margin drivers
  • Debt: Repaid Gavis loans
  • CAPEX: Will be ~1000 cr. in FY21
  • FY21 working capital was ~145 days. Want to bring it down to 100-120 days

Disclosure: Invested (position size here)


The query on promoter seriousness was a shocker/ dampener. There is no smoke without a fire.

found the promoters slightly shaky vis-a- vis the gung ho agressive attitude in previous calls. Most of the timelines of launches were extended over previous estimates.

Nice to see a VP asking questions in the concall.


trying to make some sense out of the pipeline indicated till now, inhalation looks with limited competition to play out in 1-2 yr, while biosimilar looks crowded and fda approvals are at least 2-3 yr off in most cases, very low visibility on injectables as it is little far out as well.
enbrel mkt size is only for eu.

s no drug name type likely launch by lupin mkt size competition including innovator remarks ( target mkt)
1 albuterol inhalation launched 400 perrigo gsk, teva , 3 authorised generics in albuterol
2 fostair inhalation 2-3 months uk mkt
3 spiriva inhaler FY23 3000 boehringer, patent expiry fy 20
4 brovana inhaler FY 22 500 sunovion patent expiry fy 20
5 dulera inhaler Fy 22 400 merck patent expiry fy 20
6 etanercept (enbrel) biosimilar launched 1500 pfizer/amgen,sandoz, samsung wyeth, in india-- cipla, intas approved in eu and launched in few eu markets and japan
7 filgrastim ( neupogen) biosimilar 785 hexal, pfizer,apotex, several others launched in india,
8 pegfilgrastim biosimilar filed in US launch by FY 23 950 coherus, mylan, biocon, novartis, pfizer, sandoz, DRL,Zydus,emcure and cipla launched in india,
9 ranibizumab ( lucentis) biosimilar FY 25 1200 roche ( innovator)coherus, and 2 more in process
10 denosumab ( prolia, xgeva) biosimilar ? 6000 amgen (innovator),no biosimilar in pipeline, 6 biosimilar in process , lupin not in sight
11 pertuzumab ( perjeta) biosimilar ? 3000 genetech innovator, no biosimilar approved, 6 biosimilar in pipeline, lupin not in first lot
12 afibercept ( eylea) biosimilar 4000 regeneron , none approved but several biosimilar in pipeline, lupin not visible in first lot recvd 3.5 mn usd
13 namuscula launched 10 approved in EU and US
14 malt1 NCE abbvie recvd 30 mn usd upfront for development
15 MEK NCE boehringer recvd 20 mn usd
16 doxil injectables FY 24 1000 J &J, SRS,Sun, cadila,merck, cipla, pfizer, DRL/natco For-doz doz pharma, mktg by lupin
17 ambiosome injectables FY 25 For-doz doz pharma, mktg by lupin
18 provera female health

Lupin’s novel drug program seems to be on track. They concluded their third milestone payment ($50 mn for MEK product with Boehringer). Here is a broad timeline of the major developments thus far.

  • NCE program is focused on oncology, immunology, and metabolic disorders
  • MALT1 AbbVie partnership (Q3FY19): Received $30 mn upfront, milestone payments upto $947 mn + royalty on sales
  • MEK Boehringer partnership:
    o MEK inhibitor compound is planned for clinical development in combination with Boehringer Ingelheim’s KRAS inhibitor pipeline to address KRAS-driven cancers
    o 04-09-2021: Received $20 mn upfront, milestone payments up to $700 mn + double digit royalty on sales
    o 27-05-2021: Received $50 mn milestone payment

Disclosure: Invested (position size here)

1 Like

Have reduced my exposure to lupin since majority of their launches are after fy 24. Except for inhaler like spiriva, dolera and fostair.

Also perrigo is expected to be back anytime now with pro air which will dent the albuterol sales.

Have added tisco the logic for same is in bhushan thread.

Inviting comments

1 Like

A couple of updates:

  • gBrovana has been launched in US, this is their second respiratory product after gProair. The other major US launch for FY22 is perforomist, hasn’t got approval yet.
  • Application for pegfilgrastim has been filed in US, they will be the 6th player in the market. Price erosion is >40% over the last 3-years and the current biosimilar adoption is ~36% of overall market. Biocon has struggled getting barely 8% market share since launch (in Sept 2018).

Disclosure: Invested (position size same as before)


Warning letter issued to Somerset facility.

Disclosure: Invested

1 Like

Gets fostair approval in UK, Lupin’s respiratory division is doing very well with 3 approvals now (proair and brovana in US, fostair in UK)


Lupin’s Q1 result has 50 Million USD from Boehringer Ingelheim MEK program income. If removed its net profit is just 160 crores?

Here are my notes from Q1FY22 concall.

  • Excluding in-licensing income, gross and EBITDA margins declined. US sales were impacted due to competition in one major product (famotidine), penalty due to failure to supply, slower albuterol ramp-up (strategy of bolstering longer term customers rather than spot sales) and a little bit pricing pressure on base business (especially due to aggressiveness from newer Indian players)
  • Expect significant improvement in US performance in H2FY22 to $200mn/quarter. Target 18-20% market share in albuterol by end of FY22 (currently ~12%)
  • Target margins of 18% in FY22
  • Lower gross margins is partly due to change in accounting, earlier partnership royalty was charged in SG&A which is now being charged in gross margin line
  • Conversation about vaccine partnership has not made any significant progress
  • Long term strategy is to go deep in 10 key markets (India, US, Australia, Philippines, South Africa, Brazil, Mexico). Also interested in making an acquisition in China
  • Target is to get quarterly US revenues above $200mn and maintain it
  • Oncology and biosimilar programs: Looking to get funds from outside investors over the next 18 months. 2 onco assets in IND stage and 5 programs currently in development. Currently impacting EBITDA by ~$65mn through marketing and R&D spends
  • R&D will be maintained at the same amount (if revenue grows, it should stabilize at 9% of sales)
  • Biosimilar: Will do capex on microbial side, well placed on the mammalian side
  • Material products for US markets in FY23: Suprep, sevelamer, revlimid

Disclosure: Invested


Has Lupin provisioned any amount out of the total 250 million $ ? If yes can someone point it out how much and where I could find it ? @harsh.beria93

This was mentioned in the contingent liability section, so probably no provisions made yet.


Lupin does show 9 drugs classified as BX, while all of Laurus’ approvals remain as AB

can you please explain a bit more?
what is BX and impact on lupin.

CNBC interview (link):

  • Forayed into diagnostics, want to position itself as a complete healthcare organization. This is being done in a calibrated way
  • Conscious of expensive M&A (once bitten twice shy)
  • Seeing pricing pressure in US (high single digit). Expect it to settle down at 5-6%
  • Suprep: expect launch in H2FY23
  • Goa observations: Addressable and no repeat, confident of addressing them
  • Somerset: Three observations are common with the warning letter. No timeline given toward its settlement
  • Tarapur & Pithampur: Ready for reinspection. No important products are coming from there
  • A lot of KSMs are sourced from China which are showing price increases
  • Looking to spin off its NCE molecules which offer good value, want to unleash value from biosimilar division

Disclosure: Invested (position size here)