ValuePickr Forum

Marksans Pharma- Can it be the next Pharma Biggie?

Now that Marksans has crossed the 100 mark. What are everyone thoughts about this company? Is this still a good company to invest in? It is trading at 20 times its BV and seems a bit expensive but I would like to hear your thoughts.

Any thoughts are appreciated.

My 2 cents…

  1. There was no increase in revenue.

  2. Margins increased which was positive.

  3. Results did not include Time Cap numbers. I believe they will show up in Q2. Time cap numbers will boost Q2 numbers. Additionally, Integration with Time Cap should also show up in Q2 numbers.

Overall I believe that stock will remain range bound between 100 - 125 till Q2. Q2 results will give further direction to future movements.

India Ratings and Research (Ind-Ra) has upgraded Marksans Pharma (MPL) long-term issuer rating to ‘IND A’ from ‘IND A-’. The outlook is stable.

http://www.myiris.com/news/sector/ind-ra-upgrades-marksans-pharma-to-ind-a/20150904113138043

Q2 Results are out…

Consolidated Revenue Grew by 21.38%
Consolidated Profit is flat because Q2: Cons EBITDA Margin At 20.1% Vs 24.2% (YoY): (Employee Expense is up 100%)

US Business grew by 107% H1 FY15 To H1 FY16 . Contributed 33% of revenue .
Europe and UK formulation business degrew by 9% H1 FY15 To H1 FY16…Contributed 52% of revenue .
Australia & NZ business gre by 10% H1 FY15 To H1 FY16.

It seems , UK business hurt by UK regulatory import alert to Relnochem from Marksans India facility.

I don’t now how Company Secretory is telling it is not a worrying factor and revenues wont be affected ? Relnochen contributed 17% of revenue and Bell & Sons contribute 25% of revenue . Now it is clear that Europe business is suffering from that alert.

Hi,

Has anyone spoken to management recently?
we can see many companies in pharma space getting one or other USFDA ANDA approvals, it’s been a while for Marksans Pharma, does anyone has any update regarding same?

Regards,

Ateek

Disc: Invested

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I am taking this data from AR 2014-15

APPROVED ANDAs 8 POTENTIAL US$4.5 billion
FILED ANDAs 11 POTENTIAL US$2.01 billion
ANDAs UNDER DEVELOPMENT 6 POTENTIAL US$3.2 billion

I don’t know whether there are any way to check the pending ANDA but to check the approved ANDA you can get from http://www.accessdata.fda.gov/scripts/cder/ob/docs/queryai.cfm

Hi Amitayu,

Thank you very much for the reply, I already have the data from Annual report

The problem with Marksans is that they haven’t the received additional ANDA approvals from USFDA since long. it will be very helpful if u have any insights regarding same.

One small thing to add, Pending ANDA’s are in Niche segment of softgel. where there is limited competition.

Regards,

Ateek

Ateek,

Marksans expect to get approvals from those pending 10 approvals next 2 years and also across other geography like canada ,UK etc. But it is also heartening to see that with only 1 ANDA approval it clocked USD20mn in FY15E. Marksans has already tied up with 3 large chains i.e Walmart, Walgreens and CVS in the US to sell the OTC Softgel products. Bought Time Cap to establish front end presence across US . These are the reasons which will eventually help marksans to grow faster in US for medium term . To maintain this growth for longer term Marksans should achieve more anda approvals as you said .

Discl: Invested.

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Hi,
As per FDA the approved products (Sep 2015) of Marksans are:
MARKSANS PHARMA LTD: GABAPENTIN, IBUPROFEN, IBUPROFEN (OTC), METFORMIN
HYDROCHLORIDE, NAPROXEN SODIUM, NAPROXEN SODIUM (OTC), NAPROXEN

Here are the List of Approved products by Company name as in Sep 2015:


Marksans appears on page 90.

Marksans has not not received any approval after Sep 2015.

Hope this helps

Discl: invested

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20% Lower circuit today. Any negative news ?

http://economictimes.indiatimes.com/markets/stocks/news/marksans-pharma-plunges-18-after-goa-plant-fails-uk-mhra-inspection/articleshow/50557348.cms

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Marksans Pharma Ltd has submitted to BSE a copy of Clarification is enclosed
http://www.bseindia.com/corporates/anndet_new.aspx?newsid=b5008cd2-0bcc-4a58-b4dd-4c3cdd253713

There seems to be a pattern in hammering stock prices of pharma mid caps. First bring out old known fact in a spicy way to scare everyone and management comes out with a statement by afternoon.

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What is happening…
Today also LC…Is some thing cookingup…
eventhough Management clarified the issue…still it is getting hammered…

Is it right time to truck load…

Granuel,Strides,Jubilant life,torrent,marksan,wockhardt…all are getting hammered one by one…

I think the issue seems to be absence of timely communication. Granules communicated about observations right away but in case of Marksans it came after media reports. The observations might be nothing substantial but in this murderous environment it would be considered serious lapse of corp. governance.

Disc: No holding

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More than that, I believe the mid-cap pharma sector, which enjoyed a tremendous bull run in last couple of years is pausing a bit. This sector has enjoyed high valuation and some money will now shift to other (supposedly) emerging sectors like urban consumption, pockets in Infra, agri etc. This churn is eminent, it happens from time to time and likely to take place over next several months.

Disc : Not invested. Comments are based on market observations over past 7-8 yrs and by no means a recommendation to buy or sell.

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I doubt one can make sweeping comments like that. Yes valuation was high but market will come back to where earnings are there and I think select pharma names won’t lack earnings power.

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How much is it going to affect Indian pharma companies?

One should not panic unnecessarily. This is only for US Government contracts. The US Government procures medicines directly for army, war veterans etc which are given at subsidized rates. For these contracts formulations had to be made in the USA. They are now trying to make sure the APIs are also made in USA.

This is not relevant for normal business. If you have an Indian API holder selling to someone making formulations to US Government you have to worry. Otherwise you are okay.