Company receives Rs 63 Cr as part of lease consideration and further Rs 26 Cr is pending.
This refers to our letter dated November 23, 2022, regarding approval of our Board of Directors for transferring the Company’s property situated at Nanakramguda, Hyderabad, Telangana, admeasuring 1.75 lakh sq.ft. by way of perpetual lease to various parties, subject to receipt of requisite approvals.
Further, we have vide our letter dated July 1, 2024, informed about transfer of part of the said property by way of perpetual lease, for a consideration of Rs. 31.50 crores respectively. We would now like to update you that the Company has transferred another part of the said Property by way of perpetual lease, for a consideration of Rs. 63.00 crores.
Intimation under Regulation 30 of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 - Schedule of Analyst /
Institutional Investor Meetings
In compliance with Regulation 29(2) of SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011, I would like to inform you that the undersigned has purchased 655 equity
shares of Neuland Laboratories Limited (i.e. 0.005 % stake) on November 27, 2024. The
relevant disclosure under the aforementioned regulation is enclosed as Annexure 1.
With house and senate governed by Republicans with Trump as President, I expect this to be short lived. I expect Trump 2.0 to be extremely negative on China. So we may have much more stringent protective measures than current Biosecure act.
I dont think this will have any major impact on neuland since the management has been very cautious on biosecure act related hype…even in last concall they looked quiet rationale while commenting on Biosecure act related business growth…
Further, whether Biosecure act comes or not, every Western company in every field have a China plus 1 strategy in place. So diversification is expected to happen in CDMO anyway.
The Act has been tabled for revision at the moment because the US lawmakers realise that a blanket ban would lead to lawsuits. Hence a revision of the Act is needed to allow for an executive review process that would prevent lengthy court proceedings. However, having said this, Big Pharma concalls over the last few years are littered with comments about diversifying away from China. They aren’t waiting for the govt. to act on it. Businesses are often ahead of the curve on such matters.
Update on final transfer of part of Nanakramguda property
This refers to our letter dated November 23, 2022, regarding approval of our Board of Directors for
transferring the Company’s property situated at Nanakramguda, Hyderabad, Telangana, admeasuring
1.75 lakh sq.ft. by way of perpetual lease to various parties, subject to receipt of requisite approvals.
Further, we have vide our letters dated July 1, 2024 and November 12, 2024 informed you about
transfer of parts of the said property by way of perpetual leases, for a total consideration of Rs. 94.50
crores, for such transfers.
We would now like to update you that the Company has transferred final part of the said Property by
way of perpetual lease, for a consideration of Rs. 23.45 crores.
Please let me know if there is something wrong with my projections for karXT (Cobenfy) drugs and Neuland’s potential profit.
I have assumed 25% as the drug manufacturing cost for BMS (Col. 2).
In the next column, I have assumed 40% NPM for Neuland and 60% as the share for Neuland out of this total API pool. The last column is in crores and the other two in million dollars. (Col. 3)
Sales (Million Dollars)
API Cost (Million Dollars)
Neu. Profit (in crore)
FY25
191
47.75
91.68
FY26
640
160
307.2
FY27
1224
306
587.52
FY28
1801
450.25
864.48
FY29
2331
582.75
1118.88
FY30
2778
694.5
1333.44
FY31
3096
774
1486.08
I have taken sales projection from the below link:
The cost to BMS for sourcing KarXT from Neuland is not even close to 25%. According to Unseen Value through one of his Twitter Spaces/Podcasts, the approximate costs to Big Pharma to source the API from their CDMO partner is ~2-3% of the total spending on the drug. The largest part of the expenses are in marketing and distributing the drug to patients.
Also, BMS has received approval for KarXT in the US only at the moment. They are yet to file it globally. You’re assuming $4.9 bn global sales. In China, the rumour is that they will partner with a Chinese CMO player to scale up commercial production.
Your article assumes a terminal date of 2034. In the interim 10 years, BMS will very probably recruit a second CMO player to de-risk its supply chain.
API/CDMO space isn’t one where you can extrapolate and forecast future sales easily. The inherent nature of the industry includes competitive advantages through secrecy and NDAs while IP infringement is a nail in the coffin of any player. That’s why top notch managements like Neuland, Laurus, Solara (current), etc. don’t disclose the molecules in their pipelines or their supply schedules. The Sales & Net Profit for a specific quarter are a function of “Client-Molecule-Geography” because each factor can differ a lot from quarter to quarter. This is what leads to lumpy cashflows Q-o-Q.
