The ultimate M&A expert in Pharma is back to what he does best i.e. sell his jewels after incubating it. I have seen that his exits are generally linked to top in the pharma sector. It may so happen this time too. Let’s see
Exactly. He has done it with so many firms.
If you look at a 5 year period, Strides stock is almost at half. So not sure he is exiting at the top. But these are probably as peak as what he thinks it can go, given the company fundamentals
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Not able to understand why Arun kumar is pledging on Solara - he would have got decent from stake sell in Sequent. Not sure where he is putting that capital into.
Any views on how this will impact stride.
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He has a thriving VC type private investment arm and you know by now that his favourite hobby is value creation through M&A activity. This pledging is just another small act for his own value creation and should not be surprising thing for anyone.
Interesting development, Aditya Puri has joined as an advisor to the group.
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Any new developments in Strides pharma which moved price sharply higher today or only technical?
Disc: invested
Q3 Results. Net profit slides to Rs 35.17Cr from 92 Cr (YOY) and from Rs 62.2 cr (Q-O-Q) due to Ranitidine withdrawal and increase in cost of material.
Gross margins and EBITDA for the quarter impacted by ~₹120m due to changes in export incentive scheme effective Sep’20
Bullish on Stelis Bio pharma.
Strides to Demerge and List its Biotech Business Under Stelis Biopharma
Aditya Puri to Chair the Board of Stelis
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[https://health.economictimes.indiatimes.com/news/pharma/strides-pharma-gets-usfda-nod-for-generic-drug/80449214](Strides Pharma gets USFDA nod for generic drug)
Concall Updates
Domestic slowdown is mainly due to covid, less number of patients visiting hospitals
Strong growth in the non US regulated markets
New and very experienced talent brought in to the board
From the Stelis CDMO slide, to me this sounds like Syngene kind of platform that provides end to end platform ? Request to share your views.
New Drug Approvals
Strides receives USFDA approval for Prednisone Tablets
Prednisone is a glucocorticoid medication mostly used to suppress the immune system and decrease inflammation in conditions such as asthma, COPD, and rheumatologic diseases.[2] It is also used to treat high blood calcium due to cancer and adrenal insufficiency along with other steroids.[2] It is taken by mouth.[2]
Strides receives USFDA approval for Ibuprofen OTC Oral Suspension (USD 133 Mn market size)
https://www.bseindia.com/xml-data/corpfiling/AttachLive/987b16b3-0d82-46c0-a40a-86d4e5e45b45.pdf
Strides Pharma Science Limited (Strides) today announced that its stepdown wholly owned subsidiary, Strides Pharma Global Pte. Limited, Singapore, has received approval
for Potassium Chloride for Oral Solution USP, 20 mEq from the United States Food & Drug
Administration (USFDA). The product is bioequivalent and therapeutically equivalent to the Reference
Listed Drug (RLD), Potassium Chloride for Oral Solution USP, 20 mEq, of Pharma Research Software
Solution, LLC.
Stelis concludes US$ 195m Series B and Series C fund raise
stelis_biosource_corporate.pdf (1.7 MB)
Some basics
A very good tweet By Dr Prashant Mishra
A brief history of biopharmaceutical medicines
Biosimilars | What is a Biosimilar? | Gastrointestinal Society
Introduction to Biopharmaceuticals & Biologic
Bio-processing overview (Upstream and downstream process)
A good presentation by Stelis
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I came across this quite old article about Mr. Arun Kumar and his record with the M&A activities in past. The last para has come true to a very high degree.
One thing is quite evident that he has been quite good in identifying the future trends in the industry which seems to indicate that the Stelis BioPharma demerger & listing and the beef up injectables of Strides are steps in the right direction. With the under-recovery in SeQuent, I wish he does not repeat the mistake with Solara. We will come to know more about that in tomorrow’s call.
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Another trigger to go big on Stelis by Mr Arun Kumar ? With Aditya Puri on board and hunt for a new CEO ?
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This is from an article that Moneycontrol Pro posted a few days back. The assumptions seem very conservative - I think the EBITDA will be higher that 5% and the revenue is also likely to be higher than $5 as it includes export orders. Looks like sure shot revenues for Stelis this year, totaling to much more that double of Strides revenue for FY 20. This was alluded to by Sajal Kapoor as well in a recent webinar.
And with the push towards ramping up domestic prodiction of Covaxin and Coveshield, won’t be surprised if Stelis gets more orders. So along with Panacea, Stelis seems like the largest beneficiary of the vaccine prodiction in India. I am expecting a rerating soon, irrespective of the timelines of the demerger.
Disclosure: Took 40% position today. Will add the rest this month depending on price action.Will look to keep it to 5% of my PF
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I would prefer Panacea Biotech and Cadila. Panacea Bio already has BSL-3 Lab. Cadila has its own vaccine which may get approval in June. Not much information is available about Stelis’ vaccine infrastructure, whether Stelis has any agreement with any Vaccine company. Even if Stelis gets order, when Stelis can start delivering vaccine. Do share if you have any detail about that
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@Amit_Paul I like Panacea as well but the extremely weak balance sheet makes it riskier. Though the upside can be larger.
Stelis already has a 200 million dose order from Sputnik as has been discussed on the thread previously. Posting another link for reference.
What the moneycontrol article does is, it puts a number to revenues and EBITDA. Assuming no disruptions in the vaccine plans and that Stelis delivers over the next ten months, we’re getting Strides consolidated at much lower than 0.5 FY 22 sales, which is a bargain as far as I’m concerned. Add to that the fact that the demerger will happen, which will unlock more value.
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What about low promoter holding and also more pledges of shares as seen on screener.
Disclosure: Not invested.
Thank you
Does BEL-3 lab matter for DNA, mRNA vaccines?
This is just a theory and pure hunch on my part. There is no data backing this.
I believe Arun Kumar will exit the business after the demerger. He is a very smart and talented man and probably a better investor. Based on his past trends, there is a method to his wealth creation.
Start a business → Incubate a lot of ancillary businesses under it as subsidiaries → Take larger stakes in the underlying business through his family office → demerge the business or sell it and transfer wealth to shareholders, with him usually getting the biggest cut since he owns the largest stake
Use the earned money to repeat the above
Based on this trend and all the recent developments I have read so far going back 4 quarters, two things are very clear
- Stelis is ready to spin off and survive on its own, the incubation period is over
- Arun Kumar wants Strides to work and focus on its core business
Several developments in Strides show that he has been prepping the business for a big exit. The recent hire of several key quality managers across, focusing the business and demerging Stelis all point to this.
Strides now is in better position than ever with a much simplified corporate structure for any PE to take over.
Arun Kumar knows CDMO and Biologics are the next leg in Pharma where hockey stick kind of growth is possible and maybe he wants to focus in that area.
Please flag this post if its not required for this thread and I will delete it
D: Invested 1/3rd of my position to get exposure to demerger, will sell Strides and add more to Stelis once demerger gets completed and Stelis is listed on the exchange.
Btw, Strides on its own its also a great business esp. with all their business developments for the US and EU markets.
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