Syngene International

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Syngene Q4FY21 and Full Year FY21 - Result Update

Syngene International Limited on 28th April 2021 announced its Q4FY21 and full-year results. The Company reported quarterly revenue from operations of Rs. 659 Cr and Rs. 2,184 Cr for the full year. Underlying revenue from operations (excluding export incentives) for the quarter grew 13% compared with the same period last year and by 12% for the full year.

Profit after tax (before exceptional gain) for the quarter increased by 15% year-on-year to Rs. 138 Cr, and by 4% to Rs. 382 Cr for the full year.

Revenue Growth over the Years

  1. Growth driven by an increase in sales from existing clients and acquisition of new clients
  2. Engage, expand and extend the strategy to extend client relationship over a longer period of time
  3. Growth in the total number of clients
  4. Increase in average revenue from largest clients
  5. Increase in number of services offered to clients

The highlight of the quarter was the extension of our long-standing partnership with Bristol Myers Squibb (BMS) until 2030. This renewal underlines the value we deliver as BMS’s largest R&D hub outside the US. Under the new agreement, the company will increase the number of scientists working on BMS projects and expand our scope of work to cover new areas of science.

Syngene’s more than 4700 scientists offer both skills and the capacity to deliver great science, robust data management, and IP security and quality manufacturing at speed.

Increase in Client Base and Scientist

Conference Call Highlights:
Syngene’s fourth-quarter growth was driven by steady performance across Discovery Services, Manufacturing Services, and the Dedicated Centers. During the quarter, the Company crossed a significant milestone with the extension of the collaboration with BMS until 2030.

The BMS partnership dates from 1998 and a fully dedicated research center were set up in Bangalore in 2007. The new agreement includes an expansion in the breadth of drug discovery research, including chemistry, biology, drug metabolism, pharmacokinetics, and research focusing on translational medicine and pharmaceutical development.

During the year, the Company expanded its research facility in Hyderabad by adding capacity for an additional 90 scientists. It also commissioned a new microbial manufacturing facility during the year to reduce its dependency on external service providers.

In addition to serving the pharmaceuticals and biotechnology sectors, Syngene also strengthened its position in animal health and executed its first integrated project in this sector.

Developed effective reagents for use in diagnostic kits to fight the coronavirus, including the development of high-quality, mammalian-derived viral proteins. The company as of this month has started manufactured remdesivir for distribution in India and other countries under a voluntary license agreement with Gilead Inc.

The company has a strong pipeline of drugs with a significant increase in integrated drugs. Syngene is well structured to cater to the rising demand for outsourcing services in pharma. The company expects the full expansion to be live within a year. Capex plan is expected to be in the range of Rs. 750– 900 Cr (USD 100 – 120 mn) for the financial year.

Here is the summary made for a quick and better understanding of the Result update for full-year FY21 and Q4FY21 from Syngene Conference Call and Investor Presentation.

The entire recording of Conference Call: https://youtu.be/-8PMOUZQ07Y

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@Shuchi_Nahar can you please explain the export incentives piece in detail. Why is it that FY21 did not have this income. Will it be zero or will it be announced by the government on a lagged basis subsequently? How can companies plan better if there is no policy uniformity around this!

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But interesting fact is Revenue per scientist is growing at healthy rate from 35 lacs / scientist to 47 lacs per scientist

So one needs to keep doing higher value of work / cutting edge - with right capex in high end equipment … this metrics of Revenue per scientist should keep going up leading to better and better margin of safety over any new entrants …

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A really cool video demonstrating the gene editing capabilities (CRISPR) at syngene.

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Thanks Harsh

CRISPR for Dummies

CRISPR: Gene editing and beyond - Visual Explanation

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Syngene Labs Virtual Tour

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what explains surge in volume in Syngene today? Any block/bulk deal?

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For Syngene, the deal with Dyadic makes sense, since purportedly it is a scalable technology. However, Dyadic has been promoting its C1 technology unsuccessfully for many years. We cannot be sure when or if anything concrete will come out of this.

From this article dated 25 May:

Phase I Safety Study

On March 18, 2021, Dyadic announced its plans to launch clinical studies for a COVID vaccine. This candidate, designated DYAI-100, will be an antigen that mimics the receptor binding domain of SARS-CoV-2 spike protein. This announcement follows successful animal trials conducted by the Israel Institute for Biological Research (IIBR) and work with the Zoonoses Anticipation and Preparedness Initiative (ZAPI) program. Dyadic entered into a master services agreement with contract research organization CR2O to manage preclinical and clinical development of DYAI-100. Dyadic has initiated toxicology studies. Other milestones include preparing and filing an investigational new drug application (IND) over the summer and obtaining clearance from the FDA to begin and launch its trial by the end of August 2021. The primary goal of the clinical trial is to validate the safety of C1-produced proteins in humans, which will be the first incidence of this use.

It seems that the Phase 1 human trials of DYAI-100 will start by the end of August 2021. After Phase 1 is over, Phase 2 and Phase 3 will follow before the US FDA approval. The whole process may take several months or years. Of course, dosing of a few vaccines began even before the completion of Phase 3 trials, but they all completed Phase 1 and Phase 2.

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Name and Business rhymes

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Syngene International Notes from Q4 results -

  1. Sales at 659 cr, up 13 pc yoy. EBITDA at 234 cr, up 4 pc. PBT at 138 cr, up 15 pc yoy.
  2. Biggest highlight for the Qtr was - Extension of long standing partnership with Bristol Mayer Squibb till 2030. Syngene is their largest R&D hub outside US. New scientists to be added to work for BMS ( company guiding addition of 160 scientists over the current 400 working for BMS ), new areas of science to be added like - new domains of chemistry, biology, drug metabolism, pharmacokinetics, translational medicine etc.
  3. New Mangalore API facility completed its qualification process and is now a cGMP certified facility. Inspection by USFDA, EMA - is a key event for this new facility. Company also commissioned new HPAPI ( highly potent API ) laboratory that will support the up scaling of manufacturing in the chemical API space. No of projects from this facility to build up over next 2-3 yrs. Company continues to make Remdesivir under license from Gilead ltd.
  4. Company guiding for mid teen revenues growth in FY 22. Expect EBITDA margins around 30 pc. Company shall keep adding fresh CAPEX ( both manpower and equipment ). Hence the PAT growth to be lower - in single digits. Capex guidance for FY - 22 in the range of 750 to 900 cr !!!
  5. In the integrated drug discovery segment, company working with drugs in onco, cardio, liver , Parkinson’s, inflammatory disorders, orphan disease and animal health sector. IDD team working on a potential cure for inflammatory disorder in Dogs. Also developed a first of its kind formulation for dogs which has a global potential. In the last qtr, 10 of Syngene’s scientists were cited globally in renowned publications.
  6. Company working hard to ensure that Mangalore facility starts to deliver as soon as possible. At present, company making small size molecules from Mangalore facility to absorb some costs. Company to add overseas sales force as well in the current FY - an imp step to move physically and culturally closer to clients. Company striving to be a strategic partner and not just a service provider.
  7. Company has added 40 clients this yr, taking the total no of clients to over 400 now. Additional capacity added at Hyderabad lab facility which went live recently. Further waves of CAPEX at Hyderabad to happen almost every Qtr now. Current cash holding at 650 cr.
  8. Biologics manufacturing - Mammalian capabilities addition - new 2000 L reactor. Microbial tech capability addition - new 500 L microbial facility. Company can make wide variety of Biologic drugs for - oncology, hormonal disorders, many other areas. To commence viral vector development and manufacturing this year to be used in cell and gene therapies.

9. Company was involved in pre clinical to regulatory filing stages of development of Odevixibat drug ( pediatric drug to treat PFIC -.a liver disorder ). PDUFA date for drug - in Jul 21. If commercial manufacturing order contract offered to Syngene, it can be a near term trigger. Company believes that the Odevixibat is a great example of company’s capabilities.

  1. India - a great place to hire the Phds / scientific talent. This helps Syngene hire. Outsourcing R&D in Pharma industry to lower cost countries with huge talent is a norm these days. That ways, Syngene is positioned really well. Company was comparing this to what has happened over the years in the IT industry.

Disc : invested , biased

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https://youtu.be/fMBNUIDo2IM

This is link of recent Jubilant Pharmova Investor Day, where RJ while talking to management on CDMO business (from 2.21 onwards) mentioned positively about Syngene and great growth potential in CDMO industry.

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move to 2:20:00 and listen for the next 7-8 minutes…its a treat for all syngene investors :blush:

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An interesting part in the conversation with RJ where Jubilant mentions that their integrated drug discovery is unique and different from Syngene. Reading Syngene’s reports and concalls, not sure if there is a USP as mentioned. Syngene state that they have added 10 clients to the IDD portfolio including a 5 year collaboration with Deerfield Discovery and Development Corporation other than their ongoing arrangement with Bristol Mayers Squibb, Am I missing something here?

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This news is doing the rounds today (its little dated )

Albireo Presents Odevixibat Commercialization Road to $1 Billion

Syngene worked with Albireo during drug discovery phase

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The TAM for Odevixibat is not so large. It would not make sense for Albireo to find another CMO to manufacture the same. My guess is that Syngene would be manufacturing the formulation.
Although its not a very large opportunity but it highlights the capabilities of Syngene and the large opportunity size small biotech companies can address.

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Source- Albireo Virtual Investor Commercial Day 2021

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Albireo Receives European Marketing Authorization of Bylvay™ (odevixibat), the First Drug Treatment for Progressive Familial Intrahepatic Cholestasis (PFIC)
EU market potential, with launch planned for September 2021, following price listing.

U.S. FDA has set an action date of July 20, 2021

Link-Albireo Receives European Marketing Authorization of Bylvay™ (odevixibat), the First Drug Treatment for Progressive Familial Intrahepatic Cholestasis (PFIC) :: Albireo

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After the European Marketing Authorization, Albireo now receives the US FDA approval for Bylvay™ (Odevixibat), Albireo is launching Bylvay immediately to accelerate availability for the patients and families impacted by PFIC.

Link: Albireo Announces FDA Approval of Bylvay™ (odevixibat), the First Drug Treatment for Patients With Progressive Familial Intrahepatic Cholestasis (PFIC) :: Albireo

Let’s see if Syngene’s management is able to give more colour on the size of the opportunity for them in today’s earnings call.