Just on the large scale CRAMS business, I don’t see Syngene working with big companies. The companies which have large multi year CRAMS business are PI Industries and Hikal.
Great result from Syngene…above my expectations 
Revenue up 22%
EBITDA margin at 38% vs 31%. This is excellent. Would be interesting to see if they can sustain this.
PAT up 55%, partly due to higher other income
Good to see a new appointment for Bioinformatics- Dr Kas was Chief Scientific officer at Strand before this.
cc growth for quarter at 13 % v/s q1fy17’s 10.7 % and q2fy16’s 20.1 % and fy16’s 19.95 % although lower but might pick up in H2 because of Amgen DC. Ebitda margins at 34.8 % is heartening.
Rgds.
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http://www.motilaloswal.com/site/rreports/HTML/636112545006700611/index.htm
4 th october report 16 (old one) but good Syngene International Peer analysis
Disclosure invested
Thanks
Yesterday, fire broke out in Syngene plant
Syngene’s Update to Exchange over Fire incident :
Q3FY17 result
Revenue up 23% yoy
EBITDA up 23%
PAT up 12% on account of higher interest and depriciation
Fire incidence has effected 10% of the total space and they are shifting the production.
One of the company’s clients has discontinued its on-going agreement with Syngene as part of the client’s Business Continuity Plan related to the fire incident. Syngene had entered into an agreement with the client in 2011 for discovery research which was valid till December 2017.
Abbott Nutrition has extended its ongoing collaboration with Syngene for one year till 31st
December 2017. Syngene and Abbott had entered into a collaboration in 2012 to set up a
dedicated center for developing science-based affordable nutrition products.
Phase I of Syngene’s formulation manufacturing facility is on-track to commence operations by mid-Q4 FY17. The facility, spread across 17,000 sq ft space, will be capable of manufacturing clinical supplies as well as commercial supplies of small volume niche technology products and will comply with regulatory requirements of the USFDA, EMEA
and other authorities.
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We will have to see how big the customer is. Their heavy reliance on top 5 customers will keep us on our toes. I was of the view that Syngene being one of the lowest cost researcher should never lose a client given their amazing track record.
Kanv
As per con call:
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revenues from this customer is 40 cr rupees per year which is 3% of total income. Client terminated contract as per their Business Continuity Plan. Not sure what this means. Maybe there is a clause in the contract giving customer an option to terminate the contract if there is any disruption in service?
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There will be a hit to the revenues in next 12 months (while the building is being repaired) due to fire incident as future capacity is being used to continue services from fire disruption. Management is bullish on long term prospects.
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New capacity from portion of capex will start from next month.
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Abbott Nutrition has renewed contract for 1 year. Being a dedicated center, isn’t this too short?
Is the affect of fire in a single building so much on next one year revenue that share almost tanked 20%+ from its high ?
Fire alone cannot be the reason as the plant is insured. The loss of revenue due to fire/loss of one client and the perceived loss of business due to clamp down by Trump could be the reason?
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Syngene is largely and R&D player. With USFDI concerns over various pharma companies. It is expected that R&D may slow down due to on going slow down in the sector. I guess the its at a good accumulation zone should keep adding at all the dips for long term wealth creation.
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Thanks everyone for your respinses…Any idea by when and how much will Strand life aquisition contribute to company revenue
This is from syngene recent concall
3 questions were asked on this topic
: Is Bioinformatics a diagnostic kind of set up sir?
Manoj Nerurkar: No, it is a diagnostic set up, it is a set up that helps life sciences companies, for example, pharma companies generate huge amount of data through their discovery effort and then when molecules are tested into clinical trials and the huge amount of data that gets generated, someone needs to make sense out of that data and Bioinformatics really helps you look at that data in a systematic way and makes sense out of it in terms of what are the patterns you are seeing, what are the signals that are worth noticing, what are the signals that are worth following up so on and so forth. So that is the type of work that Bioinformatics does. Of course, there is a diagnostic element to it or diagnostic kind of industry but that is not what we are looking at when it comes to Pharma and Life Sciences and application of Bioinformatics to those kinds of industries.
Surya Patra: Whether Strand added any client to our Biologics business or not or just the capability that we have added?
Manoj Nerurkar: We have definitely added a capability. We also had a few clients come through the acquisition that were legacy clients and now have become our clients and we definitely look at building that business. Of course, the clients that Syngene had pre-acquisitions, we are talking to them about this particular service line that we have now added and how can we integrate that service into some of the other things that we do for them to see how we can enhance the kind of value addition om what we do for those clients as well.
Surya Patra: So is it possible to say that what is the kind of revenue base that we have so far received on this front?
Jonathan Hunt: One of the key things operationally with this business is that you integrate it with all of the other aspects of discovery science that you do. So the best is driving the problem if you think about it from a client perspective. The discovery engine in chemistry, the discovery engine in biology, in toxicology, the use of high throughput screening, genomics, proteomics, all of those things are generating, in the past gigabytes of data and now it is terabytes. The challenge is to interpret that and that really has two dimensions to it. IT Informatics capability and deep understanding of science, whether it be chemistry or biology, when Bioinformatics group does, is not only do that as a standalone service line, but more importantly integrate that into all of the other work we do. So while we are seeing good client traction post the Strand acquisition, financially, it is most likely to materialize itself in the other verticals because it adds value to what they are doing.
That is from concall
From my information
The deal gives Syngene access to Strand’s patented Virtual Liver model and the NGS analytics platform
The Virtual Liver model is able to predict the toxic effect of different drugs or chemicals on the liver (both rat and human) using information from laboratory-based experiments prior to actual testing on live animals or humans.
I hope above information will be helpful
Thanks
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Syngene added one more client http://www.bseindia.com/corporates/anndet_new.aspx?newsid=33f434e4-0db4-444c-99a6-4fbd63ce7ee5
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FY17 Results Press release
http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/74a49043-cab6-47bb-a033-78453c7be767.pdf
Not so impressive results. Seems like it will take a little longer time to recover from fire incident couple of months back.
Here are my notes from results and the concall
Second half had some disappointements on numbers because of the fire incident. 10% of infra of discovery chemistry was destroyed in the fire. Refurbishing this will take time, maybe Q2-Q3. They worked on 2 shifts to minimize impact and shifted to other areas in the plant.
There was slight improvement in gross margin due to improved product mix. For Fy17, EBITDA margin adjusted for other income was 34%
Expect to reach up to 20% growth levels in FY18. 3 parts other than base business that will contribute to growth in FY18 are- Formulations capacity (17000sqft capacity started in Feb), Expanded capacity of biologics, and bioinformatics.
In 4Q Syngene signed a strategic agreement with a Canadian biotech firm for development of five monoclonal antibodies for biologics business … Agreement is for
a) process development (so this probably means that these 5 molecules are out of initial discovery phase) and
b) clinical scale batches production. “Significant strategic achievement”. Biologics are now more imp than small molecules. Focusing on this. “We are leader in end-to-end services in biologics in India”. It takes 12-15 months for process development and then the manufacturing for clinical trial batches will come.
Bioinformatics is important because lot of data gets generated in fields of genomics, genetics and this data could be used to make informed decisions. It can also be useful in area of personalized medicines, especially in areas like oncology. Bioinformatics may not directly contribute to revenues but it helps customers to make faster decisions.
There will be an impact of 2-3% on margins expected in Fy18 due to focus on improving safety infrastructure and on business development.
Regarding rupee strength, there are 2 cushions- 1) forex hedges in medium term 2) price increases- Customers are used to an inflation of about 3% so anything beyond that needs to be discussed, but there is a scope if reason is currency changes.
Revenue share from top 10 clients is 70%. There is a gradual decrease in concentration ratios. No of clients grew close to 300 vs 255 odd.
High single digit molecules in late stage clinical trials, ie phase 2b and phase 3 (earlier I thought they had 8-9 molecules in phase 3, but number includes phase 2b). Mangalore capacity expansion is timed to come on-stream when some of these molecules are expected to be launched.
API facility construction will start this Q and will be operational by FY20. Delayed a few months due to environment clearance.
Out of the USD 200mn ECB loan, 79mn has been used. Rest amount is earning interest income. Other expenses reduced due to forex grains as they had hedged rupee.
If the company manages to grow PAT by 20% in FY18, the stock is trading close to 30x forward earnings, which is definitely not cheap.
Discl: Invested, more than 5% of my portfolio.
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