Best case assumption PAT at 15% (Margins anticipated in 4 years is 20%) = 900 cr
Pharma is valued at 33 PE, giving PE multiple of 45 to wockhardt being a rising star) So best case MCAP in FY28-29 for Wockhardt will be 40500 cr.
Current MCap of Wockhardt is 28000 cr. So potential upside in Wockhardt is limited to just 40% in 3 years if everything goes well and assuming they get valued at 33% more than industry and they can manage a PAt margin of 15%.
Am I right in valuing Wockhardt or I am missing something which can raise Wockhardt’s valuation by a significant number which I have missed in my valuation.
Add a hypothesis that wockhardt will sign a license deal with an external company for Zaynich in next 3 years. That alone might bring in Cash flows of minimum 900 crore per year as royalty.
I can be wrong but looks to me this is what market is betting on!
Its just acceptance for review .. FDA approval may take further 6 months even considering priority status.Don’t you think the pdf is somewhat wrongly named ?
No approval has been received till now.. Only application to appove the drug has been accepted by the FDA.. the drug will be approved in due course of time.. The drug will be reviewed under fast track process which have six month time instead of 10 months in normal process..
How so ? Its always a possibility ..else why the review..just approve . Agreed,chances are very very high that it will get approved .My point simply was that its not FDA approval for commercialisation already ,it will still take a few months probably .This particular notification is nothing to get excited about ( some people are ..as it is 18% up in this dreary market) as this is not the nod for commercialization yet .
Disc. Invested from 440 levels and 2/3rds booked already.
India is launching AMR2.0 policy, Nephithromycin/Zynich may become a mandatory drug to fight Superbugs emergency in India. Who knows wocky cross 2500 by the time launch approval is received:joy:. Anyway this is my largest bet and will hold for next 4-5 years atleast.
Mandatory …who will mandate it ? Even as per management statement,the course price will be aroung $8k to $10k in developed markets and may be $800to 1000 ,here in India. The company has also said that they are not positioning the drug as first line treatment…it is intended to be the salvage drug or last option to maintain the premium pricing.
Even Naphithromycin is not being positioned as an OTC drug like azithromycin yet and is costly .
The management guidance for 2028 is 6000 crores revenue only(not only zaynich ..whole company) … are not you expecting a bit too much ? Off course ,it may cross 2500 much sooner if it gets popularity as a stock ,but doubling revenue in 3 years , does not look like a multibagger opportunity at CMP and PE considering the story is well known and developing only along expected lines for anyone who has tracked this for past 2 years or so.
Wockhardt is not only Zynich, its about Emrok-O, Nephitromycin, Zynich, WCK4283, Odrate and bio based glargin story. Fuviscku is OPD version of Zynich which is about to close phase3 trail. Fuviscku will replace meropenem in US once approved as meropenem is 50-60% effective, Fuviscku is 90-95% effective. Its all about conviction based on your research. US FDA QIDP status itself shows approval probability of almost 100%.
. Anyway this is my largest bet and will hold for next 4-5 years atleast.