indian listed pharma companies - brief data review

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www.indiabusinessreports.com Listed Pharma Companies - Brief Data Review Sector: Lifesciences Sep 2015

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Page 1: Indian Listed Pharma Companies - Brief Data Review

www.indiabusinessreports.com

Listed Pharma Companies - Brief Data Review

Sector: Lifesciences

Sep 2015

Page 2: Indian Listed Pharma Companies - Brief Data Review

Valuations and Market Data

www.indiabusinessreports.com Listed Pharma Stocks in India

Page 3: Indian Listed Pharma Companies - Brief Data Review

Pharma Sector has enjoyed a phenomenal 3 year bull run in India

www.indiabusinessreports.com 3Listed Pharma Stocks in India

-20.0%

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140.0%

160.0%

IBR Pharma Universe CAGR (FY12-FY15)

Page 4: Indian Listed Pharma Companies - Brief Data Review

Key stats..

www.indiabusinessreports.com 4Listed Pharma Stocks in India

Sector market cap up 3x in the 3 year period FY12-FY15

Sector CAGR return was 42% over the 3 year period

MNCs gave poor returns, Abbott and Pfizer the exceptions

Ajanta, Alembic and Granules up more than 10x in this period

Page 5: Indian Listed Pharma Companies - Brief Data Review

Sun retains No 1 rank, increases relative market share over FY12 to FY15

www.indiabusinessreports.com 5Listed Pharma Stocks in India

Source: India Business Reports

Company Name Sep-15 Rank MC Share Rank Mar-12MC-Share

(Mar'12)

Sun Pharmaceutical Inds. 2,20,149 1 30.2% 1 23.7%

Lupin 83,402 2 11.4% 4 8.7%

Dr. Reddy'S Laboratories 71,586 3 9.8% 2 13.1%

Cipla 52,108 4 7.1% 3 10.5%

Aurobindo Pharma 42,268 5 5.8% 13 1.8%

Cadila Healthcare 37,130 6 5.1% 6 6.8%

Glaxosmithkline Pharmaceuticals 28,689 7 3.9% 5 8.2%

Torrent Pharmaceuticals 27,975 8 3.8% 9 2.3%

Divi'S Laboratories 27,957 9 3.8% 7 4.5%

Glenmark Pharmaceuticals 27,292 10 3.7% 8 3.7%

Alembic Pharmaceuticals Ltd 13,158 11 1.8% 23 0.4%

Ajanta Pharma Ltd. 12,526 12 1.7% 25 0.2%

Abbott India 11,553 13 1.6% 16 1.4%

Ipca Laboratories 9,465 14 1.3% 12 1.8%

Company Name Sep-15 Rank MC Share Rank Mar-12MC-Share

(Mar'12)

Sanofi India Ltd. 9,247 15 1.3% 10 2.2%

Biocon 8,670 16 1.2% 11 2.1%

Natco Pharma 7,354 17 1.0% 21 0.5%

Pfizer 7,066 18 1.0% 14 1.6%

Strides Arcolab 6,576 19 0.9% 15 1.5%

Jubilant Life Sciences Ltd. 5,066 20 0.7% 17 1.4%

F D C 3,651 21 0.5% 19 0.7%

Shilpa Medicare 3,608 22 0.5% 24 0.3%

Novartis India 2,614 23 0.4% 18 1.1%

Unichem Laboratories 2,356 24 0.3% 20 0.6%

Granules India Ltd. 2,349 25 0.3% 28 0.1%

J B Chemicals & Pharma 2,220 26 0.3% 26 0.2%

Dishman Pharmaceuticals 2,076 27 0.3% 27 0.2%

Merck 1,273 28 0.2% 22 0.4%

Apart from Sun, lot of churn in top positions. Lupin gained over Dr Reddy and Cipla to emerge No 2 Biggest gainers – Aurobindo Pharma, Alembic and Ajanta Pharma. Losers – all MNCs + Biocon, IPCA, Divi’s, Glenmark, Strides (due to business sale), Jubilant

Page 6: Indian Listed Pharma Companies - Brief Data Review

Though with a little stumble post Ranbaxy acquistion

www.indiabusinessreports.com 6Listed Pharma Stocks in India

Source: India Business Reports

Company Name Sep-15 Rank MC Share Company Name 31-03-2015 Rank MC Share

Sun Pharmaceutical Inds. 2,20,149 1 30.2% Sun Pharmaceutical Inds. 2,22,654 1 33.6%

Lupin 83,402 2 11.4% Lupin 91,294 2 13.8%

Dr. Reddy'S Laboratories 71,586 3 9.8% Dr. Reddy'S Laboratories 58,447 3 8.8%

Cipla 52,108 4 7.1% Cipla 57,006 4 8.6%

Aurobindo Pharma 42,268 5 5.8% Cadila Healthcare 33,792 5 5.1%

Cadila Healthcare 37,130 6 5.1% Glaxosmithkline Pharmaceuticals 28,376 6 4.3%

Glaxosmithkline Pharmaceuticals 28,689 7 3.9% Divi'S Laboratories 23,789 7 3.6%

Torrent Pharmaceuticals 27,975 8 3.8% Glenmark Pharmaceuticals 21,323 8 3.2%

Divi'S Laboratories 27,957 9 3.8% Torrent Pharmaceuticals 20,190 9 3.0%

Glenmark Pharmaceuticals 27,292 10 3.7% Aurobindo Pharma 18,219 10 2.8%

Alembic Pharmaceuticals Ltd 13,158 11 1.8% Biocon 9,320 11 1.4%

Ajanta Pharma Ltd. 12,526 12 1.7% Abbott India 8,543 12 1.3%

OTHERS OTHERS

SECTOR TOTAL 7,29,285 100.0% 6,62,410 100.0%

Sun fell from Rs1200 levels in Apr’15 to around Rs 800, but have recovered a bit to above Rs 900 levels. In market cap terms loss is less, since equity expanded due to Ranbaxy merger.

Sector market cap has grown 10% in this period, signifying clear underperformance by Sun

Page 7: Indian Listed Pharma Companies - Brief Data Review

Valuations may now face a period of consolidation

www.indiabusinessreports.com 7Listed Pharma Stocks in India

Company Name Market Cap P/E Profit CAGR

Profit CAGR

EV/ EBITDA

EBITDA CAGR

P/S Sales CAGR

(Rs Cr) (x) 3 Year 5 Year 3 Year 3 Year1 Sun Pharmaceutical Inds. 2,20,149 48.5 15.0% 27.4% 26.5 30.2% 8.1 50.1%

2 Lupin 83,402 34.1 39.7% 29.1% 21.1 37.7% 6.5 21.5%

3 Dr. Reddy'S Laboratories 71,586 30.6 17.8% 46.1% 19.5 16.7% 4.8 15.6%4 Cipla 52,108 41.5 3.7% 3.0% 23.2 10.3% 4.6 17.4%

5 Aurobindo Pharma 42,268 26.9 22.8% 17.3 114.1% 3.5 37.4%6 Cadila Healthcare 37,130 31.3 20.1% 17.5% 21.6 16.4% 4.3 17.8%7 Glaxosmithkline Pharmaceuticals 28,689 60.2 3.6% 34.5 1.5% 8.7 10.9%8 Torrent Pharmaceuticals 27,975 37.3 37.5% 26.6% 22.6 39.1% 6.0 19.7%

9 Divi'S Laboratories 27,957 32.8 16.7% 20.1% 22.3 17.3% 8.9 18.8%

10 Glenmark Pharmaceuticals 27,292 57.4 0.8% 7.5% 27.5 12.4% 4.1 18.0%11 Alembic Pharmaceuticals Ltd 13,158 46.5 29.2% 48.2% 33.0 22.3% 6.4 11.8%

12 Ajanta Pharma Ltd. 12,526 40.4 58.1% 24.0 51.1% 8.5 29.4%13 Abbott India 11,553 50.4 23.6% 24.1% 30.4 22.4% 5.0 15.5%

14 Ipca Laboratories 9,465 36.5 4.8% 16.8 6.3% 3.0 9.9%

Valuations ahead of reality. PE ratios for example are ahead of 3/5 year profit CAGRs Most large caps need to see a period of valuation adjustment

Page 8: Indian Listed Pharma Companies - Brief Data Review

Growth priced into almost all pharma stocks now

www.indiabusinessreports.com 8Listed Pharma Stocks in India

Company Name Market Cap P/E Profit CAGR

Profit CAGR

EV/ EBITDA

EBITDA CAGR

P/S Sales CAGR

(Rs Cr) (x) 3 Year 5 Year 3 Year 3 Year15 Sanofi India Ltd. 9,247 35.1 11.2% 10.9% 19.0 14.0% 4.7 14.4%

16 Biocon 8,670 16.4 15.8% 12.5% 9.1 13.7% 2.8 13.8%

17 Natco Pharma 7,354 56.5 30.2% 35.7 21.4% 8.9 16.5%18 Pfizer 7,066 101.2 -27.5% -12.6% 17.9 5.4% 3.8 18.9%

19 Strides Arcolab 6,576 7.8 52.7% 50.4% 8.6 20.9% 5.5 -22.4%20 Jubilant Life Sciences Ltd. 5,066 0.0% -162.5% 12.8 7.8% 0.9 10.5%21 F D C 3,651 24.7 3.3% 13.7 8.3% 4.1 7.7%22 Shilpa Medicare 3,608 49.7 20.4% 28.2 24.0% 5.9 24.2%

23 Novartis India 2,614 33.1 -19.4% -7.4% 17.9 -24.9% 3.0 1.1%

24 Unichem Laboratories 2,356 31.3 -3.0% -10.9% 19.0 -3.8% 2.0 14.2%25 Granules India Ltd. 2,349 25.8 44.2% 12.9 37.8% 1.8 25.2%

26 J B Chemicals & Pharmaceuticals 2,220 22.1 -46.8% -3.4% 9.8 -39.9% 2.1 9.7%27 Dishman Pharmaceuticals & Chemicals 2,076 17.3 27.9% 0.4% 7.3 18.7% 1.3 11.8%

28 Merck 1,273 29.5 -12.0% -8.0% 13.5 -8.4% 1.5 15.5%

Only a pharma company with very strong growth prospects can sustain current valuations Even stocks with traditionally conservative growth record, like Unichem, FDC have seen surge in valuation

Page 9: Indian Listed Pharma Companies - Brief Data Review

Sample Business Data

www.indiabusinessreports.com Listed Pharma Stocks in India

Page 10: Indian Listed Pharma Companies - Brief Data Review

Divi’s and Ajanta reported best margins in FY15

www.indiabusinessreports.com 10Listed Pharma Stocks in India

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Margins reported by Indian Pharma Cos

EBITDA Margin PAT Margin

Page 11: Indian Listed Pharma Companies - Brief Data Review

Growth of exports as a % of revenue halted in FY15

www.indiabusinessreports.com 11Listed Pharma Stocks in India

For Sun, Cipla, Torrent, Divi’s, Glenmark – share of domestic revenues grew However, export growth remains the focus area of Indian pharma.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Sun Pharma

Lupin

Dr. Reddy's Laboratories

Cipla

Aurobindo Pharma

Cadila Healthcare

Torrent Pharma

Divi's Lab

Glenmark

Alembic Pharma

Ajanta Pharma

Ipca Lab

Biocon

Natco Pharma

Strides Arcolab

Jubilant Life

Domestic / Export Sales

Domestic Exports

Page 12: Indian Listed Pharma Companies - Brief Data Review

US market is the dominant geography for most Indian pharma companies

www.indiabusinessreports.com 12Listed Pharma Stocks in India

0% 10% 20% 30% 40% 50% 60%

Sun Pharma

Lupin

Dr. Reddy's Laboratories

Cipla

Aurobindo Pharma

Cadila Healthcare

Torrent Pharma

Divi's Lab

Glenmark

Ipca Lab

Natco Pharma

Jubilant Life

US Markets as % of total company turnover for FY15

Sun gets around USD 2.2B of revenue from US. In FY14, contribution of US market was 61%, down due to Ranbaxy Cipla is one major which has a different mix. It is also looking to boost US turnover now. FY17 expected to be a big year for Cipla

Page 13: Indian Listed Pharma Companies - Brief Data Review

R&D spends up in FY15, most companies talking of higher spends going ahead

www.indiabusinessreports.com 13Listed Pharma Stocks in India

R&D spends increased for most companies in FY15. Increasing focus on decoding chemistry for complex molecules is leading to increase in R&D spends Dr Reddy, Biocon and Glenmark are highest spenders on R&D. Glenmark seems to book only about 20% through P&L

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

Sun Pharma

Lupin

Dr. Reddy's Laboratories

Cipla

Aurobindo Pharma

Cadila Healthcare

Torrent Pharma

Divi's Lab

Glenmark

Alembic Pharma

Ajanta Pharma

Ipca Lab

Biocon

Natco Pharma

Jubilant Life

R&D Spends (% to sales)

FY15 FY14

Page 14: Indian Listed Pharma Companies - Brief Data Review

Average employee salary around Rs 8-10 lakh per annum

www.indiabusinessreports.com 14Listed Pharma Stocks in India

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Sun Pharma Lupin Dr. Reddy'sLab

Cipla AurobindoPharma

CadilaHealthcare

TorrentPharma

Divi's Lab Glenmark AlembicPharma

Ajanta Pharma Ipca Lab Biocon Natco Pharma Jubilant Life

Employee Salaries for FY 15 (Rs Lakh per annum)

Ajanta Pharma appears, the best performing stock, is also the lowest paymaster, paying half of industry average. Ipca, Alembic, Natco also have similar low pay

Aurobindo, the other top performing stock, has much more realistic pay figures. Sector leader Sun also appears to be among the top paymasters

Page 15: Indian Listed Pharma Companies - Brief Data Review

Clear difference in field force productivity between leaders and the rest

www.indiabusinessreports.com 15Listed Pharma Stocks in India

0 10 20 30 40 50 60 70 80

Sun Pharma

Lupin

Dr. Reddy's Lab

Cadila Healthcare

Torrent Pharma

Alembic Pharma

Ajanta Pharma

Ipca Lab

Field Force Productivity for FY15 (Rs Lakh per annum)

Sun leads. Its productivity was much higher in FY14, down due to Ranbaxy influence, but much above the rest Ajanta has least (among those where data was available). Rapid expansion in field force could possible explain low productivity

Page 16: Indian Listed Pharma Companies - Brief Data Review

Lower DMF filing in recent quarters

www.indiabusinessreports.com 16Listed Pharma Stocks in India

Period Total DMFs filed % %age of Indian DMFS

1Q 13 132 61 46%

2Q 13 140 75 54%

3Q 13 155 65 42%

4Q 13 178 81 46%

20 13 605 282 47%

1Q 14 154 88 57%

2Q 14 199 88 44%

3Q 14 89 31 35%

4Q 14 127 51 40%

20 14 569 258 45%

1Q 15 193 96 50%

2Q 15 126 45 36%

2015 YTD 319 139 44%

Page 17: Indian Listed Pharma Companies - Brief Data Review

Key Indian DMF filings in Q2

www.indiabusinessreports.com 17Listed Pharma Stocks in India

DMF Filer Molecule / Brand Dosage Form

Genericized US Annual Sales ($ mn)

Comments

Cipla Albendazole USP (gAlbenza) Tablet No 105** Product has gone offpatent, but nor genercized yet; other filers are Sequent Scientific, Uquita and Unimark

Cipla Ambrisentan (gLetains) Tablet No 595* Patent expires in 2015; Liley generic launch by end 2015; other filers are Mylan, Watson and MSN Labs

Alembic Azilsartan (gEdarbi/gEdarbyclor) Tablet No 37** NCA exclusivity till Feb’16; Other patent exipry in 2025; no other DMF filer

Aurobindo Ranolazine (gRanexa) Tablet ER Yes 510* Lupin only generic to launch; Patent expiry in 2019; there are 10 other filers

Sun Tadalafil (gCialis) Capsule No 1040 Patent expiry in Nov’2017; other 17 filers and one tentative approval

Auro Peptides (Aurobindo)

Octreotide Acetate (gSandostatin) Injectible Yes 1750* Sandostatin genercized with 7 generic players; However SandostatinLR not genercized with patent expiry in 2017

Aurobindo Esomeprazole (gNexium) Capsules, Pallets

Yes 1876 Teva has already launched; other generic players to launch in H2Fy16

Cipla Olanzapine (gZyprexa Zydis) Tablet/Capsule/Inj.

Yes 120 Many generic players

AuroNext(Aurobindo)

Sodium Bicarbonate Injectible Yes NA Off patent; 6 other DMF filers

Lupin Darunavir Propanolate (gPrezista) Tablet/Susp No 1831 Other key DMF filers are Cipla, Hetero and Mylan

*Global Sales; **Bloomberg Global Sales

Page 18: Indian Listed Pharma Companies - Brief Data Review

Disclaimer

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Listed Pharma Stocks in India

Page 19: Indian Listed Pharma Companies - Brief Data Review

Thank [email protected]

www.indiabusinessreports.com Listed Pharma Stocks in India