Ashish Chugh of Hidden Gems recommended an investment in Panacea Biotec on 15th April 2014. His analysis was based on a number of facts and figures on how the worst was over for the company and how the future would be rosy.
In hindsight, because Panacea Biotec was already at the bottom of the barrel, it was a classic “Heads, I win; Tails, I don’t lose much” sort of stock.
The stock was then quoting at Rs. 108. Today, it is at Rs. 165, resulting in hefty gains for Ashish Chugh’s followers.
The latest news is that Panacea Biotech has entered into collaboration with Rising Pharmaceuticals Inc for the marketing of one of its vaccines in the USA.
The salient features of the collaboration are as follows:
(i) Rising specialises in the sales, marketing and distribution of finished pharma products in the US market;
(ii) Rising will market in the USA an “oral controlled release product” manufactured by Panacea;
(iii) An application for approval of the Food & Drug Administration (FDA) has been filed. The approval is expected to be received in three stages between early 2016 to September 2017;
(iv) The market size for the product is about $300M. There are/ will be other competitors in the field;
(v) Currently the product is not available as a generic drug. Once, the patents expire in times to come, Panacea/ Rising will be among the top three to launch or at least among the top six;
(vi) The total end-to-end revenue potential of the collaboration from milestone payments is USD 13 million. Out of this, USD 2.5 million has been received. USD 1 million would be received in the current quarter. The balance is contingent on the undertaking of the bio studies and the FDA approval milestones. Panacea is also entitled to a share in the profits that will be made from marketing the product;
(vii) Panacea has also, on 12th December, entered into a strategic alliance with Apotex, the largest Canadian-owned pharmaceutical company. The alliance is for research, development, license and supply of two drugs delivery based high barrier to entry generic products for US, Canada, Australia and New Zealand. Panacea will undertake product development and will manufacture and supply the products to Apotex, while Apotex will be responsible for regulatory affairs, Hatch Waxman litigation and commercialisation activities in the territories;
(viii) While the Apotex alliance is for injectible products, the Rising alliance is focussed on oral products.
So, it does look Panacea Biotec will see rosy days ahead, as correctly predicted by Ashish Chugh. Whether the stock should be bought or not has to be decided by you based on your own due diligence and research.