Laurus Labs – Can Business Transform to Next Level?

FY23Q1 Conference Call Summary

P&L Statement

• Rev 1.5KCr YUP 20%

• Rev(Formulation): 0.35KCr YDN 33%

• ARV Rev: 0.38KCr

  • volume & prices will stabilize
  • leading MS / will inc marginally

• Onco API

  • Rev: 63Cr YUP 5%
  • has largest high potent capabilities

• API (excl onco+ARV) : 0.14KCr YUP 80%

  • incl diabetes, CV and asthma
  • new contract supplies
  • Ft: healthy growth FY23

• GPM 57% YUP 1% ← better product mix

• EBITDA: 0.45KCr / EBITDAm: 30%

• RoCE: 29%

• CAPEX: 209Cr / Ft: FY23 & FY24: 2KCr (1KCr – CDMO + 1KCr non-ARV)

• Overall GPM stable

  • lower ARV margin offset by higher CDMO margin

• other expenses: 33Cr (higher)

  • power sourced from pvt sources ← R: power shortage
  • forex losses (restated loss, not real loss)

CDMO – Synthesis

• Rev: 580Cr/Q YUP 190% [YUP – growth YoY]

• contracts: 2

  • multi CDMO contract with niche API
  • global major life science

• high demand → inv in 3 mnfg sites + R&D unit

  • steroids, hormones, high potent molecules
  • large volume products in animal health.

• -: Mngt is not commital on future run rate

• commercial products: 7 – intermediates: 4 / API: 3

  • late-stage products: many

• +: NCE – patented → long runway

• +: pricing is predictable and stable / not much pricing pressure

• Focus: commercial execution & pipeline expansion&execution

• most rev coming from CMO

• Ft: CAPEX asset turn: 1-1.5

• Ft: Rev share: 33% ← 25%

• differentiator – speed & flexibility

Laurus Bio

• Rev: 30Cr

• rev will pick-up with

  • ramp-up of new capabilities
  • debottlenecking for a large scale CDMO partner

• alternate food industries

  • scale, cost and functionality will remain the core drivers

• fermentation – world is overdependent on China

• capacity built for:

  • synthetic biology
  • alternate foods
  • recombinant food proteins

• Revenue forecast

  • FY23Q1 30Cr
  • FY23Q2 30Cr Same
  • FY23Q3&Q4 inc in rev <–R: downstream debottlenecking
  • FY24 ← flat
  • FY25 Ramp-Up ← R: CAPEX

• CAPEX 3-4M ltr capacity

  • Plan: FY23Q2: land acq
  • opportunity is there, lacks capacity
  • facility ramp-up FY25
  • start of CAPEX to peak commercial sale: 3-4Y
  • competion of CAPEX to peak commerical sale: 2Y
    (full capacity utilization)

• R1 facility expansion

  • new R&D block
  • downstream balancing equipment

R&D / Filing / Launches

• US ANDA filed: 30 / Approved: 11 / Ten App: 14

• CAN App: 11 / Launch: 5

• EU: CMO opp: product validated: 2

• DMF Filing: 74 (1 non-ARV in Q1)

• launched lopi-rito combination in US

• non-ARV formulation: lot of filing done, lot of approval anticipated

• R&D/Sales: 3%

• Products in R&D pipeline: 55 / Addressable Market Size: $40B
  (review + dev)