@Mahesh I like both Syngene and Suven – both would be among my top 6-7 bets (if I was forced to take 6-7 bets). With Syngene, what I like more is that they are involved from discovery stage for many molecules. With Suven, what I like is that they have mind-blowing margins for CRM (ex their in-house research); inspite of their cash guzzling research, and assuming none of this fructifies, I still believe Suven is a very good business. If one wants to take the inhouse research into consideration for valuation, then I agree – Suven has no place in a concentrated portfolio. Syngene I feel is slightly overvalued at CMP, Suven is fairly valued.
@Vivek_6954 As Mahesh has mentioned, the 3 phases of clinical trials take 6-8 years, not even considering the discovery phase. So if a company enters this business today and if they get small contracts, the partner might see that they are doing good work after few years, but to build trust about privacy with the partner, and particularly in the industry would take a longer time. The other aspect is one would need to start with smaller number of scientists and increase as one gets more contracts. One can poach a handful of experienced scientists here-there but not a team as large as Syngene.
Q for scuttlebutt: How satisfied are the scientists at Syngene/Suven with their careers?
Discl.: No holding in Syngene or Suven. Recently sold off stake in Suven on realizing mistake that there is no MoS.
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