I tried to understand the prospects of cephalosporin capex. Investor presentations have only conveyed that the company has invested 30 crores for capacity expansion at the Mehsana plant. The capex is completed and is expected to contribute revenue of 150 crores in the next 3 years as per the management.
“The company plans to manufacture 20 plus Cephalosporin products including Cefalexin Oral Suspension BP, Clavulanate Tablets, Cefixime Capsules, and Cefuroxime Axetil Tablets among others. The company also looks to export to African, Latin America, and Southeast Asia markets and expand to other markets after necessary approvals.”
Source: Lincoln Pharmaceuticals Ltd plans to launch Cephalosporin products soon; Acquires a plant in Mehsana, Gujarat – The Pharma Times | Pharma & Health Care News Portal
So, I tried to understand the market of the drugs discussed. FDC and Alkem Labs seem to be the major players. Both companies have most of their revenue derived from Anti infectives like Lincoln.
FDC
Alkem Labs
For both these companies cephalosporins are a major part of its anti- infective portfolio.
For FDC
Source: FDC investor presentation Q323.
FDC has a facility at Baddi dedicated to Cephalosporin products. And has a 25 % market share of Cefixime. (Brand ZIFI) and Alkem has a market share of 23.1 % in this product (Brand TAXIM-O).
Similarly for Alkem laboratories also, cephalosporins are one of its major products. Cephalosporins contribute to more than 55 % of its total anti-infective revenue. As per the HDFC research report cephalosporin market is Rs. 70 bn market and is growing at a CAGR of 4.5 %.
Source: https://www.hdfcsec.com/hsl.docs//Alkem%20Labs%20-%20IC%20-%20HSIE-202011090722077343834.pdf
And both companies have a bulk of their anti-infective revenue from Cephalosporins. From what I read, the pricing of some of these products is under NPPA’s control.
So, as per my understanding expansion into cephalsoporin is a natural extension of Lincoln’s anti- infective portfolio.
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