Key take-aways I can recollect from the investor call:
Natco has only booked 25% of Revlimid in Q4 and 75% is left. Majority of the balance 75% would come in the June quarter and the remaining in the September quarter.
Inventory of Agro is ~150 cr (major portion would be CTPR). Majority of the sales happen in June and July so the inventory should be liquidated then.
Planning to spend 300 cr+ in R&D (~10% of sales compared to 8% in FY23) this year since the he cash flow is expected to be good.
Looking to close down on a domestic acquisition this year (although this is what they’ve been targeting since the past two years). My sense is that the valuations have gone down so this might actually be the year they go ahead with something. As Rajeev alluded earlier, he doesn’t want to make an acquisition for the sake of utilising the cash at any price. It has to be at the right price.
Planning to launch 7-8 products in the Canada, Brazil, US subs.
Expecting the international subs and the API business to grow at 20% CAGR for the next 2-3 years.
While the domestic business profits have gone down in the past 3 years, it seems they will be stagnant from here-on and no further downside is expected.
Will continue to file multiple FTFs – (not sure about the number but back of my head I think he mentioned 7-8 in the coming year)
Expecting Agro to be 10% of the sales in the coming years. Planning to launch more products in the next 4-5 years where there is hardly any competition/litigative in nature. Do not intend to give away the pipeline due to competitive reasons (obviously)
The company is not in the CDMO side of APIs because working with global companies doesn’t give them the flexibility and also their strategy is completely different.
Planning on a couple of launches and FTFs in the US via Dash – some in collaboration (profit share), some individually.
Based on this, I believe Q1FY24 could be a bumper quarter with major Revlimid profits kicking in. The previous years did see Copaxone, Tamiflu sales taking a major hit, Covid inventory getting written off. Hopefully this could be one year where there are no major challenges. I would’ve appreciated if Rajeev would’ve alluded on the UK acquisition (though it seems to be just a marketing front end) and the competitive landscape and their strategy for that particular market. Also, clarity on Imbruvica would’ve been helpful – the last update from what I remember is that J&J had won the litigation and Natco with it’s partner was to appeal further. I believe this could be a major trigger that the market is looking for since none of their other FTF pipeline drugs are perhaps as big as Imbruvica and that is going to be important once Revlimid becomes generic in 2026.
Disc : Invested. Added more in the past 30 days.
| Subscribe To Our Free Newsletter |
