Alembic & Alembic Pharma

Key takeaways from the concall:

• Launch of front end: The company launched its first product gNamenda (Memantine Hydrochloride) through its own front end in USA. The good part is for the remaining 27 ANDAs pending approval, apart from 4 – 5 rest would be marketed through their own front end. I think many of us had concerns over company doing all the hard work in R&D and then faltering in the execution – as we have seen some loss of market share in gAbilify & Pristiq 505 (b) (2) is going to be addressed through launch of own front end.
• R&D: The R&D expenses for the full year are expected to be around 250 crore (this quarter it was around 90 – 95 crore including capitalised R&D cost) and going forward they would be around 8 – 9% of the revenues. The company filed 3 ANDAs including Warfarine 505 (b) (2) (although with a partner). The company seems to be working on complex projects in derma and injectables. Even in 27 ANDAs pending approval, many are FTFs and Para IVs. The company got approval for 2 ANDAs in the quarter and launched 1 (gCelebrex with Trigen as the partner) recently.
• ANDA Pipeline: The company expects to file 8 – 10 ANDAs and expects to launch 6 – 8 products per year for next two years. For gPrisiq, the company has settled with the innovator (Pfizer) and hence did not indicate the launch date (it is expected around June – July, 2016).
• gAbilify: The company has lost some market share post entry of Apotex. The company did not indicate any guidance going forward but said that it will take time for market shares to settle for the product. The company receives remittances from the partner post lag of one quarter. With every new entrant, the price erosion takes place. Despite the loss of market share and price erosion, it continues to remain a very lucrative opportunity.
• Capex: The capex for the full year is expected to be around Rs.300 crore. For H1, they have incurred around 120 – 125 crore.

Also, our tribesman Rohit Oza started the Q&A session. Great going.