Ranvir’s Portfolio

ORCHID PHARMA –

Company overview and Q2 FY 24 updates –

Company manufactures widest range of Oral and Sterile Cephalosporins APIs with a product portfolio of > 35 products spread across 6 generations of Cephalosporins

Company is the inventor of Enmetazobactum – likely to start sales in China, US, Europe in FY 25. This molecule is out licensed to Allecra Therapeutics and Orchid is entitled to receive royalties on its sale

Orchid Pharma was acquired by Dhanuka group in FY 22

Cephalosporins form about 30 pc of anti-biotic mkts. Other families of antibiotics include – Penicillin, Macrolides, Carbapenems, Fluoroquinolones

Manufacturing blocks –

Sterile APIs – 6 Blocks ( 05 crystalline and 01 Lyophilised blocks )
Oral APIs – 07 blocks
Intermediates – 05 blocks

Have approvals from – USFDA, PMDA, EUGMP

Company exports directly/indirectly to over 60 countries

Company’s strengths –

Complex chemistry of Cephalosporins
Sterile manufacturing requirements
Cross – Contamination is a big problem and acts as a natural entry barrier
High upfront capex
Low cost of operations

Company’s long term debt has come down from 427 cr to Nil post the takeover in 2021

Q2 highlights –

Sales – 199 vs 165 cr
EBITDA – 31 vs 20 cr
PAT – 20 vs (-) 5 cr

Company working very hard on cost optimisations and reducing wasteful expenses to engineer a turnaround

Company is setting up a plant for manufacturing of an important KSM –
7-ACA used for synthesis of most Cephalosporins. Earlier, it was being imported from China. Company shall receive PLI benefits for manufacturing this product

Also setting up a front end for sale of formulations directly to hospital chains, large standalone hospitals. To launch this business in Q1 – FY 25

Orchid has been selected (a big deal) as the contract manufacturer of a patented molecule – Cefiderocol, patented by Shionogi – Japan – for its sale into LMIC countries (135 of them ). Technology for this product shall be directly transferred by Shionogi to Orchid

It’s a completely new antibiotic – works well against resistant bacterial infections. Likely to save many lives

Cefiderocol – FDF plant would require an investment of Rs 80 odd cr. Expected launch in second half of FY 26

For next 3 yrs, expect revenue growth in the range of 20-25 pc CAGR !!!

Regulated vs Emerging mkt sales breakup for Orchid Pharma @ 40:60. Likely to continue in future too

Oral:Sterile revenue split @ 66:34

Revenue from US currently is negligible. Aim to scale it up meaningfully in the future

Company’s capex to set up a new Sterile manufacturing block is now complete. Not yet inspected by regulated market regulators

Orchid lost a number of customers in US, EU (pre-acquisition). In the process of winning back some of them

At present, top 3 products contribute to about 75 pc of company’s sales

H2 is generally better for the company vs H1

Disc: new entry, biased, not SEBI registered